Myopia

AWESOME modified

Renowned for its namesake gooey bars, a few biker gangs, Diana Krall (hot) and some world-class strip bars, Nanaimo is a bustling little waterfront place halfway up Vancouver Island from BC’s somnambulant capital, Victoria. Over the past few months the city of 90,000 has slithered into the national spotlight for all the wrong reasons.

First, local realtors started pumping the local media about offshore buyers targeting the area. True enough, a Chinese developer stepped up to propose a luxury hotel on the waterfront, and various other high-profile commercial properties in the area have gone to investors from Asia. And, for sure, some houses have been purchased by people who are Chinese immigrants.

But what worked for the house-pumping industry in Vancouver – scaring the locals into thinking they have to buy now or every house will be gobbled by a dude from Guangdong – just backfired on the Island. A white supremacist group stuffed mail boxes with racist flyers exhorting the locals to stand up against the yellow peril. This was neatly followed by the spraying of outdoor bench ads placed by Chinese-Canadian realtors with swastikas and epithets. The mayor was appalled. The media did a 180 and was outraged. The cops got involved. And Nanaimo sported a black eye.

NANAIMO modified

As you know, this is a time-worn tactic of the real estate business. ‘Buy-now-or-buy-never’ is the strongest incentive local agents have to turn buyer ambivalence into a heady mixture of fear and greed. Today nothing inspires more emotion in BC than China. Even in Vancouver, the supposed epicentre of offshore investment, it’s not that Chinese are buying up everything, but the meme that they are which has driven locals to self-inflate the price of houses. Now it’s a crisis of affordability. There’s nowhere that real estate risk is so elevated. People from China did not do that. We did.

Well, back to Vancouver Island for a dose of reality. The regional real estate board is one of the most data-progressive in the land, routinely compiling a mess of info on who’s actually buying, and why. The latest buyer profile was published a couple of days ago and found 94% of residential real estate purchasers intend to live in the digs they’ve acquired, while 1.77% are investors.

And where do the buyers come from? Here ya go, you silly little racist, white supremacy weenies.

VIREB modified
*   *   *

So the big story this week happens Wednesday morning. That’s when the Bank of Canada will make its interest rate announcement. In Ottawa, at the bank’s fortress on Laurier Street, journalists will have been locked up for three hours studying the brief press release by the time it’s published on the BoC site at 10 am (you can check for it here). An hour later bank boss Stephen Poloz and his sidekick Carolyn Wilkins will hold a presser at the National Press Theatre down the street.

So, obviously, it’s a big deal. And there’s heated debate on whether Poloz will do the right thing and hold the line on rates, or cave to the dark side and cut a quarter point. BeeMo economists think he will nip. Scotia economists think not. Capital Economics’ David Madani seems to be lobbying for a reduction. CIBC’s Benny Tal warns any drop would be a game-changer.
“Financial markets are evenly split over whether the Bank will cut rates by 25 basis points to 0.50%,” says Madani. “With the economy seemingly in recession, we don’t see why the Bank wouldn’t lower rates.” Bank of Montreal’s Sal Guatieri cautions a rate slice would be, “another log on the fire for the Toronto and Vancouver housing markets. It’s not the amount that matters, it’s the message it sends to homeowners and potential buyers that rates are going lower rather than higher and will almost certainly stay low for quite some time. That just encourages more people into the market.”

The stakes are high. On the pro-cut side is the argument the economy is borderline recessionary, oil prices are junk, employment is mediocre and international woes have cut the value of commodities, and whacked us. Even PM Harper admitted this all over the weekend. On the no-cut side are those who say the last reduction did little to help the economy, but jacked house prices and fueled a big jump in consumer debt. With the US bound to raise rates by the end of the year, and Canada destined to follow, we’re setting ourselves up for a world of hurt down the road as epic debt resets and houses correct.

Then, of course, we have a federal election in about 100 days. If you were the prime minister, would you want a recession or higher house prices?

That sounded like a rhetorical question, didn’t it?

235 comments ↓

#1 JR on 07.12.15 at 2:27 pm

Nanaimo : ‘Surrey by the Sea’

#2 JO on 07.12.15 at 2:37 pm

Neoliberal junk economics. Polls and his predecessors will be hunted down for the destruction of our society.
The financial illiterate suckers who are leveraging up 15-20 to one on mispriced credit at record low rates will get devastated over the next 5 years. Then look for these morons to come looking for handouts from the rest of us
I am sick of this corrupt and fraudulent system that pretends to be ” free market” capitalism
The system is designed to siphon off massive wealth from the masses via mispriced credit and govt policies to encourage debt fuelled consumption
The average person just needs a pocket calculator to start with their gross income then deduct all taxes, user fees, mortgage interest payments, other debt interest payments, insurance premiums, and then from whatever is left you deduct inflation and investment fees and taxes on the illusory gains
Once you do this you can see we live in a neoliberal paradise
If Poloz lowes rates again Wed we are o r step further to the end game
Lowering rates does NOT help the economy. It destroys it. Any temporary boost in GDP and income is fake as it was driven by an increase in unproductive debt
So easy to see the scam they are pulling
Caveat Emptor

#3 Mark on 07.12.15 at 2:41 pm

“And there’s heated debate on whether Poloz will do the right thing and hold the line on rates”

Why is ‘holding the line on rates’ the right thing?

By most measures, inflation in the Canadian economy is dead. House prices declining. And the rest of the economy comatose and getting worse. Keeping policy rates high in such an environment is not only not the ‘right thing’, but its actually robbing the Canadian economy of a critical monetary policy tool that is intended to help lessen the severity of downturns.

The Harper government has made it known that it won’t be initiating additional stimulus spending. So what else is there left to do other than the BoC to lower policy rates, all the way to zero?

If anything, by not cutting rates all the way to zero a year or two ago, and leaving them there, Poloz et al at the BoC appear to be way behind the curve. Thus precipitating the downturn we are now seeing. A pro-active approach would have been more useful and helpful for the economy. Now the deflation genie appears to be out of the bottle, and likely accelerating as the short-term forex shock has mostly worn off.

There is no deflation. — Garth

#4 Jackie DiAngelis on 07.12.15 at 2:44 pm

When are they going to increase deposit insurance for CDIC.

It has been about 10 years now and it should be around $142,000 to be equal to $100,000 coverage in 2005.

As for the Bank of Canada, stupid is as stupid does. People know that the Bank of Canada does not want rates are normal levels which just 7 to 8 years ago was 4.5%.

They are a joke and all those that say lower interest rates stimulate the economy and work so well, here is your proof that they have gone off the deep end and it does not work now.

It actually is fueling a real estate frenzy that will probably end up like 1989 to 1996. Many forget those days.

Deposit insurance is meaningless in a country with such a concentration of banks. If one fell, account-holders would not be compensated. Happily, it is unnecessary as such a failure will not occur. Thus, there is zero need to spread your assets over numerous accounts to be ‘covered.’ — Garth

#5 Mark on 07.12.15 at 2:59 pm

“When are they going to increase deposit insurance for CDIC.”

Probably/hopefully never, given that there’s far too much money ‘deposited’ in Canadian banks (feeding the RE and consumer debt bubble) and not enough money productively invested in the equity of private job-creating business.

There is no deflation. — Garth

Those CPI numbers are incredibly weak, trending towards zero and less, and that’s after a one-time 20% currency shock to the downside. Imagine how low the CPI numbers would be if the currency shock had not occurred!!

#6 Time is #1 on 07.12.15 at 3:02 pm

#1 JR Nanaimo : ‘Surrey by the Sea’

Correction. North Surrey by the Sea.

#7 bdy sktrn on 07.12.15 at 3:06 pm

#1 JR on 07.12.15 at 2:27 pm
Nanaimo : ‘Surrey by the Sea’
————————
oceanfront in either will still do just fine.

#8 Jackie DiAngelis on 07.12.15 at 3:14 pm

So CMHC is meaningless too but banks don’t have only $100,000 per property CMHC in Canada.

I believe others when they say Mark is an internet troll because if it was up to him, nobody would be responsible for anything like paying their bills.

If we are not going to have deposit insurance and not increase it then I my deposits will take others houses, condos, properties etc. to the most value I can get.

The whole purpose of people having money in the bank is so they know they are going to get it back within reasonable limits.

#9 Republic_of_Western_Canada on 07.12.15 at 3:14 pm

There is no deflation. — Garth

You’re kidding, right?

We have a massive critical global hydrocarbon industry that now has too few dollars chasing too much product. In turn dropping related money velocity and prices in supporting industries all over the place. That’s the quintessential definition of deflation.

#10 Nora Lenderby on 07.12.15 at 3:21 pm

Another anecdote in the continuing saga of Ottawa watering holes:

http://www.cbc.ca/news/canada/ottawa/rochester-pub-closes-after-more-than-10-years-in-little-italy-1.3148100

This pub’s been there for more than 20 years, and although much extended, it isn’t on the Little Italy strip.

The owner now says:
“Part of our problem has always been that we’ve had a loyal group of customers for the past 10 years and they’re all buying houses and having babies. We’re not getting a younger crowd coming in to replace the ones that are now $400,000 in debt.”

Another blow to the hospitality industry of Ottawa. First there was the hi-tech bust. Then there was the late Mr. Radwanski, he of the scandalously swollen lunch budgets. (Some posh French restaurants closed almost immediately). Then the Senate expenses scandal.

It’s getting so difficult that one almost has to order the truffle-encrusted pigs’ pancreas ahead of time…

#11 Basement guy on 07.12.15 at 3:30 pm

It’s 2015 and we are still talking about rate cuts
If the BoC cuts rates and later the U.S. starts raising then it’s my calculation that a year from now we will back to 1%!!.

#12 zee on 07.12.15 at 3:30 pm

hi
I think foreign ownership has different meaning for different people.
In my opinion any person who uses income/money earned from out side of Canada to purchase real estate here regardless if they are landed immigrant should be considered as foreign ownership.
I know of many families who live here but the main income earner works elsewhere and most of the time earns way more than here and pays no tax. They are buying properties as investment here. We who live here and earn here simply cannot compete with their buying power. This is a large portion and some thing you have never addressed and taking into account when discussing Canadian properties specifically in GTA and Vancouver.

#13 Got out in time on 07.12.15 at 3:31 pm

I was hoping that title of this post

http://www.yattermatters.com/2015/07/really-how-stupid-are-you/

is directed at the recent buyers of properties in Vancouver alas it is just a good old commission fight wrapped in to the gospel of good customer service. According to his own disclosure new owners purchased the property(under the false premise of living in it) instead they rent out property for a year and now offering property for sale for $800000 more than what they paid for a year ago. In my calculations that is an increase of more than $2000 per day over last 12 months. How can anyone in a right mind tell me that this is going to last for too much longer. These days Vancouver is a sad picture of greed from both sides of the story:Realtors and house flippers. But truth to be told there is one happy group called renters. It appears from the story that renters of the house where a tad unruly and enjoying their life a bit more than adjacent house owners. How telling of the times that are coming…

#14 Frank on 07.12.15 at 3:36 pm

Imagine how low the CPI numbers would be if the currency shock had not occurred!!

Yeah imagine how much cheaper things would be if energy costs weren’t halved in 6 months! If gas cost way more I’d be swimming in consumer goods in your deflationary paradise!

#15 Shawn on 07.12.15 at 3:48 pm

Jackie, the GIC millionaire of yesterday’s discussion.

Jackie, be aware that the masses never appreciate success, especially among one of their own. (They are okay with sports star and celebrity success because those are not people like them.

To see a fellow wage earner save their way to millions is quite infuriating. It makes people mad as they realize maybe they could have done it too.

Those who are in the business of putting people into non-GIC investments are also somewhat infuriated by your success.

I am not saying that GICs are the way to go for others but I do sincerely congratulate you on your success.

Your comment is awaiting moderation.

#16 Suede on 07.12.15 at 3:52 pm

Don’t all act like you know what somnambulant means.

#17 Shawn on 07.12.15 at 3:52 pm

Rate Cut

I very much doubt it will happen.

#18 paul a on 07.12.15 at 3:55 pm

Well i guess it would be to responsible and ethical to suggest that the BOC should in fact raise by .25% to correct the incredibly stupid stunt that was the last rate cut, buy the way the hoped for increase in exports, that was hoped for , and propositioned as grounds for the last cut , has in fact turned into what we now know is dust in the wind,based on last month’s 2nd largest ever recorded trade deficit. it only propelled stupidity and procurement of unsustainable debt,mostly connected to the world class joke, we call the real estate market. so the question is can our BOC governor see the dangers, and do the correct thing,hold,or the most prudent raise,to show the financial world and give our citizens a heads up reality check, that this country is fiscally responsible,and our drunken flirtation with unsustainable real estate debt, is a fools folly and the hangover will be a real bitch?

#19 Shawn on 07.12.15 at 3:56 pm

Deposit Insurance

It is relevant because the government will make good on it in some fashion even in the unlikely event that a big five bank runs into trouble.

And it is most certainly relevant for those with GICs at little credit unions.

There dozens or probably hundreds of little deposit taking institutions that could not attract deposits without deposit insurance.

Stay the course Jackie.

CDIC does not cover credit unions. — Garth

#20 Jackie DiAngelis on 07.12.15 at 3:59 pm

What CMHC should do is sell off their mortgages to private investors worldwide. What is it $600, $700 billion.

These private investors like MICs, mortgage investment companies can charge higher interest rates and we can finally have a decent real estate correction and Canadian taxpayers will not be responsible for all the misguided mortgagees and their lenders.

This way the Bank of Canada’s rate cuts will not

#21 Brian Ripley on 07.12.15 at 4:07 pm

“Deflation”

My new Employment Rate chart (employment/population ratio) is deflating:
http://www.chpc.biz/earnings-employment.html#Rate

…and every time I look at net import-export trade
http://www.chpc.biz/household-debt.html

… it describes how our population is buying more than it sells. And where is that income to buy coming from?

Increasing levels of debt; eventually we will have to sell assets; I suspect investment condos and recreational properties will be on the list.

#22 Bucky on 07.12.15 at 4:15 pm

Would a rate drop have any other positive economic impact than temporary stimulus from further increases in real estate prices and consumer spending/debt? Would there be benefit to the business community to invest in new production or increasing productivity with updated equipment and technology?

Seems to me if the objective of a rate cut would be to spur consumers into propping up the economy by taking on more debt in this stage of the business cycle then it is a really, really bad idea.

#23 Retired Boomer - WI on 07.12.15 at 4:17 pm

I would love to see Poloz do something very unexpected. That would be to front-run the U.S. by raising the rate by .25

That would send that Shock & Awe thing through the public, the Bankers etc. Everyone might sit down, and have a good think.

Do I expect that? No., I’m in for .25 to .5 cut because he is a demonstrated weenie. At least you aren’t Greece.

#24 Godth on 07.12.15 at 4:19 pm

DELETED

#25 Nagraj on 07.12.15 at 4:20 pm

This creepy Harper guy goin’ into the Oct election reminds me of MADAME Du BARRY’s last trip – to the guillotine.

There she was in the cart, screamin’ at the angry, jeering crowds that she hadn’t done nuthin, that she was a good person, etc. Didn’t do her any good at all of course.
Then when they dragged her close to the blade, her famous last words were, “Encore un moment!” Meaning: please let me live for just another minute, please! Samson the Executioner, “Oh shut up.”
WHOOSH
In the 1919 Lubitsch silent movie version her head is thrown way into middle of the jubilant crowd.

“And there’s heated debate whether Poloz . . . ”
Well, just how heated is it, eh? In a really, really fiery red hot debate, the losers git mad as hell. I’m inclined to go with MARK and SMOKING MAN re fateful Wednesday next, but I wouldn’t put my head on the line.

Who’s this Poloz guy anyway? How’s he get on with the bidders at Treasury auctions? Does he play checkers with Harper (and cheat)? Is he really immune to being Bastilled? Does he get English messages from Liberal Chatty Cathy Carney via pigeon? (Does the Bronx Dwarf know he exists?)
I think he’s an aspiring aristo (from the boonies), a technocrat arriviste, si vous voulez.

Banksters’ duelling eggheads – place yer bets, rien ne va plus.

#26 Alex N Calgary on 07.12.15 at 4:26 pm

Hey Guys, I was just in Nanaimo a month ago visiting my parents, did a walk to the beach in Oakbay where we had walked 200 times before (as we were so poor living there that was all we could do) saw a 17 or 18yr old Chinese kid in a brand new corvette cruising down there with his tiny GF, I’ve seen old men with supercars there, but that was Real new to me.

It might be a minor % of transactions but its happening, I LIVE in a rental house in Calgary in a chinese area (edgemont) owned by chinese investors who don’t live in Canada brokered by their chinese friends who live here and take care of rental stuff (take care….).

Its real, but its just more fuel onto the fire of real estate problems, is it racist to point out that Chinese investment is visible and not helping things on the west coast? I think its a statement of fact, racist would be hating all Chinese for ruining the country or something, this is more observation of what is happening on ground level. (with no idea of real estate transaction history thats all we really have in the big picture anyways right?)

Things are slow here in Calgary, WTI is back down, world production continues to increase, as more barrels pumped makes up for less per barrel, everyone is holding their breath for fall projects to be announced for drilling here in cowtown, when it doesnt’ happen, the panic will set it.

We already here it everywhere about layoffs, including mine of course, here it comes.

BTW our new plan is to become the next Brad Lambs, since you Garth are the Brad Lamb of investements vs. real estate, why shouldn’t we do brad lambs on the next housing cycle? Screw taking the moral highground, people will buy anyways, we’ll just give the people what they want, just like you do, nobody wants to hear about the bubble, nobody wants to be helped, they just want to be rich, lets facilitate that.

That ‘Chinese kid’ – was he from Mainland China, or was his father born in Richmond? Your observation means nothing. — Garth

#27 TRT on 07.12.15 at 4:30 pm

My cousin came from overseas for a month to visit and ended up buying a house. Since he looked at the house in person and signed the contract IN Canada, he is a local buyer.

You are classified as a foreign buyer only when the transaction takes place at one of major brokers overseas office. ReMax Shanghai, etc.

Oh, another note. There are 300,000 Canadian Citizens in Hong Kong alone. What if you added the other countries in the region? And if they decide to come back to Canada, what will happen to Vancouver prices?


Incorrect. Buyer origin means buyer origin. — Garth

#28 nubbers on 07.12.15 at 4:33 pm

Going out on a limb here, but perhaps it is possible that lowering interest rates now, just before they are forced back up, will have a beneficial effect for those waiting to buy a house?

The resulting last minute tranche of lemmings will completely over extend themselves and won’t be able to survive once interest rates start going up. In a while, the extra repossessions might drive house prices down even faster and lower than they would have done otherwise.

Just have to be patient.

#29 Godth on 07.12.15 at 4:34 pm

DELETED

#30 TRT on 07.12.15 at 4:42 pm

Realtors put together that circle pie chart. Trust them this time?

Show me your data. — Garth

#31 Nosty, etc. on 07.12.15 at 4:44 pm

Blacksheep. SWL1976, bill, Spectacle, SMan et al — Not sure if you’ve read this — Greece’s Temptress, or The Lure of a Woman.

Freedom First is right, esp. now it appears that Greece is turnng over its sovereignty to get a bailout.

Texas is taking charge of their own affairs. Not a bad idea!

#203 Smoking Man on 07.11.15 at 11:46 pm — “I’m calling for a revolution..off with their heads.”

A good wine takes its time, but you appear to be right.

#32 takla on 07.12.15 at 4:45 pm

so if the peeps in gov drop rates again we can expect another few cents shaved off the Canadian dollar.How low can they go without pushing inflation on imported consumer goods further stressing the consumer.
Getting your money into U.S dollar based investments is proving a prudent move.

#33 TEMPLE on 07.12.15 at 4:46 pm

On the pro-cut side is the argument the economy is borderline recessionary, oil prices are junk, employment is mediocre and international woes have cut the value of commodities, and whacked us…On the no-cut side are those who say the last reduction did little to help the economy, but jacked house prices and fueled a big jump in consumer debt.

Both sides are right. So now what?

#34 Exurban on 07.12.15 at 4:52 pm

Quite correct that there is little foreign real estate investment in Victoria and Nanaimo. That’s one significant reason that prices there are so much lower than in Greater Vancouver!

The bank rate thing is scary. The big picture is like this — 1990s Japan saw badly-run banks that had made dubious loans get bailed out, leading to a cycle of extend-and-pretend and low low interest rates. The 2000s United States saw a very similar thing happen, with similar results. Ditto for the current European Union countries; the “Greek crisis” is largely a taxpayer bailout of German and French banks. Interest rates there have actually gone negative. So, around the world we have slowing growth, growing debt, and interest rates converging at a very very low level. It would be nice if Canada bucked the trend, but it doen’t seem likely.

#35 A Yank in BC on 07.12.15 at 5:08 pm

Garth.. in your opinion, is the U.S. Fed more independent from political pressure than the BOC?

#36 Mark on 07.12.15 at 5:12 pm

“I believe others when they say Mark is an internet troll because if it was up to him, nobody would be responsible for anything like paying their bills.”

A troll? Hardly. I make an argument, I’m respectful about it, and I back it up with facts. I don’t engage in ad hominem which is pretty much the definition of trolling.

The suggestion is that interest rates should be higher. What’s that going to do to the economy? Accelerate the RE declines already well underway in most of Canada (a few high-end enclaves in the GTA/GVR excepted), and drive up the cost of capital for consumers and businesses at a time when they can least afford it.

All for what? To put a little bit more money into the pockets of people with their ‘savings’ accounts who mostly don’t spend very much money anyways? To make equity less attractive when more equity investment is desperately needed in the Canadian economy?

The real trolls are those who claim that “low interest rates” are hurting seniors and the fixed income crowd. Nothing could be further from the truth. As Garth reminds us almost daily, the 10-year return of a balanced portfolio has been within its usual historic range of around 7%. Low interest rates have made most seniors and boomers spectacularly wealthy through housing and bond appreciation. Low rates have facilitated government borrowing to pay for extravagant health care and social welfare programs for seniors. The “seniors” who rely solely on cash savings account interest and are complaining of the cat food lifestyle — largely have only themselves to blame for adopting a one-asset strategy. But even at that, the low-inflation, almost deflationary environment we have experienced has created a sort of nirvana for Canadian seniors with government benefits. Seniors and boomers should be absolutely terrified of a potential future return to a higher inflation, higher interest rate environment.

#37 dave on 07.12.15 at 5:13 pm

somnambulant … wow, that’s a good one!

#38 nonplused on 07.12.15 at 5:24 pm

In a perfect world elections wouldn’t influence central bank rate decisions. Note that I said “perfect”.

I think the BoC should be hiking rates now, at least modestly. The dollar collapse may be keeping some companies (including the oil patch) modestly solvent but I don’t think it’s helpful on the whole. Plus the low rates are encouraging crazy behaviour beyond just the housing market. Here in Alberta we just elected a crazy NDP government that intends to borrow $10 billion dollars next year. Would anybody be thinking of that if the coupon was 5%? No they would not. In fact I don’t even think they could do it, nobody would lend it to them.

#39 kumbaiya on 07.12.15 at 5:27 pm

Hey Garth, how far do you have to ride on your Harley before you encounter a sign that you can’t read or hear a language you don’t understand?

I vacation in Asia every winter so it isn’t a shock to me. For people who don’t seek out that experience it takes a fair bit of getting used to so maybe a little empathy is in order. My ex gf (from Asia) visited me here in Vancouver and kept asking me where all the white people were, said she felt like she was at home.

#40 Sheane Wallace on 07.12.15 at 5:51 pm

#5 Mark
#9 Republic_of_Western_Canada

deflation?

Are you insane?
CAD lost 20 % of it’s value in less than a year, everything imported is more expensive, decent pair of shoes is over 100 $.

Commodities imploded (gas is still 1.25 today in To) but everything else, specially food is exploding.

Mark, you thoughts might be valid in some way for a closed regional market (stating that when people have no money there is no inflation) but boy, please remember that this is an open world market these days where if you can’t pay, someone else will so nobody will subsidize your poverty.

CAD going down big time will further drive inflation, just go to any grocery store.

#41 Ryan on 07.12.15 at 6:01 pm

I’m betting BOC leaves the rate unchanged. Neither up nor down. Staying as is prevents more fuel from being added to home-buying frenzy (lack of a cut might even give some prospective buyers some pause), precludes the political fire associated with the last rate cut, and keeps Canada positioned for rate increase in step with Fed later.

#42 Sheane Wallace on 07.12.15 at 6:01 pm

#10 Jackie DiAngelis on 07.12.15 at 3:59 pm
What CMHC should do is sell off their mortgages to private investors worldwide. What is it $600, $700 billion.

There is no one insane enough to pay us that money for the pile of crap these mortgages represent without the government guarantees.

If that was the case there would be no need of government guarantees in first place, as the banks would gladly take the risk if that pile of crap (another) house was really worth 1.5 millions in To/Vac.

House prices in To/Vancouver are now 4-5 times higher then they were 15 years ago, literally insanity.

There is no saving the mass here, just save your money and investment and move, it is that simple.

#43 Mark on 07.12.15 at 6:03 pm

“CAD lost 20 % of it’s value in less than a year, everything imported is more expensive, decent pair of shoes is over 100 $.”

The CAD$ lost 20% of its ‘value’ against the USD$. It did not lose 20% of its value against other major world currencies, particularly those which export consumer goods to Canada. Additionally, the global economic slowdown has deflated the USD$ prices on those imports, so the translation back to CAD$ has only been minor.

I saw this acutely in the prices of fruits and vegetables. In January, yes, it looked liked there was going to be a big shock. But 6 months later, the prices are similar to what they were a year prior. Supply chains adjusted. Contracts were re-negotiated to reflect the new buying power of the CAD$. And life goes on. CPI YoY is trending lower, and if the CAD$ stabilizes at this level and starts drifting higher, then explicit CPI deflation is just right around the corner.

#44 whitey on 07.12.15 at 6:05 pm

# 19 Mark

This is the most clear and sensible thing I’ve read from you! A lot of the savers on this blog missed the real estate boat, seem bitter about it and want to see a crash.

I still have no idea where the deflation and falling real estate prices are though, they certainly aren’t here in YVR.

#45 Mark on 07.12.15 at 6:09 pm

“What CMHC should do is sell off their mortgages to private investors worldwide. What is it $600, $700 billion.”

CMHC insured mortgages are already fully funded and owned by private investors. The CMHC acts as a guarantor. There is nothing to ‘sell’.

The CMHC, as an agent of the Crown, is legally obligated to make good on the guarantees they have written in exchange for consideration paid. Its not really a liability which can be ‘sold’ as it has no present revenue associated with it. The best case scenario is that the CMHC stops digging itself a deeper hole, and stops insuring mortgages. But incidentally, because the CMHC is so dominant in the market for subprime mortgage insurance, it can be argued that CMHC is the market for that sort of credit risk. And CMHC reducing its activity exposes the spectre of creating a systemic event in the housing market.

As it stands, the mere announcement that the CMHC subprime mortgage insurance authority would not be extended, by then-Finance Minister Flaherty, in Budget 2013, marked the peak of the Canadian housing market. It has been softening/declining ever since.

#46 Sheane Wallace on 07.12.15 at 6:10 pm

House prices are going nowhere without the guarantees of CMHC. It is the pile of crap that will determine Harper’s legacy and it won’t be good.

#47 Retired Boomer - WI on 07.12.15 at 6:10 pm

I have no clue what Poloz will do. I think being a political creature he will do the politically expedient thing.

It would be more enlightening to see him jack UP rates .25 front-running Janet Yellin, who might, maybe, actually, someday -really- increase rates……

But, since I don’t believe in the tooth fairy, Santa Claus, the Easter Bunny, or politicians to do the right things…

I’m in for the .25% cut to a .5% cut.

Then you can play Greece!

#48 Bob on 07.12.15 at 6:15 pm

Mark the United States is our biggest trade partner. We import most of our fruits from Florida and California! There is inflation in toronto. I live it everyday!

#49 Mark on 07.12.15 at 6:16 pm

“I know of many families who live here but the main income earner works elsewhere and most of the time earns way more than here and pays no tax.”

If you’re upset about it, the CRA has a program where you can rat them out for tax evasion. As all Canadian residents have a legal obligation to declare their worldwide income and pay tax accordingly.

http://www.cra-arc.gc.ca/gncy/cmplnc/otip-pdife/menu-eng.html

#50 Godth on 07.12.15 at 6:17 pm

DELETED

#51 Smudgekin on 07.12.15 at 6:19 pm

We badly need to adopt that U.S. strength where no president can sit for more than 2 terms. If the party wins a 3rd election a new leader must be chosen. These people who yearn for power you don’t let them get it for too long.
No Canadian prime minister should sit for more than two terms.

#52 DON on 07.12.15 at 6:20 pm

Garth’s pie chart seems right.

Lots of Albertans, some Ontarians (example: BIL Parent’s) and the older ones from Vancouver and the rest of BC. People of Asian decent – not so much in the way of residential houses (imo) but definitely commercial properties, especially hotels and resorts, which are usually just busy in the summer months.

By the way there are two main gangs in Nanaimo (drug hub) with money – the Hell Angels and the Vietnamese. There is one bar in particular where the gangs sit on opposite sides of the bar. I have also heard that the Scorpions and/or the United Nations both from Vancouver have entered the picture. Also rich Asian youth attend the Vancouver Island Universities.

But the local realtor signs are trying to create a fenzy in Nanaimo.

#53 Sheane Wallace on 07.12.15 at 6:20 pm

43 Mark

You are crazy. Organic apples at Whole foods are at $ 4 per pound, were 3.5 earlier this year and $ 3 last summer. Pretty much corresponding to ALL other prices increases I am noticing, at least 10-15 % maybe more (including the bacon shrinkage to 350 g from 500 g and price increase for the reduced package of 60 % on top).

The ONLY place where prices are rising slower is Costco, that’s why they have the insane traffic on the weekends.

Even Stats Canada is acknowledging the food inflation, I already posted that link earlier and you were trying to fight it out. Food prices specially for imported food are increasing steadily (most of our food is import from US and South America).

Food prices could be down only due to seasonality, but definitely consistently up on year to year basis,

#54 OttawaMike on 07.12.15 at 6:21 pm

I did nazi that coming.

#55 Sheane Wallace on 07.12.15 at 6:26 pm

#44 whitey

People are mostly angry that their savings are suppressed and devalued due to negative real interest rates and rampant inflation cause by irresponsible and excessive government guarantees on mortgages.

What you and the other stupid don’t understand is that the permanent damage to the economy from the housing folly and capital miss-allocation caused by it would be horrendous.

Bottom line – if you have kids there dream career would be maybe Starbucks if more intelligent or arranging shelves at Staples. That’s it. While the world moves ahead.

#56 DON on 07.12.15 at 6:30 pm

#26 Alex N Calgary on 07.12.15 at 4:26 pm

Hey Guys, I was just in Nanaimo a month ago visiting my parents, did a walk to the beach in Oakbay where we had walked 200 times before
******************************

Did you mean Oak Bay Victoria, where’s the Oak Bay in Nanaimo? Just curious.

#57 whitehorn on 07.12.15 at 6:31 pm

#26 Alex “It might be a minor % of transactions but its happening, I LIVE in a rental house in Calgary in a chinese area (edgemont) owned by chinese investors who don’t live in Canada brokered by their chinese friends who live here and take care of rental stuff (take care….).” I agree with your statements, although a touchy subject, and can relate based on my experience. I went out with a Chinese woman 30ish who owned 4 houses (1 Edmonton, 1 Calgary, 1 Canmore, and 1 Saskatoon), while her parents still lived in China but later immigrated to Canada. She definitely did not have the income to have all that property and found out later were all owned by her parents – directly or indirectly financial transaction (never did ask). Two of the places were rental and the other two were occupied by her parents and herself. So yes it is a percentage, I’m not sure the amount but does exist. In essence, your a Canadian citizen but the money transaction was done prior with Chinese funds.

#58 Sheane Wallace on 07.12.15 at 6:32 pm

And BTW house prices in Toronto and not declining but the opposite, increasing courtesy of Poloz & Joe and & CMHC & Co and with expected interest rate decrease they could easily move another 20-25 % as measured in the confetti called CAD.

It is amazing that one can still sell the shack, cash these confetti, convert into solid money and move out.

It is like every house owner in To/Vancouver winning from the lotto and having limited opportunity to claim the prize. Don’t be mistaken, this opportunity of a lifetime won’t last long.

#59 Mark on 07.12.15 at 6:34 pm

“This is the most clear and sensible thing I’ve read from you! A lot of the savers on this blog missed the real estate boat, seem bitter about it and want to see a crash. “

I’m not sure that people on this blog want to see a RE crash. I know that I’m perfectly happy buying non-RE investments at 20-30 cents on the dollar, because most of the investment community is obsessed with houses, bonds, and RE. In a way, the RE bubble is actually allowing prudent and smart people to acquire un-loved assets “on the cheap”, rather than being forced to even pay fair value for them as ordinarily would be the case if the markets were more balanced. As it stands, its trivial to buy 3X more earnings, and 5X more net cashflow in non-RE investments as it is in Canadian RE.

However, eventually I am going to want to buy a few houses, and the high prices have facilitated the creation of an enormous amount of fairly high quality supply which will be ripe for picking as the economy undergoes its usual cyclical change, and the tide of high RE/bond prices goes out. You can make a heck of a lot more money being a contrarian than you do just following the herd into already epicly-overpriced assets.

#60 John on 07.12.15 at 6:44 pm

OF course, this data proves that Asians have bid up Vancouver. Prices on the island are reasonable–because not only are there few jobs, but there is little foreign investment. Prices are insane in Vancouver because of foreign investment, or money laundering.

Not really. Victoria ain’t cheap. Van prices are high because 95% of the transactions are local-to-local and they’re nuts. — Garth

#61 100 Days to an NDP Government! on 07.12.15 at 6:46 pm

It’s coming, people !!!!

Not long now for a long-awaited positive transformation of Canadian politics.

Whether a stand-alone majority or coalition with the Liberals, major change and increased economic fairness is on its way for Canada.

Alberta was not a fluke. The countdown clock is ticking finally for Harper and all believers in neo-conservative nonsense.

http://www.huffingtonpost.ca/2015/07/08/ndp-popularity-poll-nanos_n_7754316.html

http://www.threehundredeight.com/

This new government will be the best way to deal with our upcoming economic hardships and real estate slowdown, rather than a government that remains in denial, with its leader hiding in a closet.

100 Days and Counting………..

#62 Jon on 07.12.15 at 6:46 pm

Are, you going with the theory of “eventually, I’ll be right”.

#63 tundra pete on 07.12.15 at 6:55 pm

If you don’t like “Surrey by the Sea”, you could always move south to “Drunken Duncan”.

Chinese mainlanders are going to eat this place up!

#64 omg the original on 07.12.15 at 6:57 pm

First, local realtors (in Nanaimo) started pumping the local media about offshore buyers targeting the area.
——————————-

Same deal here in Victoria – local RE board and agents talking up Ham influx. Even Michael Campbell, who’s a Saturday morning Vancouver investment radio guy, is talking up Vancouver Island as the next great Ham landing pad.

As I mentioned last week I have been doing the local open house rounds with a friend looking for an investment property – simply no sign of HAM.

#65 Sheane Wallace on 07.12.15 at 6:58 pm

#48 Mark

one idiocy after another, the pile of crap coming out of your keyboard is endless.

When you live and work abroad you can legally claim loss of residency.

Why pay taxes when you don’t get benefits anyway (e.g being 3 months absent voids your right on Ontario health care).

#58 Mark
Which part of: “There would be no meaningful house price correction from the top as we all go bankrupt otherwise” did you do not understand?

They will just kill the CAD, that’s it, no price corrections, even the opposite, prices will keep going up.

#66 Steve French on 07.12.15 at 6:59 pm

Garth:

Good points on a small group of racist idiots in Nanaimo.

What do you reckon on this story today from Oz? (honest question)

– Steve

————–

http://www.macrobusiness.com.au/2015/07/illegal-asian-buyers-raise-ghost-house-fears/

“If the government does not quickly fix the monitoring and enforcement of foreign investment, along with the Australia’s anti-money laundering laws, then residents’ concerns and accusations about illegal real estate purchases will continue to escalate, leading to a back-lash against new law-abiding migrants who wrongly get accused of driving-up home prices and pricing-out their children and grandchildren.

It’s an unfortunate situation that is in nobody’s best interests, and highlights the urgency of fixing the foreign investment regime.”

People in the world whose heads are the most messed-up by real estate: (1) Anyone in Australia, (2) Everyone in YVR. — Garth

#67 Sheane Wallace on 07.12.15 at 6:59 pm

#47 Retired Boomer – WI

Greece has a better weather!

#68 omg the original on 07.12.15 at 7:04 pm

60 John – Prices on the island are reasonable–because not only are there few jobs, but there is little foreign investment.
————————-

You must mean Port Alberni.

Pretty much anywhere else on the Island has been so grossly overvalued for so long people no longer realize we are in a massive generational bubble.

But because we are a conservative bunch it will take years to unwind.

#69 ed on 07.12.15 at 7:05 pm

RE #! JR “Nanaimo : ‘Surrey by the Sea’”

Ha, ha, so true. I prefer “Canker Sore by the sea,” but really the phrases are synonymous. I think the average IQ in Nanaimo is about 55 (which is the average income too–55,000). And I think there is something like 55% of self-employed are involved in selling houses, fixing up houses, or yardwork companies. What will happen to “canker sore by the sea” when housing starts its inevitable decline?

PS Think anti-Chinese racism is bad in Nanaimo, you should see out anti-aboriginal racism. Their cultural highlight says it all “Empire days”; I’m sure they are still saying residential schools were a great idea…

#70 Jimmy on 07.12.15 at 7:07 pm

That looks like the old Neighbood Watch sticker.
I still have one. Unused, about 6″ square.
Offers?

#71 Mark on 07.12.15 at 7:11 pm

” Organic apples at Whole foods “

I stopped reading the rest of your post right then and there. Whole Foods? The uber-high-end grocery store chain of which there’s what, only a half dozen examples of such in all of Canada catering to a very specific high-end clientele? Try comparing prices at chains that most Canadians shop at. You’ll see that they most certainly have not gone up anywhere near what the differential between the current and present CAD/USD pair implies.

#72 Mark on 07.12.15 at 7:13 pm

“When you live and work abroad you can legally claim loss of residency.”

But you can’t have any assets in Canada then. Nor be in Canada for anything but trivial amounts of time. Obviously not something that applies to these alleged foreign “families” buying Canadian RE. Familiarize yourself with the process of becoming a non-resident.

#73 ed on 07.12.15 at 7:14 pm

RE #v26 Alex N Calgary

The mark of a racist is to be able to pick a needle out of a haystack. There is a 20th Century example and many recent ones of what happens when a whole nation starts identifying anyone a little different than the official line, making them scapegoats and targets…

#74 Rexx Rock on 07.12.15 at 7:23 pm

I remember in 1993 sitting in a hospital bed in Vancouver and talking to the guy beside me about real estate.He said his wife is a realtor and that a guy bought 10 houses from her and he was from China.He bought the houses unseen just for an investment.Thousands and thousands of house have been bought from Chinese investors since the mid 80’s.Its just business,get over it.

#75 Freedom First on 07.12.15 at 7:26 pm

Yes. That question says it all. Higher house prices or to get elected. The job of a Political party is to get elected.

On a personal note. I am always worldly/asset diversified, but I have been overweight cash for the past year, and just invested in a Canadian energy ETF last week after a substantial drop this past year. I do not care about hitting absolute bottoms. I care about good value, operate with a long horizon, and am always liquid and nimble to move quickly. There is going to be more great deals coming soon in Canada.

Patience, knowledge, and discipline, which are in short supply, pay extremely well. Ignore the [email protected], the MIL, the BIL, your co-workers, the crazy that comes out of your own mind, and the MSM. Become self-educated and you will do well, even if you only get financially educated enough to be able to find a good financial adviser.

Also, an absolute must: stay away from doomers and anyone pushing an all-in ANY one asset strategy, as no one knows what is going to happen. No exception. None.

#76 AB Boxster on 07.12.15 at 7:27 pm

#36 Mark

——————————————————————-

The real trolls are those who claim that “low interest rates” are hurting seniors and the fixed income crowd.

Seriously?

Sure the past 10 years may have produced the magic 7% returns with Garth’s mythical balanced portfolio.
But with massive amounts of volatility.
Volatility in savings and income is not what seniors, or soon to be retired persons, need with their finances.
They need the stability that comes from reliable fixed income investments.
They do not have a long timeline to ‘wait for the markets to go bullish’
At 30, who cares if your retirement savings tank for 10 years. At 60, it may mean cat food, or how about just not taking them drugs.

They don’t need 10% CIG’s. How about a crappy 4% reliable return, before inflation.

The effects of inflation are vastly overrated, especially for seniors and retirees, unless you have poverty level incomes.
Boomers would delight in a higher interest rate environment.
At least one that has not been artificially kept low for the past 5 years.

Low interest rates have made most seniors and boomers spectacularly wealthy through housing and bond appreciation.

Housing wealth is a falsehood. Most seniors will stay in their homes and downsizing for the average senior nets little. Their wealth is in their savings, not in their homes.

Low rates have facilitated government borrowing to pay for extravagant health care and social welfare programs for seniors.

You mean that extravagant health care that all Canadians (not only seniors ) take advantage of?
The one the does not cover prescription drugs or eyeglasses or dental care, (which oddly enough disproportionately affect seniors) right?

To put a little bit more money into the pockets of people with their ‘savings’ accounts who mostly don’t spend very much money anyways? To make equity less attractive when more equity investment is desperately needed in the Canadian economy?

Really? Because having extremely advantageous taxation of capital gains and dividends is not enough incentive to play in the equity sweepstakes?

Look, no one begrudges those who believe that they can win at the markets.
Create your balanced portfolio.
Be as successful as you can.
If you can succeed in the global financials sweepstakes game, the more power to you.
If you fail, please be sure not to complain.

However, don’t begrudge those that want a marginally better fixed rate of return, and who don’t have the risk tolerance, of financial understanding, or the time or energy to give a ‘shit’ about managing a balanced portfolio.

Rates have been held artificially low for far to long with disastrous consequences.

Time for rates to rise.

#77 young & foolish on 07.12.15 at 7:28 pm

Exactly …. politics first, economics second (as always)

#78 gladiator on 07.12.15 at 7:30 pm

Garth, you say it’s locals who buy 1.2M-dollar houses (average price) on Vancouver island – per the realtors-who-are-usually-not-to-be-trusted-but-we’ll-trust-them-now pie chart.
But let’s suppose this is true: 95% of buyers are locals. Also, let’s throw in the bank-of-mom effect to assume that the downpayments come from parents; shall we say 100k would sound reasonable? Now, with an average family income of 80k, with a downpayment of 100k – how do the buyers get their mortgages approved? 1.1M dollars on average being borrowed based on 80k average salary? Hmmmm. If this is really happening – maybe the banks are crazy for lending over 10x the family income to house buyers, not the buyers? But are the banks THAT crazy? I think not.
So there is something else going on that cannot be captured by official data. 1M+ dollar houses are selling like hotcakes in a city with 80k average family income and it would be safe to say that banks will not lend over a million to such an average family.

Since when do first-time buyers with a $100K down payment from Mom buy $1 million houses? — Garth

#79 Scumop on 07.12.15 at 7:31 pm

#53 Sheane Wallace I’m not an organic foods guy. I see food prices are up elsewhere too. And gasoline here the same as it was before $ and oil both went south.

As a token member of the working poor here, I am saddened by a failure of many to recognize there is a problem. If it must have a name, maybe that name is stagflation (prices up, economy stagnant).

But still working, unlike too many Greeks plus more than a few roughnecks and others formerly in Alberta’s oil biz. For them, the price of food does not have to be inflated for it to hurt.

#80 Mark on 07.12.15 at 7:31 pm

“is the U.S. Fed more independent from political pressure than the BOC?”

Considering that David Dodge practically resigned his post at the BoC on account of the government’s pursuit of subprime mortgage guarantees at the CMHC, there’s a pretty good argument to be made of significant political independence of the BoC.

If anything, in Canada, the government has done almost everything in its power to undermine the BoC. The BoC has excellent credibility in sticking to its inflation fighting mandate and the 2% inflation target.

A similar situation in the US. If anything, it appears that the Fed is trying to bury Obama and his political cousins with all this talk of an interest rate hike when the economic data has very little support for such. The suggestion of political interference or conspiracy is bizarre when the actions seem to point to quite the opposite.

#81 lose-lose? on 07.12.15 at 7:36 pm

Garth – in your mind, what is a win-win situation? (re: following your ‘rhetorical’ question – recession or higher house costs).

I remember in 2008/9, the talk about “not enough stimulus” vs “bailing out the bank/ers” — was that we would have a ‘lost decade’.

So was that really so bad? Maybe if you are a young person and unemployed, it was… but the governments job is to help the masses

And unfortunately, if the masses are over-in-debted, that’s who ends up getting the help.

So what do you propose? How will _government_ fix the problems? What should it do?

#82 Oceanside on 07.12.15 at 7:36 pm

#30 TRT on 07.12.15 at 4:42 pm
Realtors put together that circle pie chart. Trust them this time?

Show me your data. — Garth

I have seen in house pie charts for one of the largest real estate companies in Canada and pretty similar. Lots of buyers from Victoria, Vancouver and Alberta, most are local.

#83 B Riding Dirty on 07.12.15 at 7:36 pm

Garth, I know you are a True Canadian. But what does that even mean anymore. As a kid who grew up in Surrey and Burnaby BC. I was part of the great Pierre Trudeau vision of multi cultural Canada. But it has gone way past that.

Richmond BC schools are 90% asian, mostly first generation, Surrey BC is Indo Canadian 80% in most area’s. Abbotsford is in the 50%, Burnaby is 70%.

These are the kids in schools. Problem is Garth, it is a problem for the face of Canada.

Come out west and hang out, see what language you hear kids to parents speak, read the store signs. No sign of French and half English if lucky.

I do not agree with acting racist, I do believe that white people are a minority. And the flow of immigrants will weaken our already fading identity of whatever it does mean to be a Canadian anymore.

Ethnic makeup of Canada includes: English or French – 26.7 million. Chinese – 1.34 million. SE Asian – 1.26 million. Feel more secure now? — Garth

#84 Andrew Woburn on 07.12.15 at 7:47 pm

#6 Time is #1 on 07.12.15 at 3:02 pm
#1 JR Nanaimo : ‘Surrey by the Sea’
Correction. North Surrey by the Sea.
#7 bdy sktrn on 07.12.15 at 3:06 pm
#1 JR on 07.12.15 at 2:27 pm
Nanaimo : ‘Surrey by the Sea’
————————
oceanfront in either will still do just fine.
============================

I live in oceanfront in Nanaimo. The only part of Surrey it looks like is Crescent Beach.

The Surrey by the Sea thing might have been a good joke 30 years ago but it doesn’t make sense anymore. It’s not much of a blue collar town these days. There are a few sketchy blocks of in the old part of town but nothing as nasty as Whalley or the Downtown Eastside. I hear we have bikers but I haven’t seen them. I used to see them all the time in Vancouver. I know for a fact that at least one senior HA lives in West Vancouver. Though if you really want bikers, I hear the best place to go is Kelowna.

#85 young & foolish on 07.12.15 at 7:49 pm

Debt, debt, and more debt (these days, it makes the world go around)

#86 X on 07.12.15 at 8:11 pm

Would a rate cut really make a difference in the economy, to have our dollar at 76c instead of 78c on the USD? A rate cut would only confirm what most already suspect, that Poloz is simply a yes man for Harper.

Make another rate cut if that is best for the economy, but without changes to the RE market, it is like leading the sheep to financial slaughter. At some point you really have to feel sorry for some so foolish, to leverage so much, simply because they were allowed to borrow so easily.

#87 Bottoms_Up on 07.12.15 at 8:13 pm

There is a 3 billion dollar stimulus being paid to families with kids on July 20th. No way they’re cutting rates.

If they do cut rates, that will be a clear sign how tight the BoC is with the PMO.

#88 eddy on 07.12.15 at 8:16 pm

@#43 mark.

Your skills are wasted here. You remind me of a guy I knew who used to sell penny stocks and worthless junk investments over tbe phone.
His favorite saying was.
“bullshit baffles brains”

#89 Nagraj on 07.12.15 at 8:19 pm

– before MADAME Du BARRY
popped into my head (hootin ‘n’ hollerin’ all the way to the guillotine) I was thinking about PINSTRIPE BLACKSHEEP and BLACKDOG and one or two other posters who got on the wrong side of GARTH re Greece.

Of course if one spends years warning the public about the housing bubble, and in the end discovers that almost nobody listened (and on top of that has to watch his country go to economic hell in a Conservative basket) well, such a one may be forgiven for dismissing collective behaviour and positing “the democratic flaw”.

In defence of PINSTRIPE BLACKDOG BLACKSHEEP et al, let Nagraj ask this: What the hell has leadership got to do with anything? Leadership is the crest of the wave, and the crest goes where the wave takes it.
The flawed demos has ways and means of ridding itself of contrarian leadership; it’s not as if there weren’t a mess of new aspiring leaders waiting in the wings, all the time.

This does not of course obviate Garth’s charge of collective error. But to suggest that enlightened leadership will make a critical difference is too idealistic.

The Greek drachmatic drama is still a work in progress. For all we know Tsipras may go the way of Du BARRY (and Harpo certainly will).

[Thatcher on the Euro: “Over my dead body.”
Thatcher on the Eurozone: . . . substituting conquest by the Bundeswehr with conquest by the Bundesbank.]

#90 David on 07.12.15 at 8:19 pm

Garth, sorry to have to tell you but Nanaimo’s “world-class strip bars” have all closed.

And we’re worried about HAM? Where is the perspective? — Garth

#91 Andrew Woburn on 07.12.15 at 8:22 pm

#4 Jackie DiAngelis on 07.12.15 at 2:44 pm
When are they going to increase deposit insurance for CDIC.
=========================

Although I agree with Garth that this is a non-issue, I suggest that people who really worry about banks shouldn’t keep much of their money in them.

If you are really hell bent on worrying, worry about the fact there simply isn’t enough in the insurance fund to cover a major shortfall. If you have cash at a credit union, worry about how much you trust your provincial government to do the sane and honourable thing in a crisis.

If you want a serious government guarantee, buy government bonds. They are backed by the full faith and credit of the Government of Canada. If we ever get to the point that the GofC defaults on its bonds, CDIC would already be toast and the country has problems beyond reckoning.

Another belt and suspenders approach would be to invest in US or Canadian bonds through a brokerage owned by a major bank. A deposit or GIC held in your name at a bank is legally just an unsecured debt. An account at a brokerage firm is legally a trust account, they hold it on your behalf and they may face criminal charges if they fail to make good on it when you ask for it back. You also get insurance up to $1 million. No major bank is going to let its brokerage subsidiary collapse.

Large businesses and money market lenders cannot rely on CDIC so they use government guaranteed bills and bonds as security.

#92 David W 2 on 07.12.15 at 8:24 pm

Garth, u focus too much on Vancouver. There are more cities than this in Canada (of course some matter more than others). How about cover Ottawa? This is supposedly a safe city – is it?

So long as you get out by October 19th. – Garth

#93 DON on 07.12.15 at 8:34 pm

#69 ed on 07.12.15 at 7:05 pm
RE #! JR “Nanaimo : ‘Surrey by the Sea’”

Ha, ha, so true. I prefer “Canker Sore by the sea,” but really the phrases are synonymous. I think the average IQ in Nanaimo is about 55 (which is the average income too–55,000). And I think there is something like 55% of self-employed are involved in selling houses, fixing up houses, or yardwork companies. What will happen to “canker sore by the sea” when housing starts its inevitable decline?

PS Think anti-Chinese racism is bad in Nanaimo, you should see out anti-aboriginal racism. Their cultural highlight says it all “Empire days”; I’m sure they are still saying residential schools were a great idea…
.

*******************************8

I’ll take Nanaimo over Surrey anyday. Just limited jobs in Nanaimo, unless as you have mentioned you want to work in housing related businesses. I have noticed that up and down the island new house builds in the spec category are hard to find (used to see multiple on one small street – now not so much- back to normal.

The island has become a shortterm residence for retired generations. Port Alberni is very affordable but the jobs hare hard to come by – especially for outsiders. Beautiful, hot summers on average, but foggy, damp winters. They are having a hard time recruiting retirees as the road in and out is steep, narrow in parts (around the lake).

Courtney area – specs homes have gone down in value. Most communities will have to once again reinvent themselves once the boomers start to move on. Perhaps working remotely will kick in bigtime.

Cheers,

#94 Smoking Man on 07.12.15 at 8:38 pm

So long as you get out by October 19th. – Garth

No shit.

#95 Lorne on 07.12.15 at 8:39 pm

Hey Guys, I was just in Nanaimo a month ago visiting my parents, did a walk to the beach in Oakbay
…….
You must walk at quite a pace….it is 115 km from Nanaimo to Oak Bay, which is in Victoria!

#96 Harbour on 07.12.15 at 8:43 pm

Don’t apply for old age pension, apply for refugee status.

A refugee gets $1,890.00 a month and an additional $580.00 in Social Assistance for a total of $2,470.00

A pensioner after contributing for 40 or 50 years get’s a maximum $1,012.00 in Old Age Pension and Guaranteed Income Supplement

Maybe our pensioners should apply as refugees!

That was incorrect when it first made the rounds among Reform Party bigots 20 years ago. It’s still incorrect. — Garth

#97 Shawn on 07.12.15 at 8:44 pm

Debt is Bad?

#85 young & foolish on 07.12.15 at 7:49 pm said:

Debt, debt, and more debt (these days, it makes the world go around)

******************************************
Yes, and would you like debt to stop at the expense of the world stopping going around? (The economy grinding to a halt)

Debt per capita of the world has probably been increasing since the first caveman borrowed dinner from another and promised to pay back when his own hunt was more successful.

In the last 2000 years almost all transactions and production of goods and services have changed from do it yourself and barter to monetary based. The trend continues (day care versus stay-at-home Mom)

It has been pointed out that cash itself is a debt of sort (cash in effect represents goods and services owed to you by the economy as a whole that you can cash in any time.) Someone described cash as like a gift card that can be used anywhere. The description is apt. Gift cards are of course a debt of a merchant.

Most “money” is in the form of bank deposits. That is literally a debt of a bank to you.

Yeah debt makes the world economy go around and has for quite a few years and always will in the future.

No, Canada and Ontario etc. will never “pay off” all their debts nor do they need to since they are immortal. Get used to it.

#98 Bottoms_Up on 07.12.15 at 8:45 pm

#57 whitehorn on 07.12.15 at 6:31 pm
—————————————
Foreign ownership, if it does contribute to inflated real estate, was likely unofficially welcomed for decades. I dont hear past owners complaining of having made money in real estate. Only now that prices have become unaffordable has the spot light started looking for an easy target. I agree with Garth, the overall impact of foreign money on prices has got to be small. Not saying its fair that Canadians might have to compete with foreign money, but your likely competition is likely not from Beijing.

#99 the jaguar on 07.12.15 at 8:50 pm

Interesting to read some of the comments (#26) that reveal the small minds present in the western provinces. Alberta usually gets the ‘rap’ as the ‘redneck’ province, but the reality is quite different. It is the smaller places in BC province (especially the BC interior) and ‘the island’ outside of Victoria where you will uncover the anti-immigrant sentiment. Those areas hate the Albertans too, who arrive with more money and work ethic than the locals. The new arrivals irritate them. It has been this way FOREVER in Kelowna, Vernon, Penticton, etc. Same thing in Duncan, etc on the Island. There are some places on Vancouver Island that don’t even have electricity. Think the movie ‘Deliverance”. Hillbillies. Parts of the BC interior as well. Someone told me Smith Falls, Ontario is like this. Dunno. Just think this small mindedness is a very scary thing. When considering a retirement destination it pays to consider not just the climate, but the attitude of the locals.
I know these comments will infuriate some, but doesn’t mean it isn’t true.

#100 Tim on 07.12.15 at 9:01 pm

#83 Sorry man but Nanaimo stinks and is full of strip malls. Whenever I ride the ferry to Nanaimo it is full of rednecks. Once you get outside the city it is nice, but there is a reason real estate is cheap there….

#101 Bucky on 07.12.15 at 9:03 pm

“saw a 17 or 18yr old Chinese kid in a brand new corvette”

Gotta say, overwhelmingly fits the profile of an MLC kid. Self-respecting 18 year old Canadian kids, including those of Chinese ancestry, wouldn’t be caught dead in a mid-life crisis car like a Vette. Or tastelessly customized Lambos, which just shout out “I have more dollars than sense”. This is a neuvo-rich thing that MLC folks are weirdly prone to – wonder if they hang out with 55-year old divorced white car salesmen?

Real tuners would drive an Evo or BMW.

#102 sockeye sam on 07.12.15 at 9:06 pm

It’s all Greek to me!

Greece is the word is the word is the word!

The Greeks don’t want no Freaks!

Build em up and mow em down. Crunch crunch crunch.

Everyone is welcome. Come on in.

#103 Harbour on 07.12.15 at 9:10 pm

I found it myself

http://ccrweb.ca/en/refugees-and-income-assistance-rebutting-chain-email-pensioners-myth

#104 Sheane Wallace on 07.12.15 at 9:29 pm

#71 Mark

You should have read it, I hate to waste my time to educate idiots who are not hearing.

#72 Mark

You continue with your idiocies, do you make difference between being non resident and severing ties with canada/permanent leave?

Are you really that stupid, boy? Are you saying that ownership of assets makes me resident here?

Maybe I should forfeit my CPP and OAS as well?
Stupid as it goes.

#105 Sheane Wallace on 07.12.15 at 9:30 pm

forgo. damn the spellchecker

#106 Mark on 07.12.15 at 9:32 pm

“Sure the past 10 years may have produced the magic 7% returns with Garth’s mythical balanced portfolio.
But with massive amounts of volatility.”

I can’t speak for Garth, but I don’t believe balanced portfolios haven’t suffered much volatility compared to historic levels. When equities went down, bonds went up. And vice versa. A GIC might not appear to have much volatility to the lay person, but that’s only on account that there’s no liquid market in which they are traded.

“They don’t need 10% CIG’s. How about a crappy 4% reliable return, before inflation.”

That’s a 6% nominal return assuming inflation = 4%. The economy doesn’t even grow that fast most of the time! Mathematically unsustainable, even if somehow the risk premia on equity (risk capital) is somehow truncated to zero.

You mean that extravagant health care that all Canadians (not only seniors ) take advantage of?
The one the does not cover prescription drugs or eyeglasses or dental care, (which oddly enough disproportionately affect seniors) right?

My province pays for all prescription drugs for seniors if they earn less than $60k/year. And all hospital care. This amounts to a very substantial transfer to senior citizens which may not be quite as sustainable in a higher interest rate environment.

I’m not arguing against taking care of the elderly. But I’m merely pointing out that a future with high interest rates wouldn’t be all sunshine and unicorns. And that such extravagances would find themselves severely under stress from a fiscal point of view.

Really? Because having extremely advantageous taxation of capital gains and dividends is not enough incentive to play in the equity sweepstakes?

The TSX has barely advanced since 2000. The economy has obviously grown substantially. Canadian stock investors have barely made anything over the past 15 years, and haven’t seen a realized equity risk premium in a generation (ie: fixed income and stocks have had similar returns!). This has led to a chronically weak domestic economy to the point where our ‘best and brightest’ are routinely encouraged to leave as soon as possible.

#107 Mark on 07.12.15 at 9:32 pm

“That’s a 6% nominal return assuming inflation = 4%.”

Sorry, meant to say, that’s a 6% nominal return assuming inflation = 2%.

#108 Mocking Sam on 07.12.15 at 9:33 pm

#78 Gladiator – That pie chart was from Vancouver Island, not Vancouver. I would imagine most of the houses sold on the Island go for much less than a million. I think what Garth is provoking you with is whether or not the same breed of racist weenies (or at least a more sober, wealthier, and educated version) are among the ones complaining about HAM 50 km to the east.

#109 Andrew Woburn on 07.12.15 at 9:34 pm

“U.S. crude oil prices have plunged by 11 percent over the last two days to a low of $50 a barrel before settling at $52. The mainstream-media blames the fall in prices on the turmoil in China and Greece, but the real driver is the outbreak of discounting by U.S. oil-rig operators.

The resulting fall in the average U.S. “break-even” cost necessary to sustain domestic oil production is now around $32 per barrel. America’s new hyper-competitive cost structure has launched a second wave of an oil boom that threatens to bankrupt OPEC.”

While I think this article overstates its case, it does show that the idea that US shale production would collapse by the fall is perhaps premature. My guess is it won’t crash until a significant number of producers default on their debts. If WTI creeps back towards $60, that could be a long time.

My reading of the tea leaves is that if you are an established oil sands producer with iron in the ground, you can ride this out. If you have Canadian shale oil/gas leases, the experience now being gained by American producers will make your investment profitable. If you only have prospective oil sands properties, find something else to do with your life.

http://www.breitbart.com/big-government/2015/07/08/second-wave-of-u-s-oil-boom-will-bankrupt-opec/

#110 Leo Trollstoy on 07.12.15 at 9:48 pm

There is no deflation. — Garth

Not surprisingly, Garth is right.

I’m also divided on whether or not the BoC should cut.

On the one hand I have a large U.S. real estate portfolio that throws off USD and a cut would boost everything.

But…

The same rate cut would juice the Toronto and Vancouver real estate market even more. And prices in these two cities have been increasing a lot over the last few years.

I’m torn.

Leaning towards hoping for a cut. It’s all out of my hands. I’m going to win either way.

#111 Mark on 07.12.15 at 9:51 pm

“You continue with your idiocies, do you make difference between being non resident and severing ties with canada/permanent leave?”

Its not my job to educate you on the process of becoming a non-resident of Canada. But it requires that one sever substantially all of their financial ties to Canada. In a nutshell, one cannot own Canadian RE as a Canadian citizen and be a non-resident. Therefore, if the foreign neighbours are earning money offshore, and not declaring it as required on a Canadian return, they are committing tax fraud.

“Are you really that stupid, boy? Are you saying that ownership of assets makes me resident here?”

I’ll defer you to the CRA page on the topic instead of indulging further in your disrespectfulness:

http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html

Not only that, but the CRA takes a very hard line on people who try to have one foot in, and one foot out the door:

http://www.taxspecialistgroup.ca/public/taxPerspectives.asp?art=83

#112 Leo Trollstoy on 07.12.15 at 9:52 pm

Jackie, be aware that the masses never appreciate success, especially among one of their own. (They are okay with sports star and celebrity success because those are not people like them.

I agree. Forget the masses Jackie. They’re jealous.

#113 Mark on 07.12.15 at 9:54 pm

“My guess is it won’t crash until a significant number of producers default on their debts. “

Good post. Not only that, but the creditors of the projects themselves will take over (as a debt to equity swap), and drive costs down relentlessly. Attempting to salvage what they can from the investment.

Which means the liquidation cycle is going to take a while. Just like the RE bubble and its crash, it won’t be over next year. That’s for sure.

#114 Leo Trollstoy on 07.12.15 at 9:55 pm

describes how our population is buying more than it sells. And where is that income

Sadly this is true. The data clearly shows that Canada is a nation of importers, not exporters.

But there is still no deflation. Nor will there be.

#115 -=jwk=- on 07.12.15 at 10:01 pm

Rate cut and CMHC max insurance of 3 times your annual earnings as reported to CRA, averaged over last 3 years.

Instant housing correction.

If they want to lower rate and not affect housing, it’s trivial. They own both the rate and the CMHC. But they won’t. They cut rates and that act surprised that prices jumped. Again.

#116 Leo Trollstoy on 07.12.15 at 10:01 pm

so if the peeps in gov drop rates again we can expect another few cents shaved off the Canadian dollar.How low can they go without pushing inflation on imported consumer goods further stressing the consumer.

You’re correct, but Canadians will be lucky if it’s only ‘a few cents’. It’s already been over 30 cents since the high of $1.10 USD to the CAD.

Getting your money into U.S dollar based investments is proving a prudent move.

It was obviously prudent when it was $1.10 USD to the CAD but only a few did it. That ship has sailed.

#117 Leo Trollstoy on 07.12.15 at 10:04 pm

“I believe others when they say Mark is an internet troll because if it was up to him, nobody would be responsible for anything like paying their bills.”

Just like you and Garth, I also agree that Mark is a troll.

It’s unfortunate that he enjoys misleading newbies. It’s wrong. But in the end he has to live with himself.

#118 webbedout on 07.12.15 at 10:07 pm

Garth

Any reason you do not use LinkedIn?
What other social media, besides specialized blogs such as this one, do you recommend for investors?

LinkedIn = job search. I already make millions from this free blog. — Garth

#119 Leo Trollstoy on 07.12.15 at 10:08 pm

CAD going down big time will further drive inflation, just go to any grocery store.

Mark is underemployed. His parents buy his groceries. That’s why he gets his knickers in a knot when Garth writes about 20 somethings that earn 6 figures. Anybody who has money doesn’t care what a 20 year old earns.

#120 Andrew Woburn on 07.12.15 at 10:12 pm

#69 ed on 07.12.15 at 7:05 pm
RE #! JR “Nanaimo : ‘Surrey by the Sea’”

Ha, ha, so true. I prefer “Canker Sore by the sea,” but really the phrases are synonymous. I think the average IQ in Nanaimo is about 55 (which is the average income too–55,000). And I think there is something like 55% of self-employed are involved in selling houses, fixing up houses, or yardwork companies. What will happen to “canker sore by the sea” when housing starts its inevitable decline?

PS Think anti-Chinese racism is bad in Nanaimo, you should see out anti-aboriginal racism. Their cultural highlight says it all “Empire days”; I’m sure they are still saying residential schools were a great idea…

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

I realize a lot of people seem to desperately need to kick Nanaimo around but times change. South Carolina has killed the Confederate flag. Nanaimo has killed Empire Days.

Nanaimo elected a 20 year old black Canadian to City Council in 2011 and a Chinese Canadian this election. The local native band works closely with the City on all important decisions.

Nanaimo is growing fast, has a good mix of government and knowledge workers. The University brings in students from all over the world. Higher end house prices are rising steadily. The two waterfront properties that just sold on my street just went for over $1 million each which, anywhere outside of YVR and the GTA is real money.

The Elder courses at the local university are well subscribed and we have a choice of live streamed Royal Opera or the Met as well as British theatre productions. The local arts scene is strong and growing. Nanaimo has many beautiful city parks. The notion that we are all slope-browed knuckle-draggers is farcical.

I get it if you haven’t been here since 1973 but try to keep up.

“Society vote scuttles Empire Days celebrations”

http://www.nanaimobulletin.com/news/294277461.html

#121 Leo Trollstoy on 07.12.15 at 10:14 pm

#65 Sheane Wallace

Your posts are sensible, but you have to understand that you can’t reason with a troll. Garth, Jackie and I have already called him out. He just likes to stir the pot and mislead the newbs. Let him have his perverted fun.

#122 Leo Trollstoy on 07.12.15 at 10:19 pm

[Mark] Your skills are wasted here. You remind me of a guy I knew who used to sell penny stocks and worthless junk investments over tbe phone.
His favorite saying was. “bullshit baffles brains”

Lol!

Great comment.

#123 Nemesis on 07.12.15 at 10:26 pm

#Nanaimo’sSpectacular… #RoadSideAttractions,Or… #”Ooops,WrongBarbie”…

https://youtu.be/uJMPom6-xmA

#AbsenceMakesThe… #Or,AProdigalSonReturnsToTheCRD…

https://youtu.be/QD0cE8B5Dj0

#124 Sheane Wallace on 07.12.15 at 10:31 pm

# 110 Mark,

Here is a link (read it well) that explains how you can get non-resident status and keep your home in Canada, by renting it out.

http://www.hutcheson.ca/articles/severing-ties-with-canada/

As for the assets: just move them out (except RRSP), sell the car and you are pretty much set.

Nobody/even CRA can force you to liquidate RRSPs in order to prove non-residency.

#125 IMF on 07.12.15 at 10:32 pm

October 20, U.S. loses its world reserve currency status to China or the SDR, dollar plummets, interest rate hikes. Game over Canada, esp. Vancouver. The end. The game is just getting started. IMF reserve currency review every 5 years. The time has come. The awakening.

#126 Dee on 07.12.15 at 10:35 pm

@#12 zee

If they live here, they pay income taxes here.

Regardless of whether they live here or not, if their family lives here and lives off that income, they pay sales tax, real estate/land transfer tax, property tax, etc etc etc here.

I don’t know how many families have one earner in another country, but if that’s the case, we should celebrate that — that’s money coming straight in and going to businesses–and, thus, people (employees or owners)–here.

Nothing to be afraid of.

#127 Cyclist on 07.12.15 at 10:39 pm

23 Boomer – yeah it would be good to do just so he could say “look I can do this”

76 Boxster – good points

Re: nanaimo – Born there. Left. No plans to go back.

#128 webbedout on 07.12.15 at 10:42 pm

Ethnic makeup of Canada includes: English or French – 26.7 million. Chinese – 1.34 million. SE Asian – 1.26 million. Feel more secure now? — Garth”

Garth, you don’t often get it wrong, but here you have jumbled up languages, ethnicities and geographies. Am also pretty sure your 1.26 million number is for South Asians, not Southeast Asians! A quick google search will confirm this for you…

I’ll give you the SE/S but the numbers are safe. Remember that the poster was clearly talking about a white Canada. — Garth

#129 DON on 07.12.15 at 10:43 pm

#84 Andrew Woburn on 07.12.15 at 7:47 pm
============================

I live in oceanfront in Nanaimo. The only part of Surrey it looks like is Crescent Beach.

The Surrey by the Sea thing might have been a good joke 30 years ago but it doesn’t make sense anymore. It’s not much of a blue collar town these days. There are a few sketchy blocks of in the old part of town but nothing as nasty as Whalley or the Downtown Eastside. I hear we have bikers but I haven’t seen them. I used to see them all the time in Vancouver. I know for a fact that at least one senior HA lives in West Vancouver. Though if you really want bikers, I hear the best place to go is Kelowna.

**********************************
It is still a blue collar town, it is just that the retirees are gaining in population, that is just a short term solution. I happen to know for a fact that a couple of the senior bikers are still in Nanaimo, very low key…better for business that way. Gone are the days when you would see numerous members cruising in 10+ or wearing their patches. Most are low key and live in the outskirts surrounding the municipalities. I happened to run into one at a local bar (accident – I looked up and saw two giants surrounding him – I apologized and the apology was returned)

Just because you don’t see it doesn’t mean it is not happening. Yes ocean front in Nanaimo is cool, but things in Nanaimo didn’t change when you moved there. Lots of contractors in Nanaimo struggling at the moment as there is not enough work to go around. It has peaked.

Not a blue collar town…LOL. It is the hub of blue collar and drugs. Why else was the RCMPs drug task force located there at one point. We are talking crack, ice, cocaine, meth etc. I have a middle class land lady at one time for a brief period in Nanaimo in the Rockland area, nice area close to you (nanaimo is small) – her son was in with a Vancouver gang, he was selling out of her house when she was at work.

But eh I would take Nanaimo over surrey or whiterock anyday. You do live in a better/safer area in comparison. But no jobs for the young who spend to support the local economy. Take Qualicum Beach for example, they no longer have to build new houses to accomondate the influx of retirees, as people are checking out on a daily basis, houses are sitting empty. A case in point – my BIL’s mom and dad moved into a nice community close to dowtown, the beach etc about 7 years ago, older couples in neighboring houses, not anymore. The owners of the local Quality Foods grocery chain (island only at the moment) realized that older folks eat less and buy smaller portions.

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

#130 pete on 07.12.15 at 10:46 pm

This is the best blog hands down. Garth you are the man. Please go back to politics…. Canada needs you more then ever.

#131 Smoking Man on 07.12.15 at 10:47 pm

Driving on the highway of life.. At the end of the road. Death.

You can’t escape it.

Now you can drive slow. Hoping your road has a few more miles.

Or you can drive fast, goals, achievements that can be posted on your obituary.

Me I drive with one foot working the wheel, the other on the accelerator.

But I’m not looking down the road, could care less if im staying in my lane, my eyes to the right, to the left, to the sky. Enjoying the view.

I know no matter what. This road is short.

Enjoy the view, don’t let the small stuff piss you off.

Happy Birthday to Me.

Got one more in…

#132 Capt. Obvious on 07.12.15 at 10:47 pm

Well, you’d hope they’d make this decision based on whether lowering rates would spur any additional BUSINESS activity. You know, the stuff that actually pays the bills. If it just leads to more consumer debt gorging that really isn’t helping the long run prospects of the economy, of which said BoC should be interested.

Classic Canadian line from Poloz would be “if necessary I’ll deliver dollar bills from my canoe to every household”.

#133 Capt. Obvious on 07.12.15 at 10:55 pm

The TSX has barely advanced since 2000.

Come now Mark, you’re cherry picking your starting point. Nortel days. Pick October 2002. Different story.

And of course fixed income has done well. Interest rates went basically to 0!

#134 B Riding Dirty on 07.12.15 at 10:57 pm

Ethnic makeup of Canada includes: English or French – 26.7 million. Chinese – 1.34 million. SE Asian – 1.26 million. Feel more secure now? — Garth

………………………………………………………………………

I am not trying to come across like one of these “but we are different in Vancouver” people on here. But we live in a city, a culture here, were it goes like this……

Rich oversea “Ethnic” money buys house off 2 or 3 maybe fourth Canadian. They then buy a House in the Fraser Valley or Coquitlam area for half or less then they sold for in the city or surrounding main areas ( BBY, North Shore) then they buy there kids ( who probably still lived at home part of the reason of there parents down sizing) a major down payment or out right a condo or townhome more then likely in the city or suburbs.

So one high price home sold to a “Over sea Ethnic” causes a house of cards effect across the fraser valley house prices.

But I am preeching to the choir, or to the preecher.

And to answer your question, Yes, and as always your Purple Koolaid tastes great. Just wondering when will I finally get drunk off it?

#135 SWL1976 on 07.12.15 at 11:05 pm

Well I was in Nanaimo today and wanted to share a sad real estate story in this comments section, so fitting this post is about Nanaimo.

We recently got a new puppy and while I was in Nanaimo I called about an add for a used dog crate for sale. I went to pick it up and the guy I was buying it off was at a RV park. While I had never been there before, once I arrived I mentioned that it was quite a nice little park.

So, I say to the fellow must be nice to stay up here for the summer, and he mentions that he lived there full time. He goes on to say that the bank told him to sell his house or they would foreclose. He mentioned that he was happy to get enough money out of the deal for a down payment on the 5th wheel he was living in, mentioned he had to give up his truck to tow it because the cost to fix it was too much for him to afford. Poor, guy looked to be in his mid 50’s and now has his life crammed in a 5th wheel that he doesn’t even own outright, and without even a truck to tow it.

I thought to myself this poor fellow is a perfect example of what Garth preaches here with a one asset strategy. I felt bad nickel and diming him on the dog crate, but it just wasn’t in very good condition. I paid more than I should have, but did take away more then a beat up old dog crate

Sad reality

#136 Washed Up Lawyer on 07.12.15 at 11:06 pm

#108 Andrew and #112 Mark

Good comments and interesting link from Andrew on the oil biz.

On Mark’s comment re debt to equity swap. To wit, the recent swap by the creditors of Connacher Oil & Gas swapping $1B in debt for equity and compressing the existing shareholders to a 2% equity position. On a 20,000 bbl/day SAGD oil sands operation.

At least the shareholders still own 2% of the company.

#137 Russ L on 07.12.15 at 11:11 pm

JR @ #1 on 07.12.15 at 2:27 pm

Nanaimo : ‘Surrey by the Sea’

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

No apologies.
As I might say, “Living in Nanaimo means you don’t have to say you’re Surrey.”

I spent the weekend in Kamloops. Bigots and rednecks abound.
It is our differences that make this such a beautiful world.

I like the Nanaimo MSM support of the above racism, it won’t be tolerated. As in, we are absolutely intolerant of this kind of intolerance… or something like that. You know, we mean good.

#138 Sheane Wallace on 07.12.15 at 11:19 pm

#115 Leo Trollstoy on 07.12.15 at 10:14 pm
#65 Sheane Wallace

Your posts are sensible, but you have to understand that you can’t reason with a troll. Garth, Jackie and I have already called him out. He just likes to stir the pot and mislead the newbs. Let him have his perverted fun
————————
I know.. There is always hope that one can reduce the idiots (the likes of Mark) one at a time. ans leave a better world.
—————————–
#125 Smoking Man

If you ever decide to publish a book it could be a best-seller.

Now pass the bottle.

#139 fleabitten monkey on 07.12.15 at 11:31 pm

#12 Zee – makes a good point. What is the difference btw a family who is landed as immigrants in a province buying real estate that is supported by funds earned outside of Canada and a foreign family buying property in that province while maintaining residency status in the foreign country where they earn their income? Its the source of the income and the economy in which it is earned that is the driver. What I would like to see explained in this blog is how in a province where it takes in excess of 12x avg income to buy a house and where avg income is $70K-$80K per yr, banks or any lender for that matter can lend and the buyers can support the payment of what would be huge mortgages based on these metrics. Something is not adding up in this alleged local cause of the bloated house prices. Although it is somewhat of an explanation, low interest rates and generous help from the bank of mom still give feasibility to the whole theory.

#140 JES on 07.12.15 at 11:32 pm

#76 AB Boxter

Well said. +1.

#141 fleabitten monkey on 07.12.15 at 11:33 pm

Edit – still DON’T give feasibility to the whole theory.

#142 Ron on 07.12.15 at 11:39 pm

Like virtually all western developed countries Harper has taken the easy route of making our economy look good. Throw endless amounts of low interest subprime mortgages to the ignorant masses instead of investing in manufacturing. Take those good paying jobs and move them all overseas. Then give anybody with a pulse and a Starbucks job a massive mortgage backed by the guarantee of our government and viola…..a vibrant economy…..at least on the surface. I bet there will be a cut on Weds. keeping with Harper’s interest in keeping the peasants happy in their million $ crack shacks.

Here in delusional Vancouver I have an interesting story to tell you Garth. I have a friend who immigrated from Argentina to Canada about 6 or 7 years ago. They were in Vancouver for about a month and were driving by a Royal Bank with a sign extolling their mortgage business. They decided to have a talk with the manager to see what they needed to plan and consider to buy a house 2 or 3 years in the future. They told the manager they had no jobs, hadn’t even applied for any, had approx. $25,000 and 2 young daughters. The manager started tapping on his keyboard and proudly told them they were approved for a $350,000 mortgage with no money down. I know someone else who got a massive mortgage with an income that doesn’t come close to qualify. They were referred to a bank manager who was taking $5,000 cash bribes to fudge the paperwork to get the CMHA approval. The whole Vancouver market is supported by lies, scams and con men posing as realtors, bankers, etc. That is why the average family spends 8% more than they earn. The Vancouver pyramid scam keeps going by any means and nobody cares as we will all be real estate billionaires in maybe 5 or 10 years. This will get very ugly at some point.

#143 fleabitten monkey on 07.12.15 at 11:50 pm

#125 Dee – they would certainly pay all the consumer taxes, land transfer tax etc, but just because they live here and the bread winner earns elsewhere does not necessarily mean that income taxes are paid fully on that income to our government. That would depend on the tax treaty btw Canada and the country in which the income is earned.

#144 rentin on 07.12.15 at 11:58 pm

House in Coquitlam sold for 1.8M. Bought last year for 1.4M. Mainland Chinese to Mainland Chinese transaction. Almost 30% return in one year. Very uneducated buyer with lots of money…..

HAM also found a greater fool amongst themselves. I love it!

#145 Yuus bun Haad on 07.13.15 at 12:01 am

One of your funnier closers Garth (in a Mort Sahl kind of way). I’ll take door #3 Bob.

#146 gut check on 07.13.15 at 12:09 am

Whoever spray painted that bench did so on their own – no one is to blame for it but the person who did it.

#147 brad blakley on 07.13.15 at 12:13 am

I live in Nanaimo. The Chinese Hotel deal is dead in the water. http://www.nanaimodailynews.com/news/updated-sss-manhao-kills-nanaimo-hotel-deal-1.1997239

#148 Freedom First on 07.13.15 at 12:14 am

#130 Smoking Man

Happy Birthday Smoky!

Throw out your rear view mirror and may you live until the return of Jesus.

#149 dosouth on 07.13.15 at 12:26 am

In reference to Nanaimo…..you may want to have mentioned the 4.5 mil that Chinese investors supposedly spent in preparation for a hotel that tied up waterfront property and 1/3 of a City park that was re-zoned for them to lease back to the taxpayer’s. It was going to resurrect the downtown and (any day now…for 2 years) put the city on the map bringing in over 200 new tourists a day.

Two councils kept drinking the Kool-aid and granting extensions and more financial benefits and by-laws to keep the deal alive. When they stopped and asked for more surety, well….

You guessed it, away they went just last week with no penalties, no forfeiture and no surprise. Nanaimo is certainly no better off for all the hype. Small cities trying to grasp at straws.

As far as the racist card, one or two fools does not make a community but certainly captivates social media for all the wrong reasons. Even suggested that these racist events -2 of them – were contrived by the investor of the hotel to use as an excuse to get out of the deal.

If you want to see how a dysfunctional council works regarding this hotel, you will want to read this article and the comments below it…..

SSS Manhao pulls plug on Nanaimo hotel project

#150 LH on 07.13.15 at 12:31 am

Happy Birthday Smoking Man!

#151 Mark on 07.13.15 at 12:34 am

Mark is underemployed. His parents buy his groceries. That’s why he gets his knickers in a knot when Garth writes about 20 somethings that earn 6 figures. Anybody who has money doesn’t care what a 20 year old earns.

Why do you constantly make stuff up? I don’t get it. Okay, you don’t like me, but that’s no reason to make stuff up.

You really should let the adults do the talking here and bugger off to the romper room. Instead of embarrassing yourself further with the uncalled for insults, trolls, and assorted ad hominems.

#152 Mark on 07.13.15 at 12:38 am

“On Mark’s comment re debt to equity swap. To wit, the recent swap by the creditors of Connacher Oil & Gas swapping $1B in debt for equity and compressing the existing shareholders to a 2% equity position. On a 20,000 bbl/day SAGD oil sands operation.”

Yup. A bail-in in action. Common and routine in the real-world of business, but for some reason, its viewed as the end-of-the-world if it were to happen in the banks.

Most of the money I have to my name was actually earned taking advantage of one of those debt to equity swaps in the late 1990s in the agricultural sector. Bought their debt at pennies on the dollar from paniced investors, joined a creditor group with some hedge funds to take over a company, and eventually liquidated when the cycle turned more favourable.

#153 whitey on 07.13.15 at 12:55 am

137 Sheane Wallace on 07.12.15 at 11:19 pm

Money for organic apples from Whole Foods but no money for a house? No further comment required. I bet that even Trollstoy (the Tom Vu of this blog) doesn’t put up the toilet seat and flush his millions like that. Time to move to a small town and plant your own apple tree, kill two birds with one stone.

Smoking man: you called the market right in your ‘hood, did you pony up and buy a second house?

#154 Not smoking man on 07.13.15 at 12:57 am

Garth

Please release the book, you have me and all my staff sold.

#155 Frustrated Kiwi on 07.13.15 at 1:00 am

Here’s our local NZ furore on Chinese buyers. Some dubious (but interesting) analysis:
http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11478719
Followed by a huge debate including:
http://www.stuff.co.nz/business/money/70155168/labours-halfbaked-property-data-turns-chinese-buyers-into-scapegoats

#156 boonerator on 07.13.15 at 1:20 am

Non-residency and owning a house.
We were away from 96-99 but I don’t think the basics have changed. The poster is correct that you can own a house but have to rent it out.
An “arms length” relationship is necessary, no renting it to your brother, who lets you stay in it for the summer. We had a management company handle it, an even farther distancing of the house from us.
It was weird, we’d come home for the summer, drive by the house and wave at it.

#157 whitey on 07.13.15 at 1:44 am

#119 Andrew Woburn on 07.12.15 at 10:1

The article you linked to with pride would seem to indicate that the Empire Days celebrations were hijacked by special interest groups. Why would that please you? If the natives, Chinese, or anyone else wants to have a parade then good on them. Why does a 120 year old tradition have to be sacrificed in the name of political correctness? If our ancestors didn’t have the gumption to subdue the heathens there wouldn’t be a Canada, would there?

#158 bdy sktn on 07.13.15 at 1:52 am

The bus from hsb to dt can be fine if not busy and car2go apparently has a hsb lot so Nanaimo is well linked to van without getting it from ferries

#159 Tamsen on 07.13.15 at 2:09 am

“B Riding Dirty on 07.12.15 at 7:36 pm

Garth, I know you are a True Canadian. But what does that even mean anymore. As a kid who grew up in Surrey and Burnaby BC. I was part of the great Pierre Trudeau vision of multi cultural Canada. But it has gone way past that.

Richmond BC schools are 90% asian, mostly first generation, Surrey BC is Indo Canadian 80% in most areas. Abbotsford is in the 50%, Burnaby is 70%.

These are the kids in schools. Problem is Garth, it is a problem for the face of Canada.

Come out west and hang out, see what language you hear kids to parents speak, read the store signs. No sign of French and half English if lucky.

I do not agree with acting racist, I do believe that white people are a minority. And the flow of immigrants will weaken our already fading identity of whatever it does mean to be a Canadian anymore.

Ethnic makeup of Canada includes: English or French – 26.7 million. Chinese – 1.34 million. SE Asian – 1.26 million. Feel more secure now? — Garth”

My cousins are music teachers in Burnaby and Richmond, BC and they say most of the students are from MLC or HK, very few from other countries …

#160 calgaryPhantom on 07.13.15 at 2:20 am

With calgary housing sales pressured and some houses down by 10%. If one is looking to buy (following rule of 90) and with ample diversification. Is this a good time to buy a house in Calgary? With such low interest rates!

#161 Shane Ricard on 07.13.15 at 2:23 am

Not a good idea to buy a house in Toronto with the ways laws are

#162 old gringo on 07.13.15 at 3:44 am

Well, the Greeks got their money.
This dog and pony show is far from over.
How many years did they buy before the next Greek crisis!
Not sure staying in the Euro is their best option.

#163 betamax on 07.13.15 at 5:25 am

#119 Andrew Woburn: “I realize a lot of people seem to desperately need to kick Nanaimo around but times change…we have a choice of live streamed Royal Opera or the Met as well as British theatre productions.”

LOL. Nanaimo has live streaming? OMG, it’s a hotbed of high culture! We don’t need no stinkin’ Louvre, we got pictures on the gall dang interweb!

I lived in Nanaimo for years, the last few only to go to college. I took a Sociology course (breadth requirement) and remember learning that Nanaimo had the highest per-capita property crime in Canada. An interviewed policeman opined that the dregs of Canada drifted west until they hit Nanaimo, then stayed.

It’s much like Surrey, only not so upscale.

#164 neo on 07.13.15 at 6:17 am

At #5 Mark

You must not be buying groceries or have utility bills. All I am seeing is inflation everywhere. Tell me what bill that you are currently paying that has been trending downward?

#165 Steve French on 07.13.15 at 6:44 am

happy birthday Smoking Man!

have a good one and don’t forget to sneak in a few JDs.

#166 Sheane Wallace on 07.13.15 at 7:17 am

#157 whitey

Remember that when you get cancer in your forties or fifties or when you kids start looking like the mutant cows due to the growth hormones in meat,

For me the incremental cost of eating organic is around $ 300 – 400 per month and I do own 3 properties.

#167 Squad on 07.13.15 at 7:35 am

If Poloz drops the interest rate again, then he should change the lending requirements to coincide with this – maybe increase the downpayment needed for a house purchase to help temper the hot markets. However, with the election on the horizon, I think they are liking those higher prices.

#168 Llewelyn on 07.13.15 at 7:40 am

The austerity measures imposed by the IMF, EEC and ECB will have a significant impact on the ordinary citizens or Greece, other nations within the EEC and at some point in time on the citizens of Canada.

It seems clear that financial institutions structured to promote the privatization ‘common wealth’ and free trade control the monetary policies applied in many nations including Canada and the United States.

It is very difficult for me to view the shift of monetary policy from democratically elected governments to profit oriented financial institutions as a positive development for Canadian citizens.

When I look into the future of Canada all I see is a growing mountain of debt and unfunded liabilities. Even the most optimistic twiddling with our future GDP cannot disguise the fact that without substantial adjustments to the benefits Canadian citizens have come to expect the total liabilities, including all unfunded liabilities hidden from plain view, of all levels of government in 2015 exceed $4.0 trillion.

As it stands today Canadian citizens are contributing over 75% of the revenues required to keep the HMCS Lollypop afloat and this share is increasing not shrinking. Oh and by the way Canadian citizens are also responsible for retiring an additional $1.85 trillion of personal debt borrowed from profit-oriented institutions.

Can Old Aged Security benefits, the Canada Pension Plan, the Universal Child Care Benefit, our public health care system etc. continue at current levels if Canadian GDP does not grow at more than 2.0% per annum? At some point in our future profit oriented institutions will demand that all governments in Canada initiate austerity measures? Just ask Paul Martin how that works.

Canada has already privatized over 90% of our ‘common wealth’, lowered interest rates to historically low levels and is perilously close to reaching their credit limit. Once profit oriented financial institutions decide that enough is enough all that will be left is austerity.

I think we all know who will take it in the neck when the ‘loonie finally drops’. Both metaphorically and in real purchasing power.

Our fascination with debt has threatened the very foundation of democracy.

Have you written Mr. Harper, then, to express your dismay at a new $2 billion in social assistance spending to be doled out to families, regardless of their financial need, later this month? Hope so. — Garth

#169 GeorgeSoonToBeRetired on 07.13.15 at 8:02 am

I almost spit up my coffee this morning watching Canada AM on CTV. Host Bev was interviewing real estate shill/lawyer Mark Weisleder about ‘shadow lending’.

(“Mark Weisleder is a Toronto lawyer, author, course developer and public speaker for the real estate industry.” So says his Toronto Star bio.)

The host had a rather frightened look on her face, talking about people borrowing their own equity to lend it to house horny types buying mcmansions and slanty semis.

Weisleder said, “…some people try to compare this to the sub prime lending in the U.S., but nothing could be further from the truth…”

We are so deluded here.

And I thought Shark Week was the scariest thing on tv……

#170 Northern Girl on 07.13.15 at 8:06 am

It is so easy to blame the “others” for one’s troubles. Why blame the Chinese, the Russians or the Persians for buying in Canada? It’s not illegal. Our government says so. Wake up Canadians!!! Garth is trying to teach you how to think critically…it’s our government who have aided and abetted real estate orgy here, not the foreigners.

#171 Ben Bur on 07.13.15 at 8:17 am

Stagflation, period.

#172 Almontage on 07.13.15 at 8:21 am

A old neighbor friend is selling his house in Georgetown ON after 46 years. He’s a widower in assisted living and his sons are taking care of things.
Bought in 1969 for $25K. Selling today for $450K.
After reasonable deductions for mortgage, maintenance and commission I figure he’s averaged 5.5% return over 46 years.
He raised his kids there and had a good life so it’s not a kick in the head, but he’s kept up with inflation and not much else. Hardly a gravy train to a luxury retirement.

A $25,000 house in 1969, adjusted for inflation, would equal $203,000 today. His basic costs (financing, maintenance, property tax, insurance, selling commission) over 46 years would be at least $158,000. That leaves a net of $89,000 in inflation-adjusted dollars from a sale price of $450,000. It looks like his annual return was about 1%. Yup, gravy train. — Garth

#173 OttawaMike on 07.13.15 at 8:31 am

I hope you got sober to celebrate your birthday Smokie!

#174 Llewelyn on 07.13.15 at 8:47 am

Just a brief observation on immigration.

Over the past 11 years Canada has welcomed 2,788,000 new citizens and 363,000 of these new citizens, or 13% of the total, immigrated from China. It should not surprise anyone that a significant number of these new citizens decided to live in British Columbia and buy houses and businesses.

I would also point out that 12% of our new citizens immigrated from India and that 25% of total immigration originated from the two most populous countries in the world.

In 2015 2.0% of the our total population arrived from China and India over the past 11 years. Who did Canadians think was occupying the 180,000 dwelling units being constructed each year?

#175 My Life is a Pile of Shit on 07.13.15 at 8:51 am

Neither Vancouver nor Nanaimo is big enough or world-class enough to absorb a lot of foreign capital the way San Francisco, Chicago, or New York can. Those Canadian cities are still backwater hick towns on the world stage. Forcing them to swallow this much foreign investment will only stir the locals and result in social/economical indigestion. My solution to this problem is to restrict Chinese foreign ownership to Richmond. The Chinese foreigners can do whatever they want in Richmond without affecting the rest of Metro Vancouver. There will, of course, be no Chinese foreign ownership on Vancouver Island. Let’s face it, the whole of Vancouver Island is far too backwater to have a place on the world stage. I wouldn’t be surprised if a Nanaimo copper (policeman) spray painted a swastika or two.

#176 Smoking Man on 07.13.15 at 8:55 am

#172 OttawaMike on 07.13.15 at 8:31 am
I hope you got sober to celebrate your birthday Smokie
……

Completely sobar. A gift to my liver once a year.

Number one tweet trending #thisisacoup

Greek crap is not settled.

Here comes the neo Nazis…

#177 My Life is a Pile of Shit on 07.13.15 at 9:00 am

I meant “…stir the locals and result in social/economic indigestion.”

#178 Bottoms_Up on 07.13.15 at 9:00 am

Have you written Mr. Harper, then, to express your dismay at a new $2 billion in social assistance spending to be doled out to families, regardless of their financial need, later this month? Hope so. — Garth
———————————————-
To be fair, this money is long over-due. $100 was being given back in 2006, and this baby bonus was not inflation adjusted. The government is playing catch up, and now giving $160 per kid under 6. This money, supposedly earmarked for childcare, does not go a long way toward a monthly daycare bill of $1000-$1600. It is also taxed at the marginal rate.

Should a bankrupt government be paying for child care? — Garth

#179 Smoking Man on 07.13.15 at 9:27 am

Has anyone considered poloz might go nuke on Wed.

0.5 cut vs 0.25 cut.

USDCAD has been range bound between 1.20 to 1.27 our output gap is growing like a belly overdosing on gluten and Pepsi. Trade balance getting crushed.

Got me a tingling feeling… Get out of the way …..

It’s going be ugly, less of course your long USDCAD

#180 Shawn on 07.13.15 at 9:36 am

What it means to be Canadian

Tamsen at 158 said:

And the flow of immigrants will weaken our already fading identity of whatever it does mean to be a Canadian anymore.

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

Ultimately what it means to be Canadian means to have citizenship or other strong ties such as landed immigrant or long-time residency to the geographic and political entity of Canada. It means nothing more.

There is no requirement for any citizen to share the views and culture of the mainstream or of any other Canadian. Yes one must obey the law or risk punishment. But there is no requirement whatsoever to belong to any certain identity of culture and views.

Notions of collective views and culture are fairly comical given the diversity. Stating that all citizens from any country share certain values belies the individualistic nature of humans. And such a statement is particularly wrong in a world of migration of people.

There will continue to be a majority view but there never was and will not be any collective Canadian view shared by all.

People from all over the world are mostly decent people.

Canadians collectively are a people that has a country, not the other way around. The people will continue to change over time. Get used to it.

What natural God-given right would Canada and its current occupants have to unfairly restrict the ability of others to move here?

Perhaps it would be wise for Canada to refuse to accept people with certain radical undemocratic views. That is difficult to do. But there is no real basis to attempt to restrict the number of people of Asian heritage. It would be unCanadian to do so? (At least it would be if there was such a thing as a universal Canadian set of values, but there is not and people are free to hold the view that there should be restrictions and it is a bit ignorant to brand them racists for that view)

#181 Frank Stillman on 07.13.15 at 9:40 am

To Shawn

There are alot of people that would of had much more savings, investments if they made more responsible and made prudent decisions.

You hear it all the time with lottery winners and people that fall into some big pot of money like a gift from parents, uncle etc., an inherited house worth $500,000 for say. They blow it and then greatly regret that they are broke.

They don’t have that discipline and drive to save money and have a mentality that others will always take care of them. The social safety net is more now a social lifetime income plan at the expense of others.

I suspect Jackie and family had a very bad experience with other investments and that is why she is fearful and putting it in GIC’s.

If they wanted really to have $500,000 to $1,000,000 or more they would of done it already. Also, there are alot of people that have all their wealth in a $500,000 home and some cottage, vacation home worth another $300,000, $400,000 and have $3,000, $4,000, $5,000 a month pensions working for some government agency or department.

They are comfortable and much more well off than they want to admit.

Also, by Jackie DiAngelis having $1.5 million in GIC’s may seem like a great amount of money but she is only getting $45,000 to $50,000 a year in annual interest instead of $80,000, $90,000, $100,000 a year in annual interest.

The Bank of Canada, U.S. Federal Reserve and other central banks worldwide are cutting and cutting and cutting interest rates, pushing down bond rates, yields.

If I was in a position of saving thousands a month and interest rates kept dropping, I can understand where Jackie is coming from saving more and more because Jackie and her family has a feeling of being ripped off and being worried getting less and less on more and more saved.

To Mark, take a break and what do expect that you are not an internet troll because you posted maybe 15, 20 times on this one blog topic. You must be benefiting from this because nobody would take so much time to do all this.

If Mark keeps this up, spewing misinformation as unadorned fact, he will not be with us much longer. — Garth

#182 Shawn on 07.13.15 at 9:42 am

Should a bankrupt government be paying for child care? — Garth

The Canadian government is far from bankrupt.

It takes a village to raise a child?

All tax breaks and outright subsidies should go to the investor class?

Should a so-called bankrupt government have allowed the TFSA?

The Canadian government has been in deficit since 2009. The national debt is $616.3 billion. The TFSA is a bad contrast – it represents a loss of uncollected tax revenue on alter-tax investments. Big difference from sending cheques to all couples with kids. — Garth

#183 BillyBob on 07.13.15 at 9:43 am

#72 Mark on 07.12.15 at 7:13 pm

“When you live and work abroad you can legally claim loss of residency.”

But you can’t have any assets in Canada then. Nor be in Canada for anything but trivial amounts of time. Obviously not something that applies to these alleged foreign “families” buying Canadian RE. Familiarize yourself with the process of becoming a non-resident.

Mark on 07.12.15 at 9:51 pm

“You continue with your idiocies, do you make difference between being non resident and severing ties with canada/permanent leave?”

Its not my job to educate you on the process of becoming a non-resident of Canada. But it requires that one sever substantially all of their financial ties to Canada. In a nutshell, one cannot own Canadian RE as a Canadian citizen and be a non-resident. Therefore, if the foreign neighbours are earning money offshore, and not declaring it as required on a Canadian return, they are committing tax fraud.

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

Absolutely, categorically wrong.

I have been an expat for nearly a decade so I know a bit of which I speak. I do not pay tax in Canada because I do not derive income in Canada and do not use any of Canada’s social services. If I had assets, whether financial instruments or RE, domiciled in Canada, I would pay tax on them. It’s not rocket science.

You do need to sever all significant ties to Canada. But contrary to your stupid statement, you absolutely CAN own real estate in Canada. It only has to be at arm’s length (i.e. can’t rent to family members) and you pay 25% tax on the rental income. Many of my colleagues do just that. I choose not to. To say you “can’t have any assets in Canada” and be a non-resident is just asinine. Tons of non-residents own big chunks of Canada. Some are Canadian citizens, some are not.

And you have to be outside of Canada for a minimum of 183 days, i.e. more than half the time. Not exactly a “trivial” amount.

Nothing like someone who has never lived outside of Canada, to lecture with “Familiarize yourself with the process of becoming a non-resident”. The only thing more annoying than a condescending know-it-all is one who’s just plain wrong about what they’re spouting off about.

You’re welcome to your opinions, just stop posting them as facts!

#184 DisgustMadeMePost on 07.13.15 at 9:58 am

Don’t worry. Justin will fix it. He doesn’t think a family like his should get that money.

#185 Holy Crap Wheres The Tylenol on 07.13.15 at 10:03 am

#175 Smoking Man on 07.13.15 at 8:55 am
#172 OttawaMike on 07.13.15 at 8:31 am
I hope you got sober to celebrate your birthday Smokie
……
Completely sobar. A gift to my liver once a year.
Number one tweet trending #thisisacoup
Greek crap is not settled.
Here comes the neo Nazis…
___________________________________________
Happy belated Birthday Smoking Man, sorry no cell connection all weekend out on Lake Erie. Sailed down Thursday arrived Friday evening. Had to go to Pottahawk Pissup. Music and action is now way off for me but have been doing it every two years for about the last 25 years. Figured you would have showed up here. Will be back again for Pissup 2017. By the way the water was still a little chilly.
http://www.pottahawkpissup.ca/

#186 DisgustMadeMePost on 07.13.15 at 10:08 am

I don’t think (or hope) there will be a rate cut Wed. I think it’s too close to the election. Remember January? That move caused many to question the sanity at the BOC…

If the US raises soon after, there will be plenty of talk about Canada’s questionable move… And I can’t see that reflecting well on the current government. Just what Harper would want, media coverage of our country in financial la la land.

#187 Frank Stillman on 07.13.15 at 10:14 am

To Sheanne Wallace

Companies do it all the time. They buy debts of personal and companies for 20%, 30%, 40% less than the value of the debt and then depending on the type of debt and interest rate, they add fees and increase interest rates on the debt.

If Canada wanted to offload some CMHC mortgages, they could sell it for less than they are worth today and private investors most likely foreign investors would buy them.

This is a way for mortgage rates to go up without the Bank of Canada increasing them directly.

They can make mortgages more expensive to engineer a Canadian real estate correction.

Banks and other lenders are waiting and waiting but want to make higher interest rates on their capital.

They will find away as they always do. CMHC mortgages will be changed someway in the next few years as it is getting too big to handle anymore.

Look at Hydro One in Ontario being privatized partially today but more will come tomorrow. The Ontario Liberals said to the Conservatives that they will never do this but they did.

#188 Nagraj on 07.13.15 at 10:16 am

#!75 SMOKING MAN “Greek crap is not settled. Here come the Neo-Nazis.” Absolutely right. Tsipras will go the way of the royal whore Madame Du Barry screamin’ all the way . . . the Far Left will be fighting in the streets with Golden Dawn, another military dictatorship in Greece is a distinct possibility.

#177 BOTTOMS UP: GT: “Should a bankrupt government be paying for child care?” Should a bankrupt gov’t be spending money to bomb Syria (of all places)? Should it be bribing the voters? How bankrupt is this gov’t?

#167 LLEWELYN re austerity measures in Canada.
Well, St.Prentice tried, Son-of-Charest is trying, and Granny Wynne doesn’t know what to do. Quebec is in for social “unrest”, and in Ont the prov NDP is first in the polls.

#189 OttawaMike on 07.13.15 at 10:20 am

#181 Holy Crap Wheres The Tylenol on 07.13.15 at 10:03 am

Pattahawkpissup, hmm never heard of it. I did participate in a Catamaran regatta at Long Pt. 30 years ago. Nice water there.

I’m launching my boat today. Had to go over the diesels and replace a cylinder head and aftercooler. $$$$. Now I should be good for a few long voyages.

#190 TurnerNation on 07.13.15 at 10:26 am

Pan am…the games no one wants.

Crippling traffic edicts. Mandatory cost overruns and legal graft to unions and preference contractors and police/security. I saw 20 minivans parked with 4 officers each plus a mounted division. Staggering hourly burn rate. All ends up hours. Nice safe work @85/hr plus gold plates if you can get it.

Let’s look in their gift store in Nathan Philips square. …coffee mug $14. Tshirt 34 or 41$
Stuffed bear $49.

Mini OweLimpics favored hobby trojan horse of elites.

Look at the bright side of HOV lanes. Sales are up for inflatable sex dolls and fashion mannequins. — Garth

#191 Mark on 07.13.15 at 10:33 am

“If Mark keeps this up, spewing misinformation as unadorned fact, he will not be with us much longer. — Garth”

I’ve spewed no misinformation whatsoever. Everything I’ve written in posts to the comments have been facts. Please elaborate on what exactly you’re talking about, because I’m befuddled as to why you would make such a broad assertion with no basis in in evidence.

To Mark, take a break and what do expect that you are not an internet troll because you posted maybe 15, 20 times on this one blog topic. You must be benefiting from this because nobody would take so much time to do all this.

Internet troll? Seriously? Its pretty bizarre that you’d say that. And 10 minutes of my day to read these comments and write a few posts?

#192 Mike T. on 07.13.15 at 10:45 am

it is possible that the racist groups on the island are hired provocateurs

something needs its LOOSH

#193 Rainclouds on 07.13.15 at 11:12 am

Mark: Hint, You are Dick………….

http://dilbert.com/series/67-Dick-from-the-Internet

SM. Did they sing Happy Birthday on Nectonite……….

In other news.

west coast Fishwrapper TYEE on the bandwagon.
http://thetyee.ca/News/2015/07/13/Vancouver-Invisible-Money/

#194 kommykim on 07.13.15 at 11:18 am

RE:#190 Mark on 07.13.15 at 10:33 am
And 10 minutes of my day to read these comments and write a few posts?

10 MINUTES to read the comments and write 17 posts?
Looks like a quality vs quantity issue to me.

#195 Holy Crap Wheres The Tylenol on 07.13.15 at 11:24 am

#188 OttawaMike on 07.13.15 at 10:20 am

#181 Holy Crap Wheres The Tylenol on 07.13.15 at 10:03 am

Pattahawkpissup, hmm never heard of it. I did participate in a Catamaran regatta at Long Pt. 30 years ago. Nice water there.

I’m launching my boat today. Had to go over the diesels and replace a cylinder head and aftercooler. $$$$. Now I should be good for a few long voyages.
__________________________________________
Isn’t owning a boat so much fun $$$$. All they are is buckets of cash that float. But for the short ass summer we have here they are a great investment. A losing investment mind you. Since your moniker is Ottawa Mike I would surmise you would not have heard of it. Pottahawk is a small sandy island by Long Point out in the middle of Lake Eire. Every year in July several thousand boats hook up on the beach for a massive four day party. I’m definitely getting too old for it now. Could not do what I did twenty years ago. Oh what the hell it is fun. Its the closest beach party to say a day at the beach in Miami. For you its a week long adventure to get here. Plus $$$$.

#196 Daisy Mae on 07.13.15 at 11:29 am

#167: “Our fascination with debt has threatened the very foundation of democracy….”

“Have you written Mr. Harper, then, to express your dismay at a new $2 billion in social assistance spending to be doled out to families, regardless of their financial need, later this month? Hope so. — Garth”

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

I think we all recognise a bribe when we see one….

#197 cramar on 07.13.15 at 11:47 am

Know someone who recently sold his Mississauga (Streetsville) house. Was talking to him on weekend and said a Chinese couple bought it. Not local. Wife here, husband back in Shanghai taking care of business. Put 35% down, which RE agent said was typical of Chinese buyers. My friend who is moving to England for business reasons, said his neighbourhood has seen a lot of Muslims buy in over the years, but recently more Chinese have been coming. Interesting.

#198 Bottoms_Up on 07.13.15 at 11:54 am

#187 Nagraj on 07.13.15 at 10:16 am
————————————————-
The government of Greece is bankrupt. The government of Canada is not.

#199 Bottoms_Up on 07.13.15 at 12:02 pm

Should a bankrupt government be paying for child care? — Garth
————————————————————–
Should bankrupt families be paying $31,200 a year to have their 2 children babysat so both parents can earn a living?

Choices. We should be careful how much personal responsibility we ask the state to shoulder. Nothing is free. — Garth

#200 Pre-Retiree on 07.13.15 at 12:22 pm

#75 Freedom First: On a personal note. I am always worldly/asset diversified, but I have been overweight cash for the past year, and just invested in a Canadian energy ETF last week after a substantial drop this past year. I do not care about hitting absolute bottoms. I care about good value, operate with a long horizon, and am always liquid and nimble to move quickly. There is going to be more great deals coming soon in Canada.
_____________________

Yes, I admit it. I agree with FF. At the time when a lot of investors panicked last week thanks to doomer news, I bought XFN for my TFSA. Sure glad I did. Things have bounced back nicely – anyhow, this is for a long-term investment, so the bounce is nice but a moot point.
And….FF would be surprised to know that I am female.

#201 Timing is Everything on 07.13.15 at 12:35 pm

Should a bankrupt government be paying for child care? — Garth

No. But why is the government (of Canada) ‘bankrupt’ (it is not, btw)? That is the question…Too much tax ‘avoidance’ perhaps. Spending tax money on things of a dubious nature. Poor leadership (poor decision making) E.I. F-35. Too much partisanship. Too much lobbying.

It’s all about choices.

I’m sure the dawgs can come with many more reasons.

#202 Timing is Everything on 07.13.15 at 12:37 pm

i.e. F-35

#203 Smoking Man on 07.13.15 at 12:53 pm

Kathleen Wynee just don’t get it.

The prez of Chrysler said, power is to expensive. She could careless. Her and her band of bicycle ridding, gluten hating salad eaters will insure this province goes the way of Greece.

I’ve come to the conclusion that without protein from real food like cheese burgers. Your brain gets fried after time.

Plus lets face it, who is she punishing, those kids that never went to university, the uneducated neanderthals in hard hats that still use words like Fag, . Let them eat cake.

http://www.nationalpost.com/m/wp/blog.html?b=news.nationalpost.com//news/824051

#204 Llewelyn on 07.13.15 at 1:03 pm

Garth do you remember when interest rates shot through the roof and our governments responded by providing grants to homeowners so that they could meet their mortgage payments until rates declined.

How about the Assisted Home Ownership Program or the Home Ownership Made Easy Program or the Residential Rehabilitation Program or the Canadian Home Insulation Program Etc Etc.

First you get Canadians hooked on housing then you introduce programs to mitigate the impact of entering the hampster wheel of debt.

We have no problem asking students to borrow the funds necessary to gain an education but asking families to shoulder the cost of day care so that both parents can work now that really hit a nerve.

As far as writing a cautionary letter to Stephen Harper I think it is cute that you think he might be interested in any point of view that will not help him get elected.

Lets face it he is hooked on a feeling

and high on believing

Ooga Chaka Ooga Ooga

There was no federal mortgage relief payment program. Any assistance was provincial. The state hss no more inherent obligation to babysit children than it does to provide families with meals or wheels.

#205 Leo Trollstoy on 07.13.15 at 1:13 pm

Mark: Hint, You are Dick………….

http://dilbert.com/series/67-Dick-from-the-Internet

Wow that was surprisingly spot on.

What else can you say about a poster who just makes up stuff (e.g. deflation, interest rates, CAD/USD, gold, Toronto RE prices, etc.) without being able to offer a single source?

Personally they make no difference to those who have a certain level of financial knowledge, but to individuals who are new to investing/saving those misleading posts give the wrong representation of current financial events and are irresponsible.

There’s no reason to drag other people into the same financial dead end.

I don’t mind a poster challenging my point of view. Just provide a source that I can evaluate.

I’ve given up trying to figure out how somebody can arrive at some of those conclusions.

#206 Jay on 07.13.15 at 1:15 pm

Frank Stillman,

You seem to misunderstand the purpose of CMHC.

My home insurance company insures my house for the full replacement cost. They receive premiums to pay for this insurance, and in return they will pay in the event of a disaster.

The insurance company is NOT entitled to sell my house. They do NOT own my home. Their sole interest is collecting premiums and paying in the event of a claim.

CMHC insurance hedges risks for banks. If you have a high ratio mortgage and cannot pay it, CMHC will step in and make the bank whole by paying them. They do NOT own your mortgage. They do NOT have the right to sell your mortgage. Their sole interest is in collecting CMHC premiums and paying when banks make claims.

Further, buying or selling a mortgage or not, you can’t just arbitrarily change a fixed mortgage rate. If banks could simply sell the mortgage to get out of a rate term they didn’t like, then they’d just immediately play mortgage musical chairs once you signed the contract.

#207 Kind of a Garth fan on 07.13.15 at 1:20 pm

> Realtors put together that circle pie chart. Trust them this time?

> Show me your data. — Garth

Why are you so nasty to your readers, Garth? Every day you get worse and worse in this respect. Can’t you respect those that respect you enough to come here and read your opinions?

And honestly, this dude is calling you out on something I’ve noticed you do for years, that is selective use of data, both in terms of being selective with your sources, the type of data, as well as the interpretation.

I’m not saying your overall thesis re:housing market is wrong, but the man is right. You constantly point out the conflict of interest in realtor organizations and lack of legislation regulating them properly. Now you’re telling us to trust realtor data just because you say so, and when someone asks you what your reason for trusting this data NOW, other than it agrees with you, you go and berate him and personally attack him. Why? Why are you acting like a vindictive little person, like your old boss Harper? Why can’t people challenge you politely and receive a polite and meaningful answer to their question?

Nobody is questioning your manhood, but you’ve set yourself up as a paragon of honesty, analysis and truth over the years you’ve had this blog. Expect us to hold you to that standard, and to ask questions.

Just please don’t be nasty. You’re not running for any office anymore, remember?

I said, ‘show me your data’, and you call that a nasty, berating attack? Dude. Get help. — Garth

#208 TurnerNation on 07.13.15 at 1:20 pm

Cracks appear? Home Capital Group’s stock creamed today. Some business risk.
Mort-gauges.

#209 Holy Crap Wheres The Tylenol on 07.13.15 at 1:23 pm

#202 Smoking Man on 07.13.15 at 12:53 pm
Kathleen Wynee just don’t get it.
The prez of Chrysler said, power is to expensive. She could careless. Her and her band of bicycle ridding, gluten hating salad eaters will insure this province goes the way of Greece.
I’ve come to the conclusion that without protein from real food like cheese burgers. Your brain gets fried after time.
Plus lets face it, who is she punishing, those kids that never went to university, the uneducated neanderthals in hard hats that still use words like Fag, . Let them eat cake.
http://www.nationalpost.com/m/wp/blog.html?b=news.nationalpost.com//news/824051
__________________________________________
Smoking Man here’s what you’re dealing with. Wynne has never been in a business that has generated any revenue for something that has been manufactured. According to Wiki….
Wynne was born in Toronto to Dr. John B. Wynn and Patsy O’Day, a musician who grew up in the Bahamas before immigrating to Canada. Wynne grew up in Richmond Hill, Ontario. She earned a Bachelor of Arts degree at Queen’s University and a Master of Arts degree in linguistics from the University of Toronto. She achieved a Master of Education degree in adult education from the Ontario Institute for Studies in Education (University of Toronto). She was a member of the discipline committee of the Ontario Society of Psychotherapists from 1997 to 2000. Wynne served as president of the Toronto Institute of Human Relations. In 1996, she helped found Citizens for Local Democracy, which opposed the efforts of Ontario’s Progressive Conservative government to amalgamate the City of Toronto. She founded the Metro Parent Network (now the Toronto Parent Network) which supports improvements in the province’s public education system, and has participated in numerous other community endeavors. Prior to her coming out as a lesbian at age 37 she was married to Phil Cowperthwaite, with whom she had three children. She now lives with her second spouse, Jane Rounthwaite, whom Wynne has stated is to be referred to as her “partner” (rather than “wife”). They were married in July 2005 at Fairlawn Avenue United Church in Toronto.

#210 Drill Baby Drill on 07.13.15 at 1:25 pm

Ah Nanaimo BC – what a wonderland !! Condo tower overlooking the BC ferry docks and the pulp and sawmills. What a prize spot for investments.

#211 gut check on 07.13.15 at 1:30 pm

#191 Mike T. on 07.13.15 at 10:45 am
it is possible that the racist groups on the island are hired provocateurs

________________

It is possible. With out media owned and controlled by a very small handful of people (and hedge funds) it’s easy for them to get away with it, too.

#212 gut check on 07.13.15 at 1:32 pm

“Choices. We should be careful how much personal responsibility we ask the state to shoulder. Nothing is free. — Garth”

indeed.
Just for the record, do you think that the same thing goes for corporate / bank IRresponsibility?
IOW, do you believe in Too Big To Fail?

#213 debtifiedi on 07.13.15 at 1:37 pm

Happy birthday, Smokie!

Stay funny.

#214 saskatoon on 07.13.15 at 1:39 pm

#198 Bottoms_Up

indeed.

one involves choice; the other involves violence.

commies love guns AND brutality–though the connection is lost on them.

hyper-rationalization and psychological hollowing ensues.

#215 A box in the Sky on 07.13.15 at 2:11 pm

#76 AB Boxster on 07.12.15 at 7:27 pm

They don’t need 10% CIG’s. How about a crappy 4% reliable return, before inflation.

————————————————-

This is what I love about olds / boomers. Always looking for something for nothing.

Not being rude but – who the hell are you to ask for a risk-free 4% return after inflation?

In a world where capital moves more freely than ever, wage arbitrage is happening on a global level causing people/corporations to have to work/hustle harder than ever to distinguish themselves, growth is anemic / debt is high and yet this clown wants 4% risk free.

Are you having a laugh?

#216 A box in the Sky on 07.13.15 at 2:14 pm

#47 Retired Boomer – WI on 07.12.15 at 6:10 pm

I have no clue what Poloz will do. I think being a political creature he will do the politically expedient thing.

It would be more enlightening to see him jack UP rates .25 front-running Janet Yellin, who might, maybe, actually, someday -really- increase rates……

———————————–

Let me get this right. You think it would be “enlightening” for the BOC to raise rates before the US even though we have lower growth, lower inflation, higher unemployment and are suffering through a resource bust?

Thank God you hard money types aren’t in a position of power.

#217 Shawn on 07.13.15 at 2:17 pm

Warning of Biased Opinion

Warning – Although I seldom admit it, my opinion is biased in various ways and tends to be based on whatever is good for me. I tend to read articles more closely when I can see that they tend to reinforce my existing views. I tend to stop reading if a see an article disagrees with my existing views.

If I am good with a hammer I tend to see only nails.

I am dismissive of counter viewpoints.

I tend to think everyone should do as I do. Especially, they should do as my customers and clients do (use my services or at least the services of people like me).

Signed:

Just about everyone, everywhere.

P.S. Note that I also see myself as unbiased and only telling you what is good for you.

#218 Robert on 07.13.15 at 2:20 pm

Small minds you must be joking what about my rights as a Canadian? I have the right to choose where I wish to live and I have the right to choose a driver of a cab. That does not make me a racist!! I am spending my after tax dollars that I earned and how and where I spend it is my business. So you holier than thou finger pointers should worry about your own backyards not mine!!!

#219 Smoking Man on 07.13.15 at 2:26 pm

Tylonal look what koo koo bird just did..

Thanks old man for the link.

http://www.torontosun.com/2015/06/11/local-company-snubbed-as-ontario-awards-40m-ship-contract-to-chile

#220 Axehead on 07.13.15 at 2:42 pm

#177 Bottoms-Up.

I don’t think any government (bankrupt or not) should be paying for child care.

Last time I looked at the BNA act, child care wasn’t one of the responsibilities of the federal governement.

#221 Holy Crap Wheres The Tylenol on 07.13.15 at 3:17 pm

#218 Smoking Man on 07.13.15 at 2:26 pm
Tylonal look what koo koo bird just did..

Thanks old man for the link.

http://www.torontosun.com/2015/06/11/local-company-snubbed-as-ontario-awards-40m-ship-contract-to-chile
___________________________________________
Should trade Wynne to Chile for some copper and fruit!
Ive had it with this gang of thugs.

#222 Holy Crap Wheres The Tylenol on 07.13.15 at 3:18 pm

Forgot the link to copperville and fruit for our Wynne trade.
http://www.digitaljournal.com/article/362825

#223 gut check on 07.13.15 at 3:50 pm

someone just referenced the BNA Act.

I never thought I’d see the day.

#224 Frank Stillman on 07.13.15 at 4:00 pm

TO Jay #205

As many expressed on this blog that they believe CDIC and other deposit insurance is not relevant than why is it okay for CMHC to protect mortgage financing for banks, lenders.

These lenders should charge the true cost of interest, fees, insurance for lending money to buy houses, condos etc.

As for changing fees and mortgage rates, they can already do it, variable rate mortgages, shorter term fixed term mortgages like 1, 2 years and even most fixed term fixed rate mortgages that mature in Canada in 5 year terms.

If banks, lenders don’t like taking the risks than there should be a reasonable limit of say $100,000 per house, condo etc. but not all mortgages in Canada.

Unlike now, a $500,000 house is fully CMHC covered for banks, lenders which is out of control.

This would at least limit taxpayers risk by alot, maybe reduce it by 80% or more since CMHC would be covering alot less, $100,000 versus $300,000, $400,000, $500,000 per property.

Just like deposit insurance by banks, trust companies, mortgage companies etc. have for depositors to give protection for $100,000.

Jay, CMHC has to be changed somehow and those that have mortgages and banks, lenders must pay for more of it and not being born almost by taxpayer Canada.

Canadians buying real estate with little or no money will not be sustained with lower interest rates.

#225 Frank Stillman on 07.13.15 at 4:14 pm

The comments about boomers and others that have money in GIC’s that would not need 10% GIC’s but 4% GIC’s would be okay to live in their retirement years is really interesting.

The only reason I can think why people would not want anyone to make 4% a year in GIC’s is they would have to pay 5% to 5.5% mortgage rates.

Think about this, someone in Toronto with a $600,000 mortgage paying now 2.5% versus a more normal 5% mortgage rate would cost this homeowner $15,000 a year in extra interest.

It seems to me that real estate and debt junkies want something for nothing. Unlike lenders and the Bank of Canada right now are keeping interest rates low, governments are going jacking up property taxes, water rates, electricity rates, garbage fees, other user fees, taxes etc. for homeowners especially and this will eventually make highly leveraged Canadians very vulnerable to foreclosure and bankruptcy.

#226 cramar on 07.13.15 at 4:24 pm

218 Smoking Man on 07.13.15 at 2:26 pm
Tylonal look what koo koo bird just did..

Thanks old man for the link.

http://www.torontosun.com/2015/06/11/local-company-snubbed-as-ontario-awards-40m-ship-contract-to-chile

——————

This news is over a month old, but it is good that people are still keeping the story alive. We need a “Put Ontario First!” policy, since Wynne was not elected by the voters of Chile. Never mind this “trade agreement” bovine excretement! Even a six-year-old can figure out that you don’t send a contract out of the country when your own people can do it.

#227 Mike S on 07.13.15 at 4:33 pm

“If Mark keeps this up, spewing misinformation as unadorned fact, he will not be with us much longer. — Garth”

Garth,
let’s be fair here
The only “miss-information” from Mark are forward looking statements, as in “CAD will go up” or “we are going to have deflation in Canada”

While not necessarily correct you can’t threat him differently than any other posters with forward looking statements

#228 S.Bby on 07.13.15 at 5:02 pm

CRA writes off $4 billion over last two years as uncollectible:

http://www.250news.com/canadian-press/?loc=2&id=33824288

… including accounts worth more than $10 million.

#229 Squirrel meat on 07.13.15 at 5:04 pm

Choices. We should be careful how much personal responsibility we ask the state to shoulder. Nothing is free. — Garth
——————

This blog appears to be free..

#230 Tamsen on 07.13.15 at 5:45 pm

“#180 Shawn on 07.13.15 at 9:36 am
What it means to be Canadian

Tamsen at 158 said:

And the flow of immigrants will weaken our already fading identity of whatever it does mean to be a Canadian anymore.”

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

Shawn, I didn’t say what you have quoted me as having said. That was someone else’s previous comment (Be Riding Dirty) who I had quoted and you attributed his comments as being from me.

#231 Unhinged Loon on 07.13.15 at 7:05 pm

I’m confident that Mark suffers some form of autism.

A serious and savvy investor that he fashions himself to be (his financial wisdom derived mostly through the prism the of hindsight) who for some strange reason feels compelled to invest his precious time into a public service blog run by a former public figure, seems very peculiar..

Mark, we read and trust Garth and his advice because of his record, his qualifications, which are a matter of public record.

You’re someone who’s a chronic complainer who invests at least 40% of his day in blogs and forums, starting his career moaning about unemployment among electrical engineers on a Toronto bargain forum…

The vocabulary you operate with seems polished, but you’ve got no credibility otherwise, and your internet career does not lend credence to your theories.

#232 AB Boxster on 07.13.15 at 7:15 pm

#215 A box in the Sky

Read the post again fool.

4% return regardless of inflation.

So if inflation is 2% and rates are 4% then a real return of 2%.

Get it?
Math not your strong suit?

And yeah I do demand that these rates return to normal.
They are held artificially low so that massive borrowing for inflated houses can occur.
Or so funds can be plowed into the equity markets inflating the value of financial investments as well.
They have become a crutch for everyone.
Corporations, consumers, governments.

It is bad policy an it must change.

To be rude..

Who the hell are you to continue to demand a -2% return after inflation?
(Math: 1% GIC, 3% annual inflation – but hey lets be honest it is much higher, -2% real return- got it?)

Where do you get the right to have governments go massively into debt to artificially keep rates low.

So you can have more free money to invest in the equity markets?
So business can buy back shares with their inflated profits?
So governments can borrow a whole lot more that they will never repay?

The policy of low rate does not work.

The fact that you demand this, ‘is the problem’.

#233 Jennifer Stamonas on 07.13.15 at 8:33 pm

To Leo Trollstoy #112

Jackie DiAngelis and her family looks like they are huge savers of GIC’s, GIA’s, TCA’s and purchasers of long term care protection and life insurance.

They don’t like or feel comfortable with other money making vehicles.

It seems they are trying to protect their principal or capital while insuring one of their possible life’s most expensive costs, long term care and costs of death, deceased person from loss of income, funeral costs, cemetary or others burial, finality costs.

I agree that the masses are more concerned with celebrities and sports and have no idea about how their doing with their finances.

If they do know it is terrible, they look the other way and eventually go bankrupt or work until their retirement and what happens, happens. They are lucky if they work for the government getting a generous, taxpayer, partially funded pension.

They don’t want to plan for savings, RRSP contribution s, RESP contributions, TFSA contributions, life insurance premiums, paying off debts sooner from mortgages, lines of credits to save interest, especially high interest credit card debt 18% to 30%, high interest unsecured loans.

They don’t want to deal with beneficiary designations on RRSP’s, RESP’s, TFSA’s, life insurance policies.

They don’t want to deal with having a bunch of paperwork and keep on track where their money is going, how much debt they have, what type of debt it is, what is the interest rate, what are their total payments, what other expenses, costs of living do they have, fixed, variable.

They don’t want to deal with changing of different tax policies and plan how to reduce or manage income taxes.

I can go on and on but I doubt it is so easy especially in the last 5 or 6 years with and ever lower interest rate, lower investment return environment to save, invest money and keep it building up if you are totally clueless what, where, when how much of it is in your household.

They want to stay in LALA land and let big government take care of them!

And that is why many face a difficult, disappointing future. — Garth

#234 Luongoop on 07.14.15 at 3:58 am

Put simply, Vancouver is being ethnically cleansed through a heavily biased shift in demographics. This, from a person, who actually lives in the region and not from some columnist thousands of miles away behind a computer screen.

#235 Joe2.0 on 07.14.15 at 4:40 pm

The IMF acts as a liaison for the banks.
Where do you think the money comes from?
Regardless, at the end of the day or bottom of the rabbit hole Greece like many other EU countries will loose its sovereignty.

The Greeks are the architects of their own situation. As we shall be. — Garth