Market update

update1

Kevin’s condo in Abbotsford was worth $180,000 three years ago. “At least that’s what the real estate guy says,” he told me yesterday. “And now he says I’d be lucky to get eighty grand for it.” There are currently about 550 condos listed for sale in the Vancouver exburb, which is one helluva lot for a town of 123,000 souls. Prices start in the mid $50,000 range.

On the opposite coast there were about 105 new or reduced listings posted in Nova Scotia on Friday, and less than two dozen sales. That’s a consistent pattern, amid falling prices. In Montreal, the second-biggest city in the nation, listings are up 11% from last year and sales in October fell 3%. The median price for a single-family detached home is $282,000, which means it has increased just 8.4% in three years. After closing costs, inflation and sales commission, your pathetic savings account did better.

I mention these three markets to add a little perspective to the housing reality now unfolding across much of the country. With the economy shifting into reverse, personal debt at record levels, more and more job losses being announced (over 1,000 in regional Ontario cities this week) and family incomes stuck in the mud, common sense tells us the real estate orgy is over. Despite what they think in Calgary, or the latest story about some idiots paying $96,000 over the asking price for a sanitized semi in Leslieville.

deal-kerr1121re01  (The house was on the market for seven days and attracted 250 people. It listed for $579,000 and sold for $675,000.)

Of course, there are no media stories about the retirees in Qualicum or Parksville, in what used to be Boomer Heaven on Vancouver Island, who can’t sell their houses, and where real estate values have already wilted by a fifth (with 555 properties languishing). Or, for that matter, the ongoing disaster that is the new housing sector in the GTA mega-market.

The latest numbers have just been released, and while sales of new low-rise houses and condos improved in October from the same dismal month a year earlier, there’s stark evidence of an ongoing decline which has attracted scant media attention. Sales of new houses in the first 10 months of this year were 19% lower than during the same period in 2011. Compared to 2010, they’ve crashed by 40%.

So far this year low-rise sales have fallen 17% and condo deals are off 27%. It’s the worst flop in a decade (when they started tracking stats like these). Most concerning is one other number you won’t read much about: 31,425. That’s how many housing units are now ‘in inventory’ – in other words, sitting on the market, and yet unsold. Almost all of those are condos, with thousands more slated to gush down the pipeline over the next few months.

This is an inventory glut of Fordian proportions for the housing industry. That build-up leads to the inescapable conclusion there’ll be even less building going on next year. And why is the construction business deconstructing? The builders blame that little tool, F, for hammering the 30-year mortgage into oblivion and making mortgages harder to obtain for young people without any money (imagine that). Then they blame the province for land use restrictions, setting aside mandatory green space so the entire region doesn’t look like a Best Buy parking lot. And, of course, they blame local municipalities for fat lot levies and development charges so new residents get to flush their toilets and send their kids to school. It’s hard to imagine why anyone needs that stuff when they have caesarstone counters and bamboo floors, but there ya go.

Well, as you’ve read here, construction itself now amounts to 7% of the entire economy (a record), while the property and housing-financing sector totals over 20% of GDP, more than the oil and gas business or all manufacturing activity. So this isn’t just a real estate story, but a key hunk of a larger tale of deflating prospects.

It’s ironic so many America-haters flood on to this blog to dis that country’s recovery, when there’s something scarier happening here. In fact, I found it interesting this week that BC – with the highest average house price – is the only province with a negative inflation rate (-0.3%). Add to that a negative personal savings rate, shake and pour, and it starts tasting a lot like Phoenix, circa 2006.

Of course the country’s not in trouble. It can always print money and raise taxes.

But you can’t.

194 comments ↓

#1 NuisanceBear on 11.22.13 at 8:57 pm

First!!! !!! !!!!

Normally 10 exclamation marks are reserved for asteroid hits and the return of the Black Death. But, thank you. — Garth

#2 JayBee on 11.22.13 at 9:03 pm

The Black Death has returned!!!!!!!!!!

#3 help on 11.22.13 at 9:06 pm

did u check out the apartment in hamilton?

#4 KommyKim on 11.22.13 at 9:08 pm

RE: Of course the country’s not in trouble. It can always print money and raise taxes.

So do you think the Federal Gov will stealthily raise taxes?
ie: Fee increases, tougher EI rules, etc….
Or will it cut deeper, further impacting the economy in a vicious feedback loop of plunging revenues.

#5 Godth on 11.22.13 at 9:09 pm

To quote Dr. Chris Busby: “We’re Fu$$ed”.

#6 zee on 11.22.13 at 9:11 pm

Garth, there are talks of the BofC cutting rates. You said that will not happen. Poloz is worse than Carney.

As for lower new homes sales, I hear that this is happening because there is not a lot of selection for buyers over the last few months. Limited selection means lower sales in the new homes category.

You’d better pray rates are not cut. — Garth

#7 Mark on 11.22.13 at 9:16 pm

$307,900 for 643 sq ft?? Would somebody please tell me who is buying these things??? Clearly the most logical explanation is that Minto is getting their prospective buyers drunk and convincing them they’re buying a condo in Vancouver.

http://www.minto.com/ottawa/Glebe-new-condos/Vibe/collections/Vibe.html

#8 Goldie on 11.22.13 at 9:17 pm

BC is also losing population now as people leave the province to look for better opportunities in other provinces.

#9 Goldie on 11.22.13 at 9:20 pm

#1:

yes, or when baby goes booboo all by himself for the first time, which is more inline with a “first” comment, which went out of fashion long ago but which lives on with some of the oldies on this blog’s comments section.

#10 Poorgeoisie on 11.22.13 at 9:21 pm

Garth is that 31,425 the number of listings in the GTA?

Unsold new housing units, GTA only. — Garth

#11 AngryMan127 on 11.22.13 at 9:25 pm

But Garth…America hating is central to this country’s identity! Diane Francis aside, most Canadians would sooner sell our national resources to a country with no due process, no freedom of speech, and little respect for the spirit of individualism than cozy up to our nasty reckless neighbours to the south.

#12 valleyrenter on 11.22.13 at 9:28 pm

Good ol’ Abby. We got a hole in the ground, been there 5+ years. Supposed to be parking garage for condos but every developer that tries to get it going seems to go under. Ol’ sales centre building sitting onsite collecting dust. New tower also been marketed for years across from Mill Lake for doctors and nurses to buy and live in while working at the new hospital, saw the presale asking prices, $400,000+ for a ‘glass box in the sky’. Good luck with that, it’s still an empty lot with a rent-a-fence around the perimeter and a sign out front growing mold. Where else but Abby can you buy a brand new, never lived in 6yo condo for $100,000 less than what your neighbors did. Bet you would be the popular one in the building. Speaking of condos, building across the way, unit finally sold on second floor after seeing it sit empty for over 2yrs. Liking the renting thing. One final thought, don’t think for a second it’s any better the further west you go. It ain’t. Even in the RE hotbed of Langley, they go begging at asking prices of 9yrs ago, not adjusted for inflation either!

#13 Habitt on 11.22.13 at 9:29 pm

Yes taxes can be raised and money can be printed. The best and brightest must be running the show. LOL

#14 DaleFromCalgary on 11.22.13 at 9:30 pm

50,000 people moved to Alberta last year according to this story:
http://www.cbc.ca/m/touch/canada/calgary/story/1.2435222

I don’t think we built enough for them all. That doesn’t account for the loss of housing stocks due to the flood. High River still has hundreds of people living in the Saddlebrook refugee camp just south of Aldersyde. Not to mention how many businesses are in Atco trailers and will be for the winter.

So yes, Alberta has ducked the housing bullet. If you rent, the landlords are calling the shots. The long-term fundamentals of Calgary housing are terrible, but for a family that needs accomodation right now, there is no choice but to buy a particleboard shack down in Seton.

#15 Jason on 11.22.13 at 9:32 pm

Garth

Its always doom and gloom for housing in Canada. You recommend a balanced portfolio filled with ETF. However housing can bring the whole house of cards down. Where do you think there is a place to make money while our economy deflates.

A housing correction in Canada will have minimal, if any, impact on a balanced and diversified portfolio. — Garth

#16 not 1st on 11.22.13 at 9:41 pm

#9 DaleFromCalgary on 11.22.13 at 9:30 pm

50,000 people moved to Alberta last year according to this story.

——-

When the patch has a hiring freeze on or is outsourcing or actively laying off people or project stalled in environmental purgatory, it makes you wonder what they will be doing for work? Probably building houses for each other.

#17 LH on 11.22.13 at 9:44 pm

The Atlantic magazine has a nice article on the future of surburban large lot homes (spoiler: it doesn’t look good)

http://theatln.tc/1aIMCli

Sexy urban, walkable houses on bite sized lots may continue to see demand for decades to come, as the central bank keeps interest rates near zero to save the surburban suckahs ;)

But don’t listen to me, I am just a 29 year old who bought seven SFHs in the last seven years in c01 and c02, all of them within short walking distance to subway and/or LRT, 24hr grocery stores, and with the majority walkable to King and Bay within 20min. Some see the future already, which explains the crazy sales in leslieville and trinity bell woods, and my $millions in unrealized capital gains.

Deniers still abound however, which explains why downtown Toronto houses are still cheaper than Vancouver, and much cheaper than comparable world cities like Sydney. I’m in this trade for the long term (unlike Garth who judging from his posts was a flipper and sold too early) and don’t mind holding on for the next sixty years.

LH

#18 Smoking Man on 11.22.13 at 9:47 pm

At provide, sad no matter how much I drink I can’t get hammered anymore.

#19 pinstripe on 11.22.13 at 9:48 pm

Everyone must be cautious with Statistics.

Statistics can be adjusted to achieve whatever is needed at the time.

#20 Suede on 11.22.13 at 9:51 pm

negative inflation rate in BC?

Reese Peanut Butter Cups cost $1.25 at Safeway. Up 25% since 2008.

StatsCan obviously doesn’t have proper weightings.

#21 pinstripe on 11.22.13 at 10:02 pm

Who the hell is Joe Clark?

Is he a real estate agent in GTA?

#22 Godth on 11.22.13 at 10:08 pm

You’d better pray rates are not cut. — Garth

Why people think the BOC, or any other central bank is autonomous, is beyond me at this juncture.

It really is time to grow up.
http://www.bis.org/press/p131111.htm

Surf around, find out who’s who en route to a monopole.

#23 Bob Rice on 11.22.13 at 10:19 pm

@LH (post #17):

You’re not suggesting Toronto is a world class city are you? Bahahahaa…

Good luck with your real estate venture.

#24 AisA on 11.22.13 at 10:22 pm

#18 Smoking Man
“At provide, sad no matter how much I drink I can’t get hammered anymore.”

Come on dude, it’s like steroids, you gotta cycle that shit or it loses it’s effect and in both cases you just end up with tits.

#25 Freedom First on 11.22.13 at 10:27 pm

It’s a weird world Garth. Rich people buy the RE when the prices drop significantly, everywhere in the world, all the time. Poor people buy when prices are skyrocketing, everywhere in the world, all the time.
When a person buys RE, and you are sitting around the table with everyone signing the papers to seal the deal, and if the sellers are not crying, your timing is off. Been my experience that tells when you are paying what a property is really worth. Oh yes, one addendum to that, it is also when owning is cheaper than renting. Simple arithmetic. Thanks for your free blog Garth. I love coming to your site to read sane thinking you write, you know, the truth.

#26 LH on 11.22.13 at 10:32 pm

Re: 23 bob rice

My point exactly. I have visited and worked in New York, London, Tokyo, Sydney and Hong Kong. Central Toronto has more similarities to the above than you think. I did not need Toronto to become the next London or New York for my bet to pay off… When buying SFH for below $200 a sq ft which was possible up to 2009. Even recently I have paid about 250-350 which is pennies on the dollar compared to those other places, while rent and wage differentials are not nearly as stark. I don’t know where the economist gets its rental yield data but it’s total bunk. You would do better to check Craigslist.

LH

#27 Godth on 11.22.13 at 10:33 pm

#11 AngryMan127

That’s a good joke. Freedom of speech? Due process? Bwaaaahhaaaha…Mmmwwwaaaahhaaa…
Welcome to 1984…erm 2013

#28 Jacques on 11.22.13 at 10:35 pm

WHO cares about: Abbotsford? Nova Scotia? nobody, that’s who. Toronto is the driving force of this country and will always be rewarded with it. Our prices will drop the least, will gain the most steadily, our quality of life relative to everywhere else is the best. There is no “Canadian” housing market. Sure, our condo market is bloated like a pig, but actual bricks and mortar housing here is here to stay and last.

The problem with renting in a market like this is when you go on kijiji or CL and see what even $2000 gets you, it doesn’t get you much/if at all anything. So it’s a lose-lose.

#29 Hollywood on 11.22.13 at 10:41 pm

not 1st #16,

I’ve always wondered that myself. The media continually mentions AB is booming. I certainly do not see that in all facets of the economy. Yes, in 2003-2007; AB had many issues with shortage of workers, but this time frame is a lot slower overall. It does not take a rocket scientist through research to realize that “most” of the Calgary Herald’s top 50 oil/gas stocks are at historic lows (5/10/15 year lows). I also recall working overseas recently with a lot of other Canadians right across the country and it seems the country booms all together, apart from better performing regions. The work situation seems to work in tandem for the most part.

#30 Son of Ponzi on 11.22.13 at 10:42 pm

Garth,
I print my own money in my basement.
But I keep it under my mattress.

#31 Backstep on 11.22.13 at 10:44 pm

Garth is that 31,425 the number of listings in the GTA?

Unsold new housing units, GTA only. — Garth
—————————-
Is that unsold and move-in ready, or does it include units whose construction is in progress or even not yet started?

#32 William of the North on 11.22.13 at 10:47 pm

Does anyone believe that CPI actually measures the real inflation rate?

#33 X on 11.22.13 at 10:54 pm

Was looking at some comparables in the area….why would anyone buy at these prices.

$490,000 townhouse for sale, would cost $2587 a month to finance with 0 down, plus $551 maintenance fees, plus $200 property taxes for about $3340 a month to buy. (not to mention the $12,000 in property taxes to close)
http://www.realtor.ca/propertyDetails.aspx?propertyId=13865809&PidKey=-397422797

Same townhouse for rent one for $2000 the other $2200 a month.
http://www.realtor.ca/propertyDetails.aspx?propertyId=13848275&PidKey=-250931771
http://www.realtor.ca/propertyDetails.aspx?propertyId=13578687&PidKey=-2086283786

It is actually $1140-$1340 a month less to rent than buy.

And were you to actually have the $500,000 to buy it, invested in a preferred coughing up 6% ($2500 a month) it would still be $300-500 a month cheaper to rent.

I know that some may argue that the value of the townhome may rise in value, but so would your $490,000 invested wisely.

It makes better financial sense to rent than buy in the GTA.

#34 aprilNewwest on 11.22.13 at 10:58 pm

BC negative inflation. So since Vancouver has the highest home prices in the country one would think it would have the higher inflation rate. By the sounds of what you’ve written Garth that does’t sound good. Do I have this right?

Follow the link. — Garth

#35 john on 11.22.13 at 10:58 pm

These realtor morons that come here claiming toronto is a world class city are either stupid or liars. Toronto has a crack smoking mayor making toronto a laughing stock. Can you imagine investors looking to pull their money out of toronto only to find out it is them the buyers that are the real crackheads for falling for a Canadian scam of cheaply built condos that are already falling apart . Now that the word is spreading around the world that toronto condo’s/owners are in big trouble. Who will want to buy a condo that will be worth less as time goes on. I can see it now $120 K 2 bed 2 bath and $1700 condo fees in 7-10 years.

#36 not 1st on 11.22.13 at 11:07 pm

#30 Son of Ponzi on 11.22.13 at 10:42 pm

I print my own money in my basement.
But I keep it under my mattress.

——
I started printing my own money, and everything else I need in my basement

http://business.financialpost.com/2013/11/19/small-advantage-3-d-printing-brings-short-run-manufacturing-back-home/?__lsa=2e0a-6b4a

#37 TK on 11.22.13 at 11:08 pm

@LH, are you trying to say that TO real estate is underpriced? Just because some other cities thousands of miles away are grossly overpriced?

#38 Infused with Opiates on 11.22.13 at 11:11 pm

114 Oceanside – good to hear from fellow islanders. You can in fact find good oceanview houses up and down the
island in the $500k range. Of course there are still many
listed for much higher. I cant say how they may compare
to a $2-3M Vancouver house. If you’re like me, you are
still amazed at how expensive houses are here, even
after the market softening. But the island (exc victoria)
now has an average price lower than Canada overall.

#39 Bob Rice on 11.22.13 at 11:18 pm

Born and raised in Toronto… had a relative from Europe visit. He has a background in construction, architecture and engineering. Visits and works around the world.

His comment about Toronto: “I’m afraid there are very many unattractive and very cheaply built structures in this city” He felt that most represented vertical gated communities.

I think he’s right. I too have traveled a bit. This is NO “world class city” – not even close… It will always be a 2nd rate city. If anything, Montreal is more world class… But alas, it’s politics stinks…

#40 X on 11.22.13 at 11:20 pm

33 – X

My bad, I calculated the following incorrectly I forgot to add in the maint fee and prop taxes….

And were you to actually have the $500,000 to buy it, invested in a preferred coughing up 6% ($2500 a month) it would still be $300-500 a month cheaper to rent.

Plus the $551 maint fee and $200 a month prop tax, making it about $1050-1350 a month cheaper to rent than buy outright.

#41 Cici on 11.22.13 at 11:21 pm

“an inventory glut of Fordian proportions” – mean, but very witty :-)

#42 Cici on 11.22.13 at 11:23 pm

#2 JayBee

He said asteroids are a very real risk too…be on the lookout!!!!!!

#43 Obvious Truth on 11.22.13 at 11:25 pm

Seriously I wouldn’t have a shed that ugly.

#44 Bottoms_Up on 11.22.13 at 11:31 pm

31,000 units at $300,000 per equals about $10 billion in unsold inventory, and rapidly growing.

#45 Son of Ponzi on 11.22.13 at 11:32 pm

Dow Jones is at 16,000.
What does it mean?
If I had invested 1 dollar at the inception of the Dow Index, would I now have 16,000 dollars.
See, it’s too complicated.
That’s why I keep my money under the mattress.

#46 Son of Ponzi on 11.22.13 at 11:36 pm

My money is on 3D printing.
This way, I can print everything I need in my basement.

#47 wallflower on 11.22.13 at 11:37 pm

Born and raised in Toronto.
Toronto the train wreck.
It doesn’t need Rob Ford to topple it.
Been a long while crumbling and it is now literally FALL-ING A-PART.
I drive the Steeles meridian all the time. BIG difference north and south in infrastructure. Some will say, obviously! 905 is new… but the key point here is: Toronto has FAILED to even plan or consider replacement. It’s just stumbling and bumbling along into mid-tier oblivion.
I love Lisbon, London, Chicago (now there’s a city that knew how to build along its waterfront to serve citizens and tourists!), Boston, Paris… Toronto in that band? Impossible. The only cool factor is when lightening repeatedly strikes the CN Tower during a dark night. The rest of it is glass tower box architecture. So few buildings of fascination or appeal. And so little street front retail of intrigue; again mostly big box repeat: high end Bloor Street used to be interesting. Now, the streetscape is attractive, but big box retail all up and down. BORING.

#48 Cici on 11.22.13 at 11:44 pm

#11 AngryMan127

Oh puhlease! We’ve been way more reckless than them neighbours down South.

#49 vangrrl on 11.22.13 at 11:44 pm

Re: Toronto’s condos- last night on CBC’s Doc Zone, check out ‘The Condo Game’…. Yikes.

#50 Snowboid on 11.22.13 at 11:47 pm

#34 aprilNewwest on 11.22.13 at 10:58 pm…

For your reading pleasure:

http://www.greaterfool.ca/2012/10/29/the-big-d-2/

#51 Kothar on 11.22.13 at 11:50 pm

Did y’all hear inflation is only 0.7% and the economists are lining up boc may lower rates!

No rate cut. — Garth

#52 steve on 11.22.13 at 11:51 pm

Decades of the parasitic financial class peddling debt to millions of witless, math challenged, materialistic morons has left our country in debt up to it’s eyeballs with no escape other than cataclysmic default.

#53 Bottoms_Up on 11.22.13 at 11:53 pm

#17 LH on 11.22.13 at 9:44 pm
———————————
Don’t you think (realize) that something must be wrong if someone can buy a couple of houses over a few years and make millions? Like, seriously? Do you think that’s normal, balanced, in-line with reality? Is what you did equivalent to the work that a top lawyer, surgeon, CEO did over that time? Or, don’t you think that your (lucky) unrealized capital gains are a function of #1 immeasurable (and stupid) risk that you took on and #2 loose lending policies, low interest rates and a public hard-on for ever rising prices?

#54 Son of Ponzi on 11.22.13 at 11:57 pm

31,000 units at $300,000 per equals about $10 billion in unsold inventory, and rapidly growing.

10 billion is pocket change to the 600 billion that CMHC is on the hook for

#55 :):( Ying Yang on 11.22.13 at 11:57 pm

Smoking Man don’t kill your liver I need to prove to my brother you exist! Invest in booze it’s a sure winner. P.S my brother says big changes in the economy in China coming, says it’s true there is a huge slowdown! He says Bitcoin is crap!

#56 dosouth on 11.22.13 at 11:59 pm

Still out of touch here in central Van Isle. We’re waiting and waiting but here are some examples of crazy –

Double lot on 150′ of waterfront for sale starting at $1.6 mil in 2010. Time passes and in Aug 2012 bought under foreclosure for $778k. Then relisted as two lots but not legally subdivided (in case they don’ sell??…)

Both listed in Oct 2012 with house plans. One for $995k and one for $1.2 mil. No takers so June 2013 one reduced to $495k for lot only(not serviced or no access) Second one remains at $1.2 hoping for a bite.

$1.2 oopps just reduced to $1.125mil

$425k walk on water front

Second was a place we looked at last weekend in Fairwinds community, just a slice and hook shot away from these two properties.

Spec house by a very well known builder. $799k in June without window finishings, appliances, closet organizers or landscaping. Fast forward to last weekend.

Voila landscaping, closet organizers installed and according to the listing/showing realtor, now appliances if you want to write a deal this month only!! …and of course a reduction in price to $750k. (looking at the building permit on line this works out to approx. $185 sq ft.)

Get it before you are priced out…

..and yet we wait for the perfect price/house/opportunity.

#57 KG on 11.23.13 at 12:01 am

The headlines and the photo told me we are finally hitting the sweet spot. Its about time.

#58 Subprime on 11.23.13 at 12:07 am

The wife and I got proof of the crash in housing on the way while walking downtown Victoria last night. we ‘re walking, talking about the market showing signs softening, talking about what could cause a hard landing, then suddenly at that very moment “CRASH”!! This guy on a bike smashes into the back of a parked car right beside us and scares the living shit out of us. He hits the road and we help him up. No blood but he looks at us and says “that was a hard landing!”. What the hell. Unbrlievable.

#59 Canadian Watchdog on 11.23.13 at 12:08 am

#32 William of the North

CPI is not an index to measure increases or decreases in prices. The proper definition is a measure by which an individual would have to increase or decrease spending to keep pace with a standard cost of living.

From StatsCan:

The CPI is not a cost-of-living index, though people frequently call it this.  In theory, the objective behind a cost-of-living index is to measure price changes experienced by consumers in maintaining a constant standard of living. The idea is that consumers would normally switch between products as the price relationship of goods changes. If, for example, consumers get the same satisfaction from drinking tea as they do from drinking coffee, then it is possible to substitute tea for coffee if the price of tea falls relative to the price of coffee. The cheaper of the interchangeable products may be chosen.

Everybody got that? You don't drink Tims or Starbucks anymore. You buy tea because coffee, milk and sugar are too expensive, so you switched. And that folks is how StatsCan keep inflation in check. They literally guess what consumers are likely to buy next. Idiots.

Sadly, this is what monetary policy is tied to and how distorted economic indicators have become. All data manufactured by the government is created for political purposes and to keep expectations to what they want you to believe it is. Bernanke said it hundred times the other day, market expectations, expectations expectations…

If I showed everyone factual data that inflation was running at 8% for items they buy, would they still think 6% returns on stocks is a good deal? No. Because they'd realize their money is losing 2% in real terms and would likely move into commodities or other riskier assets. But what if their personal inflation rate really is running at 8%? What if rent prices are really going up 12-15% per annum? Ask yourself, how would you even confirm using your own sources and not government data? You might be stumbled if you think about it. And, you could be losing money just based on the fact that you believe government data, or an advisor.

I'm always fascinated when I meet these financial advisor guys: you ask them about returns on stocks and they'll be quick to browse their phone and drop you a quote in a jiffy. I ask them how much rent, car insurance, food prices, watches, etc., have gone up by and they either say check StatsCan or look at me with funny face like this convo is irrelevant because stocks are up!

And so Milton Friedman and other economists that warned of inflation and central planning were right. Inflation is the silent wealth killer that goes unnoticed with no representation.

#60 NotAGreaterFool on 11.23.13 at 12:16 am

“Eventually, everything boils down to demand and supply,” Mr. Athanassakos said in a telephone interview from Western University in London, Ontario. “Whenever this ratio goes over 7%, it signifies over-investment in housing and two or three years later, we have a severe correction.”

http://business.financialpost.com/2012/02/17/housing-market-poised-for-severe-correction-finance-professor-says/

#61 renters rule on 11.23.13 at 12:17 am

Wage deflation, in Vancouver anyways, is real. From my own personal experience, I am currently making, all in plus benefits, 30% less on a $140K all in basis, than I was 4 years ago. My sister, after a prolonged period of unemployment following her previous employer’s bankruptcy, also about 30% less, all in… salaries have been coming down in Vancouver for the past 3-4 years, on the order of 30% in many, many fields….. the math re housing prices in this city just does not hold up, when the interest rates continue to move up, cannot even imagine how much this will f*ck up this city….

#62 James on 11.23.13 at 12:18 am

Most concerning is one other number you won’t read much about: 31,425. That’s how many housing units are now ‘in inventory’ – in other words, sitting on the market, and yet unsold. Almost all of those are condos, with thousands more slated to gush down the pipeline over the next few months. – Garth

Almost all of those are condos –> That is key.

#63 Cici on 11.23.13 at 12:19 am

#28 Jacques

Sorry, but news to you, there is far better quality life outside Toronto and at far better prices.

And while renting in TO definitely won’t get you much on the dollar, neither will buying.

And when jobs slow, people will go…regardless of “quality of life.”

#64 NotAGreaterFool on 11.23.13 at 12:21 am

Garth – what did you think of the ‘The Condo Game’ documentary on CBC?

#65 Cici on 11.23.13 at 12:25 am

#32 William of the North

No.

We think they are using the same actuaries with the same faulty practices as CREA.

#66 Basil Fawlty on 11.23.13 at 12:31 am

“It’s ironic so many America-haters flood on to this blog to dis that country’s recovery,”

Why is it that being critical of the US economy equates to being a US Hater, yet you can dis the Canadian economy on a daily basis with nary a thought of being a Canada Hater? This America Hater propaganda of yours is getting beyond stale. You nip any rational debate at the bud by immediatly labelling any critical US analysis as “Hate”. It is funny that the only one on your blog continually using the word “hate” is yourself.

#67 KommyKim on 11.23.13 at 1:14 am

RE: #32 William of the North on 11.22.13 at 10:47 pm
Does anyone believe that CPI actually measures the real inflation rate?

Not many I’m sure. Saw the bogus “news story” about BC’s negative inflation numbers on the local TV station. One of the causes was deemed to be lower electricity prices! What a joke that is.

Maybe if you just only bought a new TV, computer, and car every year you would pay less than last year.
But property taxes, energy, cable TV, phone, food, etc have all gone up this year.

#68 Mr.Hulot on 11.23.13 at 1:35 am

Garth thinks foreign investors are not a problem in the Canadian Real Estate market. LOL

Check out ‘The Condo Game’ on CBC’s Doc Zone.

#69 Cici on 11.23.13 at 1:44 am

#49 vangrrl

Oh my God, I just watched that documentary. Heartbreaking, especially the story of Christina Sobolak, who is stuck paying a monthly mortgage to live in a mould-infested, flood-damaged slum…How can what they have done/are doing to her even be legal?

#70 Show them facts on 11.23.13 at 1:47 am

Garth,
I’ve followed your blog for 5 years. It seems to me you could demonstrate to all your naysayers your real estate predictions are based upon fundamentals. Why not, for ever major market or region, just build a graph plotting, over time, the absolute number of actual sales executed vs absolute number of listings available vs average home price? You could do this for both houses and condos independently. It would also be interesting to know the proportion of this ‘active’ side of the real estate market vs inactive (% of market not listing their homes). Now draw similar graphs from US cities/reions approaching and following their peaks (if only we had comparable data sources). I think the public would see the clear trend at market top (of housing- not condos) of decreased actual sale executions and escalating prices as you say “buyers chase fewer units available”. I also think we need to demand new standardisation of language from the CREA in its media reporting. They often manipulate the term “sales” to give the impression the market is improving whereas they should have to express actual sales executions vs sales prices vs
listings. “Sales” can have many meanings and the exploitation of this term to give the impression of an ever-attractive market is both disingenuous and unethical at best. Where are the regulators?

#71 enthalpy on 11.23.13 at 1:47 am

I’m not ready yet !!! Wait another year and I can break out the champagne

#72 BigDaddy on 11.23.13 at 2:00 am

We definitely need more foreign capital to keep this fantasy going.

Remember Fantasia, Disney’s Masterpiece.

#73 MEANWHILE IN EUROPA on 11.23.13 at 2:16 am

#64 NotAGreaterFool

Any chance of uploading that documentary on You Tube?
We can’t access CBC here in the SW of France

http://theceliachusband.blogspot.fr/2012/01/blog-post.html

#74 LH on 11.23.13 at 2:20 am

@37 TK

Yes.

LH

#75 Snake on 11.23.13 at 2:50 am

The salary you must earn to buy a home in 25 cities

http://www.hsh.com/finance/mortgage/salary-home-buying-25-cities.html

#76 LH on 11.23.13 at 2:57 am

@53 bottoms_up

Answer: e) all of the above

Since the dawn of time rewards accrue to SMOKING MEN who take risks, sales and trading

I saw an opportunity and backed up the truck
Was also fortunate to have a great job and supportive family which made financing possible.

Now sitting on about eight bucks of real assets (sfh) levered conservatively less than 50% with all mortgages floating or very short term. 5 year fixes are for losers.

This momentum trade still has legs, good for another decade at least thanks to typical canadian self-deprecation of what is the country’s greatest city.

LH

#77 Andrew Woburn on 11.23.13 at 2:58 am

114 Oceanside on 11.22.13 at 3:09 pm

There will be no impact on RE because you can save hundreds of thousands by retiring on the Island anywhere but Victoria (or even there if you wait). We got a gorgeous water view home for $500K that would sell for $2-3 million in Vancouver.
+++++++++++++++++++++++++++++++++++++
The market for homes over $500K in Qualicum Beach and Parksville has been seriously affected by the economy and most of the current sales are between $375 and $425….By the description of your 2 to 3 million dollar home for $500K it must be in Port Alberni or Port Hardy.
=====================================
In my view Parksville and Qualicum prices are sinking because of generational change. These towns were beloved of my parents’ generation for whom retirement heaven was getting drunk either at the golf course or while playing bridge at somebody’s house. City boomers are not going to retire someplace where they have to drive half an hour to the cinema or to find adequate shopping.

Oceanside also has very limited housing stock, mainly older, smaller bungalows on concrete slabs, because they were built on the assumption that retirees are too frail to climb stairs. We looked at a dozen places there when they were still selling for $500K and said, no, we are not that dead yet.

Our house is in Rocky Point, Nanaimo where houses are selling today for $450-650K and more for waterfront. Yes it would be worth huge bucks in Vancouver but remember even a teardown in the big city can be $1.5 million with no view at all. Just imagine what Vancouverites would have to pay for what we have, an unobstructed 180 degree view of the Strait of Georgia ten minutes from a major shopping centre, schools and hospital.

#78 Regretful on 11.23.13 at 3:01 am

My son asked me the other day what his friend gets when his Dad sells. I said about 600 grand. He then asked me what do we get when we sell? I said nothing because we rent. My son then said why would you have ever decided to do that? I spent the rest of the day depressed knowing he was right. There are thousands like me out there. We could of bought homes when they were 300,000 and now they are over a million. We are the living dead. The real fools that didnt take heed of buy now or be priced out forever. My other friends kids have their future taken care of for them by inheiritance of the house. My kids future is bleak. All because I just didn’t buy. Oh well bourbon and this blog will get me through life

Most realtors who come here to undermine this blog are at least somewhat plausible. I expected better from you. — Garth

#79 The R on 11.23.13 at 3:04 am

but Garth,

can’t we just log on to almost any investor on-line account and print as much money as needed to maintain the status quo ( even increase it a bit ?)

isn’t that like printing your own money ?

#80 Infused with Opiates on 11.23.13 at 3:05 am

56 – dosouth – The first one interested me, so I did a little research. They are in fact two lots, separately titled, created in what looks to be a phase of a larger development back in ’63. They both have legal access and would have been serviced to whatever level was the requirement at the time (guessing water only, but on septic). The RDN map sheet shows an address on only one of the lots, and the tax info reads identical for both ie they are treated as one lot for that purpose.

I believe the original lots were purchased by the same party who built their house straddling the lot line. Not unheard of back in that time. It is possible the titles were then “bound” prohibiting the sale of one without the other as long as the situation remained unchanged.

Fast forward almost 50 years, and that house may have deteriorated to dozer bait. Demo the house, and voila, two waterfront building lots.

#81 pulse on 11.23.13 at 3:20 am

I’ve noticed other pieces of truthiness slipping out from overstressed cracks. Perhaps another victim of the elite has disturbed the underworld?

A very interesting read for anyone familiar with Brookfield or wanting to understand some of the many ways we are shafted (in a nice way) by the rent seeking, globalist, non tax-paying wizards who wish us to pay much more to avoid freezing;

http://sirf-online.org/2013/11/18/brookfields-looking-glass-world/

Taxes due are just what they say they are!

AIG, Gore, Strong, currency and interest rate swaps, derivatives, ‘regulators’…. the inverted sphere expands!

Thinking of McGuinty’s billions – why should the international and local media be on such a relentless hunt for the Ford family just prior to our Real Estate implosion?

#82 OffShoreObserver on 11.23.13 at 4:10 am

The evaporating wealth in the housing stock must be having deleterious effects on Baby Boomers and even their parents. Consider these three situations as signs of the times:

1. My Mother’s Financial Advisor does nothing for her estate but diminish her wealth. Last year she was forced to pay almost $30,000 in extra personal income tax because of their mismanagement of her account. (They still took their fees, though) The so-called “Financial Advisors” [“FA”] are wealth shrinkers.

When my Father died in 2002, his retirement fund rolled-over to my Mother’s. It totalled about $1 million. The FA fees then were about $12,500/year.

Now, my Mother has, in the normal course of retirement, drawn down her funds. Despite the ineptitude and mismanagement of the FAs, her portfolio is down to about $400K. So, the FA fee decreases to about $5,000/year.

So, because there is no real prospect of an increase in her portfolio and the fees paid to the FA, she does not attract any attention from them but the relentless monthly fee.

(They refuse to recognize my power of attorney and access to her investment accounts. More on that in a separate piece.)

But, my mother isn’t the only one with a diminishing portfolio, all her almost 90 or 90 plus year old friends are similarily running down their net worth. Consequently, the FA’s annual fee income is diminishing–and I don’t think he is busting his ass building book, as it were.

Now, the FA, presumably, wants to retire. However, what with his house–he lives in Canada–diminishing in value and the value of his FA operation declining: what is the present value of his operation with a shrinking pie? Less and less as the matrons run down their portfolios and go to their great reward.

So, he’s stuck between a rock and a hard place–and I am coming after him, too.

2. One of my lawyers–I try not to use them, but sometimes you are forced to–billed me $8,500 for amalgamating two companies into one. (I wanted to simplify things and there were minor tax losses within the two companies I could use in the succeeding one to write-off against future income.)

He provided nil advice and no elegant strategy. I could have filed online for a $350 filing fee times 2 or $700. Instead, I get a bill for $8,500.

I am going after him for that, too.

All I can think, is that he is facing the pressure of wanting to retire [I think he is about 78] and is trying to squeeze his portfolio for all its worth.

3. People I know who thought they married wealth: I have a number of acquaintances who thought they married well and it seemed they thought they could bootstrap their way into a cushy retirement with modest savings, if any.

Most of them find out about the time their kids are 25 or 30 that their wives’ wealthy parents set-up trust funds for their daughters and sons, grandsons and grand-daughters, but not the son-in-law.

For myself, I have been quite fortunate to have a large nest egg and not have to share it with anyone.

One of the fellows I know had a wife retire as a fully-pensioned teacher. So, the bulk of their wealth is in her pension. In order to unlock the equity in their house, would require a divorce, which has its own pitfalls.

I don’t know where it stands now.

It must be shitty going cap in hand to the wife: “Honey, can I have fifty for the pub?”

He doesn’t talk to me anymore because. “You are just like my sister. You are a Narcissist.”

I had to look up what the word meant.

Talk about sour grapes.

Yes, I like myself.

But, all the above situations suggests there exists a great deal of stress among the people singled out. It must manifest itself in some fashion.

What a great epistle on how to be a loser, then whine about your own lack of research and common sense, concluding you are a victim to others. Well done. — Garth

#83 detalumis on 11.23.13 at 7:53 am

Qualicum or Parksville, in what used to be Boomer Heaven on Vancouver Island. That’s a good one, the whole reason the market collapsed is because no boomers are moving there. It’s the oldest community in Canada with huge numbers of boomer parents living there, like the 80+. Boomers generally don’t want to live in senior communities in the back of beyond.

Nothing ages you faster than going from living in the GTA being in a go-go area to taking up gardening in a faux town. Oh gee my grass has grown 1 millimetre over night, no thanks.

#84 bigrider on 11.23.13 at 8:33 am

From yesterday- Garth ” Over the last three decades ,over sixty houses and investment properties have migrated through my hands”

Blog dogs , you can put your own estimate as to the average profitability in each and every one of those sixty real estate transactions .Come to your own conclusions as to our blog hosts net worth.

Here’s mine. Garth’s a “1 percenter of the 1 percenters.”

2nd conclusion- the much larger percentage of his net worth easily derived from real estate as is the case for most Torontonions in his age range and above.

Does not mean it will be the case moving forward, simply an observation.

#85 Not 1st on 11.23.13 at 9:50 am

#82 bigrider on 11.23.13 at 8:33 am

From yesterday- Garth ” Over the last three decades ,over sixty houses and investment properties have migrated through my hands”

——-

Yeah, sounds surprisingly liquid doesn’t it?

Absolutely not. I have been caught several times in markets which turned illiquid. Taught me much. — Garth

#86 Mr. Happy on 11.23.13 at 10:17 am

“…Toronto is the driving force of this country and will always be rewarded with it. Our prices will drop the least, will gain the most steadily, our quality of life relative to everywhere else is the best…”

Are you smoking Rob Ford’s CRACK????

#87 live within your means on 11.23.13 at 10:36 am

#28 Jacques on 11.22.13 at 10:35 pm
WHO cares about: Abbotsford? Nova Scotia? nobody, that’s who. Toronto is the driving force of this country and will always be rewarded with it. Our prices will drop the least, will gain the most steadily, our quality of life relative to everywhere else is the best. There is no “Canadian” housing market. Sure, our condo market is bloated like a pig, but actual bricks and mortar housing here is here to stay and last.

The problem with renting in a market like this is when you go on kijiji or CL and see what even $2000 gets you, it doesn’t get you much/if at all anything. So it’s a lose-lose.
……………………..

I care, as we live in the Halifax Regional Municipality. I’d never live in TO, but we’ve often thought, over the years, about returning to Mtl when hubby retires. Likely won’t happen tho as we have a good life here. We both still miss some aspects of the big city life, but not the traffic, etc.

#88 live within your means on 11.23.13 at 10:49 am

#32 William of the North on 11.22.13 at 10:47 pm
Does anyone believe that CPI actually measures the real inflation rate?
…………….

Not me. There are so many items not included.

#89 live within your means on 11.23.13 at 10:54 am

#82 bigrider on 11.23.13 at 8:33 am

I don’t care what Garth’s net worth is, as long as he can increase ours. :-)

#90 Daisy Mae on 11.23.13 at 10:59 am

“As inflation slips into the negative zone deflation is the new reality.”

Well, you did tell us a larger concern was ‘deflation’….and here it comes, starting in BC.

#91 Ronaldo on 11.23.13 at 11:06 am

#61 Renters Rule –

”….. the math re housing prices in this city just does not hold up, when the interest rates continue to move up, cannot even imagine how much this will f*ck up this citty….”

And Toronto as well. It is interesting to note that the average medium family income for 25 top major cities in Canada that Toronto and Vancouver rank 21st and 22nd. Far below Ottawa which is the highest . Young people today who are living in these two cities will never get ahead unless they are part of the 1%. Slaves to the banks and landlords.

#92 live within your means on 11.23.13 at 11:10 am

Not sure if I posted this joke before. I’ve a terrible memory – old age.

Power outage

We had a power outage last night and my PC, iPad, iPhone, TV and games console shut down immediately, so I had to talk to my wife for a few hours.

She seems like a nice person.

#93 robert james on 11.23.13 at 11:15 am

Another bankrupt Okanagan eyesore.. Kelowna must be Canada`s realstate slease bag capital.. http://www.kelownacapnews.com/news/232857861.html

#94 Ralph Cramdown on 11.23.13 at 11:41 am

I’ve said it before and I’ll say it again. It only matters that one person acts as though he believes the CPI: The man with his hand on the target rate knob at the Bank of Canada. And he does act that way.

If you think your personal CPI is higher than the official one and its going to impact your future consumption, you’re going to have to save/earn more and/or spend less. It’s that simple.

#95 TurnerNation on 11.23.13 at 12:10 pm

Weekly roundup of Toronto-centric silliness.

Yep the top’s in. Who needs careers when we have RE.

http://www.torontolife.com/informer/toronto-real-estate/2013/11/19/before-and-after-renovation-192-northcliffe/

The Story: Amir Shahi, a 31-year-old with a degree in electrical engineering, spent five years working various corporate gigs before calling it quits and getting his real estate license. Soon after, he met his girlfriend, who was in the process of renovating her second property. Since then, the couple have renovated and resold several homes in Toronto’s west end, though they prefer not to call themselves “flippers”—a term they think underplays the associated risk and legwork. “We call ourselves rejuvenators of neighbourhoods,” quips Shahi.

#96 Infused with Opiates on 11.23.13 at 12:22 pm

81 detalumis – I’d have to argue that living in the big city during your working days takes years off you life with the increased stress and polution, so maybe it’s a wash! Now as far as working in the garden goes, I am sure that is much healthier than sitting at a leafs game. My neighbours are retired (early 70s) and they find lots to do on small town VI. I am amazed how active they are.

#97 Buy? Curious? on 11.23.13 at 12:24 pm

Garth, the CBC Documentary has scared the brown smelly stuff out of people (I know I can’t use swear words). The Panic has arrived! YES!

http://www.youtube.com/watch?v=mOQbeQIp9-8

#98 heineken on 11.23.13 at 12:25 pm

Smoking Man on 11.22.13 at 9:47 pm
At provide, sad no matter how much I drink I can’t get hammered anymore.

you need some dope.
go see buddy rob. lol

#99 newcomer21 on 11.23.13 at 12:26 pm

The examples that you cite, (slow sales, languishing markets like Abbotsford) are a comfort. It proves that markets move up and down based on local conditions and as these conditions change, price moves either up or down. Bargains are to be had for the astute investor.

In Calgary, supply is constrained by a lack of developed land. Lot prices are climbing and a large developer says this will continue for at least 18 months, making new home prices in Calgary increasingly expensive. The flood and a dynamic market makes Calgary unique. The good news is that the same forces correct very quickly as conditions change.

What is lacking in your tedious criticism of real estate markets is a suggestion of a mechanism that might work better than supply and demand. Every time you highlight a “soft” market you tell me that market forces are working well and bargains are to be had for those mobile enough to move into these markets.

Unfortunately, if people followed your advice and rented continuously since the “The Greater Fool” was published in 2008, they would have lost 20-40% of a tax free capital gain in the major markets.

As people age and if they avoid the real estate market, they are almost certain to be much poorer in retirement. This is another item that you ignore. There are indisputable benefits to the “forced savings” that a house purchase requires and the tax free asset building that is essential in retirement. On these points, author of “the Greater Fool” is silent.

As a provider of “affordable housing” for low income seniors, I can assure you that very few of these have ever owned real estate. The differences in retirement are remarkable between owners and renters. My basic advice to my children and others is that you jump in when the local conditions are favourable. You then devote at least three years to rapid debt reduction. Don’t jump in unless you are prepared to make this sacrifice. You will very quickly see your interest costs fall and your repayment schedule shrink. You have done the one thing that will virtually guarantee a better retirement for you and your family.

(a) Nobody who directed their capital to a liquid portfolio rather than house equity has lost 20-40% in the last five years. I have shown consistently that the returns of balanced financial investments have far exceeded those of residential real estate, even in demand markets. (b) Older people with the bulk of their net worth in real estate are actually often worse off in retirement than those who exited and concentrated on building assets which produce cash flow. Nobody needs to own a house at 75 years of age, but everyone at that age needs income. Your arguments are emotive, and weak. As such, quintessentially Canadian. — Garth

#100 Musty Basement Dweller on 11.23.13 at 12:28 pm

#28 Jacques on 11.22.13 at 10:35 pm
WHO cares about: Abbotsford? Nova Scotia? nobody, that’s who. Toronto is the driving force of this country and will always be rewarded with it. Our prices will drop the least, will gain the most steadily, our quality of life relative to everywhere else is the best. There is no “Canadian” housing market. Sure, our condo market is bloated like a pig, but actual bricks and mortar housing here is here to stay and last.

The problem with renting in a market like this is when you go on kijiji or CL and see what even $2000 gets you, it doesn’t get you much/if at all anything. So it’s a lose-lose.
≠============+++======
Classic brilliance. Print this out and frame it for future reference. Welcome to the herd.

#101 Ogopogo on 11.23.13 at 12:38 pm

#91 robert james on 11.23.13 at 11:15 am
Another bankrupt Okanagan eyesore.. Kelowna must be Canada`s realstate slease bag capital.. http://www.kelownacapnews.com/news/232857861.html

Agree 100%. One thing not mentioned in the article is that this is/was supposed to be a ski resort too. However, the site is too at too low an altitude to get any significant snowfall, even artificial. It is a scam, pure and simple.

Like Snowboid, I wait patiently for reality to catch up with the Okanagan real estate delusion.

#102 heineken on 11.23.13 at 12:40 pm

#17 LH on 11.22.13 at 9:44
But don’t listen to me, I am just a 29 year old who bought seven SFHs in the last seven years in c01 and c02, all of them within short walking distance to subway and/or LRT, 24hr grocery stores, and with the majority walkable to King and Bay within 20min. Some see the future already, which explains the crazy sales in leslieville and trinity bell woods, and my $millions in unrealized capital gains.

____________________________________________

Right on!!
Tell it like it is.
Keep “rolling the dice”.

#103 Son of Ponzi on 11.23.13 at 12:50 pm

Ronaldo,
Nice hat trick against Sweden.

#104 VT on 11.23.13 at 12:54 pm

For those who tweet, there’s quite a bit of conversation happening about CBC’s condo game episode. Garth has been mentioned as has Brad Lamb and others (including lots of realtors who are not too happy with the show).

Go join the conversation blog dogs!

https://twitter.com/search?q=%23condogame&src=hash

#105 Mister Obvious on 11.23.13 at 12:57 pm

#98 newcomer21

“My basic advice to my children and others is that you jump in when the local conditions are favourable.”
————————-

Then you will certainly be advising them to stay completely out of the gasbag of Canadian major city real estate for at least the next ten years.

What kind of investment strategies you are recommending in the meantime? Perhaps you should direct your children to greater fool for some useful guidance.

#106 Ronaldo on 11.23.13 at 1:05 pm

#101 Ogopogo on 11.23.13 at 12:38 pm

#91 robert james on 11.23.13 at 11:15 am
”Another bankrupt Okanagan eyesore.. Kelowna must be Canada`s realstate slease bag capital.. http://www.kelownacapnews.com/news/232857861.html
————————————————————-

”Agree 100%. One thing not mentioned in the article is that this is/was supposed to be a ski resort too. However, the site is too at too low an altitude to get any significant snowfall, even artificial. It is a scam, pure and simple.

Like Snowboid, I wait patiently for reality to catch up with the Okanagan real estate delusion.”

Yep, things not looking so great in the valley of he sun. The following is an example of what can happen with recreational properties when the markets turn as they did in 08. Never recovered.

http://www.6717000.com/blog/2009/05/discount-pricing-in-the-okanagan/

#107 Devore on 11.23.13 at 1:13 pm

#67 KommyKim

Saw the bogus “news story” about BC’s negative inflation numbers on the local TV station. One of the causes was deemed to be lower electricity prices! What a joke that is.

That’s some fine investigative journalism there. I checked my BC Hydro bills online, took all of 3 minutes:

Rates:

June 2010:
basic charge: $0.13410/day
step 1: $0.06270/kWh
step 2: $0.08780/kWh
rate rider: 4%

October 2012:
basic charge: $0.15050/day
step 1: $0.06800/kWh
step 2: $0.10190/kWh
rate rider: 5%

October 2013:
basic charge: $0.15270/day
step 1: $0.06900/kWh
step 2: $0.10340/kWh
rate rider: 5%

Yup, must be those lower electricity prices alright!

#108 bigrider on 11.23.13 at 1:14 pm

You may understand Garth, that when one admits to transacting 60 real estate deals over a span of 30 years and a self admission of ‘being a real estate junkie’ that his readers may now challenge his assertions against RE as a successful investment enterprise.

Add in the 30+ house humping TV porn shows and the abnormally high concentration of people associated with housing construction/sales or financing in one form or another and you have a T.O that resembles the movie ’28 days’ with people infected with the RE bug instead.

Investments covering 30 years in a dozen separate markets. Everyone is free to replicate it. — Garth

#109 Ralph Cramdown on 11.23.13 at 1:48 pm

#99 newcomer21

Oh, where to begin?

“The good news is that the same forces correct very quickly as conditions change.”

I don’t think there’s another market on the planet that corrects more slowly than real estate. Once those foundations are poured, the building is going up regardless of current market conditions, whether its
a spec infill McMansion that will be done in six months or a 50 storey condo, 75% sold with 60% to investors, that’ll take two years to complete. And people trying to sell stick a sign on their lawn for a year or two, either because they want to get ‘their’ price or they can’t afford to pay out the mortgage at market price.

“What is lacking in your tedious criticism of real estate markets is a suggestion of a mechanism that might work better than supply and demand.”

The supply and demand is controlled by a couple of knob-twiddling nabobs and their policy wonk underlings in Ottawa. Nobody’s going to lend YOUR sorry ass 5-year money at 3.25% without much of your skin in the game.

“Unfortunately, if people followed your advice and rented continuously since the “The Greater Fool” was published in 2008, they would have lost 20-40% of a tax free capital gain in the major markets.”

You don’t get 20-40%. That’s the average price, including redevelopments and major renos, which your home will not be. And you have to deduct all your maintenance and periodic renos (did you want to sell as a “handyman special,” or just “tired/dated/waiting for your finishing touches!”), and all those fees and commissions. Use leverage and time it so you don’t incur mortgage discharge fees and you can make a great %, but your risk goes up, too.

“The differences in retirement are remarkable between owners and renters.”

You’re comparing a group which obviously could afford to own with one where at least some of them could not. Yes, the difference between rich people and poor people is that the rich ones are richer.

Residential real estate in most places has been a great investment over the last 30 years and it may be a decent one over the next 30. But the near term prognosis isn’t so good, transaction costs are a killer except in a rapidly rising market, and its an asset class that’s looking very overbought right now.

P.S. It was only a “forced saving plan” before anyone with equity was relentlessly sold HELOCs. Recent numbers out of CAAMP (a.k.a The Dunning Letter) show a lot of homeowners hitting up the home ATM, many of them for debt consolidation.

#110 Ole Doberman on 11.23.13 at 1:54 pm

RE correction coming 2015:

http://armstrongeconomics.com/2013/11/23/real-estate-outside-usa/

“In the USA, this is a reaction rally overall in real estate. However, during the wave, peripheral economies will see their real estate markets peak in 2015. The US is the core so it peaked first. People made money in the States so then they look around and try the same thing in the next market. We should see highs in Switzerland, Britain etc.”

#111 X on 11.23.13 at 2:00 pm

The 20 year average annual return of the TSX is 6.8%, even with 2 of the biggest market crashes in history.
http://www.taxtips.ca/stocksandbonds/investmentreturns.htm

The historical annual rate of return for RE is 5.4%.
http://www.td.com/document/PDF/economics/special/LongRunRateOfReturnForCanadianHomePrices.pdf

#112 Linda Pearson on 11.23.13 at 2:10 pm

#78 Regretful on 11.23.13 at 3:01 am

…My kids future is bleak. All because I just didn’t buy. Oh well bourbon and this blog will get me through life
**************************

Your kid’s future may be bleak because you didn’t fund an RESP or some other account to ensure he’ll get an education. Or failing that, it may also look bleak because you haven’t instilled in him or her a spirit of self-confidence and self-sufficiency. And oh yeah, maybe cut back on the bourbon and your own pitiful whining.

#113 Shawn on 11.23.13 at 2:45 pm

“X”, What is Your Point?

“X” at 111 said:

The 20 year average annual return of the TSX is 6.8%, even with 2 of the biggest market crashes in history.

The historical annual rate of return for RE is 5.4%.

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

Is the point that 20 years ago it was better to invest in stocks than real estate?

For real estate should we add the avoided rent to the capital appreciation and deduct property taxes and maintenance?

Should we perhaps own a house AND invest in stocks?

What do these historic statistics tell about future returns, if anything?

#114 tony bologny on 11.23.13 at 3:02 pm

why worry about deflation QE (money printing) is working awsome for the stock markets ,it worked well for Weimar republic of Germany when their stocks soared with money printing and worked amazing for Venezuala’s stock market aswell (over 400%)and is working amazing for the Japanese stock market ,time to taper my ass the whole thing will be toast if you stop QE or raise interest rates even chimpanzes loose it when you stop the flow of bananas . dow 20000 just around the corner with QE to infinity

#115 Snowboid on 11.23.13 at 3:10 pm

#78 Regretful on 11.23.13 at 3:01 am…

Is this your website?

http://alliedhomedeals.com/custom/index.cfm?id=204663

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

#106 Ronaldo on 11.23.13 at 1:05 pm…

“…things not looking so great in the valley of the sun…”

Maybe you can call it that in summer, but the real Valley of the Sun (except this weekend) is:

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

Or maybe the story of our youngest son:

http://www.imdb.com/title/tt1429411/

#116 Regretul on 11.23.13 at 3:17 pm

Most realtors who come here to undermine this blog are at least somewhat plausible. I expected better from you. — Garth
No Realtor here. I’m not talking about buying today. My rent is way way wayyyyy cheaper than a person buying the equivalent house today. I pay rent of $1200 a month for a place which would sell for 1.2 million. I have a long term rent agreement (25 years, a longer term is being currently negotiated) with an Inflation rent hike increase of 1% per year How anyone can afford to buy with huge debt and pay for the upkeep is beyond me. A home costs around $1000 a month to run even if it is paid off! Sure we have some savings from renting/RESP money but nothing compared to those who bought 10 years ago and have 100’s of thousands of dollars to leave their children when they sell. A house is worth nothing til it is sold. Real Estate rewarded those who bought and rewarded people who took on huge debt even more. I thought borrowing alot of money was irresponsible and that’s why I chose to rent back then. The market decided I was wrong and for that my family will suffer. The owner from years ago will sell and those profits can go to their Children’s down payment, the potential option of a home equity loan allows toys to be bought with plenty of profits. As a renter I see myself no different than a Welfare Recipient. Like the children of Welfare often continue on Welfare so will the children of Renters continue to be renters. Because of my decisions most likely my children and their children will be renters because there is no way we can save the 100’s of thousands for a downpayment for a house plus save for retirement. Is noon too early for that bourbon.

#117 Piccaso on 11.23.13 at 3:19 pm

#78 Regretful on 11.23.13 at 3:01 am

…My kids future is bleak. All because I just didn’t buy. Oh well bourbon and this blog will get me through life
**************************

Your kids future is his.

#118 James on 11.23.13 at 3:31 pm

(a) Nobody who directed their capital to a liquid portfolio rather than house equity has lost 20-40% in the last five years. I have shown consistently that the returns of balanced financial investments have far exceeded those of residential real estate, even in demand markets. – Garth

RE is 10x leverage + tax free (if principal residence).

Equity market is 3x leverage with margin.

RE is riskier obviously but the payoff is bigger too.

You ignore the substantial costs of entry and exit (and maintenance) for real estate, which comes off any net. – Garth

#119 Snowboid on 11.23.13 at 3:45 pm

My last post included a link to AlliedHomedeals.com, but I neglected to state this ‘company’ was formerly known on the web as KelownaHomeDeals.com.

The concept of rent-to-own has been discussed before, but nothing much positive can be said as reinforced by this CBC report on the above company:

http://www.cbc.ca/news/canada/british-columbia/homeowners-stung-by-botched-rent-to-own-scheme-1.1394692

#120 newcomer21 on 11.23.13 at 4:32 pm

#105 mister obvious and #109 ralph cramdon

Right now, my advice is to buy in most of the markets in Canada with the exception of Calgary, Edmonton, Saskatoon and Regina where the markets are very expensive and may correct in the next 2 years. Those who move to Calgary, especially, are finding there is nothing suitable to rent so there is really not much choice.

Low interest rates make it easier to repay the capital at an accelerated rate. The real estate market is active across the country because thousands are coming to the same conclusion. There is little fear of rising interest rates for the next 18-24 months and it looks more and more likely that the developed economies (US, Canada, Europe) will imitate Japan’s tepid recovery with marginal growth rates, an aging population, and a need to rebuild and prepare for retirement. The investment fraud of 08 wiped out many nest eggs.

You need a home and a place to raise a family and renting over the long term has many disadvantages, especially in retirement. If a retirement condo is needed, the house becomes a source of capital and can be converted tax free to cash to pay the monthly expenses of $3000-6000 or more.

Arguments that rely almost exclusively on fear and repetition tend to be emotive and weak. How can one seriously put full faith in the Investment community after the meltdown of 2008? The industry serves the interests of the corporate sector and not the small investor. Almost daily we read about yet another fine or criminal investigation (five years later) as these same people try to explain their actions and contribution to the 2008 melt down.

A sensible and impartial analysis would surely account for this risk. The investment advisor community has lost a great deal of credibility. There is a proven risk that needs to be acknowledged. The industry is not transparent and there are risks inherent with any investment vehicle on the market.

In comparison, owning a home is simple and almost a sure fire way to prepare for a better retirement. It is surprising to hear Garth dispute this. He suggests instead that we put our faith in the investment advisor. Doesn’t this raise a question or two?

Saying folks should put their faith in real estate because you don’t trust the financial industry says more about you than about smart money management. The fact is, in retirement people need income, not bricks and mortar, and holding the bulk of your net worth in one single asset your entire life is fraught with risk, especially for people entering the market at a time such as this. There is no single strategy which works for all. You have a jaded and simplistic, anti-corporate view, which is consistent with you job and background as a non-profit housing guy. Believe it or not, others also have a moral compass. — Garth

#121 robert james on 11.23.13 at 4:42 pm

#101 Ogopogo.. In regards to the Okanagan Mountain Development ,,http://www.kelownacapnews.com/news/232857861.html There was a thread on Castanet regarding the Okanagan Mountain development that was just removed,, there was a couple posters that had worked on the site that were apparently ripped off by the developer,,were not paid , ( Castanet tends to be a bit real estate friendly,, may have something to do with the Realtor ads ) Anyway ,someone just brought up Eddie Haymore,, another Okanagan developer..Eddie bought Rattlesnake Island across from Peachland and planned to have belly dancers ,,mini golf , etc. ,,this was in the early 70`s ,,I used to sail alot back then,, here in Peachland and would pass his barge going back and forth to the Island.. Anyway,, the government took his Island away and it became part of the the Okanagan Mountain Park.. Eddie was not at all pleased,,he sent a letter bomb to some government official which was frowned upon even back then.. lol.. So the real estate Donald Trump wannabes are not new here,, right back to the Bennet Boys that,” bought some land and sold some land and made a capital gain”.. By the way Eddie Haymore`s Castle ,,now called the “Peachland Castle” it`s not really a castle,, just stucco over God knows what is for sale here in Peach town.. If interested,, ask the realtor the history and if you can get a mortgage and see what they say.. It was a grow op about 10 years ago or so but they may not tell you that..

#122 eddy on 11.23.13 at 5:05 pm

Looks like the virtual tour for the above house still works-

http://theweirteam.ca/Virtual%20Tours/56%20Kerr%20Rd/index.html

That part of 416 is hot. There are Very few listings.

Mutual drive, no parking in drive.
It’s relatively easy to get a street permit for overnight parking, for a fee. Finding a spot is another thing

#123 jess on 11.23.13 at 5:11 pm

Canadian Watchdog –

unless you have access to one of these
http://www.singaporefreeport.com/index.php#/about

http://www.economist.com/news/briefing/21590353-ever-more-wealth-being-parked-fancy-storage-facilities-some-customers-they-are

#124 jess on 11.23.13 at 5:50 pm

The rise in prices has been exacerbated by the popular practice of renting out apartments exclusively as vacation accomodations. Berlin’s senate now plans to change that by introducing rules banning these apartments…
http://www.spiegel.de/international/germany/berlin-bans-short-term-vacation-apartments-for-tourists-a-935085.html

#125 Ronaldo on 11.23.13 at 5:52 pm

#103 Son of Ponzi on 11.23.13 at 12:50 pm

”Ronaldo,
Nice hat trick against Sweden.”

Thank you. Was a walk in the park.

#126 Marcus on 11.23.13 at 5:53 pm

Wait until the meme of the dead sardines and sea stars off of Vancouver and the rest of the west coast catches on. Scientists have just confirmed also that radioactive ceasium is in the plankton. Exactly on schedule per Pacific drift from Fukushima. What will happen to real estate then?

#127 Shawn on 11.23.13 at 5:55 pm

IMPACT OF INTEREST RATES

Newcomer 21 at 120 said:

Low interest rates make it easier to repay the capital at an accelerated rate.

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

Is that so?

Did low interest rates not push the purchase price of house up to say 4 times income from the previous 1 or two times income that resulted when rates were much higher?

Do low interest rates no make it easier to carry each $100k of debt and therefore people took more debt?

Does the ability to repay a loan not run in proportion to income as opposed to interest rates?

Are today’s mortgages at four times income not MUCH harder to pay off since putting 10% of income on the mortgage only knocks the principal down 2.5%? When a mortgage was one times income (’cause that was all that could be afforded at 15% interest, 10% of income brought the mortgage down 10%?)

Does the home price to income and home price to rent not enter into you calculation at some point?

P.S. I own my home free and clear and doubt that I will ever rent. We paid a bit over one times family income for it in 1995 ($135k, that was normal for SFD in those days in Alberta) and paid it off in about 7 years. In today’s market I would not want to buy or rent. I would probably reluctantly buy something like a townhouse.

#128 James on 11.23.13 at 6:07 pm

You ignore the substantial costs of entry and exit (and maintenance) for real estate, which comes off any net. – Garth

Of course that should be factored in. Moving forward one should be more selective where to invest in RE. To me a SFH in Toronto downtown high demand area Toronto is a good bet. But it could also be a bad bet. Time will tell…..

That was decisive. — Garth

#129 Jackofall on 11.23.13 at 6:24 pm

Is it just me or are all of the RE-pumpers tonight completely missing the boat? I think I got dumber by reading all of today’s comments. Should have taken Garth’s advice and curled up in front of Glee with a bucket of fried chicken.

#130 Canadian Watchdog on 11.23.13 at 6:46 pm

#123 jess

"Collectibles have outperformed stocks over the past decade, with some, like rare coins, doing a lot better, according to The Economist’s valuables index."

Yep. But because Bloomberg or iTrade don't have collectables price indexes, then it must mean that stocks are the only game in town.

#94 Ralph Cramdown

Tuition Crunch Takes Big Toll

Nearly half of the nation's colleges and universities are no longer generating enough tuition revenue to keep pace with inflation, highlighting the acceleration of a downward spiral that began as the recession ended, according to a new survey by Moody's Investors Service.

Huh? Inflation outpacing tuition now? That's unpossible.

#131 TurnerNation on 11.23.13 at 6:54 pm

Sneaky two listing.

This house has been on offer in its various forms for a few years!

$899,000
MLS® X2629166
6 + 1 Beds, 5 Baths
8 PORCUPINE CIRC, Barrie
RE/MAX CHAY REALTY INC., BROKERAGE

$899,000
MLS® 1303563
6 Beds, 5 Baths
8 PORCUPINE CI, BARRIE
RE/MAX CHAY REALTY INC., BROKERAGE

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=13151058&PidKey=2078052125

#132 jess on 11.23.13 at 7:15 pm

Which is worse for the environment coal or petcoke

http://www.midwestenergynews.com/2013/10/14/first-it-was-detroit-now-petkoch-piling-up-in-chicago/

…”Petcoke on the move
After Mayor Dave Bing ordered the Detroit petcoke piles gone and Michigan legislators introduced bills, the Detroit piles were reportedly moved to Ohio.

The New York Times revealed that some petcoke from Detroit is being shipped to power plants in Nova Scotia in what it called “something resembling a bottle return program” — since the tar sands came from Canada. According to the Times, one of the world’s largest dealers of petcoke is the Oxbow Corporation, owned by William Koch.

…”petcoke is exported to Latin America and Asia for power plants or highly-polluting cement kilns. Petcoke can also power gasification plants – the coal gasification plant proposed in Chicago would have been powered partially by petcoke and located on the same Beemsterboer land where piles are now rising.

#133 Smoking Man on 11.23.13 at 8:08 pm

Ha Ford after all the moving, still has a crazy high approval rating.

Let’s analysis this…

Not that they like him more. But hate guys with man purses who want to use law rather than a pitch to part you separate you from what’s in your wallet.

Was in communication with the UCC told me BOC Will cut the overnight rate by 1/4 point second meeting from now, the one in Dec. Will be the warning.

Bet accordingly grasshoppers… And make some serious loot.

#134 Mister Obvious on 11.23.13 at 8:08 pm

#120 newcomer21

“How can one seriously put full faith in the Investment community after the meltdown of 2008?”
—————————

I can with no problem whatsoever. I have been seriously invested in vehicles other than real estate since 2000. To be fully honest I have also owned real estate during that time. However, today I own none.

I have lived through the ‘dot com bust’ as well as the global financial crisis that began in the fall of 2008. In both those cases I watched my saving diminish. I’m not saying it was fun but I did stay the course and resisted the temptation to sell into a falling market. I’m sure glad that I did.

In hindsight, those market events, ugly though they seemed at the time, made barely a ripple in my long term plan.

Today my investments (to which I have since contributed significantly) have recovered and grown nicely. In aggregate they spinoff enough wealth to live quite comfortably even here in downtown Vancouver.

Garth Turner is 100% correct when he says losing money (on paper) is not the same as running out of money (in reality). If you can’t understand the difference then you are destined to forever be a member of the reactionary herd.

I am still a fully invested, happy health renter. The cost of housing has risen to undreamed of levels largely due to the cheap money you expect will sustain the RE market for another couple of years.

Houses pay you nothing but they continuously extract money on all fronts. The only reason to ‘jump in’ at today’s super high prices is a belief that they will rise even higher in price, that such prices will maintain, and you will be able to extract that price when you want to or you must.

That thinking is the hallmark of the greater fool. It’s an extremely risky gamble now and grows more so every day.

My financial advisors do NOT buy investments at any price ‘just to get in’. They are considerably smarter than that. They wait until a potential investment represents actual value.

That is very unlike the innocent sheep who line up at presales because their parents have convinced them that opportunity is fading fast.

#135 Daisy Mae on 11.23.13 at 8:41 pm

#78 Regretful: “My kids future is bleak. All because I just didn’t buy. Oh well bourbon and this blog will get me through life…”

Most realtors who come here to undermine this blog are at least somewhat plausible. I expected better from you. — Garth

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

LOL I’ll be damned — another realtor. You can’t put much over Garth, Regretful. Give it up.

#136 BS Detector on 11.23.13 at 8:53 pm

The question is….how long can Canada keep the bs going? We are really pushing it.

Also, I bet house prices have gone up in Waterloo even though thousands have been canned from RIM. How long can this go on lol

#137 recharts on 11.23.13 at 8:54 pm

No bubble here

http://www.zerohedge.com/news/2013-11-23/nope-no-bubble-here

Sentiment, according to Citi’s proprietary model, has now reached levels of euphoria not seen since the peak of the bubble in 2007/8, macro-economic data is deteriorating rapidly, and as Tobias Levkovich notes, intra-stock correlation is also posting a worrisome sign.

But perhaps, more than any other indication of just how far ahead of itself the US equity market has gone is the total and utter disconnect the following 8 charts show between aggregate and sector micro-fundamentals and the share price which is supposed to represent their expectations. With net profits being helped by a meaningfully lower effective tax rate and sharply lower interest expense, primarily assisting the Financials sector, expecting these two crucial pillars of support to be sustained is simply folly.

In the interests of plausible deniability, look away… we highly suggest Bullard, the QEeen, and the bulk of the mainstream financial press, look away…

#138 Question folks on 11.23.13 at 8:56 pm

Question – what are municipal taxes on a house that is priced at $700,000?

Say for example in Toronto, what would property tax cost on a small shack say for $700,000?

I’m 30, have got about $80k saved, currently rent in Montreal and have seen huge gains on BAC, IR, WFC et al. I’m not buying anything in Canada but just wondering where property tax fits into this huge bloated beast.

#139 KommyKim on 11.23.13 at 9:22 pm

RE: #114 tony bologny on 11.23.13 at 3:02 pm
working amazing for the Japanese stock market ,time to taper my ass

How did it work out for the those who invested in Japanese stocks in 1999, 2006-2007?

#140 Ronaldo on 11.23.13 at 10:01 pm

#127 Shawn – $135,000 family income in 1995 was very much over the medium family income for that time and you could easily have afforded a much more expensive home than what you purchased. You were living quite a ways below your means at that rate.

For someone less fortunate than yourself and who was in the average family income category, that home would likely have been 2 or more times their income.

I too purchased a home in 1984 for $90,000 (new), 3 b.r. about 1150 s.f., a basic starter home. It too was 1 times our family income. I could have done as others did who had the same income as myself and purchased a home twice that price or more as there were many to be had but I chose to live well within my means as well. Everyone ones situation is different.

P.S. I would never buy a townhouse or any other type of condo again. Too much hassel with volunteer boards who don’t have the knowhow or the background to manage these things. And you always have that one person who appoints himself as the “condo cop”.

#141 Andrew Woburn on 11.23.13 at 10:44 pm

I got to wondering after my comments on Parksville and Qualicum as retirement destinations, where will all the retiring boomers actually go? Are they really likely to swarm into the downtown condos of Toronto and Vancouver?

My unkind comments on the very pleasant communities of Oceanside only reflect my city kid background. If you were able to retire there from a small town in Saskatchewan or Ontario, you would think you were in paradise, albeit a little early. I can’t see many rural people retiring to a skybox in the city.

What about all these suburbanites who are supposed to sell off their McMansions and become urban swingers? Problem one in my experience is that most older suburbanites don’t really like the city and don’t go there except for special events. It is really hard to imagine that many will want to trade elbow room for a 600 foot box. It is easier to imagine them downsizing in their own community or moving to a nearby small town.

That leaves the people who live near downtown, say North Vancouverites, who use and enjoy the city. We were in that category and considered a downtown condo. The first problem is square footage. If you have been living in 3,000 square feet and they show you the 800 foot condo facing straight into another condo building, you shrivel inwardly. You could downsize into 1,200 feet but, downtown, that would soak up a lot of the cash you plan to live on. The second problem is that cities are for young people and a lot of them are going to be in your condo association and they are not going to want the things you want. The third issue is noise from the street and from your neighbours. Downtown Vancouver is an endless cacophony of sirens, crazy people shouting, construction equipment at 7am etc.,etc. When you’re thirty it’s the exciting pulse of the city and you are part of it all. When you are 65, it’s hard work remembering that it’s all fun.

The last issue is, what will you actually do in the city once you retire? Are you really going to regularly want to shell out $150 to inspect Lady Gaga’s latest revelation of anatomy. Will you really enjoy sitting in hip restaurants with people younger and weirder than your children whose only form of communication is shrieking at each other over deafening bass lines or texting the person beside them. Sadly Whole Foods and yoga cannot save you. You are old and irrelevant so why pay the price of being there? Eventually the light bulb goes on and you realize that the money you save by not being downtown will more than cover the cost of a hotel when there is some event you really want to see.

Some people will retire downtown and thrive just as some will find their joy in Parksville. Yes I know lots of retired Europeans and New Yorkers are happy in their cities. The next generation of Canadians is also evolving to be happy in small urban spaces but my generation didn’t and probably won’t. I don’t claim to have any answers here but I would be interested in other points of view.

#142 Ralph Cramdown on 11.23.13 at 11:08 pm

#137 recharts — “Sentiment, according to Citi’s proprietary model, has now reached […]”

Does it not strike you as just a little bit ironic that Zerohedge is trying to sell you a story based on believing the output of a proprietary Citi model? You got trolled there.

#143 Herb on 11.23.13 at 11:15 pm

#138 Question folks,

go to the website of whatever municipality you are interested in, Toronto for instance, find the “Property Tax” tab, go to the “Property Tax Estimator” there, type in whatever house value you choose, and click “Calculate.”

A rule of thumb I’ve found: the annual property tax take is 1.5 to 1.7% of the value of the house, depending on the municipality.

#144 OttawaMike on 11.23.13 at 11:39 pm

Wow.
Conrad Black and Smoking Man are one and the same. I have long suspected the faux spelling and grammatical errors were a coverup of SM’s true identity:

http://fullcomment.nationalpost.com/2013/11/23/conrad-black-the-salvation-of-rob-ford/

#145 Bottoms_Up on 11.23.13 at 11:39 pm

#116 Regretul on 11.23.13 at 3:17 pm
——————————————
Did you state what city you live in? In Ottawa, $1200/mo in rent would be about the equivalent of about a $250,000 garden townhouse.

If you rented all these years, yes you missed out on perhaps the best real estate appreciation, ever. But don’t let that get you down, many, many people also missed out (those prudent and risk averse, those too young, those without enough income, those that jumped the ship too early). Now that you know how the game is played, use your knowledge to put your family in a better place in the future. I’m sure you could do it.

#146 jd on 11.23.13 at 11:51 pm

Q: How many ways can you spin on the spot, Stephen Poloz?

A: Enough to be a Prima Ballerina of economic disinformation.

http://business.financialpost.com/2013/11/21/boc-chief-stephen-poloz-says-canadian-housing-market-not-a-bubble-predicts-soft-landing/

#147 recharts on 11.24.13 at 12:05 am

What really strikes me is that I never thought of the fact that as money is cheap for RE so it is for speculating on the stock market, hence the stock market bubble

The stock market has reached euphoric levels while the fundamentals are not there as they are not there for RE.

By your theory the market will keep going up while the corporations will increase their profits by firing people and increasing prices. These are your fundamentals, remember?

This will be cool!

#142 Ralph Cramdown on 11.23.13 at 11:08 pm
#137 recharts — “Sentiment, according to Citi’s proprietary model, has now reached […]“

Does it not strike you as just a little bit ironic that Zerohedge is trying to sell you a story based on believing the output of a proprietary Citi model? You got trolled there.

#148 Tony on 11.24.13 at 1:25 am

Re: #147 recharts on 11.24.13 at 12:05 am

Corporate profits in America are falling not rising as can be seen here.

http://www.zerohedge.com/news/2013-11-19/look-away

#149 Mayor of Qualicum on 11.24.13 at 2:35 am

I’m a Qualicum/Parksville lad.

Garth speaks the truth. The richer boomers moved to the area and the building mania started approx 98 and took off in the early 2000’s. New subdivisions everywhere, and I mean everywhere even far away from health care facilities – not very forward looking of the boomers – lol. Little if no industry, not many high paying prospects for the youth, most are now in Alberta or flying back and forth.

The area is busy in the afternoon and then dead by 7pm even is the Summer months. (Qualicum that is) Who will buy there houses…who????? I wondered why all the restaurants in the area aren’t busy…well the old mostly eat at home. I have run into many people who eat out 1-3 times a year…yup the only town where just about every house has a landscaper.

#150 Mayor of Qualicum on 11.24.13 at 2:44 am

Oh yah, very little if any building going on, half finished sub divisions. The value of land in the towns will stay relative but the surrounding areas prices are coming down as the mania is over. Nothing lasts forever to think so is nuttiness. Oh yah and the houses most are customs “dream houses” large and hard to heat. Nothing but herd mentality and lust. I mean really the retired have a short shelf life. Those areas stand to loose a large population over the next couple of years and it started 8 years ago. In home care in the area is the largest business. People driving from house to house caring for the elderly and one person per house. It’s life…plain and simple.

We are in for a ride.

#151 World According To Garth on 11.24.13 at 3:19 am

#143 Herb on 11.23.13 at 11:15 pm
#138 Question folks,

go to the website of whatever municipality you are interested in, Toronto for instance, find the “Property Tax” tab, go to the “Property Tax Estimator” there, type in whatever house value you choose, and click “Calculate.”

A rule of thumb I’ve found: the annual property tax take is 1.5 to 1.7% of the value of the house, depending on the municipality.
——————————————————-

Problem is today the pencil pushers overvalue the houses so they can suck as much tax as possible out of the working poor so the fat cat pencil pushers can collect their 91,000 dollar average salary and 1,000,000 pension when they retire 50% of that pension funded again….by the working poor. Disgusting.

#152 Obvious Truth on 11.24.13 at 7:37 am

I’m thinking of making a switch to questrade. Anyone here using it. Is there a catch to free eft buys.

Seems like this could be a great option for those here who may be looking to manage smaller accounts.

I can’t find a min balance for lower trading fees. Any insight?

#153 JK on 11.24.13 at 9:55 am

It’s ironic so many America-haters flood on to this blog to dis that country’s recovery,…..

LoL …. Is that why the (soon to be announced) QE program will increase. Dream on … The Fed knows recovery is not.

#154 NoName on 11.24.13 at 10:21 am

http://goo.gl/B0TfAk

this is interesting, swiss to cap MAXIMUM wage 12x lowest worker wage.

#155 blase on 11.24.13 at 10:27 am

#149

“well the old mostly eat at home”

Made me laugh, something hilarious about the way you worded that.

#156 Bottoms_Up on 11.24.13 at 11:10 am

#152 Obvious Truth on 11.24.13 at 7:37 am
———————————————-
I use QT. I’ve found great customer service (via email), and the platforms are not bad. I use it to manage an RESP account, low fees and very straight-forward. I believe there’s no quarterly inactivity fee if you maintain an account over $5000.

#157 Bottoms_Up on 11.24.13 at 11:16 am

#151 World According To Garth on 11.24.13 at 3:19 am
——————————————————–
I’m fairly sure property taxes also fund:

1) Public Transit
2) Garbage collection + recycling
3) Fire and police
4) Infrastructure including water/sewer
5) Education
6) Social services including food banks, women’s shelters etc.

91,000 these days is basically a working poor wage, the net take home pay of someone earning this and someone earning 1/2 as much is not as big as you might think.

If you don’t like taxes and civilisation, move to Somalia, I hear they’re looking for more pirates these days.

#158 Ralph Cramdown on 11.24.13 at 11:27 am

#147 recharts — “By your theory the market will keep going up while the corporations will increase their profits by firing people and increasing prices. These are your fundamentals, remember?”

No, I don’t really remember that. While individual corporations are constantly trying to increase efficiencies, overall employment is increasing, as are production, sales and income. An employed person spends more than an unemployed one, and increased consumer spending leads to increased employment. This is true both in Canada and the US, and both central banks have signalled continued easy money.

http://advisorperspectives.com/dshort/updates/Big-Four-Economic-Indicators.php

I have no idea whether “the markets” will keep going up in the short term or not. I’m comfortable with my portfolio’s P/E and yield, and when I need to reinvest dividends or invest new cash, I can still find companies that meet my criteria. Not being Warren Buffett, I have the advantage that I don’t need to find cheap companies big enough to soak up a $10 billion investment.

And hey, if you think North American stocks are too bubbly for you, shop internationally for P/Es and yields that suit you. Or in cheap sectors. Canadian REITs can be had below book, senior miners are cheap and juniors are practically free. Still, I’d rate the mood of domestic investors as cautiously optimistic, and that’s the people that are IN the market. There’s lots still huddled in bonds and cash, moaning about their low returns. The rally will continue until morale improves.

#159 toronto condo glass falls again on 11.24.13 at 11:36 am

Toronto condo’s are crashing yet again as yet another glass panel from a cheaply poorly built condo. Toronto condo’s are only worth 25 cents on the dollar. Anyone buying a condo is just stupid as Condo’s will drop in value every day, week, month and year. Buyer beware

#160 Daisy Mae on 11.24.13 at 11:41 am

#108 bigrider: “You may understand Garth, that when one admits to transacting 60 real estate deals over a span of 30 years and a self admission of ‘being a real estate junkie’ that his readers may now challenge his assertions against RE as a successful investment enterprise.”

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

If these 60 transactions over 30 years was in the correction proportion to the rest of his portfolio, why not?

#161 Shangri La = Another Crap Condo on 11.24.13 at 11:57 am

http://toronto.ctvnews.ca/pane-of-glass-falls-from-downtown-highrise-1.1557899

But it was so expensive to buy? It must be so well made? LOL

#162 harboursnug on 11.24.13 at 12:00 pm

#149 Mayor of Qualicum

Talking to my bud last night in Nanaimo. He said real estate crashed there in 2008. He paid 350K for a half duplex and is lucky if it’s worth 280K.

Although he road the ride up on his previous place buying for 150K and selling it for 320K

If they had a bridge and not the bullshite ferry for $160 a pop it would be different but that ain’t happening.

#163 Gigawatts on 11.24.13 at 12:17 pm

Funny recent post on red flag deals about some guy facing foreclosure but refusing to sell:

http://forums.redflagdeals.com/help-possible-foreclosure-need-advice-1410566/

#164 Andrew Woburn on 11.24.13 at 12:27 pm

#149 Mayor of Qualicum on 11.24.13 at 2:35 am
I’m a Qualicum/Parksville lad.

Garth speaks the truth. The richer boomers moved to the area and the building mania started approx 98 and took off in the early 2000′s. New subdivisions everywhere, and I mean everywhere even far away from health care facilities

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

I wonder if they were really boomers. The leading edge of boomers didn’t turn 60 until 2005. Younger people think of all older people as boomers but there was a sharp generational shift. When I began university in the mid sixties, the big men on campus wore three-piece suits and some even smoked pipes. By the time I left, we were mostly faux hippies. It was like we jumped from the thirties to the seventies overnight. That line is still there and developers ignore these shifts at their peril. Many suburban parents think their city kiddies will trade their condo lifestyle for the burbs when they “grow up” but I wouldn’t bet on it.

#165 john on 11.24.13 at 12:33 pm

In the wake of the DOC’s documentary yet again another glass panel from an over priced condo has fallen again. This is just the tip of the iceberg with the condo problems in Toronto. Realtor scum will have to spin and lie real hard to con a victim(buyer).

http://toronto.ctvnews.ca/pane-of-glass-falls-from-downtown-highrise-1.1557899

#166 Daisy Mae on 11.24.13 at 12:38 pm

#140 Ronaldo: “I would never buy a townhouse or any other type of condo again. Too much hassel with volunteer boards who don’t have the knowhow or the background to manage these things. And you always have that one person who appoints himself as the “condo cop”.”

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

There are many strata management companies available. However, many gated communities — most of which are governed under the condo act — are now opting to manage themselves simply to save costs. Therein lies the problem — they are volunteers, often self-appointed and invariably unqualified — so conflicts arise over various issues. Most homeowners take it lying down because they don’t know their rights. Actually, we are simply individual homeowners sharing some communal costs. And because we live in close proximity to each other which is nice from a ‘security’ point of view, there is a need for a reasonable set of bylaws. Other than that, we’re entitled to the peace and enjoyment of our properties. We don’t need any one group of people throwing their weight around…we don’t need ‘condo cops’. And we don’t tolerate it.

#167 Ralph Cramdown on 11.24.13 at 1:00 pm

#148 Tony — “Corporate profits in America are falling not rising as can be seen here.”

That chart doesn’t even show corporate profits. It shows rising stock prices and declining analyst estimates of forward earnings. If you want to know whether corporate profits are rising or falling for 2013Q4, you have to wait for them to come out and compare them to 2012Q4. They’re going to be higher.

Meanwhile, let’s zoom out on that chart a bit:
http://www.yardeni.com/pub/peacockfeval.pdf‎

Oh look, analysts start with high earnings estimates and revise them down later EVERY YEAR, but they keep ending up higher than the previous year, and look at how much money you’d have missed if you used Zerohedge’s lame chart as an indicator of anything!

When a site’s job is to convince you it’s raining shit every day whether skies are blue or brown, they’ll find a way to convince you. Some people are more easily convinced than others.

#168 Ralph Cramdown on 11.24.13 at 1:08 pm

#162 harboursnug — “If they had a bridge and not the bullshite ferry for $160 a pop it would be different but that ain’t happening.”

Yeah, how DID our dreams of economic stimulus go from “we’re building a bridge to the island” to “we’re reducing tariffs on imported kids’ hockey equipment and building a gazebo in Muskoka” in a single generation?

Small ball, Mr. Harper, small ball.

#169 Infused with Opiates on 11.24.13 at 1:22 pm

149 Mayor of Q – do you have your demographics right? the bulk of the boomers were in their 40s in 2000. Were these the people moving to Pville/Qualicum?

#170 X on 11.24.13 at 1:24 pm

http://www.cbc.ca/doczone/episodes/the-condo-game

#171 Nemesis on 11.24.13 at 1:55 pm

“It’s ironic so many America-haters flood on to this blog to dis that country’s recovery, when there’s something scarier happening here.” – HonGT

Indubitably, AuldPol… whereas the MapleSyrup ConstitutionalMonarchy’s problems may not be intractable… they are, in many respects, far worse than even UncleSam’s…

By way of example, let’s PeelBackTheCurtain on HogTown’s SeamyUnderbelly…

“It’s unbelievable, the hidden poverty in Toronto, one of the wealthiest cities in the world.” – Oktay Adner

[G&M] – In Toronto Centre, where is the middle class?

…”In the heart of the 18 high-rise apartment towers that make up St. James Town, Oktay Adner, an immigrant from Turkey, says like many immigrants he left his middle-class status behind when he came to Canada. A university graduate with a career when he arrived, it has taken six years of struggle to get a glimpse of the middle class here in Canada. He hopes to get there soon.

“I will be back at the zero point after 10 years,” he says.”…..

http://www.theglobeandmail.com/news/toronto/in-toronto-centre-where-is-the-middle-class/article15572377/

On the LighterSide… today’s ‘Zen’ is brought to you courtesy ‘o WhistlerRealtors… who are finally able to report that their ‘condos’ are once again, ‘Smokin’ Hot!’…

“The shocking thing was how quickly it turned from ‘oh, there’s a bit of smoke,’ to ‘oh, the whole building is on fire.’ You know, 30 or 40 metres of the whole roof, it just went like this so quickly. It was surprising.” Alex Taylor – Bystander/CitizenJournalist

[CBC] – Video: Fire in Whistler Village

http://www.cbc.ca/news/canada/british-columbia/fire-in-whistler-village-1.2438254

#172 Mulroney GST, Harper HST -see the trend? on 11.24.13 at 2:10 pm

@#156 Bottoms_Up
If you don’t like taxes and civilisation, move to Somalia, I hear they’re looking for more pirates these days.
********

You may be suffering from an undiagnosed form Stockholm Syndrome

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

Percentage based taxes are a tax on inflation, inflation itself is a hidden tax, inflation is built into the system, so it’s a tax on a hidden tax.

#173 Canadian Watchdog on 11.24.13 at 2:21 pm

Repost:

BC's employment-to-population ratio is now below 60% for the first time since January 2003. Chart

Now we're starting to see Canada's structural demographic problem that can't be reversed with ease. The only quick solution is to crank up immigration. And that's exactly what the government will do.

#174 World According To Garth on 11.24.13 at 2:27 pm

#157 Bottoms_Up on 11.24.13 at 11:16 am
#151 World According To Garth on 11.24.13 at 3:19 am
——————————————————–
I’m fairly sure property taxes also fund:

1) Public Transit
2) Garbage collection + recycling
3) Fire and police
4) Infrastructure including water/sewer
5) Education
6) Social services including food banks, women’s shelters etc.

91,000 these days is basically a working poor wage, the net take home pay of someone earning this and someone earning 1/2 as much is not as big as you might think.

If you don’t like taxes and civilisation, move to Somalia, I hear they’re looking for more pirates these days.
—————————————————-

No…….91k is not the working wage of pushing paper unless your a govt worker.

2nd my sister is a front line healthcare worker. It’s funny how paper pushers like yourself always have to bring up “police and nurses” to justify their existence. There have been countless studies that show front line workers make up less than 15% of the govt workforce. FAIL

#175 recharts on 11.24.13 at 2:56 pm

That is worrying! From what I see there the over 65% population is increasing with 1M people per year. That will put some pressure on the Healthcare system.
He he …Ralph Cramdown just said above that the employment is increasing. Not sure if he is speaking about the canadian numbers or about the fudged american numbers.

#173 Canadian Watchdog on 11.24.13 at 2:21 pm
Repost:

BC’s employment-to-population ratio is now below 60% for the first time since January 2003. Chart

Now we’re starting to see Canada’s structural demographic problem that can’t be reversed with ease. The only quick solution is to crank up immigration. And that’s exactly what the government will do.

#176 rosie "moving forward" in the knowledge that, "this won't end well" on 11.24.13 at 2:56 pm

Lot’s of boomers lookin’ for a job. Why don’t they just live off the proceeds of their biggest single investment? Beats me. http://www.ottawacitizen.com/business/Working+beyond+Nearly+five+Canadian+workers+they+never+able/9205107/story.html

#177 Smoking Man on 11.24.13 at 3:09 pm

#144 OttawaMike on 11.23.13 at 11:39 pm

Wow.Conrad Black and Smoking Man are one and the same. I have long suspected the faux spelling and grammatical errors were a coverup of SM’s true identity:

http://fullcomment.nationalpost.com/2013/11/23/conrad-black-the-salvation-of-rob-ford/
……………….

Close and accurate assessment, just picked the wrong guy. Notice Conrad and I think alike. We are both Smoking Men…..

#178 wtf? on 11.24.13 at 3:35 pm

Does anyone notice that the Canadian estate market is set explode because the Toronto professors and pundits are getting squeezed? Is it only all about Toronto? In the stock market we have a saying that ‘ its only winter when there is snow on the driveways in New Jersey’ ( majority of brokers and traders have family home there) and only then does the oil and gas index start to move.

#179 Ripped on 11.24.13 at 3:51 pm

#173 Canadian Watchdog on 11.24.13 at 2:21 pm
Repost:

BC’s employment-to-population ratio is now below 60% for the first time since January 2003. Chart

…The only quick solution is to crank up immigration. And that’s exactly what the government will do.
———————————————————-

What, so there’s higher unemployment?

#180 Herb on 11.24.13 at 3:55 pm

#174 World According to Garth Yourself,

your broad-brush tarring might be a little credible if you would back up your claims with facts and the odd veryfiable link.

The fact that your sister is a “front line healthcare worker” possibly is true but irrelevant to your proposition (at #174) that “countless studies that show front line workers make up less than 15% of the govt workforce.” Give us a link to an objective study, i.e. one that wasn’t done by or for right wingnuts to “prove” an ideological point.

Google “percentage of front line workers in government” and let us know which of the 3.6 M results back up your contention.

#181 Penny Henny on 11.24.13 at 4:12 pm

#138 Question folks on 11.23.13 at 8:56 pm
Question – what are municipal taxes on a house that is priced at $700,000?

Say for example in Toronto, what would property tax cost on a small shack say for $700,000?
—————————————————–
about 3700-4100, depending on the neighbourhood

#182 Piccaso on 11.24.13 at 4:21 pm

My retired neighbour this morning was giving me the gears to go and buy a new wazzoo XRS Ski-Doo like him.

I said that I can’t afford the toys like you can (this retired dude has more toys than you can imagine).

He’s says a screw it… I still have a mortgage on my house and owe more on it now then when I was working !!

I wonder how many retirees are like him with the lowest rates in history and more house equity then ever before?

#183 Ralph Cramdown on 11.24.13 at 4:23 pm

Spot the equity bubble.

2007: BCE trading around $40 to yield 3.75%. A year earlier it had been down to 4.4% yield, before all the income trust business… Ten year Canada averages about 4.3%. Investors ambivalent about holding BCE at 87% before-tax yield of Canadas.

2013-11: BCE yields 5%, Canadas of ’23 yield 2.63%. Investors ambivalent about holding BCE at 190% of the before-tax yield of Canadas.

BCE’s dividend is up 60% since 2007. What bubble?

Nothing special about BCE. It’s just a large cap income stock considered safe and whose business everyone understands.

#184 Canadian Watchdog on 11.24.13 at 4:31 pm

#175 recharts

That's not the scary chart. This one is. The government knows there's a crisis ahead and there's nothing they can do about it other then ramp up immigration, ease up on foreign direct investment policies and most importantly, keep the public calm.

#179 Ripped

Nobody believes the unemployment rate anymore. The best measure of jobs used by institutional investors and the one indicator that keeps getting thrown in the Fed's face is the employment rate (employment to population ratio).

#185 Smoking Man on 11.24.13 at 4:34 pm

I sure as hell would love to be a fly on the wall at the national post, happy holidays party.

Don’t know the men but as sure as I’m sure a BOC rate cut imminent, I know Conrad Black and Andrew Coyne don’t like each other that much.

I love black, a super smoking man, Andrew a silver spooned brat. His attack on Ford revolting, going threw life in the shadow of his old man, taking the moral high ground.

Or maybe he wants to work at the Toronto Star.

I hear there are snipers on roof tops in the heath of Ford Nation taken out Toronto Star paper boys.

Lol

#186 Obvious Truth on 11.24.13 at 5:04 pm

156

Thanks Bottoms_Up.

Seems the perfect place to invest regular smaller contributions in ETFs.

No charge to buy would be perfect for longer term Resp contributions.

Nice find.

#187 TurnerNation on 11.24.13 at 5:10 pm

Canada is now a frozen wasteland, for the next 6 months.

What to do…spend $700,000 on a tract house, 6″ from neighbours in outer 905 area.

With our -30 windchill winters and +40 humidex summers spend massively to heat/cool.
It makes sense; that two adults and two kids need 2500sq feet plus basement + garage supremely is a first world problem. While daily you spend 10-12 hours at work and commute, 8 hours asleep, leave only a few hours of shopping, tee-vee and video gaming.
Drive to your local outletmall filled by gaudy American fashion houses.

Spend 1-2 hours each day stuck in traffic on the Don Valley Parkinglot, or Lakesnore Bvld, or on Gardiner DistressWay. Or pay the Con’s friends via the outsourced 407 Troll highway.

Worth fighting for ! Our way of life. With 5% yearly inflation in taxes, utilities, cable, insurance and, soon, interest rates. Bank, Insurance, and Utilities and Governments thanks you.
I’m not feeling a good slave today. ThoughtCrimes.
galore. Hard work brings freedom.

Ps. AC’s staffers assembled an apology video for Garth:

http://www.youtube.com/watch?v=idbZ9ly7DzU

#188 Herb on 11.24.13 at 5:20 pm

#185 SM,

I love Andrew Coyne! Unlike you and Ford, he makes sense.

#189 HAWK on 11.24.13 at 5:30 pm

#173 Canadian Watchdog on 11.24.13 at 2:21 pm

You are probably right, but I think we will also see the elderly working for a lot longer. Retirement at 80, will become the “new normal”.

#190 Smoking Man on 11.24.13 at 6:21 pm

#188 Herb on 11.24.13 at 5:20 pm#185

SM,I love Andrew Coyne! Unlike you and Ford, he makes sense.
…………

How does that not surprise me old chap.

It’s sick, got Floyd on the head phones…. By gold fish, 6 players, pick a bubble bounce, I have hit like 20 award all.
For them all.

2 misses……. The odds are astronomical, my wife who is just hammered says to them. He has a connection to the UCC amazing,

They go huh,

chic to the right says, are you the smoking man.

I said who?

She says never mind.

Then takes my photo.

Honey if you read this when you get home, please don’t post it….. I will pick your bubbles again if your nice.

Now perhaps I should stop throwing the foot ball pool.

Next week a perfect game just to freak out fellow tax farm slaves. Who might venture here……

Smokingberg…….

#191 Canadian Watchdog on 11.24.13 at 6:55 pm

#189 HAWK

That's certainly the trend, but I'm beginning to get a sense that Gen Y may revolt against fiat currency and stocks and move into the latest speculative savings vehicle that just moved into the number five spot for top payments in world.

If this trend continues and grows to its long-term potential, it will eventually have an impact on RE, bonds and stocks. Some of you will laugh, but keep in mind what social trends have taught us about expoential growth within a short time frame.

#192 Ronaldo on 11.24.13 at 9:12 pm

#189 Hawk

”You are probably right, but I think we will also see the elderly working for a lot longer. Retirement at 80, will become the “new normal”.”

And what type of work do you think they will be doing.? Most companies would like to get rid of you once you get to be around 55. At this point you are perceived to be a potential LTD case. They can’t afford to gamble on you. There are plenty of young university grads out there lusting for work and companies can get them for a lot less than is currently being paid the old dudes.

#193 Mayor of Qualicum on 11.25.13 at 1:13 am

Yes I got my facts on the boomers straight – ever heard of freedom 55 and that would have started in the 2000’s. Trust me it’s the boomers that bloated the place, some even turned around and sold real estate, now they are all turning 65. Some people did get to retire early on the 55 and Qualicum attracted a fair deal of them.

#194 Steven on 11.25.13 at 11:16 am

Of course the country’s not in trouble. It can always print money and raise taxes.

But you can’t.

Precisely Garth.
Individual canadians can not print the money they need to buy hyper inflated real estate or make up for their inaduquate rates of pay. May be the government has some options but canadians are screwed. It is merely a matter of time before it becomes obvious.