Spring fever

LOVE modified

As Toronto motorists joyously celebrated the advent of Easter by jamming highways and playfully gesturing to each other with their fingers, the local real estate cartel was publishing some astonishing numbers.

Sales in the first two weeks of April, “started off on a strong note,” said the board, “with a 10.8% year-over-year sales increase.”

Wow. Maybe I was wrong. Said Reatress princess Dianne Usher: “The robust increase in sales speaks to the fact that home ownership remains affordable in the GTA.  The majority of home buyers purchase a home using a mortgage.  A household earning the average income in the GTA can comfortably afford a mortgage on an average priced home.”

Hmm. Let’s parse this a little.

First, it’s impossible to know the truth. TREB has secretly fudged its numbers yet again. Sales this month are actually only 6.6% higher than those reported one year ago. But last April’s sales were 6.5% lower than the previous year – which means no growth in two years, while the population has increased dramatically. Not good. In fact, with the exception of last year this was the worst April (so far) for GTA detached house sales since the financial crisis back in 2009.

See how much fun numbers are? Of course, besides quietly revising its stats the real estate board never supplies context for its reports, because… it’s always a great time to buy!

Now, how about the average family affording the average home, currently $583,697? Well, the average GTA family earns $96,040, which means houses cost six times income. According to Demographia, that falls into the ‘severely unaffordable’ category. It also means to buy the average home a family would need at least $45,000 for a downpayment and double land transfer tax and a mortgage (including CMHC premium) of $570,000. The monthly (with property tax and insurance) would be $3,400, or 42.5% of gross (before-tax) income.

Now let’s refer to CMHC’s rule:

Affordability Rule 1
The first rule is that your monthly housing costs shouldn’t be more than 32% of your gross monthly income. Housing costs include your monthly mortgage payments (principal and interest), property taxes and heating expenses. This is known as PITH for short — Principal, Interest, Taxes and Heating.

See what I mean? Fail.

But the average resale price in the GTA also includes a lot of one-bedroom and loft condos which clearly do not attract families, and aren’t suitable for them. So maybe we should look at detached houses only. But when that happens, a whole new level of risk emerges.

Here is the scorecard for detached houses in 416. Sales of 628 for the last two weeks came in 11% higher than last April, which was 10.8% lower than in 2012, which was 3.9% less than in 2011. So, this April fewer detached homes were sold than in 2010, 2011 or 2012.

Of course this year we have 2.99% five-year fixed mortgages, which means you can’t blame higher interest rates for poor sales. But you can blame a lack of listings, and exceptionally unhealthy public attitudes, for a massive and dangerous escalation in prices.

The average detached 416 house is now changing hands for $1,012,172 – an increase of 19.2% over last Spring. Yikes. This surpassed the 14.2% price pop in 2011 when sales crested and F freaked at the prospect of a bloated gasbag that could rupture at any time, blowing up the economy. He tightened mortgage rules – which brought year/year increases down to 3.2% (2012) and 6.22% (2013).

Quick summary: sales are back below 2010 levels for detached 416 homes, and prices have risen since then by 50.1%. Nice news if you own one (but only if you sell and crystallize the capital gain), but it all boils down to a single word: risk.

Feel free to ignore me, of course. Most people are.

But not Carmen and Ricky. Yesterday I ripped the immigrant couple a bit for wanting to buy an inflated house at the wrong time, with no money, so they could get a washer and dryer.

Says she: “We saw what you posted. Thank you so much. It made us clear of how to proceed and my husband was celebrating that he listened to you. Thanks for that washer idea as well…lol..

“Your advice made us think what is important and we are considering saving more and putting up in some investments, although that’s our next research of where to put the money and using some of our monthly dollars to invest for my sons sports or some extra music classes.

“Thanks again for your time and will be holding on the idea of buying home until we see your GO on your blog.”

My Easter just improved.


#1 wellwisher on 04.17.14 at 8:37 pm


#2 DocInWaitingRoom on 04.17.14 at 8:39 pm

Sure some homes had sold signs as we ev d past neighborhoods of people walking with 1k strollers in minus 10 April weather but don’t be fooled this is getting ugly fast.

Even Scotiabank said it doesn’t look good for long time…. two income trap exactly. Totally agree middle class suckers most out there no one wins this rat race into the rat trap. You know the electical ones that char broil the rats so the smell goes into the air. Like passing a kfc. The peanut butter always smells good before the shtf

#3 Terrie on 04.17.14 at 8:40 pm

Awesome. :)

#4 i.see.debt.people on 04.17.14 at 8:43 pm

….furrrrrrst :)

#5 DocInWaitingRoom on 04.17.14 at 8:44 pm

Thats why internet rules read this


Then this reporting crap with positive ads and links thrown. Glad all their propaganda boxes are gone from the syreets


#6 905cpl on 04.17.14 at 8:46 pm

The reality of the modern world is that an average inhabitant of this planet cannot afford to own a dwelling unit (if it is not on a squatted land and not made of tin or cardboard). This reality quickly invades last heaven of perceived equality : North America. It is literally : Buy now or never, if you qualify for a mortgage. Future is rent. You can shake real estate prices but you cannot shake people who bought and hold on if they have jobs and came from places where you can only own in your rarest dreams. Garth, stop deceiving people, you could be right one day, but that day is long past due.

#7 Nemesis on 04.17.14 at 8:46 pm










[NoteToSaltyDogCinephiles: Nicole may well be, “To Die For”, but rest assured, Doggies – MegRyan is, like, totally, “Proof of Life”. Well. There it is. What’s in your basket? TeeHee!]

#8 Victoria Real Estate Update on 04.17.14 at 8:47 pm

House prices in Victoria are ridiculously high. The same can be said for house prices in Canada’s other major housing markets.

Underlying fundamentals (incomes and rents) do not support house prices in Victoria. Hundreds of cities throughout the world have been in the same situation that Victoria is in right now. The result has always been the same – a major, multi-year price decline. House prices always revert to the mean (where incomes and rents support prices). It isn’t different in Victoria or anywhere else in Canada.

By 2006, house prices in Las Vegas, Nevada had soared far above the level of support provided by incomes and rents (bright yellow line). Inevitably, prices corrected back to their long term mean. They said it was different in Las Vegas, but it wasn’t. They said house prices in Las Vegas could only go higher, but they went lower. In 2006, they said it was a good time to buy in Las Vegas, but it wasn’t.

Let’s take a look at house prices in Las Vegas.

House criteria:
* min. 3 beds, 2 baths
* min. 1800 sq. ft. of above ground primary (main) living space
* 2004 or newer
* attached double garage

In Victoria, a house like this would probably cost $700 K or more.

In Las Vegas, the combined value of these 5 houses (that fit the above criteria) is about $674 K.

$116 K (4 beds, 3 baths, 1813 sq. ft.)
$132 K (4 beds, 3 baths, 1916 sq. ft.)
$141 K (3 beds, 3 baths, 1896 sq. ft.)
$138 K (3 beds, 3 baths, 1949 sq. ft.)
$147 K (3 beds, 2.5 baths, 1811 sq. ft.)

It’s obvious that house prices in Victoria are extremely bubbly.

Historically, house prices in Canada and the US had been approximately the same (until 2006 ). Incomes in Canada and the US are also approximately the same so the norm (similar house prices) makes sense based on economic fundamentals.

By 2006, the household debt-to-income ratio in the US was far above its long term mean (third chart), along with house prices. By 2008, the household debt-to-income ratio in the US began its inevitable decline and this coincided with big price declines in US house prices. The same will happen in Canada. Victoria’s big price declines will happen as Canada’s (record high) debt-to-income ratio falls.

Girls and guys, it would have been a mistake to buy a house in Las Vegas near the peak of their housing bubble in 2006. At that time, all indicators pointed (correctly) to a major price correction and that is exactly the situation Victoria is in right now.

Despite some recent gains, house prices in Las Vegas remain well below their 2006 peak, which was 8 years ago. Thousands of families in the US continue to experience financial distress as a result of buying at or near the peak of the 2006 US housing bubble. Don’t make the same mistake. Don’t buy a house in Victoria right now. Wait for lower prices. When you do buy (at lower prices) it will be clear to you that buying now (in 2014) would have been a mistake.

Until next time – Cheers!

#9 Lead Paint on 04.17.14 at 8:52 pm

It’s pretty straight forward – currently the majority of people value having a home over having money. They will give away countless amounts of borrowed money to join and compete with the over 70% who have the same priority.

That equation will change. As boomers retire they will need money more than they need to ‘own’ a home. Interest rates will raise. Home ownership will revert to the average, as it has in the U.S..

At that point it will be much easier to get a house and much harder to get cash.

Plan accordingly and have fun along the way! And watch out for icey driveways.

#10 Muttley O'Toole on 04.17.14 at 8:52 pm

I wonder how many Canucks GT has saved from their impetuous urges?
Sadly, I suppose on the other side of the coin there are a number that will live to regret they consigned his blog to the ignore basket.

#11 eddy on 04.17.14 at 8:57 pm


#12 Jas on 04.17.14 at 9:01 pm

I will wait too.

#13 Freedom First on 04.17.14 at 9:02 pm

Carmen and Ricky-saved. I think even F would be pleased. Congrats Garth. Gives me hope knowing there will be some survivors of what is coming. Denial by Canadians is truly astounding after so many countries have had their housing meltdowns and seen millions of their citizens financially broken, many into poverty. This is not melodrama. This is fact.

#14 BCD on 04.17.14 at 9:05 pm

Smoking Man?
Airhead Princess?
World According to Garp?

And roll out the resident trolls in



1. . .

#15 takla on 04.17.14 at 9:09 pm

It amazes me that this continueing quantitative easing down south keeps this gas bag of an economy inflated,as we know yellen is cutting back slowly and the market seems to have peaked and is balanceing on the peak,ready to dive as she pulls more off the table???Consumers are strapped,Canada will go down for the long decent and housing crash’s??oh well…rivera paradise/stevie ray vaughn just started on the 54′ fisher tube amps…im in dream land again…

#16 X on 04.17.14 at 9:13 pm

It really is a shame that the RE boards are allowed to roll out the crap that they do with no oversight. Leading the sheep to slaughter.

#17 DocInWaitingRoom on 04.17.14 at 9:15 pm

Great stuff here


Also two incomes allows for families to take larger debt. Families working harder not spending time with their kids or spouses really for no benefit since the 50s.

If immigration was causing home prices to double then its amazing why all real estate has gone up Canada wide due to availabe cheap credit? I didn’t see many immigrants in Elliot lake

Have fun working another 15 years plus extra for your (banks) home plus another decade for the furnishings.

Make sure you invite me over in 25 to see it in all its glory!

#18 just an observation on 04.17.14 at 9:25 pm

I love you Airhead Princess.
Let me be your prince darling…. ;-)

#19 Julian on 04.17.14 at 9:26 pm

It appears CMHC’s affordability rule is based gross income.

Isn’t 32% as a general guideline too high, given that 32% of gross likely translates a ballpark of 50% net.

#20 AisA on 04.17.14 at 9:27 pm

No smoking crater, no bid!

C’est le nouveau mantra.

#21 cmj on 04.17.14 at 9:37 pm

I think new home owners really don’t realize what expenses they have until the bills come in. I have a suite and therefore need to document all home expenses to write these off against the rent revenue. This year our monthly expenses average $905 and we have NO mortgage. These expenses on a 1 million dollar home in BC are property tax, house insurance, heat, light, phone, cable, water utilities. it is a newer home and therefore we don’t have additional costs with repairs or renos.

Not only does buying a home create added fees but new owners also have additional costs with running a house.

Think carefully about buying a home and listen to Garth’s daily blog to make a major financial decision

#22 Mike T. on 04.17.14 at 9:40 pm


Good post.

#23 Babblemaster on 04.17.14 at 9:40 pm

“Thanks again for your time and will be holding on the idea of buying home until we see your GO on your blog.” – Carmen and Ricky.


Don’t hold your breath guys.

#24 Steve Eisner on 04.17.14 at 9:42 pm

Thanks for making me rich Canada!

#25 -=jwk=- on 04.17.14 at 9:45 pm

They should have bought. At 420k it was a decent multiple of income and will be worth 600 in a year or two.

900sf Bungs around here (w08) that were an outrageous 450k 18 months ago are now being snapped up for over asking listed at 599. There is now one at 698 (quartz countertops you see). Nothing stays on the market more than a few days. The pattern is the same, list on thursday, open house saturday, sold sign tuesday. Any house, any condition. Gone.

They should have bought this is not going to end in their lifetime.

You suffer from recency. — Garth

#26 JL on 04.17.14 at 9:45 pm

Wow this blog is obsessed with the GTA.

YES it is the biggest single market in the country but it still only represents 10% of the nation, which means 90% of the country could care less. Am I supposed to be worried that TO has created a massive bubble for themselves?? Wow talk about the rest of the country.

What’s Calgarys or Montreal’s or Winnipegs avg price to income? Why don’t you throw up a chart with the 15-20 largest Canadian cities??

#27 Doug in London on 04.17.14 at 9:52 pm

@eddy, post #11:
Of course such a day will come, although probably not in the near future (is there anyone at all out there who remembers 1994-95?). I am old enough to remember when mortgages were at or near 20% in 1981-82 and a lot of “experts” thought that would persist for many months if not years. Eventually either interest rates will normalize or the housing market will run out of buyers because they are priced out of the market and ultimately over time prices will normalize. Everything, absolutely everything, goes full circle. Don’t hold your breath though, it can take a long time for a correction to cause prices to normalize as we saw with gold from 1980 to 1999, tech stocks from 2000 to the later part of last decade, or the long bear market following the peak of Japanese stocks in the late 1980s. Take Garth’s advice, FORGET about buying a house if you are in an overpriced market, and put your money into other investments instead. If you are still itching to own real estate, buy REITs instead. The Boxing Week blowoff, where the push was on last year to clear out inventory of REITs at fire sale prices is over, but they’re still reasonably cheap if you don’t yet own any.
So when DO you buy a house? When the conversation at the workplace, or among customers at Tim Horton’s consists of a lot of bellyaching about how prices have fallen, and even the “experts” say prices are going nowhere for the next 20 years, then you should get up off your ass and do some serious house hunting!

#28 gigi on 04.17.14 at 9:53 pm

“OTTAWA – The Bank of Montreal says a sudden and sharp correction in the housing market could have a devastating impact on the Canadian economy overall, enough to trigger another recession.”


#29 Smudgekin on 04.17.14 at 9:56 pm

Fevered nitwits who claw nickels & dimes at the dollar store and return an online purchase because of duties & taxes. Then suck-up CREA’s crap and blow it big time to the banks.

#30 gladiator on 04.17.14 at 10:02 pm

If you put your feet in a block of ice and your head in a hot oven, on average you should feel fine. Never liked averages in cases where extreme numbers might skew the reality. Comparing median family income with median home price would be so much more meaningful.
And this is especially true in Toronto, where there is a good number of high- and very high-income families. Median is at least 30% lower than the average.

#31 Aggregator on 04.17.14 at 10:03 pm

So we've all heard GTA's latest trend: "There's a shortage of listings". That's true, but here's why…

Last December RealNet's mouthpiece, The Toronto Star, reported the following:

More than 28,000 condos sold in the preconstruction phase in 2011, the most by far in a single year. Many are unlikely to be completed for another year or so because of construction bottlenecks — a shortage of skilled trades and equipment — that have limited completions to about 16,000 units a year.

In 2013, developers completed 50% of scheduled units. That means only half of the units (condos, townhomes and detached) that were suppose to be completed came into TO's pipeline last year, and that backlog is now expected to extend into 2014. So where's all this inventory hiding? Under contruction

See that light green shaded area? Depending on what figures you believe, half of those could be speculators now trapped at the mercy of developers that are afraid of completing too many units at once, since they know those units will be flooding MLS with listings on occupancy, and competing with developers' unsold inventory.

The premarket is where you will see the first cracks in the system, and if developers congest inventory and delay too long, there's going to be mobs of speculators trying to weasel their way out of contracts with lawsuits. This is what the Bank of Canada is watching closely and fears might unwind in a disorderly manner.

So expect more cheering from realtors this spring as more 'scheduled but not completed' units clog up and add even greater risk to TO's housing market. Things aren't well, and nobody is reporting it.

#32 World According To Garth on 04.17.14 at 10:04 pm

#14 BCD on 04.17.14 at 9:05 pm
Smoking Man?
Airhead Princess?
World According to Garp?

And roll out the resident Overpaid Useless Pencil Pushing Govt Worker Mr BCD…..at 9:05 pm looks like. Thanks for making Canadians poorer by the day !!

#33 World According To Garth on 04.17.14 at 10:11 pm

Course while we are on the subject of being shafted by BCD and his cronies…….


Again THANKS for keeping CANADIANS BROKE !!

#34 World According To Garth on 04.17.14 at 10:14 pm

And then there is Ceaser pissing away what little money we have (unless your a govt worker) in Ukraine. WTF interest do we have in Ukraine that we need to give it 220 MILLION DOLLARS????????



#35 KommyKim on 04.17.14 at 10:17 pm

RE: #21 cmj on 04.17.14 at 9:37 pm
These expenses on a 1 million dollar home in BC are property tax, house insurance, heat, light, phone, cable, water utilities

You need to strip out the heat, light, phone, cable, water & utilities because you’d still have to pay these if you were the renter of a comparable SFH.

#36 Andrew Woburn on 04.17.14 at 10:37 pm

183 wow comment 182 on 04.17.14 at 3:32 pm
anyways you might wnt to read the Two Income Trap, it’s your blog on steroids,
Thanks for this. One eye opener was:

“A generation ago, American had what were called “usury laws”, which limited how much interest a lender could charge. Pretty much every nation on earth has usury laws, and America had them in place since colonial days. But Congress effectively wiped out the usury laws in the late 1970s and early 1980s, and as a result the lending industry was transformed. A generation ago, when a bank could only charge 12 percent interest, they were in the business of carefully screening whom they lent money to. There were no all-purpose credit cards, there were no consolidation loans. They lent money only to people who could pay them back. But today, when you can charge 20 or 30 or 50 percent interest, heck, they can make money lending to every man, woman, and child, even an occasional family dog! And that’s exactly what’s happened. They offer more and more loans to people with bad credit, and most of those borrowers end up even further into debt.”

#37 Retired WI Boomer on 04.17.14 at 10:38 pm

Weather forecast for tonight: Dark

RE Forecast for the Immediate Future: Expensive

Night ends, so do Bubbles just ask the US. Your job is to keep your sanity, and your money while so many around you are losing theirs.

Renting IS cheaper than owning.

Can’t save enough by renting? Then you do NOT know how to manage your money, or you are woefully underemployed. Both can be fixed, rather easily.

Buried under a big house note, not so easily fixed.

House RICH but, cash poor? Sell the dump, cash in, move to a cheaper area. They do exist.

Stupid can’t be fixed, but it can be improved.

Smoking Man – enjoy your Rants
Airhead Princess & World According to Garth…not so much

my opinion, and has no meaning or effect on others PFFFT

#38 Smoking Man on 04.17.14 at 10:45 pm

I thought Flipped was going to be a flop… First move for many..


Hello TIFF

#39 WINEPEG on 04.17.14 at 11:33 pm


#40 Mr Buyer on 04.17.14 at 11:38 pm

I have been thinking about the whole investing thing and no matter how I look at it I keep coming back to the the understanding that demand for stock is often largely divorced from the actual demand for the goods or services a company provides. In other words there is not much substance behind a large part of the value ascribed to most stocks other than what somebody is willing to pay for the the stock. Of course there is a relationship between any given stock’s value and the company’s perceived health but it is often by no means a direct relationship. This thinking is indicative of the less sophisticated nature of my thinking but we all have our crosses to bear. Since I have spent years travelling around this cul-de-sac in my thinking I have finally concluded that I am likely never to change these views and I am nearing a point of no longer trying to change or modify them in the absence of new understanding so I have decided to revisit the notion of demand. Turning this investing thing on its head I see the somewhat understandable element of demand and its impact upon pricing. I need like 4 or maybe 5 pairs of shoes but my wife explains to me that just because one pair of shoes I have are black that does not mean they are dress shoes so I now have a few more pairs than I did than when I was single. It got me thinking about shoes and how there is a demand for shoes that is largely fueled by perception rather than the need to protect a person’s feet. My past days in retail home electronics sales largely in shopping malls also underline the phenomenon of demand largely divorced from need. This is a real and persistent element of our society that almost qualifies as a durable good in and of itself. Demand fueled by perception as a durable good. For some tortured reason this notion feels right to me. This I can understand. Investing makes much more sense to me with this premise. I could never understand why a thriving company would ever need or want to share its profitability. Why wouldn’t an owner take the step-wise manner of expansion and capture of market share? The recent inflation of house prices addresses that notion nicely. If I have company Y and a competitor company X is rapidly expanding by means of financing through selling stocks or whatever well I better do the same to capture market share at a comparable rate. When this practice becomes common place there is also the notion of keeping shares in my own company and offering shares to the public and pure public demand for the stock (not my product) multiplying my net worth. This is understandable. Will this type of demand persist? While it certaining ebbs and flows this demand based upon perception can be banked upon for sure in my tiny estimation. While it will dissapear before the demand for water does it will be there close to the bitter end. I have been looking around Japan and I clearly see demand that has persisted throughout decades of deflation in real estate prices. So long as there a people and they need what a company makes and the company has stocks a portion of the value of a stock will be due to public perception rather than the company’s bottom line. I am one step closer to jumping in.

#41 Mr Buyer on 04.17.14 at 11:47 pm

I noticed that certaining is not in the dictionary. I am pretty sure I meant certainly but a year of working night shifts has added to the damage I did to my brain cells in my twenties.

#42 Ronaldo on 04.17.14 at 11:49 pm

334 – World According to Garth –

”WTF interest do we have in Ukraine that we need to give it 220 MILLION DOLLARS????????”

A down payment on the 2.2 billion that the Ukraine owes Russia for their heating fuel. Good thing winter is almost over cause the next thing will be Russia cutting off the gas supply to them.

#43 Tom from Mississauga on 04.17.14 at 11:51 pm

The traffic was insane in Toronto today. 2.5 hour drive from the island airport to Brampton. Watched a fight at Queen and McCaul Street downtown too at 10 am. Nuts.

#44 World According To Garth on 04.17.14 at 11:52 pm

Smoking Man – enjoy your Rants
Airhead Princess & World According to Garth…not so much

my opinion, and has no meaning or effect on others PFFFT

Yes well there is an old old saying……the truth hurts. And as long as people keep denying the truth the more hurtful its going to get…..

#45 KommyKim on 04.18.14 at 12:01 am

RE: #33 World According To Garth on 04.17.14 at 10:11 pm
Course while we are on the subject of being shafted by BCD and his cronies…….

Paul Martin raided $28 billion from the PSPP in 2000 in order to eliminate the deficit and pay down federal debt. So any so called “insolvency” of the PSPP is bunk.

Your constant whining that because, YOU do not receive a benefit then no one else should either, is just silly. You may as well say, “people are dying of starvation in Africa so the rest of us should too.”
Why not try and improve your own lot instead of trying to bring everyone else down to your own pathetic level.

#46 MEANWHILE IN FRANCE on 04.18.14 at 12:08 am

Happy Easter from France where wine is cheaper than water.

#47 The spend spend spend Crackservatives on 04.18.14 at 12:29 am

World According To Garth on 04.17.14 at 10:14 pm
And then there is Ceaser pissing away what little money we have (unless your a govt worker) in Ukraine. WTF interest do we have in Ukraine that we need to give it 220 MILLION DOLLARS????????



These crack head conservatives do nothing but throw way tax payer money while selling Canadian assets for pennies on the dollar to their corporate friends. I hate crackservatives.

#48 Nemesis on 04.18.14 at 1:21 am



#49 BG on 04.18.14 at 1:22 am

#26 JL
Yeah I agree.
Please talk about us peasants, who do not live in the GTA.
We usually only get a quick mention.

#50 Keith on 04.18.14 at 1:51 am

Interest rates will rise – but when? If the purpose of higher interest rates is to curb inflation, where will that inflation come from? Not from the government, that has a vested interest in understating the CPI on which the benefits to seniors that they pay out is based. Not from increased wages, with most workers getting change for a quarter for hourly based wage increases.

Support the value of the Canadian dollar? Not with Ontario, the financial basket case province with the vestiges of the Canadian manufacturing sector benefitting from a low dollar

Bubbles burst when credit tightens. We’ve had amortisation cut from 40 to 25 years, down payments reintroduced to five percent, mortgage insurance capped to a value of one mill. Yet the bubble remains fully inflated in Vancouver, with a family home in reasonable condition on the East side will cost you a cool million, give or take.

Policy makers are fully invested in the current price (certainly not “value”) of real estate. Who wants to be kicked out of office for forcibly deflating the bubble. Enough of the public has drank the real estate kool-aid, with it’s highly leveraged tax free “gains.”

Price is divorced from income, you say. That ship sailed a long time ago in these parts. Vancouver is 22nd in Canada for median household income, 1st in housing price and rent is no bargain either. The price of real estate hasn’t been based on family income for a long time, and frozen real income hasn’t stopped the increases.

People credit foreign money, others scream to high heaven that it’s a myth. What is interesting is that although housing affordability is the seminal issue in Vancouver, no government has studied what role offshore money plays in the real estate market, although restrictions on foreign ownership exist in other markets.

At the end of the day, no one can credibly explain to me what is going on. Galbraith said markets can stay irrational longer than you can stay liquid. This market has been irrational so long, I lose faith in all explainations.

Open to the field – what is going to make the bubble burst? If stalled wages won’t do it, what will?

#51 Tony on 04.18.14 at 1:59 am

Re: #27 Doug in London on 04.17.14 at 9:52 pm

I remember the real estate crash in the fall of 1987 vividly. I was driving some moron named Rocky from Greenwood Racetrack to Orangeville Raceway. Out of Rocky’s mouth came “see that piece of land there in 5 years you will have doubled your money”. The plot of land was in Brampton. Almost the very next day the bottom fell out of the real estate market. So if you need any tips on when the market will peak go to a racetrack or a professional wrestling event where you will find the absolute dumbest people on Earth and listen to what they have to say. Do the opposite and you’ll end up wealthy beyond your wildest dreams.

#52 Waterloo Resident on 04.18.14 at 2:15 am

I remember reading a few days ago an article that explained why and how house prices in Canada could DOUBLE in the next 24 months.

The story went something like this:

“As the economy in the US gains traction, better and higher-paying jobs will materialize here in Canada, and along with the influx of new high-income jobs paying in excess of $200,000 per year, we will see demand for Canadian houses literally EXPLODE over the next 24 months.”

I wonder; $200,000 per year jobs??? What? Where? Who? How can I get myself one of those jobs, what type of education do I need to get in order to obtain one of these jobs. And these are not supposed to be a ‘rare’ form of occupation like petroleum engineering, no, they are supposed to be careers that ordinary people will be able to obtain because the economy will soon be ‘BOOMING’.

Sounds bogus to me.

#53 Waterloo Resident on 04.18.14 at 2:43 am

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This is how you can watch almost ANY movie for free.

Another good place to watch free movies is a site named ‘Megashare’, but ‘Putlocker’ has a bit higher quality.

If you want to actually save one of these movies to your computer, just go download a free version of ‘FREEMAKE VIDEO DOWNLOADER’ and it will let you keep a copy of that video appearing on the screen. That’s what I do.


Try it, you might like it.

#54 BigM on 04.18.14 at 2:53 am


Prices in the UK are skyrocketing again, not just London.
18 – 20% a year.
The BBC is running a series of interviews, and reporting up to 20% of young people will NEVER be able to afford a home.

It’s a worldwide nutter thing.

#55 Edutainment on 04.18.14 at 3:17 am

Sorry Garth but this post wasn’t nearly saucy enough for me. The finger waiving on the highways doesn’t quite do it. Even the picture is tame. Come on, think. There must have been something tittilating in your life lately. If not, the long weekend is starting. Go out there and investigate people like that realtress offering sexy times for listings. Are they for real? The people want to know, Garth.

Glad to see Carmen and Ricky backing away from this financial disaster. There have been many other advice seekers featured in blog posts before, and quite a few of them left me with the impression that after Garth and the commenters analyzed and advised till they were frothing at the mouth, they were gonna buy a house anyway. Due to emotions, feelings, anxiety, fear, lust, and all the other things that should have nothing to do with major financial decisions.

#56 Dr. Wu on 04.18.14 at 3:26 am

‘will be holding on the idea of buying home until we see your GO on your blog.’

Dear Carmen and Ricky, let me splane: this blog represents a thesis. You can’t raise a family in a thesis.
The difference between you and Garth is – he has a house, you don’t.

I can afford one. — Garth

#57 groovin123 on 04.18.14 at 3:45 am

At what point does Garth realize how closely corelated the stock market is with housing prices? I prefer the liquidity of markets, but really, one follows the other. You market humper.

There is no correlation between the TSX and the Canadian residential housing market. — Garth

#58 Nemesis on 04.18.14 at 3:55 am

#PartingShots #BriefTutorials:Ontology&Metaphysics



[NoteToSaltierDogz: See y’all on Monday… but, rest assured, a WellDeserved SundayTreat is coming your way {Admittedly, “Pre-Canned” – and let’s just hope the ScribblerBot posts it on schedule/as programmed. Sorry about that, SaltyDoggies – but, sometimes, “You gotta do… what ya gotta do.” BeWellAll… Now go have some fun. FaceTimeFun.]

#59 Flummoxed on 04.18.14 at 6:59 am


#60 shredder on 04.18.14 at 7:17 am

Harper Sales Tax
is what’s killing new house construction or driving the price a lot higher. Hense the jump in resale houses
I lived in BC when Gordo fell for the ‘easy money” and brought in the Harper Sales Tax. Energy efficient stuff ( like energy star windows) were PST exempt and then all of a sudden cost 13% more. Sucked an extra $1.6B….yes billion dollars a year out in taxes.

I’m building a house now, quaint small SW Onterrible town. No retired fire or police chiefs making $130K a year sucking off the tax roll, Trades have pretty sharp pencils when quoting, it’s just the Harper Sales Tax on everything that hurts.

Reminds me of a lying Brian quote ” as us Irish say, the bigger the guilt, the bigger the funeral”

Did I mention the house will have ICF walls, concrete poured floors with in-floor heat, steel joists? If a tornada goes thru town, my house will be the only one standing.

#61 T.O. Bubble Boy on 04.18.14 at 8:01 am

$900k House of the Day for Friday, April 18th:

3 Finalists
1) A reno’ed $899k 18ft-wide Semi-Detached in Riverdale/Danforth
2) A $899k 19ft wide semi near College/Dufferin
3) $899k 2-bdrm bungalow on 30ft lot (ready to be torn down) near Avenue/Wilson

#2: Yet another Semi-Detached place on the “wrong side of the tracks”, priced like a Detached SFH in an established neighbourhood.

#62 economictsunami on 04.18.14 at 8:19 am

Recently Canadian bank economists have come out with the ‘revelation’ that any shock to the economy (coming from Canadian RE price corrections) will be a drag on the Canadian economy for years to come.

Both western economies, also that of Europe/ Asia have all pursued similar monetary strategies and currency debasement to aid their “everyone an exporter” policies. (Where does the demand come from?)

But yet our individual economies, as well as globally, continue to flounder.

Oh, the wretched effects from easy credit and the resulting wealth effect.

Distortions, particularly in the bond markets where yields are lower on some Spanish debt then US, can only be tolerated for so long.

I guess we will soon understand, we aren’t so different after all…

North American Central Bankers Confirmed A Depressing New Normal Is Upon Us…


The Scars of the (US) Housing Bust (in One Very Telling Chart):


#63 Sean on 04.18.14 at 8:27 am

Happy Easter Garth and blog doggies!

What really blows my mind is how long this is all going on. Garth, your logic and arguments are, of course, correct. Most blog dogs are here as a sort of refuge of like-mindedness, in an otherwise virtual loony bin. But your timing, and all of ours in sharing your opinions, has been catastrophically wrong.

I mean… there is stupid, there is really really effing stupid.. and then there is Canada real estate circa 2012, 2013, 2014…

I have seen it many times before.. internet stocks, gold stocks (not the recent bull, but more so the mid 90’s bull).. US housing.. etc. But this run in Canadian real estate “feels” as ridiculous as any, almost approaching the blind stupidity of the tech bubble.

Of course markets will re-assert themselves, especially in real estate. In every cycle, the average house is once again affordable, even inexpensive, to the average family.

Keep up the good work!

Remember that Toronto (or Calgary) does not constitute ‘the real estate market.’ Many communities are already entering a corrective phase and houses are turning illiquid. — Garth

#64 Bob Lablaw on 04.18.14 at 8:43 am

Bloody easy man. 2.8 million voters of Ukranian heritage.

#65 martha on 04.18.14 at 9:15 am

Carmen, if you and hubby are still reading here… take a look at what you can rent here in Hamilton for less than you are paying now in Burlington. You are paying $1300 now… these two are renting for $1,195.00 + utilities.

(And no, I do not work for these agents, I simply did a Kijiji search….these were the first two listed in your price range.)



Renting can be very nice and very comfortable. My landlord takes care of everything… I get to garden, and he mows the grass and shovels most of the snow. I have a lovely apartment with a nice patio in a nice neighborhood, and he pays the taxes…. Since I moved here he has put on a new roof and last month when the heater died, he put in a new one within two days (it was a weekend and he provided space heaters until the new one came)

It’s a huge win for me….

I am pushing 60, living on a fixed budget. But I have always rented…apartments, homes… whatever I needed at the time. Renting is not a bad thing…it gives you flexibility (like taking a vacation or following your muse, or following your career to new and exciting places) and allows you to do things with your money you cannot do when you “own” a house…

And if you put in a bit of effort, and take care of where you live…I always leave a place better than when I moved in. Landlords LOVE YOU. I lived in one place for 6 years and the owner never raised the rent…another I live there for 10 years and he never raised the rent. And because I am a good tenant, I have letters of recommendation to show to the next prospective landlord…complete with phone numbers.

Good luck – hope this helps….

#66 Ralph Cramdown on 04.18.14 at 9:32 am

#40 Mr Buyer — “I have been thinking about the whole investing thing and no matter how I look at it I keep coming back to the the understanding that demand for stock is often largely divorced from the actual demand for the goods or services a company provides.”

As an investor, you have to decide whether you believe that markets are efficient or not (I think not) and then, if not, whether you have the talent to beat them (i.e. pick winners and avoid losers). There’s bad stocks that nobody should own, stocks in good companies which are overpriced, and stocks in good companies which are underpriced.

The book Supermoney, by ‘Adam Smith’ covers a lot of this insanity, and shows that not much changes.


#67 rosie "moving forward" in the knowledge that, "this won't end well" on 04.18.14 at 9:50 am


Just make sure your on the right side of the “pop”.http://ochousingnews.com/wp-content/uploads/2013/01/a_thank_housing_bubble.gif

#68 mathman on 04.18.14 at 10:03 am

The bubble will not burst until rates rise and folks can no longer purchase, and those owning can no longer make the payments.

The real estate market over the last 5 years has been a function of three things ;

1. Interest Rates – no consequences to borrowing way beyond means which leads to

2. Speculation driven by stupidity

3. CMHC – without CMHC and left to it’s own devices the real estate market would be 30-50% below where it is today.

#69 mathman on 04.18.14 at 10:12 am

case in point – i do a little pro bono work for friends looking for financial advice. My friend asked me to chat about a few rentals condo’s he was looking to buy, despite his much smarter wife’s hesitation.

he had the MLS listings, the market rents, insurance info etc. The first question I asked was what is the CAP rate.

my friends answer not surprising, what is that?

this is not an isolated example, legions of would be donald trumps are betting the farm without doing basic math.

quick calculation, the best cap rate of the three properties was still negative .70. Silly me I always thought the idea of an income property was to have income, not to pay a tenant each month.

even after this he still thinks it is a good idea because the value is going to up! of course it is.

#70 Linda on 04.18.14 at 10:17 am

Hi Garth,

Is it a good idea to invest in a multiplex (4 to 5)?
I am having a bit of cash and after I read that news:


…I guess Canada will follow the same path.

Of course I am looking to buy one outside the crazy market, with a price near the assessment or foreclosure. In fact a good deal.

I think the rent market will be an interesting market in the future. Do you think the same?

I already have a plan for my “senior years” so I want to diversify my portfolio.

The financials will dictate if it is a good investment or not. And you have to answer the question: ‘Do I want to be a landlord?’ — Garth

#71 Alberta Ed on 04.18.14 at 10:58 am

I hope the Globe’s alleged real estate reporter reads this. On the other hand, I suspect that the Globe (and the MSM in general) finds this topic too hot to handle (or too hard to do their own research, like a real newspaper would).

#72 Drill Baby Drill on 04.18.14 at 11:10 am

Dear pathetic blogsters : if you want an example of boom and soon to be bust look no further than Kitimat BC. The Clark government in BC this past week did two 180 degree turnarounds on environmental oversight regulations for LNG facilties. Chevron has just come out and stated that the cost structure (taxation, wages) of doing business in BC is not conducive to a positive “go” decision. Now couple this with the BC government’s dithering and indecision as well as USA and Australian based LNG export facilties already up and running well you get the picture. By the way Kitimat BC real estate has gone up 100% in one year.

#73 bigtown on 04.18.14 at 11:14 am

Former Prime Minister KIM CAMPBELL put down $400,000 approximately in a presale condo agreement to buy a unit in the Georgia Hotel Complex back in 2007. At the time the units priced at $1.5 million and now are going for $900,000 so Kim is out the $400k and any return on that money AND THE REAL ABUSE IS HER UNIT DECLINED IN VALUE by over $600k. Boy you really need to be careful in real estate.

#74 airhead princess on 04.18.14 at 11:27 am


#75 Shawn on 04.18.14 at 11:58 am

Mathman or Jargon Man?

Mathman at 69:

The first question I asked was what is the CAP rate.

my friends answer not surprising, what is that?

And in this case your friend may not have understood the math.

But in general one can understand a topic very well without understanding industry jargon like CAP rate.

Also the fact is that the concept of a CAP rate as used in industry seems to assume that property values always rise at least enough to offset deprecation. Maybe they do, maybe not.

When I was first buying rental property in 1989, I did a detailed spreadsheet but I had yet to hear of the term CAP rate. (Capitalisation rate, cash return on unleveraged capital)

#76 tkid on 04.18.14 at 12:43 pm

Here’s some really handy advice practially ANYONE can use:

You are an eegit and recommending folks here commit criminal acts. Watching movies via these sites and downloading them is illegal and the courts are allowing through court cases where the movie industries are suing the downloaders. It is a thin wedge right now, but it will become more and more of an issue.

You are far better off renting a move for a buck or two from one redbox.ca’s boxes that can be found just about in every supermarket nowadays. Better yet, if you like the movie and don’t want to return it, don’t. After a certain # of days you get to keep the movie! My last rental I didn’t even pay for – the company sent me a free rental code!

No, you say? Want free movies you say? GO TO THE STINKING LIBRARY! Free books, free CDs, free DVDs, free Blu-rays! And best of all you get to keep your name out of the damn lawsuits.

#77 Linda on 04.18.14 at 12:51 pm

….”The financials will dictate if it is a good investment or not. And you have to answer the question: ‘Do I want to be a landlord?’”… — Garth

Thank’s Garth.

I am reading a lot on the subject (doing my homework) before doing any move.

#78 scibadubadebumbado on 04.18.14 at 1:03 pm

Our Government will not tell us how many properties are bought by foreigners. Look at England for a hint.
New York and Paris realize the impact and have levied heavy capital gain taxes of up to 50%. England just added a tax of 28%.
Read below for a hint as to why we have a housing bubble. Garth you have admitted to us why we locals have no more money to buy and the only reason left for the present situation is Foreign Hot Money.


Foreign investors have bought about 70 percent of newly built properties across central London, according to Savills (SVS.L), while 30 percent of luxury London homes worth 1 million pounds or more were bought by non-UK residents in the year to June, Knight Frank said.

Developers that have benefitted or are looking to cash in on the trend include Berkeley (BKGH.L) and Barratt Developments (BDEV.L), who have built thousands of homes in London, as well as British Land (BLND.L) and Land Securities (LAND.L), which have recently entered the luxury housing market.

Property lawyers and estate agents said foreign owners would be relieved the tax will not apply to historic gains before 2015. But they cautioned that the overall impact could be marginal as many foreign investors see London property as a safe and profitable place to park capital.

“Tax is not the primary driver for the majority of international buyers of residential property in London,” Knight Frank’s head of global research, Liam Bailey, said.

“It is important to note that the change to CGT rules brings the UK in line with other key investor markets, such as New York and Paris, where equivalent taxes can approach 35-50 percent depending on the owner’s residency status.”

It was not immediately clear how the tax would be collected and how it would apply if foreign owners used a domestic company to purchase property.

Damien Bloom, a partner at law firm Berwin Leighton Paisner, said the government would probably place the responsibility for collecting the tax with the transaction’s solicitors, a practice already seen in France and Ireland.

Britain last year introduced stamp duty of up to 15 percent for purchases of more than 2 million pounds through a company, a move which some agents have blamed for stalling the 10 million pound-plus market in London.


#79 jess on 04.18.14 at 1:14 pm

Russia teams with MIT on Skolkovo Institute of Science and Technology

In Russia, the Skolkovo Innovation Center outside Moscow

#80 scibadubadebumbado on 04.18.14 at 1:19 pm

The 42nd Canadian federal election is tentatively scheduled for October 19, 2015.
Don’t expect any housing bubbles to be pricked before this date. Our Government inflated the housing bubble to get elected. They don’t want to lose base votes (homeowners) this close to an election.
A housing deflation will take many years and will change the political landscape.

#81 sciencemonkey on 04.18.14 at 1:37 pm

@45 KommyKim

The argument that private workers want to drag public workers down to their level is flawed. Private workers want lower public worker pay and benefits because we are paying the bill. We are being forced to pay our servants better than reality allows us to live.

The problem is public sector unions. All they do is force taxpayers to overpay. They should be abolished. Where unions are needed are with evil large corporations like Walmart. We need lots of unions in the private sector.

#82 Kaganovich on 04.18.14 at 1:41 pm

“No, not rich. I am a poor man with money, which is not the same thing.” – Love in the Time of Cholera

#83 triplenet on 04.18.14 at 1:49 pm

#75 Shawn

There are numerous capitalization rates utilized in real property valuation.
Perhaps you got a little confused with the complexity of the analytical process and the precise rate you should be considering.
And no, capitalization does not inherently depend on constant value appreciation.

#84 Smoking Man on 04.18.14 at 1:58 pm

For you true believers,
Happy Easter,

Party time in AC

I really need a dashcam facing me and wife on road trips….

The dialog and mod swings…. I mean it’s a movie…..

Makes Marty and Rust seam boring….

#85 World According To Garth on 04.18.14 at 1:59 pm

#45 KommyKim on 04.18.14 at 12:01 am
RE: #33 World According To Garth on 04.17.14 at 10:11 pm
Course while we are on the subject of being shafted by BCD and his cronies…….

Paul Martin raided $28 billion from the PSPP in 2000 in order to eliminate the deficit and pay down federal debt. So any so called “insolvency” of the PSPP is bunk.

Your constant whining that because, YOU do not receive a benefit then no one else should either, is just silly. You may as well say, “people are dying of starvation in Africa so the rest of us should too.”
Why not try and improve your own lot instead of trying to bring everyone else down to your own pathetic level.

So I understand you….your suggesting that “EVERYONE” has the ability to be making 100K a year. Everyone. That’s the dumbest thing financially I have ever heard. Then there is the whining and Africa cop out.

1. I wasn’t born in Africa so
2. Because I was not born in Africa does not mean its fine for the Govt to be so stupidly in-efficient, greedy and corrupt that its okay to steal taxes (60% average) to pay for its glutenous multi multi layered needs while granny works at Timmies and Chinamart till she dies.

I guess Kimmy you failed the biology class where they teach you that a virus (Govt) eventually kills its host.

#86 TS on 04.18.14 at 2:05 pm

#80 scibadubadebumbado on 04.18.14 at 1:19 pm

You wish.

#87 G in V on 04.18.14 at 2:06 pm

# 56 “will be holding on the idea of buying home until we see your GO on your blog.’—Dear Carmen and Ricky, let me splane: this blog represents a thesis. You can’t raise a family in a thesis.The difference between you and Garth is – he has a house, you don’t.”

I can afford one. — Garth
Beautiful! Well said GT.

#88 World According To Garth on 04.18.14 at 2:10 pm


#89 TS on 04.18.14 at 2:13 pm

#68 mathman on 04.18.14 at 10:03 am

What about job loss in weak economy?

#90 Dr. Wu on 04.18.14 at 2:16 pm

#78 scibadubadebumbado on 04.18.14 at 1:03 pm

Our Government will not tell us how many properties are bought by foreigners.

Don’t worry about foreigners. I would guess that the word ‘foreigner’ is not even in Harper’s globalist vocabulary, unless he’s planing to introduce “I Wanna Know What Love Is” into his live act.

Foreigners have what used to be our jobs, that’s more troubling than them showing up here and covering our RE vendors with cash. They have the cash because they have the jobs and factories. The land you are worried about was stolen from natives so we’re traders of stolen goods. If we were talking about art we would run the risk of forfeiting the goods. But our trade is crown sanctioned. Visualize a market full of wannabe buyers with restricted access to credit and not enough cash to buy, and THAT is a real nightmare.
If they show up with legal tender that’s enough for me.

#91 World According To Garth on 04.18.14 at 2:22 pm

For everyone that think’s that “Govt Worker Easter Monday” is a holiday.


Its not……..but Govt Workers get it off courtesy of your tax dollars. KEEP WORKING HARD. The Govt NEEDS your taxes. Right Kimmy?


#92 Shawn on 04.18.14 at 2:30 pm

Capitalization Rate

triplenet at 83:

And no, capitalization does not inherently depend on constant value appreciation.


Me confused? You must be new here.

CAP rates take cash flow and divide by asset value, typically.

Cash flow typically adds back any depreciation expense as a non-cash expense. (Though admittedly, idiotic IFRS accounting has decided that depreciation no longer exists)

In that way cash flow and CAP rates mix return on capital with return of capital.

Does the CAP rate consider that at some point a building must be replaced?, otherwise the cash flow stops?

Anyhow, my previous post focused on the idea that what is more important is the math, not the jargon.

#93 economictsunami on 04.18.14 at 3:36 pm

So what’s going on with New Zealand’s RE you ask?…

12 Reasons Why New Zealand’s Economic Bubble Will End In Disaster:


#94 Old Man on 04.18.14 at 4:15 pm

Caesar is giving lots of taxpayer money away in the $billions, so am wondering if he has become a Realtor in disguise? What is his commission rate? Did he split it with F and the Carnival Man too? Too many deals with the unholy alliance in charge, and we the people demand a full audit! Lets start with the $3.1 billion that is missing; it went poof and nobody can find it. I see that the Carnival Man was at the church funeral, but was in hiding – why?

#95 World According To Garth on 04.18.14 at 5:07 pm

#88 World According To Garth on 04.18.14 at 2:10 pm

Garth apparently has an allergy to the T word. Only “partial” truths allowed on this blog…..

#96 Roger_Home_Inspector on 04.18.14 at 5:10 pm

#60 shredder on 04.18.14 at 7:17 am

Sounds like you’ve got a good sense of what you want in a homes construction and how to get it- bravo!

Steel is the way to go with residential construction imho. Strong yet flexible, durable, cheap and recyclable. It also won’t rot, grow mould or mildew, warp or twist. And, it’s fire proof. You can span larger spans with engineered metal segments than you can with wood. And did I mention it’s cheap? ICFs too are a great technology, specifically in our climate. Too bad few people have the foresight to realize the extra cost pays in dividends over traditional knock down formed foundations.

Funny you mention $130k per year for a fire chief. So many people wish to participate in fire fighting activities. People line up for the jobs, hundreds deep and I’d have to think a good number of them are quite qualified.

That said, why wouldn’t we employ more volunteer firefighters in large urban areas? I live in a township where all our guys are volunteers- they are very dedicated and provide phenomenal service to our community. Sure, in larger urban areas you’d always have a need for full time staff, but why can’t we supplement a good number of the manpower with volunteers who truly wish to give back to their community and would do so for little or no money? Isn’t that truly “public service”?

p.s.- after the firefighters union reads this post I may disappear.

#97 gladiator on 04.18.14 at 5:32 pm

@96 Roger Home Inspector:
Steel is one of the weakest elements out there. If you take a 1 inch thick steel beam, throw some paper on it, douse it all with kerosene then put it on fire, it will melt. Best proof to it is the official report on what caused the twin towers to collapse. And keep yourself informed, will ya? Don’t embarrass yourself.
sarc off

#98 airhead princess on 04.18.14 at 7:42 pm

“74 airhead princess on 04.18.14 at 11:27 am


???? Something I said? Or was it someones reactions? I aim to please.

#99 TurnerNation on 04.18.14 at 8:04 pm

Re. yesterday’s post, the good news is you can hire two people having graduate level education each for only 115k! That’s like 58k apiece.
(So much for the 6-8 years spent in advanced school. )

Still too high! I bet in India you could hire for half this. Getting there. The new Kanada.

#100 Happy Renting on 04.18.14 at 8:38 pm

Yeah, Carmen and Ricky! Let’s face it, what families really want is a detached home, and the price tag on that is currently insane. Your sons will enjoy their extra music or sports lessons. :)

#101 Doug in London on 04.18.14 at 8:42 pm

@economicdisaster, post #93;
So New Zealand and Australia are also part of the real estate bubble club that Canada is an honorary member of. In all 3 countries, KEEP AWAY from real estate unless you are buying in a cheaper locale with prices that have already returned to reality such as Windsor, Ontario. Last week, in response to another post I described this bubble as being like the gold bubble I relived in my 1980 nostalgia trip. Yes, this nostalgia trip only not included hearing Back in Black by AC/DC (from Melbourne, Australia) but also True Colours by Split Enz, from New Zealand. You can learn a lot from nostalgia trips.

#102 Roger_Home_Inspector on 04.18.14 at 10:32 pm

#97 gladiator on 04.18.14 at 5:32 pm

My error, I didn’t realize we were setting the building ablaze with kerosene.

The way I’d view it is this: If you build a home with traditional lumber framing and manufactured materials such as OSB and Glulams, if the house starts on fire, it’s likely to burn down or at least be hollowed out pretty good. Portions if not all of it may collapse as a result. All framing and sheathing materials would be combustible and add significantly to the potential fire load. Plus you’d have to deal with the unsightly bowing and warping of floors and walls inevitable with traditional lumber framing.

If the home is built of steel, 30-50% of the fire load is removed and replaced with non combustible materials. Less combustible material means less chance of a fire in the first place and less intensity should one occur.

Would the steel building collapse under high heat over a prolonged period? Probably. Then again so would the wood framed house. What was left would likely be pulled down by a hi-ho in the end in either case. The nice thing is my steel framed house had no nail pops, flat even floors and no unsightly beams and posts exposed in the basement. Also, my steel webbed floor joists allow the duct work and other utilities to pass through so there were no bulkheads either.

Plus, when my steel framed house burned down, GHG emissions were reduced due to the reduced volume of combustibles and a good portion of rubble would be recyclable.

#103 Cici on 04.19.14 at 1:06 am

OMG, what’s truly frightening is that the Roxton home appears to be way better-built luxury in comparison to the Ellsworth dump…the take-away? – If you are going to pay nine times more than the real value of a home’s worth, make sure you don’t renovate it, or slam the doors too hard behind you…


#104 Gene on 04.19.14 at 4:57 pm

I live in Victoria and I sold my home last December.
I notice one can buy a house up Island for 1/2 price and then use the other 1/2 of the house money for retirement income. Less traffic and smog up island also.

My view is central bankers will screw up the economy by keeping interest rates too low, for too long. This implies asset values go to a maximum, resulting in maximum debt in the economy. We will eventually reach a tipping point as prices and debt cannot rise forever and then the economy tips over; jobs lost, mortgages unpaid, banks lose money and tax payers get screwed as CMHC pays out big dollars due to housing defaults.

I want to be in a small town before civilization begins to fray. My sympathies to anyone living in the big cities.
Between smog and traffic, you’ll probably die ten years before your time. This likely will be good as you won’t be able to afford retirement as you spent all the money on real estate.