Help me

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Are you fed up with global macroeconomics, hairdressers who parse monetary policy better than the Fed and old retired snorts who surf all day and then tell you why the government is lying about Labour Participation Rates?

Me too. Sucks.

Instead, let’s mess with some of the silly people who write me for advice.

Here’s Alan, in Calgary, where one of the major banks has forecast a 3.5% decline in house prices this year (stop laughing):

I read your blog this evening and want to ask – what if I just want to buy a place to live? So house prices are going to be down 3.5% – so what? In the grand scheme of things, that doesn’t seem like a lot.

Our rental house (we have an amazing $1500/month utilities included) went on the market today. While we certainly WOULDN’T buy it for the $409K asking price, or the $344K that it was assessed at (fine to rent, pain to buy), we are considering buying. We’ll never get a rental at the same price that we’re getting now. What’s the problem of buying a house and just living in it for a few decades? We don’t want to go crazy with debt, but we’d like something around the $300K number – we make $105K annually. Two kids, though – money is tight for sure.

Anyways, I was just wondering about buying for the long-term. Good time for buyers?

Great example of thinking with your pants, Alan. First, buying a house because your rental is coming to an end and you hate moving is hardly justification for what could be a debilitating, long-term action. I know nothing about your finances, other than ‘money is tight for sure.’ But that’s enough. Without a substantial downpayment (let’s assume 10% on a $350,000 house) owning will cost you several hundred dollars more a month – in financing, taxes and insurance alone – than renting. So money will get tighter.

The only reason you might want to pay more now to live in a lesser place is if you believe you’re building equity in the future. But forget that. You’ve chosen what is possibly the worst time in decades to consider buying in Cowtown. As of Thursday, listings had swollen by 87% over this time last year while sales were down 38%. Almost 1,500 families who bought in the last eight weeks without previously selling their houses are now freaking. We’re on the cusp of serious price deflation, given the collapse in oil and the layoffs that will materialize this spring.

So, Alan, you can buy a crappy house, penalize your family with less cash flow and lose all your equity in the next year. Or you can move. Duh.

So much angst in Alberta. Here’s Alicia. Poor, horny, soul.

Hi Garth: My family is moving to Fort Saskatchewan, AB for my husband’s job.  He’s getting transferred in the next couple months, and works in the agriculture industry.  We expect to stay there for the long term.

I really want to buy a house.  I’m house horny.  We have 2 kids under 3 years. I want to pay down 20% on a house.  We have about $150k.

My husband wants to rent.  He’s wanted to keep renting for the last 5 years but I feel I need to settle down. Also, my parents are pressuring me to buy a house and not rent.  They think renting is throwing away ones money. However, it’s difficult to find anything to rent for under $2000/month.  Probably be looking upwards of $2500/mth. Buying a place implies our monthly payments will be $1500/month. Is it better to rent or buy?

Sounds like Alicia wants a $700,000 house, and to buy it without paying the pirates at CMHC. Fair enough. But this also means a mortgage of almost $600,000, and a monthly of $2,700, plus property tax and the usual gaggle of other costs. Then there’s $850 a month in lost gains on an uninvested downpayment. So, owning will mean at least a thousand dollars more a month than renting.

Add to that all of the unbridled risk now extant in the Alberta market (see Alan, above), and the awesome chance you will diddle away most of your downpayment buying at the pre-correction peak. So why are you even having this debate? Ah yes, your parents. Two more Boomer know-it-alls? Meddling in your marriage? Imposing their values on you?

They’re wrong to comment. You’re weak to listen. Do what’s best for your family.

Finally, here’s confused Clarence, to prove the Kool-Aid’s just as potent in Toronto.

Love the blog. I’ve been reading it for the last year or so. I come to you in need of advice.

My girlfriend (age 31) and I (just shy of age 29) just signed a purchase agreement for a townhouse in downtown Toronto. Asking was $799k, we bought for $765k. Our combined base salary is $141k. We currently live together in a condo she owns, which we now plan to sell. It’s also in downtown Toronto. We figure we could get about $330-$340k for it, mortgage on it is $260k. The net amount we make will wipe out our existing debt (mainly from school). Our down payment is $165k, which we have liquid. The payments would be about $2400/month. We currently pay about $1400 a month on the condo’s mortgage, plus $335 in monthly maintenance fees.

Despite the gloom and doom, I think it’s still a good idea. This is a 5-15 year house for us, we aren’t looking to get out of it quickly. It’s got hardwood, a built in garage, granite counters…it’s not exactly a shack. We have no plans to have children. I personally don’t think a $600k mortgage is too bad at this point in our lives. That’s $300k each, which we both did on condos (I sold mine last year). Single people have $300k mortgages on sub 600 square foot boxes, so why not combine and get an actual house instead for essentially the same obligation per person? We’ve run the numbers and we feel fine about what income we’ve got leftover after all the fixed expenses are accounted. She’s a CA, I’m a CFP, we’ve been following the market for years…we’re not total idiots when it comes to this stuff.

We have until Friday to walk away. The girlfriend is getting seriously cold feet (it isn’t her dream house, she isn’t in “love” with it) and as I said I want to go through with it (I don’t think her dream house exists. Not for our price range and desired neighbourhood, at least). Any thoughts?

The most terrifying part of this, of course, is that he’s a financial advisor and she’s an accountant, which basically means we’re all screwed. Oh, and unmarried, so the mortgage could be a lot more durable than the relationship.

Seriously, think about it. The monthly finance bill plus property tax will be $12,000 more a year than the condo now costs, in after-tax dollars. The lost income on the downpayment will double that – so you have to devote about $40,000 more in gross earned income to afford the move. Then you will have zero liquid assets, no financial portfolio and $600,000 in variable-rate debt.

Oh yeah, and your GF still doesn’t love it because it’s not her dream house? Guess what comes next.

Hope you’ve had an excellent 29 years, Clarence. Your life. It’s over.

348 comments ↓

#1 1st Fried egg for sure on 01.29.15 at 7:04 pm

I have nothing to add, except party on.

#2 Paully on 01.29.15 at 7:13 pm

Clarence, are you really sure that you are not the girlfriend in your relationship?

#3 bigtown on 01.29.15 at 7:13 pm

I was at the TD bank on 38th Avenue in Myrtle Beach behind a guy from New Brunswick. All the Ontario people are sure upset about the loonie and this east coast guy said he was staying home next year. This boomer from N.B. is counting the pennies.

Gas is down to $1.85 per gallon here in South Carolina.

#4 Bill Gable on 01.29.15 at 7:15 pm

“Almost 1,500 families who bought in the last eight weeks without previously selling their houses are now freaking.”

Try Fort Mac!

Great post today – as usual.

I cannot believe how naive some folks are. [email protected] is always on the lookout for, , clients.

Sheesh.

#5 Yes you shouldn't on 01.29.15 at 7:17 pm

These people can’t be for real. It is probably just real tors trying to mess with Mr. Turner. Either way we are in trouble :)

#6 protea on 01.29.15 at 7:18 pm

Amazes me no end that there are many people out there who still feel that real estate is a sound investment. Whenever I sound off about the real estate market I honestly feel that people think I am misguided in my thought process.
With a friend for lunch today the real estate topic come up and I ask him why it is so expensive to live here . He gives all the typical answers about living in paradise, beautiful weather scarcity of land etc. Just blows my mind when folks don’t take into account the fundementals these days. I still feel the day of reconkoning is around the corner.

#7 Double-yolked on 01.29.15 at 7:20 pm

Yoozers..
People are strange

#8 Fatima Llewellyn on 01.29.15 at 7:23 pm

My friend is renting his house in Vancouver for $2,000 per month. His landlord wants to put the house up for sale, so asked my friend if he wanted to buy it. My friend asked how much? The landlord said $949,900.

My friend choked on his spit.

Let me get this right…950K for something that spins off 24K a year in gross income, before property taxes or maintenance. That’s a 2.5% gross investment yield. WTF???

Are people in Vancouver from Mars?

#9 Robert Agnew on 01.29.15 at 7:23 pm

Well Steve the mail boy Harper, oil company shill, professional business community activist, pr expert, amateur hockey historian, thespian Murdoch extra And economic genius has not prepared us for the Great Recession. Pardon me while I fill up my gas tank with Suncor .

#10 Uh Oh Canada on 01.29.15 at 7:26 pm

Wow. We’re screwed. By the way, have been looking at random listings in my area and notice a lot more fireclosures than in the previous four years. The folks mentioned on the post are counting on job security-which may not be feasible in our current economic climate. And this is just the beginning.

#11 Mike T. on 01.29.15 at 7:29 pm

Unfortunately my wish is for these folks to do whatever they want. My only request is come back and let us know how it all went down.

I will feel bad for you the same way I feel bad for NA hockey players in Russia.

#12 };-) aka Devil's Advocate on 01.29.15 at 7:33 pm

#6 protea on 01.29.15 at 7:18 pm

What don’t you understand about; what a ready willing and able buyer is prepared to pay a ready willing and able seller, neither being under undue influence to buy or sell?

It ALL comes down to supply and demand.

#13 Marco on 01.29.15 at 7:36 pm

Thanks Garth,

Another one bites the dust. http://www.cbc.ca/news/business/jones-new-york-to-close-its-36-canadian-stores-1.2936686

The closings and unemployment just keeps coming.
I’ve never seen this before.

#14 Definitely eukaryotic on 01.29.15 at 7:38 pm

Prokaryotic decision makers.. glad they are in finance ..yeah baby!

#15 U.S. Guy on 01.29.15 at 7:40 pm

Forgetting for the moment the cost of buying an overpriced house, With your dollar dropping by 20+% do Canadians see an increase in everyday living expenses like utility bills, groceries or eating out? I know gas is dropping but what about the rest?
Here in the US prices seem to be rising with the dollar?? 
Does anything make any difference to the average everyday guy? Are Canadians hurting with the drop of your dollar?

#16 Eukaryotic's rule on 01.29.15 at 7:42 pm

Night-time reading for these folks

“Investing for prokaryotics”

#17 NoName on 01.29.15 at 7:42 pm

@#7 Double-yolked

Can believe you didn’t include a link, ccc…
Doors
People are strange
http://youtu.be/eDW_yAwaHnc

#18 western observer on 01.29.15 at 7:44 pm

The spring market here in Vancouver is going to be outstanding!

Logic, math, rational thinking, the future be damned.

SFH market will be on fire.
-Lower dollar means 20% discount to our offshore friends.
-BOC and Banks will be lowering the rate again
-Emotion and want rules the local herd.

It’s 10 degrees and sunny even though the haters thinks it rains here 24/7.

Speaking of haters – I think it is born from envy.

I attended a 50th Birthday celebration in Edmonton 2 Springs ago. When people found out I was from Vancouver I had 3 couples tell me that as soon as they are able, they want to leave Edmonton and move to Vancouver.

It is the most attractive city in Canada with the mildest climate. The San Francisco of Canada.

40% of homeowners in Vancouver proper have no mortgage. The highest rate in Canada.

#19 Pt Bob on 01.29.15 at 7:46 pm

new Vancouver rental in Gastown – dog allowed who always enjoy urine smells and jumping over sleeping bags in your doorway http://vancouver.craigslist.ca/van/apa/4844012247.html

#20 Clarity on 01.29.15 at 7:47 pm

Garth your examples are great, but very unclear. I think it’s time you school these people correctly and allow people to have some sort of table to fill in at home

Make a conservative assumption. Assume home price stay the same, but add in broker in/out + transfer taxes and then let people understand what is P+I

Assume you sell the place flat in 10 years vs renting (increase of 1.5% every two years). How does it all come out? The more real the examples, the better your message will be

Good Luck,

#21 S. Bby on 01.29.15 at 7:49 pm

Literally as I read this blog (taking a short break), guy at work in the next cubicle from me is on the blower with someone… speaking mostly Cantonese… all I can make out in English is Metrotown… Richmond… fixed rate… penalty… I wonder what they are discussing?

#22 Gulnar on 01.29.15 at 7:51 pm

MSM sometimes is useful. At least I found your interesting blog through G&M.
Macro economy is just being driven to keep a capitalistic society / system [email protected] monetary steroids.

#23 its OVER for Canadian oil sands on 01.29.15 at 7:52 pm

Anyone who is even think of buying RE in Alberta is brain dead or very stupid/ clueless to reality. Alberta will look like Detroit one day as the oil sands shut down maybe for good. An orderly shutting down of operations is happening as we speck. The BoC had to devalue the canadian dollar to allow that to happen. Without an orderly shutting down of the oil sands the canadian economy would crumble. Not that the economy is not crumbling right now it’s just allows an orderly crash.

#24 shriram on 01.29.15 at 7:54 pm

I thought you would comment about the feds in the state side are not in a hurry about raising interest rates

The mid-year increase is on schedule. — Garth

#25 When the music's over on 01.29.15 at 7:55 pm

turn out the lights…

http://calgaryherald.com/news/politics/prentice-cabinet-to-take-pay-reduction

#26 Happy Renting on 01.29.15 at 7:55 pm

Hmm… Maybe RE isn’t in big trouble, after all! Sounds like there are still plenty of greater fools to go around (even among those who read this blog! What the heck??????)

#27 Reality check on 01.29.15 at 7:57 pm

I can one up microman … I am renting a lake front property in okanagan valley appraised @ 1.6 MIL $$$$ for ONLY 900.00 per month and only pay for power .. Beat that rental lol how’s that for subsidizing me ….. All the free fruit I can eat and large re k and 2 car garage and room for my camper and toys YES I am from CALGARY. Lol sold my house at peak eat your heart out

#28 Victor V on 01.29.15 at 7:57 pm

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/2015/01/29/tim-hortons-lays-off-350-employees-at-its-headquarters-and-regional-offices&pubdate=2015-01-29

TORONTO — Tim Hortons says about 350 employees lost their jobs this week in layoffs across its organization, focused mainly at its headquarters and regional offices.

A spokeswoman for the company told The Canadian Press that all affected employees have been notified and the layoffs remain within commitments made to Industry Canada to maintain certain job levels.

The company has a total of 2,300 employees at its headquarters, regional offices and distribution centres across the country.

#29 bob on 01.29.15 at 7:58 pm

I can’t believe the CA and CFP think that 600K is an acceptable amount for a mortgage. Wow, that just blows my mind.

If you are sure you are not going to have kids, use that money to travel or do something interesting instead of watching the laundry dry.

#30 Buy it on 01.29.15 at 7:59 pm

It never ceases to amaze me that such simple minds could access to such high wages! That they even have to ask your advice on stuff like this is ridiculous!

Buy it spend your last dime, real estate only goes up (mocking) seriously people if you have to ask these questions you should have a guardian and be on a short leash so you don’t hurt yourself!

#31 Norm Bodner McLeure on 01.29.15 at 8:01 pm

If Clarence purchases the townhouse and then something comes up, he could probably be able to take on a part-time job to help cover the bills if necessary, and/or his spouse? Maybe that is what he is considering..

P.S. How long is the commute to work?

#32 Bladen Reynold on 01.29.15 at 8:05 pm

Just read on the Zero Guy’s page, A single ounce of gold can buy you 29 barrels of oil. What would you rather have? According to the market they are equivalent value.

#33 Ray Skunk on 01.29.15 at 8:08 pm

That Clarence email has to be bullshit surely? It’s just too perfect.

Hardwood and granite counters… precisely the two “in a nutshell” terms that sum up the state of home buyers today.

She’s already emotionally checked-out of this monster purchase (800k for a townhouse? LOLtastic) and he’s still pushing it?
She’s OUT – embrace it, this is your escape route!

In other news Mrs. Skunk’s best friend has just started dating a Realtor. I’ve been lucky to hold her back from buying a condo for the past twelve months, just managing to convince her to stay living in a private wing of her parent’s home (for free, I may add) every time she gets the twitch.
Well, that’s all for nothing now. I tried. Another CFA commits fiscal suicide.

#34 aL pacino on 01.29.15 at 8:09 pm

Is that bandit ?
A lovely creature indeed.

#35 Buy it on 01.29.15 at 8:11 pm

We shouldn’t even waste our time on idiots like this!

#36 tkid on 01.29.15 at 8:12 pm

Ohmygawd, I can’t believe the number of folks who email you with nutzoid schemes. And every last one of ’em has admitted their rationale boils down to IwantIwantIwantIwantIwant. The front page of most newspapers is devoted to either the plunging price of oil, the plunging loonie, the plunging number of jobs, and currency wars and they want you to sign off on getting themselves into more debt and ultimately bankruptcy court.

Lunatics!

#37 Herf on 01.29.15 at 8:12 pm

“So why are you even having this debate? Ah yes, your parents. Two more Boomer know-it-alls? Meddling in your marriage? Imposing their values on you?”

Ah yes. Parents.

‘Dear Mom and Dad:

We know/think you love us and care about us and only want the best for us, but please buzz off and let us kids grow up to become adults and take responsibility for our own decisions (good or bad). Life and the world aren’t the same as when you were our age. We know you mean well, but at the end of the day, we’ve got to live our lives independent of you because you won’t always be around.

Love,

The kids’

#38 For those about to flop... on 01.29.15 at 8:12 pm

Ppwweeeehhh.
I thought I was going to be listed as one of the silly people you talk to!

#39 Binder Dundat on 01.29.15 at 8:13 pm

@ Alicia’s comment: a $700,000 house in Fort Saskatchewan of all places?

Surely you must be joking.

#40 The End on 01.29.15 at 8:14 pm

#13 NoName
Just trying to keep the lyrics in check!

https://www.youtube.com/watch?v=3s7vmJm05_E

https://www.youtube.com/watch?v=wRwwUZLV-IE

#41 S. Bby on 01.29.15 at 8:15 pm

#8 Fatima

My figures too. My rent is $2K monthly and the property is “worth” a million. Makes no sense. The owner is simply speculating. Lots of that going on in my Burnaby area.

#42 Victoria Real Estate Update on 01.29.15 at 8:16 pm

For those of you who may be interested, scroll down to see my comments.

#43 Victoria Real Estate Update on 01.29.15 at 8:17 pm

2014 was another weak year for Victoria’s real estate market.

Sales of single family homes were more than 26% below Victoria’s long-term average, despite today’s historically-low (emergency level) interest rates (population adjusted).

Total Single Family Home Sales (Yearly)
. . . . . . . .Greater Victoria. . . . . . . .
. . . . . . (Compared to 2007). . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
2007…********************
2014…*******
2013…***
2012…**
2011…***
2010…*****
2009…***************
2008…*******
2006…***************
—————————————————–
. . . -40%. . . . . .-20%. . . . . .0%

(Source: Victoria’s board)

2007 represents an average year for SFH sales in Victoria.

SFH sales have been extremely weak in Victoria since 2010. The following facts are simply shocking (even without population adjustment):

* 2012 – lowest SFH sales total since 1982.
* 2013 – second lowest SFH sales total since 1984.
* 2011 – third lowest SFH sales total since 1984.

If the extreme stimulus of historically-low mortgage rates can’t bring SFH sales in Victoria back (or even close) to normal (average) levels, what will?

(continued below)

#44 Victoria Real Estate Update on 01.29.15 at 8:20 pm

It’s a well established fact that slow sales lead to lower prices, or in Victoria’s case, continued slow sales lead to even lower prices.

Prices across Greater Victoria continued to decline through 2014. Last month, Brookfield’s price chart for Victoria indicated the following:

* Late in 2014, prices were down 3.6% from a year earlier (comment # 60).
* By late 2014, prices had fallen to the lowest level since August 2007 (even lower than 2009’s lowest point) (comment # 60).
(Changes, see comment # 27.)

If today’s rock-bottom rates can’t stop Victoria’s price decline, what will?

Prices in Victoria have fallen significantly since 2010 without rising rates or an economic shock, which proves that neither is necessary for a housing market to begin a significant price decline.

(continued below)

#45 Sitting on the Dock of the Bay. on 01.29.15 at 8:21 pm

Hey western observer, I’m from SF.. Van ain’t no SF.

#46 Happity on 01.29.15 at 8:27 pm

BDI at lowest in 3 decades.

Must be those shipbuilders continuing overcapacity since 2008, don’t worry there is no global deflation and the USA is having an economic renaissance.

Nothing to see here, move along minions.

#47 Herf on 01.29.15 at 8:27 pm

“She’s a CA, I’m a CFP, we’ve been following the market for years…we’re not total idiots when it comes to this stuff.”

But they at least sound like partial idiots. Maybe “CFP” should stand for “Certifiable Financial Planner”?

How does that lawyer’s motto go? “He who represents himself has a fool for a client”. It sounds like something similar applies in this case to these financially trained whiz kids. At the very least, it seems that despite all that financial learning, they’re just as susceptible as Joe Sixpack to emotions, hormones and perhaps a misguided sense of permanence w.r.t. anchoring ship for any protracted period of time (particularly in these uncertain economic times).

#48 espressobob on 01.29.15 at 8:30 pm

#32 Bladen Reynold

That’s the problem with the zero dude, selling you a doom theory, and your buying it? Most of us, and Garth has clearly pointed out, is the fact GOLD is not legal tender! What else is new? Good luck with that.

#49 YVR Renter on 01.29.15 at 8:33 pm

I think I take the record for the most outrageous rent-to-price ratio. The house we are living in is on the waterfront and appraised at $4.5m. Our monthly rent is just over $4,600.

That makes a gross rental yield of 1.2%. Obviously that’s before property taxes, maintenance, insurance etc etc.

Anyone have a better deal than that?

#50 Help me | Realties.ca on 01.29.15 at 8:33 pm

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#51 Prairieboy43 on 01.29.15 at 8:37 pm

#39 Fort Sask also has $1,000,000.00 homes. Along the North Saskatchewan River. Alicia I have a house I will sell you < $700,000.00. I will even throw in 1 yr grass cutting by the neighbor kid.

#52 Linda on 01.29.15 at 8:38 pm

Clarence: If you & your girlfriend do NOT totally love it do not buy – think about paying the majority of your free cash over every pay for decades, while hating where you live. Not a good idea.

As for comments about relationships, if you purchase a house & both names are on the mortgage, you may as well get married because it will be easier to divorce than it will be to shed the mortgage, particularly if house prices go into free fall. No religious offense meant, but the words ‘whom God has joined let no man put asunder’ pale in comparison to ‘who the bank has jointly mortgaged let no one dare to sunder – until we get our money back’.

Plus, if house prices are about to go into free fall, plenty of time to find ‘the one true love’ of a house & pay one heck of a lot less for it, too. Bargain & happiness in one – go for it!

#53 Harbour on 01.29.15 at 8:39 pm

This is supposed to be bad news: The U.S. home ownership rate has now fallen to 64%, the lowest level since 1994. As if two decades of progress have summarily been wiped out.

What’s really going on, however, is the last bit of air squeaking out of a 20-year housing bubble that obscured the pitfalls of owning a home, while exaggerating the virtues. The U.S. home ownership rate is now back to its historical average—where it probably ought to be—as this chart shows:

http://finance.yahoo.com/news/hooray-for-a-falling-home-ownership-rate-190138469.html

And us idiots up here in the frozen toilet are still as house horny as ever paying more then twice the price for a house……… I’ve lost all words to explain the absolute stupidity Canadians have with real estate.

#54 There will be blood. on 01.29.15 at 8:42 pm

Take heed Oilberta

http://www.imdb.com/title/tt0469494/

#55 HD on 01.29.15 at 8:43 pm

#312 For those about to flop… on 01.29.15 at 8:08 pm

Thanks HD ,I wasn’t trying to time the market or anything like that .
I was just wondering what asset class should I spend for the TSFA contribution this year.
I know your trying to help me and I appreciate it.
Thanks for the tough love.

————————————-

No problem at all.

In your previous post your wrote:

“With the rocky economy is now a good time to load up on bonds instead of equity?
Help the rookie out!”

That is a market timing exercise…unless I don’t understand your question.

A passive approach would be to not pay attention to the “rocky economy” and to just rebalance until you get the desired asset allocation; 60% equity, 40% for example.

Just balance the portfolio and ignore the noise.

Best,

HD

#56 Ray Skunk on 01.29.15 at 8:46 pm

#9
new Vancouver rental in Gastown – dog allowed who always enjoy urine smells and jumping over sleeping bags in your doorway http://vancouver.craigslist.ca/van/apa/4844012247.html

My word!

Anyone who skipped over this needs to click that link right now.

That first picture showing the flotsam and jetsam of society hanging around outside this overpriced closest of despair… but ignore that, it has “funky oversize washroom doors”. Absolutely priceless!

#57 screwed on 01.29.15 at 8:47 pm

The debt cannot ever be paid back. The Greek’s new PM pretty much says so and he’s just getting started.

What’s on the other side of that debt? Banks and governments holding the debts as assets to service obligations. When a default occurs, the obligations cannot be paid unless government asks the CB to print to cover.

What’s a million Dollar mortgage when governments are trillions in debt?

A million today is yesterday’s one hundred thousand.

Big numbers shouldn’t scare anyone. A million financed at 1.5% is the same as a hundred thousand financed at 15%. That was reality in the not too distant past.

Rates are never going up. Money will lose in value more and more until debts are inflated away.

As long as the income is there to service the payments, my only advise can be to anyone to take on as much leverage as they can.

Enjoy life while you still can.

#58 Edmonton on 01.29.15 at 8:48 pm

To Alicia: be careful! My Aunt & Uncle were told in July 2007 from a realtor that they could list there house for $550,000 dollars. They live in Fort Sask. Of course, they’d just retired and decided to buy a huge luxury motor home & new car on lines of credit against there home. Now they have over $150000 in debt and their house can’t sell for $400,000. They have many friends during the boom of the late 60s & early 70s that bought & now want to downsize. Many of their friends have listed the last year, and only one has sold. Several had to pull off the market. In Fort Saskatchewan Alberta they even have large condo developments on the west side of town that were built in 2008, but we’re turned into rentals and to this day, still have brand new suites that have never been lived in yet! I don’t think you should buy. Even with these low interest rates they’ve never been able to recover back to the boom of 20007!!!

#59 svr on 01.29.15 at 8:48 pm

“Are you fed up with global macroeconomics, hairdressers who parse monetary policy better than the Fed and old retired snorts who surf all day and then tell you why the government is lying about Labour Participation Rates?

Hey, at least they look past the headlines for their financial information… you may want to give that a shot!

#60 DisgustMadeMePost on 01.29.15 at 8:51 pm

#44 YVR Renter on 01.29.15 at 8:33 pm

Close but no cigar… I am renting for $2300 and the latest appraisal shows over 1.7 mil. The owner must have had a big down payment… Yikes.

#61 Cowtown Cowboy on 01.29.15 at 8:52 pm

Hi Garth: My family is moving to Fort Saskatchewan, AB

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

Hey, that’s my home town, once a Fort boy, always a Fort boy! I considered moving back, but too many 25 yr old hammerheads tearing around in their lifted f250’s…lots of operators out at Shell making well into the 6-figures..just not for me anymore. I think my parents paid about 20k for our house and sold it for over 300k 40yrs later, doubt I will see that kind of return, unless someone is going to give 4.5 million…probably not

#62 Retired Boomer - WI on 01.29.15 at 8:55 pm

Three stories. Three idiots. The water? The Air? Toxic something up there that is melting otherwise seemingly functioning cranial filler.

As for the CFA in TO? I would run from that dude.

I failed to hire one adviser when he admitted he leased his car – a VW convertible. Besides having a crap reputation for reliability he leased the vehicle? …. and YOU want to give ME financial advice?

Caveat Emptor people. We share space with many strange 2 legged creatures including ones with feathers. The rest I trust.

#63 western observer on 01.29.15 at 8:55 pm

re#45 Sitting on the dock of the bay

My post says the San Francisco ” of Canada”

I have been to SF as well and it is a fair analogy

#64 SWL1976 on 01.29.15 at 8:57 pm

Biggest single purchase in your life.

Would your rather pay a huge premium or wait and get a discount?

Seems like a no brainer to me, but I’m not the one shopping for real estate when even the MSM is calling it bubbly and good paying jobs in this country are going the way of the dodo

On another note I watched the National last night to see what the CBC would be babbling about, and wow! Politics these days, especially the cons with their name calling and finger pointing makes me want to vomit.

Embbarrasing to watch. I wish it was a bad joke. Unfortunately it’s our reality

#65 Victoria Real Estate Update on 01.29.15 at 8:57 pm

Victoria’s economy has been weakening since 2010 (when prices in Victoria began to fall). It seems certain that this trend will continue through 2015 and beyond, when one considers the following:

* The BC government’s 3 year hiring and pay freeze (that started in Sept. 2012) is still in effect. Victoria is a government town. A government hiring and pay freeze obviously creates major problems for Victoria’s economy and house prices.

* Loss of the wealth effect due to falling house prices. As house prices fall, those with negative equity stop feeling rich and spend less money (bad for the economy) and are unable to move up the property ladder (bad for property sales and prices).

* The price of BC bud has dropped from about $10 a gram to $7 a gram. – It’s no secret that Victoria‘s pot industry is a huge part of the local economy. The falling price of BC bud (and less demand) will continue to negatively impact Victoria’s economy and house prices.

Recent major development that will further weaken Victoria’s economy:

* Layoffs in the oil patch through 2015 as a result of today’s crashing oil prices. – I don’t have the exact numbers for this, but apparently there are a number of Victorians who commute to northern BC and AB to work in the oil patch. Layoffs in the industry will obviously have a negative impact on Victoria’s economy and house prices. Low oil prices could be around for years.

How bubbly is Victoria’s housing market? A quick look at house prices in the US makes it obvious that Victoria’s housing market is extremely overvalued.

Arizona:
$115 K, Florence, AZ (Phoenix) (3 beds, 3 baths, 2,220 sq. ft., built in 2006, attached double garage)
$120 K, Maricopa, AZ (Phoenix) (3 beds, 3 baths, 2,233 sq. ft., built in 2005, attached double garage)

Florida:
$120 K, Jacksonville, FL (3 beds, 3 baths, 2,027 sq. ft., built in 2005, attached double garage)
$113 K, Palm Bay, FL (3 beds, 2 baths, 1,955 sq. ft., built in 2005, attached double garage)

Texas:
$120 K, Houston, TX (3 beds, 3 baths, 1,985 sq. ft., built in 2005, attached double garage)

Nevada:
$149 K, Las Vegas, NV (3 beds, 2 baths, 1,801 sq. ft., built in 2005, attached double garage)

Georgia:
$85 K, Riverdale, GA (Atlanta) (4 beds, 3 baths, 1,870 sq. ft., built in 2006, attached double garage)

Girls and guys, prices in Victoria are down 12-15% from peak, but Victoria’s housing bubble remains inflated. Prices will fall a lot more before reaching bottom. Most of Victoria’s price correction will happen as prices across Canada fall. All national housing bubbles go through major price corrections (see House Price to Income Ratio chart).

Renting for now (risk-free and worry-free) for less than the cost of owning the same property is a no-brainer considering that houses will be much cheaper in the future.

Until next time – Cheers!

#66 Marco on 01.29.15 at 9:02 pm

@ western observer.

No it’s not. More like Seattle of Canada. That might be a stretch as well.

#67 For those about to flop... on 01.29.15 at 9:04 pm

Hey HD ,I am one of the lowest earners on this blog and I was asking Garth what should I concentrate my $5500 on for my TSFA .
I know this is a small amount but low earners have less leeway for mistakes.
For that matter I could argue that i need financial advice just as much if not more than anyone else on this blog.
I want to be financially independent and I don’t want to rely on government handouts.
That should be for people who really need it.
Eg.someone with a lifelong disability .
Take care and thanks for the help.

#68 Forever ZIRP on 01.29.15 at 9:05 pm

“Sadly for all our futures, cheap money is here to stay. Just get used to it.”

http://www.telegraph.co.uk/finance/comment/jeremy-warner/11373011/Sadly-for-all-our-futures-cheap-money-is-here-to-stay.-Just-get-used-to-it.html

“Central banks have been struggling to normalise interest rate policy. Increasingly, there is reason to doubt they ever will be able to.”

“the possibility that rates are stuck where they are for many years is very real. And if they are, it’s got big, and far from healthy, distributional consequences, further widening both the wealth and inter-generational divide, and increasing the propensity to financial crisis.”

“There is a mismatch between what the Fed is signalling and what the markets expect. With even some exceptionally long-term rates also at close to zero, that market view is maybe never.”

#69 Blacksheep on 01.29.15 at 9:06 pm

“Hey western observer, I’m from SF.. Van ain’t no SF.”
———————————————————–
I think your missing the point.

Pick a city, INSIDE Canada’s borders, that is most like SF?

#70 More like helpless on 01.29.15 at 9:06 pm

https://www.youtube.com/watch?v=7JTy-GCfmvw

#71 Daisy Mae on 01.29.15 at 9:08 pm

“The most terrifying part of this, of course, is that he’s a financial adviser and she’s an accountant…”

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

Yeah…and the ‘accountant’ on our strata council has our contingency fund invested in GICs. All idiots. So sad.

#72 Victoria Real Estate Update on 01.29.15 at 9:09 pm

Arizona:

$115 K, Florence, AZ (Phoenix) (3 beds, 3 baths, 2,220 sq. ft., built in 2006, attached double garage)

$120 K, Maricopa AZ (Phoenix) (3 beds, 3 baths, 2,233 sq. ft., built in 2005, attached double garage)

#73 Harbour on 01.29.15 at 9:10 pm

#9

Is 250 sq ft the size of a bed or a bedroom?

Looks like a nice neighborhood … NOT !!

#74 NoName on 01.29.15 at 9:12 pm

@#40 The End

good old days, Woodstock 1969, joe cocker – with a little help from my friends
http://youtu.be/3xJWxPE8G2c

#kia

#75 Julie K. on 01.29.15 at 9:12 pm

Wondering where all the rental properties are going to come from if/when we all heed the advice & sell our SFH’s (or don’t get into one to begin with)? And won’t the SFH/mortgage avoidance attitude drive up rental prices everywhere (making landlords, well, lords?)? What about homes with suites in them? Will they fair better in the near/long term? Are they a better (ie safer) investment? Is there a run on mobile home parks as a “solid” investment in light of the projections? So many Q’s and so little time until the RE crash. Yikes. I am terrified, need help, not very quick and almost dead.

No worries. The vast majority of people will never see it coming. There will likely be a glut of rentals. — Garth

#76 Arfmooocat on 01.29.15 at 9:13 pm

#8 Fatima Llewellyn on 01.29.15 at 7:23 pm
My friend is renting his house in Vancouver for $2,000 per month. His landlord wants to put the house up for sale, so asked my friend if he wanted to buy it. My friend asked how much? The landlord said $949,900.

My friend choked on his spit.

Let me get this right…950K for something that spins off 24K a year in gross income, before property taxes or maintenance. That’s a 2.5% gross investment yield. WTF???

Are people in Vancouver from Mars?

…………………………………………………………………….

#77 wallflower on 01.29.15 at 9:14 pm

#8 Fatima Llewellyn on 01.29.15 at 7:23 pm

My friend is renting his house in Vancouver for $2,000 per month. His landlord wants to put the house up for sale, so asked my friend if he wanted to buy it. My friend asked how much? The landlord said $949,900.

My friend choked on his spit.

Let me get this right…950K for something that spins off 24K a year in gross income, before property taxes or maintenance. That’s a 2.5% gross investment yield. WTF???

Are people in Vancouver from Mars?
= = ==== == = = = = = = = = = =
I have an even funnier story. Acquaintance was paying $2000 monthly rent for a house in Victoria, Oak Bay area. Landlord did the same thing. Wanna buy? How much? $1M. Okay. Acquaintance did that. Five years ago. And we all know which direction the Victoria market headed.

#78 Arfmooocat on 01.29.15 at 9:15 pm

#8 Fatima Llewellyn on 01.29.15 at 7:23 pm
My friend is renting his house in Vancouver for $2,000 per month. His landlord wants to put the house up for sale, so asked my friend if he wanted to buy it. My friend asked how much? The landlord said $949,900.

My friend choked on his spit.

Let me get this right…950K for something that spins off 24K a year in gross income, before property taxes or maintenance. That’s a 2.5% gross investment yield. WTF???

Are people in Vancouver from Mars?

…………………………………………………………………….

When I went to college, My real estate class said you need to collect at least 1% in rent per month of the property’s value. In this case, $949,000 X 1% = $9,490. They need to collect $9,490 a month in rent or they are doomed for failure. The recommended rate is 1.5% and the monthly rent should be $14,235 a month for the landlord to make money on this investment.

#79 CalgaryBoy on 01.29.15 at 9:17 pm

It is absolutely NOT the time to buy. Anyone who buys a house right now is a complete idiot!!!

The money’s gone in Alberta. People are still in la-la land. Most of my friends and co-workers have no clue what’s happening and what’s about to happen.

They actually think it’s stupid of me to read this blog, to follow the WTI, & watch the Calgary housing market.

People need to wake up and not follow & believe what the government, the real estate agents / real estate boards & BoC are saying about the housing market.

Wake up and smell the tulips!

#80 Mark on 01.29.15 at 9:20 pm

“With your dollar dropping by 20+% do Canadians see an increase in everyday living expenses like utility bills, groceries or eating out? I know gas is dropping but what about the rest?”

Simply put, no. Labour prices, which are a significant component of what most Canadians buy, are obviously quite stable. Energy is a substantial component of the cost of most imported stuff from the United States (particularly food), and energy prices have dropped significantly even in CAD$ terms. Additionally, dropping global demand has truncated CAD$-translated price growth on most imported stuff.

Canadian consumers are certainly not enjoying the full extent of consumer price decreases that are seen in the contemporary United States, but there is no evidence of any sort of consumer price inflation in Canada, nor anything on the horizon. Additionally, the bond market has so much confidence in the probability of a rebounding CAD$ and CAD$ price stability that it has been bid to record low yields.

The people who run around claiming that houses have dropped 20%, or claim that inflation is running high, are, for lack of better words, kooks looking for attention. Yes, house prices have dropped in Canada over the past couple years, but only minorly. And inflation is nowhere to be found and deflation is now the most significant fear, especially with consumer spending going into the toilet and demand disappearing.

#81 Steve on 01.29.15 at 9:24 pm

Whats the deal with ZPR (Preferred Share ETF)? – it seems like its been falling more than regular Canadian Equities these past few days.

#82 bdy sktrn on 01.29.15 at 9:24 pm

Hey western observer, I’m from SF.. Van ain’t no SF.

—————–
well, canada ain’t no USA.

van is seattle+SF+LA+SD all in one for us canooks. eh?.

#83 Darryl on 01.29.15 at 9:25 pm

“Hey western observer, I’m from SF.. Van ain’t no SF.”
———————————————————–
I think your missing the point.

Pick a city, INSIDE Canada’s borders, that is most like SF?
——————————————————–
Vancouver is not even close to San Fran. Can’t say any city is .

#84 bdy sktrn on 01.29.15 at 9:27 pm

and van’s dim sum beats SF’s like a rented mule.

more asian inflows on a much smaller market.

#85 -=jwk=- on 01.29.15 at 9:27 pm

what kind of house do you get for 300k in Calgary? Because here in Toronot that is a 1bed condo. you want a 3bed 2bath? try 800k. if your income is really 105 and you can really get a house for 300k, go for it!

and clarence, if it isn’t her dream house you will be either seperated or moving in4 years. Take that to the bank…

#86 Smoking Man on 01.29.15 at 9:27 pm

Ok here are the 40 things that the Greeks are going to do.

Duh, JfK, 911,Sandy hook. MH17, Charlie.

I’m betting after the machine digests this, life expectancy for its leaders.. 2 weeks tops…

Syriza. Here the 40 points of the Syriza program.

Audit of the public debt and renegotiation of interest due and suspension of payments until the economy has revived and growth and employment return.
Demand the European Union to change the role of the European Central Bank so that it finances States and programs of public investment.
Raise income tax to 75% for all incomes over 500,000 euros.
Change the election laws to a proportional system.
Increase taxes on big companies to that of the European average.
Adoption of a tax on financial transactions and a special tax on luxury goods.
Prohibition of speculative financial derivatives.
Abolition of financial privileges for the Church and shipbuilding industry.
Combat the banks’ secret [measures] and the flight of capital abroad.
Cut drastically military expenditures.
Raise minimum salary to the pre-cut level, 750 euros per month.
Use buildings of the government, banks and the Church for the homeless.
Open dining rooms in public schools to offer free breakfast and lunch to children.
Free health benefits to the unemployed, homeless and those with low salaries.
Subvention up to 30% of mortgage payments for poor families who cannot meet payments.
Increase of subsidies for the unemployed. Increase social protection for one-parent families, the aged, disabled, and families with no income.
Fiscal reductions for goods of primary necessity.
Nationalization of banks.
Nationalization of ex-public (service & utilities) companies in strategic sectors for the growth of the country (railroads, airports, mail, water).
Preference for renewable energy and defence of the environment.
Equal salaries for men and women.
Limitation of precarious hiring and support for contracts for indeterminate time.
Extension of the protection of labor and salaries of part-time workers.
Recovery of collective (labor) contracts.
Increase inspections of labor and requirements for companies making bids for public contracts.
Constitutional reforms to guarantee separation of Church and State and protection of the right to education, health care and the environment.
Referendums on treaties and other accords with Europe.
Abolition of privileges for parliamentary deputies. Removal of special juridical protection for ministers and permission for the courts to proceed against members of the government.
Demilitarization of the Coast Guard and anti-insurrectional special troops. Prohibition for police to wear masks or use fire arms during demonstrations. Change training courses for police so as to underline social themes such as immigration, drugs and social factors.
Guarantee human rights in immigrant detention centers.
Facilitate the reunion of immigrant families.
Depenalization of consumption of drugs in favor of battle against drug traffic. Increase funding for drug rehab centers.
Regulate the right of conscientious objection in draft laws.
Increase funding for public health up to the average European level.(The European average is 6% of GDP; in Greece 3%.)
Elimination of payments by citizens for national health services.
Nationalization of private hospitals. Elimination of private participation in the national health system.
Withdrawal of Greek troops from Afghanistan and the Balkans. No Greek soldiers beyond our own borders.
Abolition of military cooperation with Israel. Support for creation of a Palestinian State within the 1967 borders.
Negotiation of a stable accord with Turkey.
Closure of all foreign bases in Greece and withdrawal from NATO.

#87 Mark on 01.29.15 at 9:30 pm

“My real estate class said you need to collect at least 1% in rent per month of the property’s value. In this case, $949,000 X 1% = $9,490. They need to collect $9,490 a month in rent or they are doomed for failure. The recommended rate is 1.5% and the monthly rent should be $14,235 a month for the landlord to make money on this investment.”

This sounds pretty accurate. Another way of looking at it is that one shouldn’t pay more than 100X annual monthly rent for an ‘investment’ property. When all of this is translated back to GAAP-compliant after-tax earnings comparable to that of the stock market, the P/E ratio for housing should be around 8-10. After all, if you consider the equity in a house to be like the equity in a business (ie: a stock), the ‘earnings’ (ie: rent) will only grow at roughly the rate of inflation over the long term. A stock that can only grow its earnings at the rate of inflation over the long term is only worth 8-10X earnings. Sometimes even less. Why should an illiquid investment in a single example of housing be any more valuable than a broadly diversified investment in the businesses that keep Canada moving, smoking, chatting on their cell phones, driving, banking, etc.?

#88 Prairieboy43 on 01.29.15 at 9:31 pm

@# 58. Fort Sask population 2001 = 13500. Fort Sask Population 2014 = 23500. No problem selling home in last 13 years. Most of people here employed by Sherritt, Dow Chemical, Agrium, Shell, Provincial Jail, Canadian Forces base Namao. Now with Northwest Upgrader, being built there is expansion. Lowest Taxes in Alberta.

#89 Truth about Realtors on 01.29.15 at 9:31 pm

https://ca.yahoo.com/finance/news/real-estate-agents-confess-dirty-110000963.html

#90 Nattie on 01.29.15 at 9:33 pm

As a US-Can citizen, every tax season I entertain the idea of moving to the US or renouncing my US citizenship (or both.) Today I was killing time looking at Seattle real estate.

Wow. You can get a 1bd condo there for 100k. Not a posh one, granted, but not an embarrassing one either. With 10k down and a 30 year fixed mortgage at 3.5%, that’s approx 600/month including hoa fees (but not taxes.) That’s the cost of renting one room in any of Canada’s major cities (Seattle incomes aren’t that low, either, but income tax is.) We’re screwed.

On another note, a friend of mine dated a CMHC economist for a bit. She described him as a bit slow, so there’s that.

#91 western observer on 01.29.15 at 9:33 pm

#69 Blacksheep

Thankfully someone gets it!

#92 fancy_pants on 01.29.15 at 9:36 pm

wonderful inquiries from inquisitive minds! we are here to help: http://www.thenutgraph.com/wp-content/uploads/2010/07/Brick-wall-of-answers.jpg

Some ears refuse to hear what the mind has already made up. happy house hunting.

#93 HD on 01.29.15 at 9:36 pm

#67 For those about to flop… on 01.29.15 at 9:04 pm

Gotcha.

Thanks for the extra info. My previous advice still stands though. Read as much as you can on the topic.

$5500 is too small to venture in ETFs in my opinion. I personally waited until my savings grew to 50k before I made the transition to ETFs.

If I had to do it again, I would put everything in a broad equity index like the S&P 500 or and a World Equity (excluding Canada) ETF. And design an asset allocation suitable for me once I reach 50K.

Easy to say in hindsight of course.

I was 27 yrs old when I got started so a long time horizon. I’m assuming that you are young as well?

Take the above recommendation with a grain of salt. The best way is for you to learn and one day you will see the light. You will know exactly what to do for yourself. You know your own circumstances better than anyone else so you should do well if you are equipped with relevant knowledge.

Best,

HD

#94 -=jwk=- on 01.29.15 at 9:39 pm

Man the YYZ can not compete with YVR valuations. We pay 1500 for a 700k home that would need 100k reno to sell (no granite! original actual hardwood! etc.).

#95 devore on 01.29.15 at 9:41 pm

#71 Daisy Mae

Yeah…and the ‘accountant’ on our strata council has our contingency fund invested in GICs. All idiots. So sad.

So legal.

http://www.housing.gov.bc.ca/strata/regs/OIC_215.pdf

#96 Marco on 01.29.15 at 9:41 pm

@ western observer

Wasn’t hard to get the first time. Your comparison of apples to oranges.

#97 Doodles on 01.29.15 at 9:43 pm

#66 Marco on 01.29.15 at 9:02 pm

Have to agree on that….Vancouver is very overrated and has to have some of the least pleasant weather on the planet in addition to being a cultural wasteland…OTOH, when the sun shines for 20 days a year, it does look like a very nice cultural wasteland….

#98 Ralph Cramdown on 01.29.15 at 9:44 pm

#69 Blacksheep — “Pick a city, INSIDE Canada’s borders, that is most like SF?”

St. John’s

#99 kessel on 01.29.15 at 9:45 pm

It looks like housing markets can remain irrational far longer than this blog site can remain active.

You want active? Stick around. — Garth

#100 Freedom First on 01.29.15 at 9:45 pm

Amazing and sad at the same time. And yet I feel even better after reading today’s Post.

Freedom. Priceless.

#101 debtified on 01.29.15 at 9:47 pm

Garth,

Why do you read these kind of emails? How do you keep your sanity? What kind of chill pill are you on?

Why do you make me read them? I read every single one of your post, you know. Can you please share to me whatever chill pill it is you are on?

I am so depressed now. I will shut up now. I can’t think of anything good to say.

Smokie!!! Where are you?!

#102 palebird on 01.29.15 at 9:53 pm

“Hey western observer, I’m from SF.. Van ain’t no SF.”
———————————————————–
“I think your missing the point.

Pick a city, INSIDE Canada’s borders, that is most like SF?”

There isn’t one period. Does not exist. Wake up.

#103 Washed Up Lawyer on 01.29.15 at 9:59 pm

#69 Blacksheep

“Pick a city, INSIDE Canada’s borders, that is most like SF?”

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

I am not very current on SF having last visited there in the late 70’s. My two buddies and I attended a recruitment dinner at a Moonies house in Haight Ashbury. We had enough sense to avoid the recruitment efforts and declined the invitation to the “ranch” near Saucilito. My folks would not have paid for a deprogramming/kidnapping to return me to Calgary.

Based on that experience, I would nominate Cardston, Alberta but it is a town and not a city.

#104 SWL1976 on 01.29.15 at 10:00 pm

I’ve been flying Victoria to Calgary on Thursday afternoons for over 3 years now and today seemed like the most empty seats I have seen. Although the long term parking was jammed as it usually is.

Another story here. Last week I was explaining to my better half some of the theory’s I have as to what is happening in the world. Anyways she was having a hard time understanding why the elites would be so mean to all us sheeple. I explained to her that she cannot comprehend what is happening because her thought process is that of a compassionate caring individual. The elites and the ones calling the shots no so much.

There is no logical way out of this mess and these massive government debts are not going away without massive inflation or financial collapse. The elites will create chaos and when the time is right offer a solution that the sheeple will beg for. Having them bent over a barrel and vulnerable will just make their next solution to the fabricated problem a much easier sell.

Irresponsible governments hate gold because it gets in the way of them running their printing press to infinity simple as that. The USD is backed by nothing more than confidence and right now that is serving them well…

Lets just say I hope the tide doesn’t go out.

#105 Binder Dundat on 01.29.15 at 10:00 pm

“#39 Fort Sask also has $1,000,000.00 homes.”

Okay, so your assertion that you can grossly overpay for a property almost anywhere is probably true.

Well done!

#106 bdy sktrn on 01.29.15 at 10:00 pm

When I went to college, My real estate class said ….
—————————-
hello? mr. intrest rate calling….

i’m guessing you ‘went to college’ sometime before 2010?

#107 Sideshow Rob on 01.29.15 at 10:14 pm

#32
I would rather have the gold. 29 barrels of oil won’t fit in my safe.

#108 JustMe on 01.29.15 at 10:16 pm

http://moneyweek.com/the-oil-price-crash-and-european-qe-will-pop-londons-property-bubble/

The oil price crash and European QE will pop London’s property bubble

Foreign money has kept the London property bubble inflated – but now it’s leaving

Up to 70% of the property sold in central London in the last few years has gone to non-UK residents. For London as a whole, the figure is around 20%. By far the biggest group of buyers is the Russians. You can bet that the ‘Arab Spring’ had a similar effect on funds from the Middle East.

an increasing sense of resentment and popular uproar about ‘ghost towns’ – areas of London entirely dominated by second homes – is adding to pressure to tax wealthy and foreign property owners more heavily.

Demographics expert Paul Hodges reckons that prices could (and perhaps even should) fall by as much as 50%.

http://moneyweek.com/paul-hodges-interview-the-great-unwinding/

Paul Hodges: UK house prices could fall 50% in global ‘Great Unwinding’

The new normal is based on the fact that life expectancy has grown by 20 to 25 years over the last century and as a result we now have nearly one in two of adult population over the age of 55.

people over the age of 55 already have everything they need and they’re moving, therefore, into a world where their needs are lowering and also their incomes are going down, so you cannot possibly get growth. It’s a very simple argument; it seems to be very obvious to me.

Therefore we are going to go into deflation because we’ve got all the supply left over from when we were consuming like mad, but we don’t have the demand anymore.

We will see this ‘great unwinding’ continue, and the Fed will end up being very, very surprised one morning to find that the US recovery has disappeared. The US economy is now riding for a fall. We don’t know how big it is, but if you look at jobs growth since 2009, it’s all – and I mean ALL, with capital letters – being tied into the oil and gas exploration bubble, so all the rest has not moved at all.

We’ve seen price falls in the housing market in the past in the early ‘90s and they went down 50%, and I think that we’re at the start of that kind of decline now – cash is actually going to be a very good investment because under deflation the value of cash goes up every day.

We’ve had six years of central banks believing that Friedman was right and saying, “If we put out enough money, then we will end up with inflation.” Could we have some common sense on this which says, “If you’ve got an older population, you’re not going to want to spend,”

what I hope is that common sense prevails and that we abandon these out-dated economic theories.

#109 CacheFreak on 01.29.15 at 10:18 pm

#86 Smoking Man on 01.29.15 at 9:27 pm
Ok here are the 40 things that the Greeks are going to do.

Duh, JfK, 911,Sandy hook. MH17, Charlie.

I’m betting after the machine digests this, life expectancy for its leaders.. 2 weeks tops…

Syriza. Here the 40 points of the Syriza program.
*******************************

Nice copy/paste job there, slim Jim.

#110 Sheik Yerbouti on 01.29.15 at 10:20 pm

Garth,

Could strategically devaluing the dollarette via low interest rates be the government’s ubermacro political strategy……
housing prices stay inflated and sheeples get to claim to each other that they are rich….once it reaches low enough…say about $3 canapesos/ USD$1, then the HAM and Uncle SAMS invest heavily in real estate……of course there are no jobs and everyone has to stay inside their private castles reminding themselves how rich they are while shivering their buns off due to unpaid heating bills!

#111 Maurice Rocket Richard on 01.29.15 at 10:29 pm

#81

Whats the deal with ZPR (Preferred Share ETF)? – it seems like its been falling more than regular Canadian Equities these past few days.
————————————————-

Hi Garth, or anybody, I have the same question as this guy. How to explain the recent move in ZPR and XPF for example, I have a hard time finding information on preferred shares ETF and I dont fully understand what is driving an up or down move in this asset class. Thanks for educating me

Preferred values move mainly due to changes in rates, actual, perceived or expected. However, the investors who buys them for capital appreciation rather than a tax-efficient and plump yield, has madeSince when was the herd worth emulating? — Garth
******************************************

Preferreds move with changes in rates, real, perceived or expected. The investor who buys preferreds for capital appreciation rather than a fat, tax-efficient stream of dividend income makes a mistake. Buy them, take the money and relax. In the long run you will always get your money back – so long as you own The right kind of preferreds, and not an ETF derivative. — Garth

#112 Nosty Vlad on 01.29.15 at 10:32 pm

#86 Smoking Man on 01.29.15 at 9:27 pm — “Negotiation of a stable accord with Turkey.”

Hey there SMan — good call! It appears Russia is unifying Greece and Turkey, with a new pipeline going to Turkey, with Greece having a major part.

BTW, didja see the link that it was the Rothschilds that bought the Charlie Hebdo operation only a few weeks prior to the attacks? This planet is our Cuckoo’s Nest, and we’re all in the crapper!

#113 zee on 01.29.15 at 10:32 pm

Hi

Why are preferred shares etfs are on sale.

#114 Smoking Man on 01.29.15 at 10:42 pm

#112 Nosty Vlad on 01.29.15 at 10:32 pm

Welcome back, I missed you bro.

#115 Pookie on 01.29.15 at 10:47 pm

I’d say Van is more Portland in scope than SF. Portland still has an NBA team though.

#116 Guy on 01.29.15 at 10:49 pm

Having grown up in Alberta and been through the economic collapse of the early eighties, anyone wanting to buy should consider renting and waiting a few months, housing prices could 1/3rd of what they are today!
Just speaking from past experience.
Consider buying gold, it is a good hedge against inflation.

#117 On a positive note on 01.29.15 at 10:50 pm

With all the layoffs, downsizing, forced retirements & whatever….. my commute seems to get shorter everyday.

#118 hohoho on 01.29.15 at 10:50 pm

> … Are people in Vancouver from Mars?

It’s the Hot Alien Money, didn’t you hear?

#119 hohoho on 01.29.15 at 10:53 pm

> … Why are preferred shares etfs on sale?

because higher yield components may get redeemed?

#120 Marco on 01.29.15 at 10:55 pm

Vancouver is Alcatraz to the indebted. By the way I love Vancouver, more so before the Real estate mania gripped our souls. And caused some of us to compare Van to other cities that it is clearly not.

#121 Moses71 on 01.29.15 at 11:02 pm

To those who lean to feeling sorry for people in the oil field who lost their jobs and now have honking mortgages and trucks to pay for with no savings? Why feel sorry for others’ egos??
I can mention a lot of situs to feel sorry for, and egos isn’t one of them
Sleep easy, my friends

#122 Ronaldo on 01.29.15 at 11:04 pm

#12 };-) aka Devil’s Advocate on 01.29.15 at 7:33 pm

”It ALL comes down to supply and demand.”

More like greed and ignorance I would suggest.

#123 hohoho on 01.29.15 at 11:05 pm

> … the bond market has so much confidence in the probability of a rebounding CAD$ and CAD$ price stability that it has been bid to record low yields …

how much of the CAD bond market is domestic institutional investors that follow reference/policy portfolio and don’t worry too much about CADUSD??

#124 Snowboid on 01.29.15 at 11:17 pm

#75 Julie K. on 01.29.15 at 9:12 pm…

A year after the housing crash in Phoenix, vacancy rates were 13.6%.

In 2013 they had only gone down to 9.3%.

Given the latest stats showing almost 2 million housing units in the Greater Phoenix area – that’s a lot of rental housing available.

#125 kommykim on 01.29.15 at 11:17 pm

RE: #113 zee on 01.29.15 at 10:32 pm
Hi
Why are preferred shares etfs are on sale.

Lots of Enbridge and TransCanada preferred in those ETFs. Some of those are down 20% in the last 3 months and trading well below par. Even the bank prefs are on sale but not as much as others.

#126 Happy Renting on 01.29.15 at 11:17 pm

#31 Norm Bodner McLeure on 01.29.15 at 8:01 pm
If Clarence purchases the townhouse and then something comes up, he could probably be able to take on a part-time job to help cover the bills if necessary, and/or his spouse? Maybe that is what he is considering..

P.S. How long is the commute to work?

Time to resurrect this hilarious follow up post.

http://www.greaterfool.ca/2014/02/28/happily-ever-after/

Clarence: it’s a cautionary tale on what you might face if the mortgage of “only” $600k gets too burdensome. If you need all your income to service it, heaven help you should one of you face an extended period of unemployment.

#127 Lala on 01.29.15 at 11:20 pm

Why didn’t you listed to me yesterday, my 2 stocks rock. Anyway, bored with the wine i decided to go kuku. Boiled some 3 grams of weed which my friend forget at my place, had a nice tea and went to sleep. I saw Garth ridding a cow wearing pajamas. Today 8 am after 10 hours still stone, damn thing to strong. Damage done seeing Garth that way.

#128 For those about to flop... on 01.29.15 at 11:21 pm

I have been in Canada for about 12 years and I’ve never had a RRSP.
I pay into a fund in Australia so I have kept my money here liquid.
My question is that if I am eligible to put 50 k in a RRSP ,should I do that or should I just invest the money myself somewhere else?

#129 Bubu on 01.29.15 at 11:25 pm

” awesome chance you will diddle away most of your downpayment buying at the pre-correction peak ”

so you think the real estate market can go down 20% in Edmonton area ( Fort Sask)… I don’t think we’ll see more than 5%… I still see people paying 10% more than the city estimate….

#130 Chasicskes on 01.29.15 at 11:28 pm

Hi Garth

I followed you advice and sold my Vancouver condo almost 4 years ago. You were right about realtors exaggerating the price increases. I had the condo for a few years with only a nominal increase in price and figure I lost about 30k when you include reno’s, special assessment and selling costs. I invested the money in a Palm Springs condo which I just sold at over triple what I bought it for. I figure I did not make much profit though after reno’s and closing costs, but I had 3 years enjoyment out of it and made about 25% on exchange which is not a bad return for 3 years. Thanks for the great advice. I plan to leave all my return in U.S. $ funds for a while to weather this storm and see how things play out. In the meantime, I am enjoying renting in Vancouver at half the mortgage cost of my former place which was no where near as nice and a lot more stress.

#131 Ahhhhhhhhhhhhhhhhhhhhh on 01.29.15 at 11:29 pm

Was the cow wearing the pajamas, or was it garth?

Garth, we’ll need you in your sleeping attire for the next blog pic.

#132 Smoking Man on 01.29.15 at 11:55 pm

#127 Lala on 01.29.15 at 11:20 pm
Why didn’t you listed to me yesterday, my 2 stocks rock. Anyway, bored with the wine i decided to go kuku. Boiled some 3 grams of weed which my friend forget at my place, had a nice tea and went to sleep. I saw Garth ridding a cow wearing pajamas. Today 8 am after 10 hours still stone, damn thing to strong. Damage done seeing Garth that way.

……

Nice, consider me Fan number 1

#133 DON on 01.30.15 at 12:00 am

@ Mark #80
Canadian consumers are certainly not enjoying the full extent of consumer price decreases that are seen in the contemporary United States, but there is no evidence of any sort of consumer price inflation in Canada, nor anything on the horizon.

******

Put the book down and go by groceries, maybe the price has not changed but the quantity may have. Easiest way to hide inflation in food stuff. Inflation is here you just are not looking close enough.

#134 Driftwood on 01.30.15 at 12:00 am

went to the grocery store today. I was not the only customer commenting to the staff about how much the prices had risen. $17 for a pkg of chicken thighs. All staff we’re repeating the same mantra-low cDN dollar. If/when the dollar goes back up will be interesting to see if the prices go back down. My kids will be eating oatmeal instead of cereal from now on:)

#135 Who luvs ya baby on 01.30.15 at 12:00 am

Montreal beats Van any day… and is far closer in spirit to SF… and it’s cheap!

For Van there is only one question…
https://www.youtube.com/watch?v=lIPan-rEQJA

#136 Haroldd on 01.30.15 at 12:02 am

105K and money’s tight? WTF?

Also, does anyone out there not have two children? Seems everyone has two, not one, not three, but two. Just another example of following the herd.

Finally, 790K for a townhouse? Again, WTF?

#137 Obvious Truth on 01.30.15 at 12:05 am

Yes the dog has more self control.

But there is always blame to go around. Could keep doors closed or tp on a high shelf.

Of course failing to do that can result in a messy clean up.

#138 Its'a bizarro world on 01.30.15 at 12:05 am

What country.. get in a car accident that turns you into a dominatrix.!!!. then sue for damages!!
Her mother used to work at BC housing!

http://news.nationalpost.com/2015/01/29/student-turned-dominatrix-awarded-1-5m-after-car-accident-left-her-with-brain-injury-and-a-new-personality/

#139 Your vs You're on 01.30.15 at 12:09 am

I noticed the blog dogs have a real problem with getting your and you’re mixed up. Here is a helpful example of how to use the two terms:

Your dog crapped on the rug.
You’re going to clean it up.

Thank you.

#140 Ozy to Clarence on 01.30.15 at 12:10 am

Clarence my boy, you are trying to catch up with the market. It’s only ONE WAY you can win this rationally and emotionally. Look at the DAMN comparables sold in same location in 2014. If you haven’t paid a cent more, then maybe it’s a decent deal. but if you’re about to pay $50000 more….. know the facts
Btw, the 10 days are for your lawyer to review the condo 200 pages declaration – don’t waste it with cold feet. when are you going to get the papers to your lawyer????? 4h before the deal gets FIRM!!! Are you serious? Usually, there are changes to be made to the contract the builder wrote, and some come back and forth and forth and back… I say, hire a professional agent that is HONEST (first buy the agent, then the house, I know it’s work, don’t be lazy), what if there are better deals out there? SHOW A BIT ON FLEXIBILITY in location and other must haves…. which are actually nice to have, man-up, know who your enemy is (the other buyers fuelled by the banks) and you’ll have a better picture. Female intuition tells me your place is not a good deal.

#141 Mike on 01.30.15 at 12:15 am

#75
No worries. The vast majority of people will never see it coming. There will likely be a glut of rentals. — Garth

There already is a glut of rentals available in certain pockets of our beloved 416 – we are talking brown brick, dilapidated 70’s,80’s soulless towers, usually away from the subway or any point of interest… with 2 & 3 bedrooms going for $1K/month or less..not too many people aspire to live in those though.

I am curious, when the ‘inevitable crash’ happens in the 416 – will the people with negative equity:

a) Just pack up and move into one of the dwellings I just described
b) Hustle like they never know they could,2nd, 3rd job, rent the basement , and Cut the fat (2nd car, $150 data plans, eating out etc), to keep their home
c) Give away their freeholds/condos to the greater fools on this blog for 20-50% off, as some keep daydreaming?

#142 james on 01.30.15 at 12:17 am

Alan,

Buy the house in Calgary. After all, buy high and hold is the key to becoming wealthy. Why wait till next year to buy at a discount when you can buy today?

Clarence, you and your girlfriend have half of my income and you are buying a townhouse that is twice as expensive as my house, in a frigid traffic-laden hellhole of a city. Not only that, but you are buying when prices are at historic highs, when personal debt levels are at record highs, and just about everyone is predicting a downturn.

The scary part is that you pretend to be financial professionals. Knock yourselves out. I can’t wait till next week when I get to return to the pacific northwest, with all of its greenery and lack of salted roads.

#143 Dr.NickRiviera on 01.30.15 at 12:25 am

Garth, we sold our house in Edmonton 3.5 years ago (partly because of the “impending housing downturn” which we’re hoping is about to take place) and have been renting a condo in Spruce Grove. Do you think fall/early winter 2015 will be a good time to thinking about buying here in Oil country if oil prices stay below $50? Or maybe wait until 2016? Any guess on how much prices will drop? (I assume you think the bank’s estimate of 3.5% is a joke). Thanks for keeping at this blog all these years!

#144 james on 01.30.15 at 12:29 am

#66 Marco

Vancouver is NOT Canada’s Seattle, and certainly not SF. Do you know what incomes are like in those cities? They both offer more in terms of culture, have lower house prices, etc.

Washington State has zero personal income tax, and the USA allows mortgage interest and property tax deductions.

The state has numerous industries: aerospace, biotech, software, agriculture, etc, plus a large military presence.

Similar weather, but that is about all it has in common. On the downside, Seattle has more violence due to certain groups, but it has lower property crime.

#145 Across the Pond on 01.30.15 at 12:30 am

#95 devore

So legal.

http://www.housing.gov.bc.ca/strata/regs/OIC_215.pdf

———————————————————-

Saved me a job posting that.

Even if more high risk investments were allowed, I’d hate to be the treasurer who presents a slim surplus in the operating, whilst disclosing that the CRF fell 20% during an equity correction!

Knee-jerk judgement are much more fun than looking up the legislation that serves your Strata Corporation though ;)

#146 fisheman on 01.30.15 at 12:32 am

Are the blog dogs sniffing their noses up at the 265 sq.ft. $890/month rental in Gastown. Do you have any idea how much cash flow will be generated from there? You are at the epicentre of the biggest, cheapest, best quality drug mart in North America. Surrounded by total losers. Best place to hide & got your dog to boot.

#147 sydcixel on 01.30.15 at 12:33 am

With the economy turning into one big mess, is Trudeau 2.0 sure that he really wants the job of PM?

#148 Grasshopper 604 on 01.30.15 at 12:36 am

#131 Ahhhhhhhhhhh
_____________________

Nice comeback to #127 Lala above… Nearly spit red wine all over the couch! The mind boggles.

#149 Happy Renting on 01.30.15 at 12:44 am

#128 For those about to flop… on 01.29.15 at 11:21 pm

It depends on how high your marginal tax rate is (you’re trying to use the RRSP to shift income so you pay tax on it in a year your marginal rate is lower.)

Some reading for you.

http://www.greaterfool.ca/2014/01/27/six-cool-things/

#150 eric on 01.30.15 at 12:56 am

“Then there’s $850 a month in lost gains on an uninvested downpayment”

Who buys and sells every month to realize 850$ on 100K.

#151 Herf on 01.30.15 at 1:00 am

Regarding U.S. cities/Vancouver, BC analogies, I once dealt with some aerospace dudes from Everett, WA who were in Van for some meetings. I think it was fall or winter (i.e. the usual damp, dark grey to black perpetual six to eight months of depressing gloom of Lower Mainland BC). I asked the Americans what the weather/climate in Everett was like and they said it was like Vancouver, but Vancouver was colder. Presumably Seattle and San Fran would be even warmer than Everett and Van, being further south.

‘Nuff said.

#152 Larry1 on 01.30.15 at 1:02 am

The paper boy was talking about CDN QE1 today. Oh, what to do with XGB…

#153 Irish Stew on 01.30.15 at 1:17 am

Everyone talks of RE in major areas like TO and Vcr……but what about other areas like SW Ontario for house prices?

Are rentals worth buying in the south?

#154 Ronaldo on 01.30.15 at 1:18 am

#58 Edmonton

Re: Ft. Saskatchewan

The same thing happened in the Okanagan back in the 90’s drought in real estate. Homes that had sold for 220m dropped 20% between 94 and 96 and the market when flat for several years and did not recover back to highs until early 2000s. The market had been so overbuilt that in 92 the vacancy rate in Vernon for example went from 0 percent at beginning of year to 7 percent by the end of the year. Condo projects were left half finished and boarded up for several years. Contractors were building units and basically selling at cost just to get out from under the properties they held and paying taxes on. Many sat vacant for months on end. This is what happens when real estate markets turn. This has happened in ”sun tax country” several times over the years. Another drought is coming to the Okanagan. We will not be able to count on the Albertans to sell our McMansions or recreational properties to. Tough times ahead.

#155 Ronaldo on 01.30.15 at 1:21 am

#127 Lala on 01.29.15 at 11:20 pm

Are you trying to mimic Smoking Man?

#156 NEVER GIVE UP on 01.30.15 at 1:23 am

30 Buy it on 01.29.15 at 7:59 pm

It never ceases to amaze me that such simple minds could access to such high wages! That they even have to ask your advice on stuff like this is ridiculous!
————————————————————–
Actually most of our “educated” and uneducated people are doing mostly repetitive jobs that any simpleton could learn without going to University.

Accountants are extremely repetitive in their work except for the ones who do real work like making decisions regarding tax and planning for corporations.

Most of the people zoned out in the car in front of you going 50k in a 60 zone are actually the back bone of our society. Mainly people who do one to 10 different tasks over and over again at work.

It is no wonder the dullards are zombie like in their reflexes.

Just look at the people around you on a busy street and ask yourself- How is it that that person could possibly provide society enough benefit to earn enough money for food and shelter?

Try that little exercise and you will be astounded at how many people out there seem to be incapable of the above!

#157 NorthOf49 on 01.30.15 at 1:30 am

500 jobs gone at CIBC

http://www.thestar.com/news/gta/2015/01/29/cibc-said-to-cut-500-jobs-to-boost-operating-efficiency.html

Supposedly hiring an additional 5000 throughout the year though. Possibly unloading high-cost talent for more front line staff.

#158 Republic_of_Western_Canada on 01.30.15 at 1:34 am

#45 Sitting on the Dock of the Bay. on 01.29.15 at 8:21 pm

Hey western observer, I’m from SF.. Van ain’t no SF.

SF ain’t no SF either, then.

Back in the day, I regularly used to drive up the 280 past Stanford into the city every couple of weekends. Hang a left at about 3rd Street and park on Turk or Polk. Step over a dozen homeless people sleeping on cardboard sheets, dodging the panhandlers.

Lots of little old bars within walking distance, with the odd newer place here and there which wasn’t too bad. (Ice Bar – Martinis, Ruby Sky, etc.) Couple of blues clubs with live music (John Lee Hookers place?).

Wouldn’t want a day job in the city though. Too much of a weird mix of excessive feminism, congestion, high prices, filth, self-entitled nasty fat people, orientals, wet/cold weather, tourist hype, homelessness.

There were lots of good places in Vancouver too though. A bit more rock oriented, maybe, but whatever. As well as big parks, good restaurants, concerts, a few obscenely rich neighborhoods, freighters parked in the bay, sailors hanging out on shore leave, druggies, etc.

The same tiring intensity of weirdness exists in Van just as in S.F., which you don’t want to fight through every day just to work there. It just has a somewhat different flavor. And it’s not hyped up that much more than stuff in S.F. is.

#159 macroman on 01.30.15 at 1:41 am

Reality Check #27

Sounds like your Mom cut you a pretty good deal for the basement.

#160 NEVER GIVE UP on 01.30.15 at 1:50 am

To follow up on the last post:

Take your family doctor for example.

What does it take to become a doctor?

Mostly an ability to memorize what the college of physicians and Surgeons want you to parrot when you are examined to be a doctor.

Most doctors stop all learning / rote memorization once they become licensed and most new information is given them through sales reps from drug companies who by far have more regular communication with them than the college.

These sales reps may or may not even have a degree.
What they need to do is give free samples and control the message that doctors receive about new and profitable drugs.

I do highly respect my doctor but I do not always agree with him and I always research everything he says to me.

In the late 60s research learned that the common cold was not caused by a chill but by a virus. It took many doctors around 20 years to come around to the idea according to a study I read about in the 80’s.

Why is it that a taxi driver makes similar wages to average Canadian wages. For such a simple job should it not be paid much less?
For the same reason a Taxi driver in Indonesia makes a similar wage to the median national wage. Wages are leveled out largely due to supply and demand for workers and not as heavily by the Intellectual demand of the job. Nor the value of the output.

Doctors, Dentists and Accountants are earning high wages largely due to the artificial protectionism given to their profession. The colleges simply turn off the tap at the University level when there are too many in the field.

My dentist told me that if he was to undercut the scheduled fees set out by the college he could easily lose his license to practice.
One procedure he does takes 10 minutes to measure for a part that is made outside of his office.
He makes $1200.00 for the 10 minutes work.

It could be reasonably argued that the value of a doctors job would be much more productive in terms of value than a taxi driver by a factor of 15 but we likely pay them only 4 to 8 times more.

If anyone could write the exams for physicians / dentistry or law, there would be a huge glut of them and wages would drift down to that of a taxi driver.

#161 NorthOf49 on 01.30.15 at 1:52 am

Got a little insight into the T.O. real estate scene at the local coffee shop. A Toronto based broker was relating to a colleague how one of his realtors was complaining how bad sales have been lately. “Sure its bad”, he says “but she’s not out there knocking on doors like she should be.” and “No need to tell me how bad it is, I lost money last year!”. He also mentioned ongoing issues with RECO but I won’t get into that, it would be too easy to identify him.

#162 bill on 01.30.15 at 2:02 am

#98 Ralph Cramdown on 01.29.15 at 9:44 pm
a good choice! a bit colder and foggier for sure [and way friendlier people as well]. very steep streets too.
in ‘frisco you are probably less likely to trip over gravestones in the fog tho’… what a night that was. we must have hit every bar on water street…..

#163 NEVER GIVE UP on 01.30.15 at 2:10 am

For those of you who believe everything your doctor says and are taking Statin drugs, all I can say is do your research.

Like it took 20 years for doctors to admit the common cold originated from a virus….it will take another 10 or 15 years for them to find a back door out of the Statin drug scam.

http://diaryofalegaldrugdealer.com/the-great-cholesterol-myth/

Just say no to Statin Drugs…

#164 nobody on 01.30.15 at 2:12 am

In the long run you will always get your money back – so long as you own The right kind of preferreds, and not an ETF derivative. — Garth

So, which preferreds are “the right kind”, and what are the characteristics that makes them so?

#165 nonplused on 01.30.15 at 2:29 am

My advice to Alan: Don’t sweat it, if the house is priced too high it won’t sell and you aren’t moving anytime soon.

My advice to Alicia: Never buy a house for a new job. Wait until you know how the job is going and no the community. It’s amazing what you can learn living there for a while. For example, simple things like the hockey club boundaries which I completely screwed up when I bought.

My advice to Clarence: Mortgages last a lot longer than relationships do these days so make sure and understand your wife/girlfriend will be living in the house with your kids far longer than you will be, but you will still be paying for it. If you have that kind of money maybe you should go for it but if you don’t it could be getting sold again soon. You can’t buy for the long term these days. There is no long term.

Also I agree with Garth, if she doesn’t love the house don’t buy it. You’ll be dealing with disappointment and renovations until you finally sell the sucker again. Women will rent a house they don’t love, but they won’t own one.

#166 Mcfly604 on 01.30.15 at 2:51 am

So Alan, Alicia and Clarence all read your blog?? I just gave myself an atomic face palm!

#167 Buy it on 01.30.15 at 2:57 am

They are the greater fools its time for them to buy … Don’t discourage them for crying out loud its Fort Saskatchewan they aren’t making anymore land there you know!

These people are from the shallow end of the gene pool, iT’s amazing these people figured out how to propagate!!

#168 Frustrated Kiwi on 01.30.15 at 3:46 am

I just want to congratulate all those sensible posters above whose landlords are seriously subsidising their rents. Yet you’re told your paying someone else’s mortgage. Bwhahaha! Well done!

#169 Hamcouver on 01.30.15 at 3:58 am

To YVR renter #44
We rent in Vancouver- place valued at 5.2 million (for the clinically insane), monthly rent $4200. Property tax was apparently $17000 last year….Neighbourhood dead- over 50% of houses unoccupied status symbols. no intention of buying here- we will leave if prices do not change. I have seen two families leave already this year (professional couples, young children)….watch for the exodus.

#170 jane24 on 01.30.15 at 4:11 am

Don’t be too hard on the kids guys. They have never seen the RE cycle turn down in their lifetimes. Their parents on the other hand have no such excuse. Shows you how short the human memory is. Folk remember good things and not that they nearly went bankrupt in the early 1980’s holding 2 houses.

Kids buying in Calgary or TO now is a truly stupid idea. Rent for another year and see how the wind blows. You are only one baby away from financial disaster. Plus never buy with a partner, only a spouse.

#171 Lillooet, BC on 01.30.15 at 5:13 am

$765k for a freakin’ townhouse in downtown Toronto? Yikes!

For that amount you could buy an estate with a large house on a large acreage in any number of small towns across Canada. Oh, right, but you like Toronto … nevermind.

#172 nubbers on 01.30.15 at 6:22 am

This is a really depressing post. I was about Clarence’s age when I did something similar, which paid for someone else’s retirement while dooming myself. This just brings it all back.

Can we have a more upbeat post next to compensate?

#173 juno on 01.30.15 at 6:33 am

#130 Chasicskes

Your definately right about real estate industry over exaggerating the gains.

Sold a Townhouse in the lower mainland in 2009/2010 just when the olympic height was about to begin. The townhouses in that same complex are selling for 20,000 less. Why, its call depreciation.

But the spankin new townhouses are selling for 50,000 more per unit. So I figure they (CREA) is comparing a tear me down unit selling several years ago to a spankin new unit which replaced the old unit. Well Duh of course its worth more. Haven’t you guys notice all the new development and hardly any old houses left.

#174 MarcFromOttawa on 01.30.15 at 7:00 am

#32 Bladen Reynold

I’d rather have the cash

#175 Bottoms_Up on 01.30.15 at 7:53 am

combined base salary of 141k vs. 600k mortgage doesnt add up. hope they never have kids as they cant afford them.

#176 Victor V on 01.30.15 at 7:55 am

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/2015/01/29/cibc-to-cut-about-500-jobs-to-boost-operating-efficiency-source&pubdate=2015-01-30

Canadian Imperial Bank of Commerce, the nation’s fifth-biggest lender, is cutting about 500 jobs companywide even as it plans to add positions throughout the year, according to a person briefed on the matter.

“These reductions reflect an overall alignment of our resources that allows us to better serve our clients and ensure that we are operating efficiently,” the Toronto-based bank said Thursday in an e-mailed statement that didn’t elaborate on which jobs and how many are affected. The person who provided the number asked not to be identified discussing personnel matters.

#177 Bottoms_Up on 01.30.15 at 8:01 am

You want active? Stick around. — Garth
—————————————————–
Garth you never cease to amaze. And, you’re partly bionic now (how’s the leg btw?) which could help explain your staying power.

#178 ANON on 01.30.15 at 8:02 am

Inflashun, NOT!
http://www.theguardian.com/business/2015/jan/30/eurozone-deflation-deepens-january
Now we get to see what deflashun looks like IRL. It’s supposed to be good, so don’t worry about a thing.

#179 Bottoms_Up on 01.30.15 at 8:06 am

#67 For those about to flop… on 01.29.15 at 9:04 pm
————————————————————-
Depends on your situation, are you young and just entering your earning years? If so, you could invest that money and take more risks (buy individual stocks rather than ETFs).

Are you considering starting a family or going back to school? If so, you might need that money for other things.

But if that is your life savings and you won’t be adding much to it until you retire, then yes following another posters advice, buying an ETF that tracks the S+P500 should serve you well.

#180 Victor V on 01.30.15 at 8:49 am

https://ca.finance.yahoo.com/blogs/insight/canadians-more-pessimistic-than-usual-about-job-211744378.html

Looming layoffs in Alberta’s oil sands. Pink slips by the thousands at Target, Sony and Tim Hortons.

All these gloomy headlines are casting a long shadow over the country.

A new employment study by Randstad Canada indicates that jobseekers are more pessimistic than usual about their employment prospects in 2015.

Nearly half of those surveyed (47 per cent) for the Workmonitorstudy said they are bracing for a tougher job market in the year ahead. By comparison, when asked the same questionin 2014, respondents were much less fearful about the year to come with only 31 per cent believing employment would deteriorate.

#181 Wow on 01.30.15 at 9:03 am

Wow REALITY CHECK #27
Just asking for karma to spank you!!

#182 liquidincalgary on 01.30.15 at 9:37 am

155 Ronaldo on 01.30.15 at 1:21 am

#127 Lala on 01.29.15 at 11:20 pm

Are you trying to mimic Smoking Man?

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

i’ve counted at least three other persona that SM posts under

#183 pbrasseur on 01.30.15 at 9:43 am

You want active? Stick around. — Garth

Don’t know how you manages to maintain such an hectic pace but bless you!

I have no doubt you’ll have a lot to write about in coming month and years!

#184 Here we go on 01.30.15 at 9:46 am

0.2% dip in GDP in November versus flat expectations

December will probably be worst. Loonie now trading at 0.78. Down she goes

http://www.statcan.gc.ca/daily-quotidien/150130/dq150130a-eng.htm?HPA

#185 economictsunami on 01.30.15 at 9:50 am

So we have the plunging oil, the diving Loonie (it is an aquatic bird after all) and what is really going on with Canadian government debt yields?

Oil didn’t kill the global economy; the economy killed oil:

http://business.financialpost.com/2015/01/29/oil-didnt-kill-the-global-economy-the-economy-killed-oil/

An ominous signal for Canada’s economy: Bond yields have inverted:

http://www.theglobeandmail.com/report-on-business/economy/dropping-bond-yields-signal-poor-outlook-for-economy/article22713269/

#186 fancy_pants on 01.30.15 at 9:52 am

buckle up for safety, it’s all downhill from here? oh, and pack your bags with hope, not sure where we are headed but blind trust whispers that a brick wall may be involved

http://www.theglobeandmail.com/report-on-business/economy/dropping-bond-yields-signal-poor-outlook-for-economy/article22713269/

#187 Rational Optimist on 01.30.15 at 9:54 am

I feel strongly that one should not buy real estate with someone whom you are not serious enough about to marry. This opinion seems pretty unpopular sometime, and I know many people my age and younger who think getting married is “not necessary.” It’s certainly true that it isn’t. Neither is making a $750,000 purchase with someone whom it isn’t “necessary” to marry. It is still more difficult to dissolve a marriage than a common-law relationship. Not getting married to me demonstrates a lack of commitment that should dissuade one from major financial moves with this person.

One other thing: if he is living in a condo that she owns, he should not say that they are “living together.” He is living with her.

#188 pbrasseur on 01.30.15 at 10:06 am

« Pick a city, INSIDE Canada’s borders, that is most like SF?»

Pointless, there is nothing even close anywhere in Canada, at least not if you look beyond scenery.

SF has seen the birth of the microchip, Intel, Apple, Google, Pixar, just to name a few. From an economic and innovation standpoint SF is the brightest light the world has ever seen.

I’m not saying Canada is a mediocre country (well ok maybe a little) but some humility could do us some good if only to help us realize we are in serious trouble.

#189 Fatima Llewellyn on 01.30.15 at 10:10 am

Well, it’s official. Canada is toast. Canadian GDP the fifth worst monthly showing since the Great Depression, while the US continues to motor ahead, albeit at a slower-than-expected pace. The loonie is getting crushed.

#190 };-) aka Devil's Advocate on 01.30.15 at 10:13 am

#122 Ronaldo on 01.29.15 at 11:04 pm

#12 };-) aka Devil’s Advocate on 01.29.15 at 7:33 pm
”It ALL comes down to supply and demand.”
More like greed and ignorance I would suggest.

To quote George Carlin; “Your average person is really quite stupid… and half of them are dumber than that”.

Throw in the Pareto Principle and the resulting mean dictates there are a whole lot of not so bright people out there. They are the masses. They are the shepple. It is they who move the markets. It is they business markets to. The customer is always right.

Just look at how dumbed down most television commercials are. Seriously? Are we just THAT stupid? Apparently so. There is your “ignorant”.

As for your “greed”, if the demand is there you can rest assured some entrepreneurial spirit will endeavour to meet it. Call that “greed” if you want I don’t see it quite so harshly. Do you feed a baby when it cries for milk? Is it they who fulfill the demand or they who create the demand who are the “greedy”. We are quite a materialistic society. A lot of that bought from Walmart fills our landfills when a newer, brighter trinket comes along. “Ignorant” who are you calling ignorant and who really is?

And we wonder why the income gap is growing? Really?

Now the thing of it is; you can’t keep shearing the shepple indefinitely. Comes a breakpoint eventually.

It does all, ultimately, come down to supply and demand.

SHIFT happens… learn to ride the tide.

#191 Jetfixer on 01.30.15 at 10:13 am

Preferreds move with changes in rates, real, perceived or expected. The investor who buys preferreds for capital appreciation rather than a fat, tax-efficient stream of dividend income makes a mistake. Buy them, take the money and relax. In the long run you will always get your money back – so long as you own The right kind of preferreds, and not an ETF derivative. — Garth
——————————————————————-

Instead of a CPD or ZPR, it would be better to go buy each preferred share individually(e.g. CIBC, RBC)?

Thanks.

#192 Simon Cowell on 01.30.15 at 10:20 am

Ouch,

They are not even announcing officially layoffs anymore

https://ca.finance.yahoo.com/news/cibc-cuts-500-jobs-past-2-weeks-wall-034029649.html

and it seems we are in recession already,
https://ca.finance.yahoo.com/news/canadas-economy-shrinks-0-2-percent-november-133446594–business.html

Loonie digging it’s way to the sixty something range, coming soon,

But BOC and the strangely behaving financial minister (dementia?) see no issue and continue to monitor the situation as they have the tools (negative interest rates coming soon and loonie diving into the fifty something range)

https://ca.finance.yahoo.com/q?s=CADUSD=X

People posting on this blog might be considered financial terrorists according to the new law to be voted on today.

There is no hope for this country so I refuse to waste my time further.

#193 Toronto_CA on 01.30.15 at 10:24 am

Canada’s economy shrank 0.2% in November: Stats Canada

This accompanied with the lowered employment numbers from December suddenly shed light on the (still) stupid BoC rate cut.

#194 Nemesis on 01.30.15 at 10:26 am

#HaveYouRiddenALongHornLately?… #PyjamasOptional..

http://youtu.be/mGzxrP2s9ew

#195 Ralph Cramdown on 01.30.15 at 10:27 am

#160 NEVER GIVE UP — “My dentist told me that if he was to undercut the scheduled fees set out by the college he could easily lose his license to practice.”

That’s how you shut down price negotiations with a simple little lie. It probably works on the majority of people, too.

“If anyone could write the exams for physicians / dentistry or law, there would be a huge glut of them and wages would drift down to that of a taxi driver.”

I hate to pop your bubble, but there are several US states where anyone can write the bar exam. Not as many as there used to be, and you have to jump through a few more hoops than in days of yore when it was just showing up and paying the fee, but those states aren’t suffering a shortage of cab drivers, as far as I’ve heard. And we’re not talking Wyoming and Idaho here. Think New York and California.

#196 Getting old on 01.30.15 at 10:29 am

No worries. The vast majority of people will never see it coming. There will likely be a glut of rentals. — Garth

With all do respect Garth, in the trenches we only see sold signs in the GTA. There is an entire generation of buyers that have never seen a market drop. What’s surprising to me is, parents who have experienced substantial losses in the past are fueling the fire. Many of these young people feel they have no other avenue for financial growth regardless of culture. Been a landlord for 40 years I cannot remember a time in the GTA when I could not rent a unit. Enjoy the the blog I will vote for you again if you run.

#197 Kenchie on 01.30.15 at 10:30 am

A reminder on why idiots who think “things were better back in the day” are wrong…

“When Bread Bags Weren’t Funny”

http://www.bloombergview.com/articles/2015-01-29/joni-ernst-s-bread-bags-and-economic-progress

#198 Rational Optimist on 01.30.15 at 10:31 am

One other pet peeve of mine is when people start talking about “love” when discussing a house purchase. I refer them to Tina Turner’s song about real estate.

#199 Bill Plummer on 01.30.15 at 10:36 am

Clarence, Clarence, Clarence….

“We have until Friday to walk away. The girlfriend is getting seriously cold feet (it isn’t her dream house, she isn’t in “love” with it) and as I said I want to go through with it (I don’t think her dream house exists.)”

And you Clarence, are you her dream boyfriend, or does the dream boyfriend exist? “She isn’t in love with it”…she will tire of you shortly too, Clarence. She sounds hard to please for $765k. Better think about that for a while….

“We currently live together in a condo she owns, which we now plan to sell. ”

That is as stupid as saying “we are pregnant” Clarence. It is her condo dumbo, you won’t be signing any papers when “she” sells. You will, however, be signing papers handing over your meager existence and future when she is thru with you.

Hope this helps!
Seriously…..

#200 The Mayor of Transcona on 01.30.15 at 10:40 am

re: Alicia in Ft. Sask

My read of her email is she wants a $450,000 house. Has $150,000 in cash and the monthly to buy will be $1500. A $300K mtg @ 3.19% for 5 years = just under $1500 a month. My read is she mean to say they want to put down AT LEAST 20%. I could be wrong though.

Also, I think I know that family, and she’s using a pseudonym.

No kidding, Sherlock. — Garth

#201 Karma on 01.30.15 at 10:43 am

“China: Overborrowed and Overbuilt”

Worth a read for anyone expecting “China money” to continue to flow into Vancouver.

http://www.ft.com/cms/s/0/8b2ce9c4-a2ed-11e4-9c06-00144feab7de.html?siteedition=uk#axzz3QDhL1xD2

#202 Philippe Couchetard on 01.30.15 at 10:43 am

The Montreal housing market is doing great, do not let Garth tell you otherwise. Here are the latest facts:

“High-end real estate on the rise in Montreal” –
http://globalnews.ca/news/1760997/high-end-real-estate-on-the-rise-in-montreal/

As previously reported here, Montreal average detached house price in December: $284,000. Increase in year/year value: 0%. That means, given inflation, an absolute loss. Yeah, doing great. — Garth

#203 young & foolish on 01.30.15 at 11:08 am

Our dollar is dropping like a stone …. how low will it go?
And how long will it stay there?

#204 Dub on 01.30.15 at 11:13 am

Don’t buy it. It is not ok to have 300k mortgage each. It is too much burden for the amount of money you guys make. Don’t let people brainwash you. You will not have 100$ to put aside to your name if you do this. Been there done that, it is not fun.

#205 bdy sktrn on 01.30.15 at 11:16 am

cbc radio – vancouver bidding wars breaking out like never before. (according to realtors)

20% over ask seen winning bids.
80+ bids for one house.

what would you expect as supply crumbles while demand blossoms.

Just what the federal government and the BoC had been praying for. — Garth

#206 Greater April Fools on 01.30.15 at 11:28 am

Well this going to go well.. how does a bank give a mortgage to a TFW!

http://calgaryherald.com/business/local-business/stress-levels-high-as-thousands-of-tfws-face-april-1-deadline-to-return-home

“They’ve built their lives here. They’ve got family, they’ve bought a house,” said Marco Luciano, spokesperson for TFW advocacy group Migrante Alberta. “Our fear is that a lot of these people are not going to go home — they’re going to go undocumented.”

#207 Ret on 01.30.15 at 11:30 am

#134 ” My kids will be eating oatmeal instead of cereal from now on.”

I’ve reported you to the appropriate authorities.

#208 It's OVER for Canadian oil sands on 01.30.15 at 11:31 am

THERE WILL BE BLOOD in Canada and you can see the Canadian economy crumbling under the debt bubble. The house of cards is falling apart as company after company is closing up shop and leaving Canada. The tip of the ICEBERG of job cuts have just started. Many will go bankrupt and lose everything.

http://www.theglobeandmail.com/report-on-business/top-business-stories/oil-and-the-canadian-economy-there-will-be-blood/article22716555/?cmpid=rss1

#209 young & foolish on 01.30.15 at 11:31 am

“Let me get this right…950K for something that spins off 24K a year in gross income, before property taxes or maintenance. That’s a 2.5% gross investment yield. WTF???”

Maybe he’s owned the house for years, and only paid a fraction of current market value.

#210 bdy sktrn on 01.30.15 at 11:35 am

typo, sorry 30 not 80 offers.

#211 young & foolish on 01.30.15 at 11:37 am

“No worries. The vast majority of people will never see it coming. There will likely be a glut of rentals. — Garth”

This may turn out to be true …. if we are indeed building too many units, or if we start taking on roommates.

#212 Holy Crap Wheres The Tylenol on 01.30.15 at 11:39 am

Smoking Man on 01.29.15 at 9:27 pm
Ok here are the 40 things that the Greeks are going to do.
Duh, JfK, 911,Sandy hook. MH17, Charlie.
I’m betting after the machine digests this, life expectancy for its leaders.. 2 weeks tops…
Syriza. Here the 40 points of the Syriza program.

_____________________________________________

Not quite sure about the rest of this post, it couldn’t have been Smoking Man as there were zero spelling mistakes. Cut and paste? or imposter?
Still don’t get it Smoking Man if it was you?

Anyway this was a first in flight, we studied this in the USAF training. I used to fly trash haulers and Aluminum Overcasts.
http://www.oregonlive.com/obituaries/index.ssf/2015/01/lt_col_edward_saylor_among_the.html

#213 Kris on 01.30.15 at 11:41 am

Hope you’ve had an excellent 29 years, Clarence. Your life. It’s over.
———————————————————

Not so fast, Garth. Canada has an abundant supply of Clarences probably because they know the govt has ‘got their back’. And the govt is doing everything it can to reciprocate that mountain-moving faith of the indebted. End of the day, the joke may be on us logical thinkers.

#214 Toronto the Good on 01.30.15 at 11:46 am

Well that settles it…

http://news.nationalpost.com/2015/01/29/toronto-ranked-best-place-to-live-in-economist-ranking-of-cities-around-the-world/

#215 Ralph Cramdown on 01.30.15 at 11:47 am

“I personally don’t think a $600k mortgage is too bad at this point in our lives. That’s $300k each, which we both did on condos (I sold mine last year). Single people have $300k mortgages on sub 600 square foot boxes, so why not combine and get an actual house instead for essentially the same obligation per person?”

This IS funny. The “that’s 300k each!” bit is the key.

If you’re single with a 300k condo mortgage, the two things you need to worry about are unemployment and a special assessment for major building repairs. Risk of the second can be mitigated in various ways.

If two middle-earners have a 600k mortgage between them the risks are now that either one becomes unemployed, or a major repair is required, or the relationship fails. Simple probability tells us that the risk of either one (or both) of two people becoming unemployed is higher than the risk to one alone, and surveys show that not every relationship lasts until the mortgage is paid off. Money is the #1 stressor of relationships, and is likely to be highest in a time of high unemployment and declining house prices.

And of course, if things get tough, you can’t sell 1/2 of the house to get down to a debt level you can service.

So no, one 600k mortgage that takes two incomes to service is NOT the same as two 300k mortgages. I guess this is the New Math they talk about: “Two can live as cheaply as two”?

#216 young & foolish on 01.30.15 at 11:53 am

“My figures too. My rent is $2K monthly and the property is “worth” a million. Makes no sense. The owner is simply speculating”

I live in a well maintained older triplex which the owner has kept and rented out for years. The current valuation of the building is well over 1 million, but the rents he collects suggest a low return. However, if you consider his original investment, he is probably getting well above 12% net return.

#217 I love real estate on 01.30.15 at 11:56 am

Another reason why things are different in Toronto.

The Economist Magazine…

(Often referenced by our host and other posters here)

….says Toronto is the BEST PLACE TO LIVE….

…IN THE ENTIRE WORLD!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

http://www.thestar.com/news/gta/2015/01/29/toronto-named-best-place-to-live-by-economist.html

Expect prices to uptick sharply this spring after a cold winter market affected by oil price drops which will NOT hurt Toronto longterm.

2015 gains should be 10% in 416.

By 2020, I expect prices to be 50% higher than today.

It REALLY IS different here, folks.

Happy property hunting :)

#218 Blacksheep on 01.30.15 at 11:57 am

pbrasseur # 188,

« Pick a city, INSIDE Canada’s borders, that is most like SF?»

“Pointless, there is nothing even close anywhere in Canada, at least not if you look beyond scenery.”
————————————————
You, are also, missing the point.

Van in no way compares economically with SF, but IF one is stuck IN the great white north, and wishes to live on the coast in a mild climate,

Vancouver is as close as your going to get.

#219 Ronaldo on 01.30.15 at 12:02 pm

#190 };-) aka Devil’s Advocate on 01.30.15 at 10:13 am

You’d make a good preacher. I think you missed your calling.

#220 Sue on 01.30.15 at 12:06 pm

So I have a question:

When you, Mr. T, were in Ottawa, and preparing a helpful report to assist Mr. F. in the preparation of his Budget you got the shaft (if I might be so indelicate).

If you were in a similar situation today (without the prospect of the red-hot poker, let’s be kind) what do you think should be in the Budget?

What else should the government do in the next while?

p.s. I am not now, nor have I ever been, Mr. O. nor am I one of his minions, I have never “worked” for the government, and I don’t live in Ottawa :-)

#221 Queen Victoria on 01.30.15 at 12:09 pm

Actually Vic would be far better, or Halifax or St.John’s, or Charlottetown.

#222 Bottoms_Up on 01.30.15 at 12:09 pm

#206 Greater April Fools on 01.30.15 at 11:28 am
—————————————————
WTF??? Mortgages to TFWs???

#223 Caesar Marcus on 01.30.15 at 12:12 pm

Oh good, look who’s back to enlighten us…Mr/Mrs Thesaurus providing his/her balanced viewpoints…

};-) aka Devil’s Advocate on 01.29.15 at 7:33 pm
#6 protea on 01.29.15 at 7:18 pm

What don’t you understand about; what a ready willing and able buyer is prepared to pay a ready willing and able seller, neither being under undue influence to buy or sell?

It ALL comes down to supply and demand.

#224 Bottoms_Up on 01.30.15 at 12:13 pm

#202 Philippe Couchetard on 01.30.15 at 10:43 am
—————————————————–
Don’t be so foolish. The ‘Montreal housing market’ is not the same as the luxury market.

And if you actually read the news report you linked to, you would see this little tidbit behind the increase in sales last year:

“The report stated that the market picked up in the second half of 2014, after the win of the Liberal government in the provincial elections.”

#225 Bottoms_Up on 01.30.15 at 12:16 pm

#193 Toronto_CA on 01.30.15 at 10:24 am
———————————————-
0.2% shrink….is that monthly or annualized? If monthly, that’s depression territory, and no wonder they dropped rates.

#226 Karl hungus on 01.30.15 at 12:16 pm

#143 Dr.nick

You should not have sold, that was dumb. Edmonton prices have already taken a hit from the last recession and are still working on recovering from that. Absolute max prices go down in 2015 is 5%. Edmonton has not had a run up like the big 3. By the time you think this “downturn” is happening you would have had half your mortgage paid off.

#227 Dead cats don't really bounce. on 01.30.15 at 12:17 pm

And Spendhsi gives a giant F-you to Prentice…. Thanks Spendshi for increase our taxes 5% every friggin year you taxaholic

http://www.calgarysun.com/2015/01/30/no-need-to-follow-provinces-cabinet-pay-cuts-calgary-councillors-say

#228 Bottoms_Up on 01.30.15 at 12:19 pm

#187 Rational Optimist on 01.30.15 at 9:54 am
———————————————-
He’s only ‘living with her’ if they’re not common-law yet. If they’re common law, then it’s half his. Hence the term ‘living together’.

#229 Ralph Cramdown on 01.30.15 at 12:21 pm

#216 young & foolish — “[…] the rents he collects suggest a low return. However, if you consider his original investment, he is probably getting well above 12% net return.”

This is the wrong way to think about investments, even though many real estate investors and dividend growth investors think this way.

An investment worth $x and yielding $y is good or bad going forward regardless of what you paid for it in the past. If this were not true, an asset today would be a “good” or “bad” investment depending on how long ago and at what price its owner bought it.

The complicating factor is tax. Selling something incurs transaction costs and crystallizes gains (hopefully) and attracts tax, so a current owner needs to consider that he wouldn’t net 100% of the value of his current holding to invest in something new if he sold.

On the other hand, many people have a pathological aversion to paying tax and realtors’ commissions, so will hold through downturns rather than sell high and share their gains…

http://www.harley.com/money-and-economics/how-thinking-affects-investing/09-anchoring.html

#230 Chris in Nanaimo on 01.30.15 at 12:22 pm

I failed….

Tried to convince my retired father in law to invest his savings in a Garth portfolio paying some nice income. But he a has a zero risk tolerance as he ‘got burnt in the 80’s”, so after a visit to his friendly mega bank ‘investment advisor’ he’s “invested in his TFSA”…although he doesnt actually know what they’ve done with the money, but apparently it locked up for 28 months paying 2% annually…so im assuming its GIC’s.

I now despair at the lost compound growth my wife wont be getting in her inheritance.

Think I’m going to set up a virtual portfolio for him with my suggestions and give him annual updates on its progress.

#231 Rational Optimist on 01.30.15 at 12:22 pm

216 young & foolish on 01.30.15 at 11:53 am

“The current valuation of the building is well over 1 million, but the rents [my landlord] collects suggest a low return.”

Guess what he should do.

#232 Its Over on 01.30.15 at 12:24 pm

I love RE #117

You do know Montreal was second on that list? YES Toronto and Montreal are rated #1 and #2 in the world? ROTfLMFAO you delusional realtors are just plain stupid.

#233 Dead cats don't really bounce. on 01.30.15 at 12:24 pm

TFW’s with $500k plus mortgages in Fort McWhacked…. thank goodness the bankers and Harpo are in charge.

#234 Marco on 01.30.15 at 12:24 pm

@ James

Agreed,

“The state has numerous industries: aerospace, biotech, software, agriculture, etc, plus a large military presence.”

Seattle has a much more robust economy than Van, and Real estate prices are cheaper.

Seattle vs Vancouver. Absolutely.

#235 Ralph Cramdown on 01.30.15 at 12:28 pm

#218 Blacksheep — “IF one is stuck IN the great white north, and wishes to live on the coast in a mild climate, Vancouver is as close as your going to get.”

So, optimal IF you have lots of money and either a criminal record or pre-existing medical conditions. I think I understand now.

#236 Blood to flow in CANADA on 01.30.15 at 12:28 pm

We have only seen the tip of the iceberg of job cuts. There will be blood on the streets. Go listen to a high school drop out realtor and see what happens.

http://www.theglobeandmail.com/report-on-business/top-business-stories/oil-and-the-canadian-economy-there-will-be-blood/article22716555/?cmpid=rss1

#237 Its Over on 01.30.15 at 12:32 pm

The Canadian economy is falling apart. Oil going down plus high debts are sinking Canada fast.

Trouble ahead? 4 of Canada’s big banks downgraded by Barclays stock analyst

#238 Marco on 01.30.15 at 12:35 pm

@Blacksheep

” IF one is stuck IN the great white north, and wishes to live on the coast in a mild climate,

Vancouver is as close as your going to get.”

Got it,

That’s better.

#239 NoName on 01.30.15 at 12:37 pm

A reminder on why idiots who think “things were better back in the day” are wrong…

I am one of those idiots who definitely thinks that things were better “back then”, I did wore bags on my feet because my boots liked, and for what ever reason is i wasn’t getting a new for a while, I am talking mid 80s here.

Fast forward to now, yes we have more now days, we are rich in things and probably that majority of people now days is poor in “soul”. We live in rat race, with one and only goal, to have things that so we can make an impression on others.

Value of family time is cheap, almost valueless, we are impressed buy trivial things, so we postpone procreation as long as we can.

The most valuable commodity that working stiff like me have is a TIME, and working stiff (me to some degree) is wasting it, “we” don’t get that exposure to todays so important triviality, have exponential harm to whole society.

and yes my kids and I shoveled snow twice yesterday for my elderly neighbor yesterday twice!

http://youtu.be/98nah1M97cI

#240 Apocalypse2015 on 01.30.15 at 12:37 pm

Idiot realtors here predicting Toronto’s prices will rise, give it a rest.

Expect GTA prices down by at least 10% this year.

And here’s an article comparing the dollar to the Titanic.

http://www.theglobeandmail.com/report-on-business/video/video-the-bottom-line-whats-the-difference-between-the-canadian-dollar-and-the-titanic/article22713097/

Major pain is on the way.

#241 Josh in Calgary on 01.30.15 at 12:38 pm

Preferreds move with changes in rates, real, perceived or expected. The investor who buys preferreds for capital appreciation rather than a fat, tax-efficient stream of dividend income makes a mistake. Buy them, take the money and relax. In the long run you will always get your money back – so long as you own The right kind of preferreds, and not an ETF derivative. — Garth

What’s wrong with a Preferred Share ETF now?

#242 Euphoric on 01.30.15 at 12:39 pm

#216 people often forget that their landlords often bought years ago before these crazy prices.
So at todays prices your rent/price ratio looks very good and it seems like your landlord is nuts, when in reality he paid a lot less than todays prices.

Good for him…good for you imo.

#243 Mark on 01.30.15 at 12:41 pm

“Put the book down and go by groceries, maybe the price has not changed but the quantity may have. Easiest way to hide inflation in food stuff. Inflation is here you just are not looking close enough.”

Grocery prices seem to be stable where I live (western Canada).

Chicken, in particular, has dropped substantially over the past 2-3 years, largely on account of competitive forces in the marketplace. While beef has risen. The other stuff, relatively neutral price-wise. Specialty cheeses from Europe have dropped considerably

So not seeing any of this so-called ‘inflation’ that the trolls claim is rampant. Neither is the bond market. And of course, lots of stuff is deflating.

#244 chapter 9 on 01.30.15 at 12:41 pm

Alicia,
Rent for the first year to get a feel for the new location after a month you may hate the place and then what. Years ago I worked for a engineering company and I worked on site at Dow Chemical personally the further away I lived from those plants the better. Alberta’s economy is going in the tank worst time to buy. Oh, meddling relatives and money are two of the biggest deal breakers for a marriage!!

Clarence,
You are setting your self up for a world of pain. Don’t even think about it!!

#245 Ray Vasquez on 01.30.15 at 12:41 pm

Canada 30, 10, 5, 2 year bond yields, 1.87%, 1.29, 0.62%, 0.40%.

Canadian oil Sands cut their dividend today by 86% from 35 cents to 5 cents.

A $28.11 stock is now $7.11 stock 5 years later.

#246 Daisy Mae on 01.30.15 at 12:49 pm

#20 Clarity: “Garth your examples are great, but very unclear. I think it’s time you school these people correctly…”

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

Garth really doesn’t owe anyone a damn thing. He lays out facts…and people do their own due diligence.

#247 Spaccone on 01.30.15 at 12:50 pm

Maybe way too early but just bought more preferred…between the 17-18% in CPD and 10% in XRE they will feed and house me (in affordable areas) if I ever lose most or all my other money.

#248 CalgaryRocks on 01.30.15 at 12:54 pm

Interesting rejection of the 1.28 figure of USDCAD.

This confirms the sellers @ 1.28 & 1.2780 to the PIP.

http://www.forexlive.com/blog/2015/01/30/more-from-the-orderboards-30-jan/

Maybe it’s just Friday @ the London Close or maybe we get a break for a bit. I don’t really know, we will see next week.

Smoky, hope you hit this action @8:30

http://tinypic.com/r/zmbpkw/8

#249 Armageddon on 01.30.15 at 12:55 pm

When Gorby and Henry are worried…yikes…. mega Black Swan…that’ll get the gold nutters going.

http://news.nationalpost.com/2015/01/30/henry-kissinger-mikhail-gorbachev-separately-warn-about-ukraine-crisis-blowing-out-of-control/

#250 45north on 01.30.15 at 1:02 pm

Fatima Llewellyn: Well, it’s official. Canada is toast. Canadian GDP the fifth worst monthly showing since the Great Depression, while the US continues to motor ahead

this is a serious problem. The US is the world’s biggest integrated economy. Canadians expect the same standard of living. I have written about my experience in the Federal Civil Service and the mis-management of resources:

The ruling effectively means that if blind people cannot see it then nobody can.

http://www.greaterfool.ca/2015/01/02/defiance/#comment-342790

this is not really the fault of the civil servants themselves. I mean the civil servants cannot oppose a legal ruling without support at the political level. At the political level, I don’t suppose the issue has ever gathered the attention of the Minister of Agriculture much less other MPs.

the Government should pass a “not withstanding” bill that allows the Canadian Soil Information System to continue without being constrained by the accessibility ruling and subsequent regulations.

#251 Mister Obvious on 01.30.15 at 1:02 pm

#229 Chris in Nanaimo

“I now despair at the lost compound growth my wife wont be getting in her inheritance.”
——————————————

“God bless the child that’s got his own”

– Billie Holiday

#252 bdy sktrn on 01.30.15 at 1:03 pm

CBOE Interest Rate 10 Year T No (^TNX)  Watchlist
1.6590 -0.0920(-5.25%)

and the beat goes on….

this will smash thru 1.5 on the way to 1.2.
scary.

janet caves.

#253 Diabolo on 01.30.15 at 1:03 pm

#215 Ralph Cramdown on 01.30.15 at 11:47 am

If two middle-earners have a 600k mortgage between them the risks are now that either one becomes unemployed, or a major repair is required, or the relationship fails. Simple probability tells us that the risk of either one (or both) of two people becoming unemployed is higher than the risk to one alone, and surveys show that not every relationship lasts until the mortgage is paid off. Money is the #1 stressor of relationships, and is likely to be highest in a time of high unemployment and declining house prices.
——————————————————

Tell me a thing or two you did in your life, I will poke a hole or two in it… LOL

There is nothing better than a paid off mortgage…. The amount of equity available for other investments and growth is amazing…

#254 svr on 01.30.15 at 1:04 pm

u no, it really hurts that you don’t post my corrections to your financial fantasies…

oh, what’s this, American GDP comes in at 2.5%, with healthcare (which would be excluded as a one time Obamacare startup expense in the Non-GAAP model world of make believe used to pump corporate earnings… causing greater fools to salivate) leading the spending growth…

ooops

hey, worry not… an over priced burger model just opened at 113 times EBITDA (Mac D is 10) as the fantasy continues to spin, fueled by central bank gifts to their un-named (protected from FOI requests based on national security issues… lol) shareholders (the banks)

US GDP growth Q3 = 5%. Q4 = 2.6%. Consumer spending growth = 4.3%. Nothing to fret over here. I think you should worry about Canada. — Garth

#255 Mixed Bag on 01.30.15 at 1:12 pm

Ralph Cramdown, nice to see you back. Always did enjoy reading your comments. Were you on vacation? Self-imposed exile?

#256 kothar on 01.30.15 at 1:14 pm

JP Morgan says there will be blood. ha! There’s a way to scare people and make their trades on the opposite to get more profit!

#257 IMF memo to Harpo! on 01.30.15 at 1:14 pm

http://www.theglobeandmail.com/report-on-business/economy/imf-urges-ottawa-to-be-cautious-while-fighting-its-deficit/article22718283/

#258 Bottoms_Up on 01.30.15 at 1:23 pm

#239 Josh in Calgary on 01.30.15 at 12:38 pm
———————————————–
He said ‘derivative’ which is different (much more risky) than a regular ETF.

#259 BCD on 01.30.15 at 1:25 pm

Remember I said Friday would be epic?

http://www.cbc.ca/news/business/barclays-downgrades-4-canadian-banks-bmo-laurentian-rbc-td-1.2937833

#260 cramar on 01.30.15 at 1:28 pm

#15 U.S. Guy on 01.29.15 at 7:40 pm

Forgetting for the moment the cost of buying an overpriced house, With your dollar dropping by 20+% do Canadians see an increase in everyday living expenses like utility bills, groceries or eating out? I know gas is dropping but what about the rest?

Here in the US prices seem to be rising with the dollar??
Does anything make any difference to the average everyday guy? Are Canadians hurting with the drop of your dollar?

————–

Not yet in Southwestern Ontario. Utility bills are made in Canada so shouldn’t reflect world prices for the Loonie for quite a while. A lot of fresh food is imported from the U.S., but there has not been any noticeable food increase …YET!

#261 Mr Stats on 01.30.15 at 1:28 pm

Correction may be done. Canadian housing in USD is now 33% off compared to the days of being at par. $400,000 USD house is now $$267,000 USD. Remember, the average USA home price is over $200,000 and rising.

The above analysis is based on on a 75 cent dollar (1.33 exchange) vs 100 cent dollar (1.0 exchange).

#262 Grantmi on 01.30.15 at 1:29 pm

This is the TELL TALE SIGN, that the market(s) are starting to roll over.

If the Transports can’t catch a bid and go up when oil is at ALL TIME LOW since 2009! Something is not right with the world!!

http://bit.ly/1yeZSex

#263 Mr Stats on 01.30.15 at 1:31 pm

Bond Yields at new record lows. Five Year at 0.61%!!

Can we see 1.70% Five year fixed mortgage rates? Inverted yields say so.

Also negative rates coming to bank accounts near you! Got to keep deflation out of housing and Canadian stocks at all costs!

Extreme statements. For what purpose? — Garth

#264 Grantmi on 01.30.15 at 1:32 pm

#247 Armageddon on 01.30.15 at 12:55 pm

When Gorby and Henry are worried…yikes…. mega Black Swan…that’ll get the gold nutters going.

Christ! Kissinger is still alive??? #Deadwood

#265 @241 Mark on 01.30.15 at 1:34 pm

‘Grocery prices seem to be stable where I live (western Canada).”

Wrong. Importing food from the USA has got more expensive

Go away.

#266 Bottoms_Up on 01.30.15 at 1:36 pm

#259 Mr Stats on 01.30.15 at 1:28 pm
—————————————-
It’s an interesting comparison, but Canadians still buy Canadian houses with Canadian money, so the cost to us is still $400,000.

#267 Victor V on 01.30.15 at 1:36 pm

IMF says Canada’s housing market overvalued by as much as 20 per cent

https://ca.finance.yahoo.com/news/imf-sees-growth-momentum-canada-153411709.html

The IMF estimated national home prices are overvalued by between 7 and 20 percent with important regional differences. Still, there are some signs of cooling, especially in overheated markets, the IMF said. It added it continues to expect a soft landing for housing.

While measures taken by policymakers have contained the growth of insured mortgages, there has been a “significant rise in uninsured mortgages alongside still-strong segments of housing markets,” the IMF said.

Additional policy action may be needed if household balance sheets and housing market vulnerabilities start rising again, the IMF said. It also encouraged more gradual measures to ensure the private sector takes up more of the mortgage risk.

#268 Victor V on 01.30.15 at 1:38 pm

http://business.financialpost.com/2015/01/30/imf-says-housing-in-canada-overvalued-by-as-much-as-20/

Canada’s housing market is overvalued by as much as 20%, says the International Monetary Fund which is forecasting a soft landing for the sector.

The IMF opinion, released Friday, is for the country as a whole and it noted there are important regional differences when talking about overvaluation which may also be as low as 7%.

“Canada’s housing market rebounded in 2014, fuelled by low and declining interest rates although there are some welcome signs of cooling especially in overheated markets,” said the IMF.

The release comes on the heels of a report from Fitch Ratings this past week which also said the housing market may be as much as 20% overvalued, citing the impact of falling fuel prices on the housing sector. It too called for a gradual decline in prices.

#269 Mr Stats on 01.30.15 at 1:38 pm

Extreme statements. For what purpose? — Garth

Only to get the truth out to people who are being taken advantage of. Everything has deflated (i.e.. Commodities, Canadian Stocks, etc.) except Real Estate.

The recent actions by the gov are to primarily protect deflation in housing. To believe otherwise is foolish.

#270 Chris in Nanaimo on 01.30.15 at 1:41 pm

Yep, keep an eye on US fruit/veg. I’m sure that spinach I brought last week has gone up by about 20%.

#271 CalgaryRocks on 01.30.15 at 1:46 pm

#232 Its Over on 01.30.15 at 12:24 pm
I love RE #117

You do know Montreal was second on that list? YES Toronto and Montreal are rated #1 and #2 in the world? ROTfLMFAO you delusional realtors are just plain stupid.

WTF. Montreal is an awesome city to live in. As far as I’m concerned way better than TO, but that’s just me.

#272 Mark on 01.30.15 at 1:47 pm

“Wrong. Importing food from the USA has got more expensive”

No it hasn’t. Transportation is a big component of getting lettuce and strawberries from the US, to Canada. And the cost of that has dropped. Additionally prices on the imports themselves have dropped in USD$ terms, so the translation into CAD$ is fairly neutral overall.

The ‘mistake’ in your thinking (thinking…not practical experience, obviously!) is to think that USD$ prices are constant (they are not), and that transportation isn’t a very major component of putting the USA-imported stuff on the shelves.

#273 Mister Obvious on 01.30.15 at 1:50 pm

#228 Ralph Cramdown to #216 young & foolish

Hey Ralph! Norton here. I had the same discussion with someone here a few months back. (I can’t remember if it was “young & foolish” or not).

I agree with you. All other things being equal, if the market value of a property rises but the yield from that same property stays constant the capitalization rate has fallen. Period. But, is that a problem, or not?

For example, in BC there are residential rent controls. Certain rental building owners are feeling pain. It does not comfort them to know they are still enjoying a 9% cap rate based on the original value of their investment.

The land value may have more than doubled since purchase (along with taxes and maintenance costs) but the owner perceives that as a loss. Ok, it’s not really a loss, nor is it a happy situation.

To whom does the owner of such a property sell? If the property can’t be rezoned or otherwise developed any potential buyer will simply be inheriting your position together with an even lower cap rate if he buys at current market value.

Rock… Hard Place.

The poster who disagreed with me made a case that the current value was irrelevant. I didn’t really buy it.

Take a theoretical case where the value of your property drops by 50% but your income remains the same. Is that a reason to be happy, or has nothing changed?

#274 Derek R on 01.30.15 at 1:53 pm

#207 Ret on 01.30.15 at 11:30 am wrote
#134 ” My kids will be eating oatmeal instead of cereal from now on.”

I’ve reported you to the appropriate authorities.

What. Kelloggs?

#275 Mafia Mortgages on 01.30.15 at 2:01 pm

Oh great…. party on…

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/amid-tighter-bank-rules-more-canadians-are-turning-to-alternative-lenders/article22708489/

#276 Grantmi on 01.30.15 at 2:05 pm

Ouch! that’s going to leave a mark! http://bit.ly/1Lrnnds

Layoffs coming soon in the CN BANKS soon I’m sure!

RBC, BMO, TD hit with Barclays downgrade as bank stocks face worst start in 25 years.

Bloomberg News | January 30, 2015 | Last Updated: Jan 30 12:54 PM ET
More from Bloomberg News

A Barclays analyst cut Bank of Montreal, Royal Bank of Canada, Toronto-Dominion Bank and Laurentian Bank of Canada to the equivalent of a sell from a hold. The Toronto-based analyst expects profit among the six-biggest banks to rise 3.1% this year, the slowest since 2009.

THE CANADIAN PRESS/Graeme RoyA Barclays analyst cut Bank of Montreal, Royal Bank of Canada, Toronto-Dominion Bank and Laurentian Bank of Canada to the equivalent of a sell from a hold. The Toronto-based analyst expects profit among the six-biggest banks to rise 3.1% this year, the slowest since 2009.

#277 CalgaryRocks on 01.30.15 at 2:07 pm

#214 Toronto the Good on 01.30.15 at 11:46 am
Well that settles it…

http://news.nationalpost.com/2015/01/29/toronto-ranked-best-place-to-live-in-economist-ranking-of-cities-around-the-world/

There is only one city on that list where you can own a decent piece of property in an awesome location for way less than 1M$, pay cash and live like a king (surrounded by french Canadian kittens)

Renting is also an option. Way cheaper the everywhere else as well.

Mmmmmm…….ontreal….

#278 };-) aka Devil's Advocate on 01.30.15 at 2:07 pm

#223Caesar Marcus on 01.30.15 at 12:12 pm
Oh good, look who’s back to enlighten us…Mr/Mrs Thesaurus providing his/her balanced viewpoints…

“Balanced” as in pun intended? You’ve got my number. Supply and demand seeking equilibrium (balance). The economy is ALWAYS seeking equilibrium as its constituents push and pull it to and fro only exasperating the matter. There ya go and not once a reference to a thesaurus };-)

It is what it is, was and will be. SHIFT happens… learn to ride the tide.

#279 oldmac on 01.30.15 at 2:08 pm

It seems that despite our unbridled access to more information that the human race ever has access to is indeed making us dumber rather than more intelligent. It is unreal how you are still getting these emails Garth.

People are positively possessed.

One of the most common things I hear from my friends is ‘and now I won’t have to move, at least for awhile’, or ‘but I really hate moving so it makes sense to buy now’.

Idiots. Lazy idiots.

The real reasons people don’t like moving:

1. They have too much crap they don’t need and won’t ever use.
2. They are forced to determine whether things of sentiments past have the same value to them (they likely do not)
3. They have to look through their entire crappy life while moving, then find a place for it at their new location.

I’ve helped a lot of my friends move into their ‘5-10’ year house and they all have the same problem. Don’t get me wrong; they are otherwise good people but when it comes to housing; they are idiots. Lazy idiots. They keep me around for my honest opinion and strong back; traits hard to find these days.

#280 Edith on 01.30.15 at 2:15 pm

Like I said SFH’s in Vancouver are going up.

http://www.cbc.ca/news/canada/british-columbia/vancouver-real-estate-detached-homes-spark-bidding-wars-1.2937732

#281 G on 01.30.15 at 2:20 pm

3 CAD banks (BMO, RY. TD) are downgraded and demolished today – all the banks, not just the select three.

RBC is down 2.7%, to $72. Exaggerate much? — Garth

#282 Edward on 01.30.15 at 2:32 pm

Average Seattle home $475,900 US $.

Average Vancouver home $501,000 US $.

At least something is soon to be par.

Why bother with such a meaningless comparison? Few in YVR are paid in US$. — Garth

#283 Mixed Bag on 01.30.15 at 2:41 pm

All these posts about family pressuring the writers to buy. If the pressure is that great that you’d rather succumb and knowingly buy in an over-priced market, why not lie? Rent and tell them you bought. When the sh*t hits the fan, will they be there to bail you out?

I have an over-bearing relative like this. When I did do something they wanted, which I didn’t want, just to shut them up, and it went wrong, the response I got? “Why did you listen to me?” They’ll pressure you, but take no responsibility for pressuring you when things go wrong. Now I don’t share much information of relevance with that relative, which is sad, as they are a close relative, but I need my sanity.

#284 Edward on 01.30.15 at 2:49 pm

Why bother with such a meaningless comparison? Few in YVR are paid in US$. — Garth
——————-
Did I extrapolate something from those figures?

#285 Spaccone on 01.30.15 at 2:49 pm

Is this wishful thinking for CAD market?

XIU.TO Weekly
https://www.tradingview.com/x/eL8NI9FK/

#286 BCD on 01.30.15 at 2:57 pm

RBC is down 2.7%, to $72. Exaggerate much? — Garth
__________________________

Uhhhh. . .down 3.29% and falling

As I write this: down 2.4% at $72.40. Yawn. The ETF that owns the TSX60 is up .8% – which is why you should be diversified. — Garth

#287 Blacksheep on 01.30.15 at 2:58 pm

Mr Stats # 257,

“Correction may be done. Canadian housing in USD is now 33% off compared to the days of being at par. $400,000 USD house is now $$267,000 USD. Remember, the average USA home price is over $200,000 and rising.”
—————————————————
One way or another, elevated Canadian home values could not be sustained at the previous, imbalanced level with the US.

The handlers of the system realized they had a choice:

A housing crash OR A currency crash and choose the latter, less damaging route.

People have simply got to learn to accept this, as it is, our new reality.

#288 bdy sktrn on 01.30.15 at 2:59 pm

wti wtf???

did a war start in the middle east?

#289 Party on on 01.30.15 at 3:02 pm

This is unfathomable…..

http://www.cbc.ca/news/canada/british-columbia/vancouver-real-estate-detached-homes-spark-bidding-wars-1.2937732

#290 Daisy Mae on 01.30.15 at 3:07 pm

#64 SWL: “Politics these days, especially the cons with their name calling and finger pointing makes me want to vomit.”

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

The ‘cons’ are desperate…and desperate times call for desperate name-calling. ;-)

#291 for those about to flop... on 01.30.15 at 3:16 pm

# 149 Happy Renting
Thanks for the help.
I read the link ,good post by Garth.
I was just wondering what people thoughts were on what they would do with 50k.
Invest in RRSP to get tax break or try to make higher returns and pay the tax as you go.
My TSFA is maxed out.

#292 TurnerNation on 01.30.15 at 3:17 pm

COS divided cut cemented bottom in XEG

#293 Matt on 01.30.15 at 3:20 pm

Anyone notice the whacking Chinese investors are taking on their Vancouver RE holdings? No, prices aren’t going down. But the Loonie is vs. the Yuan which is pegged to the USD.

Someone that bought a condo for $500,000 in 2011 needed $3,375,000 Yuan (6.75 exchange rate).

That same condo, even if it’s appreciated 10% since then – which most haven’t – is now worth $2,695,000 Yuan (4.90 exchange rate today)

That’s a paper loss of 20% in 3 years without property prices even coming down… yet. They’ll be the ones that get hit the hardest.

#294 José on 01.30.15 at 3:21 pm

#287 bdy sktrn on 01.30.15 at 2:59 pm
wti wtf???

did a war start in the middle east?
—————
No, just month end short covering. But maybe it’s also signaling a bottom.

#295 Half full of whisky on 01.30.15 at 3:23 pm

A stellar year it will be… and the end result of all this will be Trudeau 2.0… some of you may have noticed… he ain’t operating on a full deck… at which point just turn out the lights.

http://business.financialpost.com/2015/01/30/rbc-bmo-td-hit-with-barclays-downgrade-as-bank-stocks-face-worst-start-in-25-years/

http://business.financialpost.com/2015/01/30/canada-gdp-falls-0-2-below-economists-expectations/

http://business.financialpost.com/2015/01/30/imf-says-housing-in-canada-overvalued-by-as-much-as-20/

http://business.financialpost.com/2015/01/30/there-will-be-blood-jpmorgan-predicts-canadian-dollar-to-sink-to-77-cents-if-bank-of-canada-cuts-again/

http://business.financialpost.com/2015/01/30/oils-collapse-has-cost-north-american-investors-390-billion-since-june/?__lsa=8079-69c5

http://business.financialpost.com/2015/01/29/cibc-to-cut-about-500-jobs-to-boost-operating-efficiency-source/

http://business.financialpost.com/2015/01/29/canadian-oil-sands-ltd-reduces-dividend-by-86-its-biggest-cut-since-1998/?__lsa=8079-69c5

#296 Mark on 01.30.15 at 3:23 pm

“The handlers of the system realized they had a choice:

A housing crash OR A currency crash and choose the latter, less damaging route.

I wouldn’t take it for granted that the ‘currency crash’ can continue much longer. There are very strong forces that are acting to push up the CAD$, just like the CHF experienced. Lower interest rate policy, for example. The need to repay debt. Look at Switzerland, look at Japan for examples of what Canada’s future will probably look like — a strong currency, declining house prices, but overall, decent equity valuations and the ability of Canadians to earn decent return from the accumulation of overseas investments.

Should be fun watching the speculators who are all lined up against the CAD$ at this point (and its mostly speculators) get destroyed in the coming months.

#297 Mr Stats on 01.30.15 at 3:25 pm

@Blacksheep

Sustained is an understatement. The pending sales apparently have been through the roof this last week in Vancouver. You don’t have to reply to this comment, you will see in the sales stats in a week or two.

#298 3/4 full of whisky on 01.30.15 at 3:28 pm

Emperor’s got no clothes…

http://business.financialpost.com/2015/01/30/the-tally-of-closed-retail-stores-in-canada-keeps-growing/?__lsa=8079-69c5

#299 Full of whisky on 01.30.15 at 3:33 pm

And then the weekly dueling idiots.. the globe vs the post each week trying top each each with the biggest idiot

http://business.financialpost.com/2015/01/29/quebec-couple-with-new-child-wants-750-million-house-and-retirement-plan/

https://www.youtube.com/watch?v=1tqxzWdKKu8

#300 Daisy Mae on 01.30.15 at 3:34 pm

#145 Across the pond: “Knee-jerk judgement are much more fun than looking up the legislation that serves your Strata Corporation though ;)”

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

There are a variety of options which could give a better return than 2.5%…..

#301 aL pacino on 01.30.15 at 3:40 pm

#281 Edward on 01.30.15 at 2:32 pm
Average Seattle home $475,900 US $.

Average Vancouver home $501,000 US $.

At least something is soon to be par.

Why bother with such a meaningless comparison? Few in YVR are paid in US$. — Garth
********************************************

Who cares about how much money people make in YVR.
Vancouver has got nothing to do with local incomes…got it.
Even you said so calling it delusional. Capish !

#302 bdy sktrn on 01.30.15 at 3:42 pm

#288 Party on on 01.30.15 at 3:02 pm
This is unfathomable…..
——————————
note these places are east side, it the refuge of the ‘locals’ who are not chip wilson. no status as a trophy address but virtually all the benefits. and you get to know all your neighbours if you want.

more people , fewer houses – most all infills are duplex or multi around here. If you want a house with a yard don’t expect fire sale prices.

#303 Edmontonian on 01.30.15 at 3:43 pm

#88 PrairieBoy43 I grew up in Fort Saskatchewan in the 1980s, and the population was 15,500. Today it is listed as 21,750. that’s a growth of about 1.78% a year.

there are over 230 MLS listings for a population of 21,000+ people? That’s really high. The price with contract.

#304 Pre-Retiree (?ETF preferred) on 01.30.15 at 3:48 pm

#165 nobody:
In the long run you will always get your money back – so long as you own The right kind of preferreds, and not an ETF derivative. — Garth

So, which preferreds are “the right kind”, and what are the characteristics that makes them so?
_________________

My question too. I am also interested in understanding
more about this. Is Garth saying hold the preferred directly, and NOT in an ETF??

For the actual blog today, if those writing to Garth were truly reading the blog, they would not ask the question as to whether they should buy or not. They either don’t read the blog or they do not exist, or worse, they exist and read the blog.

What’s wrong with a Preferred Share ETF now?

#305 José on 01.30.15 at 3:56 pm

#297 3/4 full of whisky
———–
Not good to see so many stores close. But when was the last time that any of you shopped at one of these stores?I was in a couple of them – to look at Sony products and then purchase on line. I would also cut through either the Zeller’s or Target entry when I parked at the mall – always lots of parking out front of these empty stores. So here’s the list of stores:

Jones New York, 36, stores, 2015
Target, 133 stores, 2015
Sony, 14 stores, 2015
Mexx, 95 stores, 2015
Smart Set, 107 stores, 2014
Bombay, Bowring & C0. Inc. and Benix & Co. Inc. 110 stores, 2014
Jacob, 92 stores, 2014
Juicy Couture, 5 stores, 2014
Grand & Toy, 19 stores, 2014
Petcetera, 18 stores, 2014
Big Lots/Liquidation World, 78 stores, 2014
Zellers, 220 stores, 2013
Espirit, 46 stores, 2012
Fields, 141 stores, 2012

Always lots of changes in the retail space. Here’s a list of stores opening soon:

Nordstrom.
Simons.
Victoria’s Secret.
Chicos.
Designer Shoe Wharehouse.
Sak’s.
American Girl.
Jimmy Choo.
Bloomingdales (maybe).
Uniqlo.

#306 NoName on 01.30.15 at 3:57 pm

@#243 Mark

I think that you a wrong when it comes to the food prices.
food price chart 2008 to 2012
http://oi43.tinypic.com/1gj887.jpg
stats Canada table 2010-2014
http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/econ155a-eng.htm

#307 Ralph Cramdown on 01.30.15 at 3:58 pm

#273 Mister Obvious — “Take a theoretical case where the value of your property drops by 50% but your income remains the same. Is that a reason to be happy, or has nothing changed?”

It’s never a reason to be happy… unless you went in with a partner and he panics and sells you his half at the bottom. But if you bought it for income and those prospects haven’t changed, and you don’t have to refinance in the near term, you’re fine. If you bought it in anticipation of capital gains or you need to refinance it in the near future, you’re hooped.

It’s always interesting to watch the transition from capital gains-oriented investors (“real estate always goes up!”) to income oriented investors. How far can prices fall? Down to a cap rate that unleveraged cash buyers will accept, compensating for their risk — think 8-12%.

For an example of this type of regime change (in this case from yield-oriented to capital-gains oriented investors) pull up a six month chart of Canadian Oil Sands. Down 75% in 6 months. Up 33% in five hours. A lot of money changed hands there, on an asset whose fundamental characteristics didn’t change a bit.

Other signs of investors being lulled into a hypnotic state: If you hear them say “you don’t buy bonds for the yield.”

#308 "Clarence"...apparently on 01.30.15 at 4:00 pm

Thanks for the reply, Garth.

Not the biggest fan of you deleting all the portions of my email that play up the upside regarding my townhouse purchase, but you have a product to sell. I get that.

I guess I left some things out of my original email. We still have savings. Lots. None of this down payment money is coming from TFSA or RRSP, both of which we contribute to annually, with both our employers matching the RRSP portion.
Make no mistake, this down payment is coming from the condo I sold last year. All $165k of it. My girlfriend’s half, which she will give me once the condo sells, will be going to trash all of my existing student debt. Almost done my MBA, so let’s not act like these are our salaries forever.

I’ve taken your advice in my TFSA, and I’ve been pushing my girlfriend to as well. US equity, preferreds, dividend payers…got them all in the TFSA. The US equity portion of my personal, non employer contributing RRSP account is largely in US equity and is up something like 60%. Less aggressive Canadian portion is also up quite a bit, and full of dividend payers as well.

Also not in my email to you, I have another condo, a rental property I’ve owned for 5 years now. Mortgage free. Will not be selling. If for some reason we can’t afford to live in the townhouse or we decide we hate it, I have no problem dumping out, selling, and moving into this mortgage free condo. Ditto if we break up (thanks for all the kind words, fellow commenters haha). Sure we’ll take a haircut on breaking the mortgage and it’ll be a huge pain, but I’ve ran through that scenario. Again, I’m a financial planner by trade. I’ve run this plan every which way. And in all scenarios we still have cash left over to max out TFSAs annually and contribute to RRSPs as well. I’ve done financial plans for people all over this country. I know exactly what our bills will be. Like I said, the house is only 15 years old, major renovations are likely years away.
Oh, I also have a defined benefit pension. Forgot to mention that as well.

So, I appreciate the advice and I’ve taken it into account. The thing is, the condo isn’t making money. She’s selling it for only $10k-$20k more than what she bought it for, which translates to no gain once you factor in all the fees. It’s also tiny. In my opinion quality of life matters, even if you can’t see it on the balance sheet, and that’s the main (but obviously not the only) reason we’re moving.

None of that changes the advice. In fact, news you currently own two condos demonstrates a lack of financial acumen. And a DB pension plan? I’ve never heard of a financial advisor with one. The lack of such a cushion usually makes people more goals-oriented. Less whiny. — Garth

#309 Overflowing with whisky on 01.30.15 at 4:02 pm

Good point Jose. Not likely to be shopping at any of the new ones either!

#310 Mark on 01.30.15 at 4:08 pm

Anyone notice the whacking Chinese investors are taking on their Vancouver RE holdings? No, prices aren’t going down. But the Loonie is vs. the Yuan which is pegged to the USD.

The so-called “Chinese investors” weren’t actually bringing Yuan to the table or even money for that matter in any significant quantity, so I don’t know why you are fixated on such. They are hedged, on account of taking out CAD$ mortgages, often in the names of their Canadian kids/wives/relatives.

What they have lost is a minor amount of equity as Vancouver house prices have declined over the past few years. But if they bought 10 years ago, they’re still well in the money, even after accounting for the depreciated Canadian currency.

Many of them may very well have even refinanced their Canadian properties, and exported the resulting “equity” to China for investment there. Equity that is never to be seen in Canada again, and properties/loans that will merely be ‘walked away’ from if prices continue to fall.

#311 Pop the Champagne on 01.30.15 at 4:15 pm

It was just a nightmare…..party back on

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/us-oil-prices-surge-at-close-of-session/article22723007/

#312 Edith on 01.30.15 at 4:23 pm

#309 Mark on 01.30.15 at 4:08 pm
Anyone notice the whacking Chinese investors are taking on their Vancouver RE holdings? No, prices aren’t going down. But the Loonie is vs. the Yuan which is pegged to the USD.
—————
Any new Chinese investors are going to be receiving a 20+% discount.

#313 Clarence the troll on 01.30.15 at 4:28 pm

Yeah right Clarence….
Trolling for a big one

https://www.youtube.com/watch?v=3c8zQVDxj1w

#314 TheRealTruth on 01.30.15 at 4:28 pm

Told you guys 4 years running that this is how it would end. With a currency crash. You have my past posts Boss,….Job on Wall street for me?

#315 prairieboy43 on 01.30.15 at 4:35 pm

@#302 Edmontonian wrong again. Maybe you should take a picture of the population sign when, you visit? Probably not to often?
Price Drop!! Hope so. Canada 40% overvalued.
If I were this couple. Wait, rent get a feel for Edmonton area. May not have a job 12 months from now.z

#316 young & foolish on 01.30.15 at 4:39 pm

” All other things being equal, if the market value of a property rises but the yield from that same property stays constant the capitalization rate has fallen. Period. But, is that a problem, or not?”

Well, if you bought for income (like preferreds) why would it matter? And when the mortgage is finally retired, you return would only increase.

#317 tkid on 01.30.15 at 4:53 pm

Hey, Girlfriend of “Clarence”, I have one suggestion: RUN!

#318 Harper...the terrorism fighter on 01.30.15 at 4:56 pm

In the closet no doubt……..LOL
In the closet no doubt……..LOL
In the closet no doubt……..LOL
In the closet no doubt……..LOL
In the closet no doubt……..LOL
In the closet no doubt……..LOL
In the closet no doubt……..LOL
In the closet no doubt……..LOL
In the closet no doubt……..LOL
In the closet no doubt……..LOL
In the closet no doubt……..LOL
In the closet no doubt……..LOL
In the closet no doubt……..LOL
In the closet no doubt……..LOL
In the closet no doubt……..LOL

#319 Nemesis on 01.30.15 at 4:56 pm

#SlowNewsFreakyFriday,Or… #YouCan’tMakeThisStuffUp…

[Independent] – Gwyneth Paltrow scorned for suggesting women steam-clean their *******

http://tinyurl.com/mj3nmtx

#AproposJazzInterval:JimmySmith&PhilUpchurch

http://youtu.be/8kxpNuRW9n0

#320 S. Bby on 01.30.15 at 5:07 pm

#216 y&f

“My figures too. My rent is $2K monthly and the property is “worth” a million. Makes no sense. The owner is simply speculating”

Current owner/speculator paid $1,070,000 three years ago. (from BC Assessment Authority)

#321 Ray Skunk on 01.30.15 at 5:13 pm

Yeah put me down in the Clarence the Troll camp.

Hits all the right buttons, the DB pension was the icing on the cake.

#322 prairieboy43 on 01.30.15 at 5:20 pm

Wow 300+ posts friday afternoon. Economic Tsunami heading our way. Get too the high ground now.

Good Luck

#323 Smoking Man on 01.30.15 at 5:20 pm

At the rate bond yields keep crashing, soon savers will be paying debtor’s coupons..

Shit Bungalows in Long branch will hit 1 million dollar mark this year if this trend continues.

#324 JMJ on 01.30.15 at 5:22 pm

I have only posted here thrice. A few random comments/thoughts:

A friend told me yesterday downtown Calgary is a “bloodbath”. People getting laid off daily. People walking on egg-shells. This is very real.

I have this incredible feeling we will see “ghost estates” and “ghost communities” in Calgary. They are still building. Downtown. In the burbs. We’ll see massive vacancies downtown, as well. It’s coming. Fast. Furiously.

I think young families, those who can work from home, should consider the rural solution. We need to learn to use our hands more. To take care of ourselves. There’s a wicked vortex coming. It’s beyond the right investments, interest rates, and so on. The system, which inevitably would break, has broken. It will not be pretty. We live in serious times. Our kids will inherit a disaster. No one seems to get this….

The best hedge: land you can grow food on. Always has been. We simply lost site of this…

#325 LOL CANADA on 01.30.15 at 5:33 pm

Rent v Buy Calculators are broken in Canada.

1M prop 700/m ptax, 300/m util, interest at absolute lowest is 1600/m. absolute minimum expenses = 2600.
Want to rent it? sure, you can get a place like this for 2k a month in Toronto. Live like a millionaire next to Rachel McAdams for 24,000 a year. ….

SOMETHING IS WRONG HERE!!!!

#326 Nutted wildroser on 01.30.15 at 5:37 pm

JMJ: You are forgetting that there are squirrels in the city…

#327 Mark on 01.30.15 at 5:48 pm

“At the rate bond yields keep crashing, soon savers will be paying debtor’s coupons..”

Well if rates go near or below 0%, money will simply disappear out of the banking system and not be available for credit growth. Little old ladies will stuff their mattresses with cash. CAD$, required for debt repayment, will become scarce and increasingly very valuable. Which will lead the BoC into lowering the rates even further, to push even more cash into the mattresses. And so on and so forth until something breaks the cycle and becomes investment or credit-worthy. Which, in a high CAD$ environment, will not be all that easy to find.

#328 Ray Vasquez on 01.30.15 at 5:49 pm

Canada 30, 10, 5, 2 year bond yields 1.83%, 1.24%, 0.59%, 0.38%. Low gets lower.

I can’t see this changing much anytime in the next few years.

Nobody knows what next month will bring. — Garth

#329 No bubble this time on 01.30.15 at 5:51 pm

Half of Canadians plan to buy within five years, and lower rates make that easier. There will only be a slight pause in the market. It will be great year yet again for owners and buyers. Renters fall further and further behind.

http://www.theglobeandmail.com/report-on-business/economy/housing/canadians-set-to-jump-on-homebuyer-bandwagon-amid-lower-rates/article22717699/

Such realtor crap. As we head towards delfation, this is leading the lambs to slaughter. There is no good outcome. — Garth

#330 Clarence on 01.30.15 at 5:52 pm

DB pensions exist at the big banks guys…sorry to be the one to break this news.

#331 young & foolish on 01.30.15 at 5:52 pm

“An investment worth $x and yielding $y is good or bad going forward regardless of what you paid for it in the past. If this were not true, an asset today would be a “good” or “bad” investment depending on how long ago and at what price its owner bought it.”

Hmmm … interesting perspective. So, my landlord should sell and take the capital gain even though his investment is generating a solid cash flow because going forward, the return is too low against current value?

#332 S. Bby on 01.30.15 at 5:59 pm

#311 Edith

“Any new Chinese investors are going to be receiving a 20+% discount.”

If there are any left…

#333 young & foolish on 01.30.15 at 5:59 pm

““My figures too. My rent is $2K monthly and the property is “worth” a million. Makes no sense. The owner is simply speculating”

Current owner/speculator paid $1,070,000 three years ago. (from BC Assessment Authority)”

Yes, he probably is at that purchase price. Although, you have to consider what he put down to secure the property. If it was a low figure, but still manages to cover his monthly expenses he is probably counting on lower interest rates to inflate the price higher before he sells.

#334 99 bottles of beer.... on 01.30.15 at 6:05 pm

Well I tried, but bloody hell.. Winston’s the man. Have one for the road, or 40,000!

Could he even get elected in today’s world?

http://news.nationalpost.com/2015/01/29/harry-wallop-churchills-feats-impossible-to-match-beginning-with-his-daily-alcohol-consumption/

#335 Not A Realtor on 01.30.15 at 6:05 pm

#323 S. Bby on 01.30.15 at 5:59 pm
#311 Edith

“Any new Chinese investors are going to be receiving a 20+% discount.”

If there are any left…
——————-
Doesn’t seem to be a shortage.

#336 waiting on the westcoast on 01.30.15 at 6:14 pm

Interesting article on PPP / IPP pension products for self-employed / entrepreneurs / professionals…

http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/self-employed-heres-a-pension-for-you-too/article22680927/

Garth – what do you think of using these instead of rrsp/tfsa’s?

#337 For those about to flop... on 01.30.15 at 6:17 pm

What about this one.
If a ETF or a mutual fund states that it’s return was say 8% and the MER WAS 1% is that one percent factored in or did you only really get 7% ROI.

#338 Hey Bubble Boy on 01.30.15 at 6:28 pm

Ya got yer head in the clouds.. it is impeding yer thinking due to lack of oxygen.. well I hope that’s the reason, or else you are basically a shyster.

#339 Mark on 01.30.15 at 6:40 pm

“If a ETF or a mutual fund states that it’s return was say 8% and the MER WAS 1% is that one percent factored in or did you only really get 7% ROI.”

Mutual fund returns are usually quoted inclusive of management expenses. Many mutual funds come in various “classes”, marketed towards different types of clientele, such as TD’s “Institutional”, “E”, “Advisor”, and “Investor” series. The returns of these classes of the same fund will differ entirely by the MER.

“If there are any left…
——————-
Doesn’t seem to be a shortage.”

There’s a severe shortage of ones actually bringing money to Canada. Aside from enough for an apartment rental and enough to buy a used Honda.

#340 Tony on 01.30.15 at 6:40 pm

Recap: very bearsih signal for oil and very bullish signal for both gold and silver.

It took forever today for any profit taking on the last business day of the month for oil… very bearish.

Silver wasn’t hit at the open today but it was a day gold should have traded sideways to down. Since it rallied today a very bullish sign for both metals.

#341 Italians love real estate on 01.30.15 at 6:43 pm

The economist magazine rates toronto as number 1 place in the world to live.

Could this be the reason our real estate prices keep rising?

Probably should have posted this tomorrow

#342 Not A Realtor on 01.30.15 at 6:47 pm

Sorry,forgot the link.

http://calgaryherald.com/business/real-estate/interest-rate-cut-could-give-slumping-calgary-housing-market-a-boost

#343 Marco on 01.30.15 at 6:55 pm

“U.S. central bankers risk inflating another asset-price bubble if they keep interest rates too low as unemployment falls, said St. Louis Fed President James Bullard.”

#344 Steveo on 01.30.15 at 6:55 pm

Oil up 8%…biggest gain in two years. Looks like we may have bottomed out..

#345 Ronaldo on 01.30.15 at 7:14 pm

#334 Tony on 01.30.15 at 6:40 pm

Hey Tony weren’t you telling us a while back that silver was going below 10 dollars and gold below 1000? Where do you see it going in the months ahead. Today’s close was $22.05 Ag and $1582 Au (cdn$).

#346 Nearly 400th on 01.30.15 at 7:32 pm

Hey Tony, is there gonna be a run on tinfoil??

#347 Jessy Bright on 01.30.15 at 11:01 pm

The housing market needs a little correction. Skyrocketing prices and high interest loans make it only tougher for the average folks who have to live in debt forever. Very unsustainable for a decent society.

Find jobs nearby, http://fonolive.com

#348 earlybird on 02.01.15 at 7:24 am

Just checked the CREB Stats for Calgary…Active listings was at 87% YoY at last count….maybe they are adding a column for an extra digit. Im curious to see what they will look like after they change the system they are using…the timing is interesting to say the least.