Meeting K

plan modified

Yes, I know this blog has been a dark place for the last few days. In fact, since that employment bomb on Friday. But the news isn’t getting any better for people with houses, or without work. If you’re a homeowner waiting for ‘better prices’ to sell in the Spring, you probably missed the bus completely. If you’re a renter, molding away in some dank, buggy grotto waiting to buy, late 2014 might be a time to start paying attention. If you’re a corporate serf thinking about quitting work to read Thoreau and find yourself, screw that. A job is the new religion.

You see, reality’s arrived in Canada. Millions thought this would never happen. They believed real estate would rise forever, mortgages stay dirt-cheap and the economy roll along while lesser places – like Europe or America – wallowed in their own toxic juices. How often have you read comments here from delusional people saying Toronto and Vancouver are cheap and tasty compared to London, New York, Paris or HK? How about all the America-haters who argued the US is a failed, declining empire, while Canada escaped recession because it’s simply better? Or the bankers who once argued debt is irrelevant so long as asset values rise?

Well, meet Karma. She’s on. Here’s why.

First, even the realtors have confirmed the news you got here earlier this week – property sales are falling. CREA admits existing home sales tumbled 1.8% in December from November – which is a very significant plop. And lest you think it was all due to ice storms and Yuletide faeries, sales have actually been falling now since September, when they hit a peak of just under 41,000.

That was a couple of months after the jump in five-year mortgage rates, when the newbies were desperate to buy before their pre-approvals turned into pumpkins. So they did, forcing sales and prices higher. This is why people start out young and moist – so they can totally mess up and still have time to recover. Maybe.

Second, the average home was worth 10.4% more at the end of 2013 than the beginning. This is 14 multiples of the current inflation rate and eight times the average wage increase. It defines ‘bubble’. It also comes as sales volumes are declining. So what do rational people do when they see an asset surging in value as demand falls? Right. They bail.

Third, our rep is falling as fast as our dollar. Said the Wall Street Journal this week: “The Canadian economy seems to be rolling over. The big question is whether this will prove to be a controlled softening. Or if the Canadian miracle of the past few years merely represents a postponed reckoning and severe imbalances are painfully put right.”

The WSJ has the same issues as this pathetic blog. Job losses equaling 10,000 a week in December. Building permits falling. An unhealthy housing market. “It would be hard to overstate the danger this represents,” the paper says.  Real estate is in a bubble in Canada. Consumers have borrowed wildly to buy in and we’ve built an unsustainable condo economy. “Canadian property has hit the sort of extremes that run the risk of spontaneous implosion.” Yikes.

Fourth, mortgages will cost more this year. Like last year. The five-year loan – the most popular – will jump a few times as bond yields rise. The US Fed will consistently reduce its stimulus spending  (it began in December) until its bond-buying program ends in about twelve months. The last time rates flew higher, we saw the kids stampeding into deals. This time expect a pale repetition. We are running out of virgins.

Fifth, like I said last week, the elephant in the room is employment. The GTA is Canada’s largest real estate market – by far. You can actually fit all the people now living in BC, Saskatchewan and Nova Scotia into this one area. The unemployment rate has spiraled north of 8% and in 416 itself is above 10%. There are more unemployed people in Toronto than live in Saskatoon.

It will take years to bring this back down, especially since the city has the highest per capita immigration rate in the world. As stated here before, without low rates, good jobs, good wages and consumer confidence, real estate croaks.

Sixth, finally (I’m exhausted), are the realtors still lying to us? Are things actually worse?

Ex-realtor and cartel critic Ross Kay sure thinks so. He calls it a ‘false market’ based on the manipulation of statistics, the media and consumers. For example, Kay claims CREA’s numbers contain 30,324 sales that were counted twice, because of multiple listings. The industry has admitted to the problem, but insists phantom deals are numerically insignificant – even though this amounts to over four full months of sales in the GTA.

Today I met a sad guy with a sad wife who wants a house in the worst way. Their plan was to buy a pre-build Toronto condo three years ago, flip it before closing and pump up enough profit for a downpayment on a detached. Well, the condo building is 18 months late, prices have fallen, the assignment market’s collapsed and they’ll be forced to close – sucking up all their money. Worse, they’ll have a condo they can’t lease for enough to carry,  costing twice their current rent to own.

Yup. She’s here.

175 comments ↓

#1 pathcontrolmonk on 01.15.14 at 9:48 pm

You forgot to mention how Neil Young is killing jobs in AB.

#2 Smoking Man on 01.15.14 at 9:50 pm

Throw another Wynne win into the equation and Detroit will look damn good after all the smoking men leave town.

One thing garth, we still need a hockey stick chart, a nice fast curve up. This spring maybe.

#3 mark on 01.15.14 at 9:51 pm

You might enjoy this Garth, well probably not enjoy, but it’s strange how people rush towards anyone who tells them the positive nonsense – (stocks/houses) they desperately want to hear.

Always seems to end in horror.

http://www.idiottax.net/2014/01/investors-say-darndest-things_13.html

#4 Porsche on 01.15.14 at 9:55 pm

I think todays real estate newbie is a different breed.

There’s no thought of paying off that real estate purchase, it’s all about selling it for more.

#5 In the Cold from Toronto on 01.15.14 at 10:00 pm

This is not so, Garth. I read last week in the Globe and Mail that real estate prices will keep rising at 2.25% / year for the next decade… and most people will be priced out of the market, because wages will not keep pace…

I need to get in now! Maybe buy both a house and a condo – the house for me and condo as an investment!

#6 Smoking Man on 01.15.14 at 10:00 pm

#193 TurnerNation on 01.15.14 at 7:46 pm

Still LMAO at the idea of a ‘Blithe Barrington’ blithely dispensing upper crust prognostications, with affect, to curious blog dogs.
……….

That’s nothing, wait till you meet Professor Gerogry Davenport, Drug addicted, cryptologic expert who buys plagiarizing software to feed his habit, and has Blithe Barrington create a distribution channels so the rich kids at Harvard can get more party time.

Then there is FBI agent, Sally Slidethemen who also has a bad habit to.

They all meet in Vegas.

#7 bobnbmore on 01.15.14 at 10:02 pm

what about the impact of the falling dollar on household finances, since oil is traded in US dollars wouldn’t a 10% decrease in the dollar result in an increase in fuel costs

in my experience what spooked the consumer and economy down here in the US that led to the real estate collapse that led to the banking crisis was rising energy costs

the Canadian consumer’s economic swagger/confidence was in part because of the dollar at or near par, CDN’s convinced themselves they must be special, people wanted our dollars we are economic stars, now the dollars falling and money is going elsewhere

the storm clouds are swirling, just waiting for the thunder to announce

the hard rain that is gonna fall

#8 Uh Oh Canada on 01.15.14 at 10:02 pm

List of job losses that effect people I know:

ADP- Many lay-offs with jobs being outsourced to the Phillipines.

Electrolux- Quebec plant has been phased out from 2010-2013 with jobs going to the US.

Reebok Canada- Lay-offs galore and downsizing.

Ouch! The high cost of real estate means higher wages that most companies cannot pay if they want to be competitive. We’ve done ourselves in. To quote Garth, “We’re screwed!”

#9 Tony on 01.15.14 at 10:03 pm

#167 Bargains everywhere on 01.15.14 at 4:47 pm
#106 Tony on 01.15.14 at 3:45 am
Funny all I see on mls is foreclosures in both Calgary and Edmonton. We’ve seen a slight dip in oil prices this year but there’s much more to come. We should easily see at least a fifty percent price chop as the world economy weakens and commodity prices tank. All this means is Calgary will be flattened with worthless oil just sitting there for decades with no buyers.
___
“Tony – you are always such a ray of sunshine. I bet your coworkers just love working with you.”
====================================
I know. I realize that some of my predictions are outrageous, but even a blind squirrel manages to find a nut on occasion.

#10 ILoveCharts on 01.15.14 at 10:03 pm

1600 additional Sears jobs disappearing. That’s not good.

#11 Maxamillion on 01.15.14 at 10:04 pm

I heard Nordstorm is hiring in Toronto.

#12 Shanks on 01.15.14 at 10:07 pm

And they said greed is good… I guess it was taken out of the context “your greed is good as long as it makes me money”. Too bad for you, average Canadian. What will happen to all the lying scumbag sacks of sh*t who have swindled you out of your money (ie realtors and politicos)? Probably nothing in this system. Good thing there is another (just ask nos-T).

#13 Ben on 01.15.14 at 10:07 pm

Garth – write something positive because I want to feel nice irrespective of reality. Waaaaaaaaaaaaaaaaah.

#14 Dual Citizen in Canada on 01.15.14 at 10:07 pm

Garth, should we now wait for the bottom and buy? Come on, you opportunist, capitalist, you. All hail Garth, master of the sheeple! Time to sharpen up my fall 2014 home buying skills. And how convenient that my lease ends in September.

#15 Snowboid on 01.15.14 at 10:08 pm

As I ponder the ‘scam’ of RE reporting in Canada, I think this is nothing compared to the link an in-law sent me a couple of hours ago.

A sure thing I was told, free energy, instant gold, world peace and trips to the moon.

http://keshefoundation.org/

OMFG

#16 T.O. Bubble Boy on 01.15.14 at 10:09 pm

Another great article in the Wall St Journal today (involving Canada): Curlers: They’re Not So Fat Anymore
http://online.wsj.com/news/articles/SB10001424052702303819704579320632674174024

(I see a Will Ferrell movie in the future…)

#17 William of the North on 01.15.14 at 10:12 pm

Sound like you are turning bullish on Gold.

Say it ain’t so Garth?

#18 Juan Refrito on 01.15.14 at 10:12 pm

Great fan of your blog, Garth. Any reason you don’t have a Facebook page? I suspect additional legions of interested readers await.

I do. — Garth

#19 not 1st on 01.15.14 at 10:20 pm

Garth, these stats back and forth are really meaningless until the first developer or builder goes bankrupt.

#20 Victor V on 01.15.14 at 10:21 pm

http://www.theglobeandmail.com/news/politics/household-debt-surge-merits-caution-but-dont-panic-harper-says/article16353758/

Prime Minister Stephen Harper says rising household debt levels are “not a reason to panic,” but urged Canadians to consider what will happen when interest rates rise in the coming years…

…“There are a percentage of Canadian households who have probably borrowed too much, which is why we’ve tightened Canadian mortgage rules to try and prevent that and discourage that. But I think broadly speaking, notwithstanding that some households are overextended, overall the Canadian housing and mortgage sector are essentially sound, and the banking sector that underwrites them is essentially sound,” Mr. Harper said, according to audio of the event.

“So look, it’s not a reason to panic; in fact, we’ve actually seen Canadian debt beginning to level off. But we would obviously encourage people to look at their debt levels carefully. Eventually, it may not be for two, three years, but eventually interest rates will start to rise. And Canadians should ask themselves serious questions about if interest rates came up significantly, would I still be able to afford my debt payments?”

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

When the Prime Minister tells the populace not to “panic”, you know the gig is up.

Someone pass the popcorn.

#21 45north on 01.15.14 at 10:26 pm

Their plan was to buy a pre-build Toronto condo three years ago, flip it before closing and pump up enough profit for a downpayment on a detached.

yeah when ordinary people get caught the crash is here

Bill Gable (from yesterday): I have a friend that runs a Family Pawn Shop and he says that people are bringing in everything from jewellery to snowboards, for cash. They have never seen anything like it

sounds like people are hurting. I appreciate your comments on the newspaper, radio, TV business because that where you made your living

Stoopid Idiot (from yesterday): Calvo says to watch when hedge funds start selling their real estate holdings. He says, “I think that will be around 2015. That will be the handwriting on the wall that the collapse in housing prices will be coming.”

that’s pretty much what Mark Hanson is saying

#22 T.O. Bubble Boy on 01.15.14 at 10:27 pm

#11 Maxamillion on 01.15.14 at 10:04 pm
I heard Nordstorm is hiring in Toronto.
———————-
are they hiring 1600 people? (the number cut by Sears this round)

#23 shortymac on 01.15.14 at 10:28 pm

Ooooo. As a house horny 20 something who has been sitting out despite major pressure this News makes me so happy.

I hope the slight rise of the loonies is a dead cat bounce so I can finish paying off my us student loans. Only a few months left.

#24 KWkid on 01.15.14 at 10:33 pm

Will we see manufacturing exports make a comeback as our dollar implodes?

At least “it’s different here”

#25 Jsan on 01.15.14 at 10:36 pm

“Third, our rep is falling as fast as our dollar. Said the Wall Street Journal this week: “The Canadian economy seems to be rolling over. The big question is whether this will prove to be a controlled softening. Or if the Canadian miracle of the past few years merely represents a postponed reckoning and severe imbalances are painfully put right.”

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

The Canadian Miracle? Isn’t that just another name for the Great Canadian Housing Bubble. It’s amazing how resilient an economy looks while in the throes of a housing bubble. I saw first hand here in Alberta how one day everyone was driving 15 year old beaters and than immediately after the Alberta Bubble the streets were suddenly over run with BMW’s, Mercedes, Lexus’, etc. Nothing had changed, no new job, no new bonus, just a big fat new home equity loan. This is what helped power the “Canadian Economic Miracle” while the rest of the world slid into a Recession. Now it’s time to pay the piper.

I still remember watching CBS evening news back in 2005/2006 at the peak of the US bubble. They were talking about how the US economy was booming, running on all cylinders. Again, a housing bubble, subsequent home equity loans fed by “The Wealth Effect” eventually leads to burnt out, deeply in debt consumers and a dead economy.

#26 Victor V on 01.15.14 at 10:39 pm

Congrats to all who held POTASH through the bumps this past year…company is buying back lots of shares and the fundamentals are looking up.

http://ca.finance.yahoo.com/q/bc?s=POT.TO&t=1m&l=on&z=l&q=l&c=

#27 PA on 01.15.14 at 10:44 pm

Garth,

Avid reader although I don’t post as much as the blog fiends around here.

Had to post today after reading this article in the Financial Post.

http://opinion.financialpost.com/2014/01/14/are-canadians-saving-too-much/

I couldn’t believe it. At a time where debt to disposable household annual income is at 164%, they come out with headlines like this. Written by some dude who “spent 36 years at Statistics Canada specializing in macroeconomics. He was appointed Chief Economic Analyst in 2008 and was responsible for ensuring quality and coherency of all major economic statistics.”

Really makes you question the quality of Statistics Canada.

But wait for it……

Last sentence reads “It could be that the hidden agenda of the academics and provincial premiers who propose more forced savings is to prevent ordinary people from spending on things they don’t approve of, like houses and vehicles, by forcing incomes into government-controlled savings accounts.”

HAHAHA

I’ll keep saving 30% of my income, enjoy my annual month long vacations and not worry of being indebted.

#28 Snowboid on 01.15.14 at 10:50 pm

Nice photoshop job on this ‘mansion’:

http://whispersfromtheedgeoftherainforest.blogspot.com/2014/01/will-this-11-million-mississauga.html

Creative realtors/auctioneers?

#29 Hollywood on 01.15.14 at 10:50 pm

Canadian real estate is very resilient and has surprised me to the strength and continual rise over the last decade. Just a few points and observations; I have about 21 cousins all in their 30’s to 40’s (most reside in Edmonton, Calgary) some with good paying jobs i.e. 100k plus jobs lawyers, managers, professors. I noticed many of them have only 1 resident and it is nothing to brag about – usually in older homes and average neighborhoods (houses worth about 450k). Some of my Aunts and Uncles most in their 60-70’s live in the better upscale neighborhoods (i.e. houses crowding 700- 1 million dollars), some have 2nd homes and simply had middle class type of jobs for their work history although most are retired. It is interesting how their offspring definitely have a lot less net worth. Although, hard to classify as houses have went from about 125k in 2000 to 450 k at present in Edmonton. Just my observations as each family is different. There is lots of wealth in that 60-70’s age demographic not all but ones that have accumulated houses or land. Will those prices continue into the stratosphere or will be get a healthy correction of 20-30 percent? I think we need it for the sake of the 20 something demographic who definitely can not afford and are our leaders of tomorrow. Also, for the strength of the economy. Just my 2 bits.

#30 Investment Virgin on 01.15.14 at 10:55 pm

I think she’s been here in Regina for a while already. CREA’s Nation Average Price Map says Regina’s housing price for Regina shows -8.1% from Dec. 2012 to Dec. 2013. I’m quite shocked.

#31 Blithe Barrington on 01.15.14 at 10:56 pm

The good news is gold leaf is coming down in price.
Time to hire someone to gild my monogram on my antique snifter collection.

#32 Obvious Truth on 01.15.14 at 10:56 pm

On the bright side. Investing is just getting fun. New highs are just as sexy as sub zero glass front refrigerators.

#33 Free bird on 01.15.14 at 10:57 pm

Yes, this won’t end well for many. Some knew the risk going in and willingly (almost arrogantly) ignored the truth or anything that didn’t fit their version if the truth. But there are a few who were just naive and woefully misled by trusted family, friends, mortgage brokers etc. and are now behind the eight ball – but aren’t quite seeing it yet. Good people making misguided choices. I have a friend whose DH is enamoured with spending and ‘stuff’. The longterm plan involves cosmetic renos like new floors but not looming maintenance issues and old appliances. Sigh. Sorry I can’t take the popcorn out as I watch a few we know and many others slowly reckon with reality but hopefully LEARN a valuable lesson. We’ve all faced a few of those.

#34 Smoking Man on 01.15.14 at 11:03 pm

Yup had a few tonight hammering out another chapter, sit on the couch watching criminal minds, noticing that the fat blond computer chic has lost some weight, thinking of all the fat female fans she left behind in
the over 200 category, they must be starting to hate her.

In the 90s when I over did it on coke, and my heart stopped.

The near death thing when my heart was napping for 20 minutes where I met God, his power over me was my fear, the fear of him doing harm to me, till I figured out it was only the crazy voice inside my head.

I fear no one now, it’s called freedom, most mortals will never have that feeling.

I just can’t explain the Ucc, it works.

4 or 5 years of history, and garth has no advice for book publishing.

Fear I guess.

#35 Garth, Someone channeled me this RE ad from 2054 - I don't n on 01.15.14 at 11:04 pm

Be one of the first to pre purchase one of the top 60 floors of our breathtaking(!) suites of the new 360 story development everyone is talking about “Belltower 1” Newly available oversize suites ranging from 12 Sq. meters to 25 Sq. meters in the heart of downtown Toronto at Young and Markham – Authentic Mediterranean craftsmanship includes retro “old world” avocado green appliances with designer 3D one piece printed cabinetry and modern engineered wood countertops – all yours starting at just under 100 million new loonies, GST1 thru 10 included! Be one of the first to act of these amazing prices! Oxygen conditioning package included!

#36 Jsan on 01.15.14 at 11:06 pm

” #26 Victor V on 01.15.14 at 10:39 pm

Congrats to all who held POTASH through the bumps this past year…company is buying back lots of shares and the fundamentals are looking up.

http://ca.finance.yahoo.com/q/bc?s=POT.TO&t=1m&l=on&z=l&q=l&c=

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

Allot of companies are doing the same. It seems to have more to do with the FEDs low rates policy.

Fed’s low rates may be juicing stock buybacks at the expense of jobs

http://blogs.marketwatch.com/thetell/2013/12/18/feds-low-rates-may-be-juicing-stock-buybacks-at-the-expense-of-jobs/

#37 Ayn Rand Army on 01.15.14 at 11:07 pm

the US is a failed, declining empire
——
It is, they’re lying about their stats. It’s a mess down there.

Canada also sucks on our own accord but we are also feeling the effects of the dismal US economy.

#38 Tomas on 01.15.14 at 11:09 pm

These CREA statistics are completely ridiculous. I own a bungalow about 6km outside of downtown Ottawa that was appraised by my bank (CIBC) for $380,000 in November 2012 (I took out a second mortgage on the house). The bank appraised it again in November 2013 for $375, 000.

No clue where the CREA gets its 10.8 percent a year increase for the average home.

#39 Victor V on 01.15.14 at 11:09 pm

PRICE DROP #6- 116 Glen Road – ROSEDALE

http://themashcanada.blogspot.ca/2014/01/price-drop-6-116-glen-road-rosedale.html

This 4 bedroom, 5 bathroom flip on an 80 x 49.3 foot lot at 116 Glen Road has been listed since October 2012 (not a typo).

Before the flip, it was listed in September 2010 for $1,100,000. It didn’t sell at that price and was dropped in October 2010 to $995,000.

So, this house sold under $1 million, and post flip, they wanted to sell it for…..

$3,280,000.

Ummm….

Guess what.

It didn’t sell.

The price was dropped in February 2013 to $2,990,000.

Then in May to $2,780,000.

And then the end of May to $2,685,000.

Again in September to $2,395,000.

AND again in November to $2,295,000!!!

Now? The price is…

$2,249,000.

#40 Garth, Someone channeled me this RE ad from the future - I don't know what to make of it. on 01.15.14 at 11:11 pm

Be one of the first to pre purchase one of the top 60 floors of our breathtaking(!) suites of the new 360 story development everyone is talking about “Belltower 1” Newly available oversized executive suites ranging from 12 Sq. meters to 25 Sq. meters in the heart of downtown Toronto at Young and Markham. Authentic Mediterranean craftsmanship includes retro “old world” avocado green appliances with designer 3D one piece printed cabinetry and modern engineered wood countertops – all yours starting at just under 100 million new loonies, GST1 thru 10 included! Be one of the first to act of these amazing prices! Oxygen conditioning package included!

#41 Victor V on 01.15.14 at 11:17 pm

http://www.theglobeandmail.com/report-on-business/sears-canada-to-lay-off-1345-as-it-outsources-customer-care-centres/article16352746/

Sears Canada Inc. is cutting another 1,628 jobs after having reduced its work force last year by almost the same number as the retailer tries to bolster its struggling operations.

The company said late Wednesday it will outsource jobs in three call centres to IBM, in a cost-cutting move that will affect 1,345 employees over the next nine months. In addition, it said it will immediately let go 283 employees at four logistics centres in Calgary, Montreal, Belleville, Ont. and Vaughan, Ont.

#42 Paully on 01.15.14 at 11:17 pm

I know a successful realtor that just sold his own condo. I wonder if he knows something that TREB and CREA don’t want us to know?

#43 Dr. Bunsen Honeydew on 01.15.14 at 11:18 pm

If indeed it gets ‘ugly’ I have an uneasy feeling that, this being Canada, the Feds will just bail out the short sighted / irresponsible / stupid / ignorant debtors, and all at the expense of us savers and taxpayers.

She’s Canadian karma, after all. Polite to a fault. Bump into her and she apologizes to you.

#44 The Peg on 01.15.14 at 11:19 pm

Uh, oh! More job cuts!

Sears Canada to cut 1,600 call centre, warehouse jobs

http://www.cbc.ca/news/canada/toronto/sears-canada-to-cut-1-600-call-centre-warehouse-jobs-1.2498144

#45 Symphony for the Devil on 01.15.14 at 11:19 pm

“Pleased to meet you
Hope you guessed my name
What’s confusing you
Is the nature of my game”

Oh man the “Stones” sure had that mother right.
Beware of “Bankers” bearing gifts.
60’s music explains everything!

#46 T.O. Bubble Boy on 01.15.14 at 11:21 pm

@ #32 Obvious Truth on 01.15.14 at 10:56 pm
On the bright side. Investing is just getting fun. New highs are just as sexy as sub zero glass front refrigerators.
————————–

Agreed – the 30%+ run by the U.S. markets (and decent gain in Canada) was great. This year is looking pretty mixed… I’m a bit more heavily weighted towards Europe vs. US or Canada or Emerging markets compared to last year.

I’m only 1.34 cents from cashing in my $USD gains too – a bonus on the U.S. equity surge.

#47 Sebee on 01.15.14 at 11:23 pm

Yup. She’s here.

OK. But is she sexy?

#48 OttawaMike on 01.15.14 at 11:24 pm

Hurry and get your Bitcoins now, before you are priced out forever:

http://www.wired.com/wiredenterprise/2014/01/chrisdixon/

#49 Mark on 01.15.14 at 11:26 pm

“Will we see manufacturing exports make a comeback as our dollar implodes?”

Dollar “implosion” is only temporary. Deflation is generally very currency-positive as there is far less domestic consumption (people repaying debt and saving instead of spending).

#50 Ripped on 01.15.14 at 11:27 pm

Loonie is world’s worst performing currency as it drops 3.1% in first two weeks of 2014

http://business.financialpost.com/2014/01/15/loonie-is-the-worlds-worst-performing-currency-after-dropping-3-1-in-first-two-weeks-of-201/

#51 Dean Mason on 01.15.14 at 11:29 pm

ING Survey just yesterday, 31% of retired Canadians are back to work full time just to pay their bills.

Include retired Canadians going back to work and it is 48%.

Not freedom 55, freedom when you die!

#52 I'm stupid on 01.15.14 at 11:29 pm

First time buyers are very similar to this video.

http://youtu.be/z2BgjH_CtIA

#53 LJ on 01.15.14 at 11:29 pm

Friend of mine, who owns a busy shop here in Calgary, made a side comment to me today: “I have noticed a lot of my customers, who are nearing retirement, have been buying expensive in-fills in the inner city neighbourhoods. What is going through their minds? Don’t they realize that the homes are overpriced for what they are getting and they won’t be able to handle all those stairs in a couple of years? Bungalow’s are what they should be buying. A lot of them can barely manage the stairs or the payments now, but they just seem to keep buying those overpriced cardboard shacks on skinny lots. What is going to happen to them when they have to retire in a couple of years?” Then he just shook his head in disgust.

Overpriced and ill-fitted. That just about says it all.

#54 TurnerNation on 01.15.14 at 11:31 pm

That someone of Blithe Barrington’s unquestionable lineage and pedigree visits this blog brings us closer to the nadir, nay apex, in the quest of veneer of public sensibility. By a gossamer thread deliver us from the vulgus. To which clubs is he belonging? A luncheon is in order.
Parents don’t let you kids become blog dogs.

(Blithe Barrington anagrams into Latrine Throbbing?)

#55 Dean Mason on 01.15.14 at 11:32 pm

It is 48% of retired Canadians going back to work if you include full-time and part-time workers.

Sorry, I forgot to add that in my last post above.

#56 no more tax cheating on 01.15.14 at 11:39 pm

Problem solved

http://ca.finance.yahoo.com/news/tax-cheats-beware-tories-launch-snitch-hotline-offer-210145527.html

#57 John in Mtl on 01.15.14 at 11:48 pm

@ #45 Symphony for the Devil on 01.15.14 at 11:19 pm:
“Pleased to meet you
Hope you guessed my name
What’s confusing you
Is the nature of my game”

“…And the man in the suit has just bought a new car
from the profit he’s made on your dreams.”

Traffic – The low spark of high heeled boys.

John

#58 Roy on 01.15.14 at 11:52 pm

“the average home was worth 10.4% more at the end of 2013 than the beginning. This is 14 multiples of the current inflation rate and eight times the average wage increase.”

Says it all. But who knows where the realtors get these numbers from. Average house up 10%. As far as I’m concerned they simply make it up out of thin air, use a Frankennumber, then tap their buddies in the media on the shoulder. I highly doubt any place in Vancouver went up 10% last year.

But the Canadian herd eats it up. They’ll believe anything, especially if it comes from an realty “expert.”

They report this 10% increase on the back of a 2013 year that saw the worst performance in job growth in decades. And 14x higher than inflation. If true it only says what everyone here basically knows forever. That Canadians are simply overpaying for real estate. Over and over again. Year after year. Its called collective delusion.

Realtors have been making out like bandits, and everyone is patting themselves on the back, celebrating the latest deal. Eventually the trickle down just means the next generation is screwed, which is where we are.

1,628 more Sears Canada jobs lost, another nail in the coffin. To buy a house, the #1 thing you have to have is confidence. Especially going only 5 down!

Job losses are a major confidence killer, not even because maybe you didn’t lose your job, but because it is a reflection of the larger economy. In this case one that is performing worse and worse with each passing week. Thanks BoC. Maybe they should lower rates again. Because, you know, why not do more of what is not working right now.

So where will you be tomorrow then if the economy is not performing. Sadly I doubt most Canadian homebuyers asked themselves this question from 2009 – 2013. Gimme granite they said.

So the dollar is tanking now, the world knows our situation is grim. Inflation may be on the way, followed by more retrenchment in consumer spending.

You know trouble is here when Harper says not to panic. LOL Yes pass the popcorn

#59 Entrepreneur on 01.16.14 at 12:00 am

Forget the banks, save your money and buy outright…only way to go.

New to small business: keep all income and expense receipts for income taxes; know when to do pst and gst; get a chartered accountant (ask around for a good one).

“Faeries” different spelling…Gailic?

#60 Musty Basement Dweller on 01.16.14 at 12:04 am

Wow..even Mr. Harper was talking about too much consumer debt today. Surprising to see him come out and (almost) talk to the public! Of course they are weasely words as usual but being an “economist” maybe he is getting a bit worried.

http://www.theglobeandmail.com/news/politics/household-debt-surge-merits-caution-but-dont-panic-harper-says/article16353758/

#61 tkid on 01.16.14 at 12:08 am

Garth,

if the Canadian dollar will continue to fall in valuation to the US dollar (I’ve read articles stating it could go to as low as 70 cents, and I can remember 65 cents so 70 doesn’t seem unreasonable), what percentage of a portfolio would you keep in Canadian funds?

How would you invest the rest? If I ask the bank to convert my money to US dollars, I get charged a 4% exchange rate. If I go into US equities I risk being unbalanced plus there is much talk of a 10% correction. Bonds seem to be a not-yet. Do I eat the exchange rate and invest it when US bonds and equities are a better value? I have the same questions for Europe and Asia.

Regards,

Alicia

#62 jemm on 01.16.14 at 12:09 am

Is it just me….

tonights newshour was so rah rah for real estate I had to look around to see if I was being punked. Nope, ctv vancouver all a giggle over house prices on the up and up, sales on the up and up – all’s well in Hongcover.

as a side note, did anyone else have a deja vu moment when that lovely lady got all exposed over selling her Jetta for bitcoin? I’m not sure if Garth’s personality is bleeding all over me but I’m not buying it. No one is that polished unless you have been coached. Any side bets on when we find out she works for bitcoin – as in the asian condo buyers last year gushing over the fancy condo’s for sale. Dam am I jaded?

#63 KG on 01.16.14 at 12:26 am

Correction: It’s here.
Good that my son does not read this blog, tomorrow he has a test on pronouns.

#64 the jaguar on 01.16.14 at 12:27 am

#53 Be sure to correct your friends buying attached infill properties in Calgary. Infills are single detached dwellings, generally on 25 foot inner city lots. They bought a “DUPLEX”. Except they probably don’t like that word. It betrays the fantasy they are living in..
Guess what? Attached infill is just another word for DUPLEX. It’s all about what is considered “fashionable” doncha know?

#65 raisemyrent on 01.16.14 at 12:29 am

they had CTV on at the gym. Sandra what’s her italian name from property virgins on HGTV saying “projected job and economic growth” will drive the market this year. It’s a great time to buy.
another realtor saying you have to be bold and just get in there.
economic advice. from realturds. on national turdavision.

co-worker looking at a house in coquitlam. and a new car for his squeeze. he’s still on probation (3 month). they currently rent downtown, and she owns another shoebox condo downtown. he also wants a new BMW because the old M3 ain’t cuttin’ it.

another one, younger, looking to rent her place in port coquitlam, move closer to civilisation. because scaling up the “property” ladder is equal to success in life.

again, google these places. they’re not Vancouver.

#66 juno on 01.16.14 at 12:30 am

You really think the CREA statistic error is an error.

I heard rumours that it was done on purpose.. Note we never had that statistical error when prices were rising and things were good. It was after 2010 when real estate went sideways that those statistics start to happen.

My take, is its to back up their sales pitch with fake stats…

#67 juno on 01.16.14 at 12:31 am

Too funny. I guess we better give the unemploy bigger cheques so they can buy more Real estate. To me ever one who is now unemploy will be selling in a year due to unsubstainment.

#68 Frustrated Kiwi on 01.16.14 at 12:44 am

I like to think of myself as sympathetic but I’m having a hard time coming up with much for the sad guy with the sad wife. The strategy was naive at best, greedy at worst. I wonder how many others have followed this terrible idea?

#69 Mixed Bag on 01.16.14 at 12:47 am

Interesting, Denzil seems to be standing with Ford lately. (Wasn’t he vocally against him a few months ago?) First during the ice storm on the podium with him, tonight confirming Ford’s position as the official liaison with the province.

City politics can be fascinating.

#70 Mixed Bag on 01.16.14 at 12:53 am

In general, RE in Toronto is expected to cool down, with the exception of some expected pockets. How would the construction of the new Humber Hospital at 401 & Keele affect local property values? I have some guesses, wondering what the blog dogs think.

#71 Pulp Faction on 01.16.14 at 12:55 am

“Today I met a sad guy with a sad wife who wants a house in the worst way. ……….they can’t lease for enough to carry, costing twice their current rent to own.”

Sure, but until they couldn’t dump it….they were bragging about how someone else was going to make the down payment on their new house, everybody should have done what they did, they are so much more clever than anybody else, work smarter not harder, etc.

Let them lose.

#72 Son o Ponzi on 01.16.14 at 1:10 am

“waiting to buy, late 2014 may be a good time to pay attention”
_________
that is what the Chinese “Year of the Horse” Horoscope predicts.
Your clients are advising you well.

#73 bentoverpayingtaxes on 01.16.14 at 1:19 am

Many thousands of high paying jobs and trillions in new revenue from our petroleum resources will prove to the savings grace from 100% taxation. Imagine the new schools, roads and hospitals the revenue can provide. You have to be a complete moron not to understand the dynamics of a healthy balance sheet in this country for once. Imagine being clear headed for once..away from the leftist nonsense that has been bought and paid for by Arabian interests. The list of green party advocates that has been subsidized by American oil money is staggering. A strong economy is a danger to the leftist politics of unions and special interests…we have seen the shift away from the leftist monotony in the years since the Liberal demise……when the leftist judiciary dies off and the leftist professors are retired….and the revenue from oil fills our coffers….Canada will be new and dynamic place…..is that what scares the CBC? Can you imagine what freedom will feel like?

#74 Cici on 01.16.14 at 1:29 am

#27 PA

The headline is off, but what the former Stats Can dude is saying is probably right on target. They are talking about “forced savings” plans, i.e., your provincial and federal governments whittling more money off of your paycheques and “investing” it for you. Nice idea, but the problem is that if it goes through and the politicians get they want, you will probably never see as much money as you would had you invested it yourself. And they may just turn around at a later date and tell you that, whoops! it’s gone…to bad for you, me and us :-(

#75 Obvious Truth on 01.16.14 at 1:49 am

Neil Young is a beast.

“People should think for themselves”

#76 KommyKim on 01.16.14 at 1:58 am

RE: #61 tkid on 01.16.14 at 12:08 am
How would you invest the rest? If I ask the bank to convert my money to US dollars, I get charged a 4% exchange rate.

You could buy the DLR ETF instead of USD for holding in the short term.

#77 James on 01.16.14 at 2:07 am

#39 Victor V on 01.15.14 at 11:09 pm

What is the point? The market is in the 500-900K range. I don’t see any data indicating any trouble for SFH. Condo bust? You bet.

#78 Thank You Garth on 01.16.14 at 2:13 am

I would like to say thank you very much for your daily posting. It’s the only thing that I look forward to reading every day. I stumbled upon your blog about 6 months ago and I was amazed at how similar our views were on virtually all money and real estate matters. Since then I have become addicted to it.

After I found out you also went to UTS, your credibility skyrocketed. Btw, too bad we lost our funding. There’s no way I would have been able to attend at current tuition levels… I’m so glad I did. Best thing my parents ever did for me was make me write that entrance exam.

Keep up the great work!

#79 BillyBob on 01.16.14 at 3:16 am

Hmmm. Yet, I continue to get emails like this from my friendly local realtor:

“Dear XXXX,

Although it’s a great time to buy a home, many younger buyers may feel shut out of the market because they haven’t saved enough for a down payment. However, what the younger generation lacks in money, they make up for in the length of time they’ll be able to save.

Below is a diagram of how much money MIllennials and other interested buyers will have to put aside each week to save enough for a 10% down payment. Forward this information on to family or friends who may be saving for a down payment on their first home.”

http://i44.tinypic.com/zvbpxk.jpg

With the linked graphic attached.

Desperate much to keep the party going? Can you believe this delusion?! In Vancouver, apparently, if you have $1300 to spare each month, in a mere five years, you can save a…10% down payment!

#80 Bob Rice on 01.16.14 at 4:02 am

Don’t real estate sales always decline toward year end?

#81 Happy Renting on 01.16.14 at 4:12 am

“dank, buggy grotto”… “young and moist”…

Someone commented a few days ago that we come here for the dissing. No we don’t. We show up for the disturbing sexual undertones. HA! Great post.

The sad couple mentioned at the end are probably very nice people, but they took an ignorant, greedy gamble and didn’t get blindly lucky. They might as well live in that new condo once completed. WTF else are they going to do with it???

#82 Zed on 01.16.14 at 4:34 am

Why not quit my job? I saved and invested and now at age 49 I have enough income from my dividends to replace my work income after all its deductions.

I don’t want to continue being a ‘corporate serf’ just for their enjoyment.

Isn’t that the point of being responsable with my money all those years, like saving and investing, renting a beautiful house close to work so we can walk to work and need only one car? I think so, this is our reward!

#83 polecat on 01.16.14 at 6:24 am

Starting to feel like the early nineties again. Layoffs everywhere, hunker down and hang on to your job. I feel bad for young people, this is gonna suck all around.

#84 Buy? Curious? on 01.16.14 at 6:40 am

Hey Garth! Great post! I caught myself dancing Gangnam Style at the end laughing my head off. Not necessarily for your wonderfully worded piece but I began visualising how people are going to live in the next 5, 10, 20 years from now. They’re going to be downsizing like crazy whether they want to or not. Unless they come from a wealthy family, more and more middle class are going to be poorer. See, I bought my house 2 years ago and should have it paid off in 13 years. I should be able to work for another 15 years at the height of my earning potential. By the time I retire, with the house sold, investments and savings, I’ll be living off the coast of Costa Rica drinking lemonade. Those that are renting now, who waited for the bottom of the market (Whateveha.), paying rent for all those years, starting new careers at 65 as consultants shuffling under First Canadian Place in the month of January will be commiting their family to generational poverty. I just downloaded some Portuguese language intructional podcasts because I’m that sure how my life will turn out.

http://www.youtube.com/watch?v=SHOqXeBXx7s

Rob Ford 2014!

#85 World Traveller on 01.16.14 at 7:43 am

#27 PA on 01.15.14 at 10:44 pm

Good lord, I am dumber for reading this. Now we are counting CPP and EI as part of our savings plan? The MSM in Canada really had lost their marbles!

#86 timOfTrees on 01.16.14 at 8:20 am

Wow, the economy!

Needed to hire a Groundman, so listed it on some crappy jobs website that I’d never heard of and had 42 applicants from TriCities in the first 48 hours before I pulled the ad.

I feel terrible because some of the guys I’ve interviewed have families (and MORTGAGEs!!) and haven’t worked in months. Tough times.

#87 Tony on 01.16.14 at 8:30 am

Re: #26 Victor V on 01.15.14 at 10:39 pm

Potash will be nearly bankrupt from blowing all their excess funds buying back shares at ten times what they’re worth. The world economy is slowing and world stock markets are set to crash big time. Potash may go bankrupt by buying back shares at the worst possible time.

#88 My $0.02 on 01.16.14 at 8:55 am

This comment contains no opinion, just evidence of what is happening and what is coming… judge for yourself.

http://www.timescolonist.com/opinion/league-puts-22-properties-up-for-sale-1.789352

#89 Tripp on 01.16.14 at 8:59 am

Condo living at its worst:

http://www.ottawacitizen.com/business/Hugh+Adami+repair+estimate+leaves+owners+Ottawa+high+rise+condo+shock/9391434/story.html

#90 Herb on 01.16.14 at 9:49 am

#6 Smoking Man,

interesting characters you are introducing into your book, but Garth has you beat. He introduced Smoking Man into Greater Fool.

#91 Blithe Barrington on 01.16.14 at 9:53 am

@TurnerNation

The monotonous grumble of the proletarian, disciplined to minister  and enhance our aggrandizement.

The endemic chattel are in abundance here.

 

#92 David on 01.16.14 at 9:56 am

#84 Buy? Curious?

I’m not sure how helpful Porteguese will be in Costa Rica..

#93 Shawn on 01.16.14 at 9:57 am

NEIL YOUNG

Saw the lengthy interview with him on CBC National news last night.

He was very articulate. Very confident in his views.

Decimated the argument that musicians should stay out of politics (who else should be excluded…).

Decimated criticism of his Hiroshima reference (Fort Mac refers to the oils sands operation not the City and also the Minister of Energy should recognize a metaphor is not an exact quote…)

Said look, form your own opinion, but here’s mine and I have a right to say it.

I am in the pro-business camp, but he did a great job of presenting his views.

Good job, Neil Young.

#94 RVP on 01.16.14 at 10:11 am

CPP and EI are definitely NOT savings!!! From the perspective of the working poor minimum wage millennial baristas, CPP and EI are taxes. In fact, CPP and EI are the largest payroll taxes that the working poor millennial generation pays. Many of these people do not even make enough of an income to pay any income taxes. The only taxes on their incomes are CPP and EI. Of course these young millennials will mostly never get to collect either CPP or EI. Part time low wage workers usually don’t qualify for EI because they never get laid off–they just get their hours reduced or they get fired. It is also doubtful that CPP will be around for the millennial generation as the baby boomers are likely going to bankrupt CPP so there will be nothing left 45 years from now for the millennial generation when they are ready to retire. For the millenials, CPP and EI are definitely NOT savings, they are TAXES!!! They get nothing in return for them!

#95 frank le skank on 01.16.14 at 10:13 am

One statistic that is not tracked and that I think is a huge factor in unemployment is the loss of employees through attrition. I work in Toronto for a big telco and we’ve been reducing head count this way for at least 5 years with no intention of replacing any of them. When you factor in the high unemployment rate, continuing layoffs and all the forced retirees trying to re-enter the job market it would appear that Toronto is in for a world of hurt.

As for Real estate, it might be a little early to say we are nearing the beginning of the end. If it does manifest itself in 2014 the correction will probably take years to hit bottom. So 2014 may be the time to start paying attention but it will be 2016-2017 before its worth buying.

#96 Grantmi on 01.16.14 at 10:29 am

WOW! Best Buy kicked in the Muschi for it’s Christmas sales. Ouch! Down 30% in premarket! that’s going to leave a mark.

Best Buy Stock Slumps After U.S. Holiday Sales Decline – Bloomberg http://bloom.bg/1dTwaB7

#97 Network Admin on 01.16.14 at 10:51 am

> #94 RVP on 01.16.14 at 10:11 am
> Part time low wage workers usually don’t qualify for EI
> because they never get laid off–they just get their
> hours reduced or they get fired.
You can definitely get the EI if you get fired (unless it was for something like drug or alcohol use at work). The only requirement is to get enough “insurable hours” (depends on the unemployment rate for the specific geographic region).

#98 500 sq ft on 01.16.14 at 11:03 am

garth
your amazing. your ability to see what others dont see is uncanny.
its happening now – deflation- and i come here to share my ideas and accept your teachings.
in 1939 a home in toronto cost $4000 and the wages were $1600.
today a home c osts $1 mill and we make combined $75k . theres no way this is going to last.
keep it up!!!

#99 Infused with Opiates on 01.16.14 at 11:04 am

94 RVP. Here is some info re CPP courtesy wiki

“The CPP is funded on a “steady-state” basis, with its current contribution rate set so that it will remain constant for the next 75 years, by accumulating a reserve fund sufficient to stabilize the asset/expenditure and funding ratios over time. Such a system is a hybrid between a fully funded one and a “pay-as-you-go” plan. In other words, assets held in the CPP fund are by themselves insufficient to pay for all future benefits accrued to date but sufficient to prevent contributions from rising any further. While a sustainable path for this particular plan, given the indefinite existence of a government, it is not typical of other public or private sector pension plans. A study [2] published in April 2007 by the CPP’s chief actuary showed that this type of funding method is “robust and appropriate” given reasonable assumptions about future conditions. The chief actuary submits a report to Parliament every three years on the financial status of the plan.”

Now quit blogging and get back to work…..

#100 Smoking Man on 01.16.14 at 11:35 am

#90 Herb on 01.16.14 at 9:49 am

Are you actually being complimentary, holy crap.

Are you on new meds, please forward list, I need some. :)

#101 Steven on 01.16.14 at 11:38 am

It will take years to bring this back down, especially since the city has the highest per capita immigration rate in the world. As stated here before, without low rates, good jobs, good wages and consumer confidence, real estate croaks.

Sixth, finally (I’m exhausted), are the realtors still lying to us? Are things actually worse?

If the importation of refugees and immigrants to Canada was shut down then the real estate market would have to cater to the working and non working poor instead of government subsidized people and wealthy new citizens. This could initiate a reality check for the real estate market and for Canada as a whole.

As for the realtors; consider their fundamental motivations. Commissions! No sales equals no commissions and of course the higher the house price the more money is made for the realtor. So yes they have an incentive to gloss over some unpleasant inconvenient truths in favor of optimistic forecasts and price projections. For them BS pays the bills where as economic reality does not. Governments suffer from the same problem except their fantasy world includes the privilege of defining to rules governing their delusions of supremacy. The patients of the lunatic asylum have hijacked the place and are posing as the staff. Until this is corrected nothing can change for the better.

#102 Josh in Calgary on 01.16.14 at 11:39 am

Garth,
I know why the Realtors would never produce a chart showing prices and sales over time so that we can look at trends and cut through the noise in the data. But why don’t you keep a running chart for us all to see? I would, but I’m too lazy and then it would only be for the eyes of one.

One or two months of down are just as meaningless as one or two months of up.

#103 Steven on 01.16.14 at 11:42 am

Governments suffer from the same problem except their fantasy world includes the privilege of defining the rules governing their delusions of supremacy.

Spell check missed a typing error.

#104 RELAX - WHAT A PANIC :) on 01.16.14 at 11:42 am

RELAX – WHAT A PANIC :)

numbers will swing back in February as Canadian resource stock hit a bottom and with lower CAN smart money sells US and buys low in here…

LOOK AT THE POSITIVE PICTURE: 92% EMPLOYMENT and 50% or more of people have no mortgage or peanuts left. They bought for 300000 ten years ago, it is worth 600000 and the left over mortgage is 150000. Do your math fellas…I do not see those guys bailing out.

YOU BETTER WORRY about getting a townhouse in a hot neighbourhood, ’cause only few are offered and every time there is a kill for it, market is totally debalanced, so unless GOVT runs a brainwash program to tell those wifes: Rexdale, Jane&Finch and Malvern are now top yuppie demand areas (no offence to anyone, lived there) – I SEE THAT 10% increase REPEATING THIS YEAR, AS IT WAS FOR PAST 5 years..

sorry about the caps, I hope it illustrates my point

#105 Doug in London on 01.16.14 at 11:51 am

Did anyone see that clip on the CBC TV news last night (Jan. 15) about real estate in Canada? Did anyone notice the more positive report, like about prices going up a national average 4% last year, was courtesy of the CREA while bank economists voiced concern about a price correction? I know who I would be more likely to trust.

@Shawn, post #93:
I also saw the interview of Neil Young (shortly after the clip about real estate) and also thought he was articulate and did a great job of presenting his views. Is all that development in the oil sands a good thing or bad? Like many things, it’s both. While it does make quite an environmental mess, it’s easy to criticize but also something to think about next time you fill up at a petrol station. As all the easy to get at oil gets depleted (where you just punch a hole in the ground and it comes spraying out), inevitably the stuff that requires more energy and capital investment (and bigger environmental footprint) becomes more attractive. Other examples are fracking and farther offshore oil rigs. What’s needed is a joint effort from all countries to reduce oil use on a large scale. Given how costly that would be, and that oil use is going up in emerging market countries (even with the slower economy many are experiencing now) that’s not likely to happen any time soon.

#106 recharts on 01.16.14 at 12:04 pm

As far as I can see the condo sales are half of what they were last year and that with no adjustments.
All the others sales are higher than last year this time

#107 Tomas on 01.16.14 at 12:06 pm

Hey Garth,

Check out the link below. Ottawa condo investing at its finest. I wouldn’t want to be a condo owner in this building right now.

http://www.ottawacitizen.com/business/Hugh+Adami+repair+estimate+leaves+owners+Ottawa+high+rise/9391434/story.html

#108 Macrath on 01.16.14 at 12:18 pm

#61 tkid
I think you mean a 4% fee on top of the exchange rate.
Beware the money changers. You have to study hard to beat this bunch. Some good info on this site

http://canadiancouchpotato.com/2010/10/18/are-us-listed-etfs-really-cheaper/
and
http://www.finiki.org/wiki/Norbert%27s_Gambit

#109 bentoverpayingtaxes on 01.16.14 at 12:29 pm

#26 Victor……or you could have just owned a better company…like Agrium….. and skipped all the headaches on the way to making out like a bandito.

http://ca.finance.yahoo.com/q/bc?s=AGU.TO&t=5y

#110 Vamanos Pest on 01.16.14 at 12:30 pm

#104 RELAX
The 10% you’re referring to is a statistical illusion. It does not reflect what you are implying, which is that any given house, on average, will sell for 10% more this year than it would have last year. Rather, it’s a reflection of a segmenting market. With higher interest rates and more strict CMHC rules, the bottom of the market (especially condos and first time home buyers) is struggling. This means, compared to historical norms, the middle and upper middle (500k-1 million) are over represented in the ‘average’. The result is a higher average, but to take this to mean home prices have gone up would be an error.

#111 DM in C on 01.16.14 at 12:36 pm

#53 Jaguar:

I completely agree — forget the spin and rebranding — they are $800k DUPLEXES. LOL.

#112 Enthalpy on 01.16.14 at 12:39 pm

I did see the report on CBC and was pleasantly surprised that they even had a “negative” angle to their story. They provided the CREA data and outlook but polished the report with the critics suggesting things dont look so good.

Was better than other reports I saw that just reported the rosy outlook.

#113 Alex n Calgary on 01.16.14 at 12:44 pm

Real estate is so tricky to track for non-realtors. Houses come up, then go down, then go up, then down. Its pretty hard to track phantom inventory and price reductions but I think there is a lot of it out here. The people who dare to leave the house listed for long periods of times reveal the real story. Friend of mine said that lots of realtors won’t even list for that long as its pricey to put houses up on MLS or ask people to pay up front, interesting…

Our friends, knowing we have to move to another rental, suggested an overpriced 450k bungalow behind their house (nice people, I could pick worse neighbours) the guy is offering SELLER financing. Very interesting, way the credit stuff and downpayments to get that baby sold, sounds a bit desperate to me, also the house is tiny, kind of rediculous.

#114 recharts on 01.16.14 at 12:44 pm

Here are the latest numbers for TO and GTA for Avg/Med prices and for Sales http://i.imgur.com/jWfXcXx.png These are all rolling averages for 30 days

Notice how big is the jump for the SFH Avg price in To. Median stays the same. More $$ properties are now dumped. Sales▼ Avg ▲ Med —

TREB will report their numbers in 2-3 days. Because of low sales and $$ property sales the stats will be highly skewed

Note how the Avg and the Median are diverging for SFH in TO and GTA.
They are both lower than 8 months ago

#115 recharts on 01.16.14 at 12:45 pm

Above I meant both Median prices for TO and GTA are lower than in May when I started collecting the stats

#116 MP on 01.16.14 at 12:48 pm

@#89 Tripp – scary article. The first comment that comes up…

“I am also an owner in this building since July 2011. At the owner’s meeting of January 7, one of the other tenants said that these problems have been known since 2001 and that at that time the owners took a vote and decided not to do the repair work, but to do it as needed. None of this appeared in my Status Report at the time of purchase or I would never have bought it. This logically would appear to be illegal, otherwise what is the purpose of a Status Report in the first place??? Someone owes me my life’s savings.”

#117 recharts on 01.16.14 at 12:51 pm

http://i.imgur.com/jWfXcXx.png

I really don’t understand what happened with the condo sales. The buyers behaved like they were all hit by the same sudden realization that something is wrong.

#118 NoName on 01.16.14 at 1:04 pm

Interesting new rules in China for defaulters, private or corporate.

http://www.globaltimes.cn/content/837877.shtml#.UtgO5cv8VzQ

Besides restrictions on traveling and employment, the defaulters will face constraints when applying for a loan or opening a credit card.

When a corporation becomes a defaulter, its legal representatives, chief executives and those directly responsible for fulfilling the obligation will be subject to the same restrictions as individual defaulters, according to Jiang.

#119 Joe on 01.16.14 at 1:06 pm

Here’s what happens.
Countries that are in trouble are printing money.
To the eye it looks good – like the beginning of a recovery.
But what it is doing is amassing a debt that is to eventually be passed on to the people.

Now what we have is billions or trillions of dollars that need to be accounted for.

All of this money being printed by Europe-USA-China.. postponing the inevitable which will be an event that will make much of this paper disappear along with the average joes wealth.

You can only kick the can down the road till you can’t.

#120 Victor V on 01.16.14 at 1:15 pm

http://www.ottawacitizen.com/business/Hugh+Adami+repair+estimate+leaves+owners+Ottawa+high+rise+condo+shock/9391434/story.html

The owners — some of whom rent their properties — are facing charges of about $40,000 for a one-bedroom unit, $55,000 for a two-bedroom and $66,000 for a three. The money is to be paid in instalments through 2017 as contractors move from stage to stage of the overhaul. The first instalments — anywhere from $2,940 to $4,555 — were due Wednesday.

Owners were told Dec. 10 that they had to pay the money on the due dates or risk liens being placed on their units by the condo corporation. They recall being told if they did not have the money, they would simply have to find it.

Some seniors on fixed incomes say there have been many tears and sleepless nights as they fear losing their homes. Some young families with children say they are in the same predicament. Some have taken out personal lines of credit to cover the charges, but they are worried they will not be able to pay back their banks.

#121 Stoopid Idiot on 01.16.14 at 1:16 pm

” #26 Victor V on 01.15.14 at 10:39 pm

Congrats to all who held POTASH through the bumps this past year…company is buying back lots of shares and the fundamentals are looking up.

http://ca.finance.yahoo.com/q/bc?s=POT.TO&t=1m&l=on&z=l&q=l&c=
=================================

#36Jsan

Allot of companies are doing the same. It seems to have more to do with the FEDs low rates policy.
Fed’s low rates may be juicing stock buybacks at the expense of jobs

http://blogs.marketwatch.com/thetell/2013/12/18/feds-low-rates-may-be-juicing-stock-buybacks-at-the-expense-of-jobs/

This.. I would suggest is not uncommon when holding large depreciating cash reserves that are costing you more than the positive press (B.S…. not always) generated by buying back your own stock.

This has a twofold benefit. Generates positive press, and can improve overall corporate balance sheet. When coming up to first quarter reported earnings. Watch for maturing stock options, Warrants, and most of all Retiring Senior Management… Then and most of all… Insider Trading Reports shortly into second quarter. Not unusual when hold large volume of cash reserves…. Think Suncor at it’s peak

#122 Steven's Mother on 01.16.14 at 1:35 pm

#101 Steven on 01.16.14 at 11:38 am
If the importation of refugees and immigrants to Canada was shut down then the real estate market would have to cater to the working and non working poor instead of government subsidized people and wealthy new citizens.

——-

Steven this is your mother.

We did not raise you to say such ugly things! Remember, not too far back in our family line we were immigrants too.

Someone is not getting any Internet time tonight and is going to bed early!

#123 World According To Garth on 01.16.14 at 1:39 pm

Unless your a govt worker getting a $ 55,000 pension paid for by working poor retired persons. RE? I think you ain’t seen allot of things yet. Wait till govt wants to jack up taxes even more to pay for these paper pushers and the 600 billion in pension money they don’t have. Maybe then Cdns will grow a spine instead of waiting in line for the new I-piece of crap.

#51 Dean Mason on 01.15.14 at 11:29 pm
ING Survey just yesterday, 31% of retired Canadians are back to work full time just to pay their bills.

Include retired Canadians going back to work and it is 48%.

Not freedom 55, freedom when you die!

#124 Tripp on 01.16.14 at 1:43 pm

#101 Steven on 01.16.14 at 11:38 am

“If the importation of refugees and immigrants to Canada was shut down then the real estate market would have to cater to the working and non working poor instead of government subsidized people and wealthy new citizens.”

My family and I are immigrants. We have a large circle of immigrant friends or acquaintances, mostly from Germany, Russia, Romania, Lebanon, Australia, Czech R., France, Belgium, Iran, Denmark, India, Holland. MOST of us have a degree, few masters and PhDs. ALL are employed in (very)good positions and/or run (relatively) succesful businesses. VERY FEW jumped into the RE market before being in Canada for 4-5 years.

I believe there are rich immigrants that invested in Canadian RE, however they are only a small minority. Most of us came here with four suitcases and $20,000-$30,000 CAD, which got us through the first six months or so. Education, qualifications and experience were the parameters that made a real difference over the years.

#125 OttawaMike on 01.16.14 at 1:43 pm

Pepé Le Pew of the Greater Montreal Real Estate Board says everything is fine:

http://www.marketwired.com/press-release/rebalancing-of-montreal-area-real-estate-market-in-2013-1869848.htm

#126 steve in sault ste marie on 01.16.14 at 1:43 pm

we have been getting killed up here.
the house sector is alive and dead.
yes there are many looking to move up and purchase homes. but the economy sucks and there are no jobs. at one time algoma steel employed 12000 people; today only employs 2000. the manufacturing sector has died a long time ago. the only thing keeping this town alive is tim hortons and provincial/federal depts and tourism. garth yu are the light in this dark tunnel and im afraid that not enough people are paying attention.
ps can you remove smoking man. he is a distraction.

#127 Alberta Ed on 01.16.14 at 1:54 pm

The mouth-breathers at CBC have yet to comprehend what is really happening with RE, judging by last night’s regurgitation of CREA stats. But that’s nothing new for the purported business reporters on our national network.

#128 Van Isle Renter on 01.16.14 at 1:54 pm

“There are more unemployed people in Toronto than live in Saskatoon.”

+++++++++++++++++++++++++++++++++

People live is Saskatoon??? I thought that was just stuff of legend.

As to Neil Young:

Wonderful entertainer. Certainly entitled to his opinion. Doesn’t make him right though. I’ll take an engineer’s view of the world any day over that of an entertainers. Why? Engineers get sued if they’re wrong. If Neil Young makes a mistake:

Maybe he might get a blister on his little finger,

Or maybe get a blister on his thumb.

(Apologies to mark Knopfler)

#129 A charity for realtors on 01.16.14 at 2:00 pm

Hurry. we need to set up a charity for realtors ’cause, say a million dollar house drops 10% an’ sells for $900,000, realtors will make only $45,000 commission instead of $50,000.

Make large cheques payable to

Rich E. Max Realtor

I mean, it’s not like the house owner will suffer … think of how much they will save on commission payments.

Alwyn

#130 Calgary Conditional Owner on 01.16.14 at 2:09 pm

@ #64 the jaguar on 01.16.14 at 12:27 am

Please, enlighten us about the public shame of living in an inner city DUPLEX or apartment? What’s so wrong with them? You certainly get more bang for your buck in the burbs, but you should also factor in transportation dollars, and most importantly, TIME spent commuting from there.

So much hatred/resentment towards home owners on this blog! :)

#131 lil' stoon disturber on 01.16.14 at 2:12 pm

ultra-high-net-worth individuals ain’t buying real estate in Canada! http://www.businessinsider.com/where-super-rich-spend-money-on-real-estate-map-2014-1

Evidence the ultra-negative-net-worth ones are though.

#132 CJ on 01.16.14 at 2:13 pm

#105: Go and research the nations that have subsidized “green” energy. And tell me how that is working out.

#133 Ripped on 01.16.14 at 2:34 pm

Is English still the first language in TO?

#134 Stickler on 01.16.14 at 2:36 pm

@ #92 David on 01.16.14 at 9:56 am

#84 Buy? Curious?

I’m not sure how helpful Porteguese will be in Costa Rica..

———
HA! classic!

#135 Herb on 01.16.14 at 2:42 pm

#100 Smoking Man,

sorry, Dear Boy, no compliment. I forgot that you can’t tell when someone is pulling your leg.

#136 realtors in a panic on 01.16.14 at 2:51 pm

Uneducated and no high school diploma realtors scream like wild animals that everything will be alright. The crash is here and now. Out of work realtors get ready for some hard times.

#137 God Here on 01.16.14 at 2:54 pm

#34 Smoking Man on 01.15.14 at 11:03 pm
Yup had a few tonight hammering out another chapter, sit on the couch watching criminal minds, noticing that the fat blond computer chic has lost some weight, thinking of all the fat female fans she left behind in the over 200 category, they must be starting to hate her.
In the 90s when I over did it on coke, and my heart stopped.
The near death thing when my heart was napping for 20 minutes where I met God, his power over me was my fear, the fear of him doing harm to me, till I figured out it was only the crazy voice inside my head.
I fear no one now, it’s called freedom, most mortals will never have that feeling.
I just can’t explain the Ucc, it works.
4 or 5 years of history, and garth has no advice for book publishing.
Fear I guess

…………………………………………………………………

Hello Smoking Man, This is God, knock it off with your I am greater that thou attitude.
For by him all things were created, in heaven and on earth, visible and invisible, whether thrones or dominions or rulers or authorities—all things were created through him and for him.
Him is I (God), not you!
I would say just wait until you show up at the Pearly Gates but unfortunately your ticket does not include the upgrade pass so have fun in the UCC. Send my regards to Mephistopheles. Tell him he can never come back!

#138 bentoverpayingtaxes on 01.16.14 at 3:12 pm

Politically correct hamstrung HAM deniers have an excuse….” they don’t have a clue”…….therefore…if the data is purposely unavailable….the issue simply doesn’t exist….how convieniant…..is the Obama crowd learning from Canadians how to remain firmly upended? And …how does it smell while your heads up there?

http://blogs.vancouversun.com/2013/11/07/foreign-ownership-of-canadian-property-more-calls-for-the-numbers/

#139 economictsunami on 01.16.14 at 3:17 pm

With the Canadian consumer credit cycle summit within sight and with the tightening bias removed by the BOC, global flows can be so fickle and fleeting…

Lamoureux: We’re Only In The Early Stages Of The Loonie’s Decline:

https://businessincanada.com/2014/01/16/yves-lamoureux-loonie-to-75-cents-greenback/

Davos Globalization Defenders Fight to Show 2014 Not 1914:

http://www.bloomberg.com/news/2014-01-16/davos-defenders-of-globalization-fight-to-show-2014-is-not-1914.html

#140 Smoking Man on 01.16.14 at 3:46 pm

#126 steve in sault ste marie on 01.16.14 at 1:43 pm

A distraction, ha. Who is forcing you to read my posts,

A distraction is doom and gloomers, end of the world dudes, gold bugs.

Liberals tree huggers now that’s a distraction.

Rather than wyne like an infant, articulate a scathing chirp, voicing your displeasure and contempt.

MN

#141 Smoking Man on 01.16.14 at 3:52 pm

#137 God Here on 01.16.14 at 2:54 pm

Do you really think I want to hang out in your world after D day.

No strip clubs, no short term
rentals. No wine or mind altering substances.

Just happy good content people all loving each other with perma smiles.

That would be hell to me.

I’ll take my chances with the red guy with the tail.

Hell of a lot more drama if you know what I mean.

#142 Porsche on 01.16.14 at 3:56 pm

#133 Ripped
Is English still the first language in TO?
………………………………………………………………………

It might be a toss, I do know there’s Hockey Night In Punjabi on TV

#143 Tony on 01.16.14 at 4:02 pm

Re: #96 Grantmi on 01.16.14 at 10:29 am

Just wait ’till the cut in food stamps in America kicks in. You ain’t seen nothin’ yet.

#144 economictsunami on 01.16.14 at 4:11 pm

Loonie shorts soar as Canada’s export challenge mounts:

http://business.financialpost.com/2014/01/16/loonie-shorts-soars-as-canadas-export-challenge-mounts/

#145 Porsche on 01.16.14 at 4:20 pm

#138 bentoverpayingtaxes

And …how does it smell while your heads up there?

……………………………………………………………………..

I thought you were replying to Smoking Man.

lol

#146 Holy Crap Wheres The Tylenol on 01.16.14 at 4:44 pm

Holy Crap I wonder what this report is going to do to the South Etobicoke area for real estate values. Oh I forgot people who purchase property in Toronto are immune to all diseases including “Stupid”. I’m glad I live in Oakville. Breath deeply now breath.

http://www.680news.com/2014/01/15/study-points-to-health-effects-of-traffic-in-south-etobicoke/

#147 Penny Henny on 01.16.14 at 4:44 pm

Rainier Wolfcastle. Buy? Curious?

is that you?

#148 Holy Crap Wheres The Tylenol on 01.16.14 at 4:49 pm

Oh, oh here it comes Olivia Chow is vying for leader of Toronto. Something poor old Jack Layton could never achieve. He could have perhaps done some good, but this one is a tree hugging socialist through and through. Get ready Toronto if she wins your taxes are going viral.

http://news.ca.msn.com/local/toronto/olivia-chow-to-address-ice-storm-response

#149 kate on 01.16.14 at 4:51 pm

hi garth, just want to thank you for your blog. it has been really helpful. my husband and i sold our condo in the fall and our investments in a balance portfolio have been doing great. with a baby on the way im glad we didnt take the housing route or we’d probably be screwed and stressed

#150 Smoking Man on 01.16.14 at 4:52 pm

#136 realtors in a panic on 01.16.14 at 2:51 pm

Uneducated and no high school diploma realtors scream like wild animals that everything will be alright. The crash is here and now. Out of work realtors get ready for some hard times.
……..

Welcome back laughingcon, this just might be your year.

#151 Holy Crap Wheres The Tylenol on 01.16.14 at 4:55 pm

Does anybody actually remember that these A-holes cost us 1 billion dollars? Please take off your tin foil hats all of you people in the two by-election riding’s and vote for anybody except the Liberals. Oh well it could be 100 billion now couldn’t it?
http://www.youtube.com/watch?v=jTmXHvGZiSY

http://news.ca.msn.com/money/two-ontario-byelections-to-be-held-feb-13-1

#152 Holy Crap Wheres The Tylenol on 01.16.14 at 5:07 pm

Lets stop pussy footing around crap. Build a God Dam Refinery lets say in Alberta or Saskatchewan. Lets employ several thousand people to build it over the next say five years. Then you will require several thousand people to run it and sustain it over its lifetime. We can tell everyone to go piss off and when they need refined oil and gas here it is boys. We just made a nice markup on the processing and employed people by doing all that work that normally would have gone to the USA or overseas. Dont be niave now if we ship crude somebody has to refine it.

http://www2.macleans.ca/2014/01/16/time-for-u-s-president-to-make-up-his-mind-on-keystone-xl-pipeline-says-baird-2/

#153 Stoopid Idiot on 01.16.14 at 5:10 pm

It’s a race to the bottom, Consider Currency War’s by James Rickards

http://www.amazon.ca/Currency-Wars-Making-Global-Crisis/dp/1591845564

#154 tkid on 01.16.14 at 5:15 pm

Thank you KommyKim and Macrath. I have some research to do.

#155 Doug in London on 01.16.14 at 5:34 pm

@CJ, post #132:
Yes, like Germany which is big on renewable energy and has the best performing economy of all the European countries. Other than nuclear power (yes, it too has drawbacks but may be the lesser of many evils) do you have any better ideas? As I said in my previous post, getting away from using so much oil will be a costly pursuit.

#156 Canadian Watchdog on 01.16.14 at 5:34 pm

Metals, Currency Rigging Worse Than Libor, Bafin Chief Says

Germany’s top financial regulator said possible manipulation of currency rates and prices for precious metals is worse than the Libor-rigging scandal, which has already led to fines of about $6 billion.

The allegations about the currency and precious metals markets are “particularly serious, because such reference values are based — unlike Libor and Euribor — typically on transactions in liquid markets and not on estimates of the banks,” Elke Koenig, the president of Bafin, said in a speech in Frankfurt today.

Well that pretty much concludes that just about everything is from chocolate to interest rates are rigged by rouge traders and corrupt bank execs. Except for real estate, because it's different.

#157 Suede on 01.16.14 at 5:36 pm

H’s new snitch hotline to taddle tale on your neighbour the tax cheat!

http://ca.finance.yahoo.com/news/tax-cheats-beware-tories-launch-snitch-hotline-offer-210145527.html

#158 Suede on 01.16.14 at 5:37 pm

hahaha

“The Tories plan to spend $30 million over five years to improve efforts to fight tax evasion both in Canada and abroad, Findlay”

Why not use that $30M to put people to work! Make a road, a bridge, or buy out Phil Kessel’s contract.

#159 God here on 01.16.14 at 5:43 pm

Smoking man go watch Little Nicky. Guess who you will be in that movie. You will be Hitler. Enjoy the pineapples.

#160 Crash Callaway on 01.16.14 at 5:44 pm

Difference between what’s creeping up to bite people in 2014 and the 1990’s is that back in the 1990’s the individual could plot his own destiny.

one income got you a house and a retirement savings plan. If you were in a relationship and it wasn’t working out you could start life anew on that one income.
Not so now… it takes 2 incomes and all your hail mary prayers to keep the wolves away and losing everything with little option to even rent an apt on one income.

2014 the year people really discover how trapped they are.
People constructed their own prisons… hell they were even allowed to pick the decor and granite counter tops for their cells. Talk about a compliant bunch and the kicker the jailers (Banks & Govt) don’t even have to furnish prison guards. The idiots with nowhere to run police themselves.

Freedom of choice will no longer be an option for the majority who swallowed the tainted real estate pill.

Sadly, the days where most people could strike out on their own are gone. The road ahead will be dismal for the greedy & needy.

#161 Squatter on 01.16.14 at 5:58 pm

#156 Canadian Watchdog on 01.16.14 at 5:34 pm:
Well that pretty much concludes that just about everything is from chocolate to interest rates are rigged by rouge traders and corrupt bank execs. Except for real estate, because it’s different.
—————————————————
Everything human is corrupt to the bone!

#162 Renter on 01.16.14 at 6:51 pm

So I’m looking around at different ways to diversify in my 60/40 balanced portfolio and I came across this ETF… http://ca.ishares.com/product_info/fund/overview/XTR.htm

It has preferreds, American high yields, laddered corporates and REITs… What do the dogs think of this one? Any unusual downside risk?

#163 jess on 01.16.14 at 6:57 pm

http://truth-out.org/news/item/21258-gov-christie-and-david-koch-in-cahoots-its-time-to-subpoena-the-committee-for-our-childrens-future

#164 Westernman on 01.16.14 at 6:59 pm

To whom it may concern:
I find the last few posts by Garth ( or whomever writes them ) humourous … as if the abysmal condition of the economy and country as a whole should come as a surprise to anyone.
I have stated many times on this blog that if Canada continues it’s Socialist, big Welfare, big Government, liberal ways that it would lead to ruination… of course being mocked along the way by the likes of mental giants like Herbie and the erudite socialist Form Man…
But it looks like ol’ Westernman hit the nail on the head again…
So enjoy your misery, you smarmy, self-entitled Canadians and always remember Comrades – ” We are just one more regulation and tax away from prosperity”

#165 jess on 01.16.14 at 7:17 pm

156 Canadian Watchdog

….. “special ring tones” and hand signals indeed

pools for fools

http://www.cftc.gov/PressRoom/PressReleases/EnforcementPressReleases/index.htm

#166 Paul on 01.16.14 at 8:41 pm

#157 Suede on 01.16.14 at 5:36 pm

H’s new snitch hotline to taddle tale on your neighbor the tax cheat!

http://ca.finance.yahoo.com/news/tax-cheats-beware-tories-launch-snitch-hotline-offer-210145527.html

———————————————————-
Rat out your neighbour

First they came for the Socialists, and I did not speak out– Because I was not a Socialist.

Then they came for the Trade Unionists, and I did not speak out– Because I was not a Trade Unionist.

Then they came for the Jews, and I did not speak out– Because I was not a Jew.

Then they came for me–and there was no one left to speak for me.

#167 Herb on 01.16.14 at 8:48 pm

#151 Holy Crap Where’s the Tylenol

“We now return to our regular programming after this paid political pronouncement brought to you by the Conservative Party of Canada.”

#168 John on 01.16.14 at 8:50 pm

Holy Crap Wheres The Tylenol on 01.16.14 at 4:44 pm
Holy Crap I wonder what this report is going to do to the South Etobicoke area for real estate values. Oh I forgot people who purchase property in Toronto are immune to all diseases including “Stupid”. I’m glad I live in Oakville. Breath deeply now breath.

http://www.680news.com/2014/01/15/study-points-to-health-effects-of-traffic-in-south-etobicoke/
____________________________________________

Those area just lost 10-100K of value just like that. With the RE crash in the GTA underway it will make the losses even worse.

#169 berniebee on 01.16.14 at 11:38 pm

#128 Van Isle Renter

Trust the world view by engineers? Because they might be sued? You’ve got to be kidding. Engineers are wonderful too…at engineering. But I’ve worked with far too many socially inept engineers, bless their hearts. The profession seems to attract those who have the temperament and ability to focus intently on the details of a single project.
The inverse of a world view, one might say.

Now admittedly Neil Young is not that great a musician, technically speaking. (I do like a lot of his music.) But his fame and wealth have allowed him to pursue his passion for social justice, travel extensively, meet a huge cross section of people, and give him the time to evaluate a great many things outside his career.

#170 Sgip on 01.16.14 at 11:49 pm

Highly rec this Neil young interview very much

[email protected] sounded like a Harper seal in this interview with @Neilyoung and Neil metaphorically whupped his ass!

http://www.cbc.ca/q/popupaudio.html?clipIds=2429818174

.

#171 Derek R on 01.17.14 at 12:04 am

#162 Renter on 01.16.14 at 6:51 pm wrote:
So I’m looking around at different ways to diversify in my 60/40 balanced portfolio and I came across this ETF…

It has preferreds, American high yields, laddered corporates and REITs… What do the dogs think of this one? Any unusual downside risk?

Looks like Canada and the US only. So it’s maybe a bit short of international exposure. And you want that for diversification.

#172 prairie person on 01.17.14 at 2:05 am

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/talk-of-rising-interest-rates-no-reason-for-homeowners-to-panic/article16369902/#dashboard/follows/

Hmmmm!

#173 Happy Renting on 01.17.14 at 3:24 am

Well, Rob Carrick is (gently) talking about it.

http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/what-to-do-if-you-fear-for-your-job/article16351166/

Once the message of caution reaches the Globe and Mail, I wonder if it’s enough to make most people pause before overextending themselves on a mortgage in a shaky job market?

#174 Enzcav on 01.17.14 at 3:23 pm

FYI.. The Spartan/Liberas Real Asset Opportunities Fund set to launch in Toronto in Q1 2014, is the 1st heged short strategy on CDN housing. Time to profit from this mess.

#175 neta on 01.17.14 at 6:27 pm

The three largest U.S. auto companies’ output in Canada was 1.48 million vehicles in 2011, down 24% from 2002, according to DesRosiers Auto Consultants. Employment dropped 55% to 20,777 workers over the same period, according to the Canadian Autoworkers Union. “There’s ongoing concern that some of the structural headwinds facing manufacturing will persist despite the cyclical rebound in U.S. demand

Manufacturing output in Canada accounted for 10.5% of gross domestic product in October, down from 16% in August 2000, according to data compiled by Bloomberg.

The change has meant that three largest U.S. automakers ship more production to Mexico and the southern U.S

A lack of pipeline infrastructure to reach international markets has resulted in a discount on Canada’s largest export, heavy crude oil, compared with U.S. benchmark prices. That discount sat at $18.50 per barrel yesterday, and reached a record $42.50 per barrel in December 2012. Canada pays international prices for the crude oil it imports [to eastern Canada], which amounted to C$1.5 billion flowing out of the country in November. At the same time, U.S. imports of oil plummeted to the weakest in three years in November as advances in domestic extraction put the U.S. on track to become the world’s largest oil producer by 2015, reducing dependence on foreign producers.

The loonie could weaken to C$1.17 per U.S. dollar by the second half of this year and C$1.30 by the end of next year, according to Jack McIntyre, who helps manage $38 billion in bonds from Philadelphia for Brandywine Global Investment Management