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DINOS modified

Hardly a day goes by that Mario Toneguzzi doesn’t throw a little more gas on the fire. But being the real estate reporter for the major Calgary paper is a popular gig these days. No shortage of news to report as the groupthink spreads.

“Home price growth best in Alberta over next two years,” was yesterday’s headline. Indeed, CREA said that, forecasting a 4% jump in prices this year with more to come in 2015. Already Calgary prices have risen 9% from this time a year ago, and when BMO economist Robert Kavcic came to town the other day he stirred more primordial juices by saying the city’s housing market was “heating up quickly again,” thanks to high demand and low supply. That sent Mario into a new state of vibration.

The average price in Calgary is now $482,702. Listings have fallen sharply (18%) and there are fewer than 3,000 properties for sale. That’s less than a two-month supply, which helps explain why prices have been pushed up the better part of 10% in the last twelve months. This echoes the Toronto situation, but is more intense. GTA buyers have a market of six million people to muddle around in, 130 kilometres wide, after all.

Falling listings amid rising prices are now a feature of urban Canadian real estate. It often also breeds slagging sales, which seems to be the case at the moment. CREA’s latest numbers show the pace of deals has slowed in the last few months, even as prices bloat.

Why does this happen? Probably because as real estate values swell and incomes don’t, homeowners are afraid of selling because they fear buying again. Most people listing houses they’ve owned for a few years would never pay what they think their places are worth. But they expect others to. And apparently there is a deep well of greater fools in Cowtown.

The number of days it took to find a buyer last month fell by 23% from the same month in 2014, despite the Winter from Hell. Meanwhile Calgarians seem truly… proud… that houses are becoming less affordable. Even that miserable flood of last summer is now viewed almost as a good thing, since it made everybody’s home worth more. In an economy which has oscillated more than most between boom and bust, moderation is scarce. Must be a cowboy thing.

Rose and Dave rent in Calgary and face a dilemma. Like the young, high-income couple I mentioned a few days ago, there is intense pressure coming from wrinklies for them to buy. “We have a large down payment being gifted to us from our respective parents. However, the money can only be used for a down payment. Our own monthly cash flow would be up if we use such a large down payment (we are looking purchase in the price zone around 600K). However, it doesn’t change that the equity would be at risk in the event of a downturn. What should we do?”

No simple answer, of course. Buying now to hold for decades might be smart. In the shorter term, it could be painful. Calgary is one dangerous market.

Why?

Well, no place is different, including all of Alberta. Everywhere the risks are uniform – mortgage rates only have one direction in which to travel, nine million disintegrating Boomers are entering their Depends years with up to half likely to bail out of houses, and prices compared with incomes or rents are beyond stupid. That there will be a correction to the mean is obvious. It’s just an issue of timing.

But Alberta is special. There’s even more risk. It’s oil.

Prices are at a premium, in part, because they move with the price of crude and (more importantly) the expectations for the oil patch. Right now the bulls are winning, as money pours into the oil sands pits and upgraders, as gambles are made on the Keystone pipeline going through and that global growth will rekindle the need for the black stuff. Everybody believes there’s a new boom, and these are the early days. So, whatever the cost of a house now, it’ll look cheap in two years.

Of course, nothing’s for sure. There’s an anti-tar sands oil lobby in the States which seems to be growing in influence. Keystone is a total unknown. But what we do know, is ballooning oil production in the US, thanks to fracking technology and an American policy of energy self-sufficiency.

In October, the amount of oil Americans were pumping out of their own soil exceeded imports for the first time in twenty years. By 2016 the US is expected to surpass Saudi Arabia to become the top global producer of oil, thanks to shale oil output. And the CEO of Exxon Mobil is now saying openly that America will need no imported oil (or any other energy) by 2020.

Oops.

Imagine the impact on backsplits dotting the suburban hills of Calgary if that happens. In six years. As rates rise and the wrinklies dehydrate.

The key message is that speculation and assumption bring more danger. (They’re sure learning that in Halifax right now as the vaunted ship-building boom turns to rust. There’s a devastating two-year supply of houses for sale.) Not only does buying at an inflated price in Calgary have inherent risk, but added to that is the petroleum factor. And if you make your living in the energy sector, it’s double-jeopardy.

Rose and Dave should (a) tell their parents that normal people don’t give gifts with conditions on them, (b) continue to rent while the Americans frack and (c) stay far, far away from anything Mario writes.

Alberta never learns.

196 comments ↓

#1 TurnerNation on 03.17.14 at 8:17 pm

Here I sit broken hearted tried to short but only started. From blog dog lodge #7.

#2 pauliegbombastic on 03.17.14 at 8:23 pm

And 1st place goes to…

#3 espressobob on 03.17.14 at 8:25 pm

I remember the ‘energy bull’ cycle from a few years ago, in the oil sands! Sure glad to be a very diversified investor these days!

Thanks Garth!

#4 Shanks on 03.17.14 at 8:27 pm

1st!

#5 Renting in Vic on 03.17.14 at 8:28 pm

All these people getting gifts from the parents don’t get it. Unless they are in competition with a sibling, the money will still be there in two years.

Finally starting to see a few properties here I would even consider at the prices. Still waiting until 2015 though – even then my wife is really into this renting thing so may not be able to buy even then.

#6 Mr. Frugal on 03.17.14 at 8:29 pm

I’d go for option (d)… Take the money and buy the S&P 500.

#7 John on 03.17.14 at 8:30 pm

Garth, do you think reduced supply of single family dwellings will support high prices SFH? Agree that cheap money fueled demand, but at the same there is almost no single family houses being built in GTA.

#8 Bob Loblaw on 03.17.14 at 8:30 pm

Keystone is a crap shoot. I would not bet on it. Northern Gateway is not happening. First Nations and environmentalists will see to that. Harper is going to get tarred and feathered and sent back to Calgary on the horse what brung him.
I’d be getting outta Dodge, NOW!!

#9 yashar on 03.17.14 at 8:31 pm

Finally furssst

#10 Waterloo Resident on 03.17.14 at 8:33 pm

Garth, here’s something that shows you that people LOVE TO SUFFER:

I asked on a blog why do men like to suffer, why do they prefer poverty and misery instead of happiness and wealth. I said why buy a house and be poor with a burden of debt that will kill you, while you can invest on the markets and get rich, and enjoy life. And I asked why do they prefer TV programs where everyone dies or is horribly mutilated and want to commit suicide, compared to one where people are happy and joyful?

When guess what everyone said: They wanted pain, poverty and misery. this is the best quote of all, from one guy:

Quote:

“Money doesn’t necessarily mean happiness. For a start there are the hangers on who just want your money and you cannot trust as far as you can spit. Who can you trust when you have money? Who is truly a friend?
Lazing in the sun can be extremely boring day after day. You would be brain dead within a year.
People happy with the hedonistic life style are generally shallow and insincere and not worth giving the time of day.
Hard work can bring true satisfaction and the feeling of accomplishment. It builds character and strength of purpose.
I’m a man and I would much prefer to be a hard working poor guy who is honest, has a sense of his own worth and knows the true value of life.
As for the TV series. How boring is it watching people living uneventful ‘Perfect’ lives? ”

SEE WHAT I MEAN?
Garth, if you have a country full of people like that, can you now understand why our housing boom has gone to such insane heights and why no one wants to save for their retirement anymore?

(IT’S BECAUSE THEY ACTUALLY WANT TO SUFFER, believe it or not.)

BTW. Bought back into the stock market at noon as all indicators did a sudden 180 turn around. If you are in cash, you might want to buy back in tomorrow.

#11 Jackofall on 03.17.14 at 8:34 pm

Kids are getting street-wise, parents think housing can do no harm. There is a simple solution. Get the parents to sign a form giving them liability over any negative equity. Win win!

#12 blueskyalta on 03.17.14 at 8:37 pm

live in grande prairie and many commercial buildings going up,nonstop building,new hospital,dino museum,industrial parks spreading,lots of work of all kinds.oil shock of any kind would surely send ripples in all areas, such is alberta,its exciting to ride the wave up its bound to have some downside ,have always had a good job last 30yrs no complaints

#13 Oil Management Faction on 03.17.14 at 8:37 pm

Canada has a huge oil economy, if the USA starts to produce more oil, then owning shares in Canadian Oil Producers could be as risky as holding a hot potato! Time to sell Canadian Oil and buy World ETFs Gartho?

#14 David Lee on 03.17.14 at 8:39 pm

Garth,

I think the mainstream is slowly catching on:

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/the-real-story-of-rising-net-worth/article17534227/

Humility might dictate that you call your blog “pathetic”, but I think it is more truthful to call your blog “prophetic”.

#15 TurnerNation on 03.17.14 at 8:40 pm

Yes the UCC tells all even time.

#16 bill on 03.17.14 at 8:42 pm

very thought provoking blog today Garth.
I wonder if the real market for Canadian crude is Europe?

#17 Freedom First on 03.17.14 at 8:48 pm

Vancouver, Toronto, Calgary, U.S., Japan, Spain, Ireland, on and on and on and on. Human beings are house horny and everywhere is different. Nobody learns. That is why so many people are screwed. Just say no.

#18 omg on 03.17.14 at 8:48 pm

SPEAKING OF BLOAT – WHAT ABOUT PROPERTY TAXES

My favourite RANT these days is the incredible run-up of Victoria property taxes over the past 8 years. I would like to know what’s happening in other cities, but in Victoria its absolutely insane.

In Victoria city we are now up 75% versus 2006 property taxes.

I am talking TAXES AND FEES here – the weasely politicians have offloaded a lot of tax increases into municipal fees. So while they can claim property taxes are “only” going up at a rate of 3 times inflation!!!!!, that ignores that fees are going up 10% to 15% annually.

This is in a city that has pretty much no snow removal budget – snow removal in Victoria consists of bolting a blade to the front of an F250 and guys shovelling salt off the back of a pick-up.

Plus we are coming-up on two huge capital expenditures (the replacement of the”Blue” bridge and sewage treatment). Those two items alone will increase taxes by between $400 and $700 annually according to the City which means it will likely be closers to $900 annually.

So for 2014 a pleasant little bungalow, depending on location, will run you $4000 to $5500 annually in fees and property taxes.

Throw in the new bridge and sewage plant and a base tax/fee run-up of 7% compounded annually and in 5 years you could be looking at $8000 annually on a bungalow in a choice part of town.

#19 Advise on 03.17.14 at 8:49 pm

Put their gift into bitcoins, they are cheap right now!

#20 Linda Mulligan on 03.17.14 at 8:49 pm

The main reason housing prices are rising in Calgary & other parts of Alberta is the basic fact that many people are moving here looking for work. Something on the order of 23,000 people moved to Calgary last year & this is not a ‘one off’ event, but happens yearly. Throw in all the damage done by the 2013 flood – some 18,000 buildings damaged, most of them of the housing nature – leaves a brutally tight rental supply below 1% & builders can only build as fast as labour & material availability allow. As for the cost, despite the much touted ‘average’ home sale price many houses are still in the $400,000 range, especially if they are older homes in less desired areas. Sure, you can blow a wad on a fancy shack in one of the high end hoods but if you don’t insist on living high on the hog & having the truly wealthy as your next door neighbours housing is still within reach here. That having been said, the boom/bust cycle inherent in the Alberta economy has knocked housing off its pins before (anyone recall the 80’s?) & will doubtless do so again. As for the US, maybe they will be oil sufficient in the near future but if they are worried about tar sands, what are they going to do if fracking contaminates their potable water or triggers some earthquakes? They may not be able to get at what they have without paying too high a price for it.

#21 Realtor #1 on 03.17.14 at 8:52 pm

I thought listing would be increasing.. Divorces, empty nesters, people who can’t afford their home, people who want to sell, rent and invest their profit.

It seems every year there is something that keeps the housing market strong- interest rates and now low inventory , boy, you doomers just ant catch a break.

Five years and counting, don’t you wish you bought in 2010?… I know next year.

#22 HD on 03.17.14 at 8:53 pm

#141 Waterloo Resident on 03.15.14 at 12:59 pm

Forget about worrying about a 10% correction in our housing market, instead start worrying about the 30% drop our stock market is going to have come Monday if the Russians have started moving their forces into the REST of Ukraine as it appears that they are doing. That’s the main reason why I got the heck out of the market a few days ago, and good thing too.

If Monday comes and there is a Russian military incursion into the Rest of Eastern Ukraine, then the market selloff will start off slow with a 3 to 5% decline, but it will quickly accelerate to a 10 to 15% decline by the end of the day. And what will come after that will be another week or two of sea-sawing declines as it will become very clear that either the NATO forces or NATO plus America will soon become dragged into the conflict in that region.

Let us just HOPE that this does not happen this weekend , because if it does, then ‘HELLO NEW DEPRESSION, GOODBYE CANADIAN JOBS’.
As useful as your other posts. — Garth

———————————————–

#10 Waterloo Resident on 03.17.14 at 8:33 pm

BTW. Bought back into the stock market at noon as all indicators did a sudden 180 turn around. If you are in cash, you might want to buy back in tomorrow.

———————————————-

So, how would you characterize your attempt to time the market?

Best,

HD

#23 FormerSaskie on 03.17.14 at 8:57 pm

Sold in AB late 2013. Lots of showings with positive comments but no offers to work with except one from a rental company. People are getting nervous about buying.

I bought 10 years ago so I could be very flexible with the price and still make a profit. My neighbors bought later than I did and want to sell now but can’t get a price that will cover what they paid for the house let alone renos, interest or taxes. Sad.

I’m renting now and may do so forever because it’s nice not worrying about maintenance and upkeep or hormonal real estate markets.

#24 AK on 03.17.14 at 9:00 pm

#2 pauliegbombastic on 03.17.14 at 8:23 pm
“And 1st place goes to…”
====================================
Definitely not you.

Take a hike…

#25 Nemesis on 03.17.14 at 9:00 pm

#CowTown #ChanelNo.5 #2SixPacks #KlaatuBaradaNikto

http://youtu.be/4J71RDJ0Gd8

[NoteToGT: You do realize that I’ve been waiting years to use that… I guess that’s what happens when you spend your WonderYears on the Prairies in the BigSkyCountry of Steak&Eggz. Talk about a ClassAct – PropheticBonus PatriciaNeal Zen: http://youtu.be/sIaxSxEqKtA ]

#26 Larry Laffer on 03.17.14 at 9:01 pm

Regarding your comment on the Keystone XL pipeline, the view from the oil industry itself is that the still-unbuilt pipeline is getting increasingly irrelevant. Pipelines can haul the bitumen to a single destination only, where the prices will most likely be the cheapest. And the bitumen must be diluted to flow through a pipeline.

In the long run, the industry will increasingly rely on rail to haul the crude to the markets – ANY market, preferably where the price commands a premium. Also, insulated (i.e. heated) tank cars can haul undiluted bitumen…

See comment at the bottom of Fred Frailey’s analysis here:

http://cs.trains.com/trn/b/fred-frailey/archive/2014/03/01/oil-by-rail-dodges-all-bullets.aspx

#27 AK on 03.17.14 at 9:01 pm

#9 yashar on 03.17.14 at 8:31 pm
“Finally furssst”
===================================
Must be a full moon tonight…

#28 Happy Renting on 03.17.14 at 9:01 pm

“That sent Mario into a new state of vibration.”

That’s the most fantastic way I’ve even seen someone call another a d**do. :)

“In an economy which has oscillated more than most between boom and bust, moderation is scarce.”

What did that bumper sticker say? “Please, God, let there be another oil boom, I promise not to piss it all away next time.” A bit of a pass to the young’uns who haven’t seen it before, but I hope some of the elders with long memories have taken smart advantage this time around.

#29 Chickenlittle on 03.17.14 at 9:10 pm

Ok guys, I am in need of some third party advice.

So we met the owners to sign the lease for our new place. There were 2 agents and the two owners, a couple. Both my husband and I got baaaaad feeling. They wanted to see our place to make sure we didn’t trash it. Fine. They want to do monthly inspections to make sure we don’t have a grow op. Sigh, but fine.

I just get the feeling that they will be up our ass all the time watching us 24 -7.

My husband is on the phone right now with the agent telling him this.

We do understand that they worry about us ruining the place, but I have 2 references from the last 5 years saying we are excellent tenants.

Any thoughts?

#30 ozy - and WHY are we LECTURING Albertans??? on 03.17.14 at 9:19 pm

And WHY are we LECTURING Albertans???

is not like torono (no typo) is the center of the world or anything…barely a cultural life…and people fighting -20C for 4 months – survival trumps all – incl friendship here

what do u want to teach Albertans….moral corruption, stock market, what?

#31 James on 03.17.14 at 9:19 pm

One thing seems clear: without parents coughing up money for a down payment, young people would have absolutely nothing to use.

That makes me wonder where the down payments are coming from. Savings? Or HELOCs? Maybe Garth has covered that, but I do not see a lot older people with 400k lying around. I’m guessing that house price inflation is being used to finance downpayments for price-inflated houses.

#32 len on 03.17.14 at 9:32 pm

The fall in the number of days on the market is a total bunk. I follow the market carefully in Calgary and what is happening is a rampant drive to re-list stale properties with lower price and re-set on the counter at zero. This is the case when sellers switch realtors but often, the realtor is the same and just de-lists at the end of month only to list at the beginning of month with the designation of “new listing”.

The DOM statistic is completely gamed, like much of other stats from the realtors – can we still call them that or do we have a new code word them these days?

#33 gut check on 03.17.14 at 9:32 pm

#29 Chickenlittle. I have learned to always, always, ALWAYS trust that gut feeling. .. You said you are childless, right? Not that I’m criticizing here, honestly I’m not – but why do you need/want a 4 bed detached? I can understand not wanting a duplex or something but could you do with a unit that’s a little smaller but more luxurious with better amenities? A rental under a pro management company might be a better bet.

#34 OKView on 03.17.14 at 9:43 pm

My wife and I love Real Estate, the problem is we love making money even more. We make some of our smartest money through buying low (and intelligently) and selling high and I am not talking about Real Estate. Shouldn’t these two go hand in hand though? After all we have always been told that Real Estate always goes up and as such the money invested into Real Estate will always go up (grow)

#35 Happy Renting on 03.17.14 at 9:47 pm

#5 Renting in Vic on 03.17.14 at 8:28 pm
All these people getting gifts from the parents don’t get it. Unless they are in competition with a sibling, the money will still be there in two years.
=========================

Maybe not. I could see, upon a housing correction, the offer being withdrawn because:

1) parents jump on the “real estate is a bad investment” bandwagon (at precisely the time it’s a much better value), or

2) when the value of the parents’ house tanks, they realize they need the gift money for retirement, or just can’t afford to hand over the cash anymore.

That said, my experience is that gifts of this nature are to be eyed warily, and if accepted you should be ready to return it at any time. That’s just me, though, I freely admit many other families probably have much healthier dynamics.

#36 KommyKim on 03.17.14 at 9:47 pm

RE: #13 Oil Management Faction on 03.17.14 at 8:37 pm
Time to sell Canadian Oil and buy World ETFs Gartho?

No. It is time, as it always is, to have a balanced portfolio. Leave finding the “next big thing” to the venture capitalists and speculators.

#37 World According To Garth on 03.17.14 at 9:52 pm

Meanwhile in Harpo Land

http://www.huffingtonpost.ca/daniel-tencer/medical-marijuana-laws-canada_b_4980014.html

Hundreds of Govt workers making 100k a year are cumin to git yooz guyz and yer bag “o” weed.

I’m so embarrassed to be Canadian sometimes.

#38 Mark on 03.17.14 at 9:55 pm

Its rather shocking how cheap some of the Alberta energy investments are these days. Talisman is down almost 70% from its highs. Suncor, 50% down. CNQ, still down 30-40%. This is despite adding significant amounts of production, de-leveraging their balance sheets, and oil prices which are within a shade of record yearly average highs.

Yet Calgarians are at least nominally still chasing housing.

BTW, kind of disgusted with a Realtor(r) ad that I saw on TV tonight. Where a SWAT team is depicted pointing guns at a hapless couple who bought their house without the aid of a Realtor(r). The message is pretty simple, in the mind of Realtors(r), if you don’t use their professional services, you are liable to have the cops break into your house pointing assault weapons at you.

#39 Mark on 03.17.14 at 9:58 pm

“Canada has a huge oil economy, if the USA starts to produce more oil, then owning shares in Canadian Oil Producers could be as risky as holding a hot potato! “

Are you kidding? The US still imports 8 million barrels per day. They will probably never manage to close that gap, short of a substantial collapse of their contemporary economy. Canadian oil is and will remain an integral part of the supply mix.

#40 Linda Mulligan on 03.17.14 at 9:59 pm

#29 Chickenlittle – maybe they are worried because you are a couple – if you are renting a big 4 bedroom house, they probably are worried you’ll bring in additional people to ‘share’ the rent without them having a say in who those people are (& more importantly, not receiving their cash for staying). Plus, do you really WANT to rent from someone who may be ‘dropping by’ on a frequent basis to check out what you are up to? At some point reasonable concern becomes crazy stalker-lords.

#41 Vangrrl on 03.17.14 at 10:01 pm

#28: Chickenlittle: Monthly inspections? Why? That seems pretty over the top. They’re going to be really annoying. Not to mention you are in no way legally required to go along with that.

#42 A Yank in BC on 03.17.14 at 10:13 pm

#29 Chickenlittle

Monthly inspections? That’s completely unacceptable. They aren’t landlords, they are paranoid control freaks. Stand up to this nonsense and say no. Better yet, unless you just gotta have this place, look elsewhere.

#43 Ilona on 03.17.14 at 10:14 pm

(a) tell their parents that normal people don’t give gifts with conditions on them

___________________________

We almost bought our daughter a townhouse near our house (I loved it, she loved it, we could’ve afforded it if she got a roommate). The plan was to purchase it in our names and transfer the mortgage to her when she’s out of school. But after learning about the tax implications (that we’d still have to pay capital gains tax on it – even if we’d “sell” it to her at a loss) and reading all those warnings about never-ever buying real estate for kids, we agreed that we’d give her a downpayment instead.

There’s tons of legal advice on the internet for parents who want to help out their children, and this option is highlighted in almost all of them as the best (as it protects in case of a child getting hitched and then divorced): give money as a no-interest loan with no repayment schedule. Technically, we give our daughter say $50K, she uses it as a downpayment, but in case of divorce it’s counted as a loan, not as an asset to be equally split up.

Our not yet 21 year old daughter completely agreed that it’s fair when we explained it to her. I don’t understand why other parents who seem to be following the same strategy (maybe advised by their lawyer, not googled) don’t explain it to their kids.

And I’m surprised that you and other readers seem to think that parents are so dumb that their only agenda is how to make their children procreate.

#44 Tiger on 03.17.14 at 10:21 pm

# 24.

#2 pauliegbombastic on 03.17.14 at 8:23 pm
“And 1st place goes to…”
====================================
Definitely not you.
Understand he is in first place!
As a looser, he or she wins the trophy!

#45 ChaChing on 03.17.14 at 10:23 pm

Toronto RE prices will continue to rise. In the words of Tesla founder Elon Musk, the product is “supply-constrained”.

#46 Ronaldo on 03.17.14 at 10:26 pm

#10 Waterloo Resident on 03.17.14 at 8:33 pm

”BTW. Bought back into the stock market at noon as all indicators did a sudden 180 turn around. If you are in cash, you might want to buy back in tomorrow.”

Might I ask what sectors of the market you are buying back into? Energy, PM’s, Financials, ???? Just wondering.

#47 My Life is a Pile of Shit on 03.17.14 at 10:26 pm

Garth, when you publish a blog, you should also publish the latest unpublished comments for the last blog under the new blog at the same time. That way, there is no incentive for anybody to comment “First!”.

#48 Renter's Revenge! on 03.17.14 at 10:29 pm

You would think that in a free market, such as Canada’s residential housing market, an increase in prices would cause a surge in supply, helping to put a damper on further price increases.

There must be something incredibly inefficient, or corrupt, about our housing market for this to not be happening.

#49 Happy Renting on 03.17.14 at 10:30 pm

#29 Chickenlittle on 03.17.14 at 9:10 pm

Ooh, tough one. How hard was it to find this rental? Many other comparable ones out there or not really?

Would a copy of your monthly hydro bill be good enough to convince them you’re not running a grow op? (Isn’t that one of the giveaways?)

I have to think that unless a house is owned by a professional rental company, anything halfway nice is going to have hovering, worried owners anxious that you’re not trashing their place.

If you want to give it a chance, try taking the owners out to dinner to get to know each other in a non-business environment and to build some trust. A small investment in money and time before you sign on the dotted line or walk away completely.

#50 Ronaldo on 03.17.14 at 10:35 pm

#26- Larry Laffer –

”In the long run, the industry will increasingly rely on rail to haul the crude to the markets – ANY market, preferably where the price commands a premium. Also, insulated (i.e. heated) tank cars can haul undiluted bitumen… ”

Right on Larry, and you can bet that Mr. Buffet had the same thing in mind when he bought the BN and Union Tank Car.

http://www.businessweek.com/articles/2013-11-14/2014-outlook-warren-buffett-cashes-in-on-railroad-tank-cars

#51 Tiger on 03.17.14 at 10:35 pm

#2 pauliegbombastic
Whear In hell did you ever get that name ,Rejects hall of fame would be a good guess!
First can mean a lot of things , some good some bad!
====================================

#52 Arse on 03.17.14 at 10:42 pm

In this year’s Mayoral Election in Toronto, I am going to vote for Rob Ford.

#53 Old Man on 03.17.14 at 10:43 pm

#39 Mark: – oil and natural gas is a poker game as USA needs no imports, and had no production needs for decades. One day they will pull out a royal flush or four aces, as Alberta is but a stage show. It was all about buying their debt for decades, and one day the game will change as they that control energy will win the game in the end.

#54 Ronaldo on 03.17.14 at 10:44 pm

#31 James –

”I’m guessing that house price inflation is being used to finance downpayments for price-inflated houses.”

In addition to Renos, Expensive holidays, Time Shares, Expensive cars, Boats, RV’s, Hummers, Vacation properties, Stock market speculation, rental properties, etc. etc.

#55 Goldie on 03.17.14 at 10:44 pm

Even if ,and it’s a big IF, the US achieves oil self sufficiency by 2020, it will only last for a small number of years before production begins to drop to a level which will require importing. The tar sands will be waiting…

#56 Ford Prefect on 03.17.14 at 10:55 pm

#18, omg: I left Victoria 22 years ago. At that time there was intense discussion about replacing the blue bridge and putting in sewage treatment. Maybe Rome was not eternal but some issues in Victoria appear to be.

#57 JL on 03.17.14 at 11:01 pm

As per my comment yesterday. No criticism of Calgary based on price to rent or price to income. Just the same old “Calgary is dangerous”. Okay… If oil stops becoming valuable.? USA may continue to increase production but it’s commensurate with massive declines from existing oil fields that still produce the majority of our oil.

Garth used to be a peak oil guy, now we’re supposed to worry about no buyers? I guess whatever argument supports his position. Kind of sounds like a Realtor.

Did you just try to justify inflated Calgary house prices with peak oil? Talk about desperate. — Garth

#58 DonDWest on 03.17.14 at 11:04 pm

I hate being young.

All you can do is trade what’s becoming the world’s most depreciating asset – your labour.

Capitalism favours the old. Capitalism rewards those who have capital – and the young have no assets/capital.

I hate being young.

#59 jan on 03.17.14 at 11:07 pm

So, is there money to be made in oilberta then.
Are u bullish on them ???

#60 45north on 03.17.14 at 11:08 pm

Chickenlittle : We do understand that they worry about us ruining the place, but I have 2 references from the last 5 years saying we are excellent tenants.

I’m no longer a landlord because the law totally favours the tenant. The CatFoodLady says the it’s now called the Residential Tenancies Act

http://www.ltb.gov.on.ca/en/Key_Information/STEL02_111677.html

there are people who are career tenants, they get the keys, stiff the landlords and then use every appeal to stay in the house. Landlords have been wiped out with no recourse.

Here’s a story:

http://www.greaterfool.ca/2013/04/26/all-in-this-together/#comment-238876

#61 Suede on 03.17.14 at 11:10 pm

Gotta Love Vancouver.

Let’s compare Oct 2012 and Oct 2013 data because the sales were so much better than the worst month on record…and it was 6 months ago! Let’s do a story on that here in the middle of March 2014. LOL

Read more: http://www.vancouversun.com/business/home+sales+largest+year+over+year+increase/9626205/story.html#ixzz2wHPeMmxA

#62 benchwarmers on 03.17.14 at 11:15 pm

Just talked to a relator tonight and he said he has never seen so few listings in Calgary ever. Worse than 08 . Only 1200 detached houses for sale right now in the whole city.

#63 Snowboid on 03.17.14 at 11:17 pm

#21 Realtor #1 on 03.17.14 at 8:52 pm…

“…don’t you wish you bought in 2010?…”

No, but certainly glad we sold in 2010 – we would have lost about $ 65,000 if we held onto our Victoria mini-McMansion.

Not as bad as our former neighbours in Victoria – who lost almost $ 100,000 – or our friends in Edmonton, who last month took a $ 200,000 loss on their real McMansion (we told them to sell in 2010)!

BTW, most people are pragmatic in the reasoning around bubbly RE, not many are doomers.

#64 Tony on 03.17.14 at 11:19 pm

Stupidity abounds especially in Calgary. They didn’t learn anything from what happened to real estate in Japan or in America. In the futures market oil prices eight years in the future are priced about 25 percent lower than today. Unbelievable, but at least the renters will have money in the future.

#65 Nemesis on 03.17.14 at 11:31 pm

#BonusZen #FourStrongWinds

http://youtu.be/pKYIEsdq3gs

[NoteToChickenLittle: “Run!” In five years I’ve seen the LandLord… twice. It probably has something to do with with his OkieShack depreciating faster than I’m shoveling rent into it. Seriously. NoteTo’Yahoos’: Think of it as a ménage à trois if you must… but you’re as close to my heart as Cali and LaBelleProvence. Sorry BC. Maybe next time around.]

#66 Len Is A Booger on 03.17.14 at 11:36 pm

#32 – Len

Nice try, bub. Have you attempted to purchase in Calgary lately? I bought a property in January. Had 9 showings scheduled on Thursday for the Saturday (2 days later). By Friday night, 7 of 9 were sold.

Oh, and for the record, I am not involved in the real estate business. I also paid cash for the property (i.e. no mortgage).

#67 bricklayer on 03.17.14 at 11:38 pm

great article. yes, Calgary is nuts. now there is more and more advertising calling for ‘fight for affordable housing for all’, I guess trying to get the last of the sheeple signed up for big loans.

one thing to keep in mind: oil is not equal oil. the refineries on the gulf of Mexico are geared for heavy crude, such as the crude from the oil sands, and also found in abundance in Venezuela (not their most favorite trading partner….). most of the oil that is being produced in the states is light sweet crude, which is good for some refineries, but not for the ones on the gulf coast. Hence, either they spend some big capital and downtime to re-tool, or find heavy crude, hence the keystone XL project.

just to show there is always more hair on things than it appears in one or two sentences…

#68 Andrew Woburn on 03.18.14 at 12:12 am

39 Mark on 03.17.14 at 9:58 pm
Are you kidding? The US still imports 8 million barrels per day. They will probably never manage to close that gap, short of a substantial collapse of their contemporary economy. Canadian oil is and will remain an integral part of the supply mix.
================================

I agree. First of all, US corporations control much of our oil and I can’t see them wanting us to have to commit our supply to China just to keep the lights on. Secondly, fracked oil has a high extraction cost and a high depletion rate so it may not be as long-term productive as the optimists predict.

Thirdly no one is talking about Europe or Japan’s oil needs. Japan is playing a dangerous head-butting game with China because all its oil has to come from the Middle East by sea right through channels China is determined to control. Adding Canadian oil to their input mix would reduce their vulnerability. If you were the US, would you offer to ride shotgun on Japanese oil imports or would you tell Japan to start buying from Canada.

Likewise, Europe has already experienced Russian natural gas aggression. Canada could offer an alternative oil/gas source to fend off such power plays or hedge against the probability of increasing Chinese/Russian influence over Middle East oil states.

“Japan is primarily dependent on the Middle East for its crude oil imports, as 83% of Japanese crude oil imports originated from the Middle East in 2012, up from 70% in the mid-1980s….

Because of its limited natural gas resources, Japan relies on imports to meet nearly all of its natural gas needs. In 2012, Japan consumed 4.4 trillion cubic feet (Tcf) of natural gas, up 50% from the 2000 level. More than 95% of Japan’s gas demand is met by liquefied natural gas (LNG) imports. Japan, the world’s largest LNG importer in 2012, accounted for 37% of global LNG demand in 2012, up from 33% in 2011….”

http://www.eia.gov/todayinenergy/detail.cfm?id=13711

#69 nomad on 03.18.14 at 12:13 am

#31 – I bet other than asking a young assistant at my local bank, nobody can tell us if parents are using their home equity to help their kids. I’d love to see public stats.

Renting in Toronto has been a no brainer: 1400$ a month for a 1 plus den at Yonge and Eglinton. Now we need a two bedroom and Kijiji tells me it’s 1900-2100. Add this up over 25 years… this city is killing me! Back to surfing for a US job.

#70 Stay the Course on 03.18.14 at 12:16 am

#29 Chicken Little

A similar situation with us. We turned it around on them. We sat down with them and said that their house in which we are going to live has to feel like a home. If we don’t feel comfortable, we won’t enjoy it here…it won’t be a home. If you don’t trust us, you won’t enjoy having us here either. We have great references that indicate we are responsible. Call whomever you like that know us and they will verify we are good tenants. To reciprocate and make us comfortable with you as our landlords, we’d like to call some of your previous tenants and references so we can trust that you are good and respectful landlords.

If they can’t agree with that premise, then it is unlikely you will be happy there. Good luck.

#71 Nemesis on 03.18.14 at 12:42 am

#ForYourEyesOnly[GT] #BigOldWorldOutThere #MakeHaste #YouTooSaltyDogz

http://youtu.be/LweA7NLPB0c

#72 Joe Calgary on 03.18.14 at 12:43 am

Real estate mania is full force in Calgary, everybody from the receptionist at work, to the cleaning personal is buying $600000 homes, with the can’t loose attitude.

#73 Longterm on 03.18.14 at 12:43 am

Here’s some real on the ground Cowtown real estate action for you. The Calgary market is HOT so you better be quick to cash out while it lasts.

Two weeks ago I listed a duplex at $429,000 and 12 hours later and 8 bids it sold for $465,000. Deal is closed and cash is in the bank. Bought in 2003 for exactly $200,000, no other offers and languishing on the market. Back then the yield was amazing, now it blows and people were fighting each other to buy it.

Last week I listed a legal up/down house in a crap location at $439,000, several bids on day one and it is headed towards closing at $445,000 this week.

Good luck to the buyers, you are going to need it. Meanwhile, I’ll dump that cash into some dividend generators.

People in Calgary are nuts and have short memories. I was born there and spent decades in the city.

As a case in point of how bloated the prices are, my brother bought a bungalow in Brentwood last summer for $589,000. These are the identical bungalow’s that a friend’s parents bought in 1970 with one parent as a newly qualified high school teacher and the other a stay at home mum.

Same with my parents. My dad had only a four year degree and two years of teaching under his belt and they bought a Dalhousie bungalow new in 1971 and my mum had no income and stayed at home. These bungalows sell in the $500k range.

In both cases these houses would be unaffordable by the same worker now unless both parents were working full time and had no kids. The bloat in Calgary is the same as the rest of Canada: cheap money.

My parents, now in their mid-70s, sold their house, invested the capital and rent one of these very same Brentwood bungalows. They have more money now than ever and more cash flow since they retired in the 1990s. And shock, horror! After 42 years of homeownership their lives did not implode and their friends didn’t tar and feather them and dump them outside the city limits when they became ‘renters’. Boomers. Read and learn.

#74 airhead princess on 03.18.14 at 12:45 am

DELETED

#75 High Plains Drifter on 03.18.14 at 12:46 am

Media hype is essential to a real estate boom and it does not hurt to have a bunch of rich Yankees who love speculating thrown into the mix. That is Calgary and when the work gets mapped out Edmonton gets a nice chance for a call option. Take a chair Vancouver and Toronto or better yet get invested in Alberta, Brad Lamb did.

#76 Roy on 03.18.14 at 12:56 am

Endless pumping from CREA

Average price for a Canadian home reaches $406,372
http://www.ctvnews.ca/business/average-price-for-a-canadian-home-reaches-406-372-1.1732410

That’s quite an increase recall about 3 months ago they were gloating the average national price was $391K.

I guess in Canada housing always rises at 15% at year. Even when the pace of new job growth is dismal, stats say we border on deflation, and when one market like Halifax is toast.

Maybe F needs to pull more rabbits out of his hat.

#77 John Prine on 03.18.14 at 12:59 am

My wife watched a bit of the Lang and O’Leary Report today and said that there was an American on that managed a lot of Canadian assets in New York. When asked what the single biggest threat to Canada’s economy was he replied the “housing market” Apparently he said that Canada can weather a lot of outside market influences but that the real estate market was essentially doomed to collapse and I assume they are adjusting their holdings accordingly . Sorry I didn’t get the name of the guest or his company.

#78 Turtle on 03.18.14 at 1:03 am

#29 Chickenlittle

You are dealing with amateurs, that is never easy. Your brain absorbs information in different ways, raises red flags (“I got baaaaad feeling”) and usually that is good enough to walk away. You don’t need to justify your decision.

I also agree with others: rent smaller and happier.

#79 airhead princess on 03.18.14 at 1:18 am

The future for rentals in Vancouver is SRO and a shared washroom….( can you even imagine sharing a washroom with derelicts who shit in the halls….what are they going to do in the toilet??)

http://www.vancouversun.com/news/metro/Huge+demand+tiny+rental+units+Vancouver/9628610/story.html

Is it really a question of demand or a true reflection of the real poverty in Vancouver? I think the latter…..Maybe crapping out the window might come back into fashion when the cans are flooded with debris…after all…do you think the building manager will be there to plunge every time a messed up junkie stuffs his shirt down the toilet) Good for you Vancouver….proving your the best place on earth….agian.

#80 Bailing in BC on 03.18.14 at 1:25 am

#28 Chickenlittle: Unless you are really desperate for the rental, go with your gut. At the very least put your foot down. People who are confident of their own quality will have their own standards. It will be the tenants who are willing to go along with anything pre-move in who will be the ones who give landlords grief once they have possession of the property. If the landlords/agents have any clues they will get that. If they have no clues, they are probably best avoided.

#81 Lorne on 03.18.14 at 1:26 am

#41Vangrrl
Monthly inspections? Why? That seems pretty over the top. They’re going to be really annoying. Not to mention you are in no way legally required to go along with that.
………
Think you might be wrong about that. Written 24 hour notice is all that is required.

#82 saltpony on 03.18.14 at 1:29 am

I wonder who owns all the houses that the Germans are renting? That seems like a good gig..

Europe is pretty squished, but still lots of room on the delta farmlands and out onto the prairies in Canada..

..subdivision after subdivision after subdivision..

oh ya, and a fracking we will go.. I think its time to start hoarding water. It’s gonna be worth waaaaaay more than gold soon enough. Waterbugs!! haha

#83 Turtle on 03.18.14 at 1:30 am

#10 Waterloo Resident

“Garth, here’s something that shows you that people LOVE TO SUFFER:”

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

Maybe people just try to FIT IN. If the whole group suffers enormous mortgages, than you will be accepted with the same load of debt. And who wants to be an outcast?

Also that “parents downpayment gift” thingy is simply the process of enslaving young souls into something they don’t fully understand.

Gift is only a gift WITHOUT any conditions.

#84 Ilona on 03.18.14 at 2:08 am

Why your parents might want to give you some money as the down payment but not as an unconditional gift:

Parents also need to consider property law when it comes to providing financial aid to a child who is married or cohabitating with a partner. If there is a break-up, you want to make sure that your investment is protected. One of the easiest ways to do this is to provide your child with a structured loan rather than a financial gift. While each situation dictates what will make sense (and you should always seek legal and financial advice), parents should always put these sorts of financial agreements in writing. While this will add to the cost of the purchase through the drafting of sound legal documents, you will be in a better position knowing that all parties are covered in the case of a disagreement. Typically, if a break-up were to occur, and a settlement were required, the loan would be subtracted from the family property before being divided up.

On the flipside, if you choose to make the gift official and put the property in the child’s name, you could potentially be in for a nice tax windfall. Tax exclusions on gifts and estates can be quite favorable to the giver, provided you have the cash to make the purchase upfront.

http://ca.finance.yahoo.com/news/help-child-buy-home-120000985.html

#85 rocko on 03.18.14 at 2:13 am

As a relatively well connected geo working in the environmental industry in Calgary I know this:
1. Oil companies have too much invested in Alberta to see things go south. Tight (shale) oil plays are on the horizon, and will surpass oil sands exploration shortly.
2. These companies are largely tied to international energy companies, especially the US. ie. the money won’t stop.
3. Keystone and Northern Gateway will be built, I have absolutely no doubt. Trains and trucks…? Not exactly working out so well lately.
4. Calgary housing is massively inflated, it will come down, just like the price of oil. But unfortunately I agree with many of the other posters here, the price is tied more to transient migration of Canadians into Calgary, as long as things are booming, houses will be in demand. As Garth always says, it’s emotional.

#86 Son of Ponzi on 03.18.14 at 2:56 am

#29
Grow some backbone and show the landlord who’s boss.
Jeess.

#87 Buy? Curious? on 03.18.14 at 4:20 am

Hey Garth! I’m not seeing any correction. When are we going to hear some stories about people in negative equity struggling to keep their homes? I’m tired of hearing how some dude has a couple hundred in the bank and is about to buy a house because his wife is bitching and complaining. Do you know how many Timbits he could buy?

Speaking of wives, I like the picture.

#88 groovin123 on 03.18.14 at 5:10 am

The US won’t need to import any oil by 2020? If anyone, (with a pulse and a functioning chunk of grey matter) actually believes that, then I have a nice Vancouver special to sell you.

#89 Meck on 03.18.14 at 6:09 am

Um, if the U.S. doesn’t want our oil, won’t China jump on it?

#90 Stupesing in Cabbagetown on 03.18.14 at 6:44 am

I grew up in Alberta and witnessed the oil boom of the 70s with escalating housing prices and the subsequent crash. And that was when oil was easy to find and cheap to extract. I think the people of Alberta will be in for a nasty surprise.

#91 Martha on 03.18.14 at 6:46 am

Keystone was never meant to supply the US with oil or anything else. Keystone is a means to get the shale oil from Alberta to the Gulf Coast to be shipped out to China or other places in the world… It just passes through the US…. in other words, it is more corporate profits at taxpayer risk…because sure as there is a spill it won’t be any company cleaning up the mess….it will be taxpayer’s money footing that bill….again.

#92 Ronaldo on 03.18.14 at 8:22 am

#87 groovin123 on 03.18.14 at 5:10 am

”The US won’t need to import any oil by 2020? If anyone, (with a pulse and a functioning chunk of grey matter) actually believes that, then I have a nice Vancouver special to sell you.”

Looking at the data on oil imports to the U.S., I agree with your statement.

http://www.eia.gov/tools/faqs/faq.cfm?id=727&t=6

Of course. What does the guy in charge of the world’s biggest public oil company know? — Garth

#93 Trojan House on 03.18.14 at 8:43 am

#92 Ronaldo

Garth says: “Of course. What does the guy in charge of the world’s biggest public oil company know?”

It wouldn’t be the first time a guy in a position of power lied.

“If you have a current insurance plan, you can keep it.” From the guy who is in charge of the most powerful country in the world.

#94 Detalumis on 03.18.14 at 9:06 am

If I was the spouse of somebody whose parents gave my husband a loan instead of a gift so that when our marriage broke up I wouldn’t get anything, I would avoid having anything to do with those kind of in-laws.

I would tell him to stick the loan where the sun-don’t-shine and I would work a lot of overtime and save up my own downpayment. Then I would make sure not to be around to look after them in their old age either. They can go hang out in a nursing home and make friends with the care workers. Any marriage into that family is doomed from day one.

The parents think they are immune from divorce? Grey divorce rates are rising faster than in any other demographic.

#95 Penny Henny on 03.18.14 at 9:36 am

#29 Chickenlittle on 03.17.14 at 9:10 pm
Ok guys, I am in need of some third party advice.

Want to see your current place. Smart, good for them.
threat of monthly inspections will weed out the sketchy tenants and will likely last for a couple of months until they feel comfortable with you.
If it is the right place don’t let those things stop you.

#96 Linda Pearson on 03.18.14 at 9:54 am

#58 DonDWest on 03.17.14 at 11:04 pm
I hate being young.

****************************
Then you’re a damn fool! Most of your posts to this blog are full of bitching and whining about people who are older than you and how they hog all the resources, all the jobs, all of the everything you seem to want.

Why don’t you get off your duff and follow the wise words of someone whose name I forget (I forget a lot nowadays) who said: “I’m lucky…and the harder I work the luckier I get.”

I’m going to be sixty-seven in a couple of months and from my standpoint, if you are as young as you seem by your writing, you’ve still got the world by the tail with lots of time to make your mark. Get to work youngster and stop your incessant complaining!

#97 Joe Schmoe on 03.18.14 at 9:56 am

Predicting a housing correction/deflation is elementary due to cost of ownership/eventual increasing ownership. The fact that most people don’t see/agree with the concept is baffling.

Predicting the demise of Canadian Oil is a bit of a stretch. If it occurs we are collectively screwed. What are we going to export? Financial advice?

What was the long term economic impact on housing prices in feces covered TO through the market correction of 2008? I mean outside of banks, fee based investors and ethnic food what else drives the economy of that place?

Quit oversimplifying complex markets out of spite…it’s beneath you.

Oil/gas will be turbulent, but it is not going away any time soon.

Incidentally where do you think most the leg work for the advancement of alternate energy comes from?

Oil production, and pricing, is based on oil demand. If US markets dry, there will be a consequence. No need to insult someone stating the obvious. — Garth

#98 Ilona on 03.18.14 at 10:06 am

#10 Waterloo Resident on 03.17.14 at 8:33 pm
Garth, here’s something that shows you that people LOVE TO SUFFER:

I asked on a blog why do men like to suffer, why do they prefer poverty and misery instead of happiness and wealth. I said why buy a house and be poor with a burden of debt that will kill you, while you can invest on the markets and get rich, and enjoy life.
_______________

Gee, thank god men don’t give birth – I can imagine the horror stories and pro-adoption movement.

I’m yet to meet a happy renter who invested in the markets and got rich. And now that we have the mortgage paid off (in 15 years – painlessly with 2 good incomes) and plan to live in it for at least 15 more years (paying propery taxes and utilities – much cheaper than rent!) – we’re yet to overcome our own fear of the markets…

#99 Ilona on 03.18.14 at 10:16 am

#94 Detalumis on 03.18.14 at 9:06 am
If I was the spouse of somebody whose parents gave my husband a loan instead of a gift so that when our marriage broke up I wouldn’t get anything, I would avoid having anything to do with those kind of in-laws.
________________

Yeah, I hear ya. I had the same concerns when reading those legal advices. And now seriously reconsidering the whole idea of helping our daughter to buy her first place. Just had this preconception that owning is better than renting and “paying somebody else’s mortgage”…

#100 tony bologny on 03.18.14 at 10:21 am

As long as the the Canadian money supply keeps expanding http://www.tradingeconomics.com/canada/money-supply-m3 house prices will continue rising along with stocks why ? because in canada a large part of reported GDP is a large part of house production or condo even tho there is little demand (25k empty TO condos)the show must go on to create illusionary GDP growth (only to be revised lower at a later date )but should there be an announcement that Canada will stop expanding monetary supply (highly unlikely in a debt/consumption based system)then housing will fall your prediction of a major housing correction would have already happened had Canada not engaged in this insane expansion of the money supply since it will almost find its way into developers hands whom I’m pretty sure are real good friends of a few politicians at the top levels ,soe of it will find its way into stock markets but most of it never really finds its way into the broader markets (mom and pops operations ) .my take is if your invested in markets and own a home your fine the tsx will keep rising as long as monetary supply is expanded ……..only one issue will be a burden in the future the value to the currency will be the issue not the stock market it will be high that is for sure

#101 rocko on 03.18.14 at 10:22 am

Hi folks, also don’t forget, the Kinder Morgan pipeline, which travels from Edmonton too Burnaby (Vancouver) is going to be twinned to carry oil sands bitumen to the coast. This pipeline construction has managed to stay under the radar due to all the media surrounding Keystone and Northern Gateway. Surprising, considering the Kinder Morgan line goes through a national park (Jasper) and numerous residential subdivisions.

Keep things in perspective. Oil and gas exploration drive the economy in the west (although I’m not claiming that houses should be more expensive for this reason, we are digging ourselves into a real-estate hole out here, no doubt).

#102 T.O. Renter on 03.18.14 at 10:22 am

Who does this guy think he is,writing articles like this. ;-)

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/the-real-story-of-rising-net-worth/article17534227/

#103 Holy Crap Wheres the Tylenol on 03.18.14 at 10:42 am

Smoking Man this may not help your theory that the universe is shrinking. Much like the phoney real estate market both are expanding; except the universe is really expanding still.

http://www.nytimes.com/2014/03/18/science/space/detection-of-waves-in-space-buttresses-landmark-theory-of-big-bang.html?_r=0

http://www.usatoday.com/story/tech/2014/03/17/big-bang-gravitational-waves/6520537/

#104 Calgary Rip Off on 03.18.14 at 10:45 am

The best ever on Calgary. Yes! Finally.

People are happy that prices are rising in Calgary? How lame. What idiots. Can you say higher taxes? So I bought a mortgage in 2011 for $420K. That same shack is now $468K according to city taxation nonsense. The berber carpet downstairs is shredded more from the cats. There are some cat scratches on the wall. Mild laminate flooring damage. The leak because the roof wasnt done right, the idiot builder put the water drainage from the chimney not out onto the roof but directed towards the brick of the chimney so it would flow down the chimney-brilliant whenever it rained. And this previous original owner guy-real smart dude-a smoker-would just paint over the damage. The neighbour said, oh yeh, that guy was all about the cosmetics. This guy previous owner also used wall paint on the garage cement floor so when the mats come up to sweep so does the paint. Another brilliant move. Yet despite all that, somehow the house is older and worth more. Oh well.

The current article by Mario http://www.calgaryherald.com/business/real-estate/First+time+homebuyers+willing+break+budget+right/9630016/story.html says that people need to make sacrifices to save for a shack. No really? Uh duh. I was commenting the other day to my wife while driving through the poorly planned streets where I live in the northwest that probably half of the tools that live in my neighborhood are living on top ramen to afford their mortgage. But it is all about outward appearances in Calgary. If a guy goes out with his wife he needs to wear a suit and she needs to wear high heels. Especially while shopping at Costco. What fools. I make it my motto to have the grunge look: I wear sweatpants, disheleved hair(often standing straight up due to calgary hard water), maybe a cat tear in my shirt, unshaven, but clean with proper deodorant. This was no one interacting with me would know that I earn average income(+$100K) in Calgary and drive a turd with four wheels. Like today it wouldnt matter if you got the grand turd at the Calgary auto show because there were too many tools with their all season tires slipping all over the road(I had to run after parking to get to work on time). So the best advice is to keep low profile in Calgary. Do the opposite of what most people do.

People can thank the oil rich in Calgary for the ripoff here. Likely the guy that is rich with the Lamborghini next door goes downtown, parks in his $1000/month heated stall, takes the elevator to his penthouse suite, checks some oil well activity for an hour at 8 am, then for the next seven hours surfs the net for porn. Then he calls it a day, drives in first gear home on Crowchild, rolls into his oversized driveway, parks, then makes relations with his wife(kids are off at ballet practice) then has his maid fix him and the wife a five star four entree course. Then he relaxes by the massive gas fireplace and opens up some overpriced red wine. So that in a nutshell is basically why Calgary housing is a joke. Give it 100-200 years and Calgary will be a ghosttown.

#105 fixie guy on 03.18.14 at 10:47 am

#96 Ilona: “… And now that we have the mortgage paid off (in 15 years – painlessly with 2 good incomes) …”

Fifteen years ago was just prior to the start of government’s artificial stimulus of the housing market. It took years to understand what was really happening to home prices. Unless you were privy to secret council meetings, that was luck, not strategy.

#106 Penny Henny on 03.18.14 at 11:00 am

Oil production, and pricing, is based on oil demand. If US markets dry, there will be a consequence. No need to insult someone stating the obvious. — Garth
—————————————————–
Say markets dry, then price of oil decreases. Price of oil decreases then demand creeps up because cheap oil will light a fire under the economy.
Round and round we go, where she stops nobody knows.

#107 Daisy Mae on 03.18.14 at 11:02 am

#10 Waterloo Resident: “BTW. Bought back into the stock market at noon as all indicators did a sudden 180 turn around. If you are in cash, you might want to buy back in tomorrow.”

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

You sound like a day trader. Risky business.

#108 Same story since 2007 on 03.18.14 at 11:03 am

OMG, you guys are still taking about the house prices… I have been hearing about the same story since 2007…
Not sure about other parts of the country, but its not the case in Calgary and Edmonton… Its booming! Its Job , Job, Job…. No US , No worries.. China is waiting…
Pipeline to Vancouver port will ensure that.
Boom in Alberta is helping me payoff the house, end of this year almost 70% will be paid off. In 2 years , I am expecting it to be paid off. It will only take around 5 -6 years to pay off the house. Glad I didn’t wait.

#109 GsAmazon on 03.18.14 at 11:06 am

#29 Chickenlittle

Amateur landlord alert! Run, don’t walk….Like so many that I”ve walked out on before, these folks don’t appear to understand the difference between *tenancy and **house-sitting.

They wanted to go into your current home??!! Did they want to do a cavity search as well??!! Cue the Toilet Safety Administration! They’re having a laugh(!) – and you should tell them so…..

Please don’t squander your family’s years of hard-won experience, references, and good name in the rental market on these comedians. You will be teaching them what to do every step of the way (like going to Wicked with a 40-year-old virgin), while they fumble around trying to “protect their equity”. Lame.

The landlord that will respect your family’s rights as tenants – as human beings who plan to live/love/poop and make a home out of a rented space – and whose experience matches yours is out there ;) keep fighting the good fight!

* – I pay you for a place to live
** – You pay me to preserve your investment

#110 Ilona on 03.18.14 at 11:15 am

#105 fixie guy on 03.18.14 at 10:47 am

Unless you were privy to secret council meetings, that was luck, not strategy.

_______________________

Did I say anywhere that it was a strategy? Yes, I agree, the prices were much lower 15 years ago. But the mortgage rates were higher. So our monthly payments for our $250K mortgage at 5-6% were about the same as today’s 400K mortgage at ~3%. All our friends bought houses after we did – and no one is dying as far as I can tell :)

I’m not arguing that in the current real estate market renting might be a better option for some (if not for most). But I think that describing buying vs renting as “why do they prefer poverty and misery instead of happiness and wealth” is overkill.

#111 rosie "moving forward" in the knowledge that, "this won't end well" on 03.18.14 at 11:17 am

It’s different here, right?

http://www.king5.com/news/less-than-1000-dollars-retirement-250779911.html

#112 bdy sktrn on 03.18.14 at 11:18 am

#86 Son of Ponzi on 03.18.14 at 2:56 am
#29
Grow some backbone and show the landlord who’s boss.
Jeess.
————————–

landlord`s house = landlord is the boss. simple.

however, uptight landlords can be calmed.
after having a bsmt apt in my house empty for 7 yrs, we decided to get a tennant. of course there was concern of how said tennant would keep the place.

once he moved in , a quick glance inside from the doorway showed the place looking much nicer than ever , clean, nice decor, orderly etc. – once i saw this i was 100% not concerned and have no worries

#113 Ronaldo on 03.18.14 at 11:29 am

#82 Salt Pony –

”oh ya, and a fracking we will go.. I think its time to start hoarding water. It’s gonna be worth waaaaaay more than gold soon enough. Waterbugs!! haha”

I’d be concerned about the ‘dilution’ of my balanced, diversified portfolio.

#114 Chickeenlittle on 03.18.14 at 11:30 am

I agree with what most of you said.

My husband called the agent to complain about being “intimidated” at the signing. The agent said he would speak to the owners and the other agent about their tactics.

I do have to agree with Henny Penny: its a good place and I don’t want to lose it.

I would get a smaller place but Milton is all townhouses and 3-4 bedroom sandwich homes. I hate townhouses bc I can hear everything my neighbour does. I swear, they do not use insulation AT ALL!!!!

I would live in a 2 bedroom apartment, but my husband does construction and has a lot of tools so we need the garage.

I think once they see our place they won’t worry. I just hate being spied on!!!

The comparables around here don’t compare. That’s why I want THIS place!

#115 Chickeenlittle on 03.18.14 at 11:30 am

Oh! And I wanted to ask them for tenant references but they are first time landlords….sigh!

#116 DUI on Money Road on 03.18.14 at 11:39 am

#18 omg on 03.17.14 at 8:48 pm
————————————
Ottawa city taxes went up about 10-12% from the years 2009-2014.

However, we were already paying more than you. For a dinky townhouse in the city you’re looking around $3500 in taxes; for a suburban cookie cutter closer to $5000. So the taxes on your cute bungalow seem about right given your lower population.

We have also lost weekly garbage removal (it’s now biweekly) but gained green bin removal (food waste).

#117 Shawn on 03.18.14 at 11:42 am

Rich Calgary Oilman Envy

Calgary ripoff at 104 is going to give us all a case of rich-Calgary-oilman envy.

#118 DUI on Money Road on 03.18.14 at 11:45 am

#98 Ilona on 03.18.14 at 10:06 am
—————————————
And do tell with your current family income and market price for your house how long would it take you to pay off that mortgage if you put 10% down?

#119 Old Man on 03.18.14 at 11:48 am

I have noticed the high prices at the gas pump as compared to a few years back. The world is awash in oil due to the current economic environment, but the prices at the gas pump don’t reflect reality. Supply and demand becomes an equation for pricing to keep the consumers paying blindly, as the sheep must make up the eroding demand to maintain profits. This means big oil and the refineries are manipulating the supply in order to keep pricing artificially high at the pump to hoop our after-tax dollars with governments taxing us too. What a game and we are all being conned.

#120 Calgary Rip Off on 03.18.14 at 11:50 am

#117 Shawn.

If I were like most of the people in Calgary I would commit suicide because the majority of the population walking around are tools. It is only due to technology and modern society that they survive. Go 100 years ago and most of the dilemmas we have today wouldnt exist because the majority of tools would never have been born and there would be more space because most of these people such as the rich people I described are a waste of space.

#121 Ronaldo on 03.18.14 at 12:07 pm

Portion of an article from the Huff Post. I wonder if the U.S. will make a decision on what’s good for Exxon considering their exposure in Russia. This should get interesting.

“Not a U.S. Company”

”In Steve Coll’s book “Private Empire: ExxonMobil and American Power,” he documents that Lee Raymond — former CEO of ExxonMobil from 1993-2005 — was asked if his company would build more U.S. refineries to fend off gasoline shortages.

Raymond’s reply: “I’m not a U.S. company and I don’t make decisions based on what’s good for the U.S.”

#122 mythbuster on 03.18.14 at 12:08 pm

Garth, what made more money in the past 5 years: 500k invested in a single-family house or invested in your ‘balanced portfolio’? I look forward to your answer…


Unleveraged, the portfolio, of course. — Garth

#123 Dupcheck on 03.18.14 at 12:11 pm

I was at the Sherway Gardens mall in Toronto last weekend. It was a strange scene to what it was 10 years ago. Majority of the people did not speak English, also majority was middle age or younger. There were not many older people around. Most of the people did not seem to keep themselves well dressed as it used to be. I guess they had no money left for themselves when the houses take it all. Things have changed!

#124 BREAKING NEWS on 03.18.14 at 12:25 pm

Gov Poloz just said we have a demographic crisis and as long as that stays, we will have low rates.

Hahaha…like they didn’t know that. I told you guys, rates are not going anywhere for a decade at least.

TRT

#125 Ronaldo on 03.18.14 at 12:35 pm

Well according to this dude, there is no problem with the housing market in Canada and that those of us that think otherwise should take a pill.

http://www.theglobeandmail.com/report-on-business/video/video-market-view-the-truth-about-canadas-housing-market/article17528468/

#126 Son of Ponzi on 03.18.14 at 12:36 pm

#112
once he moved in , a quick glance inside from the doorway showed the place looking much nicer than ever , clean, nice decor, orderly etc. – once i saw this i was 100% not concerned and have no worries
————————-
Could be a sleeper.

#127 James on 03.18.14 at 12:39 pm

http://www.ctvnews.ca/mobile/business/bank-of-canada-head-says-slower-growth-may-be-new-norm-1.1734549

Lower rates for longer. RE doomers loose again.

Actually this is bad news for houses. — Garth

#128 Alberta_Bound on 03.18.14 at 12:51 pm

Do we really think the US will 100% shed it’s need for Canadian crude? Fracking needs massive amounts of material and man-power to happen. I’ve read reports saying that by 2020 the wells drilled in the early frack boom are going to start running dry. In order to keep up with increasing population growth and cutting off foreign oil the sheer scale of production to keep up would have to be massive and there just isn’t enough equipment to make it happen. A former NSA advisor to Obama said blocking the keystone pipeline would be a gift to Putin. And if there is one thing that unites Americans, it’s sticking it to Russians.

#129 Ilona on 03.18.14 at 12:51 pm

#118 DUI on Money Road on 03.18.14 at 11:45 am
#98 Ilona on 03.18.14 at 10:06 am
—————————————
And do tell with your current family income and market price for your house how long would it take you to pay off that mortgage if you put 10% down?

___________________

We wouldn’t even qualify for the mortgage if we were to buy our house now (we know as we got pre-approved for about two thirds of it when started looking for a place for our daughter) But since we came to Canada 20 years ago when we both were 26, our daughter was 1, and we had $12K “net worth” (that lasted us 4 months – right before we found our first jobs and bought an old car), had to buy a house and sponsor 2 sets of parents to live under the same roof – I’m sure we had it tougher at times than most who were born here :)

#130 Steven on 03.18.14 at 12:58 pm

Abiotic oil is a theory and oil from dinosaurs is a myth.
Crude oil comes from buried zoo and phyto plankton that died and was buried on the ocean floor under sediments. No oil from magma and none from dead dinos.

#131 Ralph Cramdown on 03.18.14 at 1:08 pm

#98 Ilona — “I’m yet to meet a happy renter who invested in the markets and got rich.”

When you meet strangers, which question do you ask first, how much they’re worth, or whether they own or rent?

Because if you’re not asking this questions of random strangers, all you’re really telling us is that your group of acquaintances, who are similar to you, are similar to you.

#132 fixie guy on 03.18.14 at 1:08 pm

@127 James: Winter and Boomers; Poloz is reading realtor cue cards. Funny stuff. Shake hands, count fingers with this crew.

#133 45north on 03.18.14 at 1:24 pm

Buy? Curious? When are we going to hear some stories about people in negative equity struggling to keep their homes?

seizures in Quebec up 20%

http://argent.canoe.ca/vos-finances/immobilier/les-reprises-de-maisons-en-forte-hausse-10032014

link thanks to Cici

#134 The real Kip on 03.18.14 at 1:24 pm

The last barrel of oil produced on earth will likely come from Alberta or Saskatchewan. The US will never achieve self-sufficiency.

#135 Andrew Woburn on 03.18.14 at 1:41 pm

Alberta never learns.
===================

Apparently nobody ever learns. From Bloomberg –

“The Coming Real Estate Bubble”

http://www.bloombergview.com/articles/2014-03-17/the-coming-real-estate-bubble

#136 airhead princess on 03.18.14 at 1:41 pm

DELETED

#137 HD on 03.18.14 at 1:48 pm

#133 45north on 03.18.14 at 1:24 pm Buy? Curious?

When are we going to hear some stories about people in negative equity struggling to keep their homes?

seizures in Quebec up 20%

http://argent.canoe.ca/vos-finances/immobilier/les-reprises-de-maisons-en-forte-hausse-10032014

link thanks to Cici

——————————–

Interesting article.

thanks for sharing :)

Best,

HD

#138 Nemesis on 03.18.14 at 1:55 pm

#AirBBW? #StrangerThanFiction #ComedianLandlords #WhatCouldPossiblyGoWrong?

“The worst part of the Internet was right there in my apartment.” – Ari Teman, ComedianLandLord

[NY Post] – Airbnb renter returns to ‘overweight orgy’

…”A comedian under the impression he had rented out his posh Chelsea pad to a man with family in town for a wedding returned home to a wild orgy, he said.

Ari Teman, 31, claimed he left his apartment keys with David Carter, 32, on Friday night and stepped out for dinner before leaving town.

When he returned to the building to grab his luggage, a rowdy sex party featuring “Big Beautiful Women” was in the process of being shut down by building management.”

http://nypost.com/2014/03/17/airbnb-renter-claims-he-returned-home-to-an-orgy/

#139 Smoking Man on 03.18.14 at 2:13 pm

So the International Community has spoken, damn you bastards who voted to join Russia.

Who died and gave you that right.

We in the international community have the exclusive right to grant democracy, not you peasants.

Look how well the Greeks and the Spanish are doing. What is wrong with you in schooled fools.

So we proped up some new nazis, put snipers on the roof to kill cops and protesters.

We did it for your own good.

We want everyone to enjoy the American dream. Jobs and prosperity for all.

#140 yann on 03.18.14 at 2:21 pm

Was just going to recommend and post a like to a great article, now I see Andrew did it on comment #135 above.

Good read! http://www.bloombergview.com/articles/2014-03-17/the-coming-real-estate-bubble

#141 Ilona on 03.18.14 at 2:23 pm

#131 Ralph Cramdown on 03.18.14 at 1:08 pm
#98 Ilona — “I’m yet to meet a happy renter who invested in the markets and got rich.”

…if you’re not asking this questions of random strangers, all you’re really telling us is that your group of acquaintances, who are similar to you, are similar to you.

_______________________

Asked a bunch of co-workers (some are definitely not similar to me :) and discovered that even if they rent and have extra cash – they have very conservative portfolios at best (beating the inflation, but nothing to brag about :), but usually it’s just money stashed in the savings (or even checking) account, waiting to be cashed in for the downpayment…

And I wasn’t prejudiced – wanted to actually find someone with whom to discuss investment strategies and stock market’s ups and downs, but alas… I’ll try to have a properly balanced portfolio in my RRSP for a few years – to see for myself if it really works (as apparently I’ve been doing it wrong :)

#142 Daisy Mae on 03.18.14 at 2:28 pm

#29 ChickenLittle: “Both my husband and I got baaaaad feeling.”

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

I’d pay attention to those gut feelings. With two excellent references, monthly inspections aren’t warranted.

Landlords can be sneaky…letting themselves in when you’re away. Just plain nosiness.

My youngest daughter experienced this years ago. So she’d leave something — a toy? a dish cloth? — strategically placed inside the apartment while they exited the outside door. If that inner door to the apartment was opened by the landlord, she’d know it.

This invasion of their privacy happened regularly. So they didn’t stay long. No one should have to live like this — no one.

#143 Cici on 03.18.14 at 2:29 pm

#29 Chickenlittle

I totally agree with everyone else…these people sound like a royal pain in the butt, and they don’t have the slightest idea of what they are doing.

In the end, it’s your call…but even if you really want the place, I think you’ll have to set some limitations to ensure your own happiness: they absolutely must pay for the water heater (if not, what’s the point in renting?), and if you agree to the monthly inspections (which personally, I wouldn’t) you will have to ensure in writing that it will be on a set date at a set time convenient convenient to and established by YOU.

However, I don’t think monthly inspections should be necessary…if these inspections should be agreed to at all, why not quartely?

Also, I do agree with the others, that your gut feelings should be trusted. I’ve always regretted it any time I didn’t go with my own. The thing that worries me the most about your potential situation is that these landlords seem inexperienced…sounds like they couldn’t afford the homeownership costs in the short term, and are looking to rent out for short-term gain, which means you could be forced to leave in a year or two…

I say that if you really want it, play hardball. Get the terms of any regular home inspections in writing and make sure they reasonable from your point of view, AND if you plan to stay their for awhile, negotiate a long-term lease and get it in writing, but first check the provincial rental laws to ensure you are covered regardless of the situation.

Lastly, remember. Homes are nice and all, but the nicer they are, the more of your own time you’ll waste a way inside. I’d like to keep renting and I presently have an awesome deal, but if I have it my way (the boyfriend wants to buy), the next rental will be smaller and more time will be spent outside of the home doing activities of all kinds and enjoying the great outdoors! Even in winter: I’ve got indoor tennis facilities close to work, the gym and x-country ski trails…who needs the idiot tube, the cost of “entertaining” other people on a regular basis and boring indoor workouts with the vaccuum cleaner?

#144 Same story since 2007 on 03.18.14 at 2:30 pm

Feds have indeed discovered a surprise strategy to avoid a crash or downturn…. low interest regime…
Even if there is a small signs for slowdown, the rates will be lowered …
Rates will only rise to control the boom or inflation, but will be lowered as soon as signs of slowdown returns. So don’t expect a 80’s style rates or even crash.
Also keep an eye on job market… Without mass unemployment and combined to lower rates, there is little chance of crash… unless you consider 5% drop as crash…

So don’t wait…… Buy a house if you really need a home.
Don’t listen to rich people, do what rich people do.

#145 EB on 03.18.14 at 2:30 pm

#29 Chickenlittle on 03.17.14 at 9:10 pm

I spent many years as a renter. Run away. You don’t need this kind of nonsense. Monthly inspections? How at home are you ever going to feel with them obsessing every few weeks over every little scratch they find on a baseboard? Credit check/references check – sure, perfectly sensible. What they are talking about? Unacceptable on every possible level.

#146 Since 2007 on 03.18.14 at 2:31 pm

Feds have indeed discovered a surprise strategy to avoid a crash or downturn…. low interest regime…
Even if there is a small signs for slowdown, the rates will be lowered …
Rates will only rise to control the boom or inflation, but will be lowered as soon as signs of slowdown returns. So don’t expect a 80’s style rates or even crash.
Also keep an eye on job market… Without mass unemployment and combined to lower rates, there is little chance of crash… unless you consider 5% drop as crash…

So don’t wait…… Buy a house if you really need a home.
Don’t listen to rich people, do what rich people do.

Rates will not be lowered. — Garth

#147 gladiator on 03.18.14 at 2:32 pm

@130 Steven:
Not to attack your point of view, but this “oil from plankton” theory is a bit off imho and here’s why:
Bacteria are really good at decomposing dead organic matter including fats (from which, allegedly, oil was formed) and there were a great many organisms that ate these bacteria. We have yet to find a place where oil is in the process of formation, because usually all dead organisms are happily consumed by other smaller ones in the seas. Are we to believe that at one point in time so much plankton and algae died at once, that bacteria were unable to process all this matter and fats were deposited and then oil was formed from them? If so, then we should be finding fossilized zooplankton shells at the bottom of oil reservoirs and lots of them, but I could not find any information about this. Where did the shells go, or did oil/fats from them seep into lower levels of sediments and the shells were left in higher levels? But if so, oils/fats are lighter than water, so they should have seeped upwards, to the surface of the sea! But then, there is not much fat from plankton covering the world ocean. Yes, oil is created from organic compounds (also called “life’s building blocks”), but does it mean it originates from “organ”-isms? There is plenty of these building blocks in space (see this:
http://www.space.com/1686-life-building-blocks-abundant-space.html )
I was taught in school that oil was created from fats of zooplankton that under pressure over millions of years became oil. But just freeing myself from school dogmas and thinking about how oil could have been created, I got all these questions I described above and as much as I try to find answers to them, it’s really difficult, because there is little more than the dogmatic and commonly-accepted view.

#148 gtaguy on 03.18.14 at 2:36 pm

#139 Smoking Man

Very funny. Do we all like that Harper is rushing over spending tax payers money to prop up an non democratically elected government which just overthrew an elected government and at the same time outraged and criticizing Russia for not interfering and stopping Crimea’s referendum vote and declaring it illegal. And a emergency UN meeting to discus sanctions due to this vote to take place. Funny I see everyone dancing in the streets in Crimea over the results and not with guns to their heads.

Wonder if they would like us declaring Quebec’s referendum illegal. Course if they split from Canada their is nothing stopping them from deciding to join Russia or China if they wanted to. Of course Canada and US would not intervene at all.

Nothing unusual about any of this I guess.

Here is the American dream. To actually have money saved for retirement. Looks like a 3rd does not even have $1000 saved for retirement. Canada doesn’t seem to much better.

http://www.usatoday.com/story/money/personalfinance/2014/03/18/retirement-confidence-survey-savings/6432241/

#149 Steven on 03.18.14 at 2:43 pm

The key message is that speculation and assumption bring more danger. (They’re sure learning that in Halifax right now as the vaunted ship-building boom turns to rust. There’s a devastating two-year supply of houses for sale.)

Garth I seriously doubt that Halifax real estate cultists have or will concede defeat just yet. Old bad habits and institutional resistance die hard. It may take decades after a 90% plus collapse and depression in prices to kill the memory of high flying genocidal home prices and that is if we get to bottom out first.

#150 An OdWrinkleyCrinkley on 03.18.14 at 3:13 pm

#29 Chickenlittle…..

I see you have had some excellent advice.
As a current “Renter” having sold my home in 2012, I would run from these people and let them keep their place. I am sure they are places available that are just as good… Good luck, what ever your decision…

#151 Shawn on 03.18.14 at 3:19 pm

Origins of Oil (Plankton versus Dinosaurs)

Actually, God created the oil so that today we could have the rich Calgary oil men described by Calgary Ripoff at 104.

And He saw that it was good.

#152 Rabbit One on 03.18.14 at 3:19 pm

#29 Chickenlittle

As everyone else said, I wouldn’t agree with monthly inspection, If the reason is just to check the rental units’ condition.
You and your spouse to control the situation as tenant.

One thing though, as of my last investment properties home owner insurance renewal (Oct-2013), I had to sign the contract to say I will physically check the premises every 2 month, externally AND internally to ensure all is good.

This is very new to me, and paying a bit more premium than tha past. ($400 / year for 1BR condo)

I mentioned, I don’t want to disturb tenants, and also has to give written notice each time.
I offer I can view every 2 month externally, but was not accepted.
Agent said this is standard requirement these days in B.C.

#153 devore on 03.18.14 at 3:39 pm

#58 DonDWest

Capitalism favours the old. Capitalism rewards those who have capital – and the young have no assets/capital.

I hate being young.

I bet you all my capital in 30 years you will whine just as much, about being old.

#154 World According To Garth on 03.18.14 at 3:59 pm

And all the while in the background, hybrid superconducting batteries are getting more powerful and soon cars will go 1000 miles before a charge is needed. Engines are getting higher and higher fuel mileage. Hybrids are becoming more and more available and affordable. No the price of oil is never going to drop at all.

FAIL Calgary

#155 Aggregator on 03.18.14 at 4:10 pm

*FLAHERTY’S OFFICE ISSUES STATEMENT THAT HE IS RESIGNING FROM CABINET

As to why, we don’t know yet, but it may be health related.

#156 gladiator on 03.18.14 at 4:10 pm

Carney gone.
F gone today.
Rats fleeing the ship?

#157 Alistair on 03.18.14 at 4:11 pm

Chickenlittle, RUN AWAY. No way should you have to tolerate monthly inspections. Trust me, you do not want this. They will probably document every little nick in the wall, every tiny stain on the carpet or imperfection on the hardwood, and try to make you pay for it. You will end up paying for the normal wear & tear of the place. Which you shouldn’t – that’s what you’re paying rent for.

Why do I think this? Because nobody is going to spend time each month inspecting the place for no reason at all. They are going to want to get something for their efforts. From your perspective, absolutely no good will come from those visits. It’s a ridiculous condition to place on a tenant who is already paying the market rate to rent the place, and you should refuse.

The landlord may well have had a bad experience with prior tenants. Or maybe they are completely inexperienced landlords, stressed out over renting out this (highly leveraged) asset, and distrustful and disdainful of “renters” in general. Or maybe they’re just really paranoid types – the kind who use up two parking spots so that the peasants won’t dent their expensive car. No matter. Do you want to deal with any of those three? I wouldn’t. If they’ve been scarred from previous tenants, you are going to suffer from their chronic suspicion. If they’re paranoid, disdainful or distrustful, you do NOT want to sign any kind of contact with them. Your gut is telling you something. It would be foolish to go against your instincts.

#158 Vangrrl on 03.18.14 at 4:14 pm

#81:
Yes, to take a look at the fridge or if something needs repairing, not to “spy” on the tenant, which is what Chickenlittle was referring to, unless I misunderstood that. They also need to give a reason for coming in and the tenant has to agree to it.

#159 Condo Minion on 03.18.14 at 4:15 pm

Breaking News!!

F is quitting!!

Guess he wants to become a real estate agent or mortgage broker or condo developer before the party is completely over.

Or he smells a disaster and doesn’t want to be on the scene….more likely.

#160 jan on 03.18.14 at 4:15 pm

#29 Chickenlittle on 03.17.14 at 9:10 pm
Ok guys, I am in need of some third party advice.

So we met the owners to sign the lease for our new place. There were 2 agents and the two owners, a couple. Both my husband and I got baaaaad feeling. They wanted to see our place to make sure we didn’t trash it. Fine. They want to do monthly inspections to make sure we don’t have a grow op. Sigh, but fine.

I just get the feeling that they will be up our ass all the time watching us 24 -7.

My husband is on the phone right now with the agent telling him this.

We do understand that they worry about us ruining the place, but I have 2 references from the last 5 years saying we are excellent tenants.

Any thoughts?

Me…which brings us to the original point…..
RENTING IN CANADA SUCKS BIG TIME !!!!!!!!!!!

#161 Steven on 03.18.14 at 4:18 pm

Capitalism favours the old. Capitalism rewards those who have capital – and the young have no assets/capital.

I hate being young.

The young don’t get paid to live where they work. May be live with mommy and daddy but not to live like them.
The young are expected to be slaves and serve the government, seniors and money lenders and not marry and reproduce. They are expected to submit and not complain or attempt to liberate themselves. That is what capitalism, communism and various shades of democracy is all about. Slavery.

#162 Jaw on the floor on 03.18.14 at 4:19 pm

Did I hear this correctly? F is resigning in order to spend more time with the Blog Dogs?

#163 Debtfree on 03.18.14 at 4:22 pm

Jimmy gonna take a gig with remax ? He must be a demigod for them .

#164 Vangrrl on 03.18.14 at 4:23 pm

#112:
When a tenant forks over X amt of dollars for that rented space, THEY are the boss of that space. They respect it and take care of it and the home ‘owner’ (if indeed they own it outright yet) is not the boss. If you don’t like it, suck it up and live without the added rental income.
But then I rent from people who are super cool, leave doors unlocked between our suites, and have always treated me with equal respect. Sounds like I lucked out.

#165 dontcallmeshirley on 03.18.14 at 4:30 pm

There are two pending court cases regarding capital gains from TFSA stock trades being considered taxable due to the trading being deemed a “business” because of a “high volume” of trades.

I think the court will strike down the CRA assessment.

#166 Happy Renting on 03.18.14 at 4:34 pm

Garth – any comment on F’s resignation today?

Yes, later. — Garth

#167 angela on 03.18.14 at 4:35 pm

Jim Flaherty resigns , going back to private sector .Of course he is after privatizing profits and socializing debt where else would he go .

#168 jess on 03.18.14 at 4:38 pm

…some landlords have giving glowing reports about tenants just to get them out.

I would take pictures and who cares if they come in invite them for tea!

#169 EB on 03.18.14 at 4:42 pm

#146 gladiator on 03.18.14 at 2:32 pm –

I’m not up to date on petrochemistry at all, but what you’re talking about has precedents. Coal deposits came from exactly that scenario – once bacteria/protists evolved the ability to metabolize lignin and , coal deposition fell of dramatically. It’s kind of a neat scenario when you think about it – there were some millions of years when dead plant matter simply accumulated in a great mess that eventually formed coal layers. Example – http://www.scientificamerican.com/article/mushroom-evolution-breaks-down-lignin-slows-coal-formation/

#170 Mike T. on 03.18.14 at 4:48 pm

‘Keystone and Northern Gateway will be built’

when the real costs are tabulated it will likely be determined the project cannot be profitable…that’s my guess

#171 Totalchaos on 03.18.14 at 4:52 pm

#29 Chickenlittle

I owned a sixplex for a few years. My insurance company demanded I inspect the units monthly or if there was trouble, I wouldn’t have coverage. I didn’t like it any more than the tenants did. With some tenants, after I got to know them, it went longer than a month. I would go through twice a year for smoke detector checks, a couple of times with repairs, around Christmas with cookies and try to make my checks unobtrusive. It’s not the owner that doesn’t trust you, it’s their insurance company.

#172 Happy Renting on 03.18.14 at 4:54 pm

#114 Chickeenlittle on 03.18.14 at 11:30 am

Well, it sounds as though you’re going to try going ahead, so we get to see if your gut instincts were right or if it is possible to calm these neurotic landlords down. Please let us know how it goes!

#173 Smoking Man on 03.18.14 at 4:54 pm

#147 gtaguy on 03.18.14 at 2:36 pm

What really sucks, Hunter S Thompson not around. Can you Imagen his words in all of this crap going around.

Reading Andrew Coyne in NP, either completely insane, or totally owned, your call.

Even Johnathan Key has got it right this time.

In the spirt of Hunter

Bastards all of them.

On 911 he called inside job and said, we are probably going to attack IRAQ.

He had a good connection to the UCC

#174 Enthalpy on 03.18.14 at 5:03 pm

I sure would love a dedicated post to F leaving.

#175 waiting on 03.18.14 at 5:08 pm

What the F ?
http://business.financialpost.com/2014/03/18/jim-flaherty-resigns-as-finance-minister-what-the-economists-say/

#176 Dr.NickRiviera on 03.18.14 at 5:11 pm

I have a feeling that F jumped ship today just as the Canadian housing market is about to collide with a giant ice berg.

#177 Pete in Barrie on 03.18.14 at 5:22 pm

Sad, Flaherty was one of the few things I respected about this Conservative party. So who’s the next finance minister? Kenney? Ughhhh!

#178 Bill Gable on 03.18.14 at 5:24 pm

FLASH:

Jim Flaherty, federal finance minister, leaves cabinet.

Link: http://tinyurl.com/nms3g6q

#179 devore on 03.18.14 at 5:25 pm

Aaaaand…. Flaherty parachutes out.

http://news.nationalpost.com/2014/03/18/finance-minister-jim-flaherty-resigns/

#180 Cash is king on 03.18.14 at 5:27 pm

F has resigned. Let the rats begin leaving the Titanic, or for a more Canadian comparison, rats leaving the Empress of Ireland.

Hopefully it is not a result of worsening health issues.

#181 Aggregator on 03.18.14 at 5:31 pm

Manufactures' inventory soars to a new record high as the big auto cartel stuff more dealers' lots with cars and trucks they don't need. Chart Channel stuffing, fake recalls, whatever…just make up something to create more work.

Jokes aside, it's the weather and those damn BC truckers fault.

#182 espressobob on 03.18.14 at 5:41 pm

#141 Ilona

Investing is a subject like many others which require a lot of study on your part! Diversification, balance, compounding, rebalancing, tax efficiency, etc etc.

Don’t beat yourself up! Learning can be rewarding.

I learned a few lessons the hard way! Some where really dumb!

Hang in there!

#183 devore on 03.18.14 at 6:01 pm

#141 Ilona

Not sure then why you would put so much emphasis on whether someone is a renter or not, happy or otherwise. Investment knowledge has no relation to property ownership. There just as many hapless home owning investors as renters.

And, directly or indirectly, we do tend to surround ourselves with people who are like us, even at the workplace. You did not ask EVERYONE, did you, you only approached specific people. There was a selection criteria. Some of those you asked did not answer, because they were using their own association criteria in response. This can very easily lead to groupthink, even when you think you are taking steps to avoid it.

I am always discussing investments and money with my friends and co-workers, some of whom own and some rent. Based on my sample, I would have to conclude home owners couldn’t invest their way out of a wet paper bag. But that would be pretty dumb.

I think your inability to find happy people who are also successful investors has more to do with the kind of people you choose to associate with, because clearly they exist. Like with investments, you should strive towards balance, not be afraid to explore and learn about the unknown, and make a conscious effort to cultivate relationships with a diverse demographic.

#184 Victor V on 03.18.14 at 6:04 pm

http://www.theglobeandmail.com/report-on-business/top-business-stories/stephen-polozs-headache-sends-the-canadian-dollar-tumbling/article17545568/

Stephen Poloz managed to knock the Canadian dollar below 90 cents over the course of one speech today with a generally weak outlook for the economy.

At least he didn’t lack humour as he painted a picture of lagging economic growth.

Here’s how he began his talk to the Halifax Chamber of Commerce: “Happy belated St. Patrick’s Day. I hope everyone’s feeling fine. I want to speak today about a different kind of headache: the prolonged lacklustre economic growth we are experiencing, here in Canada, but also globally.”

The loonie, as Canada’s dollar coin is known, was at 90.5 cents when the Bank of Canada posted the governor’s speech on its website, noted chief currency strategist Camilla Sutton of Bank of Nova Scotia.

Within a few minutes, it slipped to 90.2 cents. And by the time he had finished a question-and-answer session, during which he said he couldn’t rule out the possibility of an interest rate cut, the loonie was down to 89.75 cents.

#185 JB on 03.18.14 at 6:05 pm

Garth, my wife and I are 34 years old, and have never owned a home due to the fact I went to university twice. Finished for the second time 6 years ago right at the height of the housing bubble here in the (Br)Okanagan.

We face a dilemma. We want to buy so that we actually pay the place off before retirement, but at the same time all assessed land values in the Okanagan have dropped 10% since last year, so we are hesitant. Some days I’m temped to dive into the market, but then I check out your blog to remind myself of reality. Thank you.

Despite continued rhetoric from the local real estate pushers, housing has become much more affordable. If this keeps up, we might be able to purchase 5 to 10 acres instead of the puny city lot we once thought we’d have to settle with a few short years back. One needs to only look at the latest Money Sense Magazine’s “best places to live in Canada” data to see it in black and white. in 2008 the average house in Kelowna was 8.5 times the average family income. Today, it’s 5.8 times.

#186 broadway skytrain on 03.18.14 at 6:21 pm

163 Vangrrl on 03.18.14 at 4:23 pm
#112:
When a tenant forks over X amt of dollars for that rented space, THEY are the boss of that space.
——————————-
sure, within the RULES laid down by the OWNER of said space.
if you want to remove walls/get 3 dogs/grow weed(without sharing)/host band practice/add roomates/redecorate/install a fireplace/breed ferrets/smoke cigarettes/etc. – then you need permission from the boss. the real boss, the owner. who can toss you out for no reason at any time in BC if the apt is part of the owners dwelling.
……………….

They respect it and take care of it
———————————
and if they don’t who gets to deal with it? right, the boss.

Sounds like I lucked out.
————————————
i’m sure my renter feels the same – he and his big dog have proven to be very responsible, i will accommodate him any way possible, within reason, as a good, happy tenant is the ultimate goal.

#187 Vangrrl on 03.18.14 at 7:04 pm

Of course within the rules laid out in the agreement AND AGREED TO by the tenant, Broadway Stn- what would I be referring to otherwise?? It is a mutual agreement. The rules must be fair and reasonable; what Chickenlittle was talking about wasn’t.
Having said that, the owners of the house I live in know they lucked out with me, too. 6 yrs and no rent increase. Again- a mutual understanding. I have just as much right to complain if they interrupt my peaceful living and if something like the heat goes and it’s not fixed within a certain time, I have the right in BC to withhold rent or contact the tenancy org. But why would I assume the negative? That’s what ‘landlords’ like you do.
Typical all the nonsense you listed refers to negative things- as of all renters are teenage hoodlums. Such a predictable attitude!

#188 Ilona on 03.18.14 at 7:16 pm

#181 espressobob on 03.18.14 at 5:41 pm
#141 Ilona

Hang in there!

____________________

Thank you, will do! :) My daughter is also willing to learn, so maybe introducing her to investment will turn out to be a better help than giving her the downpayment money :)

#189 Vangrrl on 03.18.14 at 7:17 pm

#185: ‘Who can toss you out at any time for no reason…’ Hah- as if they would do that. They need me far more than I need them :)!!

#190 Ilona on 03.18.14 at 7:23 pm

#182 Devore

Sorry, your questions don’t make any sense – as are my answers that are taken out of the context. The initial comment was here if you care:

#98 Ilona on 03.18.14 at 10:06 am

#191 Ralph Cramdown on 03.18.14 at 7:25 pm

#184 JB — “We face a dilemma. We want to buy so that we actually pay the place off before retirement […]”

Despite what you may have heard, there’s no rule that says you can’t start paying off the house until after you’ve bought it. Start by aiming to have 20% down, to avoid that pesky mortgage insurance. Keep at it, invest well, and pretty soon you’ll start to notice that your savings are growing exponentially (with some ups and downs) rather than linearly. If you manage to save the whole price of a house before you buy it, you can pay cash, give a cash-out mortgage or HELOC for 80% of value, invest the cash, and have a tax deductible mortgage.

#192 espressobob on 03.18.14 at 7:32 pm

#187 Ilona

I’m hoping your daghter many years down the road can look back at you and thank you for your efforts!

So get busy and hit the books! And keep following Garths blog! Good Luck!

#193 Ralph Cramdown on 03.18.14 at 7:35 pm

#141 Ilona — “wanted to actually find someone with whom to discuss investment strategies and stock market’s ups and downs, but alas…”

You’re much more likely to find success and helpful index investing tips if you check out the Bogleheads website or the Canadian Couch Potato than asking friends or co-workers. Most people either don’t save enough aside from their homes, or just aren’t good at managing their own investments (which is why the financial industry makes billions of dollars shaving a percent or two off the top…)

And it isn’t hard to see how index investing with rebalancing works. Just check out one of several online “periodic table of investments,” and you can make a spreadsheet with the indexes’ returns, fees of low cost ETFs that track those indexes, and what your returns and volatility would have been.

If passive index investing isn’t your thing, there’s a million other sites and books detailing every strategy from fundamental analysis through technical, cyclical and astrological.

#194 Ilona on 03.18.14 at 8:08 pm

#192 Ralph Cramdown

You’re much more likely to find success and helpful index investing tips if you check out the Bogleheads website or the Canadian Couch Potato

_________________________

Thank you, this is what I decided to try yesterday: http://www.greaterfool.ca/2014/03/16/out-of-control-2/#comment-292687

And today’s comments were obviously a mistake as I was trying to make a point about one thing, but ended up defending myself from all the misunderstandings…

#195 Laura on 03.18.14 at 10:50 pm

Great blog!!

#196 emily on 03.18.14 at 10:57 pm

#195

agree