Conservatives

hipsters

“But,” he said, looking seriously confused, “where else am I going to put my money?” Brandon is 26, an IT guy making ninety grand, with $85,000 in the orange guy’s shorts earning an awesome 1.35%. When we began talking the kid had but one idea of what an ‘investment’ is. A condo. And after that, maybe a townhouse.

Real estate and savings accounts, he knows. Financial assets, no clue. But he learned the lesson well. Brandon’s parents have a big house in the burbs and, as far as I could tell, not much else. His dad, 48, lost his job six months back, as a manager at Best Buy. Now nobody around there’s hiring. “And they’re not moving,” says the kid. “They’ve got a beautiful place.”

You have to live somewhere, but real estate’s turning into a debilitating asset. Especially for the young – those people who line up overnight and pee in the bushes around the sales trailer just so they can buy an unbuilt slapped-together townhome on a distant cul-de-sac. Or the thousands of hipsters who clog downtown condo web sites with VIP pre-registrations. Or the emerging families who fuel bidding wars for $700,000 sad semis in areas the crackheads, pimps and mayors just moved out of.

The obsession with housing by the under-35 crowd is as dangerous as it is hard to fathom. Now there’s new evidence suggesting a causal link between house horniness and a staggering economy. Forget whatever you learned about the benefits of an ‘ownership society.’ Real estate apparently murders jobs.

A study by researchers in the US and the UK has a stark conclusion: when home ownership rates go up, a few years later so does the jobless rate. Like this:

131106093401-home-ownership-unemployment-rates-620xa

Right now 70% of us have a house – the highest level in four generations. In fact homeownership has swelled here even as it recedes in the States. At the same time, prices and debt have been shooting higher, while incomes have not. To guys who analyze things all day, this spells crapstorm.

How does real estate turn into job losses? Most importantly, people with houses (or condos, or hot tubs) don’t like moving to find employment. They’ve traded freedom and flexibility for mortgage payments, property taxes, tied-up equity capital and a weird sense of permanence. They just can’t contemplate the hassle of listing a property, going through showings or the sale process, paying a mortgage penalty or moving. So most don’t.

In the US, by the way, when the property gasbag blew up and valuations plunged (along with the economy and jobs), millions of workers with houses simply couldn’t leave their homes because there were no buyers. Millions more could only sell by taking a price less than their outstanding mortgage, meaning they had to come up with a huge cheque just to go. Of course, nobody here noticed. We’re special.

Second, real estate kills jobs (say the researchers) because people buy houses in ridiculous places where they’re more affordable. Like the thronging young masses below, lining up last winter outside a developer’s office in Milton, 55 kilometres to the west of downtown Toronto.

MILTON1

Long commutes waste money and eat brain cells. They make people less productive and ultimately less employable. They foster stress, murder marriages and turn fecund young homeowners into their depleted parents. By the way, those fifty-five clicks from Milton to the DT can easily chew up 90 minutes of bumper time.

Lastly, people who buy real estate instantly turn into old farts, or (as they are known) conservatives, who want nothing to change. Opposition to new enterprises or fresh development in the area is invariably opposed, which is said to stifle entrepreneurship. In fact, so strident is the NIMBYism these days that local planners won’t even try to integrate small retail into a residential hood. The result is predictable – burning a litre of gas to go find a litre of milk.

“The effects are strikingly large,” says the report. “In the long run, doubling home ownership in a state can lead to more than a doubling of the unemployment rate. We need to break the obsession with home ownership. You erode the flexibility of the labor market and it causes jobs to slowly disintegrate.”

The ideal? Young people who go where the work is, staying flexible and mobile, advancing their skills and careers, absorbing risk, being liquid and driven. Then when they get closer to retirement, they can turn into sedentary homebodies who worry about dust bunnies and watch The Biggest Loser.

So will our delusional obsession with real estate come to bite us in the economic butt? Maybe it already is – says the Bank of Canada, which now lists a “disorderly unwinding” of consumer finances as the thing to fear. A new report there speaks of growing strains which could lead to a housing plop. They include an imbalance in the ratio of house prices to incomes, and a big deviation in real estate values from the long-term trend. Kinda like this?

Yahoo!

Never, ever think this will end with a whimper.

165 comments ↓

#1 TurnerNation on 11.14.13 at 10:00 pm

Today’s pic: All fat and no chattel.

#2 HP sauce on 11.14.13 at 10:03 pm

Want some Mexican ketchup with that?

#3 TurnerNation on 11.14.13 at 10:04 pm

From an area north of GTA with published 15-20% unemployment figures.

(Yet, flogging McMansions on the golf course:

http://www.thecountryclub.ca/thecountryclub-home/ )

“The fact is many people in the community are just one paycheque away from a crisis that could jeopardize their housing. Layoffs, illnesses, family breakdowns, low-paying jobs with no benefits, soaring utility costs and rental units that are not properly maintained are putting people at risk of homelessness daily, a press released issued by A Place Called Home states.

They are, however, educated, caring individuals who have reached a crisis in their lives.

This year the shelter has seen a disturbing increase in children under the age of 12 who, with their families, have become homeless for many of the above reasons. ”

http://m.mykawartha.com/news-story/4208222-homelessness-a-reality-in-kawartha-lakes/e

#4 sideline sitter on 11.14.13 at 10:05 pm

I’m going to keep renting and banking as long as possible… but, much like your example I’ve got my money festering in a bank account doing diddly…

Soon, ETFs, and dividends… but, I get scared when I think QE will end and take the markets along with it.

Someone tell me things are going to be ok!

#5 Canadian Real Estate Update on 11.14.13 at 10:05 pm

Canada’s housing bubble is larger than the 2006 US housing bubble.

The following metrics are the most important when considering the size of any housing bubble. Using these metrics, let’s compare Canada’s current housing bubble to the 2006 US housing bubble.

Keep in mind that incomes in Canada and the US are about the same and have been for a long time.

1. Overall increase in house prices (first chart):

Canada: + 124% (2000 to present)
US: + 53% (2000 to the peak in 2006)

2. Increase in price-to-income ratio (first chart):

Canada: + 56% (2000 to late 2011)
US: + 24% (2000 to peak)

3. Increase in price-to-rent ratio (second chart):

Canada: + 73% (2000 to late 2011)
US: + 35% (2000 to peak)

4. Increase in household debt-to-income ratio (third chart):

Canada: + 53% (2000 to present)
US: +41% (2000 to peak)

5. Increase in percent of labour force employed in construction (first chart):

Canada: + 43% (2000 to present)
US: + 10% (2000 to peak)

6. Increase in residential construction as percent of GDP (second chart):

Canada: + 56% (2000 to present)
US: + 38% (2000 to peak)

7. Increase in real estate investment as percent of GDP (second chart):

Canada: + 63% (2000 to 2012)
US: + 41% (2000 to peak)

8. Canada’s home ownership rate is at a record level (70%) and higher than the rate in the US (69%) at peak.

#6 Smudgekin on 11.14.13 at 10:07 pm

Milton where they take an F-150 over bar soap.

#7 Chickenlittle on 11.14.13 at 10:08 pm

In ten years time Milton will be a dump. All the new builds are cheap and ugly. The price tag ain’t cheap…over $400k for a piece of crap. Already I see some falling apart. And can you say BORING?!?

At least I rent here….

#8 Mike on 11.14.13 at 10:08 pm

NIMBYism is heavily present when it comes to cell phone towers. No one wants a tower anywhere near them, but they would be lost without their cellphone. YOU CAN’T USE YOUR CELLPHONE WITHOUT THE TOWERS!!!

#9 [email protected] on 11.14.13 at 10:09 pm

Interesting link between ownership and jobs. But wouldn’t most companies want to take advantage of this and locate their businesses close to major cities with high home ownership? Pool of eager workers needing jobs for their homes?

#10 not 1st on 11.14.13 at 10:12 pm

Garth, I don’t think the millennials and some Gen X are interested in moving for better employment regardless of whether they rent or own a place. There is something more intrinsic in their nature as to why being mobile is not a priority.

#11 Scott In Toronto on 11.14.13 at 10:15 pm

Quite an interesting study with a fascinating conclusion. Thanks for pointing this out.

#12 TnT on 11.14.13 at 10:17 pm

The RE Cartels will start a campaign to lure these suburbanites back into the city once the kids fly the coop…

These Boomers are not like the previous generation.

They love the gym, dinning, shopping and salons and it will be the perfect fit, selling their house higher than what they will pay for the condo.

#13 Ray Skunk on 11.14.13 at 10:17 pm

ETF Advice Sought:

I currently have 10 ETFs with a book value of approx. $10k each in my self-directed account.
Three of them have a current market value > book, with ZDY being my star performer. The bottom of the pile are naturally REIT and bond-based.

I feel I need to diversify more, and – after today’s rally – am considering cashing out $5k from each of the top three and reinvesting in ZUB, ZGI and ZWU.

Any blog dogs (or even the great GT himself) have an opinion on these particular ETFs? Thanking you.

#14 Liquid on 11.14.13 at 10:17 pm

I think if we see looked at the amount of credit market debt in Vancouver and compared it to that average home price graph in your post, we’d see some pretty telling similarities :)

I think it’s possible to stay flexible, mobile, and liquid even as a young homeowner. There are property management companies that will do all the leg work for you to find and screen tenants, deal with repairs, and even mow the lawn. They charge a fee however, usually about 1 months worth of rent, but it’s not a bad deal. If I lost my job tomorrow and there was an offer in Calgary or Regina, I would leave my home in Vancouver right away, but not sell it. I’d have someone manage it for me and use my new rental income to subsidize my living expenses in another city. This strategy is especially convenient if you live in an apartment or townhouse with a strata, as many strata companies will offer these types of management services :) As the owner of a condo, I don’t have to lose any equity in my property by doing this, and I still have the option to sell my place in the future if I decide to ^_^ Flexibility for the win :D

#15 marco from van on 11.14.13 at 10:18 pm

I just moved… From a townhouse “worth” $1.3 million in leafy Shaugnessy (a braggy burb of Van’s west side) to one “worth” $2.9 million in Kerrisdale (another braggy burb in Van’s west side).

The Square footage went up by 1200, I got a garden and a double car garage (double height to boot). The new digs came with a 4 year lease (yes 4 years with no rent increases) and negotiated down from $4K per month to $3750 and recently renovated (1 year since the renos).

So here I am with the money I would have had to put down for a 50% mortgage making me about 2 X the rent in after tax yield. After having a 50% down, the payments would have been far in excess (I’m guessing about $12K) of the rent to have the SAME place.

The loss of opportunity, cost of the cumulative interest AND loss of liquidity would ONLY have been mitigated if the property value increased about 10% YoY for the next 4 years.

I have to say I almost felt guilty when, not only did I know I was being subsidized by the owner, but also when he made it clear that “I held the cards” as there aren’t many families who have this rental budget.

He asked for my notice of assessment from last year as proof of income, it had $640K on the “total income” line… He just could NOT understand why I was a renter – just did not compute.

Meanwhile, I have a great fees only adviser who has helped me structure my financial life to achieve a sustainable growth platform.

I am liquid, my children’s education is taken care of (they are 3 and 10) and I have enough invested in assets that can become cash within 48 hours to last me over 10 years at the current burn rate (which is not frugal at all).

Then I compare that to my future neighbor (100% Canadian) who I met as they were pouring concrete foundations for his new house (“worth $4 million after construction). He’s in his 50’s and in the short period of time we spoke he said they mortgaged themselves to the hilt, but that this house will be their home for 20 years and take care of their retirement…

Then a truck full of plywood, MDF and other very “durable” construction materials pulled up… 20 years huh? retirement huh?

I’ll take my fixed asset poor, liquid rich model anytime over his.

#16 Smoking Man on 11.14.13 at 10:19 pm

FORD’S POLITICAL CORPSE

is still warm and look, the Smoking Men are at the door.

It’s back to business as usual in Toronto.

Toronto mulls ideas to tackle its multibillion-dollar congestion problem

Toronto is floating dozens of ideas to tackle congestion, a worsening problem that is costing the city billions according to the business lobby.

Note: Word “Business Lobby” last two words.

http://www.theglobeandmail.com/news/toronto/few-options-available-to-ease-torontos-congested-streets-reports/article15436040/

It’s how it works kids…………..

#17 T.O. Bubble Boy on 11.14.13 at 10:20 pm

The scariest place in the GTA right now is at the foot of HWY 400. Thousands upon thousands of townhomes built right next to the highway, that seem destined to become a future ghetto.

So – yes, Milton is bad, but parts of Vaughn may be worse!

#18 DW on 11.14.13 at 10:20 pm

Now the TD Bank is helping customers as they wait in line, by playing Just for laughs gags for stress relief. Seems to be working and makes paying those bills a bit easier!

Had a visit to the local dollar store today and again there were a lot of brand new high end vehicles in the parking lot. Signs of the times as people live beyond their means.

Do we really need copper eaves troughs and down pipes?

#19 Cow Man on 11.14.13 at 10:20 pm

Amigos:

No doubt Garth is correct. The only question is will any of us live long enough to see the correction?

#20 Knickerbocker Knosty on 11.14.13 at 10:28 pm

“To guys who analyze things all day, this spells (Conservative) crapstorm.” — Garth
— and —
#49 economictsunami on 11.14.13 at 7:40 am — ” … with central bankers willing to risk an even bigger credit bubble to keep the demon of falling prices at bay.”
— and —
#54 Smoking Man on 11.14.13 at 9:13 am — “Of course she will talk the sweety wife into granite and debt.”
— plus —
#117 jess on 11.14.13 at 6:03 pm — “eminent domain”

Good points. The vast majority of sheeple believe that everything revolves around debt and central banks, while ignoring the crapstorms — fair enough.

But who controls the private-for-profit central banks? They appear to have some self-regulations in place, but only for show to sheeples in crapstorms.

It is curious why the Rothschilds never appear on Forbes Richest People list. Is it because they are worth around five hundred trillion (pounds, dollars, euros or yen — fill in the amount of your choice), and don’t want publicity? The Rockefellers make themselves available, but don’t make any noise about it.

Of course, there are only two families who pull our muppet strings, and don’t care for public non-profit central banks. Others are small fry, but are needed as props. Approx. worth, Forbes, Secrets, Oz too and Further to the TPP. “Because under Fascism, like feudalism, people with a net worth above a certain level are immune from the laws!” wrh.com.

Who has vested interests in oil, climate change (carbon taxes) and war companies, who is driving Agenda 21, Monsanto, Obamacare et al? It’s good to let TPTB dictate to the world what they want doing, because as SMan points out, the UCC [and the negative force — Satan, the devil or Lucifer] control and are in charge of all the stuff that happens down here, but no one controls the UCC. Au contraire, It runs everyone and everything.

#21 Sparky55 on 11.14.13 at 10:28 pm

#9 [email protected] on 11.14.13 at 10:09 pm

“Interesting link between ownership and jobs. But wouldn’t most companies want to take advantage of this and locate their businesses close to major cities with high home ownership? Pool of eager workers needing jobs for their homes?”
*****************************
No, most companies are not willing to pay the wages these people are demanding (also likely the same reason their original employer left/closed down/let the person go), as the people, who are jobless, need the high wages to support their much over priced real estate. Most people are stubborn, and will not work for less then they received before (or can not work for less, as they were living pay cheque to pay cheque). They are also rapidly increasing their debt while they are unemployed, which will put an even greater demand on the required wages.

#22 Herb on 11.14.13 at 10:29 pm

I thought the explanation would be simpler: higher prices mean more money going into real estate, less available for other goods and services. Therefore, less economic activity in other sectors, less manpower required there, and higher unemployment.

And the solution? Wages won’t increase because that would go against the profit imperative and be tarred as socialism. So real estate prices will have to fall to the level at which they can be paid, “revert to the mean”, if you will. The only question is how fast, and that depends on what will push the downward spiral.

#23 Randy on 11.14.13 at 10:31 pm

Am I a NIMBY because the McWynnity Liberals are forcing Wind Farms into my Community and making me live in a Post-Industrial Junkyard ? Mad Max 2 coming up !!!

#24 Devore on 11.14.13 at 10:35 pm

#19 Cow Man

No. You better buy a house now, before you’re priced out forever.

#25 Ralph Cramdown on 11.14.13 at 10:40 pm

On a long term chart like that, either semi-log axes or an exponential rather than linear curve fit is called for.

#26 Carpe Diem on 11.14.13 at 10:49 pm

#10 not 1st

And that’s why you have aging boomers working at Home Depot or McD’s while their kids work at Starbucks.

I rent a home, buy used cars and make more than 99% of the people out there (but probably not the 99.1%’s)

My wife is a homemaker, so I feel very upper middle class versus top 1%. But at least my kids are at home when not in school versus pre and post care and never see their parents. At least they have a full-time mom!

Both generations (boomers and kids) have mortgages to max. This 60 year-old Home Depot clerk boasts that they have an 100K RV and their kid has a home with granite counter tops. I asked … where does your daughter work? Guess the answer.

I have an 8 year old kid is asking me if the stock market is up or down on a daily basis. I’m educating my kids how my father educated me.

Understand the tax system,
understand accounting,
understand financial markets,
watch but don’t trust the news.
Don’t get into debt and if you do make sure you are generating a profit from it.

My kid is getting an RBC Direct Investing test account this summer and we shall have a fun game.

#27 HummanaHummana on 11.14.13 at 10:49 pm

I have guys working for me who make $120,000 but are asking for pay advances. Some others can’t travel for business because they can’t get credit cards. Lots of people are broke and living on borrowed time. Something has to give.

#28 Smoking Man on 11.14.13 at 10:51 pm

Vlad

The UCC is the voice everyone has in there head. To some it’s faint, others ignore it. And me I’m tuned into it with sub woofers cranked.

How have I magically called stuff on here year after year with crazy accuracy. Top traders, economists go ag
ainst me at times and lose.

People think it coincidence when they feel they will hit a jackpot in the casino and they do, or when they walk in and feel the wallet will be emptied by end of night, then it is.

This summer was driving to an estate in Rockwood. I turned left onto side road 20, was getting ready for my right turn onto watson rd.

DANGER DANGER DANGER screamed the UCC.

Consciously I thought the approaching truck was to be a problem. I turned the corner, and a chic on a a bike just wiped out ahead, I could not see her as there is a bump in the road I usually zoom over and tray and get the truck air born. So spoked by this feeling I went slow and slammed my brakes and just missed running over this lady.

That’s how the UCC works, you don’t know the exact danger or benefit you just know it’s going to happen.

500 Trillion, I wana be friends with them :)

#29 Franco on 11.14.13 at 10:51 pm

The long term trend will eventually catch up and not by falling prices either.

#30 will on 11.14.13 at 10:56 pm

“Opposition to new enterprises or fresh development in the area is invariably opposed, which is said to stifle entrepreneurship.”

I think you mean to say “opposition to new enterprises or fresh development in the area arises, which is said …” or just “new enterprises or fresh development in the area is invariably opposed …”

Anyway it’s a fascinating idea – free thinking people suddenly turning into conservatives because they find themselves in a situation they didn’t understand or anticipate. I’ve actually thought about it recently but you are the first to articulate it. Thanx Garth.

#31 Shawn on 11.14.13 at 10:59 pm

MATH MATTERS LOG SCALES ARE NEEDED

Ralph Cramdown at 25 said:

On a long term chart like that, either semi-log axes or an exponential rather than linear curve fit is called for.

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

Ralph beat me to it with that comment. Need log scale on the vertical axis.

On a regular scale any constant percent growth will shoot skyward if enough years are shown. It’s called exponential growth and even 1% is exponential let alone 5% or whatever.

On a log sale a 4% constant growth or whatever shows as a straight line no matter how many years.

Chart is from Real Estate Board of Greater Vancouver.

It’s flawed and should be ignored. It’s misleading.

Even on a log chart I am sure the hockey stick effect is there. (And why not, given lower interest rates). But the raw data chart is pretty much garbage as 36 years are too many to show without a log scale.

Shame on the Vancouver Real Estate Board.

They should have listened up in that grade 9 math class instead of muttering that “we will never need this stuff”.

#32 not 1st on 11.14.13 at 11:00 pm

Garth, you can bet that F and H aren’t going to rock the housing boat until they are safely re-elected, so expect a few more years of this and then the wall will come.

You can expect them to throw some more bones for the wrinkly boomers as well.

#33 JS on 11.14.13 at 11:06 pm

#15 Marco

Same thing with me. Income on my NOA is a bit higher than yours and will be 7 figures next year. I recently went to RBC to apply for a US $ credit card, and they insisted I bring in my NOA, pay stubs,etc… to verify my income.

The lady at RBC looked at my NOA, looked at me, and then said “why are you still renting?”. I said RE is overvalued she said well, if you ever change your mind, you know where to find me.

People think that just because you can afford it, you should buy a house. I more than doubled my money in the stock market last year, and had I stuck that into a house, I would probably be even.

#34 [email protected] on 11.14.13 at 11:07 pm

F is planning to double the TFSA contribution. Really though it does appear everything is going up not down.

#35 Smoking Man on 11.14.13 at 11:08 pm

This guy has a huge connection to the UCC

http://www.liveleak.com/view?i=eec_1384474203

#36 Mediabuff on 11.14.13 at 11:11 pm

The regression line on the chart is above virtually the entire series prior to 2002.

The bubble is actually much worse than the chart shows, because the bubble is skewing the entire line upward.

#37 Van renter on 11.14.13 at 11:15 pm

#15 Marco from Van:
Are you willing to share the name of your financial advisor?

#38 Catalyst on 11.14.13 at 11:22 pm

I think the more important link is between high house prices and unemployment not ownership. The reason unemployment and high house prices are correlated is because in order to afford rent of $1200 for a one bedroom, for it to be somewhat affordable at 30% of gross income which is $48,000 annual income. So people demand at least this much when seeking employment otherwise why work? For some perspective, firefighters/police in New York make 45K, in toronto they make 90K. Public servants indeed!

The high and ever rising housing costs will kill off all private sector business in Canada who are already dealing with rising property tax, rising utility costs, rising leasing costs, and very high wage demands for labor, not to mention an indebted populace with low disposable income after housing/transportation and its looking scary out there…

#39 Waterloo Resident on 11.14.13 at 11:23 pm

Don’t worry, all of today’s unemployed young people can go to ALBERTA and work as rig-workers, earning upwards of $34,000 per year, working in -50C weather (fun).

#40 Sparky55 on 11.14.13 at 11:23 pm

Heinz closes Ontario plant:

http://www.theglobeandmail.com/report-on-business/heinz-to-close-ontario-plant-cut-800-jobs/article15442338/

That’s 740 direct jobs gone, + a whole lot more indirect jobs lost. Think of the farms supplying the plant and what they buy, the trucks, the suppliers (ingredients, bottles, boxes, equipment, etc, etc), maintenance, utilities, then the spending of employees (and it’s cycling through the economy), tax generation, etc

#41 not 1st on 11.14.13 at 11:29 pm

#26 Carpe Diem on 11.14.13 at 10:49 pm

Debt shouldn’t be something to be feared and avoided. If you know how to use it, its basically cheap money from the banks, just don’t let it indenture you to them.

I have a decent sized mortgage and I am not going to sell, but I worked diligently over the past couple years to get enough money saved to put into an ETF whose dividend will pay my mortgage off for me. BMO, TD, BNS and RB are buying my house for me. Yes, I am richer than I thought, once I turned the tables on them.

#42 Cici on 11.14.13 at 11:33 pm

Oops, mean to post this here, since Garth brought up the reference tonight:
N.I.M.B.Y. – The Great Canadian Chalk Circle way :-)

http://www.youtube.com/watch?v=gj6vIT-wXNI

#43 greaterfool2013 on 11.14.13 at 11:37 pm

#13 Ray Skunk

Bahahahahahaha!

Sorry. No help for Cheapskates. Go ask Carrick. I’m sure you’ll be happy with the advice. It’s worth what you pay for it and best of all…. I know you’ll love this….. IT’S FREE!

#44 Rexx Rock on 11.14.13 at 11:39 pm

Yes its time to get out of real estate and take your nice profits and run.Its sad gic pay so little because of its safety.Real estate had a great run and has created awsome wealth for the average Canadians.We are blessed the banks did this,thank you central banks.

#45 Victor V on 11.14.13 at 11:42 pm

In Leamington, Ont., a town synonymous with tomatoes and ketchup, Heinz Canada announced Thursday it is closing its century-old plant, throwing 740 people out of work.

http://www.thestar.com/business/2013/11/14/heinz_to_close_leamington_plant_740_employees_affected.html#

#46 Victor V on 11.14.13 at 11:46 pm

WATERLOO, Ont. – After BlackBerry helped build its reputation as the epicentre of Canada’s technology sector, Waterloo, Ont., is working against the odds to find jobs for hundreds of employees who have been laid off by the smartphone company.

At a convention centre on the outskirts of the city, nearly 700 people — about half of them former BlackBerry staff — gathered at a technology jobs fair this week where they hoped to find a position at another company.

But the overwhelming attendance suggested that most would face disappointment.

http://ca.finance.yahoo.com/news/wave-job-hunters-hits-canadas-tech-sector-via-233716167.html

#47 Cici on 11.14.13 at 11:48 pm

Heinz to close Ontario factory, trim 740 jobs…

http://www.theglobeandmail.com/report-on-business/heinz-to-close-ontario-plant-cut-800-jobs/article15442338/

From the article; pay attention to this boys & girls:

“Heinz’s cuts underscore the significant pressures facing manufacturing plants in Canada, in part because the loonie has been hovering near parity for the past few years, making exports more expensive.”

#48 Ben on 11.14.13 at 11:50 pm

we have a big problem. Parents got “rich” off paper wealth in housing and don’t understand how. But they love it. The tell their kids. Kid looks at dad. He’s got a regular job, he’s not that smart and yet he’s sat on near $1MM of housing. They look at their outgoings and their income. How long will it take me to save $1MM dad? You’d have to live 10 time longer than me son and work weekends.

Housing is the mechanism for intergenerational wealth transfer. Let’s just call it that and then we can move onto removing this unearned wealth from the olds.

#49 Joe on 11.14.13 at 11:52 pm

Ran into a developer in Cuba who has been building and marketing to the Chinese market for years, his projects in a Vancouver burb always sellout.
He goes over to China and eventually sells out, no problem all very low key.
No problem getting into Vancouver if you have the right connections.
You should check into the immigration laws and how they are being bypassed.
I’ll give you a gue$$.

#50 Cici on 11.14.13 at 11:54 pm

#9 [email protected]

It’s not feasible for most businesses to set up shop in every little suburban nook and cranny. Not a large enough client base to drive profits, land and commercial space probably overpriced due to high residential development, and transportation costs eat away at any and all profits.

From the other article I cited earlier about the Heinz factory:

“Southern Ontario’s economy has been hit particularly hard in recent years by factory closures as companies shift production to places with cheaper labour and higher productivity. Leamington is about 50 kilometres southeast of Windsor, Ont., and the regional unemployment rate is above 9 per cent.”

#51 Vangrrl on 11.14.13 at 11:55 pm

A new woman at work today said she had a 2hr morning transit commute. White Rock to Vancouver. She asked where I live and I said a 15 min bike ride away (downhill on the way to work). Yeeow did she look envious. But hey, she most likely ‘owns’ and I rent. Too bad I have two extra hrs in the morn to have another cup of cof and take the beast on a long walk before my fun bike ride ;).

#52 Tiger on 11.14.13 at 11:55 pm

32 you missed it wrinkly and all like you, now that’s perfect , thears no wall, just idiots dinner time! So sad! I don’t want it to be thus way what are you pls tell me do you think much what are you going to do or just don’t think wtf is the wall boy!!!!”

#53 Van Doc on 11.15.13 at 12:07 am

#15 Marco #33 JS agree with Van Renter #37

Care to share your financial advisors? I’m currently searching for a good fee based advisor

#54 len on 11.15.13 at 12:07 am

Anyone else getting tired of the crack dealer preaching to the crack addict about the evil of crack? For frack sake, don’t deal crack! Not that complicated!

#55 Cici on 11.15.13 at 12:07 am

#15 Marco from Van

Right on, that’s what I’m trying to do…but on a MUCH SMALLER scale, LOL! Same strategy, but unfortunately for me, different bank accounts.

When line of work are you in to make $640,000 a year, by the way. Drug dealer, real-estate agent/flipper?

Uhh, I ulmost feel sorry for that dummy future neighbour. Tragic…

#56 Tiger on 11.15.13 at 12:10 am

CMHC just now their more idiots out there than mosquitoes just in van and tr alone never mind cal
Get a re pro can suck some more out of you! I sell my Owen keep the cash go get a hooker latter savings about 4,000.00

#57 Shack63 on 11.15.13 at 12:13 am

I remember Calgary in the early-mid ’80’s. Couldn’t find a job, layoffs everywhere, university graduates were working as labourers in warehouses and homes were being flipped for $1. Some made money and lots of people lost a bucket load. In the end, we all muddled through just like we will again. Some of us will get rich in the downturn and many others will lose their shirts. But we’ll all make it through. So i have to ask what’s so new?

#58 Ralph Cramdown on 11.15.13 at 12:14 am

#134 Observer — Quoting Fox:”The Fed’s policies fail to make sense even in purely Keynesian terms. Keynes taught that the key to pulling an economy out of recession is to increase demand. Repressing interest rates is supposed to stimulate borrowing and thus stimulate demand. But the Fed’s repression of interest rates has penalized savers. The collapse of demand from savers has in turn more than offset any new demand from borrowers lured by the low interest rates.”

Debunking this ought to be as simple as pointing out that it’s an opinion piece on Fox news, but I’ll go a bit further.

Savers are savers. S-A-V-E-R-S. If you lower a saver’s income by a dollar, he won’t lower his spending by a dollar. He might lower it by less than a dollar, or he might not lower it at all. Likewise if you raise his income by a dollar, he’ll probably save at least part of it, because that’s what savers do. Borrowers, on the other hand, tend to spend every dollar they borrow, because it’s generally a losing proposition to borrow a dollar and save it. Likewise with the poor, workers living paycheque to paycheque and those on food stamps. Every extra dollar gets spent.

The other thing to point out is that lowering rates has stimulated the economy and raising rates has cooled it since the birth of the Fed. If Fox wants to say this is no longer true, you ought to ask for some proof.

Fox wants you to think in terms of the average saver, whose spending habits are probably somewhat affected by lower investment income, rather than in terms of the average dollar owned by a saver, which has a 35% chance of being in a 1%er’s account, and a greater than 50% chance of being owned by someone in the top 5%. Those people aren’t spending much less because of low interest rates.

#59 tb on 11.15.13 at 12:23 am

#13 Ray Skunk

That’s called rebalancing.
Look it up and yes, you should do it to maintain your portfolio’s target asset allocation, though I won’t comment on the specific ETFs.

#60 Dr. Bunsen Honeydew on 11.15.13 at 12:32 am

You Torontonians sure have got one whale of a mayor.
Heck, he got fourth place on the BBC world news site this evening.
Wow. Just wow.

#61 Ralph Cramdown on 11.15.13 at 12:36 am

#38 Catalyst — “For some perspective, firefighters/police in New York make 45K, in toronto they make 90K.”

10 seconds of research reveals that an NYPD officer with 5.5 years on the force makes $91k plus overtime. When you read something ridiculous, it never hurts to check. “Trust, but verify” said some guy.

#62 Tiger on 11.15.13 at 12:38 am

DELETED

#63 Holy Crap Wheres The Tylenol on 11.15.13 at 12:39 am

Just finished watching John Stewart on The Daily Show. Thanks to Rob Ford he should get an Emmy next year. I bet John Stewart and all of the other talkshow hosts are praying Rob Ford does not get removed from office. It’s like shooting ducks in a pond!
OMG could it get any worse? Tune in tomorrow, same Bat time, same Bat channel.

#64 Marco from van on 11.15.13 at 12:39 am

#55 cici…

I am in the software industry… I leave those other more profitable businesses to those more courageous. I run a global operation for a US employer and have a couple of personal ventures in other high tech on the side – none of my business is actually based here or for the local market.

Mobility, flexibility and agility are absolutely key so I can move to where the opportunities are… I chose to be in Van until it is no longer the right place. For now it suits my needs,

#65 Fed-up on 11.15.13 at 12:42 am

@#29 Franco on 11.14.13 at 10:51 pm
The long term trend will eventually catch up and not by falling prices either.

————————————————————————————————–

I see. So home prices will stay the same while people’ s currently over-inflated salaries increase by another 150%

Sounds plausible.

#66 Tiger on 11.15.13 at 12:54 am

That’s Darrell penner councillor city of Port Coquitlam bc
Played at this place (Robert pictons )home as in a band tottaly illaglep the way it shouldn’t be

#67 Brian Ripley on 11.15.13 at 12:58 am

re: Bank of Canada “…speaks of growing strains which could lead to a housing plop. They include an imbalance in the ratio of house prices to incomes…”

I took a look at The Economist’s housing index data base today and compared Canada, U.S., Japan and Ireland since the DotCom blowout in 1Q 2000 and also looked up the Conference Board of Canada’s GDP per Capita comparisons.

The mashup is here: http://www.chpc.biz/2/post/2013/11/canada-vs-ireland.html

As for The Irish Miracle “The case is clear: an economically challenged government, perniciously influenced by the interests of the housing lobby, blew it. The entire Irish episode will be studied internationally in years to come as an example of how not to do things.” (David McWilliams)

And my riff on the Vancouver Real Estate Board’s housing chart is called Bull Horse Mountain http://www.chpc.biz/bull-horse-mountain.html

As you can see there has already been a stair step down in Vancouver sales and we are now at the beginning of the next seasonal sales drop going into the spring of 2014

#68 The Dude on 11.15.13 at 1:29 am

#48 Ben, are you serious man? Get real. “10 times as long”.

Garth, what’s so hard to understand? Since 2009 you have been dead wrong about interest rates rising and the strength of the housing market. You were spot on with the gold bust, but anyone who listened to your advice in 2009 has lost out on some serious equity with regards to housing, simply because you were wrong about interest rates rising. Check the chart and factor in more equity being paid down with lower interest rates.

You don’t get it. It has nothing to do with their boomer parents, it has to do with the fact that Gen Y-ers want to build some equity. The reason 30-somethings are still buying houses is because they can still slap 5% down on a home. And why the heck would they put anything more down than that with today’s interest rates? Money is virtually free right now. You know that. This thing ends when both: 1) virgins can’t come up with a down payment large enough, and 2) a rise in interest rates forces lower prices. I’m pretty sure we’ve hit 1), so prices will be sticky until the day variable rates are back up to ~5%. It’s not rocket science dude.

The Dude.

#69 retired Boomer - WI on 11.15.13 at 1:29 am

Markets & sentiments can turn (sour) on a moments notice. Could be something as common as a storm, a big business in trouble, international events, hemorrhoids.

Big GAINS in the real Estate you own are NOT big gains until they are realized. Miss the market, and you have merely a house.

Here in the US we saw prices in the most bloated markets fall by 70%. Naturally, job losses both preceded and followed the melting of values until they hit the bottom.
This did not happen overnight, but over a period of a few years.

Where will you be when the melt starts? Will you be able to “see” what is happening, or stand by like a deer in the headlights until you are struck down? Think!! Act!!!

SM’s UCC has a warning device…if you can tune to it.

#70 The Dude on 11.15.13 at 1:41 am

The reason the young aren’t as mobile is because major cities are much larger then they used to be, so staying near one city can provide all the opportunity one needs without haven’t to travel much further.

The Dude

#71 KommyKim on 11.15.13 at 2:05 am

RE: #26 Carpe Diem on 11.14.13 at 10:49 pm
My kid is getting an RBC Direct Investing test account this summer and we shall have a fun game.

Why not just build a portfolio using Google Finance today?
https://www.google.ca/finance?hl=en&tab=we

#72 Andrew on 11.15.13 at 2:16 am

I would really like to see links to your sources, as I do not altogether trust that bar graph. (I do not, however, doubt the conclusion.)

#73 Observer on 11.15.13 at 2:51 am

@ Ralph Cramdown

I quoted Hunter Lewis, whose article happened to appear on the Fox website. I’m not myopic to the point that I automatically write someone off because they appear there any more than if they appeared on CNN.
His cred looks quite good to me. By the way, Japan has had low rates for a long time and we know what has happened there.

#74 Infused with Opiates on 11.15.13 at 2:52 am

5 Cdn RE update – the comparisons are meaningful only
if we assume the Cdn and US markets were at the same
points in 2000. Better to use the straight ratios from the US peak to Canada today.

58 Ralph – while I provide no data for the effects of the ZIRP, I believe them to exist to a considerable extent. Savers will save more of their total income to offset lower growth, those living (partially) off fixed income
simply dont have as much income to spend, and thirdly
(the least quantifiable) ZIRP sends a message that there
is an underlying problem with the economy causing
hesitation to make large purchases. I believe this was either brought up by or to “Blog dog Carney”.

14 Liquid – that is an option which doesnt seem to get
mentioned much here. Probably works even better if you have no mortgage. I’d like to hear from others who have
done this how it works and what to watch for.

#75 TheRealTruth on 11.15.13 at 3:00 am

That graph at the end of the post suggest Vancouver”s prices are higher than ever!

Lack of High end sales ($2.5 Million plus) are skewing the average price downward s compared to 2 years ago, yet it is at record highs.

Now that we know rates are going to stay at zero for a while, when on this blog are we going to talk about the phenomenon of concentrated settlement patterns of immigrants over the last decade? Plus the addition of TFW + TFS?

#76 TheRealTruth on 11.15.13 at 3:02 am

#49 Joe:

How dare you mention that subject here.

#77 rocko on 11.15.13 at 3:11 am

#39 Waterloo Resident: I think you got some bad information. Standard day rate for a rig hand is ~350 with no experience, roughneck make about 500 and a driller around 700. These guys work only 200 days a year and all expenses are covered when working including food and camp. Much more than the $35k you quote. Even the water truck driver starts at 200/day.

Trust me, I’m usually the most educated guy up there and likely the lowest paid. Should have been a rig-pig, more money in it than engineering…but then again, I have a corner office with a mountain view…

#78 Spaccone on 11.15.13 at 3:39 am

@16 SM

Traffic in Toronto is absolutely horrendous, I mean the worst I’ve ever seen it. As a very recent example, heading to the core in the offhours it took me 25-30 minutes to trasverse about 30ish km of highway, and 30-40 minutes to navigate 2 km in the core. We really could stand to convert wide states of the frustrating stop-and-go traffic control method to roundabouts. Once you’ve driven a primarily roundabout system it’s hard to go back.

#79 gtrz4peace on 11.15.13 at 5:24 am

Hey Garth,

Please excuse the typos in the previous 2 versions of this — it’s late and I am very tired — but here is the one to print.

We agree that real estate is overvalued, and a bubble here. But we take exception when you start talking about how people become “conservative” and “resist change.”
What kind of change? Like Fracking operations that want to move next door (destroying your drinking water) or pipelines nearby, or plants that will spew pollutants into water and soil? Or change like a Big Box store coming in, when many people know that, as small as local businesses may be, the Big Box Stores also kill local business and create “McJobs” – low paying jobs that in some cases, can be closer to slave labor.

Residential communities opposing that kind of development are to be applauded. At least the lemmings are standing up for something.

As to home ownership being a negative, the truth is many of us have situations that make finding a rental very hard. Specialized needs like chemical sensitivities, large dogs, allergies to carpet, etc. We are personally finding it impossible to move and rent without paying significantly more than we would staying in our home.

Vancouver sucks as much for renting as it does for too-high real estate. No arguments there.

#80 P.Bocanegra on 11.15.13 at 5:53 am

http://www.nakedcapitalism.com/2013/11/ilargi-deflation-a-stock-market-crash-and-then-christmas.html

From the comments:
“Sometimes I wonder whether if the world is being run by smart people who are putting us on, or by imbeciles who really mean it”.

#81 Jason on 11.15.13 at 6:06 am

Seems to be true! calgary’s ownership peeked much higher than Edmonton’s back in 2008 & their unemployment was much lower back then. Now, their unemployment rate has pushed up to close to 5%! In the meantime Edmonton’s average house price plunged 6 % since the peak in May this year. the RE board is spinning the facts saying sales are up over Oct. 2012.

#82 P.Bocanegra on 11.15.13 at 6:48 am

“For some perspective, firefighters/police in New York make 45K, in toronto they make 90K.”

Yeah, this is complete and total garbage.

#83 Tripp on 11.15.13 at 7:23 am

#5 Canadian Real Estate Update

Thanks for putting those numbers together. Quite scary!

#84 Obvious Truth on 11.15.13 at 7:38 am

Great shifts in technology have always caused employment dislocations.

The Windsor area has had high unemployment since the auto industry started to shrink. It will survive and adapt. Towns with universities always grow.

The Waterloo area in contrast has exploded. There is no stopping that region. I predict it will be the most important regional centre in the country. It won’t take 5 years. The talent there is astounding. Google is quietly building new offices as we write. Lazaredes is still laying the groundwork. I bet the university is top 5 in NA for technology.

There is a huge shift taking place. As I drove through London a few weeks ago the closure of many plants was evident. Small motor this widget that. But if you look close you see thisteck and thatsolutions everywhere. They are the new suppliers to the service sector and industry.

Kudos to the kid. If you’re reading this you see the big money has shown up today. Tell Garth you want to be like them. He will tell you what it takes. Go make your fortune. This is a dream you can fulfil in only a few countries in the world. Upward mobility and opportunity still exists here. Perhaps then housing will bore you too. Maybe you’ll be an employer one day and help grow our economy. The new one.

#85 Devore on 11.15.13 at 7:38 am

#70 The Dude

The reason the young aren’t as mobile is because major cities are much larger then they used to be, so staying near one city can provide all the opportunity one needs without haven’t to travel much further.

Your premise is wrong, and so is your line of reasoning.

For one, the unemployed and soon to be unemployed from Blackberry are going to disagree with you, and so will the workers at the (former) Heinz plant. And ask any recent post-secondary graduate for their opinion on the matter of employment choices, or maybe our resident whiner-in-training will chip in.

While population has increased over the last decade, “much larger” is a gross overstatement. Economies of nearly all major Canadian cities are shockingly undiversified. If you are willing and able to relocate, your opportunities multiply. This is so obvious, I can only assume you are trolling, and your other comments certainly indicate so.

#86 Devore on 11.15.13 at 7:52 am

#79 gtrz4peace

As to home ownership being a negative, the truth is many of us have situations that make finding a rental very hard. Specialized needs like chemical sensitivities, large dogs, allergies to carpet, etc.

My gosh, it really is different here. Not only are our house prices destined to remain high forever, but we are more sickly and sensitive than people in other countries. Our dogs are also larger than dogs in other countries. Oh my, this is a quandary indeed. I better buy a house, because my carpeted, chemical-laden apartment is apparently slowly killing me.

Before you crucify me on the altar of political correctness, the references in today’s blog refer to the aggregate. Obviously, there will be individuals with real needs so particular that they are difficult to house in average accommodations, rental or otherwise, while you are projecting your individual circumstances to some large portion of the population. This is a common affliction, and very human.

#87 neo on 11.15.13 at 7:58 am

Last year I remember the lineups for the New Mattamy development in North Oakville, which is closer to Milton than where the CEO’s live in south Oakville. Anyway, a year later and all those people lining up and they still have a little less than half their available lots for sale. You can lead a horse to water but…

http://www.mattamyhomes.com/GTA/Communities/Oakville/The-Preserve/

#88 Buy? Curious? on 11.15.13 at 9:01 am

Conseravitives, More Hippies, less hipsters, but stills feel like hemoroids.

WooHoo Garth! Predictions of Condogedden are coming true! Just wait until the glue keeping those condos together start flaking out like Rob Ford. Say, what has done more to put Toronto on the map, SARS or Rob Ford? No wonder he keeps his wife out of the spotlight.

A family friend has had her house in Oshawa on sale for over 6months with no intention of reducing her price. I don’t why she bothers.

(I was going to put up the link from a Tarintino movie, Dusk till Dawn with Cheech Marin doing the marketing for a Gentlemen’s club on the outskirts of Mexico, but I knew you’d delete it. See? I know the rules and I’m respectful.)

Rob Ford will be opening up for Kat Williams at CasinoRama later this year. I suggest you get your tickets now! You’ll get a 10% if you tell them you’re with Buy? Curious? 20% if you mention Smoking Man!

#89 Oprah McLeod on 11.15.13 at 9:04 am

A 26 year old with $85,000 in savings making $90,000/yr.

If you are going to keep making up stories…at least make them believable.

It’s a generous, but not unreasonable, pay grade for an experienced (three years) IT guy in the GTA. Where he got the bank account, I have no idea. Sorry for your inadequacy. — Garth

#90 maxx on 11.15.13 at 9:12 am

Yet again, a great eye opener. Excellent post Garth.

Another lovely feature of this catalyzed economy-melting house lust/psychosis is that, when an owner is looking under the sofa cushions to make payments and carrying costs, how much cash does s/he have left over to spend in the broader economy? Not much!

Unless of course s/he resorts to spending on consumer credit. Oooops! Too much of that (and there’s no sign of that freight train slowing down anytime soon) quickly destroys national economic health as well.

Stories abound of borrowing on one card to pay another; paying mortgages, rent, taxes, etc on lines of credit; using HELOCs to pay down consumer debt then racking the debt back up again……at a current rate of 1.63 percent of every dollar earned.

What a complete disaster.

This mess would have been so easy to avoid and this country might have been a genuine world leader in fiscal acumen. From our leaders, right down to youngsters in first grade opening up their first savings accounts.

Well done F and BOC! Was the dance of the sugar plum fairy on the world stage of G8’s enjoyable? The world at large may have believed the caped crusaders for a wee while, but now, it sees differently.

And comparisons to other world economies just don’t cut it. Many see this cheap device as a convenient way to justify painful and stupid austerity measures on social programs which were largely already paid for.

But gold-embossed business cards, limos, vanity projects galore, senatorial and governmental entitlements, etc., etc. are all fine.

Economic Action Plan. Anyone?

For at least a decade now and with acceleration going forward, money has gotten much harder to earn, and evaporates waaaay easier than it used to because jobs are disappearing daily and we are taxed and fee-ed to death.

Protect yourselves. Get creative and see just how far you can stretch a dollar. You’d be beyond amazed.

#91 CrowdedElevatorfartz on 11.15.13 at 9:34 am

@#27 Hummana Hummana

Do we work at the same place?

#92 CrowdedElevatorfartz on 11.15.13 at 9:39 am

@#60 Dr Bunsen
Yup. Thats the Mayor of Toronto. And he wears his Maple Leafs jersey with pride…..

#93 CrowdedElevatorfartz on 11.15.13 at 9:40 am

@#63 Holy Crap….
No, its like shooting a whale in a pond………..

#94 Toronto Condo rents flat???? on 11.15.13 at 9:43 am

http://www.thestar.com/opinion/commentary/2013/11/14/torontos_amazing_condo_boom.html

While rents in the seven most attractive U.S. cities are spiking, rents in Toronto remain comparatively flat due to our bountiful supply of condominium units.

@CanadianWatchdog
The above matches what I see on MLS condo rents…
I wonder what is their data source.
Your observations based on Kijiji rents indicated that rents are increasing.

#95 Smoking Man on 11.15.13 at 9:50 am

I was seriously considering importing Indiana Jones hats and selling them on line for crazy prices. Branding SM logo. Super man logo turned upside down.

After watching the events of late at city Hall. There is no market for heterosexual proud white men.

Plan b

Import Man Purses,
SM will mean soft man with a flower in the logo. I will make a commercial, be in tights, pink shirt and socks while holding a yoga mat.

I will inhale huge breaths of helium before I speak to hit the right octave.

Trade my pick up for a bike with peddles.

The only way I can connect with the wangless men of this city.

But it will out sell Man’s man hats by a ratio of 4 to 1

#96 700K -the resistance point for prices in TO on 11.15.13 at 10:01 am

This is interesting, for SFHs, if you eliminate the >1$M sales the average is slightly above 600K (couple of thousands). Median is close to that (580K)

Since eliminating the >1M sales will imbalance the mix of numbers your next step would be to eliminate the <500K and recalculate the average and you get 693K and 672K

These are peak values reached in October and May June, with very small variations in between. This shows that for the under 1M market the prices are practically flat with most of the sales in this range.

As some stupid commenter on the RedFlagDeals forum likes to say, the current interest rates will continue to enrich the rich. From the above perspective I think that "the rich" are now selling homes to each other taking more and more credit. If that is the case then let them be rich :-) .

#97 Ralph Cramdown on 11.15.13 at 10:20 am

#74 Infused with Opiates — “while I provide no data for the effects of the ZIRP, I believe them to exist to a considerable extent. Savers will save more of their total income to offset lower growth, those living (partially) off fixed income simply dont have as much income to spend”

Do many savers actually do this? The investment industry uses long term average rates of growth, knowing full well that there will be periods of underperformance and periods of outperformance. Then the calculation might be presented as “if you save $600/month from now to retirement, you should have enough to last 25 years after that at 70% of pre-retirement income.” Approximately nobody recalculates every year and adjusts current consumption versus savings, do they? Also, the theory seems to suggest that savers are 100% in government bonds. A US saver with a 60/40 stocks/bonds weighting is up 12% this year, perhaps an older one with a 40/60 weighting is up 8%. This is repression?

Further, the mainstream economic theory is that people will be MORE compelled to save if the (interest) rewards are great, and tilt more toward current consumption (perhaps buying a new car at low finance rates) when rates are low. This seems to be how it works when the Fed adjusts rates.

And those on a ‘fixed income?’ For today’s retirees, a good fraction of that is usually social security and pension income, neither of which are affected by low rates. The remainder is usually a combination of income and depletion of saved capital. Yes, lower rates deplete capital faster, but just as in the saver’s case, plans are based on an average rate of return with full knowledge that they will vary over the retiree’s lifetime.

The argument is more suited to a character in a Jane Austen novel, living strictly off the income from his capital, which he doesn’t touch because it goes to the next generation for maintenance of the family estate. There aren’t many like that today (not that there ever were…), and economic policy should be aimed at the majority.

#98 Mr. Frugal on 11.15.13 at 10:26 am

Everyone it too focused on living and working in Toronto. Perhaps there are better opportunities for you people elsewhere. I would advise young people to learn a trade (e.g. welder, pipe fitter, etc.) and live in a small town outside of the GTA. You will make almost as much money and benefit from lower cost housing. Then if you couple this with Garth’s brilliant investment advice and build an investment portfolio which is liquid, diversified and balanced you will come out ahead in the long run.

#99 Randy on 11.15.13 at 10:32 am

In Ontario over 300,000 public servants have been added directly and indirectly by the McWynnity Government over the past 10 years….Maybe they are adding to the bidding frenzy in the real estate markets since they have job security, above-market salaries and defined benefit pension plans….

And that pales in comparson to the bloat Mr. Harper has caused in the federal ranks. — Garth

#100 Iso-Classical on 11.15.13 at 10:43 am

“The result is predictable – burning a litre of gas to go find a litre of milk.”

No sh*t! You should see Sherwood Park, just to get Timmy’s will take 30 mins out of your day…15 mins just to get out of the sub-division.

#101 Ralph Cramdown on 11.15.13 at 10:52 am

Cui bono?

As I mentioned above, the average American saver on the street is probably happier right now than he was a year or five ago. His house has started to go up in value again, and he has nice gains in his 401(k) (like an RRSP).

So who’s unhappy, and wailing about the repression of savers? The really rich, that’s who. If I had a net worth of high-eights to ten figures, I’d have a lot of it in US government bonds (why risk your money when you’ve got enough that you’ll never run out?) and my two biggest concerns would be inflation and the interest rates on those bonds.Among American households, who owns the Treasuries?

“Back in the 1970s, for example, the richest 1 per cent of Americans “only” held 17 per cent of all the federal bonds that were in private sector hands. This was partly because during the second world war and in the immediate aftermath there was a strong attempt to distribute Treasuries widely. But since the 1980s, the proportion of debt owned by the top 1 per cent started to rise sharply, hitting 30 per cent in 2000 and 42 per cent in 2013. The last time it was this high was in 1922, when the ratio was 45 per cent.” — http://www.ft.com/intl/cms/s/0/90618d30-4d05-11e3-9f40-00144feabdc0.html?siteedition=intl#axzz2kcVHhIUW

THAT’S why the press (owned by…?) is screaming about financial repression. Those people don’t care about unemployment rates, house prices, or even much about stock market levels. Interest rates and inflation only.

#102 Everything is OK on the Toronto condo market on 11.15.13 at 10:55 am

To get a sense of just how far ahead, consider some of the usual suspects: Chicago, Boston, Manhattan, Atlanta, Los Angeles, San Francisco and Miami, which collectively gained 34,330 new residential housing units between 2009 and 2012, according to data collected by the U.S. Census Bureau.

Over the same period, according to city statistics, Toronto alone gained 56,444 new units — 20,000 more than the U.S seven put together. You have to add Seattle, Minneapolis and Philadelphia to the U.S. side of the balance before it tips. In broad terms, Toronto is building 10 times as much new housing as any comparable U.S. city.

http://www.thestar.com/opinion/commentary/2013/11/14/torontos_amazing_condo_boom.html#

This is probably a comparison factor that can be added to this list:
http://www.greaterfool.ca/2013/11/14/conservatives/comment-page-2/#comment-271105

I bet you that if we count the total number of condo units built in Canada we have built 10 times more than what they built in US:
US population: 313 mil
Ca population:34 mil

Population growth rate:
http://www.indexmundi.com/g/g.aspx?v=24&c=ca&c=us&l=en

So you wonder how the heck is this sustainable, we build more condos than they do, we are ten times smaller than they are in every respect excepting RE, yet the prices are still rising?
WTF is buying?
I know I know, Asian investors and immigrants. 200K immigrants every year whose biggest dream is to leave their small homes in their countries and come here to live 4 persons in a 600sqft condo.

Something does not add here!

#103 Poorgeoisie on 11.15.13 at 10:55 am

Dude #68 people that listened to Garth back in 2008-9 were listening to well reasoned advice. People that ignored him and bought do appear to have made money but neither knew that the CMHC limit would be raised to 600b. If it were a hockey game and Garth’s team was up 10-0 it would be a safe bet that Garth would win. A stupid person would bet on the other team, but if the ref decides Garth’s team has to pull their goalie and only ice 3 skaters while the other team gets to play all their players at once then that stupid person gets to pretend that they are smart.

The game is not over. — Garth

#104 Infused with Opiates on 11.15.13 at 11:10 am

96 700k – a completely illogical methedology.

97 – Hi Ralph. I think you have to acknowledge the effects are there, but, as you have stated, to what degree do they affect the big picture?

I believe a normalization of rates will help the economy
in many ways after the initial cold shower.

#105 Rusty Venture on 11.15.13 at 11:23 am

#77 rocko – Do most of these camps employ welders, or are welders only needed for setup?

My son will be finished his welding course by the start of summer and will have his red seal ticket.

I know the camps feed well, because these guys burn a lot of calories, but do they have internet?

#106 Macrath on 11.15.13 at 11:34 am

The Leamington plant, the second-largest Heinz plant in the world closing. The farmers and the towns people devastated. I lived there for a while after retirement and you would be hard pressed to find nicer people anywhere.

Honest and hard working just doesn`t cut it any more. They still had an honour system for buying tomatoes and cucumbers from the growers road side stands. Incredible in this day and age.

Wake up Canadians your Country is going down the drain!

http://business.financialpost.com/2013/11/14/heinz-leamington-job-cuts/

#107 Mixed Bag on 11.15.13 at 11:46 am

#95 Smoking Man on 11.15.13 at 9:50 am

Those man purse comments have me laughing at my desk, for a good, long while.

#108 Steven on 11.15.13 at 11:55 am

Rising land and house prices kill construction jobs due to pricing the customers out of the market and this means less production and ultimately unemployment and demographic problems. Also construction workers do not get paid enough to buy houses and that is a fact and it does not matter how expensive houses get.

People like me are conservatives, people like Stephen Harper and Brian Mulroney are liberals in disguise and that to is a fact. If it were not the case Canada’s national debt would have been paid down or paid off by the Harper or Mulroney led conservative governments.
What does conservatism in existing canadian political parties stand for? Answer: Fiscal and moral irresponsibility, globalism,zionism and socialism. This is not the solution to Canada’s problems, it is the problem!

You’d better explain the relationship between fiscal irresponsibility and Zionism. — Garth

#109 Snowboid on 11.15.13 at 11:55 am

#38 Catalyst on 11.14.13 at 11:22 pm…

The actual starting salary for a Toronto firefighter is $ 52K, the $ 90K you mention is with five years experience (1st class).

The starting salary in NYC is lower at $ 43K, but after five years it’s $ 99K or about $104K CAD.

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

#39 Waterloo Resident on 11.14.13 at 11:23 pm…

Our young relative started as an entry-level worker west of Edmonton, and clears $ 2000 a week.

That’s certainly more than $ 34K a year, unless he only works 17 weeks a year!

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

#40 Sparky55 on 11.14.13 at 11:23 pm…

Wonder if this has anything to do with McDonalds changing condiments from Heinz to another supplier?

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

#89 Oprah McLeod on 11.15.13 at 9:04 am…

We had independent contract DBAs and DAs making in excess of $ 100K back in 2005 – ages were mid-20s to early-30s.

#110 LP on 11.15.13 at 11:56 am

#84 Obvious Truth on 11.15.13 at 7:38 am


Kudos to the kid. If you’re reading this you see the big money has shown up today. Tell Garth you want to be like them. He will tell you what it takes. Go make your fortune. This is a dream you can fulfil in only a few countries in the world. Upward mobility and opportunity still exists here. Perhaps then housing will bore you too. Maybe you’ll be an employer one day and help grow our economy. The new one.

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

I have no idea if the rest of your post is true or wishful thinking. However, your last paragraph is a breath of fresh air today. Your positivity (is that a word?) and optimism is much needed, not only among the young, but for us seniors who must rely on the strength and capability of the young to keep our economy growing into the future.

And please, Don D West, don’t assume I’m thinking of the young as a means to keep me in the style I’m used to – my husband and I have pretty much looked after that ourselves with our own hard work and perseverence.

#111 angela on 11.15.13 at 11:57 am

Lockheed Martin Cutting 4,000 Jobs, Closing Plants but the company is up 49% this year
“Amazing” production is way down but shares are up is this what a recovery looks like in america
http://abcnews.go.com/Business/wireStory/lockheed-martin-cutting-4000-jobs-closing-plants-20886868

#112 eddy on 11.15.13 at 11:58 am

#106 Macrath on 11.15.13 at 11:34 am

The Leamington plant, the second-largest Heinz plant in the world closing. The farmers and the towns people devastated

any Ontarian who buys anything with the name Heinz on it deserves to have their ass kicked all the way to Ottawa where they can tell the Globalist PM that in a healthy economy ‘producers and consumer need to be the same people’ (Ellen Brown)

#113 Steven on 11.15.13 at 12:09 pm

Re:#106

When you consider the fact that global warming is a lie and we are facing a little ice age or even a big ice age then Heinz is doing the smart thing even if it hurts canadian jobs. Once either cold climate event kicks in tomato growing will be nonviable any way.
Canadians will have a choice with a little ice age grow cold tolerant crops or risk high prices and or starvation.
With a big ice age it is either move to the southern united states or die! As for canada’s precious real estate values canadians can kiss all that good bye forever. Only life and portable real assets will matter.

Are you a thawed mastodon? — Garth

#114 Smoking Man on 11.15.13 at 12:22 pm

DELETED

#115 happity on 11.15.13 at 12:22 pm

If real estate controls the employment rate so predominantly, it just shows the real economy has been transferred to Asia. And that the stock market rise is linked to central bank printing – which by the way is a fact, just look at such a chart.

It also means those who sold all their tangibles into a blinking light on a computer screen are beholden to the central banks, who have admitted they don’t really know what they are doing.

#116 To the "there is no more land" idiots on 11.15.13 at 12:37 pm

Breaking news: There is no more land in Hong Kong!!! The buyers must have stopped buying because they don’t have anything to buy

Figures from the Land Registry show that there were only 3,426 residential units sold in October, a drop of 60.7% year on year and of 7.1% compared with September. On a rolling three-month basis, the number of all types of building units being sold is at its lowest level since March 2001.

http://www.businessinsider.com/hong-kongs-economy-is-in-the-calm-before-the-storm-2013-11

#117 Herb on 11.15.13 at 12:44 pm

#95 SM,

don’t forget to hire Don Cheri as your poster boy in pink.

#118 Squatter on 11.15.13 at 1:14 pm

#95 SM:
Why not wear a pillow and inhale lots of helium.
That way you could become a zillionaire selling maternity clothes!

#119 Macrath on 11.15.13 at 1:19 pm

#112 eddy

This goes way beyond the loss of a few jobs, the slow bleed of our economy by a thousand globalist cuts.

This is the immediate destruction of an entire productive region of Ontario by a bunch of greedy corporate scumbags. Unprecedented corporate treachery !

#120 TnT on 11.15.13 at 1:21 pm

#103 Poorgeoisie on 11.15.13 at 10:55 am

Dude #68 people that listened to Garth back in 2008-9 were listening to well reasoned advice. People that ignored him and bought do appear to have made money but neither knew that the CMHC limit would be raised to 600b. If it were a hockey game and Garth’s team was up 10-0 it would be a safe bet that Garth would win. A stupid person would bet on the other team, but if the ref decides Garth’s team has to pull their goalie and only ice 3 skaters while the other team gets to play all their players at once then that stupid person gets to pretend that they are smart.

The game is not over. — Garth

*********

Therein lies the problem with this game…

Either side claims victory by extending the periods on which to keep score.

#121 Wilbur on 11.15.13 at 1:30 pm

http://money.ca.msn.com/savings-debt/yourmoney/home-sales-up-nearly-40percent-in-vancouver-area-1

Don’t always believe what you read… This will end badly…

#122 TnT on 11.15.13 at 1:32 pm

#84 Obvious Truth

This reminds me of the general story behind NASA employees after the Apollo missions were cancelled.

You ended up having a huge brain pool of geniuses sitting around. It’s their nature to think and keep busy.

That brain pool went on to create, added and or contributed to the new Computer Industry….

I have faith that this pool of kids are going to be fine and contribute to the next big “thing”….

PS… I love your posts OT. It’s much needed optimism and compassion on this blog…

#123 Son of Ponzi on 11.15.13 at 1:34 pm

Carpe Diem #26
My son is an elite Bantam Hockey player.
He will play in the NHL.

#124 Ralph Cramdown on 11.15.13 at 1:38 pm

#112 eddy — “any Ontarian who buys anything with the name Heinz on it deserves to have their ass kicked all the way to Ottawa where they can tell the Globalist PM that in a healthy economy ‘producers and consumer need to be the same people’”

Yes, let’s have a moment of silence for all those migrant Mexican and Jamaican seasonal tomato pickers who from now on will only be able to afford store brand ketchup when they get back home.

#125 TorontoBull on 11.15.13 at 1:49 pm

@95 SM- your support for RF reveals a lot about you. See the whole analysis done by someone who is ‘schooled’ but pretty darn good nonetheless. You may see your profile on page 9:
http://metapolis.ca/wp-content/uploads/2013/06/Progressive-Coalition.pdf

#126 Bottoms_Up on 11.15.13 at 1:52 pm

#100 Iso-Classical on 11.15.13 at 10:43 am
———————————————
That is a failure of urban planning and those planners, developers and city rubber stampers should all be ashamed of themselves.

#127 Josh in Calgary on 11.15.13 at 1:54 pm

#13 Ray Skunk,
I’ll agree with #59 here. Rebalancing is KEY to investing. You don’t invest in a balanced portfolio because they all go up at the same time. Some will go up and others will go down. But at some point the ones that went down are the better value and the ones that went up are the most at risk of going down again. you take your profits from the ones that went up and rebalance by buying the ones that went down.

You picked your original allocations for a reason. Unless you messed up in the first place then stick to your guns and rebalance.

Like #59 I will not comment on specific ETFs. But it sounds like with 10 or so you should be adequately diversified (remember, ETFs often hold 100+ different companies to begin with). As to the REITS you clearly bought near the top. But they kick out distributions (which is why you bought them). So now that they are cheaper (on sale), it’s the perfect time to top them back up to your original allocation.

Also make sure you have fixed income. One ETF for government bonds (lower return and lower risk) and one for corporate bonds (higher return and higher risk) should cover it. Most people will allocate from 30 to 50% for FI.

One final note. I recently found out that my self directed account (one of the big banks) offers a series of mutual fund available only to self directed account. The MER is drastically reduced from the same exact mutual fund pedalled by the “investment advisors” in the bank. Basically you save money by not having the “investment advisor” in the loop. Compared to ETFs the MER is only slightly higher, but you don’t get hit with the trading fee and the return (after MER) on a 1yr 2yr and 5 yr basis are all higher. Just throwing it out there as an option to make the point that ETFs are great, but not ALWAYS the better bet.

#128 Toronto_CA on 11.15.13 at 1:58 pm

#120 TnT on 11.15.13 at 1:21 pm

It’s called Reversion to the Mean. When bubbles form and burst then overshoot on their way down, they will eventually revert to their long term historical means (for housing this would be in relation to rents and incomes).

We all know that extremely cheap, easy to obtain credit is responsible for the current bubble, with a sprinkle of fault on media/marketing induced house horniness.

#129 Bottoms_Up on 11.15.13 at 2:00 pm

And that pales in comparson to the bloat Mr. Harper has caused in the federal ranks. — Garth
———————————————
Careful there Garth as there was a reasonable initiative for ‘public service renewal’ that was/is desperately needed as the Liberals (inappropriately, with zero foresight) turned off the hiring tap in the 1990’s. There is now a significant age gap in the public service (deficit of individuals aged 41-50), and the baton is now being handed down to perhaps less experienced individuals than there otherwise would have been:
http://www.tbs-sct.gc.ca/res/stats/demo12-eng.asp#toc23

#130 Macrath on 11.15.13 at 2:12 pm

#124 Ralph Cramdown

All the millions of tons of field tomatoes are harvested by machines owned by indebted Canadian farmers under contract for $99 a ton. Most crops are harvested by expensive machinery. But there might be a few jobs left for Canadians shoveling manure at the mushroom plant once the foreigners are gone.

#131 not 1st on 11.15.13 at 2:13 pm

Garth, you weren’t really a conservative in govt were you? I don’t see you in the same threads as Harper and crew.

#132 Michael on 11.15.13 at 2:14 pm

As much as I agree Vancouver housing is ridiculously overpriced, the trend line is incorrect. It shouldn’t be a straight line, it should be geometric (or the scale should be logarithmic).

#133 subprime on 11.15.13 at 2:15 pm

Wow TSX hits 2 year record high of 13,500….I’m getting an overwhelming urge to buy stocks? Everyone else is so why not me? Now’s the time. Maybe I’ll call my brother-in-law for advise cause he had some of that gold stock before. bre.. something. “I am a winner!” “I am a winner”

#134 TnT on 11.15.13 at 2:38 pm

#125 TorontoBull

Now is the perfect time for John Tory to get in the race.

He is a squeeky clean conservative that will pull Toronto back to the “good” and may provide a viable candidate for those who just can’t hand the keys back to the Ford….

#135 Westcdn on 11.15.13 at 3:29 pm

I was doing my usual prowl among various websites looking for an edge against the TPTB when I came across this 1:20 hour video. Is this the message or a form of it that SM wants us to hear? http://www.youtube.com/watch?v=0Dcyt2fA9GM#t=4010
Anyway, my general impression is that debt deflation is not imminent so party on. I am watching the 10 year US Treasury rate as a warning to get ready for a storm. If it gets above 3% I will start to play defense. GLTA and myself as I will need it. I often thought that all a successful manager had to do was get the right people in the right place at the right time. Unfortunately, timing seems to be God’s domain but 2 out of 3 is still a good result for me as long as I remember my limits.

#136 TorontoBull on 11.15.13 at 3:34 pm

@132
I wish you are correct, BUT he is too ‘elitist’ for FORD NATION. Plus the have the “loser’ brand attached to him unfortunately

#137 rosie "moving forward" in the knowledge that, "this won't end well" on 11.15.13 at 3:44 pm

If I buy one of these can I please be a hipster. http://www.cbc.ca/news/canada/british-columbia/new-surrey-mini-condos-have-foldaway-walls-beds-1.2425879

#138 Rexx Rock on 11.15.13 at 4:11 pm

The housing market gravy train should have a couple more good years left.Everbody who bought in certain areas are sure laughing their way to the bank.Its still the best way for Canadians to gain wealth as I see it for a while except condos.Canadians will always want to own a home,that is a given,there is no denying it.Renters are always looked upon as poor or uneducated.

#139 bruce c on 11.15.13 at 4:13 pm

DEAD CAT BOUNCE> Too late the few months of rising sales are over. Day to Day sales across Canada have stagnated. We are now officially in a correction.
Yes remember this date. Nov. 15th 2013. Every day prices will continue to fall. news from REAL EST. Sales stats as of
Monday have leaked out. Condo crash has begun and its worse than they thought. This will be a Boodbath….

#140 Rusty Venture on 11.15.13 at 4:13 pm

#129 Bottoms_up. Good catch. I disagreed with Garth’s statement, but hey, he’s good enough to host this blog.

Figure 10 is also quite telling. The proportion of executives and economists has tripled in the federal public service, at the expense of inspectors, scientists, operational and technical folk – in essence the people who inspect and monitor your planes, trains, food, fisheries, the environment…

#141 aprilNewwest on 11.15.13 at 4:43 pm

#139 – bruce c – CBC just now saying Canadian home prices continue to go up not that I believe the media especially when the numbers are coming from the real estate gang. I only heard the headline as I turned it off then.

#142 kilby on 11.15.13 at 4:45 pm

Watching CHEK news in Victoria last night, trumpeting “great news” for Victoria, 10,000 new units to be built to handle the housing demand. CBC NewsWorld today….Prices and sales all rising not a bubble. I can’t believe all the analysts and the Federal government have their heads this deep in the sand….NONE of the fundamentals are in place to justify this and every month makes the potential for a disaster worse..Talk privately to any realtor and they will tell you it’s not like the CREA reports at all but they won’t speak publicly about it.

#143 aprilNewwest on 11.15.13 at 4:45 pm

#138 Rexx Rock – only the ignorant look upon renters as lower class.

#144 Smoking Man on 11.15.13 at 5:21 pm

#125 TorontoBull on 11.15.13 at 1:49 pm

Ya I seen it,

What is this Ford Bashers own condos in mass, ha
Karma will be a batch….

I can tell a schooled put that pdf together.

Very in accurate.

#145 jess on 11.15.13 at 5:23 pm

Secret documents published today by WikiLeaks and analyzed by Public Citizen reveal that the Obama administration is demanding detrimental terms in trade negotiations. The terms would limit Internet freedom and access to lifesaving medicines here and abroad, belying the administration’s stated commitments to reduce health care costs and advance free expression.
WASHINGTON, D.C. – Secret documents published today by WikiLeaks and analyzed by Public Citizen reveal that the Obama administration is demanding terms that would limit Internet freedom and access to lifesaving medicines throughout the Asia-Pacific region and bind Americans to the same bad rules, belying the administration’s stated commitments to reduce health care costs and advance free expression online, Public Citizen said today.
Learn more.
http://www.citizen.org/pressroom/pressroomredirect.cfm?ID=4020

nixon’s fast tracking opposed
http://www.citizen.org/documents/press-release-151-Ds-bloc-of-Rs-oppose-fast-track.pdf

#146 Smoking Man on 11.15.13 at 6:10 pm

#145 jess on 11.15.13 at 5:23 pmSecret documents published today by WikiLeaks and analyzed by Public Citizen reveal that the Obama administration is demanding detrimental terms in trade negotiations. The terms would limit Internet freedom and access to lifesaving medicines here and abroad, belying the administration’s stated commitments to reduce health care costs and advance free expression.

………..

To bad every reporter in the world is at Toronto city hall of ford’s driveway

#147 TakingResponsibility on 11.15.13 at 6:17 pm

Realized today that Garth’s Greater Fool Blog is possibly one of the last bearish or critical of the Canadian housing market’s blogs left. The others from various parts of the country seem to have slowly died.

Thanks, Garth, for your consistent investigative information that is often contentious/contrarian on Canada’s housing market and financial alternatives.

That is a whole lot of your time. Appreciate!

#148 T on 11.15.13 at 6:18 pm

“So the music plays on. However, current conditions are well above the “irrational exuberance” levels immortalized by Allan Greenspan and similar to previous market peaks that occurred just before serious market declines. Wall Street Sector Selector remains in “yellow flag” status, exercising caution for the week ahead”

#149 Mister Obvious on 11.15.13 at 6:32 pm

#138 Rexx Rock

“Renters are always looked upon as poor or uneducated.”
——————-

Yes, often they are. But how renters are ‘looked upon’ has no bearing whatsoever on their financial position.

I don’t mind keeping that attitude in place. It does wonders to maintain the subsidization of rents by landlords. Especially here in Vancouver. Sweet!

#150 Danforth on 11.15.13 at 7:10 pm

Sticker maker can’t even use correct grammar.
Should be “More hippies, FEWER hipsters” !

#151 IM in C on 11.15.13 at 7:40 pm

Calgary housing faltered with the 2009 down turn. Has picked up a bit. -If- (and that’s a big if!) the LNG sector booms, Calgary’s housing market will defy gravity and Garth Turner, and soar to new heights.

I think Encana already answered that. — Garth

#152 Big Brother on 11.15.13 at 8:30 pm

Smoking Man was just spotted at Seneca again, drinking wine at the bar. MKULTRA knows all, not the UCC!

#153 jj on 11.15.13 at 8:32 pm

For smoking man

Don’t make me spank you again. Me: A gen x’er. Far better trader than you.

Iceberg Vodka + rob ford.

go back to the shadows smoker, remember a few days ago?’

don’t make me the nice guy again

jj

#154 Smartalox on 11.15.13 at 8:51 pm

Garth has stated before that CREA’s sales statistics compare revised figures (from 2012) with gross estimates from the current year, so it always looks like sales are increasing. At the same time, historical (multiple-year comparisons) of sales figures are not provided by CREA.

In stocks, technical analysis types note a triple top – when prices for a stock reach a consistent high three times, on declining sales volumes, as a precursor to a precipitous decline.

Could it be that CREAs statistical subterfuge is intended to hide the declining sales volumes, and mask the triple top formation?

#155 recharts on 11.15.13 at 9:06 pm

There is very few places where the idiocy of those who already bought and want this circus to have no end, does not suffocate any common sense.

At least for Ontario there is no alternative for a forum where one can post negative opinions on RE without being suffocated and trolled by an army of idiots inclined to ignore any common sense logic for the shake of their own profit.

The truth is that with 70% ownership rate there is a high chance that most of these people are in debt and their only way out of their own mess is a never ending increase of prices. That plus the usual pests, the RE agents, who are, most of them, like the bed bugs in To, any rental building or any forum has a good number of them….

Considering the above, a contrarian opinion has no chance on any forum, it will be swamped by RE bullshit in no time. You simply don’t stand a chance, you are outnumbered and “outspoken” from start.

However I heard that bed bugs die from low temperatures (or low sales) and the winter is coming…

I can’t wait to see the condo numbers for this month for 416!

#147 TakingResponsibility on 11.15.13 at 6:17 pm
Realized today that Garth’s Greater Fool Blog is possibly one of the last bearish or critical of the Canadian housing market’s blogs left. The others from various parts of the country seem to have slowly died.

Thanks, Garth, for your consistent investigative information that is often contentious/contrarian on Canada’s housing market and financial alternatives.

That is a whole lot of your time. Appreciate!

#156 Daisy Mae on 11.15.13 at 9:21 pm

#100 Iso-Classical: “The result is predictable – burning a litre of gas to go find a litre of milk.”

“No sh*t! You should see Sherwood Park, just to get Timmy’s will take 30 mins out of your day…15 mins just to get out of the sub-division.”

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

It’s still all about ‘location’. I can access anything I need on foot, if need be. And yet I am free of the traffic, noise and congestion….until I get to the gates. ;-)

#157 Smoking Man on 11.15.13 at 9:33 pm

#152 Big Brother on 11.15.13 at 8:30 pm
Smoking Man was just spotted at Seneca again, drinking wine at the bar. MKULTRA knows all, not the UCC!

Sorry big brother but I hacked your computer. No where near Seneca.

JJ my next post is dedicated to you.

Ying Yang. Sunday is on.

#158 DR on 11.15.13 at 9:54 pm

http://www.thestar.com/business/2013/11/15/condo_rents_hit_new_high_amid_seemingly_insatiable_demand.html

#159 Brendan on 11.15.13 at 10:55 pm

In Ontario over 300,000 public servants have been added directly and indirectly by the McWynnity Government over the past 10 years….Maybe they are adding to the bidding frenzy in the real estate markets since they have job security, above-market salaries and defined benefit pension plans….

Keep up with the times, the Ontario public service has been shrinking in recent years and at most has 70,000 employees, not 300,000 newbies. Most salaries are on par with provincial averages for the private sector equivalent. – Brendan

#160 maxx on 11.16.13 at 8:07 am

#111 angela on 11.15.13 at 11:57 am

“Lockheed Martin Cutting 4,000 Jobs, Closing Plants but the company is up 49% this year
“Amazing” production is way down but shares are up is this what a recovery looks like in america”

Yup. Balance sheets can only look good for so long when the bellows of cost-cutting are practically the only thing propping them up.

That was an extreme and unfounded statement. — Garth

#161 save. spend. splurge. on 11.16.13 at 12:00 pm

Why don’t we just pass a law that limits anyone buying a home without 20% down in cash.

(and it can’t be 20% from a line of credit or credit cards, both of which I have unfortunately, seen.. and not in 20-something year olds, in guys who are 40!!)

I don’t get what’s so hard about limiting people who aren’t financially responsible to begin with. If you can’t save 20% of the purchase price, you have no business buying a place.

My rough estimates are if you take 5% down on a 25-year mortgage, you pay the value of the home 3 times over with maintenance, added bills (all the home ownership stuff) included by the time your mortgage is done.

3X over.

$800K house = $2.4 million

..so essentially, you paid $1.6 million to save $800K in home equity.

Does anyone else not find this ridiculous?

Buy a house in cash or in as much cash as you can, at the lowest prices possible.

That’s what I’m planning on doing, and if I never get to do that, I’m OK with that too.

#162 World Traveller on 11.16.13 at 12:09 pm

#78 Spaccone on 11.15.13 at 3:39 am
@16 SM

Traffic in Toronto is absolutely horrendous, I mean the worst I’ve ever seen it. As a very recent example, heading to the core in the offhours it took me 25-30 minutes to trasverse about 30ish km of highway, and 30-40 minutes to navigate 2 km in the core. We really could stand to convert wide states of the frustrating stop-and-go traffic control method to roundabouts. Once you’ve driven a primarily roundabout system it’s hard to go back.

***

I agree but it would be near impossible to convert intersections especially in the core to fit roundabouts.

#163 DR on 11.16.13 at 10:54 pm

#161

Let us know how your plan works

#164 Paul on 11.17.13 at 9:59 am

recharts on 11.15.13 at 9:06 pm

I can’t wait to see the condo numbers for this month for 416!

*********************************************
I can hear you breathing heavy are you slobbering as well? lol

#165 Doug in London on 11.17.13 at 1:19 pm

I think I’ll stick with owning real estate in the form of REITs, which were at fire sale prices earlier this year and still at sensible prices now. They pay great dividends, while leaving the hassle of actually managing the properties to someone else.