The gene pool

FLOP modified

About the time, yesterday, the Toronto Real Estate Board was announcing May sales had increased 11.4% over last year (it was actually 8.8%), a realtor rushed onto this pathetic site populated with social rejects and bad seed to say this:

Those of you who have believed in Garth since 2009 have lost out on growth of up to 65%, even more in many locations, in real estate assets. Even with a large drop, if it could ever happen, you will be far behind those who bought and waited out any temporary blips.
How much will you be prepared to fall behind in the next ten years?
You really are the greater fools. Garth is your official enabler.
Shame on all of you. So sad. I know of no one who has had to sell for less than they bought in the last fifteen years… enjoy raising your kids in a crowded apartment building with drug dealers on every second floor. Dumb people make bad parents… I wouldn’t want any of my kids reproducing with any of yours.

Seriously. He wrote that. Buy a house now or end up in drug-infested rental squalor with rat-children and no future. And it’s all my fault.

Of course, you might feel different right now if you were trying to sell an unwanted big house in Victoria’s Oak Bay, a buyerless Muskoka cottage or Caledon estate acreage, a condo in DT Calgary or almost anything in Montreal or Halifax. Many markets are already hitting a correction. But let’s set that aside for a minute and talk about the real issue. Maladaptive brain activity change. Or, brain farts.

This happens when people (for argument’s sake we will include realtors) believe something so intuitively and repetitively that they make serious errors. When enough people are convinced of the same thing, in an unthinking and robotic fashion, BFs turn into delusions and manias. The errors become legion. And before ya know it, young innocents are buying slanty semis for $900,000.

Well, we’ve seen this before on this enabling blog. Remember the gold thingy?

There was a time (three years ago) when bullion was advancing to $1,900 an ounce and this site was overrun with manic metalheads telling everyone they were idiots if they didn’t jump on board. To the bullion bunnies, stocks were trash. The US was going to default on its debt and turn into a giant Detroit slum (full of drugs and rat-kids). Even cash was junk, being just so much fiat paper issued by bankrupt and illegitimate governments.

Here was the cult of recency at work. Humans being what they are, people want to believe what happened recently will continue to occur, setting a pattern for all future events. Humans also crave simple. It’s why so many of us migrate to a one-asset financial solution. You know, all you need is a garage full of gold. Or a house. Why fuss with understanding balance and diversification, or learning what a preferred share, ETF or a REIT is? Besides, everything else is risky and designed for losers. How can you possibly argue with success?

So, when I told the metalheads in 2011 to sell their bars and coins, harvest their profits and find some balance, it was pure flatulence. “Even with a large drop,” they said, “if it could ever happen, you will be far behind those who bought and waited out any temporary blips. You really are the greater fools. Garth is your official enabler. Shame on all of you. So sad. I know of no one who has had to sell for less than they bought in the last fifteen years.”

Well, in the last three years, guess what? Gold collapsed. Down 34.5%. It was so obviously coming.

The US economy recovered and the currency along with it. That stability and rising corporate profits attracted money to assets which promised far more predictable growth – shares of companies that were making money. Inflation vanished, so fiat cash became more valuable, not less as the gold nuts had convinced themselves would happen. Banks around the world got stronger, more stable. Contagion in Europe was contained. Central bankers coordinated their playbooks. And without inflation or financial collapse, gold crumbled.

Look at its value relative to stocks:

GOLD modified

Source: Bloomberg

But this post isn’t really about gold, an emotional and narcotic asset which promises more losses. It’s about irrationality, and how it can sometimes look so rational. So convincing. So certain.

Residential real estate’s the new bullion. It’s that one-asset, simple solution to the overwhelming complexity and incomprehensibility of modern life and financial markets. What was once just shelter is now a retirement strategy, an investment plan and savings vehicle, all justified by recent gains – because everyone knows it will go on. So if you don’t jump in, “how much will you be prepared to fall behind in the next ten years?”

Asset inflation. Risk and loss. It’s sad the same lesson has to be learned, over and again.

And please, be careful who you reproduce with.

214 comments ↓

#1 shocked! on 06.04.14 at 5:36 pm

The fact still remains that had one invested in real estate over the last decade they would have enjoyed a healthy profit…whether on paper or realized in cash:)

Same for a financial portfolio, with more diversification and cash flow. The point is that a one-asset strategy is drenched in risk. — Garth

#2 Vamanos Pest on 06.04.14 at 5:39 pm

…and 65% in five years? My portfolio is up over 200% in that time. To whoever wrote that ridiculous comment: don’t worry about me, I’m doing fine thanks. You do your thing and I’ll do mine…BTW are your kids as annoying as you are? Because I don’t think you have to worry about that whole reproduction thing.

#3 Teacher's Ass-istant on 06.04.14 at 5:43 pm

I am so confused. I never watched Oprah. So if you’re an enabler, I’m codependent? Drug dealers on every other floor? None on the floor I live on maybe I should go check the odd number floors. It’s just something I have to do for meeeeeeee.

Then there were these lines “It’s about irrationality, and how it can sometimes look so rational. So convincing. So certain.” and for some reason I was reminded of the Ontario Leaders debate last night.

Oh and this little beauty “Maladaptive brain activity change. Or, brain farts.” Great, I’m probably gonna need another specialist now and you know how long it takes to get an appointment with them and how long they keep you in the waiting room with a bunch of sick people! Maybe I should just find really smart realator like the one who wrote to you and knows everything.

Lastly I’m concerned that the teacher that touched Smoking Fool might still be out there.

#4 Kris on 06.04.14 at 5:45 pm

TIME FOR A BLOODY REVOLUTION IN THIS SCUM OF A COUNTRY !!!!!!!!!!!!!!!!!!!!

#5 Freedom First on 06.04.14 at 5:46 pm

Sadly, the house salesperson who posted that message just sounds like the average RE crazed citizen world wide. And you don’t have to look very hard today to find all of the comments from multi-millions of people in countries that had their housing crashes in recent years and were financially beheaded who now say housing is not a good investment. Also very sad, Garth has told us numerous times that he only posts messages from house salespeople that do not have to be censored. This house salesperson is one of the tactful ones, so to speak.

#6 www.totalinvestor.com on 06.04.14 at 5:54 pm

So who is this smart ass real estate agent?
After an insult like that I want to hire him to buy a $950k semi in Moronto, Bantario. NOT!

#7 Kris on 06.04.14 at 5:58 pm

AS LONG AS CRAZY/STUPID/GREEDY PEOPLE KEEP THIS MENTALITY IN THIS COUNTRY…..IT WILL ALWAYS BE DIFFERENT HERE.

As smoking man always says, you can’t fight the herd.

#8 dosouth on 06.04.14 at 6:00 pm

So we’re looking at homes in Fairwinds-Nanoose Bay. Been watching for a long while. Prices sliding and the wife talks to a fellow who she works with. He enquires as to if we are buying yet? She replies, “Prices are adjusting down finally in line with assessments, so we are looking.”

Apparently he replies, “Assessments are only a number, the value is in the house and location. The wife and I looked for two years before buying ours.” He then admitted to paying $500k over the assessed in 2011 (but 150k under asking) and the house is now assessed at 785k less than what he paid. Wow, he has lost more than what we plan to pay for a quality home.

No biggie though, after all it is just a number.

#9 I love real estate on 06.04.14 at 6:01 pm

We’ll see whose story comes true, Garth.

Those charts you showed a while back demonstrate clearly that the 1989 ‘bubble’ was sharp and severe.

What we have seen in price growth the last fifteen years has been much more gradual, with many underlying demographic and economic factors changing to support it.

As for using my comments for today’s theme, I take that as a compliment:

http://www.youtube.com/watch?v=0YAcoDkj_dI

Now for my 5%….?

(Good realtors always EARN it)

#10 Old Man on 06.04.14 at 6:03 pm

There are no problems in Canada as the Minister of Injustice is attempting to reform the Charter of Rights and Freedoms. Its called an attack upon 15 (1) or our Equality Rights to established a bad precedent with his new Bill.

#11 james on 06.04.14 at 6:06 pm

#1

From the fact that it may have paid off to buy real estate 6 years ago, it does not follow that it will pay off to buy real estate now.

Sure, if you bought ten years ago in Vancouver and sold out yesterday, you had some pretty serious gains. If you didn’t sell, you have what are termed unrealized gains. Not everyone can take profits at the same time, of course, and housing markets are prone to becoming less liquid when sentiment changes.

#12 Trojan House on 06.04.14 at 6:09 pm

First of all, gold rises and falls on the strength of the US dollar, and in the confidence of government. Gold was easy to transport back in the day so that when the confidence in a government collapse and other assets lost value, you could move gold across borders virtually untraceable. Today that is not possible. Therefore, gold cannot be a hedge.

Second of all, the paragraph about the US recovery and European contagion being contained is completely false. There is no recovery in the US. What we are seeing is money moving into tangible assets, especially in US dollars. Many countries in Europe have not turned the corner. Their solution is to hunt for money, taxing anything that moves.

#13 Smoking Man on 06.04.14 at 6:09 pm

#3 Teacher
Lastly I’m concerned that the teacher that touched Smoking Fool might still be out there.
……….

He is, and I will out him in my book… 9.99 on line…

Hey that rhymes…

#14 MWerk on 06.04.14 at 6:11 pm

The dream is over, at least south of the border…
http://money.cnn.com/2014/06/04/news/economy/american-dream/
Maybe here is different…

#15 Notta Sheeple on 06.04.14 at 6:11 pm

I don’t believe Garth ever said “never buy real estate.”

I think the message here all along has been “don’t put all your eggs into any single market (any market, equities, gold, real estate or otherwise) and never into a market that has peaked, has absolutely zero growth potential, and is surely destined to decline.”

Has there been a bull run in real estate and equities? Absolutely. The trick is, like that child’s game tapping a penny across the table, knowing where the edge is without getting stupid and greedy.

#16 Protea on 06.04.14 at 6:16 pm

I for one sold my house in North Vancouver in March.2012 for $1.250,000 the investor who bought it put $75,000 in the house put it up for sale and it took until today June 4 .2014 to get a maybe sale we heard from the RE agent. The asking price was $1,299,000 probaly went for the same price I sold it for .I figure with closing costs it will cost the investor approx.$135,000. And also the lost opportunity of his money.
Friend of ours had her house for sale almost one year ago for 1.7 million its now reduced to 1.34 million and has not sold yet. These are everyday and real examples of thr real state of the RE market in Vancouver. I take the propaganda put out by RE agents as a grain of salt.

#17 espressobob on 06.04.14 at 6:21 pm

Eric Sprott said, silver would be ‘the investment of this decade’. He didn’t say for who? Eric, say you didn’t go short?

Metalheads (commodity & sector plays) got their heads lobbed off & handed back to them on a ‘silver platter’! Maybe thats what Sprott meant?

#18 Rabbit One on 06.04.14 at 6:24 pm

I have been so impressed about how many intelligent,
sane comments are in your blog.
All those people are so educated, know basics
and advanced economics, value of life, etc.

What I found is wrong in this world now, is
who made non-intelligent decision, who cannot do math,
(like one bought tonwhouse for $400,000 5 years ago with morgage,
sold for $401,000, claim one made $1K profit, tax free)
irrational, emotional, aka, stupid people all win, made money
in real estate investment.

Might is Right?
Sick and tired….!

#19 sheane wallace on 06.04.14 at 6:24 pm

Gold is actually up 200 % in the last 12 years.
The suppression of gold prices is at the expense of the western banking reserves that were sold to the east/China.

When gold collapses and costs next to nothing give me a call, I will buy all that ‘unwanted used’ gold from you.
It is very healthy for your finances in long run to have 5 % of your net worth in gold.

Gold manipulation and short selling is a fact, not conspiracy theory, we got the first bank fined a week ago for gold market manipulation.

In short term trading gold can go lover as it is very heavily sold short (Comex has 100 paper contracts for each once of gold in storage available for delivery)

I am definitely not a gold advocate or a gold bug and have no more than 5 % of my portfolio in gold.
Frankly speaking all this bulls.it about gold is pointless and makes me sick, don’t like it, don’t buy it. When it hits 5k (yes it will but gas would be $ 5) drink a glass of cold water and move on. Energy could be better investment. But gold will have it’s day as it always had.

You guys are funny. — Garth

#20 van guy on 06.04.14 at 6:27 pm

Garth,

the house I wanted to buy in 2010 was 600k. Its now 900k. Now I cant afford it :(.

So? — Garth

#21 sheane wallace on 06.04.14 at 6:27 pm

#12 Trojan House
……………………………
Money is not moving into tangible assets.
Gold is money as a store of value. Currencies are not, they were introduced as receipts for gold, then were detached from gold in 1973.

currencies are moving to tangible assets.
Energy could be even better investment.

#22 sheane wallace on 06.04.14 at 6:30 pm

gold is the only thing ‘in bubble’ that nobody owns.

#23 Kris on 06.04.14 at 6:35 pm

From the comments by those realturds, I would regard drug-traffickers as much more honest bunch than those scum-money loving get it at any price turds.

#24 Cici on 06.04.14 at 6:37 pm

That dumbass really shouldn’t be pointing fingers and calling other people names. He’s way too sure of himself, and all because luck has so far been on his side.

I take comfort in the fact that his luck will eventually (sooner the better) run out.

Also, in terms of drug dealers, there are plenty adjacent to the tree-lined avenue of 2-million dollar homes in the Toronto neighborhood I’m currently staying in.

And as for people who’ve lost money on RE in the last 15 years…I know of at least 5 in Victoria. And as for those who’ve made profits, they’ve reinvested them in RE by “moving up” to something that cost 65% percent more a few years later. So, none of them are wealthier, some of them are actually poorer but they don’t know it yet (they’ve been buying depreciating junk with their “rising home equity”), and buy the time they realize that no one single asset goes up forever, it’ll probably be too late and they’ll end up selling for a loss.

If I do ever buy RE, it probably won’t be in Canada, and if it is, it will be at a deflated price. And I won’t buy just any old wobbly, slanty semi, row or particle-board detached home.

And in the meantime, I’ll rent at a discount and save.

#25 };-) aka Devil's Advocate on 06.04.14 at 6:38 pm

Gold is a safe haven in times of economic strife. The reason it stopped climbing is simple because people came to realize we weren’t headed for economic Armageddon.

On housing; we’ve seen it time and time again, the market SHIFTS ever 7 to 10 years. Each time we hit dizzying heights we say it can’t happen but it does. The reason is simple, despite this being an unsustainable economic model, it’s all we’ve got and our governments will bubblegum it together with whatever resources are necessary and available to them at the time.

Our economic paradigm requires constant growth. Our governments do everything possible to ensure it. Ultimately we overshoot and those ill-gotten gains are clawed back, but only the ill-gotten gains as we never recede as much as we advance.

This is why I am telling my millennial children to buy now. Buy now and understand that those properties you buy will peak and fall back but don’t cry over the losses from the peak as you bought well in advance enough that you will still have gained handsomely.

Shift happens, always has always will. I’m willing to stake my children’s financial future on it confident that it will put them miles ahead in the end.

#26 sheane wallace on 06.04.14 at 6:39 pm

The US economy recovered and the currency along with it
……………………….
I laughed so hard that know I need a pill. I understand the importance of the dollar and considering the stupidity of North Americans the powers to be are and would be very successful in their deception, however they are barking the wrong tree, they can not deceive the world and North Americans are rendered practically useless consumers with no say in the world economy.

#27 sheane wallace on 06.04.14 at 6:39 pm

now I need a pill

#28 };-) aka Devil's Advocate on 06.04.14 at 6:43 pm

In other words keep crying that the sky is falling for surely it will… in about 5 years’ time. In the meantime it certainly does look to me like we’re in for another round.

Sales in Kelowna are up 40% year over year.

Oh and where ever you are Form Man check out the MOI… solidly in Seller’s territory at less than six months.

#29 };-) aka Devil's Advocate on 06.04.14 at 6:48 pm

BTW: REALTORS® don’t set prices, Seller’s don’t set prices. It’s Buyers that set prices. Right now buyers are bidding against one another pushing prices higher. Price follows volume – be it up or down, price follows volume.

#30 Kris on 06.04.14 at 6:49 pm

1 possible point why its different here.
Homeownership in China is 100% plus, right.
Has the RE market corrected in China, hell NO.
Chinese canadians as i observe them regularly, walk around nicely holding hands tripping over themselves because their eye are focused on houses and their respective land.
With a high percentage of Chinese people here, it pretty much guarantees the orgy to probably never ever end.
After All, these people also have children and you can bet anything, they will not be renting anyone’s basement.
THE END…..sorry Garth.

China’s housing market is seriously correcting. — Garth

#31 GsAmazon on 06.04.14 at 6:58 pm

Raising a family in a rental apartment downtown??!! On purpose???

*sigh – I’ve come to realize that the herd doesn’t believe anything is possible until they see me do it first…..

try not to step on my rat-children on your way to mind-blowing success.

HArhar – that realty-infiltrator comment made me laugh more than Shirley’s.

#32 Londoner on 06.04.14 at 6:59 pm

As we await news from the ECB as to whether they will just cut the overnight rate to zero of if they will embark on another round of LTRO or QE let’s consider an alternative view. The goal of BOC, Fed, BOE, ECB, etc is to have a 2% inflation target along with an increase in economic productivity and to prevent deflation at all costs. It still remains unseen as to whether a deflationary cycle will emerge despite the central banks’ efforts or whether they will manage a slow steady rise in inflation without sending it skyrocketing. However there should be no doubt that the aim of current monetary policy is to create inflation to make repayment of debt easier. Given this fact is it unreasonable for a household with the means to purchase residential real estate to do so as a hedge against inflation in an environment with such direct objectives? If a deflationary cycle does emerge surely it would be short lived given the willingness of central banks to take drastic actions.

#33 Kris on 06.04.14 at 7:03 pm

China’s housing market is seriously correcting. — Garth

Not in Shenzhen of Beijing.

#34 Nemesis on 06.04.14 at 7:06 pm

“Humans are a threat to the balance of the universe.” – HommeDuTabagisme

Actually, SM – I’m still pondering that conundrum… and so far, you could say ‘TheJury’sStillOut’…

http://youtu.be/sIaxSxEqKtA

Of course, there’s always PlanB… As, in the interim, my InterGalacticTransDimensionalOverLords have been working on more than a few BugFixes/Upgrades.

http://youtu.be/AzWK-x5WlXk

Just thought you’d like to know.

[NoteToGT: Just between the two of us, I rather doubt we’ll surpass our prior achievements – you know… Dogs&Monkeys. Never mind. We live in hope. It’s the OnlyWay. Always has been.]

#35 Millenial-Falcon on 06.04.14 at 7:07 pm

Garth, can you write a future post about QE and fiat currency and why the US fed can inject all that liquidity into the system and have no negative consequences ? Is there a simple answer ?

#36 nitehawk on 06.04.14 at 7:07 pm

Garth are you saying this is a good time to buy Gold ;)

#37 Lactose the Intolerant on 06.04.14 at 7:20 pm

Here’s a brilliant piece of advice from The Hamilton Spectator. When your destitute under-employed adult kids “boomerang” home, get rid of them by buying them a condo! Thats right! Saddle them with hundreds of thousands of dollars debt! Brilliant!

#38 Smoking Man on 06.04.14 at 7:30 pm

OK ladies of the night, time to take back your lexis, your condo, your vacation.

Harpo just put you out of business. McDonald’s is hiring.

Now we gotta lock up our daughters, wives, and sisters.

That one eyed, smelly fat albino man who has no chance of a normal relationship, and no outlet will now be walking the
streets ready to explode…

#39 Stoopid Idiot on 06.04.14 at 7:31 pm

http://www.marketwatch.com/story/over-50-of-americans-struggle-with-home-affordability-2014-06-03

Half of Americans can’t afford their house
June 3, 2014, 1:58 p.m. EDT

As the housing market slowly recovers, a majority of homeowners and renters are finding it hard to meet rising rents and mortgage payments, new research finds.

Over half of Americans (52%) have had to make at least one major sacrifice in order to cover their rent or mortgage over the last three years, according to the “How Housing Matters Survey,” which was commissioned by the nonprofit John D. and Catherine T. MacArthur Foundation and carried out by Hart Research Associates.

These sacrifices include getting a second job, deferring saving for retirement, cutting back on health care, running up credit card debt, or even moving to a less safe neighborhood or one with worse schools.

“Affordability issues are real and a major hurdle,” says Lawrence Yun, chief economist at the National Association of Realtors, an industry group. Home prices have increased 20% over the past two years while wages have barely gone up, he says. “Only by adding more new supply, via housing starts, can home prices be tamed,” Yun adds.

In fact, construction of housing units has averaged around 1.5 million a year for the past five decades, he says, but it’s likely to be less than 1 million in 2014.
What’s more, at least 15% of American homeowners (or residents of 78 counties across the country) were living in housing markets where the monthly mortgage payment on a median-priced home requires more than 30% of the monthly median household income — long considered the maximum for rent/mortgage repayments. Housing costs above that threshold are “unaffordable by historic standards,” says Daren Blomquist, vice president at real estate data firm RealtyTrac.

In New York county/Manhattan, mortgage payments represent 77% of the median income and in San Francisco County represents 70%…… more

#40 johny on 06.04.14 at 7:34 pm

Russia hires Goldman Sachs as corporate broker ,oh you mean the banks that run america run Russia who would have guessed here is the link from bloomberg
http://www.bloomberg.com/news/2013-02-05/goldman-sachs-hired-by-russia-as-corporate-broker-to-boost-image.html

#41 Piper on 06.04.14 at 7:35 pm

Garth, should I sell my house and rent ??? take the money and run??

Status: married with wife and 3 small kids. In my late 30s

My GTA home is worth about $1.1m and I have $250k mortgage on it.

Between my wife and I, we have about $300k invested in the stock market, mostly In registered accounts. I also have a DB pension through work.

Obviously I am heavily weighed In RE right now. What should I do?

#42 Stoopid Idiot on 06.04.14 at 7:36 pm

Buy low sell hi… I get it Garth…. This is great entry point for Gold?… yes!

Stoopid

#43 Ben on 06.04.14 at 7:42 pm

Looking at Montreal to buy/rent yesterday I saw two 5 beds, both near one another, in a good neighbourhood. I could have rented for half the cost of the mortgage on the one for sale.

Just who is buying into this? Time for some Darwin awards.

#44 Observer on 06.04.14 at 7:46 pm

Oh boy, do we ever need Zillow.
There are lies , damn lies and statistics. The house we sold four years ago is now worth approximately 50 % more than when we sold it.
See, told ya so, say the housing bugs. Er, not so fast, clever clogs, say I. You have conveniently forgotten to take into account the 300K+ that the new owners have put into it.

#45 Mister Obvious on 06.04.14 at 7:47 pm

” I know of no one who has had to sell for less than they bought in the last fifteen years… “
———————————-

However, selling residential real estate for more than you paid carries no guarantee whatsoever that you will actually profit.

As usual, most people prefer to do simple additions and subtractions using gross numbers and conveniently forget real details that actually count toward the bottom line (much like the CREA does).

Liquid investments have low carrying and disposition costs while many of them pay you to own them. When they rise in value the chances are far better you will earn a profit. If they don’t rise you can be out of them easily and still have had earnings to mitigate losses. Try that with real estate.

If chasing after perpetual capital gain without pausing to rebalance is the only trick in your book you are a financial neophyte and indeed a greater fool.

#46 Eatin' Bonbons on 06.04.14 at 7:47 pm

To Smoking Man:
You haven’t mentioned your boat this Spring, or perhaps I missed it. Just wondering if everything was Ok on that front – I imagine you’ll be hitting the Lake soon.

#47 Son of Ponzi on 06.04.14 at 7:50 pm

China’s housing market is seriously correcting. — Garth
——————
And the correction is starting in the Chinese province of Richmond, too.

#48 Smoking Man on 06.04.14 at 7:55 pm

#46 Eatin’ Bonbons on 06.04.14 at 7:47 pmYou haven’t mentioned your boat this Spring, or perhaps I missed it. Just wondering if everything was Ok on that front – I imagine you’ll be hitting the Lake soon.
……

Took it for a spin two weeks ago. Water to damn, cold. If I’m challenging God in thunder storms. I need a plan B.

If a wave Knox Me of the boat, kill switch triggered, I won’t make it back to boat before hypothermia paralyzes me.

It’s all about risk vs reward..

#49 just say no on 06.04.14 at 7:56 pm

realtors in Victoria BC say houses double every 10 years! So keep making those mortgage payments people and what ever you do….do not think of selling..you must hold on forever and that way some people can make big gains cause of low supply….the demand will be high and the sheeple that live in fear will buy at any price cause they do not want to miss out on getting instant rich be cause it is all about money…..money money, get, mine……. even the relationships are opportunistic seeking…to gain….and the house goes up they split and one buys the other out and they both think they won? The new mental illness house worshipping for money money money……the new family values “what is your house worth?” Always goes up forever and ever so renters are losers blah blah blah…….lol. Love those Realtors! They can get you your money!

#50 Old Man on 06.04.14 at 7:57 pm

#38 Smoking Man – there is one part Peter The Great has failed to address, as his Bill is a walking sham. I am sure it makes him a bit nervous too. So let us include in your words of wisdom the following: Now we gotta lock up our sons, husbands, and brothers too. :)

#51 Cowpoke on 06.04.14 at 8:01 pm

The [herd] has been corralled!

Were just [animals]!

We just [think] were smarter, thats all!

#52 Mr. Reality on 06.04.14 at 8:05 pm

I think the definition of stupid is:

buying a home, paying 100’s of thousands of dollars in interest on the mortgage, never doubling up on payments, remortgaging or using HELOC’s to buy crap, paying taxes and insurance and finally renovating the home……then turning around and selling it claiming it was an investment and you made money never actually calculating the true costs and the actual loss.

And that blog dogs is the psyche of the majority of homeowners in this country…..

home = profit

Mr. R.

#53 johny on 06.04.14 at 8:09 pm

#20 van guy on 06.04.14 at 6:27 pm
Garth,

the house I wanted to buy in 2010 was 600k. Its now 900k. Now I cant afford it :(.

So? — Garth
nice response ,he could have made more money than your advice would have in 3 years

Actually $600,000 put in a 60/40 balanced portfolio in 2010 would be worth $880,000 today. No mortgage payments. No property taxes. No debt. And lots of comforting diversification. — Garth

#54 valleyrenter on 06.04.14 at 8:11 pm

Yep, “real estate never goes down”. Tell that to my buddy Jonnyboy who has watched his assesment drop every year for the last 8yrs, or the 4 different couples we met in the last building we lived in. Underwater, all of them, can’t sell and “move up the property ladder”. One couple are even trying to take over the family farm and pretty much are never home, unit above them sold for $151,000, they bought theirs for $198,000. Ouch!

#55 Dean Mason on 06.04.14 at 8:15 pm

Gold was 35 U.S dollars a troy ounce in 1971 now it is 1,245 U.S. a troy ounce today.

This is 35.57 times higher or 3,557% increase in 43 years.

It had to correct from 1,910 U.S. a troy ounce because it was up 54.57 times or 5,457% in 40 years.

It is just plain reverting to the mean or the law of averages. It was not sustainable just like when the Dow Jones, Nasdaq and S&P 500 levels back in the year 2000, up 18 to 20 times, 1,800% to 2,000% in 18 years from 1982 to 2007

Reverting to the mean is a bitch if you listened to the pushers. — Garth

#56 Smoking Man on 06.04.14 at 8:25 pm

#50 Old Man on 06.04.14 at 7:57 pm#38 Smoking Man – there is one part Peter The Great has failed to address, as his Bill is a walking sham. I am sure it makes him a bit nervous too. So let us include in your words of wisdom the following: Now we gotta lock up our sons, husbands, and brothers too. :)
……

Ha, never thought of that, guess I’m a bit of a sexist, but you are
right…..

As always religious freaks of nature always make things worse.

They worship an invisible man in the sky, that promise to make things right after death.. Correct all injustices.

So in the mean time get back to
being a bitch..

Stupid Humans, thank god I’m an alien..

#57 Mark on 06.04.14 at 8:27 pm

“Here’s a brilliant piece of advice from The Hamilton Spectator. When your destitute under-employed adult kids “boomerang” home, get rid of them by buying them a condo! Thats right! Saddle them with hundreds of thousands of dollars debt! Brilliant!”

That just means they’re even more likely to come back “home” when they go bankrupt, and the likelihood of finding a decent job with a bankruptcy on the record is relatively poor.

I personally am aghast at how many highly educated professionals, even in the ‘finance’ industry, can look at Canadian RE (P/E = 35, growth similar to the rate of inflation over the long term), and still purchase.

BTW, I see that Anikiri moron is still spamming the RFD forums with his trolls. Pathetic.

#58 Snowboid on 06.04.14 at 8:31 pm

It’s interesting to see the stats about May RE in the Central Okanagan. While overall $$ sales are indeed up 40% from last year they are:

Almost 18% down from the peak in 2007 (including inflation).

I too read the great article about ‘multiple offer’ bids being the new normal in Kelowna – this based on an article by a local RE agent who heard second-hand about one house that had multiple offers.

But haven’t we heard about this ‘scam’ before? Listing a home lower than real value and starting a bidding war!

Bottom line is RE has a long ways to go to catch up to 2007.

We gladly renewed our lease for another year – even agreed to a 1% increase in rent to help the owner cope with the 18% increase in strata fees!

Ever patient, the Snoboid family.

#59 the jaguar on 06.04.14 at 8:32 pm

I used to work in a job where I was in a position to listen to stories about marital breakups. One of the things I sometimes asked people was whether they saw it coming. A high percentage of the men never did for some reason. What they did confess was that after it happened many of their friends, family or associates told them they weren’t surprised. They ALL saw it coming. There is something about this current situation with real estate that feels exactly like that. There are those who absolutely see the inevitable and those who stubbornly cling to their beliefs like they believe in Santa Claus. There is something desperate in their tone. I made some seriously good money in the past twenty years on two homes I bought and sold. Only because I bought at the right time in the housing cycle, and because I wanted homeownership at that time in my life. I may again, when the time, location and price is right. But to think there is no housing bubble or consumer debt crunch coming in this country is madness. Like politics, all real estate is local. Some people just aren’t seeing the bigger picture. Thank you Garth for giving them a bigger overview outside their little world.

#60 Dean Mason on 06.04.14 at 8:37 pm

Mathematics and economics bores, mystifies and hurts a lot of peoples brains but that makes no difference when the economy and investments of all types have to come back to reality.

I think their was movie called Reality Bites!

#61 johny on 06.04.14 at 8:42 pm

Actually $600,000 put in a 60/40 balanced portfolio in 2010 would be worth $880,000 today. No mortgage payments. No property taxes. No debt. And lots of comforting diversification. — Garth
but he would have made 300k with no taxes and if its nts in toronto there would have been a bidding war harvesting more money and there is no mrtgage payment if he would have put 600 k investment

I give up. — Garth

#62 TheCatFoodLady on 06.04.14 at 8:43 pm

Do they teach those sales tactics at RE School?

First – renters are associated with doomers but that doesn’t matter as much as we’re… WRONG! We LOST OUT! Big time too. We’re given a big, sexy number with no detailed analysis. But hey, who needs that when we’ve potentially lost 65%!!! As bad as losing a winning LottoMax ticket, eh?

If that’s not bad enough if we don’t jump in now – we’ll lose more. Sucks to be us.

And we’re a wellbeing seeking herd with an official enabler. Thank goodness this poster is here to liberate us from Garth’s lusty thrall. If not, we might have been snickering over his turns of phrase for years, YEARS, I tell ya! Is there a worse fate?

And not buying houses.

Shame on all of us – we’ve let down simply everything, clearly. We are unfit. We’re sheerly stupid & are freezing out our kids. Although apparently we don’t have as many of those. Must be all that radon in musty basements. Or the preservatives in the Pizza Pockets we eat while whining over losing another Wii game.

Back to kids – how can we be living in crowded apartment buildings if we didn’t have as many? Shouldn’t many of the few pallid offspring we had, have succumbed to the lure of illicit pharmaceuticals & either be demised, in rehab or spending their holidays at the GrayBar Hotel? So where are the crowds in these grungy apartment buildings coming from? Shouldn’t they be fleeing, screaming in fear as our, (thankfully few), whey faced offspring mow them down as they race in uncontrolled fashion up & down the halls?

“When we raise them that way” – LOVE IT! We’re made to feel guilty for no other reason than they might have lived in apartment buildings. We’ve scrooched them out of a better life. Quick! Revoke our parental licences!

And let’s all line up for our Darwin awards – if we can manage that stiff struggle up the basement stairs. That glowing orb in the sky? It won’t hurt you – it’s simply the beaming countenance of your local RE agent who – oh blessed day! – is here to save you & me from our dismal selves.

#63 Midas on 06.04.14 at 8:47 pm

Your bashing on gold is exactly what corporate America wants you to do !!! Good boy, they must think reading your blog :) What about the California couple that found a $10 Million gold stash on their property . Yes, Million with a M :) Imagine if that poor dude 150 years ago would have stashed fiat money, what would have been the value of the stash ??? You can say all you want Garth, but fiat money come and go in the history of the world, but gold has remain a valuable storage of wealth. One day not that far away, this whole circus will come down crashing hard. Nothing to add here.

#64 geogar on 06.04.14 at 8:49 pm

Sixty freakin five percent. Plus I’m dumb and my children are of low cal DNA. Garth!! How could you do this to me.

#65 Realtor # 1 GTA on 06.04.14 at 9:00 pm

you’re missing the point ..

because its taking so long for this “correction” to occur you were better off buying years ago because in the end most of you even with a correction will probably buy at a higher price point then when you decided to wait for the correction.

Or it was better to buy when you first starting reading this blog because you can sell now — rent, and then invest.

Timing the market is almost impossible – look at the DOW for months I heard a correction is coming soon

You’re missing a bigger point: the less diversification people have in their financial lives, the greater the risk. — Garth

#66 Shawn on 06.04.14 at 9:08 pm

Stocks were Golden

Dean Mason at 55 brags? that:
Gold was 35 U.S dollars a troy ounce in 1971 now it is 1,245 U.S. a troy ounce today.

This is 35.57 times higher or 3,557% increase in 43 years.

*****************************************
That is impressive but meanwhile the S&P 500 with dividends reinvested was up 65.3 times (data according Morning star publication – Stocks, Bonds, Bills and Inflation).

But yes, Gold has been very impressive over that period. Even with dividends reinvested and assuming no transaction costs and no income taxes, stocks did not beat Gold by much over that particular period.

Gold was up 8.66% per year in nominal dollars (before deducting inflation) That is all it took to grow 35.57 times in 43 years.

#67 Pete on 06.04.14 at 9:13 pm

To paraphrase, when the tide goes out it will be fun to see just how many are swimming naked – maybe that’s what the pic was saying…

#68 Andrew Woburn on 06.04.14 at 9:13 pm

#8 dosouth on 06.04.14 at 6:00 pm
Apparently he replies, “Assessments are only a number, the value is in the house and location. The wife and I looked for two years before buying ours.” He then admitted to paying $500k over the assessed in 2011 (but 150k under asking) and the house is now assessed at 785k less than what he paid. Wow, he has lost more than what we plan to pay for a quality home.
============================

We were looking at Fairwinds-Nanoose in early 2012. Not much was moving and what did was mainly going at around assessed value. At first everything looked cheap to us after Vancouver prices. Maybe that was his mistake. I realize assessments are now imaginary numbers in the big smoke, but in most of Canada, they are there for a reason.

We finally decided we didn’t want to be 80 years old in Nanoose and afraid to drive those country lanes after dark. We chose an ocean view property in North Nanaimo for slightly less money. It looks like other people think the same since our area is now selling well and at $50-$100K over assessment in many cases.

#69 Yitzhak Rabin on 06.04.14 at 9:13 pm

Gold also corrected a similar magnitude in 1976 and 2008, before undergoing enormous rallies. Sentiment on the metal and the miners is about as low as ever. Bubbles don’t occur in things nobody owns. Things became overheated in 2011 mainly because of trend chasing “hot money”. The same kind people pushing stocks like Twitter and Groupon to insane valuations.

The fundamentals that drove gold higher from 1999 to 2011 are still in play. Increasing US total debt, large expansion of the monetary base, large trade deficits and negative real interest rates.

If the taper continues, there will be serious consequences for the US economy and equity market. The next major move will come in the form of more QE than the original $85 billion/month, in an attempt to stave off a depression.

#70 LL on 06.04.14 at 9:16 pm

http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/dont-let-your-tfsa-land-you-in-tax-jail/article17123629/

TSFA…attention to easy charged penalties……….
TSFA penalties is a “gold mine”!

On Governement web about TSFA they say you can redraw money if you want to buy a house, a car, holiday, etc…I though it was for saving for your old days???? They should not write things like that..they encouraging ..again..to spense, not to save for your old days.

#71 TurnerNation on 06.04.14 at 9:21 pm

Today, Blog Dog Poloz came though again. Hockey Hair is good for something.

Up Uppa uppa.

#72 takla on 06.04.14 at 9:23 pm

All fiat currencies historically eventually have returned to zero worth,If one was to put a hundred dollar bill in one box and a hundred dollar s worth of gold{20.00 per oz-5 oz’s} in another box in 1930 and bury the two and dig them up today the hundred dollar box would be worth the same,the gold box would be worth 5 times the current price of 1242.00=6210.00!
I know garth is a stock bug as opposed to a gold bug but these facts cant be discounted.
Gold as a store of wealth has no contemporary,and buys the same amount of hard goods today as it did 100 yrs ago.
I like my gold and it does help me sleep at night

But you can’t spend it, or live another 100 years. Worthless arguments. — Garth

#73 bdy sktrn on 06.04.14 at 9:24 pm

the Fraser Institute, Canadian Taxpayer Federation, Conference Board, council of Chief Executives etc. have given you the ideology that the public service is overstaffed, overpaid and underworked.
———————————
for him maybe. For me, it’s simple observation of sloth, weakness and overeating.

#74 LL on 06.04.14 at 9:26 pm

….they say you can redraw money if you want to buy a house, a car, holiday,…

Sorry, you should read “withdraw money”, not “redraw money”.

#75 Teacher's Ass-istant on 06.04.14 at 9:29 pm

#58 Snowboid
I sense a level of skeptism. You don’t think Devils’s Anus snuck back in here to spread misinformation (again), do you? Afterall you said youself an article by an agent about one house does exist.

#76 Marty Crane on 06.04.14 at 9:32 pm

Hi Garth,

When you write “About the time, yesterday, the Toronto Real Estate Board was announcing May sales had increased 11.4% over last year (it was actually 8.8%),” can you give us some back up as to where you get your numbers *8.8%)? Or even how the Toronto real estate board came to theirs?

Simply compare published y/y numbers. — Garth

#77 devore on 06.04.14 at 9:33 pm

#7 Kris

As smoking man always says, you can’t fight the herd.

Why would you want to? Just get out of the way.

#78 RW on 06.04.14 at 9:37 pm

One of the big name custom home builders in winnipeg went bankrupt this week. Home sales over $500k are very slow.

#79 Ironic on 06.04.14 at 9:37 pm

The only thing that is going to bring down this housing market is a major recession in the US, which looking at the negative Q1 GDP (even after being juiced by ObamaCare, recent additions to pump it up by 500B, and understating inflation) we are on our way to. The rosy forecasts have been dead wrong for 4 years, and now the numbers are heading south at the same time as tapering. Like most central planners used to do, lets blame the weather. This summer will be an interesting one.

Growth is expected to be 3% in 2014 and at least that in 2015. So much for that theory. — Garth

#80 Doug in London on 06.04.14 at 9:41 pm

While this blog isn’t officially a gold blog, the subject has come up so I might as well add my 2 cents (or a few milligrams of gold) worth. When gold hit $1900 per ounce in 2011 and the manic metalheads were telling everyone they were idiots if they didn’t jump on board, I flew head first into the time tunnel and out into 1980 when gold last peaked at $800 or so an ounce and many people were lining up to buy it. Wow, what a trip that was, hearing Rock Lobster by The B52s for the first time, as well as Gary Numan singing “here in my car I feel safest of all, I can lock all my doors it’s the only way to live in cars” and AC/DC singing “rock and roll aint noise pollution, rock and roll will never die” and so on. How could anyone NOT see that 2011 (just like 1980) was a good time to SELL gold, rather than buy it?

#81 KWkid on 06.04.14 at 9:42 pm

Nice condescension.
The use of shame, disappointment and name calling are all fine touches as well.

Everyone should do what everybody else does because if you don’t you will never achieve success or get a date.

“Dumb people make bad parents”

And I hope for your sake your children will someday forgive your child rearing deficits.

#82 Scully on 06.04.14 at 9:46 pm

#16 you are so right. I have seen that for the last couple years too, but you don’t hear about that in the media. That realtor bleating to Garth is so full of shit. I wish the public did have access to the same MLS info as realtors do. I don’t understand why there is not enough pressure to change this.
Smoking Man, is 9.99 online for your book or for the first four minutes. :)

#83 Fred on 06.04.14 at 9:47 pm

Living in Toronto, some of those drug dealers are renting the basements of the homes the sucker owners had bought.

#84 Grunton Banton on 06.04.14 at 9:48 pm

It depends on how long your time horizon is..if you are planning in retiring in 25-30 years, then 5-10% of gold in your portfolio is a way to diversify your holdings. If you are retiring in a few years, it might not serve you as well. Can the Fiat Printing continue at this rate for another 25-30 years if you face that distance to retirement? If you think yes then sell all your gold. If you think no then own 5-10%.

#85 Drunken Stupor on 06.04.14 at 9:54 pm

Re comments on China RE
http://www.macrobusiness.com.au/2014/06/citi-china-should-panic-about-housing-now/

#86 dosouth on 06.04.14 at 10:00 pm

#68 Andrew Woburn on 06.04.14 at 9:13 pm said:…

“It looks like other people think the same since our area is now selling well and at $50-$100K over assessment in many cases.”

—————————–

Andrew I would be interested in the residential addresses or MLS #’s and the sales data.

VIREB records show May sales $3000 per unit below 3 year average. Sales up .87% month over month (they do play with the HPI though and make things look rosier)

Still if you have MLS or addresses that have sold over assessed (presumably over asking too) then that would certainly help us……

#87 Son of Ponzi on 06.04.14 at 10:00 pm

The picture depicts a Naked Official taking a dive on his speculative RE investment in Richmond.

#88 Bottoms_Up on 06.04.14 at 10:03 pm

#41 Piper on 06.04.14 at 7:35 pm
————————————-
Worry less about your financial situation and spend more time enjoying your family?

Come on, you seriously asked what to do as you only have $850,000 equity, $300,000 investments and a defined benefit pension????

#89 Son of Ponzi on 06.04.14 at 10:05 pm

You gotta watch “Yukon Gold”.
Then you’ll understand man’s obsession with gold.
Gold is for real, unlike a card box pretending to be a luxury house.

#90 Bottoms_Up on 06.04.14 at 10:06 pm

#76 Marty Crane on 06.04.14 at 9:32 pm
—————————————–
The numbers they report to the media are always higher than reality, as later on they (quietly) revise the numbers down.

#91 brainsail on 06.04.14 at 10:08 pm

#67 Pete on 06.04.14 at 9:13 pm

“To paraphrase, when the tide goes out it will be fun to see just how many are swimming naked – maybe that’s what the pic was saying…”

Very funny and a very good observation but maybe the real message is that there are already many swimming naked but don’t realize it while the tide is still high.

#92 espressobob on 06.04.14 at 10:10 pm

#63 Midas

It’s amazing what some people will pay for memorabilia! Gold coins, hockey cards, postage stamps etc.

That doesn’t change the fact these items are what there are, items. PM’s are metals mined out of the earth, nothing more. Gold standard was abolished in 1971 by one Richard Nixon. Bummer. But then again there is this guy.

http://www.youtube.com/watch?v=QCCLjrymkP4

#93 Andrew Woburn on 06.04.14 at 10:11 pm

35 Millenial-Falcon on 06.04.14 at 7:07 pm
Garth, can you write a future post about QE and fiat currency and why the US fed can inject all that liquidity into the system and have no negative consequences ? Is there a simple answer ?
======================================

To date QE hasn’t put much spendable cash into the real economy so it hasn’t had much impact on inflation. Although trillions of electronic dollars have been created, they are mostly held by the Fed and the major banks. The official story is that the Fed’s intention was to buy so much prime US debt paper and mortgage backed securities that key interest rates would fall, investors would have to buy riskier assets to earn a satisfactory yield and business would be stimulated to expand and create jobs. The flaw in the argument is that big corporations are already sitting on billions in cash they are afraid to invest so they are just using cheap financing to buy back their own shares instead of creating opportunity and jobs. The liquidity created by QE is all on Wall Street and not on Main Street so the price of financial assets is increasing but not wages.

Probably 80% of the US money supply is created by bank lending,not by government printing, so when bank lending falls even large increases in government “printing” are not enough to counter the deflationary effects. But whatever you think of QE, it is a daring work of financial engineering and I would not bet against its architects’ ability to unwind it smoothly without triggering major consumer inflation.

However I often read comments from people who spit the words “fiat currency” like a witches’ curse who tell you with great confidence that governments will never, never ever, raise interest rates again because the payments to carry their debts will bankrupt nations. But isn’t the nasty thing about fiat currency that it can be printed at will? If you can print money, how do you go bankrupt? If inflation kicks in and government interest payments increase, doesn’t inflation also drive down the real cost of government debt while boosting the economy and maybe also rescuing a bunch of mortgage poor millenials?

Nah, they wouldn’t, would they?

#94 LL on 06.04.14 at 10:18 pm

#84 – It depends on how long your time horizon is..if you are planning in retiring in 25-30 years, then 5-10% of gold in your portfolio is a way to diversify your holdings. If you are retiring in a few years, it might not serve you as well. Can the Fiat Printing continue at this rate for another 25-30 years if you face that distance to retirement? If you think yes then sell all your gold. If you think no then own 5-10%.

…If the Fiat printing continue at this rate for another 25/30 years, the money will devaluated and hyperinflation will come.
How to protect your wealth if there is hyperinflation and money devaluation?

Hyperinflation is a complete myth. Never in this lifetime. — Garth

#95 Bobby on 06.04.14 at 10:25 pm

#28 Devil’s Advocate,

I’m looking at condos in Kelowna and have seen many units with days on market in the triple digits. Some of over 400 days. I have spoke to a few realtors and each have said many units that were purchased in 2007-2009 are down rather significantly with many vendors selling at a significant loss.

If you want I can send you the info. Or perhaps you should get out more.

#96 Old Man on 06.04.14 at 10:31 pm

#89 Son of Ponzi – have about 6 pounds of Yukon Gold left under watch as those potatoes are the real deal for my dinners.

#97 Bobby on 06.04.14 at 10:32 pm

I recall a new realtor once telling me that I was foolish to have money in retirement funds. Real estate was where it was at. Funny, my well balanced portfolio was up 14.5% last year. Did I mention he has a second job, as sales are slow.
Sadly, the realtor quoted in this article is synonymous with many of the realtors I have encountered. Very little relevant information, many just say what needs to be said to make a sale. Buyer beware!

#98 TO Renter on 06.04.14 at 10:34 pm

#61 Johny

If the $600K house sold for $900K, for cash, in Toronto and cost $0 to own since 2010, the gain wouldn’t be $300,000, it would be $232,950 net of the bigger costs associated with getting in and out of resale housing (land transfer tax going in, commissions + HST going out).

Granted I don’t know the fees/loads and tax treatment (sheltered, unsheltered, interest, gains, dividends) on Garth’s balanced mix growing $280,000 but I’d say we have a horse race…

Considering everyone not paralyzed by fear and sitting on cash could have been a winner since 2009, whether by careful design or blind luck, the commentators here are oddly touchy.

I enjoyed my real estate bubble run, it was simple, I just sat. The number of financial choices out there are overwhelming. Now I have to think to stay liquid – 10% in here, 15% over there, rebalance regularly to harvest the gains. I get asked : what is my investment knowledge? Risk tolerance? Time horizon? Goals? Insurance coverage? Estate plan? Am I using borrowed money? What RoR am I targeting (to retire, fund education, live well)?

Contrast that with my realtor booking half an hour to tour a house that would take everything I had, and then some, and, to be fair, a bit of added time highlighting the mortgage broker’s print-out. Then some high pressure tactics to close the deal.

My money would say it finally grew up (as in wiser), found a better management team, has a purpose and a plan.

#99 Cici on 06.04.14 at 10:43 pm

#41 Piper

You shouldn’t worry about selling. You should focus your energy on paying down the rest of the home as soon as possible, within 10 years if possible, or even less if possible.

Enjoy your home, life and family ;-)

#100 Andrew Woburn on 06.04.14 at 10:45 pm

86 dosouth on 06.04.14 at 10:00 pm
Still if you have MLS or addresses that have sold over assessed (presumably over asking too) then that would certainly help us…
========================

I haven’t seen much selling over asking. It’s just that asking prices bumped up last fall and seem to be staying there. The area I am watching is Hammond Bay to Lantzville east of the Island Hwy. Stunning sea views close to everything you need. You can get past sale history from the BC Assessment people at

http://evaluebc.bcassessment.ca/

#101 LL on 06.04.14 at 10:51 pm

….Gold standard was abolished in 1971 by one Richard Nixon. Bummer. But then again there is this guy….

The reason gold was abolished was because France (DeGaulle president) was asking USA to be paid in gold and that’s why Nixon abolished the gold standar (and it was suppose to be for 6 months!)

#102 Retired Boomer - WI on 06.04.14 at 10:53 pm

Have you HERD the news, there’s good rocking’ tonight. –

Herd it through the grapevine.

Have you HERD.

OK, so much for famous song titles. Herd activities can get one trampled. Regression to the mean is quite REAL.
Stocks are not heading there today, real estate might be.
Gold is a past folly. I own no asset (except my home) that does NOT pay ME to own it. Automatic growth you say? I say YES!! I learned how to get mine, and keep it, so go get yours, and keep it. HINT: DEBT doesn’t get you there.

If you don’t like the post, don’t read the thing. Garth has been quite correct, his timing was a bit slow that is all.

#103 Cici on 06.04.14 at 10:54 pm

#48 Smoking Man

Get a drysuit! http://shop.foghmarine.com/browse.cfm/gul-code-zero-drysuit/4,1032.html

If I lived in Toronto on a permanent basis, I would be on that boat and on the lake already!

#104 Old Man on 06.04.14 at 10:56 pm

The latest study in 2014 for major gold mines puts the costing at about $1,125 per oz. before interest and dividend payments. Thus they are underwater even before taxes according to this major study.

#105 Mark on 06.04.14 at 11:01 pm

Assessments really aren’t all that useful in determining RE value. Assessments are based on formulas that are pretty generic as to square footage, land area, frontage. Not what’s actually inside the house, the finishings used, quality, etc.

As for huge gains, as Nortel’s investors will tell you, they’re not really gains until you realize them. Most Calgary, Toronto, and Vancouver RE has lost a few percentage points in the past year, so the gains are slipping away. The RE boards are running around mad trying to sell their “delusion” that prices are going up, but thankfully most are smarter than that, to see the significant impact the changed sales mix has had on the overall numbers.

#106 Longterm on 06.04.14 at 11:14 pm

#8 dosouth on 06.04.14 at 6:00 pm

Keep looking and when you do see what you might want don’t be afraid to offer what you think it is worth and if rejected move on to something else. There’s certainly not a supply problem on Vancouver Island.

I’m on one of the Gulf Islands. Prices have been dropping for 3-4 years and the daily real estate updates I receive for my island are largely price changes downward or relistings of properties at lower prices after they have been off the market for a year or so. I know because I’ve kept my own spreadsheet of prices from 2011 forward on my hunt for land. I finally found what I was looking for last summer. Original price three years ago was $232k and no hydro installed. I offered a firm $142,600 including Hydro being installed and after the seller rejected three times and I resubmitted the offer they accepted. It’s only worth what someone will pay, and that is most certainly way down there somewhere.

#107 Longterm on 06.04.14 at 11:20 pm

#41 Piper on 06.04.14 at 7:35 pm

Are you serious or is this B.S.? It’s a no brainer mate.

Sell the house, invest the $800k after fees along with your other $300k and you should be earning $70-100k annually on your $1.1million, ideally at very low tax. Compound that for a decade or 15 years and you won’t need that lush pension.

Or just quit working now and you could easily live on that with a pack of kids [I do at age 43]. Travel the world, take the kids to live in Mexico or Central America for a year or two, set-up a small part time business, cultivate some creativity, walk the TransCanada Trail, walk across Europe, go live on a canal boat in Europe for a while, sail the South Pacific, learn to play the bag pipes, etc.

You have a big fat tax-free gift. Take it.

#108 Quebec is Great on 06.04.14 at 11:27 pm

Anyone out there watch HBO’s VICE? If you can, watch the Scrap Metal episode (no.8 I think).. After watching this a couple times I got the a vision that Canadian Economy = Wile E Coyote suspended in thin air over a very high cliff.

People are so desperate for work in many old hollowed out US cities it is really unbelievable. How could any Canadian business not find this cheap and desperate labour highly appealing… Personally, I don’t think Canada can stay insulated from this stark contrast much longer.

#109 LL on 06.04.14 at 11:28 pm

http://www.forbes.com/sites/mikepatton/2014/04/28/is-u-s-hyperinflation-imminent/

….Hyperinflation is a complete myth. Never in this lifetime. — Garth….

Maybe yes maybe no..hopefully not!

#110 Marco on 06.04.14 at 11:32 pm

Its funny because he believes drug dealers don’t live in affluent neighbourhoods. Also, a large proportion of people will die well before they can reap the benefits of their “real estate retirement plan”. That’s the real truth they don’t want you to hear.

#111 Inglorious Investor on 06.04.14 at 11:40 pm

“Hyperinflation is a complete myth.”

Whoa… hang on a minute. A myth? I think you typed before you thought there. Hyperinflation and or/very high inflation has occurred in many, many countries throughout history.

If you are referring to the chances of hyperinflation in the US/Canada/Europe I’d say the chances are slim right now.

That said, it sure seems like other large economies, such as China, Brazil, Russia, are attempting to gradually reduce their dependence on the US dollar by introducing trade deals denominated in local currencies. They are also moving away from T Bonds into other assets. I believe they are attempting to dethrone the dollar without economic or geopolitical disruptions. The process will have to be gradual.

However, if/when the day comes that the US economy shrinks significantly enough in relative importance, such that the dollar is just another currency and not the world’s largest reserve currency, then the chance of hyperinflation in the United States will be much higher.

But they can just mask the reality of hyperinflation by introducing a new currency before the old one actually collapses. In this case, incomes may remain the same in nominal terms, but the price of everything will double overnight as the switch is made. They did it in Europe not that long ago.

And if you consider the future financial obligations of governments, I’d say the chances of such a currency swap or other some such devaluation at some point are pretty high, absent a major economic boom/expansion. Of real wealth. Not debt expansion and spending. And not just the transfer of wealth via inflation. But the creation of real wealth that actually goes to those who earn it.

#112 Dean Mason on 06.04.14 at 11:46 pm

To Shawn #66

My main point was not that Gold was up 54.57 times or 5,457% in 40 years 35 U.S. versus 1,910 U.S a troy ounce which is 10.54% compounded annually but that everything must come down to reality at some point.

Nobody keeps their investments for 40 years and reinvests all dividends and how do we know that Morningstar is telling us the real facts.

The 65.3 times number you gave is a 11.01% annual compound rate of return if it is over 40 years.

Good luck try achieving that over the next 40 years anyone.

#113 hohoho on 06.04.14 at 11:51 pm

> … when the tide goes out it will be fun to see just how many are swimming naked – maybe that’s what the pic was saying …

the picture obviously depicts a poor, peer pressure driven, short-less virgin, about to dive head first into the deep end and blow his entire wad

time to jump into the “gene pool”! … NOT!

#114 Sheane Wallace on 06.04.14 at 11:53 pm

You guys are funny. — Garth
————————————-
Garth, you don’t need to convince me on gold.
I am going with the flow in the next 2-3 years, as I stated some gold is good to have as insurance.

However in long run the current pretend and extend
policies will not work, we both very well know where this is going with the west unable to control BRICS, so short of war which is not going to happen the powers are shifting.

You can’t have the cake and eat it too.
You can’t outsource your jobs without weakening your economy.

We live in historic times, unfortunately our leaders are not up to the task, you need visionaries, not idiots in power.

#115 Hulot on 06.04.14 at 11:55 pm

Here is another guy, Chrstopher Whalen from KROLL Bond rating Agency, a US Housing specialist, who obviously is not as SMART as Garth who says don’t look at the U.S. as an example for Canada as to what will happen because ASIAN investment SUPPORTS the Canadian real estate market.

Him, the Conference Board of Canada, Bernanke and Siegal must be all wrong.

http://www.bnn.ca/Video/player.aspx?vid=376068

#116 Sheane Wallace on 06.04.14 at 11:59 pm

Hyperinflation is a complete myth. Never in this lifetime. — Garth
……………………..
Maybe not in yours but how about the younger generation?

It is funny but what matters in long term is exactly real estate and gold, you trash both which is correct in short term, but in mid to long term you are wrong.

#117 Inglorious Investor on 06.05.14 at 12:03 am

#93 Andrew Woburn on 06.04.14 at 10:11 pm

“If you can print money, how do you go bankrupt? If inflation kicks in and government interest payments increase, doesn’t inflation also drive down the real cost of government debt […]”

They’ve been able to engineer higher inflation without higher interest rates, which has greatly reduced the carrying costs of debt. Just remember that every extra unit of currency must be matched by an extra unit of productivity/wealth, or all they are doing is transferring extant wealth. It’s an old scheme that they’ve executed in many different ways throughout history…

• debasement of gold/silver money money (Ancient Rome, U.S. 1933)
• new currency (Europe circa 2000)
• QE today

#118 Inglorious Investor on 06.05.14 at 12:07 am

#92 espressobob on 06.04.14 at 10:10 pm

“PM’s are metals mined out of the earth, nothing more.”

Tell that to the world’s central banks, many of which have recently attempted to repatriate their gold (e.g Germany) or buy as much as they can get (e.g. China).

#119 Sheane Wallace on 06.05.14 at 12:08 am

At this point international and commodities diversification is the correct strategy, stating that the west is recovering and there is no inflation (while quoting 8.4 % energy increase) is misleading, you would be right in nominal terms but not in real terms, this is why it is so important to underestimate the inflation.

Prosperous nations like Germany are nations where the interest of the poor, middle class, business, unions and government align, it is possible to have that equilibrium.

I am sorry but we can’t constantly lie and steal impoverishing the middle class and then pretend that things are hunky-dory.

#120 Snowboid on 06.05.14 at 12:12 am

#75 Teacher’s Ass-istant on 06.04.14 at 9:29 pm…

There are agents of gold in the Okanagan who seek to remain employed, so love to muse about this ‘hot’ market.

Sadly we don’t see the market with the same enthusiasm. In fact our agent has told us after looking at several properties our ‘low-ball’ offers were too high. These places haven’t sold to date, and will fester until some sharp agent suggests re-listing to lower the DOM!

Although we didn’t get a deal this year, we aren’t complaining – the luxury condo we rent would cost us about $ 1000 more a month to own!

BTW, link to the hot market article is:

http://www.kelownacapnews.com/lifestyles/261138041.html

#121 Waterloo Resident on 06.05.14 at 12:13 am

Garth’s right, but it’s anyone’s guess at to when the Toronto market will start falling, or even ‘IF’ it will ever start falling.

There is a saying that reminds me of how the Toronto market keeps levitating higher and higher despite all of the bad fundamentals and bad job statistics.

It goes like this:

“NEVER UNDERESTIMATE THE POWER OF STUPID PEOPLE IN LARGE NUMBERS.”

#122 Inglorious Investor on 06.05.14 at 12:14 am

“But you can’t spend it, or live another 100 years. Worthless arguments. — Garth”

You can always exchange it for currency. Yes you have to pay a commission, but same with exchanging currencies, no?

As for living another 100 years, haven’t you ever watched Lost Horizon? How the heck did the people of Shangri-la live so darn long? Maybe it was all the gold ;)

#123 Son of Ponzi on 06.05.14 at 12:17 am

Growth is expected to be 3% in 2014 and at least that in 2015. So much for that theory. — Garth
—————–
Thus spake Nostrodamus.

#124 Debtfree on 06.05.14 at 12:19 am

That’s right . Nothing is simple . But who wants nothing ?

#125 Son of Ponzi on 06.05.14 at 12:22 am

#96 Old Man on 06.04.14 at 10:31 pm
#89 Son of Ponzi – have about 6 pounds of Yukon Gold left under watch as those potatoes are the real deal for my dinners.
————
You’ve got good taste.
But nothing beats German Yellow potatoes.

#126 For those about to flop... on 06.05.14 at 12:23 am

Looks as though his winged keel is sticking out!

#127 Christopher Lackey on 06.05.14 at 12:59 am

These realtors sound so annoying and they are all the same – I have heard this same argument for six years now. 65% gain for all over five years, except for the 33 million canadians who don’t live in downtown toronto or vancouver. Maybe they’re starting to wonder why shitty bungalows that cost 400k+ in Canada go for less than 100k in the states, why multimillion dollar homes here can be bought south of the 49th for 400k, even near major centres, why teardown bungalows in Toronto are literally selling for the price of french chateaux, but all these idiots can say are “great time to buy!”. You are really original characters – I guess you learn a lot in six weeks of real estate school, like how to sound like a broken record. No need to mention what this market would look like without cmhc, emergency interest rates, bank giveaways, parents giving away down payments, and house-horny cash-carrying immigrants. Or what happens when listings tick up in a region of 6 million with 85k average household income where everyone thinks their house is worth seven figures. Because that’s not a house of cards.

I have to be patient while I save and invest, so I can pay cash for the foreclosed mcmansion of some dumbass realtor in 2020.

#128 John Prine on 06.05.14 at 12:59 am

3 Kris on 06.04.14 at 6:35 pm
From the comments by those realturds, I would regard drug-traffickers as much more honest bunch than those scum-money loving get it at any price turds.
_____________________________________________

You don’t have to listen to them, same as mutual fund salespersons, or anybody selling anything you don’t really need. Time for everybody to take responsibility for their own financial condition. Chrysler intimates all men need a “Ram Tough” pickup but only a small percentage borrow the money to actually buy them……Don’t blame Chrysler for your 90 month $500 payment.

#129 Oceanside on 06.05.14 at 1:01 am

Went to an open house in Victoria the other day, the realtor hosting it sold the unit to the vendor in 2008 for $50,000 more than the current asking price.

#130 KommyKim on 06.05.14 at 1:05 am

RE: #72 takla on 06.04.14 at 9:23 pm
If one was to put a hundred dollar bill in one box and a hundred dollar s worth of gold{20.00 per oz-5 oz’s} in another box in 1930 and bury the two and dig them up today the hundred dollar box would be worth the same,the gold box would be worth 5 times the current price of 1242.00=6210.00!

A fairer comparison would have been, “If you bought $100 worth of stock in Ford Motor Co vs $100 worth of gold in 1930.”

#131 STM on 06.05.14 at 1:12 am

“Actually $600,000 put in a 60/40 balanced portfolio in 2010 would be worth $880,000 today. No mortgage payments. No property taxes. No debt. And lots of comforting diversification. — Garth”

I’m pretty sure he doesn’t have $600,000 in cash. It’s the leverage that makes the difference.

#132 North Yorker on 06.05.14 at 1:27 am

Actually $600,000 put in a 60/40 balanced portfolio in 2010 would be worth $880,000 today. No mortgage payments. No property taxes. No debt. And lots of comforting diversification. — Garth

Not very convincing answer, Garth.
If he had $600,000 to invest in 2010 why would he be looking to buy $600,000 house? He could have bought $1.2mil house with 50% down. This house would be worth $1.8 mil and gain would be tax free if it was principal residence.

May be he only had $100,000 for down payment in 2010 so now after 4 more years of renting and saving he has $130,000 but the same house cost $900,000.

#133 GUnit on 06.05.14 at 1:49 am

Maybe its the lack of drama associated with a balanced and diversified portfolio that some people can’t stand having one. There’s really nothing to talk about once you have one!

#134 Tony on 06.05.14 at 3:11 am

Gold was bid up years ago on some strange belief hyperinflation would emerge. Now short term the metal is reacting to deflation not the true picture of America today. Things have gotten much worst for America and longer term gold will probably be the best investment of the next decade. As for Toronto real estate going up the reason must be total stupidity as Ontario is in much worst shape than it was in the past. Canada is one big accident waiting to happen and most people who paid too much for a house stand a very good chance of losing it.

#135 Buy? Curious? on 06.05.14 at 4:55 am

“Of course, you might feel different right now if you were trying to sell an unwanted big house in Victoria’s Oak Bay, a buyerless Muskoka cottage or Caledon estate acreage, a condo in DT Calgary or almost anything in Montreal or Halifax. Many markets are already hitting a correction.”

These are your examples of a Canadian housing market correction? Isn’t Victoria the Canadian equivalent to a elephant graveyard? It’s all old people there. Halifax? Um, ya. There’s a thriving metropolis. Muskoka? Boring. Montreal? It is the only city in the world that has street signs showing you how to get out. No, really. They have street signs telling you how to get to Toronto.

Toronto is where it’s at! It may not be New York or London but it’s the closest thing Canada has. Look what happened to their real estate prices. It’s a sporting, cultural, financial, single females Hub with a diversified thriving population!

Buy or don’t buy, I don’t care. The person that buys my place in 13 years will have well over a million dollars, at least! And that will be more than enough for me to retire on while I still have my youthful good looks.

https://www.youtube.com/watch?v=qdt0CF3nZRE

#136 Hillbilly on 06.05.14 at 6:17 am

General comment

I find it both comical and disturbing that RE agents would (attempt to) post such vitriolic and demeaning nonsense as that of the cretin that Garth has put in his posting today.

I mean, do you ever see stockbrokers, insurance people or any other profession / career attempt to sell their services by denigrating and chastising others for their choices. If they did, would you be inclined to deal with them?

#137 Buy? Curious? on 06.05.14 at 6:23 am

#127 Christopher Lackey on 06.05.14 at 12:59 am

“I have to be patient while I save and invest, so I can pay cash for the foreclosed mcmansion of some dumbass realtor in 2020.”

Whhhaaaatttt? So you’ll pay 5.5 more years of rent, invest your savings and get what, 3-5% return and think you’ll buy a place for 50 cents on the dollar? Bwahahaha! Where in Canada do you think that will happen?

And if your preference of a home is a McMansion, regardless of price, makes you a person of questionable intelligence in need of a prostate exam, too.

https://www.youtube.com/watch?v=5qm8PH4xAss

#138 Hillbilly on 06.05.14 at 6:26 am

I actually enjoy reading / hearing people in a bubble try to come up with justifications / rationalizations for prices that have become detached from fundamentals and reality.

And it always, in the last analysis boils down to ” it’s different this time” or “it’s different here because….” or close approximations / derivatives thereof.

Why I enjoy it is that it confirms to me that the bubble is extant and that such with ultra-bullish sentiment, that a contrarian stance is warranted and generally soon to be rewarded.

#139 neo on 06.05.14 at 6:30 am

Growth is expected to be 3% in 2014 and at least that in 2015. So much for that theory. — Garth

Expected by who? The Fed? Their track record for forecasting has been the equivalent of throwing darts. Wouldn’t exactly hang my hat on that Garth.

Compendium of private sector economists polled by Bloomberg. — Garth

#140 neo on 06.05.14 at 6:34 am

#131 STM on 06.05.14 at 1:12 am
“Actually $600,000 put in a 60/40 balanced portfolio in 2010 would be worth $880,000 today. No mortgage payments. No property taxes. No debt. And lots of comforting diversification. — Garth”

I’m pretty sure he doesn’t have $600,000 in cash. It’s the leverage that makes the difference.

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

Yes. Leverage can be the great surrogate for wealth. But unlike actually wealth it is for more transient and fleeting. Many in Canada will learn that lesson.

#141 Realtor # 1 GTA on 06.05.14 at 6:43 am

the greater point…

your people are getting impatient waiting for a correction

without a “spike” in either unemployment or interest rates conditions will stay the same.

Debt -service ratio is what this market about

low listing?? one would think with record high debt that more people would be selling to get out of debt???

70% ownership and sales are only down 10%?????

You only need ONE person to buy your home

No, the greater point is that as prices and debt rise, housing becomes a riskier play for families who swallow your Kool-Aid and put all their resources into a single asset. Your message is consistently irresponsible. — Garth

#142 OttawaMike on 06.05.14 at 7:05 am

Smoking Man
Took it for a spin two weeks ago. Water to damn, cold. If I’m challenging God in thunder storms. I need a plan B.
———————————————————–

I saw a satellite image posted by Chris Hadfield on Twitter a couple of days ago, it showed ice still remaining on parts of the Great Lakes– In case there is any doubt as to how brutal last winter was.

#143 My Life is a Pile of Shit on 06.05.14 at 7:32 am

Garth, I know you’re not telling people not to own real estate. You’re saying don’t put all of one’s wealth into one asset, and don’t go into debt for the sake of owning a home. But when you tell people like me to rent, you’re telling me to put all my money into stocks and bonds — that’s less diversified than being a homeowner. To follow the Rule of 90, I have to own my home (without debt), and thus divide my wealth between real estate and stocks & bonds. Even if it is cheaper to rent, most of my investment income as a result of selling my home will go toward rent, thus making my standard of living sensitive to investment returns and rent increases.

#144 jess on 06.05.14 at 7:41 am

Imagine a programmed pixellated human as your financial advisor or ad seller etc ?

see digital ira
http://www.youtube.com/watch?v=RzKb6YVAyQI

#145 Smoking Man on 06.05.14 at 8:01 am

ECB cuts, yes the economy of the world on fire..

Deposit rate now below zero. WTF

Get ready for Prozac to take the overnight rate to. 25 by year end.

#146 eddy on 06.05.14 at 8:15 am

@#127 Christopher Lackey

Re saving to buy a house for all cash. Where I live in 416 that’s does not work. There are lots of folks who have all cash for a house and still put mortgages on them, the rates are so good

i clicked your name and read some of your blog, No one hates Harper’s cons more than me, but in your telecom piece you sound like a Bell employee/ shareholder.
Re media character assassination of politicians- it’s Not done to sell papers or fulfill a public need, it’s done to control/punish politicians.

#147 Grantmi on 06.05.14 at 9:16 am

http://www.cbc.ca/player/ueberproxy.html?ID=2462182310

Should the Bank of Canada rethink its monetary policy?

Carl Weinberg, chief economist for High Frequency Economics, on why the Bank of Canada needs to cut interest rates and soon Watch: 6:14

Wow…”Cut rates!”

What,s this guy smoking?

#148 Kevin Unfortunately in Winnipeg on 06.05.14 at 9:27 am

“One of the big name custom home builders in winnipeg went bankrupt this week. Home sales over $500k are very slow.”

So who was it?

#149 };-) aka Devil's Advocate on 06.05.14 at 9:29 am

#58 Snowboid on 06.04.14 at 8:31 pm

Ya gotta do whatcha ya gotta do and ya gotta believe whatcha ya gotta believe… that doesn’t necessarily make it the right thing to do or the truth but if you feel it’s working for you – GREAT. Now watch and learn for an education is a bargain at any price and I expect you’ll be paying dearly for this one.

If you re-read my posts you’ll note I allude to the ever present SHIFTING of the market. What happens in an upswing is as more and more get in, panicked that if they don’t they will miss their opportunity. Slowly at first their incremental demand eventually turns into a landslide volume that causes prices to overshoot. Eventually that excess is clawed back, but never so much as it advances. Such was the case from 2007 to 2008. 2007 was peak volume and 2008 was peak price. Remember price ALWAYS follows volume – up or down. Also look back and you will note, quite starkly, that the price increase from 2003 to 2008 didn’t come close to reverting back to 2003 prices in the subsequent correction. Nor did it in any SHIFT that preceded the 2003 to 2008 SHIFT nor will it in this SHIFT I expect we are at the bottom of today.

We really don’t want to go there but people, being people, fraught with emotion, will, eventually, like lemmings push the market in that direction. The eventual irrational exuberance I anticipate in the market will ultimately be followed by a cleansing cycle I expect in about five to six years’ time. Between now and then, save for some unforeseen event, prices will begin to rise, slowly at first and then exponentially. You know what they say “History may not repeat itself, but it certainly does tend to rhyme”. But the ensuing cleansing of the market will not nearly erode the price appreciation that precedes it as demonstrated by the most recent SHIFT (2003 – 2013) and all those 7 to 10 year SHIFTS that preceded it.

Of this I am so confident I have staked my children’s financial future on it.

SHIFT happens, always has, always will. Well that’s how it will be for as long as we adhere to this current economic model anyway and, trust me, “they” are going to do whatever it takes to retain it for as long as “they” can.

};-)

#150 Inglorious Investor on 06.05.14 at 9:33 am

Draghi pushes Europe below the freezing point.

Has Europe just entered the world of negative nominal interest rates where depositors will have to pay the banks to borrow their (depositors’) money? The debt machine must keep pumping it out at all costs after all.

However, it they think this will induce risk-on for the people and generate loan growth, I think they are delusional. When people are in survival mode, they don’t care about assets and they certainly won’t take on more debt (unless it’s needed to survive).

Hey, maybe that will be the next bubble in the progression: stocks, housing, bonds, education… slavery). All the people will care about is having enough money to eat and live. This will cause greater fear and capital will flee and go into hiding (or to the US) while they give a huge boost to the underground economy as people shun the banking system.

They are destroying Europe in attempt to save themselves.

Crash. And. Burn.

#151 };-) aka Devil's Advocate on 06.05.14 at 9:35 am

You see it is not REALTORS® or even Sellers who set the price of real estate. It is Buyers who set the price of real estate and there isn’t a damned thing you, nor I nor any seller can do about it. They (Buyers) are the market.

Garth is trying to influence the market. I follow it.

#152 Londoner on 06.05.14 at 9:37 am

I thought the ECB would take the refi rate to 0 but instead they’ve only dropped it 10bps. I guess they need to keep a little to cut again in the future. Deposit rate down to -0.10% but what’s that going to accomplish really? As a bank would you rather pay -0.10% to keep your money at the ECB or would you suddenly start lending to riskier cptys for a positive yield?

#153 miketheengineer on 06.05.14 at 9:38 am

Garth:

You said this before….if it don’t sell…the price is too bloody high. Lower the bloody price you fools. And if you castle is in the middle of “no where”….too bad for you , because like Garth said in the past, location to buses, stores, etc. will be the most important thing. Why is it the people with “real” money are paying huge bucks for shacks in downtown Toronto…it is the location baby…waking distance to this and that…short drive to work…or subway. Location location location.

Everytime I look at properties and see 1 million for a nice home “outside” the city…I laugh and cry at the same time…cry cause right now that dream to own one is out of reach for me…and laugh, cause I don’t have to sell one, which will be even more difficult going foward.

I am praying for much better times….

One of the best features of being in the city is location to “medical treatment”. Doctor…2km away…Dentist…walking distance….bus stop…I can spit on….GO train….20 min walk…Go Bus….5 min walk…Walmart…next to Go train…
And the hospital is like a 10 min drive in rush hour.

Oh and lucky for me, they are installing an LCBO soon to open, and it is staggering distance too!

#154 maxx on 06.05.14 at 9:53 am

#8 dosouth on 06.04.14 at 6:00 pm

“…..“Prices are adjusting down finally in line with assessments, so we are looking.”

Apparently he replies, “Assessments are only a number, the value is in the house and location. The wife and I looked for two years before buying ours.” He then admitted to paying $500k over the assessed in 2011 (but 150k under asking) and the house is now assessed at 785k less than what he paid. Wow, he has lost more than what we plan to pay for a quality home.”

Most properties on the market now are in the “damned if I’m not going to recover all of my expenses mode”. That’s why municipal and owner assessments often have enormous discrepancies. Land transfer tax, mortgage interest, upgrades, maintenance, repairs and last but not least, profit entitlement. Small wonder many owner assessments are out to lunch and the subject properties can easily fester for years on market.

#155 unlimited cash on 06.05.14 at 10:10 am

DELETED

#156 Dean Mason on 06.05.14 at 10:26 am

Watch out for high yielding dividend paying stocks.

Just Energy announced that they will cut their annual dividend from 84 cents a share to 50 cents a share.

This is 40.476% less dividend income per year and their shares.

They will also pay dividends quarterly instead of monthly.

A year ago, shares are down about 5.00% as well. The share price was $15.00 in June-2004, down 58.47% to $6.19 today.

Like I said before, it is unsustainable. They were paying a 12.92% dividend yield and now it is about 8.00% a year.

They will cut their dividend again. Watch out!

#157 };-) aka Devil's Advocate on 06.05.14 at 10:38 am

#95 Bobby on 06.04.14 at 10:25 pm
#28 Devil’s Advocate,
I’m looking at condos in Kelowna and have seen many units with days on market in the triple digits. Some of over 400 days. I have spoke to a few realtors and each have said many units that were purchased in 2007-2009 are down rather significantly with many vendors selling at a significant loss.
If you want I can send you the info. Or perhaps you should get out more.

Speculation was rampant during the exuberant years 2003 to 2008. If you have deep pockets building a condo development provided the highest yield. Flips, or assignments of contract, where a buyer entered into a purchase agreement on an yet to be built condo in the hopes of reselling, or assigning that contract, for a large profit was the flavour of the day. Contractors were actually building and selling to flippers rather than end users.

Of course this, condo market, was the pinnacle of “irrational exuberance” and of course it was the market which was subsequently most clawed back. But a good deal of the gains in the Kelowna condo sector still remain even after the correction.

A seller can put whatever price they want on their property; it doesn’t mean it’s worth it. Those condos in Kelowna that have been on the market for a triple digit number of days are a prime example of that.

A good number of condo owners who are selling their Kelowna condos today are those who bought them at the very peak of the market. They are trying to get out that which they put in. They stand a better chance of achieving that today than last year or the year before but, still, they must put the right price on it. Unfortunately for many they bought high and are now trying to recoup their costs at the very bottom of the market – yes I believe this is the “bottom” which means but one direction from here. If they wait another couple years they might stand a chance of breaking even. This happens when you buy at the peak of any market. Right now, I would suggest that you can buy those condos at the bottom of the market still and ride them up to the next peak. BTW I do think there might still be some price reductions in the Kelowna condo sector but they will be marginal and, if you were to buy today, I am confident the market will have increased enough in 5 years time that it will put a smile on your face.

Single family residential inventory in Kelowna is below 6 months worth at this time (1,738 available and 1,208 sold in the last 6 months). Strata inventory in Kelowna is still well above 6 months’ worth with 1,183 units available and 746 having been sold in the last 180 days.

#158 };-) aka Devil's Advocate on 06.05.14 at 10:43 am

*** CORRECTION ***

My bad, condo inventory too is below six months worth. But the condo inventory is still well above the MOI of single family residential.

Now I gotta go and help some homeowners sell and wanna-be homeowners buy.

#159 };-) aka Devil's Advocate on 06.05.14 at 10:47 am

Sorry totally wrong again, and too busy to explain myself out of it…. adios

#160 };-) aka Devil's Advocate on 06.05.14 at 11:00 am

Damn personality traits. Here, here is a better explanation.

FOR SINGLE FAMILY RESIDENTIAL
first column; PRICE RANGE,
second column UNITS AVAILABLE,
third column; UNITS SOLD IN LAST 180 DAYS

0 – 500K, 668, 762
500 TO 1,000K, 728, 401
1,000K PLUS, 333, 54

And so too is it consistent with strata

BTW I specialize in the under $750K Kelowna market. It is the Under $500K market that is hot – REAL HOT!

#161 Tony on 06.05.14 at 11:28 am

Re: #137 Buy? Curious? on 06.05.14 at 6:23 am

Many resale condominiums and apartments in Edmonton are still down about 40 percent (they were down 50 percent two years ago) from the summer peak of 2007. So it is possible to buy at a 50 percent discount.

#162 MC on 06.05.14 at 11:34 am

#132 North Yorker on 06.05.14 at 1:27 am

You avoided his point about diversification risk.

If you really want to make an apt comparison with your example, you may as well have said something like invest in Tesla in 2010 for $17.00 for $600,000 for that amount you could have bought 35000 odd shares which today would be worth north of 7 mill, do you really care about taxes at this point?

#163 Christopher Lackey on 06.05.14 at 11:35 am

@146 eddy – my point was the hubris of the “buy now or be priced out forever” crowd driving the RE cartel’s message is misplaced. They think they pump into infinity because “toronto is so hot”, Taking on a huge mortgage significantly diminishes your autonomy, and exposes you to siginificant risk; leaving comments on this blog does not.

As for Bell, not an employee or a shareholder, and Irefuse to deal with them as a customer; just think the government taking out ads with taxpayer dollars to attack one of the country’s biggest market cap blue chips that is also one of its biggest private sector employers is counterproductive and irresponsible.

#164 saskatoon on 06.05.14 at 11:41 am

“Now we are in a completely different world.”

– Draghi

Typical European. Europe = World. — Garth

#165 Suede on 06.05.14 at 11:55 am

OMG Garth, HAM is real! haha..

http://www.theprovince.com/news/Reality+show+pitch+ultra+rich+Asian+girls+Vancouver+with+video/9904384/story.html

Now i have to convince my brother to marry into one of these families somehow.

Who needs school.

#166 liquidincalgary on 06.05.14 at 12:00 pm

@ #12 Trojan House

gold does NOT trade relative to currency.

currencies trade relative to other currencies…i feel like i keep having to repeat myself on this

#167 Rational Optimist on 06.05.14 at 12:09 pm

41 Piper on 06.04.14 at 7:35 pm

Look around at some rentals to see what they’re like in your neighbourhood. If you can really sell your house for a million or more, that would spin off a lot of rent money. Figure out how much, and then look and see what kind of a place that can rent you in your school zone. Or, better yet, move to the core.

#168 Big Brother on 06.05.14 at 12:15 pm

#56 Smoking Man on 06.04.14 at 8:25 pm
#50 Old Man on 06.04.14 at 7:57 pm#38 Smoking Man – there is one part Peter The Great has failed to address, as his Bill is a walking sham. I am sure it makes him a bit nervous too. So let us include in your words of wisdom the following: Now we gotta lock up our sons, husbands, and brothers too. :)
……
Ha, never thought of that, guess I’m a bit of a sexist, but you are
right…..
As always religious freaks of nature always make things worse.
They worship an invisible man in the sky, that promise to make things right after death.. Correct all injustices.
So in the mean time get back to
being a bitch..
Stupid Humans, thank god I’m an alien..

……………………………………………………………………….
MKULTRA says Smoking Man you are an oxymoron when first stating God is an invisible man in the sky that you obviously don’t believe in but then refer to him by thanking him (God) in the next sentence. So therefore if God doesn’t exist why comment about something that isn’t there?
Is God out there?
Are aliens out there?
Is God and alien?
There is as much evidence for both being out there and we programmed you for Crazy Wisdom.

#169 Brad in Cowtown on 06.05.14 at 12:17 pm

I have to give credit where credit is due.
I was wrong on gold, like many “metalheads” were/are. Garth was right.
Simple as that.
Still think he’s wrong about Calgary housing though. There are absolutely NO signs of a correction here any time soon. It’s the perfect storm for rising prices, low rates, rising incomes, very low unemployment, high migration, booming economy…
Prices will fall in Calgary… WHY?

#170 Snowboid on 06.05.14 at 12:25 pm

It may be true that the Okanagan RE market is near the bottom, but we are not convinced.

Condos, especially high-end luxury units, are listed nowhere near the prices paid if they purchased 2007-2009.

In our own building there are multiple examples of units listed currently at prices 20-30% less than the original purchase price six years ago.

Hardly a better chance at recouping their investment. One unit has a DOM of over 800 (if you include all the ‘re-listings’) with multiple price changes downward – not a single bite. It’s currently listed at 26% less than the owner paid – they are not happy (we have talked to them) but they are still haven’t sold and are in denial. It also hurts that they got hit with fairly large strata fee increases this year!

We listen to our own agent, who actually understands what is happening in Kelowna, and doesn’t spout nonsense.

#171 Bottoms_Up on 06.05.14 at 12:41 pm

#151 };-) aka Devil’s Advocate on 06.05.14 at 9:35 am
———————————————————-
Would you stop it with the registered trademark symbol already!!!!!

#172 sciencemonkey on 06.05.14 at 1:10 pm

What pisses me off about DA is his new SHIFT routine. It makes me think of a smug, lame boomer trying to be quirky.

I don’t dislike him for being a realtard and house pumper, however; even though I completely missed out on the RE market, I am an RE bear, and I agree with the denigration heaped on me by the realtard from Garth’s post.

#173 not 1st on 06.05.14 at 1:12 pm

Garth, have you considered the fact that there are some locations in the world that RE has never gone down, ever,even in cities that have been around for hundreds of years. London, Paris, Hong Kong, New York.

Maybe Vancouver is destined to join these ranks. And yes, immigration and nationality does have a lot to do with it. In Asian and East Indian cultures, there is a hidden caste system where people with money and means really have to show it to others. Often that means building a big over bearing house and then stocking it with 5 families.

#174 happity on 06.05.14 at 1:14 pm

Ecb plans mire policy actions.

Garth, do you think they will move to negative interest rates, and what will that do to your USA economic renaissance and multi-year calls for higher interest rates?

Lol

Nothing. It’s Europe. — Garth

#175 Ottawamike on 06.05.14 at 1:27 pm

Just to play Devil’s Advocate;, you guys should embrace Satan he is a pretty cool guy .

#176 Angus on 06.05.14 at 1:32 pm

So the ECB lowered its Deposit facility to − 0.10 % no thats not a typo but isn’t negative interests rates the same thing as a bail-in ,ya like the one coming to canada
if anybody things we are living in a normal paradigm well good luck to you in the future

#177 Hillbilly on 06.05.14 at 1:34 pm

Devil’s Advocate – comments # 157, # 158, # 159 and # 160

MOI = Months OF Inventory

MOI is calculated dividing the current month’s total listings for sale (inventory) by the most recent month’s number of sales.

It is not taking the current month’s total listings and dividing it by the last 180 days’ (6 months) total sales.

Generally accepted that greater than 6 months inventory is a “buyer’s market” and under 6 months inventory is a “seller’s market”

So, you are either trying to mislead or you don’t know how to calculate MOI.

You don’t even know the basic metrics of your own industry for heaven’s sake !!!!!!!!!!!!!!!!!!!

#178 Mr. Frugal on 06.05.14 at 1:39 pm

If you have a balanced portfolio you don’t need to know what’s going to happen next. You just buy a little bit of everything and wait. Sort of like fishing.

#179 Smoking Man on 06.05.14 at 1:44 pm

#164 saskatoon on 06.05.14 at 11:41 am

ECB basically made it official, currency war on..

Broke ranks with other central banks.

Canada’s trade balance was brutal, Prozac talks down dollar, then it bounces back up…

Market thinking is, housing to high, Prozac bluffing.

Well now that ECB fired a shoot accros the bow, look for Prozac to roll up his sleeves, drop the rate.

#180 Hillbilly on 06.05.14 at 1:46 pm

not 1st – comment # 173

Absolute rubbish !!!

Every RE market in the world has had corrections and collapses in prices, some lasting for decades or even longer.

The Dutch have records going back over 440 years and they had major price reversals.

Do you think prices in London, Paris , Berlin, etc. didn’t go down in World War 2, for example.

Hong Kong has had spectacular reverses in just the past century.

I cannot believe that you could even post such drivel !

#181 Sockeyemoon on 06.05.14 at 1:47 pm

Q: When is a million dollar tear down not a tear down? A: When you can’t tear it down!

Vancouver may ban demolition of older homes.

http://www.cbc.ca/news/canada/british-columbia/demolition-ban-could-require-recycling-of-older-vancouver-homes-1.2666030

… Last?

#182 Trevor on 06.05.14 at 1:50 pm

Garth,

I don’t know how you do it day after day responding to some of these people. No matter what side of the fence you are on; believing real estate or a balanced portfolio is king — every person on here thinks they are smarter then the next. I have always believed that a truly intelligent person realizes they will never have all of the answers which allows one to continuously thirst for knowledge.

Thank you for what you do Garth. What you offer here is insight to help people think analytically. You have opened my eyes into what a balanced diversified portfolio can offer as well insight into the frankenumbers — Things I never received at school, the bank or from parents.

Trevor

#183 calgaryPhantom on 06.05.14 at 1:53 pm

Who is right.

Bonds or Equities.

#184 Sanj on 06.05.14 at 2:04 pm

Prices in Vancouver are dropping:

http://www.asianpacificpost.com/article/6225-vancouver-house-prices-take-record-fall.html

#185 Mark on 06.05.14 at 2:04 pm

“Garth’s right, but it’s anyone’s guess at to when the Toronto market will start falling, or even ‘IF’ it will ever start falling.”

Already happening in Toronto, Vancouver, and Calgary. Its not a matter of “if” and hasn’t been for the past year.

#186 };-) aka Devil's Advocate on 06.05.14 at 2:13 pm

#171 Bottoms_Up on 06.05.14 at 12:41 pm
#151 };-) aka Devil’s Advocate on 06.05.14 at 9:35 am
———————————————————-
Would you stop it with the registered trademark symbol already!!!!!

To do so would infringe upon the copyrights integrity. I am a REALTOR® and as a member of that community I will not stop using it as it is supposed to be.

#172 sciencemonkey on 06.05.14 at 1:10 pm
What pisses me off about DA is his new SHIFT routine. It makes me think of a smug, lame boomer trying to be quirky.
I don’t dislike him for being a realtard and house pumper, however; even though I completely missed out on the RE market, I am an RE bear, and I agree with the denigration heaped on me by the realtard from Garth’s post.

So you admit you “completely missed out on the RE market” yet you refuse to learn from the education that costly lesson provided you.
Clearly you don’t get the concept of SHIFT happens and are doomed to live out your life stuck in the past. Want to change your future? Take action NOW.

#177 Hillbilly on 06.05.14 at 1:34 pm
… MOI is calculated dividing the current month’s total listings for sale (inventory) by the most recent month’s number of sales.
It is not taking the current month’s total listings and dividing it by the last 180 days’ (6 months) total sales…

As you accept; anything in excess of six months inventory is a Buyer’s Market, anything less than six months inventory is a Seller’s Market. Therefore dividing the current inventory by the last 6 months sales will yield a quotient which if over 1 is indicative of a buyer’s market and if under 1 is less is indicative of a seller’s market. The smaller the number the more a buyer’s market it is and the larger the number the more a seller’s market it is.

Furthermore, volumes can vary significantly from month to month. The larger the sample the more reliable the result.

#187 neo on 06.05.14 at 2:18 pm

Compendium of private sector economists polled by Bloomberg. — Garth

Uh huh.. And what were those same “private sector economists” predicting the GDP would be to start this year, 6-12 months ago? Any of them predict it would be negative? I can guarantee you if they thought first qtr. would be negative they wouldn’t still consider 3% a possibility.

Not exactly a typical winter. Stand by for a big rebound. — Garth

#188 Old Man on 06.05.14 at 2:24 pm

The old women are not all stupid and had much to say about Peter The Great. Oh this gets juicy. They believe he has lived a sheltered life and his Bill by definition lacks reality as they all know the street. They want to create a new Bill with a three part foundation out of fairness and freedom for all without discrimination. I said what tell me more! They whispered he is leaving out the dark side for special services, and began to name them all, and was shocked!

#189 Hillbilly on 06.05.14 at 3:16 pm

Devil’s Advoxcate – comment #186

Bull crap !

MOI is MOI is MOI, not some other ratio that you concoct!

Even using a 6 month AVERAGE as a denominator in the
ratio does not give the CURRENT status of the market.

Your method generates a number LESS LIKELY TO SCARE BUYERS ! – and that is why you use it.

using YOUR numbers, one is forced to average the past 180 days (6 months) sales;

So, on properties of 1,000 k ( one million dollars or greater);

54 sales divided by 6 months = 9 sales/month on average

333 current listings

therefore MOI = 333 divided by 9 = 37 months (over 3 years) of inventory !!!!!!

Your method; 333 divided by 54 = 6.167 on your ratio which is based on 1 according to you

Saying ’37 months inventory’ is a lot easier to understand for most folks and carries a hell of a lot more negative impact.

Like I said, your calculations are intended to distort and obfuscate the true picture.

Q E D

#190 OttawaMike on 06.05.14 at 3:24 pm

Only DA can solicit as much response on here as Smoking Man. Well done.
Even more remarkable is to find the time during the busy spring used house sales season.

#191 john on 06.05.14 at 3:25 pm

Building the house of wealth:
If you build the house of wealth you need a strong foundation. This is not made of concrete but gold bullion. Every month I add a new window or door, every few months a new room to the house of wealth. These new stock positions come from reinvested dividend or REIT income.
If my foundation is too large then I will trim it and move the funds to stocks or REITs or ETF’s.
A stock portfolio is like an apartment building. Every new stock position is a new room to be rented to a tenant and receive rents, that is dividend or REIT income. Some tenants are good (BCE), while others are deadbeats (AEM). Bad tenants get the boot, that is tax loss selling.

#192 Ruh Roh! Chinese are angry! on 06.05.14 at 3:32 pm

http://www.torontosun.com/2014/06/04/millionaires-sue-canada-for-the-right-to-be-canadian

#193 chapter 9 on 06.05.14 at 3:54 pm

#173 not 1st
Let’s go back to the mid 80’s in Alberta. Canadian Commercial Bank and Northland Bank of Canada went broke because they were heavily invested in real estate,oil, and natural gas. Bank of British Columbia and the Continental Bank of Canada merged with other banks to survive. You could not give away real estate residential or commercial and before this all happened we were experiencing the same insane thinking.
Interest rates went up and the dollar dropped. Game Over!!!

#194 DM in C on 06.05.14 at 3:55 pm

DA has been banned previously…. seems he is reverting back to his old self…. don’t feed the troll, he’ll show true colors soon.

Although tolerance lately is pretty high on this blog for insults, douchebaggery, bigotry, misogyny, xenophobia and realtors .

#195 sciencemonkey on 06.05.14 at 4:08 pm

@186 DA
The reason I missed out on RE was because I only entered the workforce in 2012, and the reason I don’t buy it now is because I’ll need all the money and flexibility I have when SHIT happens, I lose my precarious job a year from now, need to wait 8 months before I find a new job, and then move to Texas or San Fran for it.

But again, I am an RE bear for anyone who has steady work. It must be nice to have certainty and roots.

#196 Mithan on 06.05.14 at 4:30 pm

Most of the world is an economic mess right now. It’s funny how Canadians think they are going to be protected forever.

#197 Toronto_CA on 06.05.14 at 4:31 pm

I think people should be more concerned with this:

http://www.huffingtonpost.ca/2014/06/05/scariest-chart-canadian-economy_n_5453531.html?utm_hp_ref=canada-business

This line could have come from Garth the Great himself:

“So where Canada’s economic growth will come from in the months and years to come is a pretty tough question to answer. We can hope the housing market somehow, miraculously, keeps booming forever and consumer demand just keeps growing. But with weak income growth and massive energy bills facing consumers, that’s unlikely.”

We are almost totally reliant on energy exports for growth as long as manufacturing continues its downward spiral. Or I guess we can keep flipping condos to eachother on credit and make the banks richer. And douchebags like the previously banned DA.

#198 Son of Ponzi on 06.05.14 at 4:45 pm

#184
interesting.
———–
Although the federal government announced in February that the IIP would indeed be cancelled, this decision only goes into effect in June, when the federal budget is passed. That is when more than 60,000 rich would-be immigrants will be informed that their bids to move to Canada have been scrapped. About 40,000 of these applicants, representing 12,000-15,000 households, had hoped to move to Vancouver.
How many of these had already bought homes in the city? And how many will be seeking to sell, when their dreams of living in Vancouver are officially dashed?

#199 sciencemonkey on 06.05.14 at 4:51 pm

@194 DM

LOL, ouch, comparing those admittedly bad groups to realtors is a low blow!

#200 sciencemonkey on 06.05.14 at 4:52 pm

Oops I mean RE bull, not bear.

#201 Smoking Man on 06.05.14 at 4:53 pm

#196 Mithan on 06.05.14 at 4:30 pmMost of the world is an economic mess right now. It’s funny how Canadians think they are going to be protected forever.
…….

You nailed it and don’t even know it.

The fact that they think they are protected, will enfact protect them.

As long as dollars changing hands, we keep moving.

#202 Old Man on 06.05.14 at 4:59 pm

#193 chapter 9 – knew it well as the private investors were syndicated pension funds, and put out a warning based on the PE ratio compared with the major banks that the risk was too high. Canadian Commercial Bank was going to collapse, but was laughed at. I got that last laugh in the end.

#203 Angus on 06.05.14 at 5:05 pm

Not exactly a typical winter. Stand by for a big rebound. — Garth

rebound in what ? the stock market or the real economy
the stock markets are at their highest levels so your good there what do you care really?if the real economy looks like doo-doo as long as the stocks are good everything is fine
I would like to point out that the Superbowl this year was not sold out there were 18000 unsold tickets
http://newyork.cbslocal.com/2014/01/28/big-game-may-not-be-such-a-hot-ticket-18000-super-bowl-seats-still-available/ It wasnt because of the weather simply because there were colder superbowls than the last one that could yield $3000 for a $600 investment its because the american people are taped out so you constant recovery meme doesn’t stick anymore

#204 Angus on 06.05.14 at 5:14 pm

The stock markets are going to the moon if we enact what the ECB did today negative interest rates will only force people to pull money out of their banks and atempt to make money by investing it because you have no other choice for gains .But the real economy will still be in the toilet You should try to tell more reality or eventually you could loose readership on your blog because people get it

That’s okay. I dislike most of my readership already. — Garth

#205 OttawaMike on 06.05.14 at 5:21 pm

Donato is one of this country’s greatest political cartoonists but this one may have crossed the line over at Garth’s Alma Mater:
http://www.torontosun.com/2014/06/04/june-6-2014

#206 jason on 06.05.14 at 5:23 pm

#164 saskatoon

Typical jesuit. It’s rather well known that these guys typically think in broad, all-encompassing conceptual terms. – Jason

#207 Angus on 06.05.14 at 5:41 pm

That’s okay. I dislike most of my readership already. — Garth
lol you do make me laugh tho
Cheers

#208 eddy on 06.05.14 at 5:53 pm

It seems like only six weeks ago when I typed here that there was a new psyop every six weeks. 20 seconds into New Brunswick ‘shooter’ reports I said to myself ‘psyop’,
sure enough, minutes later on TV came the gold standard of psyop verification- a live message from Stephen Harper inserting himself into the hoax. Do you doubt me?
Type ‘Lac-Mégantic Rick Potvin’ into a search engine and you will see-
every level of government has been corrupted- from PM
down to local authorities. “Oh Canada”

#209 rick on 06.05.14 at 6:12 pm

That’s a big reason I rent. Can’t stand dealing with oily parasites like thatg in the realty racket.

#210 Mark on 06.05.14 at 6:13 pm

“That is when more than 60,000 rich would-be immigrants “

Just because they’re ‘rich’ back in China doesn’t make them ‘rich’ in Canada. Most immigrants, especially those with non-English surnames, are only minimally employable in Canada. And Chinese RE is hyperinflated and not very sellable either.

If a person has $2-$3M worth of Chinese RE that provides, at best, maybe $20-$40k of after-tax income, can’t sell it, and needs to take out a CMHC subprime mortgage to buy in Canada — are they really ‘rich’? Or are they absolutely stupid for even considering a Canadian RE purchase?

#211 Smoking Man on 06.05.14 at 6:19 pm

#205 OttawaMike on 06.05.14 at 5:21 pmDonato is one of this country’s greatest political cartoonists but this one may have crossed the line over at Garth’s Alma Mater:
http://www.torontosun.com/2014/06/04/june-6-2014
…..

Yup, most definitely crossed the line
Ha…….

#212 bdy sktrn on 06.05.14 at 6:36 pm

#148 Kevin Unfortunately in Winnipeg on 06.05.14 at 9:27 am

———————————
kevin, why? it’s not a long drive to vancouver (i went detroit-van in 52hrs. a long time ago) and never looked back

it’s been summer weather here for the past 2 months
we have been boating the past 6 wknds – my kid’s been swimming in the ocean for the last 2 and i will tomorrow.

jobs are available for newcomers with a non-bc work ethic

————-
smokey, what sorta boat do you run?

#213 Snowboid on 06.05.14 at 8:14 pm

#190 OttawaMike on 06.05.14 at 3:24 pm…

Our current agent is about half the age of the golden god, but with twice the wisdom.

The auriferous one would be wise to lay low lest others find out how bad his own business is faring.

#214 Rick on 06.05.14 at 9:54 pm

Ottawa Mike and other politically proper dumbkaufs need to get a sense of humor and learn what metonymy and metaphor are. The cartoon is a commentary on Wynne getting bloodied during the debate. It’s a metaphor just like when I used the term bloodied. The doofuses talking of grave offense and domestic abuse etc. are just stupid sissies. Now THAT you can take literally.