They asked for it

EAT modified

The real estate industry is asking for your help. No, seriously. Put down your weapon and listen to me.

For a longer time than most mammals live, this pathetic blog has yammered on about how organized real estate has failed consumers. Frankenumbers to mask market trends, for example. Encouraging (or merely allowing) engineered bidding wars which consumers must enter blind. Fuzzy stats which local boards revise in secret. Preventing the publication of sales histories or even days-on-market for individual properties. Counting multiple listings of the same house. Forcing homeshoppers to sign a punitive buyer’s agreement. Deliberately mispricing properties to start a riot. And threatening to vivisect poor bloggers who say ‘realtor’ instead of REALTOR®.

In days such as these, when real estate has become the asset of choice for seven out of ten Canadians, with debt bloated as a result, and the economy now hooked on housing, we have a looming train wreck.

People buy million-dollar homes in less time than they can find a pair of jeans. They take on massive risk through historic leverage. They eschew other investments, retirement savings or kids’ education funds, because they can’t afford them. Houses suck off everything. And yet the facilitators – the realtors – are thinly regulated, sparsely trained and too-often ethically-challenged. It’s an eat-what-you-kill industry sadly in need of reform.

And – until this moment – they didn’t care.

On Tuesday the president of the BC Real Estate Association, Jake Moldowan, sent me a note. After I had the GreaterFool Bomb Disposal Unit open it, an unexpected surprise…

“I am part of the team leading a significant research project on behalf of BC organized real estate called the Journey of Discovery. As part of our research, we are reaching out to five experts who track significant changes in the real estate industry. We have selected you as one of the five, and would like to invite you to contribute to our Disruptive Change Report and we are willing to pay you for your time.”

Turns out the provincial body actually wants to clean up the industry, or at least hear from those who believe change is necessary. It even issued a fat discussion paper asking big questions like, what in the future will customers expect of realtors? How is the business of house-flogging going to change, because of the economy, or technology or a tidal wave of wrinklies?

Hell, it even started with a quote from the Globe and Mail which quoted this site:

In a recent Globe and Mail post, Rob Carrick cites Garth Turner, “…nobody actually knows what’s going on with real estate. Not the eggheads. Not the Fster (Federal Finance Minister Jim Flaherty). And certainly not the consumer. There’s simply no good, credible, dependable, non-biased data available, because all current stats must first be laundered by the industry itself.”

Anyway, here’s the rub. Jake and his crew have asked me to do something quite specific. “We are looking for your opinions on the significant forces that have shaped the real estate industry over the past five years, and the significant forces that are likely to shape it over the next five years. We encourage you to think broadly about the types of disruptors: regulatory, new entrants, business model innovation, agent practice changes, consumer behaviour changes, market forces, etc. The ideal disruptor list will include those that have both scale of impact, and show a diversity of forces changing the industry.”

Disruptors? Like Brad Lamb or Bob Rennie? Or like unregulated marketing and insane commission rates? Pandora, meet box.

The task is to create two lists of the top 5 things that have created the kind of housing market that we have today, and what will change it in the years to come. What led to the nutso situation in which two Canadian cities have average SFH prices of over $1 million? With rapid technological change, will buyers and sellers even need realtors in the future? If so, what role should they play? Is the business under-policed by government? How can we stop the virgins from being crushed in bidding wars? What can realtors do to mitigate a crash?

“We need two “top 5 lists” from you – past, future,” they’re telling me. “So we can achieve consistency between the lists, please provide each example with one headline (sentence or fragment) and 2-3 explanatory sentences.”

Are we up to the challenge, blog dogs? What five things do you wish me to tell the realtors about how we got into this sorry state, and the changes that will be needed to get out?

Second, the real estate association says it’ll pay me a grand for the answers. I plan on asking for 5%.



#1 CPG on 05.20.14 at 8:00 pm

“And while the Bank of Canada may be fretting about the country’s low inflation rate (a worrying sign of slack in the economy), consumers themselves aren’t seeing things this way.

The cost of living has surpassed health care as the number-one concern for consumers, the study found.”

Why Those Reports About Canada’s Healthy Economy Feel Like BS

#2 not 1st on 05.20.14 at 8:03 pm

“We are looking for your opinions on the significant forces that have shaped the real estate industry over the past five years..”

Sounds like they are trying to buy you off. Don’t forget to mention the HAM flying around in helicopters.

#3 Steve on 05.20.14 at 8:08 pm

I think a turning point has appeared. Once you’re mainstream Garth, it should create some chaos! Don’t be afraid to tell the truth like you always have!

#4 Dual Citizen In Canada on 05.20.14 at 8:10 pm

My biggest point, Garth, is that we need the industry to adopt a site like We need Remember the guy that said, “An educated consumer is our best customer.”?

#5 wallflower on 05.20.14 at 8:12 pm

A thousand dollars for doing their slog work?
Ask them what that translates into as a percentage of total 2013 BC agent commissions paid for residential properties.
I think that is the starting point.

#6 Mark on 05.20.14 at 8:12 pm

I think Realtors have a credibility problem when some who identify themselves with the RE sell-side community go to various message boards and forums and troll ad nauseum, complete with the extremities of ad hominem.

A good and honest Realtor should have no problem telling his/her clients that its a terrible time to buy a house. Realtors owe it to themselves to educate themselves on the merits of other investments, instead of pounding the table to RE even though it is valued at double or triple that of other investments with similar risk (ie: those XIU index funds).

Realtors should also distance themselves from people who behave completely unprofessionally (for instance, the trolls on the RFD forums by the nicknames of gomyone, anikiri, and donnie740).

#7 Fred on 05.20.14 at 8:12 pm

First, tell them to watch The Wolf of Wall Street. Now change “Wall” to “Main” and they’ll see themselves. The Wolves of Main Street.
They sure knew how to sell that pen.

#8 T5_INCOME on 05.20.14 at 8:12 pm

You are the perfect candidate for this Garth.

My #1 issue with used property sales people is the promise of great returns on investment property and how they can blatantly advertise it.

There is zero regulation in making promises of future investment returns is pure malice towards unsuspecting investors that have bought into the ideal that Realtors are highly educated, well versed professionals.

It is clearly illegal to mislead investors in this manner in the securities industry. Not to mention real estate is typically much more leveraged than securities investment.

#9 wha tha ? on 05.20.14 at 8:15 pm

Fox, meet the hen-house.
Enjoy your time there.

#10 waiting on 05.20.14 at 8:16 pm

I’m thinking
(a) I smell a rat …
(b) It’s a trap!
(c) They really are sincere about cleaning up the industry …
(d) They want to be able to publish something and say Garth Turner contributed to it …
(e) I’m pretty cynical

#11 Terrie on 05.20.14 at 8:17 pm

• Transparent buying and selling process. Show all taxes and closing costs right up with the house price?
• Streamline the buying and selling process. (probably doable over the web) Agents are likely gong to be unnecessary in the future.
• Statistics on selling prices and sales should be gathered by an independent research body.
• Banks not allowed to lure people into greater and greater debt.
• If a seller or their agent suggests or claims there are competing offers on a house, in order to stampede you into buying; then if you buy the house, they should have to prove the other offer actually existed.

#12 Frustrated on 05.20.14 at 8:22 pm

I can think of 1 thing the real estate industry can do is… If someone under prices the home, and the highest bidder is still too low that the home owner wants. I feel if the offer given is over the asking price, the home owner should have to take it. If the home owner doesn’t like it, then don’t under price your home. As for a good cause for the money, I think it should go to the ALS. After I was told I have it, its such a horrible disease and more people should learn about it because its not well known.

#13 polecat on 05.20.14 at 8:23 pm

Greater Fool bomb disposal? Thank’s for the chuckle, that was priceless. Hopefully it’s not the amazons. Scary if they are looking to the oracle for help, little late.

#14 Darth on 05.20.14 at 8:24 pm

Trap… Be careful.

#15 valleyrenter on 05.20.14 at 8:25 pm

That’s a tough one, so many to choose! As for the past, emergency low interest rates that got left out in the sun too long and are now stinkin’ up the joint. Only way to fix that is by slooooowly raising them hoping for a “soft landing” in prices.

As for the future, what will be a significant force that will shape real estate for the next 5 years? Boomers get my top vote. Will they stay in their homes and draw a reverse mortgage? Will they cash out and downsize? Will they free up money in their home to help Jonny or Suzie with sizable down payments to keep the party going, and will it be enough?

As for what to do with the money? I say find a local not for profit that gives a helping hand to people that need it to get them off the streets.

#16 Darth on 05.20.14 at 8:26 pm

Ask who else has been asked to participate… then speak to them and find out if it’s all legit. You don’t want to be the only one bringing food to the potluck.

#17 omg on 05.20.14 at 8:28 pm

In the Age of the Internet will we even Need Real Estate Agents?

Sadly I think people are too frightened by the entire house buying experience for RE agents to ever become a thing of the past. They need someone to hold their hand.

The idea of going and buying a car and getting crewed over is one thing – people do that on their own all the time and might get hosed out of several thousand dollars.

The idea of going out on their own to buy a multi hundred thousand dollar house is simple to much of a gamble. Even though in fact most RE agents only look after thier own interests not those of the client.

I think the best we can hope for is a market were access to the MLS system is truly free and open. And perhaps where their is some zillow-like competition.

Then perhaps the $35,000 commissions will finally be trimmed to something reflective of the actual work.

#18 sheane wallace on 05.20.14 at 8:29 pm

1. CMHC and clueless government
2. irresponsible banks
3. complacent media
4. self serving real estate
5. clueless buyers

#19 Jackofall on 05.20.14 at 8:30 pm

$1k? hah. Tell them you have an hourly rate, but you don’t publish the numbers, so they should make you their best offer. After all, they don’t want to miss out. Right now is a great time to Solicit Mr. Turner.

Oh, and be sure to get them to sign a contract so that they can’t go soliciting someone else for the next 6 months, while you are working together.

#20 Cow Man on 05.20.14 at 8:32 pm

Sir Garth:

Too bad they want five things. I can wrap it up in one. Senior Governments’ desire to make housing an entitlement. We have socialized housing by making it “AFFORDABLE” to every one. CMHC in housing and Farm Credit Corporation in farmland. Farmland has far surpassed the per cent increases in housing. All because government backs the loans at ridiculously low interest rates.
1. Government control of interest rates.
2. Government control of amortization period to long.
3. Government removal of high down payment %.
4. Government allowing homes to be used at ATM’s. HELCO’s should be discouraged.
5. Government allowing reverse mortgages.

#21 TurnerNation on 05.20.14 at 8:33 pm

Keep your fiends close, your enmities even closer.

#22 takla on 05.20.14 at 8:35 pm

Garth ,don’t fall for it…its a trap.SUN TZU teach’s the
supreme importance of war is to attack the enemys stategy.
For them to come to YOU of all people is highly suspect questionable.

#23 sheane wallace on 05.20.14 at 8:35 pm

#1 CPG
slack in the economy?

It seems we live in different worlds. Lying about inflation won’t help. Gas at 1.37, look at food prices. Deflation?
My behind.

#24 Ruben on 05.20.14 at 8:36 pm

Golly. How about the myth that the “Free Market” is the great god of efficiency, omniscient and omnipresent.

As Joseph Stiglitz said (for which he won the Economics Nobel), the Invisible Hand of the market is invisible because it does not exist.

#25 Goody Niosi on 05.20.14 at 8:39 pm

Biggest problem – the government underwriting mortgages people can’t afford and effectively taking banks off the hook – and putting taxpayers on the hook. Can you imagine the difference it would make if every buyer had to have 20% down – and the lender had to take full responsibility?

Oh yes – your $1,000 – SPCA please!

#26 investment virgin on 05.20.14 at 8:43 pm

How we got into this mess:
#1. Stirring up hype just to inflate a market. All that marketing about how great a market is just to make a profit screwed us all in the long-term, including the realtors. Example, Regina & Saskatoon

#2. Creating very skewed housing data reports to keep the market moving. It should be illegal.

#3. Getting the media to spin news to encourage buying. It should be illegal.

#4. Promising false ROI. It should be illegal.

#5. Promising instant wealth and security by purchasing a house. It’s a house, not a bank full of cash. It should be illegal.

How to fix it:
#1. Regulate the real estate industry like the financial industry so realtors/real estate agencies can’t feed us lies about housing data, ROI on properties, bidding wars, repair costs, etc. The industry needs a watchdog.

#2. Provide transparency of data so people can make informed decisions. Put it all in one place online for easy public access.

#3. Realtors/agencies should be honest. Not greedy. Stop spinning stories in the media that aren’t true.

#4. Show proof of multiple bids on a property and what the offers are.

#5. Mandatory inspections for all accepted offers to protect the buyer.

#27 TheCatFoodLady on 05.20.14 at 8:43 pm

That’s a big mandate, especially for any person or persons serious about pointing out the problems & potential solutions.

When do they want an answer & yeah, who else is involved?

I’m going to carefully re-read your post & think hard before answering.

#28 Van Isle Renter on 05.20.14 at 8:44 pm

The realtors offering to police themselves is as dumba$$ as asking Greenpeace, the Sierra Club and the World Wildlife Fund to write emissions regulations on how to deal with coal fired electrical plants.

Oh… wait a minute… that did happen…. and it led to massive power price increases in Germany and a huge increase in CO2 emissions, exactly the opposite of what the greenies said would happen. Ontario, your turn is next.

Criminal incompetents policing themselves. What could possibly go wrong???

#29 frank le skank on 05.20.14 at 8:48 pm

#11 waiting on 05.20.14 at 8:16 pm
I agree, I’m skeptical about how their motives. I think they will take anything you say out of context to downplay the severity. Their creative writing skills are unparalleled.

#30 Lily on 05.20.14 at 8:48 pm

Stats need to published and maintained by a third party with no vested interest. There is no other way to ensure trust with the public. No agent should ever ever represent both seller and buyer. There is just to much conflict of interest in the RE industry, it’s just to easy to screw over a customer.

#31 SteveD on 05.20.14 at 8:55 pm

The cause -greed.

The money – a scholarship fund

#32 pinstripe on 05.20.14 at 8:58 pm


The real estate industry and the politician decision makers are in a hellava mess and now there is a need to share the blame.

There is no need to tell them “I told you so”.

In order to get any change, it is necessary to experience total failure.

#33 real estate chat on facebook on 05.20.14 at 8:59 pm

Housing Obsession: A conspiracy???

I have always been one to look beyond the innocent look of things. The movie JFK by Oliver Stone woke me up out of my naïve stupor when I was a teen. Why do things unfold as they do? Is it a simple coincidence or are there deeper motivations by those in power?

One of the staples of the “American Dream” is home ownership. This dream has clearly spilled over to Canada. Immigrants for decades have come here hoping to one day own land. Land has historically symbolized power, independence, and achievement all over the world. You see humans are more alike than we are different.

But why is home ownership particularly more robust and sought after in North America? The rates of home ownership are a lot less in other G7 nations. For example in 2012 Germany’s home ownership rate was only about 53%… so half of Germans like to rent. In France only 64% (anyway google it). Why is owning an obsession here.

Ok so I put on my conspiracy theory hat. People in control want to stay in control. Shakespeare has written about this many times in his plays. Governmental people, leaders of industry, the super rich want power and want society to stay as it is…the status quo. How do they control us? By selling us something that will make us feel safe and probably make you money. We all love safety and money…right?

So they do a few things at the same time. We have a culture of fear. We are all fearful of just about everything…our jobs, our health, running out of money, terrorism, etc. At the same time money has become dirt cheap. Never ever has money been this cheap. Wooohoo the party is on. We are encouraged to borrow. Why the hell keep money I n the bank at 1 %? You are actually losing money this way when you take inflation into account. So our media and culture promotes home ownership. You need to live somewhere right? You want to have status right? You want to show off your home to your friends right? This is how we are brainwashed on the level of values.

So why does the power structure love this? Well if you own a home and have a huge mortgage on it you are going to be a slave! Yes I said that. You will be a slave to that debt. A slave never questions, never causes problems… what do slaves do…yes you got it, they work. They don’ t think much, just work baby. And this is exactly why we have all been brainwashed into buying homes. If you rent as many Europeans do, then you do not have to be such a slave.

If you want to rebel and question our system well then you don’t have so much at stake. Notice how Europeans and other people in the world revolt in the streets when their leaders try to screw them. You never see this here in North America anymore because we have been convinced to all become owners.
We have been convinced that we are special, like we are part of the super rich, the one per cent. But of course we are not… this is part of being brainwashed. We are all confused and deluded into thinking we are more than what we are. We think that material things we bring you happiness, but material things will lead to emptiness.

Perhaps the Germans know something we don’t… that a house, shelter, is not a means to true happiness. Perhaps relationships with people and having those who serve us resting on an uncomfortable edge are better paths to happiness. That’s what we all want right..happiness? Is being a slave to your debt and possessions true happiness?

#34 jc on 05.20.14 at 8:59 pm

I was going to share this anyway, but it might actually contribute to the list of disruptors.

I enjoyed a presentation today by the deputy chief economist of the Alberta treasury and finance department. He spoke for an hour, and painted a pretty rosy picture of Alberta, indicating that it leads the nation in a number of important categories. Most importantly job creation (about half the jobs created in Canada in the last year or so have been created in AB), but also GDP growth, productivity, net migration, etc.

He explained that AB was enjoying a unique situation in the most recent development boom (~2010-present), in that the rest of the country, still weighed down by slow growth and unemployment, has been able to supply the labor AB needs, enabling it to avoid the massive wage inflation witnessed in the last cycle (2004-2008). “Growth without inflation” was the simplified message.

Of course this all sounded great from the AB perspective, but I was really taken at how bad a light this cast on the rest of Canada. It is very troubling that the country appears to have only one card in its hand, and there is no guarantee that card is even an ace. Look at a recent time series plot of US oil production, and more importantly trade balance for oil to understand the risks. I suspect the economics of Keystone XL are deteriorating by the day.

Another interesting observation he presented, was that household debt growth appears to have slowed quite rapidly in the past few years. While not conclusive, this does suggest we are at or near the top of the debt cycle. Given the magnitude of debt incurred in the past decade, and that we know a large portion of it went into home purchases and renovations, I would argue this is top of the long term debt cycle. A lot of future consumption has been sacrificed for current consumption.

He also spent some time on demographics, showing three different scenarios he ran on the employment rate, and no matter how generous his assumptions about boomers staying in the workforce longer, his modelling suggested there will be fewer people working as a percentage of the whole, for decades to come. Hardly a revolutionary conclusion, but it drives home the point that anyone under 40 today, will be expected to ‘make a lot more, with a lot less’ through the rest of their careers. I have been referring to this demographic shift as the ‘coming plague of locusts’…. and I’m only half joking.

Hope this contributes to the discussion, G.

#35 The Fix is Right Here on 05.20.14 at 9:00 pm

– Crea / Treb forced to use 3rd party Audited real estate transactions data. Government to Ban HPI indexes as they are a complete smokescreen

– Zillow style public MLS website with previous selling prices/dates, days on market, etc.

– Government regulations on advertising. I. E. Brad Lambs ads boasting 280% returns on his condo investments

– Ban blind bidding wars, also known as the killer B’s… Put in a proper auction process like Ebay

– Tax all foreign purchasers of real estate in Canada based on the sale price. Example, 10% tax on purchase price. End the ridiculous speculation buyers that drive prices higher. If they don’t live here, make them pay for it. Why are they allowed to profit and pay almost nothing in taxes to our government. Put that money to use for other programs our citizens can use.

#36 Paul on 05.20.14 at 9:01 pm

Cap on commision or flat fee regardless of how much a house sold for. Full history of house being sold. ( what it sold for 10 yrs ago ) Option to fire your Realtor anytime and not have to pay him commision if you find another Realtor. Ethics codes enforced by fines and penalties. Home inspection people need better regulation, they worry about not getting referrals from RE agents if they pick things apart.

#37 Ralph Cramdown on 05.20.14 at 9:05 pm

I think it’s actually tough to name five orthogonal forces. I’m thinking
– rising prices
– falling interest rates
– domestic investors’ hunt for yield and fear of stock markets
– foreign investors’ search for safe assets. Vancouver real estate is just as much a symptom of this as the giant piles of collateralized copper and aluminum to be found in various Chinese port cities
– banks’ preference for zero rated (i.e. ‘safe’ CMHC guaranteed) assets/loans in the wake of Basel III reserve requirements

These are all, to varying degrees, interrelated. Much as large forest fires create their own wind, bubbly leveraged asset markets create their own dynamics through sheer momentum and greed.

As to factors shaping the market in the future, who knows? They’re trying to get ahead of it and shape the process somewhat with this, methinks.

About the realtor industry specifically… It’s an odd one. It isn’t like the number of divorce lawyers or bankruptcy trustees triples from the trough to the peak of their industries’ cycles, but it happens in real estate. It doesn’t seem to hold commission rates down much at all, and the long term agents still seem to do most of the deals, but a number of clients get stuck with inexperienced agents at peaks, often at full commission. In skilled trades, rightly or wrongly, there’s apprenticeships before plumbers and electricians get turned out on an unsuspecting public. In real estate, not so much.

*** Looking specifically at realtors *** the biggest problem remains that buyers’ agents incentives aren’t aligned with buyers’. As long as both sides make more money if the buyer pays more for a given deal, they’re essentially both working for the seller regardless of semantics or codes of ethics. And as long as that’s true, the trade associations will always be working for higher prices, regardless of the long term wisdom of it. The monthly pressers seem always to be directed at potential buyers sitting on the fence, and the US organizations were optimistic liars every month from the peak to the bottom.

#38 Maxamillion on 05.20.14 at 9:11 pm

Devil calls and asks you how to clean up it’s act for a thousand dollars?

#39 Fred on 05.20.14 at 9:13 pm

In no particular order.

1. All counter proposals must be in writing
2. Apply a hefty tax to “foreign speculators” that are not CDN citizens (when the party ends we’re the ones holding the baggage after all)
3. Audited monthly sales stats by independent 3rd parties legislated to be made mandatory
4. No double listing that inflates sales stats
5. Higher risk applied to banks offering the loans
6. BRA’s made illegal
7. Legislate nationally the boards reporting under the jurisdiction of Stats Canada
8. Make home inspectors more liable for false or missing information
9. Legislate that all homes on the market must be listed online with
asking and Sale pricing (better informs other buyers in the area)
10. Everything else listed in this blog

#40 Mr. Reality on 05.20.14 at 9:15 pm

#1 above all else

CMHC! End it.

Mr. R.

#41 Roger_Home_Inspector on 05.20.14 at 9:17 pm

Mandatory 30 day opt out period after the signing of an agreement to purchase.

Really, when most of us purchase a home we’re making a long term contractual obligation between ourselves and our lender. We have all sorts of consumer protection in place for water heater rentals and energy contracts, but when it comes to shelling out hundreds of thousands (if not millions) of dollars over the majority of our lifetime for a home, no recourse exists.

How many of us have made an impulse purchase or a purchase at the pressuring hand of a sales person? Probably most of us. Ever thought you really really needed something one day just to realize the next that your purchase was money ill spent? It’s the same with houses- realtors are just wanting to get that paperwork signed and I firmly believe many people do so under pressure from the agents but also under their own impulse (especially first time buyers).

I’d propose this- mandatory 30 day opt out period after clearing of all conditions on the agreement to purchase. In that 30 days the buyer is to have no contact from their representing realtor or any affiliate or party acting on their behalf. At any point within the 30 days, the buyer can cancel the agreement to purchase without penalty. Simply fax in a form and the deal is cancelled. No contact from realtors. No guilt trip.

This would give buyers lots of time to dwell on the decision. Regrets and second thoughts can then be followed by action. Plus, clients would have a good bit of time to perform any due diligence and have quoted any required repairs and the full cost understood before they own them.

#42 Fred on 05.20.14 at 9:17 pm

#36 – point #4

We can call it…”Re-Bay”

#43 raisemyrent on 05.20.14 at 9:18 pm

I presume that:
– everyone will add their 2 cents
– the greaterfool statistical data department will somehow compile all responses

therefore: something along the lines of the realisation that real estate agents are not economists, financial advisers, or psychics. they’re sales people. perhaps a disclaimer.

no one trusts used-car sales men (or women) but everyone seems to blindly trust real estate agents. i.e.
buying a car – typically 5 figures, 0-10 year financial commitment
buying real estate – 6 to 7 figures, 5-35? year financial commitment.

Something is terribly wrong with what I just described.

#44 CJ on 05.20.14 at 9:24 pm

What got us here: low interest rates + relaxed mortgage standards

That’s it. That’s all I’ve got. No crystal ball on the future.

Charity to donate to: either SOS Children’s Villages (endorsed by Mike Holmes) or Habitat for Humanity.

#45 Terry on 05.20.14 at 9:25 pm

I think you’re being distracted Garth. Organized Real Estate is throwing you some kibble bits to get you on their side. You are obviously making an impact that they don’t like and I think this is another way they have come up with to soften you up and slow you down. Caveat Emptor Garth!

#46 Peter on 05.20.14 at 9:26 pm

I’ve got one…

Online information and background history: All home renovations / improvements over a specified amount (say $6000 for arguments sake) must be listed on the homes history online database including building permit number. This should force “flippers” to (a) actually get a building permit and (2) fully disclose what has been truly done to the home which the inspector can cross reference. This should help filter out some of the bad names out there when it comes to flippers putting lipstick on pigs and help potential lawsuits when it comes to full disclosures.

#47 sheane wallaces on 05.20.14 at 9:28 pm

1 k is 1 square feet of a crappy bungalow in To/Van City.

It is not worth the typing. Tell them to shove it up….

#48 Sweep on 05.20.14 at 9:28 pm

First they sub-con their research work to you, then you sub-con it out to the blog dogs….who can the blog dogs sub-con this out to…….if it gets swept far enough down the food chain, maybe the results will be diluted enough to be unintelligible….and become policy

#49 sheane wallaces on 05.20.14 at 9:33 pm


You should start every post with:
CMHC delenda est
as in
Carthago delenda est by Cato the Elder.

Who knows, after 5 years of repetition the idiots in power might get bored.

#50 Property Accountant on 05.20.14 at 9:35 pm

1. CMHC has to be reformed or scraped – just like US government is debating now whether to kill Fannie Mae & Freddie Mac or fix that ill system, so should we. Otherwise we , taxpayers, will be on the hook for CMHC debts. No bank would ever lend 95% of home value if it wasn’t for CMHC guarantees. So we have virgins getting happily in debt and banks promoting the scheme, as there are no risks …. apparently to anyone.

2. Independent body gathering real estate stats and publishing them regularly, just like we have StatsCanada publishing employment reports, GDP growth or CPI rate according to scheduled dates.

3. Regulation on advertising deals – Brad Lamb & others shall be accountable for offers or prospects they present, so as real estate agents promising great returns. Just like financial professionals, they shall be regulated what can be ethically presented.

#51 Vancouverbound on 05.20.14 at 9:35 pm

Who are the other 4 experts?
Can they edit your response?

#52 sheane wallaces on 05.20.14 at 9:35 pm

Ops, I forgot :
6. Fluoride in the water.

#53 clos on 05.20.14 at 9:36 pm

Debt advertising should include the consequences. bmo ad for people my age. Insinuating the biggest problem you have when buying a house is that the one you want might not be for sale. I also am seeing houseflipping apps advertised on facebook. This is stopping soon.

#54 Blair on 05.20.14 at 9:37 pm

Factors that shaped Today:
1. Low interest rates.
2. Treating agents/mortgage brokers as experts, not understanding they are salespeople.
3. Buyers lacking financial education.
4. Buyers letting emotion take over when buying.
5. Asking parents for advice.

Factors that will shape the future:
1. Low interest rates going up.
2. Lack of financial education.
3. Aging boomer behaviour.
4. More millenial renters.
5. Less certainty in job markets.

#55 Kboy on 05.20.14 at 9:39 pm

Well, I can think of at least one disrupter: Rental Suites.

I am 35 and what I have noticed is that 4 out of my 7 friends that have bought houses recently have renters. I don’t know what the stats are, but a lot of people who are young and have houses now have renters in a suite. When I grew up, none of my friends parents had renters. I think this is the new norm.

#56 cash0 on 05.20.14 at 9:43 pm

1. interest rates
2. interest rates
3. interest rates
4. interest rates
5. interest rates

#57 D gritton on 05.20.14 at 9:47 pm

Realtors to me are like used car sales people, I don’t care if your a sleaze ball as long as I can find all material information about the property from an independent third party for free:

1. We should know if the property is a foreclosure. If there are any other foreclosed properties on that street or condo building – if so how many.

2. We should be able to have access to past events that occurred in the house without having to use a Realtor or contact the police (e.g. drug house, murders that occurred in the house, natural events – e.g. persistent flooding that occurs every year in spring when the snow melts due to where the home is located).

3. Condos (new and old) should state, in the listing, how many units in that building or building complex were bought by investors to be rented out or stay vacant hoping to flip the property. How many units are currently being rented by tenants.

4. Condos should state how frequently the maintenance fee has been increasing over time (i.e. annualized rate of increase in maintenance fee cost). For potential home owners to get a sense of what the fees could cost in 5-10 years time)

5. When an offer is being placed, the broker representing the home owner should clearly state in writing they also represent a seller who has placed an offer on the home owner’s house. This information should also be presented in writing to other brokers and their clients who are placing an offer on the house.

6. Sellers should state if the house was built near toxic or contaminated land. As well as state if their are any businesses or social welfare buildings that have been built or could be built that would affect the price of the property (e.g. slaughter houses, halfway houses, government housing projects, noisy train/subway lines)

7. Property turnover, how many previous owners did the home have. Does the street or condo building have high home owner turnovers.

8. A website to list brokers or firms who have had disciplinary action for serious offences and report them in the newspaper like they do investment security violators.

#58 Potato on 05.20.14 at 9:47 pm

Here is my thinking: the main function of a realtor these days is as a gatekeeper to MLS data. That monopoly is just about all that keeps them in business — they have (or are in the process) of eroding their brand in nearly every other way.

Eventually, if they are not careful the data will get away from them. And in that world what will be left of their profession? They need to make being a licensed realtor mean something. It should be a mark of trust — as an uneducated consumer, I should be able to go to any old realtor and know that a copy of their license on the wall is a sign that I can trust the ethical handling of the real estate deal to come.

Conflicts-of-interest are toxic. In medical research if you so much as touch tobacco money you’re done — you can’t get another peer-reviewed grant to do cancer research, you can’t publish in the many journals. So my first suggestion is to ditch them. That will come in a few forms:

1. End double-heading a deal. A good agent likely should be a specialist in a neighbourhood, and will quite likely be able to bring buyers and sellers together on their own. But there is simply no way to have one person fairly represent both sides. Some brokerages have house rules where another agent from the office will step in to one side or the other, and even that isn’t going far enough. I suggest that the licensing body creates salaried positions for people to remove conflicts-of-interest: to oversee or take over an arm of double-headed deals.

2. Rebuild the commission structure. It doesn’t really make sense that a $1M property is twice as lucrative a listing as a $500k property when they’re both the same amount of work. And while a percentage-based commission aligns the seller’s interests with the seller’s agent’s (to some extent — a fast, sure sale will still be preferred by the agent over a marginally larger commission), it is very much against the buyer’s interest to have the buyer’s agent compensated as a percentage of the deal. The financial advisory industry is moving towards open, flat fees — realtors should, too.

3. Transparency in transactions. Bidding wars in particular: move to a more open auction format, or at least the ability to review competing bids post hoc. That will also eliminate the lingering fear of phantom bids. Update the MLS system so that no asking price is required: if it’s an auction, it’s an auction (though the seller’s may have a secret reserve), no need for phony asking prices only to later breathlessly drool at the “over-asking” delta.

4. Licensing rigour: there must be a way for consumers to get appropriate, independent redress if there’s an issue with one of your agents. And it must happen in a timely manner, with real consequences. Slaps on the wrist are slaps in the face. Of course, you’ll need better data verification and records, for instance evidence of competing bids, so the other areas will have to be cleaned up as well.

5. Data quality should be a much higher priority. How is it that nearly 2% of sales every month fall through in TREB’s reporting? That’s crazy. Moreover, MLS itself is just gross: a few kids working evenings while in school can review postings before they go up for spelling, grammar, and obvious errors (like 10,000 sqft 1-bdrm condos). Limited character counts died with newspaper classified, use actual words. Implement some minimum standards for a listing, take some pride in what’s up there.

Furthermore, as Garth will surely point out, overall data and reporting could be much improved. Don’t be afraid of averages and medians and quality-adjusted indexes all together.

6. Finally, don’t over-promise. Act as though a securities watchdog was involved. Posting fictionalized accounts of ridiculous “but possible” 400% returns to hook a buyer is despicable, even if there was some fine print about past returns not guaranteeing the future. In fact, question whether promising returns is your balliwick at all.

#59 Herb on 05.20.14 at 9:47 pm

Do they want to clean up the industry, or to be seen as wanting to clean up the industry?

I think you are being set up as a patsy, Garth. Remember the talk shows and round tables you subjected yourself to? Surely the people who set each switch leading to this train wreck know the switches to reset to prevent it. The Government will do what they ask, or will have to tell them what to do after the event.

Actually, it is a self-adjusting industry foul-up. Subsisting only on what they kill, they have reduced the “game” to where “kills” will be fewer and farther between, leading to the starvation of unsuccessful “hunters”, with the survivors having to hunt more realistically and successfully. We’ve seen Aggregator’s charts about numbers of salespersons and sales per.

I look forward to a repeat of the situation of the early-to-mid 1990s, when the number of RE agents in Ottawa, for instance, fell from 5,000 to 1,500. I remember it, but don’t expect to find that stat on an OREB site, just as you won’t find any significant decline in prices. But fall they did, about 25%, on the basis of personal experience. And the market settled down for 10 years.

Tell them to try truth and ethics, commodities unheard of in the contemporary RE industry, and to take their lumps, as their clients inexorably will be taking theirs.

#60 don on 05.20.14 at 9:50 pm

37 Sheane wallace. The price of something is not always an reliable indicator of inflation, For example beef prices in America are at an all time high, but apparently production is low. Has deflation and access to business credit caused the production to drop below base demand thereby increasing price? I am a fish farmer in Ontario and the same basic thing is happening. The credit expansion of the past has caused the value of land to rise which in turn has blocked out new entrants to the market. I am not producing more but the demand seems higher so the price is rising. Also the regulatory hurdles to entrance has blocked people from getting into the business. Banks seem to have money for home mortgages, but little else.

#61 The Patient on 05.20.14 at 9:50 pm

Top 5

1. Low interest rates
2. Over-sweet CMHC backstopping
3. Prenatal bias for “real estate”
4. The nesting instinct
5. Bias of “It’s different here.”

Needed changes:

1. 60% (not 100%) coverage for banks of assessed value of CMHC’d mortgages, with a hefty premium to the banks if they need make a claim;
2. bar for CMHC mandatory coverage if <30% downpayment, not <20%
3. Revised oversight of CREA, including mandatory listing of sales history, DoM and no re-listing under different MLS #s to mask price drops and DoMs.
4. No REALTOR sales contract to exceed 3 months
5. Appoint a National Real Estate ombudsperson who is actutally accountable…and vocal, not some federal turtle who never says a peep (Garth, you could do this.)

Which charity? Some sort of financial literacy foundation. I understand they're starting to crop up, thanks in part to F. He saw the need, and good on him for that. I miss him.

#62 Nemesis on 05.20.14 at 9:50 pm

#Disruptors. #YouNeverForgetYourFirstSemtex®Supreez.
#BeenThereDoneThat. #Leprechauns.

“After I had the GreaterFool Bomb Disposal Unit open it…” – HonGT

[NoteToGT: 5%? The Guild would thoroughly approve. Be sure to insist on FirstDollarGross on “TermsNoLessFavorable”. NoMonkeyPoints: ]

#63 DAN on 05.20.14 at 9:52 pm

#34 real estate chat on facebook

I feel the same way lately. It seems so ‘out there’ that it’s conspiracy like. Any home owner or aspiring home owner would say that you’re crazy for thinking like this BUT ITS TRUE.

I sit here in a coffee shop in a suburb plaza. Within this block there is a BeeMO, RBC, TD bank, ScotiaBank and CIBC. Every two blocks (6kms) there are another slew of banks. Why are so many banks required in such a small area? who’s funding them?

They are the landlords of all the mortgaged properties within the few blocks. Conspiracy like, yes, but think about it.

#64 Pete on 05.20.14 at 9:54 pm

Notice the question asked is basically what WILL happen to the RE industry, not what SHOULD happen. Very different questions. What should happen already would have happened if not for the tooth and nail fight from organized RE.

#65 sheane wallaces on 05.20.14 at 9:55 pm

I also forgot:
7. BOC and Marc ‘the talk’ Carney

#66 For those about to flop... on 05.20.14 at 9:55 pm

Garth why don’t you give them a heap of fact and figures but then don’t tell them how you arrived at your conclusions. In other words give them some of their own medicine.

#67 Real State on 05.20.14 at 9:56 pm

1. Low interest rates thanks to loose monetary policy significantly responsible for rising prices, not increased wages or an economy on fire.
2. CMHC ‘covers’ risk for banks, removing otherwise risk prudent banking decisions.
3. Lack of robust and trustworthy RE data to monitor the market and reign in expectations.
4. “US subprime is not in Canada so we can’t have a crash”. Cult belief of RE price increases forever.
5. A faulty political belief that real estate is the backbone of an economy, so if it’s juiced then prosperity follows. (Cart before the horse thinking).

#68 DAN on 05.20.14 at 9:56 pm

#7 Mark

Those guys are useless hacks. You’re probably aware that they attack other people now, proving that they were the ‘trolls’ all along.

#69 Edmonton Kween on 05.20.14 at 9:56 pm

How we got here:
1) low interest rates (people think they can afford a house now! Lack of financial literacy means people believe what banks tell them, but banks just want to make money, not protect the financially illiterate masses)
2) no / low down payment (poor people can take on a lifetime of debt now!)
3) long amortization period (makes things more “afforsable!”)
4) CMHC removing risk from lenders (banks dont care whi borrows money! They arent on the hook anymore)
5) lack of regulation and transparency (houses are “investments”. My realtor said so.)

Where are we going:
1) higher interest rates. (party’s over)
2) energy: energy costs are rising. (mcmansions will be expensive to maintain, and commute to. Hello condos)
3) economics: oversupply of unwanted assets. (Boomers will be selling essentially the same “lifestyle” -huge house in a suburb- at the same time and gen x+y wont be interested.)
4) crushing debt. (Kills buying power. Bankruptcy trustees will flourish)
5) location location location (who wants to buy in canada? BRRRRR)

#70 not 1st on 05.20.14 at 9:58 pm

#35 jc on 05.20.14 at 8:59 pm

Just a little tip, its well known that most of those oil sands are going to remain right where they are.

The oil patch can duck and weave all they want, but they mis-read the tea leaves on this one and the price will be paid.


1. Opposition to carbon fuels has never been higher.
2. Climate change reports coming out quite often now.
3. No pipeline capacity ready to go. All proposals bogged down and the earliest anything other than XL could be built is like 5 years.
4. All pipeline proposals are strongly opposed by native bands and environmentalists who are very well organized.
5. Alternative energy sources becoming cheaper and cheaper.
6. The people who we want to sell our oil to don’t want or need it.

#71 mishuko on 05.20.14 at 9:59 pm

1) access to historic info such as previous sale prices and land transfer taxes of a house for sale (interwebs?)

2) accurate reporting of sale/listings that are independently audited for accuracy

3) ombudsman

4) penalties for disservices

5) unbiased representation and dissemination of information

#72 Snowboid on 05.20.14 at 9:59 pm

I would like to see all the information on a property available online.

For example, here is a Zillow post about a similar area to where we bought in Phoenix:

There was also additional information about taxes, assessments, pest problems, etc – all online through county sources.

This allowed us to narrow down a list of 200 potential homes to 10 we wanted to look at.

In Kelowna it seems even our RE agent can’t get some information on a property until we put in an offer.

It’s a waste of time to go through the process of an offer to purchase and wait for information to be provided as part of ‘Subject to’ clauses.

On a positive note, they are starting to use DocuSign here in the Okanagan so most of the process can be done electronically.

#73 Chopper on 05.20.14 at 10:00 pm

#5 Dual Citizen In Canada on 05.20.14 at 8:10 pm

My biggest point, Garth, is that we need the industry to adopt a site like We need Remember the guy that said, “An educated consumer is our best customer.”?

Agree in the US you have and you get alot of info like DOM, last price sold for and when, etc.

Sadly in Canada the RE Cartel thinks it can hide all that info and screw the consumer. I also blame consumers for not demanding transparency and putting pressure on our government to regulate and police the RE Industry.

Canadians are wossies no backbone like out neighbours to the South. We like to be PC and polite total BS if you ask me.

Lower commissions, more transparency, the use of technology(Internet) to research before buying RE, these are things consumers want.

I just told [email protected] who was processing a mortgage renewal application about this blog and she wrote the address down and said she will check it out. I told her how it has changed my financial life and she was amazed by what I told her.

Just spreading the word Garth.

#74 sheane wallaces on 05.20.14 at 10:01 pm

#57 don

Sure the demand is higher as there are more money lent out due to the magic power to create money in a fractional reserves banking hence there is more money in circulation and higher demand for your product.

BTW if you hear of organic fish sold wholesale just ping me.

#75 sheane wallaces on 05.20.14 at 10:02 pm

1.1 square feet, damn it.

#76 Blobby on 05.20.14 at 10:03 pm


#1 – Allowing people to borrow more than 3 times their income
#2 – Fake real estate figures

Those 2 will do.

#77 AisA on 05.20.14 at 10:04 pm

Five points is too many.

What got us here?

1. Obscene abuse of CMHC and it’s intended purpose.

Where are we headed? It’s right there in today’s post.

1. “Houses suck off everything.” = unavoidable smoldering pit.

#78 sheane wallaces on 05.20.14 at 10:08 pm

#72 Snowboid
Transparency and relevant information? In Canada?
What an oxymoron.

#79 X on 05.20.14 at 10:09 pm

‘forces that have shaped the real estate industry over the past five years’
-low rates
-low downpayments
-bogus numbers from the RE boards
-morons in the media printing bogus Re numbers
-buyers borrowing from their RRSP/borrowing to get their 5% down

Next 5 years:
-rising lending rates
-any regulatory changes in downpayments/RRSP borrowing/CMHC lending standards
-change in buyer sentiment
-change in government oversight (as there currently is no oversight in the asset that Canadians have most of their net worth in)
-a non MLS controlled website that goes mainstream, and all info goes public (someone could gain current MLS access, run a program to download all previous MLS info, and try to work their new site forwards)

#80 sotiri on 05.20.14 at 10:11 pm

1- No CMHC
2- No CMHC
3- No CMHC
4- No CMHC
5- No CMHC
…and then everything else will take care of itself.

#81 Doctor Fierce on 05.20.14 at 10:13 pm

The 2008 financial crisis eroded or obliterated many canadians faith in financial investments. Simultaneously, the crisis prompted governments and central banks to enact policy that ‘goosed’ the housing market. In under two decades many people saw devastating losses in one class of investment and subsequent massive gains in another. As of 2014, for most financially illiterate, housing is the clear ‘winner’ – leading to the speculative heights we are now reaching. At least thats the way I see it.

#82 GF Tool on 05.20.14 at 10:13 pm

$1k? hah. Tell them you have an hourly rate, but you don’t publish the numbers, so they should make you their best offer. After all, they don’t want to miss out. Right now is a great time to Solicit Mr. Turner.

Oh, and be sure to get them to sign a contract so that they can’t go soliciting someone else for the next 6 months, while you are working together.


This times a million!

#83 game over on 05.20.14 at 10:15 pm

Pointing the finger at any one group is futile. Humans are so flawed it should not be a surprise that we have ended up here. Capitalism and the banking system is ultimately a game of Monopoly. THE GAME ENDS WHEN ONE PLAYER HAS ALL THE MONEY. Like the game, the rich get richer really quickly just before the end. You might point out that the fundamental problem is that game is over, we just don’t know it yet. We maxed it out and killed the world in the process. Oooops.

#84 pr on 05.20.14 at 10:18 pm

…I plan on asking for 5%.

Ahahah that is a good one!

#85 Nemesis on 05.20.14 at 10:18 pm

#Addendum. #JustForTheArchives.

#86 tkid on 05.20.14 at 10:19 pm

What led to this nutso situation?

A realtor organization that sends out bully emails to bloggers who use ordinary english words like realtor, so the commenters of the blogs have to use phrases like loam lizards.

A realtor organization that won’t release real statistics, backed by auditor sign-offs.

Banks that have insanely low mortgage rates, offer cash-back mortgages, and allow seniors to carry a mortgage into retirement.

All to ensure prices keep going up up up.

If the loam lizards want to not kill the golden goose, they should be encouraging house prices to remain even, with no price hikes. They should be discouraging bidding wars. Fellow bids should be made public.

This way the loam lizards keep making their commissions, the real estate market is unsexy but sober, and the sales and purchases continue. If prices keep skyrocketing the market will crash into a brick wall and there will go the Canadian economy with it.

#87 nancy on 05.20.14 at 10:22 pm

1. Limit Foreign Ownership to curtail money laundering
2. Heavily tax flippers who buy and sell within 2 years.
3. Canadian Mortgages not available to foreigners.
4. Higher interest rates on non-primary residences
5. CMHC not available for homes priced higher than $500,000.

#88 Bob Rice on 05.20.14 at 10:25 pm

Well, since the war is over (70 years ago), I’d get rid of CMHC altogether… I think the returning soldiers bought and sold those homes by now and are 6 feet underground…

Killing CMHC would right all this mess in about 12 months.. 20% absolute min. 25 absolute max amort.

Done. You’re welcome.

#89 Pooh on 05.20.14 at 10:27 pm


2. Wuss government (low rates, lax laws)
3. Ignorant-optimism (driven by a generation that hasn’t seen bad times)
4. Herd misconception that housing is an investment (opposed to a shelter)
5. Zero governance over the realtor Wild Wild West


1. Dismantling and regulation of the realtor industry – in every regard
2. Stringent governmental rules on borrowing
3. Shift loan accountability from CMHC to the lender
4. Eradicate flipper incentives (houses are for rain, not for mans greed)
5. Create an independent and unbiased collector and source of industry data

#90 jc on 05.20.14 at 10:27 pm

#70 not 1st on 05.20.14 at 9:58 pm

Well, you’re a little more bearish on the future of hydrocarbons in AB than I am, but it all points in the same direction.

#91 Canadiense on 05.20.14 at 10:28 pm

Now: the belief that realestate only appreciates, and it is a good investment.
Future reforms: none, clearly we are different in Canada

#92 GF Tool on 05.20.14 at 10:35 pm

#87 nancy on 05.20.14 at 10:22 pm
1. Limit Foreign Ownership to curtail money laundering
2. Heavily tax flippers who buy and sell within 2 years.
3. Canadian Mortgages not available to foreigners.
4. Higher interest rates on non-primary residences
5. CMHC not available for homes priced higher than $500,000
I’ve read all the suggestion but this is the ONLY one where I agree with ALL 5 POINTS!

#93 NoName on 05.20.14 at 10:47 pm

i hope that i am wrong, but i think its too late do anything. mass hysteria about re by people, media and rebords did huge damage our future. sometimes it feels like that gen x&y are at the point where they can’t afford to live in the country that they are born in.
i stumbled on this blog on aug 30 2011 and by reading it over the time i have come understand that world doesn’t work a way that is presented in media and marketed by interest groups.
I have spend lots of time trolling internet, reading, observing friends and coworkers in attempt to better understand mechanic that influence and average person. it didn’t take long to spot trend of misinformation that is readily available and packaged so elegantly that contained all basic elements that affect us in a way that many stear clear from making objective and rational decisions regarding re. last few years was perfect storm in making.
Public was bombarded with claims tha incorporated all following
Availability, of information on re that no one questioned origins and accuracy of claims.
Familiarity, we all new someone who made out like bandit on re
Memorability, claims true or not were vriten so good that me and homer simpson had no problem remembering them
Recency, think how often we read about bidding wars in newspapers
Sequence, buy house, renovate and sell for profit
Pressure, just think of peers or inla in-laws.
and best for the last
Contrast, low life renter vs proud owner

I hope that this rambling, make sense to somebody.

best for the last,

Ford also said the group home has driven property values in the region down by $150,000 “overnight.”

Read more:

#94 keelaboy on 05.20.14 at 10:49 pm

1. Low interest rates.
2. Low supply of houses.
3. High demand for houses.
4. I dunno.

#95 Len on 05.20.14 at 10:51 pm

Dear RealtorTM:

What is on your side?
1) Monopoly access to data
2) Template from provincial legal associations to fill in Agreement of Purchase and Sale
3) lock box to allow remote access to a property for viewing

That is it. Given the disruptive force of technology, how long do you think you can protect the above three?

You’d be better off consulting with travel agents, circulation services library technicians, and photo technicians. And the last two had actual skills.

Lobbying the government to protect your fiefdom is your only recourse here. Not sure the public is quite that gullible though but hey, desperate times and all….

#96 devore on 05.20.14 at 10:54 pm

In top 3 consumer trends in real estate in the future will be transparency or information and process, and real choice. It’s happening all over the world, and on other market types as well, but in Canada the real estate industry is moving backwards. Canadians are no different than other people. Once our real estate stops being the go-to for road to sure wealth, attitudes will change quickly, as people will want much greater value for their money, and the industry will not be ready.

#97 coastal on 05.20.14 at 10:54 pm

“I think Realtors have a credibility problem when some who identify themselves with the RE sell-side community go to various message boards and forums and troll ad nauseum, complete with the extremities of ad hominem.”

I agree but the realtors who are on the buy-side who troll the Victoria house blogs being mister nice guy giving out free weekly stats while trying to flog condos for developers and taking fancy pics of the building construction jobs while rarely saying a bad word about those who have gotten hosed the past 7 years buying at the top and are now down money or break even at best.

It’s pretty pathetic that they are allowed to post their bullshit when a financial advisor would never get away with they crap they do. No wonder agents are looked upon as sleazy salesmen with a 3 month course, the lack of professionalism reeks in spades. They need to be forced get their own blog and take responsibility for their statements to the BCREA.

#98 old gringo on 05.20.14 at 10:54 pm

Realtor versus buyer.

I see this as an organized offense against a disorganized defense.
Winner takes all, to the loser goes the spoils.

#99 not 1st on 05.20.14 at 10:59 pm

#90 jc on 05.20.14 at 10:27 pm

Well, you’re a little more bearish on the future of hydrocarbons in AB than I am, but it all points in the same direction.


Not at all. Ab will still be producing the 2-3 million bbls it has for a long time, half exported, half used domestically. Might get some down east end users yet.

But the 8 million bbl day expansion plan to the USA and China is done like dinner. This is what the patch was working toward.

#100 Aggregator on 05.20.14 at 11:00 pm

Ottawa Citizen – Jun 3, 1980

Premier flays interest rates

VICTORIA (CP) — The federal government is punishing Canadians for its own shortcomings by allowing interest rates to rise to artificially high levels, Premier Bill Bennett said Monday.

"It's a little like the father who goes out and gets drunk and then comes home and beats up the family," the premier told 400 people at the B.C. Real Estate Association's annual convention.

Bennett said while the federal and some provincial governments have done nothing to solve the problem, his Social Credit government's $200-million housing initiative was one effort to deal with the problem.

"Do you hear anybody criticizing that program, a program that will see 4,000 housing units built this year with the owners getting mortgages at 9.75 per cent?" he said. "The only thing I have heard is that the $200 million wasn't enough."


Let's face it. We're a nation of beggars who couldn't strive it wasn't for government-backed schemes to boost the wealth effect with appreciating home prices and ATM equity withdrawals. The question as to who's really responsible for inflation homes lies in this 1976 document written by The Housing And Urban Development Association of Canada (now Canadian Home Builders Association), which lists the building industry's great achievements as the following:

– Removal of NHA ceiling.
– Amortization period extended from from 35 to 40 years.
– Mortgage insurance fees reduced by 50%
– Loan ratios increases resulting in lower down payments.
– Loan on existing house broadened to include, in addition to purchase, improvement and alterations.
– Five year roll-over mortgage
– Increase maximum loans amount.
– Considering 50% of wife's salaried income when computing gross debt service ratio, subsequently amended further to include 100% of wife's income.
– Increasing maximum loans on apartment housing units.
– Agreeing to issue undertakings to insure or to make loans on houses where work has progresses from the first floor or joist stage.
– Reduction in sale tax on building materials
– 500% grant as rebate or portion of sales tax.
– Improvement in terms and qualifications related to the grant.
– Removal of restriction on high ratio loans insured by private mortgage insurers.
– Reduction of capital cost allowances from other income for new multiple rental units.
– Extension of AHOP to include private lenders in program.
– Extension of limited dividend type programs.

How can organized real estate address the issues when the issues involve investigating organized real estate and the building industry's lobbying and corrupted efforts to infiltrate public agencies to subsidize them? Why do you think the first thing Pauline Marois did as Premier was establish an anti-corruption unit to investigate the construction industry? She knew how out of control it was.

The only way Canadian real estate has a chance to reform itself, is if it comes from someone at the top, as it did in the United States when the Department of Justice sued the National Real Estate Association for limiting competition by hoarding the data. 

After NAR was sued and had to release detailed MLS statistics to third parties sometime in 2007, the company Core Logic found that NAR was overstating home sales for over a decade. This is exactly why Canadian organized real estate doesn't want to share data, because if they do, the market will quickly figure out any discrepancies in the data. I guarantee if Klump was put on public record and asked how many presales are trickling into resale data (which NAR later admitted was a large part of sales being overestimated), he will either run like rat and play it as an insignificant factor since nobody has the official data to audit sales.

And to think that BCREA, (probably the most corrupt and closely tied to the building industry and UN's sustainability ideologies) will do anything is a complete fallacy. Nothing will change until it comes from the top. There needs to be reforms to consumer protection acts that were removed from OSFI's mandate in 1990s and an Attorney General (since the Competition Bureau is intentionally underfunded and now a watchdog with no teeth against organized RE funding) that actually goes prosecutes private sector organizations for violation the law.

But none of that will happen, because the way our laws and acts our setup in Canada, it makes it nearly impossible for the government to pass any major reforms without the approval of the GG Commander-in-chief (Her Majesty).

So don't expect anything other then more looting of taxpayer dollars to keep the ponzi scheme going. I told you: the next government backed scheme is coming as Genworth's insurance limit will be breached later this year or next.

#101 Roman on 05.20.14 at 11:01 pm

Well, that’s easy how we got here: Canada is special.

Fixing is easy:
1. fire this guy who’s leading “a research”, as well as his whole department
2. close CREA
3. Shutdown CMHC (yes, banks should take the risk if they are so greedy)
4. Shutdown ugly
5. Publish database for free

300px images of 1 mln houses on this ducking
Just unbelievable.

#102 GenXer on 05.20.14 at 11:01 pm

They need your highlight the obvious for them? Ok – here goes:

1. Prolonged emergency interest rates – converted the mindset of the buyer from long term affordability to a focus in monthly carrying costs. Longer term rates are causing people to believe they can carry large mortgages indefinitely.

2. CMHC Mortgage Insurance and collatoralization. In verses the risk profile for banks to make high risk buyers more attractive to lend to, allowing more credit to flow to those with small down payments.

3. Reduced down payments – make it easier for borrowers to clear the barrier to entry and take advantage of the programs above to over leverage on housing.

4. No tax on primary residence capital gains – makes housing gains the most lucrative investment gain possible – pulling funding away from investment in the markets where it would propel the economy.

5. Unchecked foreign investment – like it or not, a significant % of the market is driven by foreign demand. These are not markets we have reciprocal agreements with – iran, Russia, china, and too much speculation is taking place with these foreign funds. Forced tracking of these funds is required to allow the government to assess the impact of foreign funds.

#103 prairieboy43 on 05.20.14 at 11:08 pm

Minimum 25% down payment.
True Real Estate Commission.
First Aid Course realtors, annually.
Defensive Driving Course for Realtors, Annually
Drug Tests mandatory for real estate industry. (same as energy industry). Annually.
Hearing test annually.
This stuff never ends.

#104 Inglorious Investor on 05.20.14 at 11:09 pm

Five Reasons For The Bubble

1. Government corrupting the markets
2. Central banks corrupting money
3. RE boards corrupting price discovery
4. Realtors® corrupting the sales process
5. Mothers in law corrupting house virgins


1 – 5. End the corruptions.

#105 West Coast on 05.20.14 at 11:10 pm

How did we get where we’ve gotten? Please give a moment’s thought to ‘economic neo-liberalism and social conservatism’.

#106 Rabbit One on 05.20.14 at 11:10 pm

I want Real Estate agents to stop calling themselves as
“Financial / Wealth Advisors”

#107 Rabbit One on 05.20.14 at 11:13 pm

As many already mentioned above, Real Estate industry needs to be more regulated, but wait a second,
Buyers / Sellers may not want that way.
For last 10 years, both are the willing participants!

#108 Mr Buyer on 05.20.14 at 11:13 pm

Since a sale can be a private transaction between two private citizens I am hard pressed to find justification for such private transactions to be fully disclosed to the public at large. Certainly the tax man must be given his due and can require records on behalf of the citizenry to achieve such ends but this end can be achieved in a confidential manner rather than in the public eye. Now when a government agency, such as CMHC, acting on behalf of the population it serves backstops such transactions I have no problem with full public disclosure of any and all present and historical data regarding houses being “purchased” in such transactions. In short, as a prerequisite for any house to qualify for any sort of insurance from CMHC all data concerning past and present sale and maintenance of a house be in the public domain and continually updated. The backstopping of the deal by the public entity makes the deal a public concern.

#109 Inglorious Investor on 05.20.14 at 11:15 pm

A warning for Garth regarding the request…

#110 DJB on 05.20.14 at 11:20 pm

What is Garth’s integrity worth?

#111 takla on 05.20.14 at 11:22 pm

Force the RE agents to publish wether a home listing is a forclosure or not.This is the hiden side of realestate nobody wants to talk about.Market forces should be allowed to absorb these growing numbers of foreclosed homes @auction prices to clear them out of the system ,not keep this info from potential buyers hopeing to support pricing.
There are currently hundreds of foreclosures in the Vancouver /lower mainland areas .

#112 Mr Buyer on 05.20.14 at 11:23 pm

As for a real-estate entity soliciting data from elements of the public intent upon reforming the business of real-estate well that could be just fact finding with intent of getting out in front of potential repercussions of widespread economic fallout. It could be detrimental to be caught flatfooted in a potential political environment that would see a highly diminished return on lobbying dollars. It would be more effective to try to anticipate more likely and deleterious changes in the present more favorable environment and counter these potential measures now. Call me paranoid but getting a clear picture of an adversary’s disposition and potential or intended strategies and tactics is just good soldiering.

#113 45north on 05.20.14 at 11:24 pm

hmm, Disruptive Change Report

1. a housing pool that has constantly expanded and improved – more houses, more features (more bathrooms, more efficient, more reliable heating systems, electrical systems with more outlets, 100 amp, 200 amp service), bigger houses (more square footage), wired for phone , cable and computer services, better insulation

2. mature infrastructure capable of constant expansion – transportation (more roads, more subways, more public transportation)
– electrical system that has constantly expanded to support more houses, each house with an upgraded wiring system
– natural gas system which has constantly expanded
– phone and cable systems which have constantly and efficiently expanded, whereas 20 years ago phones were regularly restricted to local calls, now intercity connections are common and usual across North America, quantum leap in computer communication

3. constant expanding pool of people with access to credit

4. constant expanding debt

5. facilitation of government and banking industry to supply credit

next future

#114 Cici on 05.20.14 at 11:28 pm

Sounds to me like the RE agents are starting to go hungry and complain to their boards. Properties are moving more slowly, and meanwhile, despite expensive advertising campaigns, greedy and/or desperate home owners are flocking in ever greater numbers to ForSaleByOwner outfits. This report will do the association a great service by showing agents through third-party accounts that the problem is their own, and nobody else’s fault.

It looks like the age of easy RE sales and commissions is drawing to a close.

Here’s my contribution, and I vote for the funds to be allocated to national food banks…especially in Vancouver and Toronto where out-of-work agents are going to be putting increasing pressure on food bank services.

How the problem started:

#1. Lax lending standards that have contributed to too many subprime-quality loans. The CMHC has overstepped its mandate in a dangerous and irresponsible manner that is choking the rest of the economy. Government backing of forty- and thirty-five-year mortgages has also been a major enabler to insane prices that are out-of-wack with household income.

#2. Lack of industry regulation that has led to manipulated bidding wars, upward pressure on prices without healthy and proper fundamentals to provide long-term price support, skewed stats, lack of transparency and so on.

#3. Lack of bank regulation on the mortgage portfolio side of the business. Banks have been overstepping their mandates by allowing people who should not be able to qualify for a CMHC loan to do so anyways, and by offering secret unpublished interest rates to entice virgins into signing the dotted red line. This has placed way too much risk on the average tax payer, and on the economy in general.

#4. An overwhelming majority of agents who are arrogant and greedy, and who barely do anything to help their clients buy or sell. By putting enormous pressure on their clients to buy without home inspections or other conditions, and by demanding excessive commissions for a job not-well-done, they have successfully convinced the masses that For SaleByOwner is the way to go.

#5. False and misleading ads by realtors and developers with no solid basis to support their bloated claims.

What the future should bring to protect buyers and ethical realtors:

#1. More regulation on the banking side in terms of loan qualification, i.e., proof of income, source of downpayment, etc.

#2. Restrict CMHC backing (i.e., 10% minimum down payment, demand greater oversight in terms of bank/lender mortgage qualification (i.e., tighter qualification measures), and increase CMHC premiums.

#3. Free, credible, well-researched and transparent stats available to the public and overseen by an independent body.

#4. Make bidding wars illegal unless all data is available to all parties.

#5. Introduce a code of ethics that agents must respect and follower in order to practice and receive commissions, and introduce a new commission structure to ensure that agents deliver the goods before being able to cash in on the prize.

#115 Tri State Pat on 05.20.14 at 11:28 pm

How we got here,
1) Rates were kept too low, trying to encourage business.
2) FIRE economy kept us away somewhat from the 2008 pit of gloom. Created some form of employment, albeit not the right kind, like manufacturing.
3) House prices kept high, helping retiring boomers in getting a much needed nest egg (which they don’t have per se).
4) Less rigorous journalism/media practices. It’s hard to find good data today. There’s just a lot more of opinionnated drive-by-media propaganda out there.
5) A government unable to admit that it was wrong in bringing in the 40 year mortgage and not increasing the minimum down payment required.
6) Accepting intense materialism to dictate what we need to have to be happy. I blame the media here again.
7) A population that has somewhat lost its interest/purpose in things other than real estate.
8) The increase of more alternative forms of lifestyles involving more reconstituted families that need an increase in households. More people living alone in a condo with a cat or dog.
9) CMHC’s shameful involvement in backing up jumbo loans. SHAME! Million dollar houses don’t have to be supported by the taxpayer!
10) The banks are too powerful. There needs to be a check and balance (pardon the pun) on the industry. Shareholders will have to understand that when the rates are low, money’s cheap and banks make less profit. Accept those consequences. Loans were given to Americans that could fog a mirror before their crash. Look what happened…
What could be done from here:
1) Rip the band-aid off quickly. It will hurt less in the long run. Increase down payments to 20% like it used to be.
2) CMHC back to what it was supposed to do; helping people , not gaming the system.
3) Introduce Zillow in Canada. Even if the data can be older, it will educate people and give them “something” to chew on.
4) Control foreign ownership of real estate. If you buy a house here you have to live in it a few months of the year. In international business it’s called tariffs and they are there for something.
5) Have citizen’s involved in new developments in their backyards. Developers are way too aggressive in building condos/houses/mansions with little forethought. Believe me that’s what happened in the States. Most contractors once they were done building a house they just built another one because they didn’t have anything else to do.
6) Don’t use RRSP money for down payments. RRSP are there so you don’t have to eat cat food when you’re 75.
7) Have real estate agents take harder courses similar to what was done in Quebec not too long ago. That will help in weeding out some of the slime.
8) Money from parents for kids buying houses should be limited/controlled/regulated.
9) Hold the banks responsible for the possibility of a bad loan. They need more skin in the game.
10) Raise the God Damned rates.

#116 statsfreak on 05.20.14 at 11:32 pm

Trap. Yeah. Definitely a trap.

Actually, my suggested response is a completely convoluted, long winded/rambling and full of baffle-gab type report. The same as they have been stuffing it to us with for years! (They deserve a little of their own medicine). Heck, I even offer to type it up for you and do some fancy-schmancy formatting to make it look we know what we are doing here at Blog Dog Central.

#117 statsfreak on 05.20.14 at 11:36 pm

#87 Nancy…
1. Limit Foreign Ownership to curtail money laundering
2. Heavily tax flippers who buy and sell within 2 years.
3. Canadian Mortgages not available to foreigners.
4. Higher interest rates on non-primary residences
5. CMHC not available for homes priced higher than $500,000.
Yeah, I am with you girl.
Would also add minimum 25% down (CMHC or not).

#118 gus on 05.20.14 at 11:38 pm

watch the trap. without rolling back the prices to normal . there will be no fix the RE industry.

#119 JL on 05.20.14 at 11:40 pm

#13 Frustrated

Good idea ” #13 frustrated” real estate specifically should ignore centuries of common contract law and ignore the principle of an “invitation to treat” and consider a list price as an offer that can be accepted by a buyer.

Well thought out.

#120 Angela on 05.20.14 at 11:43 pm

The mess of the realtors is a function of the whole real estate Ponzi scheme. If it weren’t booming, it wouldn’t be so lucrative for them and there wouldn’t be such a great interest in keeping the ride going. The real estate organizations have gotten fat by exploiting a situation that was not of their making. Low interest rates and the invention of the 35 and 40 year mortgage were what started the machine up. Sounds like a whole bunch of finger pointing, doesn’t it. Interest rates started it! But were it not for a low bar to entry, we wouldn’t have had a boom in condos, which turned around and started increasing in value before the ink was dry. So then we all got hot and excited about seeing lineups for presales. When Rumpelstiltskin ran out of straw they started paying people to make the lineups. They’ve got called out, but there’s been no repercussions for the false advertising. Because no one cares. Really, do we really care anymore? I have finally decided to get on with my life and stop speculating what the RE market is going to do.

#121 just say no on 05.20.14 at 11:44 pm

maybe all those 50+ year olds should never have been allowed the 35 and 40 year mortgages? Using rental suite income to increase the mortgage amount? All mortgages should have to be paid off by the age of 65? Or the year employment stops? I live within the 90 rule and home debters can keep the mess they made! Not my problem and I can sleep at night knowing I did not screw anyone over lol! Business today is nothing to be proud of.

#122 Expat watcher on 05.20.14 at 11:44 pm

It seems there are a number of consistent replys. I would suggest an online poll/questionnaire to get a feeling of how strongly people feel about the particular issues. Pass the results on to those asking for your input.

#123 Valleyboy on 05.20.14 at 11:45 pm

Nice Garth,

They obviously read your blog so I’d take the grand lol. Sounds like they wanna learn some better sell tactic’s.
But after all the cash the realtor cartel has made in the last 10 years I’m sure they could offer you 10g.

1. Make sure to counter your offer least twice.
2. Make sure you read the fine print.

Some good post above.

#124 Kyle on 05.20.14 at 11:45 pm

New Yorker recently said it’s all about the 1% parking cash here in Vancouver:

#125 JL on 05.20.14 at 11:46 pm

For a period of time I believed that CMHC was the reason for artificially low interest rates because banks effectively took on little risk in residential mortgages.

However the fact that private insurers (GE) offer the same mortgage insurance suggests that in the absence of CMHC more private entrants would fill the gap.

Maybe this whole conversation is pointless. Everyone here is trying to identify why prices have become insanely high and what the industry should do etc… Maybe the industry has nothing to do with it and we’re trying to understand human behaviour and emotion. EVERY business wants peoples’ money and they all spend billions advertising to get it, has the real estate industry really done such different things then everybody else in convincing 7 out of 10 people to buy?

Garth’s argument about the numbers being secret so people can’t make informed decisions, etc… sure maybe that’s true, but would that really make a difference? Look at the past 5 years, there are CONSTANT articles in the news about the real estate bubble in Canada, and no one cares, is this the industry’s fault?? Are they really so good at spinning news or are people simply undedicated and intellectually lazy.

#126 Expat watcher on 05.20.14 at 11:47 pm

replies…and a spell checker for your website

#127 Marco Polo on 05.20.14 at 11:48 pm


you don’t need five recommendations on Canadian housing, just one.

And it’s this: ” don’t be a debt crack whore “.

Fairly simple.

#128 KG on 05.21.14 at 12:02 am

@ #19:
1. CMHC and complicit government

#129 T.O. Bubble Boy on 05.21.14 at 12:04 am

The task is to create two lists of the top 5 things that have created the kind of housing market that we have today, and what will change it in the years to come.

Top 5 that shaped today:


2) Generational lows for interest rates

3) Financially Illiterate people – investing in RE because their parents told them, because they are scared of stocks, because RE always goes up, etc.

4) Home Reno insanity – including HELOCs everywhere, countless HGTV shows filmed with government tax breaks, “Economic Action Plan” (home reno tax credit), etc.

5) Realtor propaganda – HAM in helicopters, “buy now or be priced out forever”, “they’re not making more land”, frankenumber, etc. etc.

Top 5 for years to come:
1) Rising Rates
2) Canadians move on from the RE obsession — HGTV shows get cancelled, media turns negative on RE
3) CMHC shrinks
4) Edward Snowden moment… somebody releases the data to prove/disprove HAM buying and other RE stats
5) Debts come home to roost – defaults, defaults, defaults

#130 Puzzled in BC on 05.21.14 at 12:07 am

The single biggest factor in the ever inflating RE bubble is the CMHC and all Gov. interference. The lenders (banks) AND the debtors (“house hornies”) can transfer the credit and price risk to Gov. sponsored/guaranteed entities(TAXPAYER!) => Privatizing of profits and socializing of risk and cost. A perfect example of “moral hazard”.
The pricing process becomes completely distorted, and as a result, many fiscally prudent people living within their means will be punished when their taxes and assets will be forcibly collected to pay for other people’s greed and folly.
The second underlying mechanism is the debt fueled expansion of the credit and money supply. Unfortunately most countries’ governments operate the same way – party today, the consequences be damned – “those will be my successor’s problems…”
Do people just get the politicians they deserve…?
And, sorry Garth, I do not share your confidence in the overall viability and integrity of this fiscal and monetary system. In the end basic laws of economics will be like gravity – an inescapable, natural force. Unsustainable debt, private and public, will be unpaid; and overreaching, invasive political power will fail.
Political (and public…) disregard for property rights, reason and logic WILL have consequences.
When this system fails, it will not be the end the world; but to many people losing their assets, it will feel like it.
My hope is the right lessons will be learned, finally: all forms of socialism lead to collapse when the substance has been consumed.
Things that can not go on forever, will not.
When will it end? How? I do not exactly know. It is the nature of lunacy that is extends beyond a reasonable man’s expectations.

#131 squidly77 on 05.21.14 at 12:09 am

10% of the realtors tarnish the other 90%.

Stay far away from realtors that behave in an embarrassingly unprofessional manner.

Respect for both the buyer and the seller, along with respect for public opinion, even if negative should always be paramount with realtors.

Oxy-moron I know.

#132 Jon B on 05.21.14 at 12:10 am

Why does this real estate association need to seek out five “experts”? Are they really that incompetent? I’m suspicious of their efforts to reach out to others to report back to them on what is completely obvious. I suspect this report will, like the RE stats themselves, be manipulated. Do you want your name on that GT?

#133 victor prentice on 05.21.14 at 12:13 am

Got us here:
2. Government meddling in mortgage rules
3. Decades long currency depreciation by gov policy
4. Benefits of owning your own place (and paying rent to the banks)
5. No taxation of gains on sale of primary residence

1. Greater competition among real estate brokerages
2. Quality control of realtors data
3. Asset deflation
4. Greater use of social networks for sale by owner
5. Greater use of inspectors

#134 NOTHING SURPRISES on 05.21.14 at 12:28 am

How the market got to where it is!

1. Allowing too small of a down payment

2. CMHC taking all the risk from the banks in case of
mortgage default.

#135 Freedom First on 05.21.14 at 12:41 am

I don’t know how Garth feels, but for myself, when someone tries to blow sunshine up my a$$, I see them as only talking to me as if I am stupid. As you can probably tell Garth, they really really wouldn’t want any suggestions from me. Thanks for showing us this farce Garth.

#136 Mack on 05.21.14 at 12:44 am

It’s not Vancouver anymore

#137 D.D. Corkum on 05.21.14 at 12:47 am

My suggestion follows.

Frequent portrayal of real estate as an “investment” without following the ethical and regulatory standards expected of an investment dealer.

Divide the industry into investment and consumer segments. The former would face greater regulation but be permitted to forecast the value of a property for the purpose of investing. The latter would not face the same regulations but be legally restrained to describing the past and present value of a property for the purpose of buying or selling a primary residence.

Pro: Dividing into two camps will interfere less than imposing “investment-like” regulations on the whole industry. Also, I would expect that discriminating between investor and consumer needs would eventually lead to these sub-industries performing better than a single combined industry would on its own.

Con: It requires crafting two sets of regulations which takes more time and effort than a one-size-fits-all approach.

#138 Happy Renting on 05.21.14 at 12:51 am

Agree with others, this feels like an attempt to make you one of them, or to at least take away your teeth.

Whatever you give them, make sure you stipulate they cannot edit it or publish only a portion of your work.

#139 Entrepreneur on 05.21.14 at 12:51 am

A wolf in sheep clothing, that is what I would call it. The association knows what to do; they are playing innocent.
I agree with most bloggers, watch yourself. Your name might get used and in the wrong way.

I say keep the advice coming and just tell the association to read your blog. Maybe they will learn something but I am sure they already know what to do.

#140 Ontario's Left Coast on 05.21.14 at 12:51 am

Hold out for more cash, Garth – You’re worth it! Besides, think about your overhead: a six-figure proofreader and the bomb-disposal unit… Make sure there’s a little something left for you!

#141 Dean Mason on 05.21.14 at 12:54 am

A primary residence may it be a house, condo, townhouse etc. is a place to live and is an asset but is not an investment.

There should be mandatory document signed by all parties acknowledging and accepting this.

Real estate commissions should be paid maximum $5,000 excluding H.S.T. upfront and the remainder at the end the end of 5 years. This way they have more risk and skin in the game.

There should be a 50% speculation tax rate every time a property is bought and sold within 10 years. This would be based only on the gain and primary residences would be exempted but only for properties valued at $400,000 and under.

This amount would be indexed to inflation every year.

All debt payments and debt loads from all sources ,personal and business must be included in calculating the determination of affordability for the total cost of monthly mortgage, property taxes, utilities etc. costs.

Anyone using RRSP’s for real estate purposes will not qualify for CMHC mortgage financing at a 2 to 1 ratio.

Currently the maximum amount is $25,000 per person so for a couple, they will lose $100,000 in CMHC mortgage financing.

#142 Andrew Woburn on 05.21.14 at 12:56 am

People have never had such access to information literally at their fingertips so why do we think more disclosure and more websites will change anything? It is all available if you do your homework. If you are a buyer your realtor can get you any MLS information you need if you can’t get it from a provincial website.

If buyers won’t ask, won’t read and won’t research there is nothing you can do for them. Nothing is forcing them to buy burgers at foie gras prices. It’s not really the government’s job to fix stupid. That’s how we got where we are today where it’s always somebody else’s job to protect you and never your own. People have been taken by con men at the bazaar for centuries. It is the only way they learn.

I wouldn’t scrap CMHC. I would bring it back its original purpose which was helping young Canadians get a place to live so they could breed more young Canadians. A maximum guarantee of say $200,000 capped at two thirds of the purchase price for first time buyers should cover bona fide starter homes while forcing lenders to have some skin in the game.

#143 ozy - my top 5 on 05.21.14 at 12:57 am

1. Trust but Verify. RECO (or gov.) should follow-up with a mandatory survey trying to catch agents that do not follow their own code of ethics, for example DID THE AGENT PUT CLIENTS INTERESTs FIRST? And Investigate deeply when not clear.

2. Trade the poker game to transparency. RECO lawyers should pave the way, e.g. write a document on DIRECT BIDDING, where all parties like buyers bid in the same room. 5% deposit required to register for the bidding, going twice, going once, sold!

3. Prohibit predatory selling by home and condo builders. Customers should actually be advised not to sign anything unless their agent advices them properly.
Then a lawyer review of the contract should be insisted on and paid by builder. The consumer will fork the cost if they do not endup buying.

4. Education: keep agents in school more than 3 weeks. like 6 months will be better, allow them to grasp moral concepts like ethical selling, etc

5. Asking price should mandatorily be posted on for sale signs. Same, the sold price should be added when SOLD. This way, all consumers are informed first hand.

#144 ozy - my top 6 on 05.21.14 at 1:02 am

6. make SPIS disclosures by seller – mandatory Canada wide

#145 Tedfiftyfour on 05.21.14 at 1:05 am

Ohh Garth, you really do set the blog dogs up. Unless you intend to manipulate the market to prevent sellers from advancing through personal financial gain this entire exercise is a waste. It’s capitalism in its finest hour.

Enjoy it, millions of Canadians have taken their hefty tax free profits and now you want to kill the goose. Sellers who are also blog dogs are not offering up their gains out of some sort of guilt. Hypocrites all, you included.

#146 John Prine on 05.21.14 at 1:07 am

Then perhaps the $35,000 commissions will finally be trimmed to something reflective of the actual work.

$3,500 in most of Canada outside the largest cities is closer to the truth for most realtors, some have houses listed for a year and by the time commissions are paid there is often no profit…Don’t forget the $600 to $1,200 per month just to stay at work, a lot of people think being a realtor is just easy money….It’s not for most.

#147 Scully on 05.21.14 at 1:13 am

Garth, I smell a rat. The only thing I hear in the industry is talk of less regulation and how the government hinders their ability to prosper. It’s an industry built on self interest. They’re all salesmen. If they don’t sell they don’t survive. Everybody has to put food on the table. That clouds objectivity, which makes me wonder about this so called proposal. The last few years we’ve all been witnessing the ultimate spin. Be careful.
Keep up the good work.

#148 Joe on 05.21.14 at 1:13 am

You don’t need and sales people….
Mls should be public…….
Standard purchase and sell agreement form and just lawyer to check the papers and here you go…..

Simple but not possible in this system…Brokerage companies CAN’T dis·ap·pear

#149 winterpeg on 05.21.14 at 1:13 am

So far “The patient” #62; “Edmonton Kween” #69 and “X” #79 have summed things up nicely from a practical point of view, as I see it, though there are alot of great posts.

#83 Game over”said: “Humans are so flawed it should not be a surprise that we have ended up here.”

Would it be safe to say that most humans respond to external controls?
So, in the future:
1) influences such as shifting demographics will in turn, influence the market: boomers
2)Changing the banks’ and CMHC lending rules should, in theory, change the real estate industry and peoples’ buying behaviours.
3)Changing rules for and marketing and selling in the RE industry should, in theory, make the market a fairer place for consumers. (The hard core capitalists could cry “foul” on point 2 and 3, railing against government intervention, but tough beans)
4)Making Financial literacy mandatory in schools might improve people’s awareness of money. Also there should be more shows making money management look “sexy” and less HGTV.
5) Perhaps a market correction and the fall out from it will shape the way people view real estate by default: eg: it may eventually become normalized to rent rather than own as in Europe.

#150 Oceanside on 05.21.14 at 1:13 am

42 Roger_Home_Inspector on 05.20.14 at 9:17 pm
Mandatory 30 day opt out period after the signing of an agreement to purchase.

Great news for sellers, maybe think a bit before purchasing…..

#151 RealCanadianSavings on 05.21.14 at 1:17 am

1) CMHC was allowed to get out of control.
2) Data on home sales has been and is inaccurate and non existent.
3) Consumers have had a false sense of confidence in real estate (and that the govt will fix any future problems)
4) Realtors fees and marketing is asinine, they do this because they can.
5) Interest rates have been kept artificially low

1) CMHC reform ( 20% minimum down, max house price, must be a ci izrn to use, limits on borrowing based on income)
2) Interest rates allowed to rise
3) A requirement to have data transparency
… And as a result…
3) buyer sentiment will change
4) Banks and Realtors won’t be able to make false claims or lie about data

#152 Turtle on 05.21.14 at 1:18 am

Go back to the old school system: mortgage can’t be bigger than three times gross family yearly income.

This rule by itself keeps everything in order. If your family income is $100k/year than you need to come up with $400k down payment on $700k house. It is actually possible if you just sold your previous house and cashed in $400k. And it is not possible if you are a RE virgin.

People can’t jump above their heads. Start slow… baby steps… Want to buy a place to live? Buy something you can afford (all bills, all groceries, childcare costs, savings etc.). If you can’t afford – stay in the same market and rent OR move and buy somewhere else.

I don’t think the offer is a trap. Everybody knows RE is going to collapse. They know it too. And there will be tomorrow after all.

And I agree with everybody above me: “Transparency!”. You can’t say it any shorter. It is a must.

#153 johnG on 05.21.14 at 1:20 am

The commission of the ‘buyers’ representative should increase only based on how good the house is for that individual purchaser. That’s hard to quantity so let’s just say that the commission is related to how much money is saved. That is the buyers rep is motivated to get price down.


#154 Kilby on 05.21.14 at 1:20 am

It seems that most everybody commenting doesn’t want to take responsibility for their own financial well being. You don’t need to buy a house or get a big mortgage, it is your decision. Are so many here upset because they overextended themselves and are looking for someone to blame…..

#155 Meanwhile, in the real world... on 05.21.14 at 1:28 am

Garth, as soon as you accept any money from the RE Association, you are officially working for the them. And, as such, this blog likely becomes a conflict of interest in their eyes. Sounds like a plan to subversively discredit you in the future.

You would be the greatest of the fools to accept any money from them.

#156 Serenity Now on 05.21.14 at 1:49 am

1) DATA – In god we trust, for everything else show me DATA! Needs to be accurate, auditable and regulated. How can you have a reputable market based on emotions and data where the error bars are greater than the values you’re publishing.
2) Regulated listings system. I’m sick of seeing the same places being listed and delisted 5 times a week to make it constantly look like it’s a new listing. Need listing price history, days on market. How do real estate agents get away with hoarding this information in a supposedly free and open market.
3) Banks handing out mortgages like needles at safe injection sites in east van. No risk to them, let the buyers dig themselves out of the hole later as interest rises. Keep lowering interest rates as prices rise to get as many people hooked in this time of rock bottom rates. Cmhc was created to help war vets buy houses, not to help a 22 year old new grad buy a 700k house.
5) More data

#157 Lobster Man on 05.21.14 at 1:51 am

Government policies are the essence of the RE “problem”. Government policies favour the RE industries, which have strong lobbies etc. We have tax-free gains for “principal residences”. Why? Level the playing field! Tax all non-registered entities for their gains (and perhaps allowing the inclusion rate to fall way below 50%). Tax the gains of all principal residences. And watch the capital allocations starting to shift, and with luck, to other more productive sectors of the Canadian economy. We have a very basic problem in the Canadian economy over the last few decades – “misallocation of capitals”, introduced by your voter-friendly politicians, with very “visible hands”. Capital gains tax on principal residence is bitter medicine. But which medicine isn’t bitter?

#158 Spectacle on 05.21.14 at 1:56 am

Thanks for blogging Garth.

It’s actually VERY sinister.

For example, Google the line, ” Journey of Discovery Agenda 21″

From the line in Moldowans , United Nations Agenda 21, scripted note, ” I am part of the team leading a significant research project on behalf of BC organized real estate called the Journey of Discovery.

You’ll find this UN Agenda 21 corrupt scam that has taken over government and countries alike.

It’s from:
Or some version of that….there’s millions more.

“In groups, students undertake a “Journey of Discovery ” to report on aspects of the selected issues in the local community and, as far as possible, some of the causes of the problems. Students can fill in the observing reality chart (based on their journey).”

Moldowans hasn’t a clue what a pawn in the social manipulation that he is, that is destroying our nations and culture. The system of social control has been perfected, and used in very significant point of influence to control and destroy us.

It gets worse and darker the more you see from the United Nations Agenda 21. It’s not about the environment….. What are they going to do now. Don’t work for them Garth. Aggregator, anything to add here?

Be well people…..

#159 TimV on 05.21.14 at 2:09 am

Probably not on the top 5, but nobody else has mentioned it — the mostly unregulated home inspection industry too often slaps a “good to go” sticker on houses that are really major fixup + reno jobs.

1) It should be clear what it means if someone markets themselves as a “certified home inspector”. 2) Sellers home inspections should come with a mandatory disclaimer that it was paid for by the seller, who may have had a financial incentive to direct the home inspector away from problems with the property.

It seems plausible to me that more regulation may come to the industry in the next 5 years.

[Of course, I know that this does nothing to help a buyer who does not get a home inspection done, but so long as there are people who paid good money for a bad home inspection, then it’s hard to advocate and tell people to do it — I’ve heard it said “you know what the home inspectors going to say, so why bother”].

#160 Spectacle on 05.21.14 at 2:25 am

Well…you asked for it, & thanks G.

Had to add another link.

Now, a definitive link between UN Agenda 21, real estate manipulation, and Garth’s blog.

Don’t fall for it Garth, or fellow blog dogs.

Regards all

#161 flatlander on 05.21.14 at 2:43 am

-full and unfettered public access to all MLS listing, sales and land titles databases
– disclosure of identities of all parties to every real estate transaction as well as commissions paid.
– same regulatory standards should apply to realtors and developers as to publicly owned corporations.
– advertising which implies any kind of return on investment should be banned unless the return in guaranteed and backed up with sufficient capital in escrow to fund the promised returns.

#162 Mike T. on 05.21.14 at 3:04 am

1. Government control of interest rates.
BoC sets interest rates not Harper

This reader is in the camp that this is a trap or set up – seems too convenient.

But if they must know

1) Policy by (RIP) Jimbo – the coordinated western housing bubble policy
2) The whole ‘you are less than’ unless you owe 1 million for a termite dump
3) The cozy relationship btw realtors and pretty much all media that relies on ad revenue
4) Television house porn
5) Access to way too much credit

#163 Steve on 05.21.14 at 3:12 am

Read Peter Schiff “The Real Crash”. That should be enough.

If not…

The past: CMHC and government tinkering with the markets to allow this to happen.

For future: The lending rate (I wish) was regulated into two tiers. One for actual loans to borrow on for real non-real estate investments that would be lower and the other for borrowing to cover mortgages, consolidation loans and the like.

That is all I really have for now.

#164 SquareNinja on 05.21.14 at 4:54 am

One of the past forces that have shaped real estate in Canada in a big way (especially in the past 5 years) is the real estate broker – real estate agent relationship.

Basically, when new people want to become real estate agents in Canada, they jump through a couple of regulatory hoops… but then the real show starts. They have to join a brokerage and then they learn the ropes of the industry. The experienced guys tell the newer guys what to do, how to do it… and every real estate agent in the country has to play the game. It’s almost a multi-level marketing scam!

#165 Swiss Dom on 05.21.14 at 5:07 am

The key metric for change will be to insist on minimum deposits closer to 20%, CMHC should be used for what is was meant. A solution for the exception not to fund the general house craze. Also capital gains on all property “flipped” within the first 5 years or Purchase. in Switzerland it is 10 years.

#166 Buy? Curious? on 05.21.14 at 5:21 am

Clothes optional Open Houses!

#167 Londoner on 05.21.14 at 5:31 am

Low interest rates and extended amortizations are fairly recent events and thus are not the primary cause for an increase in housing demand and prices. The trend began as follows:

1. Mass construction of condos began to replace dedicated multistory rental buildings in urban areas. The low cost of entry into the market meant that more private individuals could become landlords.

2. The attraction of newly built homes spread from condos to new build SFHs in the suburbs of major cities. Specifically the ability to buy a new (often larger) home for a lower cost and with a delayed closing (1-2 yrs) requiring only a minimal deposit, thereby allowing the household more time to save the required downpayment.

3. A change in the focus of retail banks to revenue generation primarily through credit products (specifically mortgages and lines of credit). This was accompanied by marketing campaigns from the banks which led to a change in consumer sentiment towards these products.

4. The buying and selling of residential properties, especially condos, proved to be profitable because of the low cost of entry, high leverage, low transaction costs and minimal tax implications.

5. Lower interest rates and extend amortizations meant that traditional debt ratios (TDSR & GDSR) were no longer adequate to assess mortgage afordability. However as these were used as historical precedents and as the origination of mortgages moved from the traditional branch network to broker networks, it meant these ratios continued to be used. Often the inputs or calculations of these ratios were modified by brokers to allow clients to qualify for higher value mortgages. Due to the increase in volume of applications, mortgage underwriters often did not perform their due diligence.

#168 Wiggleroom on 05.21.14 at 5:56 am

Cut out this ridiculous bidding war fodder by forcing sellers to stick to their original price and accept whatever offers are given. I.e. If a house is listed 100k below market value to try and stir up bids, and those bids don’t happen, the buyer should be forced to accept the offers on the table.

There was an article in the globe last week about someone who tried to do this, then got an offer for their asking price. They then refused the single offer and jacked the price up 50k! This sort of thing should be illegal. If you propose an asking price it should be taken seriously and it should be upheld.

#169 Harry Wilson on 05.21.14 at 6:04 am

Hello, Mr. Turner.

I’m not smart enough or knowledgeable enough to name the forces most shaping real estate in Canada now or in the near future; other commenters have already listed anything that I could add. However, the view from my particular rung in society has taught me one thing: there are certain people from whom you should not accept favours.

I’m guessing that a thousand dollars is not a sum that would make a huge difference in your life (I resisted the urge to use the phrase ‘pocket change’), and taking this thousand dollars would make you, if only for ten minutes, an employee of BCREA. Maintaining impartiality on the business of real estate is important to you and to your blog, and I suspect that you wouldn’t want anyone in that business to feel that they had ‘brought you on-side’ in any way.

Do tell Mr. Moldowan that you will work on answering his questions. Do insist that in return, you will be kept informed as to the progress of their study, and any implementation of policy resulting from it. Do keep us, your faithful readers, informed on this progress, and the sincerity of BCREA’s wish to open a dialogue on real estate in Canada.

Do not accept the money.

#170 maxx on 05.21.14 at 6:34 am

“what in the future will customers expect of realtors?”

What melting customer base they have left. Not for everyone, but many realize that they can do their own research, marketing and negotiating. The tools are out there, except perhaps a recognized logo for the lawn sign.

Making a better sign is not brain surgery, nor is using alternative marketing engines.

FSBO is rapidly increasing and there certainly wouldn’t be an increase if it didn’t work, or, more importantly, people TRUSTED the cartel.

It’s high time the industry got its fat, bidding-war instigating behind kicked into line by people as regulation certainly hasn’t and won’t do it. It’s had decades of crafting weasel words and distorting numbers to satisfy bottomless greed. Anyone having seen bidding wars first hand knows this. Anyone having analyzed the complement of adjectives at the individual franchise level knows this. Anyone having attempted to have a sensible conversation with a realtard knows this.

It wants our help.

That’s so rich.

#171 Harry Wilson on 05.21.14 at 6:36 am


Meanwhile, in the real world… at 1:28 am,

I wasn’t trying to be a copycat; when I was writing my comment (posted at 6:04am), Mr. Turner was safely tucked in bed, and your comment hadn’t been moderated and posted yet.

Having said that, you make an excellent point! :)

#172 Roman on 05.21.14 at 7:08 am

After reading answers through the night, Jake Moldowan said ‘…screw it’, book a meeting with the board to tell them everything all right and there is no need for ‘a research program’.

#173 Steven on 05.21.14 at 7:31 am

Garth is the fat lady about to sing of the virtues of equities?,_Dylan_Grice_%26_Others_Shared.html

#174 Mr. Frugal on 05.21.14 at 7:41 am

The past;

1. CMHC providing easy credit
2. Low interest rates
3. Debt oriented culture
4. Financially illiteracy
5. Unrealistic expectations (i.e. sense of entitlement).

The future;

1. A correction in the real estate market.
2. Higher interest rates.
3. A new generation of home buyers with more realistic expectations.
4. A renewed sense of thrift and frugality (i.e. you can’t spend what you don’t have)

#175 Ralph Cramdown on 05.21.14 at 7:50 am

#108 Mr Buyer — “Since a sale can be a private transaction between two private citizens I am hard pressed to find justification for such private transactions to be fully disclosed to the public at large.”

You need to think about it more.

First, who owns the land? If you say “the party named on title” you’re wrong. The Crown (i.e. all of us) owns it, ultimately. If you have title in fee simple, you own a very broad package of rights attached to that land, but not all of them. You don’t generally own subsurface mineral rights, your land may be expropriated by the Crown, and it may be subject to forfeiture if you don’t pay property taxes (rents to the Crown?). So your “ownership” is by no means absolute.

Second, it is a generally accepted principle that transparent markets are better markets. When you buy or sell stock of a public company through a brokerage, your broker is subject to a rule called NBBO, or National Best Bid/Offer. It needs to look at all markets and get you a price at least as good as you could get if you picked the most favourable advertised price. Markets without disclosure are usually markets where the party with more information has an unfair advantage over the other party. This may not be deemed important in the market for hockey cards or art, but in real markets that significantly affect many people, we’ve moved beyond that.

Thirdly, corruption. Given nonpublic land transactions, it’s very easy for parties to curry favour (bribe) others by selling them land below market. This happens more than occasionally even with our public system, because the press can’t be bothered to look.

Fourth, Chinatown!
Watch the movie. Or read about the role of MERS in the US mortgage foreclosure debacle. A transparent public title system must have been mandated for a reason back in the mists of time (the Domesday book?) but there’s plenty of morons out there who, lacking imagination and history, only realize what they had when it’s gone. Santayana, etc.

#176 CTO on 05.21.14 at 7:51 am


I, like many of the others here on this blog, smell a rat. i’m sure you do too.

Our property bubble issues in this country are not a Real Estate Company issue. (They just survive like any other private company).

It is a GOVERNMENT issue.

1. Raise interest rates, we never needed them so low in Canada in the 1st place. 1 – 1.5% should do it.
2. Heavily restrict or all out remove the wayward CMHC. It was never intended for its current reckless existence.
3. Enforce the media to clearly indicate that a report or info source is a player in the private industry and has an iron in the fire. Right in the article, big letters. (like the new cigarette box warnings)
4. Carefully regulate the industry with penalties for unethical behavior. However, should an owner get more than asking for a house, then “so be it”. I think the prior changes will keep a free market in check.

#177 Millenial on 05.21.14 at 8:24 am

If the money is significant you should do it Garth. You can totally ‘keep it real’ without being a douche to them. Watch Peter Schiff’s speech to the Western Regional Mortgage Bankers Conference in 2006:

#178 AfterTheHouseSold on 05.21.14 at 8:45 am

#168 Harry Wilson
“Do not accept the money”.

I agree Harry and others. Please don’t accept the money Garth.
“Something is rotten in the state of Denmark”.

#179 Sheane Wallace on 05.21.14 at 8:48 am

Madani believes correction would be 25 %

That would translate to roughly 40 % in Toronto and 50 % in Van City,

I think it could be bigger but frankly speaking I don’t care any more. Moving to Europe any time soon. Would be watching the show when TSHTF, it would be spectacular.

#180 Eatin' Bonbons on 05.21.14 at 8:50 am

Ah the often lazy real estate industry… Unless there’s easy money on the end of it, many just don’t know how to work for a living… I suppose none in the requesting group ever took any Strategic Management or Corporate Strategy courses, or may not recall the theory.

1. Consult Google Scholar (as a starting point) to see what’s been published using proper Research Methods that can be credible and cited. Research papers from other countries can sometimes offer insight.

2. If they find nothing, and are serious about what they are trying to do – hire a consultant group who has the ability to properly Research across a broad and relevant audience. Blogs are anonymous, cannot qualify the credentials of any of the people giving their opinion. I know asking the Blog is not their direct request, but they likely figured the question would be put to the Blog, as happens on occasion for other matters.

3. Read up on Porter’s 5 Forces. Look up Porter in general – if some type of future Strategy is what they’re after. There are other good sources and models to use as well for a proper analysis before deciding on the 5 points.

I have spent years going through this kind of Research and Corporate and Future strategy in general. It takes time and has to be done properly. This is a serious issue that requires serious research IMO, for this reason I offer the preliminary opinion above.

#181 dupcheck on 05.21.14 at 8:59 am

CHMC is the problem. It should not exist. Banks should be responsible for their own loans, not the government. When gov is in bed with the private sector there are no more morals. Conflict of interest.

#182 Kira on 05.21.14 at 9:05 am

In answer to the question – what will change in the next 5 years? (not what should change)

– Mortgage rates will likely increase, lowering the house price people can afford

– Expect regulation changes designed to protect those without adequate down payments. (either banking or CHMC reg changes) because the Feds will become increasingly concerned about debt levels

– a CHMC “moment of truth” where changes will be made to the debt ceiling, or some means of reducing taxpayer liability (I wish!)

– Boomers downsizing as they realize they don’t have enough saved for retirement. There will be a glut of higher end properties.

– Cottages will continue to lose favour – new immigrants don’t have a “cottage culture” and the younger generation would prefer to rent occasionally rather than have the work and cost of maintaining one.

– Bonus prediction – Millennials will start preferring renting over buying – they already are moving towards renting computer storage space (the cloud), music and other aspects of life. They will look at the current high prices and balk. One of their values is quality of life and they won’t see the value of the steep sacrifices needed to buy and maintain a property.

I would also add that change happens at the margins (boomers and millennials are just coming into new life stages). Change also happens more slowly than you might expect. Five years isn’t a lot of time.

#183 liquidincalgary on 05.21.14 at 9:09 am

@ #24 sheane wallace

NET deflation

get yer head outta yer cliff claven

#184 Adam on 05.21.14 at 9:09 am

#36 The Fix is Right Here

You mean a website like in Nova Scotia?

#185 Ralph Cramdown on 05.21.14 at 9:14 am

#176 CTO — “Our property bubble issues in this country are not a Real Estate Company issue. (They just survive like any other private company). It is a GOVERNMENT issue.”

I can’t entirely agree. The reason you’re subjected to so much advertising (in print, online, and on radio and TV) is because it works. You may dispute how well, but advertising works on the population as a whole.

Organized real estate has done a masterful job of inserting positive messages into the media. Reporters (those that are left) tend to be lazy in their quotidian stories, and the industry always has a release about how prices (or sales) are up from last year (or last month), possibly not adjusted for cancellations. If all else fails, they compare to the ten year average without adjusting for inflation or population growth.

This is, fundamentally, an advanced course in how to lie with statistics. They wouldn’t devote so much time and money to it if they didn’t think it worked.

#186 E.F. Hutton on 05.21.14 at 9:15 am

#42 Roger_Home_Inspector on 05.20.14 at 9:17 pm
Mandatory 30 day opt out period after the signing of an agreement to purchase.

Roger, you’ve had a lot of good, well thought out posts here.
Until now.

#187 UVZ on 05.21.14 at 9:17 am

Jake Moldowan,

To discuss the CMHC, please contact:

Ms. Christine Lagarde
International Monetary Fund

#188 rosie "moving forward" in the knowledge that, "this won't end well" on 05.21.14 at 9:20 am

Some excellent suggestions. On realtors in general there seems to be a lack of trust and accountability. The government could directly regulate the industry or do the same indirectly. A self financed and governed College of Realtors might solve some problems. The industry should make its rules and codes enforceable through this type of body. Realtors would pay a mandatory annual fee to cover the costs of running the College. In turn the College would set the rules. The College would monitor and force regular upgrading, at the realtors expense. The College would have the authority to revoke a realtors license.

#189 crowdedelevatorfartz on 05.21.14 at 9:22 am

Fascinating. Seems like the reptilian breed aka Realtors are worried about what may be coming. Good.

1. CMHC has gotten out of control. With taxpayers ultimately on the hook. CMHC should only be allowed to insure up to a max of 50% or $500,000.00 ( which ever is the lesser amount) of a property’s value.
2. Banks cannot award mortgages for longer than 25 years. Banks cannot “offer” employee rates, down payment lines of credit, cash “bonuses”, etc. Just a mortgage. Nothing more.
3. People should be allowed to access a Zillow style website for free to review sales history on any property.
4. Real estate agents found illegally “pumping”, flipping, boosting a price by subterfuge, etc.etc.etc. should lose their license……permanently. Face maximum fines and or jail time.
5. Real Estate cartels should not be allowed to spend millions of dollars on advertising in the news media. The should be regulated like the cigarette industry. (Ruining someone financially is almost as bad as cigarettes).
No more hype. Just verifiable facts. If the facts are wrong apologies and retractions should follow heavy fines.

Personally I think this is a waste of time. These self serving swine have had it too good for too long to change willingly.
We need a severe, painful market correction…….. which is perhaps why they are coming to you with an olive branch made of cash……blatant bribery is all they understand.

#190 liquidincalgary on 05.21.14 at 9:22 am

wow…lots of suggestions

opinions are like……., everyone’s got one

not quite the Privy Council, but congratulations Garth!
…give ’em hell

#191 Trevor on 05.21.14 at 9:24 am


1. Rental Suites – these are why home prices have surpassed 1 million in major urban areas. Instead of 1 family servicing the mortgage, now there are 2. This trend will continue.

2. Rural areas continue contraction while the population continues shifting to Urban areas – generational housing will become more prevalent in Urban areas.

3. Lower home ownership rates – especially in rural areas as careers dissipate and give way to “jobs” as the workforce needs to remain mobile.

4. Real Estate agents NEED to represent the buyer, not only the seller. If real estate agents do not embrace this approach and the public continues to see them as overpriced salespeople; I can see a day where agents will be obsolete.

5. Home ownership rate decline – as boomers continue to retire with no pension and over indebted post secondary grads leave school the amount of people able to afford a mortgage will decline. also 20 somethings are not settling down until 30 tightening the home ownership pool.

#192 raider on 05.21.14 at 9:27 am

1. Make the price and title transfer history visible to the public (preferably for free). The idea of the agent was to represent the buyer and the seller, they should not be gatekeepers to pricing history.

2. Increase the minimum down payment for CMCH insurance to 10%, reduce the maximum qualifying amount to 500,000 CAD. Better yet, get rid of it.

3. Penalize the unethical advertisement of implied profits for real-estate. Predicting the price-performance on RE should be as regulated as predicting the performance of stocks.

4. Financial sanity checks for RE buyers. Back in the 90s in Germany, you had to take a questionare testing your perception of risk and financial literacy before you were allowed to open a brokerage account. This would be a neat idea for RE in Canada.

Sort of unrelated, since it doesn’t fall into their jurisdiction.
5. Increase property taxes on the secondary residence. They are an easy target to plug the financial black-hole of entitlement spending. This likely also curbs speculation.

#193 Crash Callaway on 05.21.14 at 9:28 am

Beware The Trap

“Hold your friends close, but your enemies closer”

Garth is offered a stinky cash hug from the REALTORS?
What’s next from those realturds…. face painting!

#194 Bottoms_Up on 05.21.14 at 9:30 am

#1) General public misconception that prices always go up.
This has been spawned by market interference, regulatory policies and lending practices. CMHC backstopping the banks, resulting in a dimunition of the impact of creditworthiness on getting a mortgage (everyone is ‘equally’ qualified), and low requirements for entering the housing market (0% dp; 30/35/40 yr amortizations)

#195 quebec economist on 05.21.14 at 9:31 am

ha a grand! Ha! what a joke!
Your ‘accumulated knowledge capital’ in this domain is well worth more then that. Brief answers should not be given for less then 10 000$…IMO.
Or you can start a bidding war for your services…who knows how much you can fetch?

#196 Daisy Mae on 05.21.14 at 9:31 am

How about this?

“Organized real estate has failed consumers. Frankenumbers to mask market trends, for example. Encouraging (or merely allowing) engineered bidding wars which consumers must enter blind. Fuzzy stats which local boards revise in secret. Preventing the publication of sales histories or even days-on-market for individual properties. Counting multiple listings of the same house. Forcing homeshoppers to sign a punitive buyer’s agreement. Deliberately mispricing properties to start a riot. And threatening to vivisect poor bloggers who say ‘realtor’ instead of REALTOR®.”

#197 Daisy Mae on 05.21.14 at 9:34 am

#11 waiting: “hmmm, I’m thinking (a) I smell a rat …”



#198 Daisy Mae on 05.21.14 at 9:39 am

#18 omg: “Sadly I think people are too frightened by the entire house buying experience for RE agents to ever become a thing of the past. They need someone to hold their hand.”


Good grief….it’s BECAUSE of the realtors that buyers are frightened.

#199 Rabbit One on 05.21.14 at 9:41 am

We need strong and healthy job market.

Here in B.C., many homeowners got excited to earn 3~4 year annual income equivalent paper-gains in a single year for example.
So, Let’s do more!

I witnessed some house maniacs here are fall in low income category.

If average person can get stable, descent job that pays $120K and up, more sane buyers / sellers and savers in the market.
(who said more money then goes to real estate?)

#200 Aggregator on 05.21.14 at 9:43 am

#158 Spectacle

The minute I seen "Journey of Discovery", I knew this was just another indirect research report for the UN's social engineering and sustainability unit. This is how they gather data, feedback and intelligence on the public's perception of sustainable development. And with vast amounts of information, they can adjust their initiatives and goals to keep the herd moving into master planned communities.

They selected Garth because this blog is a good platform to gather intelligence; not because they want to change anything. Yes, some of you will say, well that's just absurd. It is. Until you read the government, RE and building industry's documents that explicitly state how to engage with the public.

Everything is controlled. You'll never solve the problem unless you get the crooks embedded in city councils and local government out.

#201 Daisy Mae on 05.21.14 at 9:44 am

#30 frank le skank
#11 waiting
“I agree, I’m skeptical about how their motives. I think they will take anything you say out of context to downplay the severity. Their creative writing skills are unparalleled.”


Well said.

#202 Holy Crap Wheres The Tylenol on 05.21.14 at 9:55 am

Back from Ireland, beautiful place, people very friendly and their real estate is in the pooper. Nothing good has happened since 2006 and now people are defaulting on mortgages by the boatload.
Our real estate industry is rife with excess pick pockets. What other industry would stand for a middle man to make money off of selling your product? I agree that their days are numbered in this technologically advanced society of ours. As for government involvement in regulating the industry it is absolutely amazing that Ottawa gets their sticky little fingers in every other part of our lives regulating and controlling things but in real estate land they are “non per” Hmmm I feel that there is a conspiracy going on here. Perhaps
I am going to be per·so·na non gra·ta if Big Brother is watching me.

Oh yes Smoking Man I’m glad you found your ET.

#203 Sheane Wallace on 05.21.14 at 9:57 am


On second thought: send them to Steve, the old owl and the joke BOC governor, after all these folks are PAID to address these issues.
If these great mangers say there is no bubble and no problem, why worry?

/sarcasm off

#204 Daisy Mae on 05.21.14 at 10:00 am

#132 JonB: “I suspect this report will, like the RE stats themselves, be manipulated. Do you want your name on that GT?”


I’m pretty sure Garth has this figured out. What a bunch of sleazes….

#205 pinstripe on 05.21.14 at 10:01 am


The plan is to choke your blog.

Harpo socked it to you once.

RE will be #2.

Who is next?

#206 NotAGreaterFool on 05.21.14 at 10:07 am


#207 Paul Hesse on 05.21.14 at 10:07 am

Here’s a timely announcement from the Province of Manitoba.

From: News Media Services [mailto:[email protected]]
Sent: Tuesday, May 20, 2014 13:53 PM
Subject: Manitoba News Release: Province Introduces New Rules that would Ensure Transparency Fairness when Buying, Selling Homes

May 20, 2014

– – –
Modernized Legislation would Protect Families, Ensure Level Playing Field for Real Estate Agents: Minister Lemieux

The Manitoba government is proposing legislation today that would ensure transparency and fair service for families when buying or selling homes, Tourism, Culture, Heritage, Sport and Consumer Protection Minister Ron Lemieux said.

“The Manitoba government will introduce new rules to ensure families get clear, fair service from real estate agents whenever they buy or sell a house,” Minister Lemieux said. “A home is the biggest purchase most families make in Manitoba. Our legislation will require agents to act in the best interests of families to protect their investments.”

The minister noted the housing market is constantly changing, which creates challenges for families as they buy or sell homes. In some situations, homebuyers and sellers can face multiple bids or agents will represent both the buyer and the seller, which creates confusion over divided loyalties and uncertainty about what fees will be charged, he added.

The proposed real estate services act would address these and other concerns and would also ensure real estate agents are working on a level playing field, the minister said. Steps to help protect families when buying or selling a home would include:

* listing online all agents and any disciplinary findings against them, so prospective clients could search to confirm an agent is legitimate and if they have a clear record;

* requiring a service agreement that explains the role of the agent in helping their client and an upfront agreement about the agent’s sales commission and fees;

* requiring agents to tell home sellers of all offers on their home in multiple-offer situations;

* requiring an agent representing the homebuyer and the seller to inform both clients of the possible conflict before a sale is finalized;

* establishing a new code of conduct that would guide responsible services and avoid conflicts-of-interest, like the advertisements and marketing of homes-for-sale would have to be accurate and truthful, clients information would have to be kept confidential and agents would be required to disclose to clients if they have a personal or family interest in a sale;

* establishing a stronger complaints and disciplinary process with broader disciplinary powers that would include mediation, suspension or termination of licence; and

* increasing the range of maximum fines to $100,000 for agents and $500,000 for brokerages from the current rate of $1,000 for agents and $2,000 for brokerages, and agents could also face up to two years in jail for breaching the act.

Real estate agents and brokers are regulated by the Manitoba Securities Commission, but their existing legislation is more than 60 years old, the minister noted.

“We are pleased the Manitoba government is taking this initiative to modernize the real estate services act. As a profession, we have provided considerable input, advice and recommendations over a number of years of consultation,” said Brian M. Collie, CEO, Manitoba Real Estate Association. “Many of our recommendations are already implemented and we also look forward to continuing this partnership to ensure that buying and selling homes and properties in Manitoba is a positive community-building experience. Organized real estate is privileged to hold this important role and responsibility. We always want to strengthen the best consumer protection practices and to enhance our profession’s role in building a better Manitoba.”

More than 500 Manitobans participated in the province’s online consultation about their concerns regarding real estate services and how homebuyers and sellers should be treated. The survey found:

* the majority of participants agreed that agents explained their role and answered their questions;

* agents were the most helpful in identifying defects in homes for potential buyers;

* slightly more than half the participants felt their agent represented their best interests;

* more than 20 per cent said their agent did not sign an agreement with them or explain their sales commission or fees upfront; and

* more than half of homebuyers and sellers experienced multiple offers or a bidding war, but more than a third of those said their agent did not explain how that process works.

– 30 –

#208 Sue on 05.21.14 at 10:29 am

I think its very simple. EVERYONE should take responsibility and have to be accountable for their own actions. Banks, realtors, govt, sellers,cmhc AND buyers. Taxpayers should not be responsible for the stupidity and greed, of the what seems to be a growing number of people who like to blame everyone else for their mistakes. No one takes ownership for their actions and decisions because there are never any repercussions. Its everywhere in society right now, everyone else is the problem, no one thinks its them. We need watchdogs, that would help. Garth, this is a no win situation, dont do it! youve already been telling them for years for free (and thanks for that!) they just are not listening. The nerve to ask! How do you keep your composure?

#209 Smoking Man on 05.21.14 at 10:39 am

It’s called.


To the Herd, Real Estate is the only game in town.

They don’t trust financial advisors, [email protected] after the 2008 melt down.

They don’t believe rates will raise.

And if you’re getting 10% tax free gain on your leveraged investment in real estate a year.

No investment comes close to that if you look at deposit risked vs Return..

A poor man’s way to make a buck.

Risky, but so is walking the street.

#210 Randis on 05.21.14 at 10:42 am

Garth I smell a trap … If they want you to fly over and meet with them make sure you bring your own team of bodyguards, and I will sign up for that.

#211 45north on 05.21.14 at 10:43 am

Disruptive Change Report


1. contracting debt

2. less access to credit

3. government and banking industry restricting access to credit

4. infrastructure at the limits of expansion
transportation (maintenance costs of roads and bridges pre-empt expansion), subway expansion still possible but very expensive, expansion of public transportation still possible
electrical system limited by energy and distribution costs
natural gas systems limited by supply
phone and cable systems decouple from other infrastructure, capable of quantum leaps

5. move to multi-unit housing, multi-generations in same house

Comments: Contracting debt is disruptive, très
disruptive. It’s pretty much the opposite of what Wynne and Hudak are promising.

There is going to be a huge shake-up. The current situation where prime downtown land is taken up by poor quality condos, will end. In Ontario, the fault lies with the Ontario Municipal Board – it will be restructured. Political power has to move to municipalities from the provinces.

As far as the real estate industry is concerned, I see more regulation. I see massive disillusionment as households are faced with being underwater. This disillusionment will undermine political support for the industry as it is. I cannot see how the real estate industry can resist calls for easily accessible public databases on housing sales as in the US.

#212 2or3orsometimes7 on 05.21.14 at 10:44 am

Psychology tells us that the best way to get someone to like you is to ask them a favour.

Awww, the Realtrs are feeling unloved. Tough.

#213 overskooled1 on 05.21.14 at 10:58 am

Bidding wars should be open and transparent in terms of price. Blind auctions are completely one-sided in favour of the seller.

#214 Aggregator on 05.21.14 at 11:04 am

Just to add to post #177…

Thankfully, there are some honest high-level real estate professionals that were warning about the future of Vancouver's real estate market, like William McCarthy, who wrote a report in 2011 titled The Impact and Consequences to Date of Asian Investment in Metro Vancouver's Real Estate Market (PDF), where he noted the following keypoints:

This rapid and unplanned rise of Asian investment in Metro Vancouver has led to, contributed to, and greatly accelerated the following:

– A virtual destruction of traditional housing affordability models. By the second quarter of 2011 the average price of a detached home in Vancouver was $843,300 (which would currently purchase only a modest residence). To fund this average residence now requires an impossible 95.5 percent of household income. Canada’s largest bank now raises the possibility that in Vancouver “home ownership is becoming a far-fetched dream.”

– A corresponding rise in overall local household debt to unsustainable levels;

– A severe shortage in affordable rental stock;

A speculative real estate economy superseding much of the traditional mixed-use and balanced economy as a taxation driver;

Provincial and local governments that increasingly involve themselves in the real estate market, dependent on the taxation and fees, and in the process distorting the risk/reward property development matrix;

 – Wordy, expensive and unproven green initiatives [Sustainable Development, Carbon Tax, etc.] being used to partially justify land use policies and high housing costs;

 – Evidence that foreign investors may have no permanent commitment to local communities other than their financial involvement, nor an interest to assimilate.

Correct he was. Because his abovementioned keypoints is what should be addressed and at the same time are the issues that organized real estate, UN organizations and government don't want to talk about. So they reach out people like Garth who have good ideas to contribute — then they weed out any effective opinions against their own interest and select the ones that will go into peer review before being released to the public.

Then by the end of it, they'll report financial guru Garth Turner says buyers need better data to make better decisions. That's it. And by that method they control the discussion and have avoided public awareness of the real issues at hand.

Ever wonder why California home prices went bust and Texas didn't? American economist Thomas Sowell explains in this short video segment.

#215 rosie "moving forward" in the knowledge that, "this won't end well" on 05.21.14 at 11:12 am

#207 Paul Hesse

Like I said. The realtors can govern themselves or be governed.

#216 Alberta Ed on 05.21.14 at 11:14 am

The real estate industry should be regulated the same as banks and insurance companies. And this column should be stapled to the Big Owe’s forehead.

#217 Huntly Gordon on 05.21.14 at 11:14 am

#5 sounds like a good idea.

#218 countrymusicfan on 05.21.14 at 11:19 am

Out here in Ontario’s sticks northeast of GTA and west of Ottawa, the spring market seems to already be getting quite old and stale. Lots of unsold properties sitting for several months.

A good friend is a realtor, focusses on the area to the west of me, specializing in cottage properties in Haliburton, Muskoka and some Kawarthas.

Tells me that things are awful, no sales at all, and the market is pretty much over for anyone trying to sell for the summer season. Way too many owners are posting bloated and unrealistic prices and properties are listed crazier than particle-board semis in the GTA, most well over $400,000. (Do people from Toronto really have that much loose change for a weekend summer home anymore?)

He says he is leaving the brokerage next month to do other work, he expects the crash is here for cottage properties, just a matter of a few months to sink in. No one can afford these prices and everyone is tapped out.

Fire sales coming soon it seems. Oh well, now that we have such long lasting winters again, who cares about summer anymore :(

#219 Chris on 05.21.14 at 11:20 am

1) CREA taking all risk away from the banks, encouraging them to loan money out to anyone
2) Pressures felt by kids from their baby booming parents that in order for them to be allowed to start a family, and be successful, contributing members of society, they must own a home. These same parents are loaning their kids the downpayments and another $20k to furnish the place b/c the kids can’t afford any of it.
3) Keeping up with the Jones’… This sort of relates to #2, but there is massive pressure to keep up appearances that you’re just as successful as your friend or neighbor… Which basically boils down to who has more credit to extend because no one actually has the money for these mcmansions and new cars.
4) Historically low interest rates
5) The media / realtors pumping up the market, creating fake news, etc.
6) F’s laxed mortgage rules (ie. 0down 40yr)

1) What the boomers strategy will be for retirement. Sell their house to fund it? Sell their home because they are now too old to maintain the yard? Keep their home until they die?
2) Interest rates
3) If the media and realtors will be able to continue to skew the #’s and trick people into thinking the market is still hot and a good time to buy when really it isn’t.
4) If the government will clamp down on banks still getting around borrowing to high risk clients (ie. awarding what is essentially zero down mortgages after the bank gives them a rebate, refund, gift, car, etc)
5) If Canadians finally start to realize that we’re not different. Housing cannot rise indefinitely forever. What comes up, will come down.

#220 Son of Ponzi on 05.21.14 at 11:32 am

In Richmond and Vancouver, the crash has already started.
Price reductions galore.
Do Real Estate floggers qualify for EI?

#221 Cowpoke on 05.21.14 at 11:36 am

It’s an eat-what-you-kill industry. Just like the car industry.

You’ve watched ‘Brave Heart’ eh!

Use the ball and chain on them and [win]!

Garth, be brave!

#222 Kilby on 05.21.14 at 11:55 am

08 Sue on 05.21.14 at 10:29 am
I think its very simple. EVERYONE should take responsibility and have to be accountable for their own actions. Banks, realtors, govt, sellers,cmhc AND buyers. Taxpayers should not be responsible for the stupidity and greed, of the what seems to be a growing number of people who like to blame everyone else for their mistakes. No one takes ownership for their actions and decisions because there are never any repercussions. Its everywhere in society right now, everyone else is the problem, no one thinks its them. We need watchdogs, that would help. Garth, this is a no win situation, dont do it! youve already been telling them for years for free (and thanks for that!) they just are not listening. The nerve to ask! How do you keep your composure?

Well said Sue. Most comments here today could be summed up with your remark. We enjoy owning our own home and have been renting for 3 years waiting for the “right place at the right price” Despite all the hoopla by Global and CREA, we, in the end should take responsibility for our own actions. Somebody who has taken out a huge mortgage or bought a home in an obviously overheated market can’t blame the bank or realtor.

It was over a year ago that McLeans magazine had a cover with the big “bubble” story, everybody has had plenty of access to information on housing in this country.

#223 Buy? Curious? on 05.21.14 at 12:05 pm

There’s alot of people who will obviously work for free. The cartel knows what Garth is worth and Garth knows what you’re worth.

Keep up the good work, bees, I mean, people!


#224 Derek on 05.21.14 at 12:29 pm

With realtor fees, property transfer tax, & closing costs on the next house. It adds up to about $30,000 on a $400,000 house, who can afford to move?

#225 Daisy Mae on 05.21.14 at 12:31 pm

Look at this — 210 posts and it’s only 9:30am Pacific time. :-)

#226 Derek on 05.21.14 at 12:34 pm

My experience with Realtors is they are just door unlockers who tell you they know a guy who can redo the kitchen for $8000. As a buyer what I want is a home inspector to look at the house with me. Maybe Realtors should be required to actually know something about houses.

#227 Panhead on 05.21.14 at 12:40 pm

Where is BPOE when you need him …

#228 Cici on 05.21.14 at 12:41 pm

#116 statsfreak

Yours is the best suggestion.

Go with it Garth! Oh, and listen to Randis at #210. But take your own private plane. And/or take an agent hostage and use him as a decoy ;-)

#229 Cici on 05.21.14 at 12:44 pm

#223 Buy? Curious?

It got me out of doing housework…told BF I had an important report to work on ;-)

#230 Linda on 05.21.14 at 12:44 pm

It’s a trend now to create artificial market.
When there is anymore economy – just flipping hamburgers – what they can do to stimulate the economy?
Start a bubble with internet stock – as Nortel, Google, Facebook – and now the real estate market (who turn as a commodity). Curious to see what’s next!

#231 Sean on 05.21.14 at 12:49 pm

This article discusses home prices in 12 large U.S. cities:

Compare this with Toronto/Vancouver.

#232 Time to Wake Up! on 05.21.14 at 12:51 pm

#34 Bang On!
#208 I totally agree.

Sadly we live in a society that is looking to blame someone or something. It does not matter if you create a list of the “top 5” or “top 50” for that matter. There is only one reason and the truth is we only have ourselves to blame. If people would wake up and take responsibility for their decisions we would not be in this mess. We need less regulation not more. If we believe governments and regulators are going to protect us we are fast going the way of communism. We DO NOT need more regulation or licensing. If I wanted to start selling arsenic flavored ice-cream let me do it. It will only sell and I will only make money if people are stupid enough to buy it. We do not need regulation to prevent me from selling this, we need people smart enough not to buy it….otherwise you get what you deserve. Right now we are simply pawns in “their” game, and further regulation and licensing will only keep us in “their” game. We need to start teaching our children and society to think for themselves. This is a harsh reality but it’s time for people to WAKE UP!!!

What got us here?

#1 Ourselves. We choose to listen to the voices of Greed/Envy/Jealousy ….believing the lie that who we are and what we have is not enough. We choose to sign the mortgage. It’s not the interest rates!!!!!
#2 Not taking personal responsibility for our decision we have made due to #1.
#3 Believing banks/ realtors/ government are looking out for you.
#4 Looking for someone else to blame instead of humbling ourselves.
#5 Waiting for government or someone else to get us out of our own mess.

How do we get out?
#1 Stop bailing people out for THEIR poor decisions and actually make people accountable…watch people really wake up then. If someone tells me to jump off a bridge should I listen? Do we really need regulation that says I can’t tell you to jump off a bridge?
#2 Educate your kids/families about how to make smart decisions, how to think for themselves…..I know it’s a crazy idea. (I had to learn the hard way that it’s not smart to have a mortgage 6 times your income, but now my husband and I are much smarter. Yes we are starting from scratch (we lost every cent of our 20% down-payment) but are no longer a slave.
#3 Teach people the only person really looking after your best interest is YOU! Not government, not municipalities, not realtors, not banks!
#4 Stop believing the lie that government is here to protect us. We are losing our freedom more each day. Look at what is happening to the US. We are not far behind.
#5 As you start to wake up….wake others up!

#233 Exile on Main St on 05.21.14 at 1:40 pm

*Surely* it has to be a sign of the times when the Pushers-in-Chief are coming to the biggest party pooper of all for advice? (And I mean that in the nicest possible way).

My totally unscientific observation here in Vancouver is that the natives are getting pretty restless – waking up the morning after, the big BMO tattoo on their foreheads isn’t nearly as nice as they’d imagined.

#234 Nemesis on 05.21.14 at 1:40 pm

#TreatTheDiseaseNotTheSymptoms #TwoTimelyThinkPieces #SomeHeavyLifting

[CounterPunch] – Neoliberalism’s Assault on Democracy: Protesting Youth in an Age of Neoliberal Savagery by Henry A. Giroux

[TheNation] – What Was Democracy?

#235 Future Expatriate on 05.21.14 at 2:05 pm


What’s the matter? “Liberal” no longer enough of a favorite curse word of Nazis?

“The national government will maintain and defend the foundations on which the power of our nation rests. It will offer strong protection to Christianity as the very basis of our collective morality.

Today Christians stand at the head of our country. We want to fill our culture again with the Christian spirit. We want to burn out all the recent immoral developments in literature, in the theatre, and in the press……in short, we want to burn out the poison of immorality which has entered into our whole life and culture as a result of LIBERAL excess during the past few years.”

~Adolf Hitler~
The Speeches of Adolf Hitler, 1922-1939, Vol. 1 (London, Oxford University Press, 1942), pg. 871-872

#236 Nemesis on 05.21.14 at 2:22 pm

#ComicRelief #’G’Men

[UK Independent] – FBI ‘weed’ problem in cyber-war

“I have to hire a great work force to compete with those cyber criminals and some of those kids want to smoke weed on the way to the interview.” – FBI Director James B. Comey


#237 Blacksheep on 05.21.14 at 2:29 pm

“how we got into this sorry state – Garth”
The “how” is obvious, It is the ‘why’ that seems to be getting overlooked.

Why the stimulus on a united front?

1) Debt saturation of a 70 year super cycle.
2) Global distribution of manufacturing.
3) Technologies require less labour, as populations increase.
4) Maximum oil production, volume based, circa 2007.
5) The patient amalgamation of citizens, globally.

#238 Smartalox on 05.21.14 at 2:31 pm

In terms of the causes of the present real-estate bubble, I think that the primary root cause was the stock-market crash of 2008. It spurred two causes:

1) Low, low “emergency” interest rates
2) A major (overblown) distrust of financial markets among “main street” investors

These factors caused the banks to realize that if they could no longer make money on high interest rates, they should make it up on volume. However, the banks also realized that increasing the volume of loans would decrease their quality (be riskier), so the banks lobbied the government to:

3) Reduce mortgage standards (less than 5% down, and 40 yr. am)
4) Allow CMHC to insure a greater number, value and proportion of loans for the banks, to reduce the risk of bad loans.

The manipulation of CMHC is an interesting one: it allowed the government to inject liquidity into the banks, and may have prevented Canadian banks from collateralizing mortgages and loans into US-style asset-backed commercial paper.

These changes provided the incentive for banks to lend clients ‘the maximum amount’ but only if it could be back-stopped by CMHC, i.e.: residential real estate.

5) All this set the stage for a ‘gold-rush’ in residential real estate. A proliferation of realtors, speculators, facilitators, the myth that ‘anyone can do it’, because someone else who came before ‘made millions’.

In terms of problem practices specific to realty:
1) False promises regarding rates of return on real estate investments. This includes characterizing real estate as an investment with guaranteed returns.
2) Media manipulation such as realtors posing as buyers, or letting the public think that they are buyers by not disclosing that they are actually only realtors. this goes for private ‘showings’ as well.
3) Implying that other offers are ‘pending’, and not acting aggressively to protect the buyers’ interests when faced with a bidding war,
4) collusion with tradespeople, mortgage brokers, building inspectors, others involved in the process
5) Lax enforcement of unethical behaviour,
6) Manipulating listings, including not posting number of times listed, number of days un-sold, price reductions, listing in multiple regions under different ID numbers.

Also, this does not directly affect customers, but is still pretty shady:
7) Exorbitant fees charged for licensing, insurance and ‘association’ (really, >$800/yr for agents in 416?), engineers pay half of that to their governing body. Fees for mandatory ‘professional development’ courses, and ‘conferences’ to sell goods and services to desperate, struggling realtors at inflated prices.

How to fix?
1) Full disclosure of listing history and prices of a property to the public.

2) Transparent pricing of properties, including itemization of associated fees, taxes, interest charges to be paid by the buyer, including any pre-payment or mortgage break fees (this may be more for the mortgage issuer, though).

3) Itemized billing for services rendered to the seller – fixed costs for advertising promotion, staging, hours spent attending, marketing the property, etc. Agents should be prepared to what they did to earn their commissions, and be prepared to compete with other agents on the basis of cost of services and efficiency.

4) Transparent bidding process for multiple offers, including starting price, bidders, bidding history, conditions, and if the winning bid falls through, the runner-up pays the lowest winning bid (e-bay style), not the highest. Buyers’ agents should be liable if they let buyers compete in a phony bidding war, let them sue the seller’s dishonest agent. I might even sign a BRA if it said that I could sue my buyer’s agent for not protecting my interests.

5) Increase in enforcement for media manipulators, and for agents who fail to disclose their status and intentions when appearing in popular media. Ditto for marketing ‘specialists’ hired by realtors to flog properties.

#239 straight six on 05.21.14 at 2:37 pm

my list of the 5 things..
not necessarily in order.

1) shameless pursuit of $ over accountability (the new norm)
2) see #1.. on steroids
3) motivated entirely by greed
4) enjoys BS’ing
5) couldn’t get a real job as a used car salesman

#240 Flawed on 05.21.14 at 2:39 pm

#222 Kilby on 05.21.14 at 11:55 am
08 Sue on 05.21.14 at 10:29 am
I think its very simple. EVERYONE should take responsibility and have to be accountable for their own actions. Banks, realtors, govt, sellers,cmhc AND buyers. Taxpayers should not be responsible for the stupidity and greed, of the what seems to be a growing number of people who like to blame everyone else for their mistakes. No one takes ownership for their actions and decisions because there are never any repercussions. Its everywhere in society right now, everyone else is the problem, no one thinks its them. We need watchdogs, that would help. Garth, this is a no win situation, dont do it! youve already been telling them for years for free (and thanks for that!) they just are not listening. The nerve to ask! How do you keep your composure?


People are taking responsibility for the actions of banks, govts and greedy corporations. It’s called bitcoin. Because nothing happens in the voting booth. Nothing.

#241 Mr. Reality on 05.21.14 at 2:47 pm


One final request. Barbara Yaffe from the Vancouver Sun must be banned from writing about realestate for life.

That woman is nothing but a realestate industry mouth piece…..

Mr. R.

#242 Holy Crap Wheres The Tylenol on 05.21.14 at 2:47 pm

#209 Smoking Man on 05.21.14 at 10:39 am
It’s called.
To the Herd, Real Estate is the only game in town.
They don’t trust financial advisors, [email protected] after the 2008 melt down.
They don’t believe rates will raise.
And if you’re getting 10% tax free gain on your leveraged investment in real estate a year.
No investment comes close to that if you look at deposit risked vs Return..
A poor man’s way to make a buck.
Risky, but so is walking the street.


Even walking the street is not as risky as the investment scenario today. You are correct though it still appears that the “home” investment thing is a sure bet at this juncture. In Toronto at least!
Rates will rise but what I am hearing is late 2015. Right now I have put my corporations assets into diversified smalls, yielding modest amounts, nothing risky, not going for the 10% or better scenario and some corporate real estate holdings on small commercial buildings. With the 10% or better investment path it could easily go south quickly and net zero or minus. That is definitely a dangerous walk across the street.

#243 Holy Crap Wheres The Tylenol on 05.21.14 at 2:54 pm

This is a risky walk across the street. Hell my day is nothing compared to these guys. This is just insane, the Palestinian Israeli thing is out of hand. What did these kids do to deserve this!

#244 frank le skank on 05.21.14 at 2:58 pm

#232 Time to Wake Up! on 05.21.14 at 12:51 pm
There is only one reason and the truth is we only have ourselves to blame. If people would wake up and take responsibility for their decisions we would not be in this mess. We need less regulation not more.


I understand what you’re saying and agree that buyers are also responsible for their own demise, but disagree about your stance on regulation. Regulation does not equal communism? Deregulation is what allowed those uninformed buyers to get 40 year mortgages on a house that’s 6+ their salary. I think your resolution (education and awareness) to the problem is long term and makes sense; I believe that regulation is a short term solution.

#245 Dorothy on 05.21.14 at 2:59 pm

1. Realtors need to be more highly educated, given that they write up legally binding contracts. There are far too many Realtors who rely totally on computer generated clauses when putting together a Contract of Purchase and Sale, while not fully understanding what all those legal terms really mean. This doesn’t apply to ALL Realtors, but it does apply to far too many of them. The standards need to be a lot higher in order to protect BOTH the Buyer and the Seller.
2. There does need to be more transparency. It’s not a level playing field when the person making the Offer doesn’t have all the information. Days on market should be part of the information on the website, and should include all listings within the previous 12 months (most days on market only include the current listing and that can be quite misleading).
3. To avoid bidding wars, people should be obliged to either accept a full price offer, or remove their home from the market for at least one full month.

#246 Sheane Wallace on 05.21.14 at 3:09 pm

#183 liquidincalgary


Then go get some treasuries while the yeild is still high..

#247 KT604 on 05.21.14 at 3:19 pm

While many of the suggestions offered here are sound (particularly around transparency and access to information), the reality is the BC Real Estate Association has very little power to enact any meaningful change. Many of these suggested improvements are beyond both the mandate and the ability of BCREA. Any sort of wholesale changes to things like the availability of statistics or commission models will require the approval of the Canadian Real Estate Association. While well intentioned, I truly hope BCREA’s initiative is an information-gathering exercise for the purposes of pleading a strong case to CREA. Otherwise, I’m afraid very little may come of this. Nevertheless, it’s an interesting opportunity at an even more interesting time.

#248 LL on 05.21.14 at 3:35 pm

…”Encouraging (or merely allowing) engineered bidding wars which consumers must enter blind. Fuzzy stats which local boards revise in secret. Preventing the publication of sales histories or even days-on-market for individual properties. Counting multiple listings of the same house. Forcing homeshoppers to sign a punitive buyer’s agreement. Deliberately mispricing properties to start a riot. And threatening to vivisect poor bloggers who say ‘realtor’ instead of REALTOR®”….

By doing all the contrary of those things listed above and having interest rates at normal rate (saving & borrowing), maybe the market/economy can improve.
The ballroom starts and have been encouraged by allowing to borrow money without having money!

#249 LL on 05.21.14 at 3:42 pm

Canada is next…

#250 Snowboid on 05.21.14 at 3:46 pm

#78 sheane wallaces on 05.20.14 at 10:08 pm…

“Transparency and relevant information? In Canada?
What an oxymoron.”

One can always dream!

#251 GeorgeSoonToBeRetired on 05.21.14 at 4:03 pm

#182 Kira – you are onto something when you said

“Cottages will continue to lose favour – new immigrants don’t have a “cottage culture” and the younger generation would prefer to rent occasionally rather than have the work and cost of maintaining one.”

#218 countrymusicfan – you were more correct than perhaps you realize when you said

“Fire sales coming soon it seems.”

From my years of experience in the insurance biz, one of the ways that people try to get out from under collapsing assets is a fire sale – literally, arson. There are lots of people who will ‘help you out’ with this kind of thing out there.

A former colleague still in the biz tells me they already have a memo this spring alerting them to pay special attention to cottage fires this year and monitor situations and numbers closely if more investigation seems needed.

I agree with both of you on this. Cottage prices make Vancouver and Toronto home prices look downright reasonable.

If you buy or hold a cottage for its ‘investment’ value, not simply the fun value, you are simply a greater fool and your money is about to go up in smoke, one way or another.

This will be a generational drop in my opinion, and due to changing demographics we just won’t be seeing today’s cottage evaluations again in our lifetimes. Get out now if you can or if you need the money. Be reasonable and lower your prices. After the summer starts you have no leverage at all until next spring, probably at 25% less than what you might get this year.

#252 Smoking Man on 05.21.14 at 5:19 pm

#242 Holy Crap Wheres The Tylenol on 05.21.14 at 2:47 pm

You want to neutralize Real Estate, find a way to kill demand or add supply.

Adding Supply is a bit tough for
416, no land.

So the only option is to create policy that will kill demand.. Feds have been doing that.

To get rates spiked, dollar needs to die, and a zillion new jobs..

Won’t happen with tree hugging Comunists in govt..

So the way I seen it, prices need to clime a lot higher to bring balance between Demand and Supply.

#253 Porsche on 05.21.14 at 5:30 pm

Probably posted already…

#254 William Bell on 05.21.14 at 5:55 pm or similar tools !!!

#255 espressobob on 05.21.14 at 6:03 pm

OK, so RE is the ‘holy grail’ of investments. It goes up relentlessly and captures those who see it as ‘
everything’ in their lives.

Realtors pump the illusion, and why not? They make dough and the buyers stay blind. Whats to blame? Have we a problem?

Paper mache, & lopsided foundations, lead piping, aluminum wiring (from the 80’s), brickwork crumbling, and a furnace fit for a museum. And then there is these gloriied apartments they call ‘condos’. Yikes.

And yet the dumbfounded keep buying. Go figure?

Not that CMHC is a part of that, nah.

#256 Bob Copeland on 05.21.14 at 6:05 pm

Looking back over the last 40 years of my life I’ve discovered every time I took a beating I had no one to blame but myself. Let them screw up. It will be a learning experience. The only prevention is blogs like this. Bet they don’t read what they don’t want to hear though.

#257 Slow Canada on 05.21.14 at 6:13 pm

To me the biggest factors are financial illiteracy, lack of discipline, lack of independent thought, and lack of imagination.

People are unfortunately not very smart, in other words.

#258 Linda Pearson on 05.21.14 at 6:30 pm

#251 GeorgeSoonToBeRetired on 05.21.14 at 4:03 pm

“Fire sales coming soon it seems.”

You mean like a “friction” fire where the mortgage papers rub up against the insurance papers?

#259 jess on 05.21.14 at 6:45 pm

fraud- a lagging indicator
charges were laid in 2008. That followed a six-year police investigation into a fraudulent scheme involving dozens of home purchases dating back more than 12 years.

search real estate fraud @Department of Justice ,SEC and FBI

The Program!

united states of secrets

#260 Objective Data on the House on 05.21.14 at 8:39 pm

Before I buy a car I have access to significantly more technical details of the product I plan to buy compared to buying a house, while the car is significantly less expansive.

As a buyer who browsing the MLS I must see the architectural layout of the house with all dimensions and elevations, areas in square meters and the site plan with property lines. The MLS offers you a lot of BS you already know but the vital information is missing. They tell you that a school or a bus stop is near by but they forget to tell you the size of the house, its age, how many times it experienced renovations, which reconstruction is backed by the formal architectural/ structural/ mechanical/ electrical design and a City building permit.

More often then not people buy “cat in a bag” following impression which is based only on a curb appeal. Agents like it – this way the have quicker close. But this is wrong. The buyer must base his decision on comparison of objective technical information, which in most cases is not available. The commercial RE buyers do due diligence: they get all technical data, property condition reports from each engineering discipline: architect, structural engineer, mechanical engineer and electrical engineer, not the unregulated house inspector brief.

As the buyer I must be sure that all past owners renovations are backed by the City building permits where required by law.

#261 b on 05.21.14 at 9:22 pm

One of your best lines yet: “After I had the GreaterFool Bomb Disposal Unit open it, an unexpected surprise…”

Made me smile!

#262 bill on 05.21.14 at 9:31 pm

an olive branch?? I trust them …..not.

#263 straight six on 05.21.14 at 11:00 pm

Some 10 yrs have passed since we first heard that the RE sky is falling..
Chicken Little comes to mind.
(I said Chicken Little, not Garth).

Meanwhile a tiny house on a 25′ lot in the 300 block of TO’s Kane Ave just sold for 155K over asking.
They had Eighteen offers!

Chicken Little.. YOU’RE FIRED!

but Garth will be kept on for his informative & entertaining writing.

#264 kam on 05.21.14 at 11:23 pm

1. For purchase of second home [target -flippers] minimum down payment should be 20%.Condo prices will drop next month.

2. Real Estate Brokerage firms should get commission $$xxx per transaction.2.5% is too high for doing nothing when the value of homes is so high. Brokers should be paid 2.5%/1% or $1,000 whichever is less. This limit will help to get rid of lots of part time brokers and full time realtors will earn more money on volume.

3. All information about the property should be available online along with the price of recently sold comparable properties , history of the purchase price of the properties etc.

4. All buyers should be able to attend multiple offers negotiations with their brokers whenever negotiation with the seller is going on .

5. First time buyers with 20% down payment should be allowed to have long term mortgages [35 to 40 yrs] so that young families can afford homes and at the same time they will be able to manage their cash flows .

6. It should be mandatory for all buyers to put financing and building inspection conditions.

7. Real Estate Agent profession should be regulated by
the Law Society of Upper Canada .

#265 miketheengineer on 05.22.14 at 9:04 am

So…I see a home on the MLS that I have been “dreaming about” at night…it is in a different city, but has the style and size…but it is just a bit out of my price range.

So I call the RE agent, for a brief discussion. This guy wants “xxx”. I ask will the owner entertain “xxx-25k”. RE agent replies…the owner wants “xxx++++” more than listed price.

So I said to the dude…o.k. have a nice day.

3 weeks later the RE dude calls me back, asking if I was still interested in the place, as previous deals fell through. I tell him “no” as I was interested a few weeks ago, but your attitude really disturbed me and I don’t want to deal with you or the owner.

I will “never ever” own a home again….screw the RE industry.

#266 Dupcheck on 05.22.14 at 1:04 pm

End these out of control, misleading, and unfair agencies or reform the heck out of them:


Regulate RE Agents, if they make so much money and have so much power on other peoples life choices, hold them accountable for their actions just like lawyers, engineers, and doctors are held accountable for their actions. Make it harder to RE agents to get licensed.

#267 Slim Shady on 05.22.14 at 3:06 pm

Dear Jake Moldowan

Here’s a blog dog’s opinion on the question you were asking Garth.

If your industry (residential housing intermediaries) has any chance of surviving it must radically and RAPIDLY change itself. It must move away from commissions into flat fees, it must HEAVILY regulate itself as a profession including a strict code of ethics (no double representation, no giving investment advice, no lying, no dishonest tactics like planning bidding wars).

The reason for that is simple. Technology has exploded, and along with it people’s overall literacy and access to information. There is TREMENDOUS backlash over your monopoly of the MLS, and over the exorbitant percentages charged as commission. A lot of the public’s displeasure towards your industry is hidden by the housing bubble getting pumped up, and all that pent up frustration will come out when the bubble pops. Expect heavy government intervention, and brush up your resume. Most of you won’t be working in real estate in a few years, and if you don’t manage your industry well then buying and selling residential property will be like buying and selling a car, with kijiji and autotrader equivalents putting you completely out of business.

There is a very very very thin margin of error in saving organized real estate (at least on the residential side). Let’s face it, the value added by the typical real estate agent is about the same as that of someone pumping gas for you at the gas station. Not many of those gas stations around anymore.

The problem is that doing what it takes to save your industry will be opposed by the majority of those employed in said industry because of short-term profits and individual selfishness. Which is why I don’t think your odds of success are very good, the tragedy of the commons is a real bear.

The TLDR is: Real Estate industry, check yoself be’fo you wreck yoself.

Points of action
– Self-regulation including a comprehensive code of ethics which is STRICTLY enforced
– Much more careful selection of employees
– Opening the MLS before the government forces you to
– Adding value to each transaction via quality information and interpretation (but don’t give investment advice that a financial professional wouldn’t)
– Open up fair and comprehensive statistics similar to Zillow in the States
– Get rid of commissions and charge a reasonable flat rate
– Immediately and convincingly stop the rampant conflict of interest
– Cut out some of the middlemen. The industry can’t support both brokers and agents once this bubble is done inflating.