Losing our way

BULL modified

Dave’s a 54-year-old career teacher in Ontario with two kids in uni and a wife at home. Like most teachers, he’s financially undisciplined (“But I have a great pension …”) having saved less than $200,000.

But that’s not his new problem. Mom & Dad are.

“My parents are in their late 70s, and are in good health.  They like to winter in Mexico, but announced that they will probably not return next winter as their retirement nest egg is almost gone.  They do not have pension income beyond CPP and OAS, and own a home that is probably worth $250-275K.  They are contemplating selling it as a means of continuing to fund their retirement and their winters south, but that would mean renting.  They have asked my brother (who is self-employed and far better off financially than am I) and myself if the two of us would buy a condo and then rent it to them.  My brother has no problem doing this, but my wife and myself are not quite sure it is the best option for us.  What do you think Garth, should we buy half of it or fund our current retirement plan?  The condo will cost about $250K.  We would probably put 25% down which would leave us owing $200K.  So a monthly mortgage payment is probably about $1,000, which my parents are willing to pay as their monthly rent.  That leaves taxes and condo fees which combined will total about $700/month.  I am in for half this amount.  I would like to help my parents continue to enjoy themselves and travel, but don’t want to jeopardize my own financial stability in the process.”

Dave’s little family tale is another reminder of how we’ve lost out way. Buying more real estate is not what life’s all about.

In fact, there’s a time comes when you’re best off to dump it. Clearly Mom & Dad should sell the house, invest the money prudently and rent. Duh. If they’re willing to pay $1,000 a month for shelter, and if the house proceeds can generate another grand a month (at a lowly 5%), what’s the problem? Why do the kids need to cough up $50,000, backstop a $200,000 mortgage and chip in $700 a month?

The cult of ownership is rampant, and continues to lead us to a difficult place. As real estate values detach from incomes, debt explodes and everybody thinks capital appreciation will turn every deal into a guaranteed profit. As stated here, higher prices bring higher prices. Until it stops. That’s when the exits clog.

Michelle’s a Millennial (“in shock,” she says) living in the burbs of YVR – an hour by car from the hipster condo featured in yesterday’s post. In fact, there’s zero cool about her hood. And yet it’s also been infected. The 30-year-old condo buildings in her area, Michelle adds, are “ripe with special assessments” since it was “victim of the leaky condo construction of the 80s.” So every few years condo owners are routinely hit with ten or twenty-grand bills (above condo fees) because of dwindling contingency funds.

Yet, what’s happening?

“The market has gone absolutely bonkers here in the suburbs since the spring. Apartment units in November/December 2015 were routinely selling for $300-380 per square foot depending on renovation level. Now in May 2016 the average unit is selling around $500 per square foot and it doesn’t even matter if the unit is renovated or not. They routinely get bid 50-100k over asking price. If you do the math a 1000sq unit for easy numbers used to go for around 380k, that means they are now going routinely going over 500k.

“In less than 5 months prices have skyrocketed off the charts. We are at peak insanity. We aren’t even that close to Vancouver (almost 1 hour drive downtown with traffic, maybe 40 minutes if you are lucky). What is going on… can you please let me know.. something is not right.”

Well, Michelle, all this pathetic blog can say is, stay a renter. The winds have changed and now blow FOMO in from all directions. Last month Canadians traded almost 61,000 houses worth more than $30 billion, which was not only a record but a 24.8% increase from the same month a year ago. Not only did the higher down payment requirements which took effect in February have no impact, but our collective house horniness and embrace of debt have moved to a whole new level.

Why? Are Canadians taking their cue from a new federal government that’s joyously borrowing and spending more than anyone imagined? Have the Millennials and the GenXers finally been convinced rates will never rise? That politicians will never let house values fall? Are we all on weed already?

The similarities to the dot-com era grow more noticeable by the day. Only this time it’s way more serious. In 2000 people piled into cool, sexy speculative investments in profitless new companies in the belief it was different this time and prices could never fall. But they did. The market lost 80% of its value. Nortel went from $120 to (eventually) zero. It wasn’t different, because it never is. Unlike our obsession with real estate now, most of that investing wasn’t based on debt.

Getting old sucks. But it does bring some perspective. In 1990 nobody thought house prices in Toronto or Vancouver could tumble. They did. It took more than a dozen years for the average price to rebound. When people lined up for hours on Yonge Street to buy ounces of gold at the most inflated price ever in 1980, it seemed like a no-brainer way to make money and beat inflation. Everybody did it. Then bullion lost 82% of its value, and has never recovered.

Leaky suburban condo prices up 60% in a year? Kids queueing to buy units at $1,100 a foot? A teacher goaded into more real estate for his septuagenarian elders? A weird cultist belief if you don’t buy now some foreign dude will? That $1.4 million average prices are the new normal?

My work here may well be done. This blog failed. We’re screwed.

184 comments ↓

#1 Chinois Mooola on 05.16.16 at 5:52 pm

The China money is real. Australia is experiencing a similar phenomena as Canada

https://www.youtube.com/watch?v=otWm4yh7Rh4

#2 Randy on 05.16.16 at 5:53 pm

Teachers work for the Liberal Parties. They don’t care about the kids.

#3 pathcontrolmonk on 05.16.16 at 6:07 pm

We all failed. We are all screwed.

#4 pathcontrolmonk on 05.16.16 at 6:08 pm

But thanks for trying Garth!

#5 Ryan on 05.16.16 at 6:09 pm

We are always at peak insanity. This isn’t going to end. We’re going to price ourselves right back into feudal society, landowner or serf.

#6 pathcontrolmonk on 05.16.16 at 6:11 pm

Meanwhile, Raymond Wong of Burnaby just submitted a petition with an obviously racist agenda to the Feds demanding regulations on foreign (AKA PRC) ownership.

https://petitions.parl.gc.ca/en/Petition/Details?Petition=e-281

http://bc.ctvnews.ca/online-petition-urges-feds-to-regulate-foreign-real-estate-ownership-1.2903413

#7 NoOneOfConsequence on 05.16.16 at 6:11 pm

Ahhh..but we are not ALL screwed.

There are a few of us who heeded you…and a few more that are beginning to.

Just convinced my partner to sell her rental condo in White Rock to get out and capture her gains.

She finally saw the light after her rentals in Saskatchewan went underwater in less than 2 years.

The buyers today are going to be scorched…greatest fools of us all….

#8 Life among the Stars on 05.16.16 at 6:16 pm

You couldn’t possibly have believed you could influence people’s behaviour! People are nuts! Oh well live goes on.

#9 Comox Guy on 05.16.16 at 6:16 pm

@ 161 water doggiez

See post in other thread. Tldr Comox Valley and Campbell River.

#10 Stephen on 05.16.16 at 6:18 pm

No please stick it out. A voice of sanity is needed.

#11 Capt. Serious on 05.16.16 at 6:20 pm

When price increases are going exponential, we know the end is nigh.

Everyone should read Devil Take the Hindmost.
It’s not different this time. It never is.

#12 Doug t on 05.16.16 at 6:23 pm

Garth just sit back and count yourself lucky – the people who drink/drank the house porn koolaid will not and shall not be converted. Like religious fanatics they will go blindly forth without full control of their faculties. and your right these same people are going to be in potential financial ruin when the cheap money comes to a halt.

#13 WalMark of Sadkatoon on 05.16.16 at 6:23 pm

daves story is brutal. no ez way out. even gartho’s solution will be tuff. good luck. most ppl have no choice. programmed to b poor. can’t change poor

#14 Silent the people on 05.16.16 at 6:26 pm

Well said Garth! We’re screwed! The problem is this won’t end well! Financial hardship is a bitter pill to swallow! Let us pray!

#15 Toothless Measures on 05.16.16 at 6:26 pm

The China money is real. Australia is experiencing a similar phenomena as Canada

https://www.youtube.com/watch?v=otWm4yh7Rh4

———-

But at least Australia has a tad more willingness to crack down on this negative influence, even if there are somewhat toothless and optic measures.

http://www.cnbc.com/2016/01/17/australia-forces-sales-of-foreign-owned-properties-after-breach-of-ownership-laws.html

Of course, it will be a cold day in hell before our federal government ever took such an action. Such action might actually offend someone other than locals, and we couldn’t possibly have that.

#16 Scumop on 05.16.16 at 6:27 pm

Mom & pop could drop the house and pump the 250K into the FIE etf which coughs over 7%/yr in divs and collect over 1400 a month. But too easy and too sensible.

If some non-Canadian resident buys it, more money for Canada!

#17 Wicked as it seems on 05.16.16 at 6:29 pm

I’m 65 this month, have been living in Thailand and India for the past couple of years, came back for the summer in Canada, get my $1500 a month pension sorted…long time reader of the blog who now realizes Canada is so screwed that it is unlivable in my situation, I took half a million off the real estate table in 2010, did the obligatory balanced, diversified portfolio and can now live very well in the tropics on my wad….Freedon first would be proud, I look after me only, rent everything and wake up pinching myself on my good fortune! Stay the course Garth, so many people need your daily blog, Thanks.

#18 Joe2.0 on 05.16.16 at 6:36 pm

Yup.
Your advice has been quite sound but the QEs that have been launched all over the planet have created cheap money and these markets are the by product.
What people seem to forget is cost average.
They get in a cheap 25 yr mortgage at say 2.5 points, but in 25 years the rates are back to 23%
It’s the ole bait and switch.

#19 MF on 05.16.16 at 6:37 pm

#175 Fed-up on 05.16.16 at 1:57 pm

You have to account for the savings made from not paying all those home owner expenses then add that to the 6%, which is then compounded with reinvested dividends.

MF

#20 Smoking Man on 05.16.16 at 6:38 pm

My work here may well be done. This blog failed. We’re screwed.
……

Don’t gartho the fat lady will sing soon. Noterly.Wynee.T2 it won’t end well.

Hence a good reson to drift toward insanity, or Alcohol addiction.

#21 Westvan on 05.16.16 at 6:40 pm

#6 pathcontrolmonk on 05.16.16 at 6:11 pm
Meanwhile, Raymond Wong of Burnaby just submitted a petition with an obviously racist agenda to the Feds demanding regulations on foreign (AKA PRC) ownership.

https://petitions.parl.gc.ca/en/Petition/Details?Petition=e-281

http://bc.ctvnews.ca/online-petition-urges-feds-to-regulate-foreign-real-estate-ownership-1.2903413
————
Obviously a redneck old stock xenophob. Shameful. Blatant racism

#22 Toothless Measures on 05.16.16 at 6:40 pm

#163-Cramar – “Case for June rate hike by FED looks pretty strong”

Until we get to June.

———-

Exactly, one minuscule rate increase 6 months ago after years of predicting a steady path towards rate normalization is meaningless.

Lets wait until June and wait for the unending excuses as to why the fed makes the decision to leave the rates the same – continued global volatility, lacklustre consumer spending, outbreak of a new virus (maybe ebola X2), tensions in the middle east, global oil glut, fear of crushing the fragile US recovery, stock markets tanking in anticipation of an increase, currency wars, etc.

Just pick a couple, as when June comes, there is a 99% chance one or more of these recycled excuses will be used. And once June comes and there is no increase, when then we are into 2017 before we have another tiny 0.25% increase if all goes swimmingly for a year.

And even if there was an increase, you can expect another surge in home prices as people rush to lock-in. Lets recount the measures taken since 2008 to cool the market and note that after each measure prices went higher and higher:
– elimination of 0 down 40 year amortization
– elimination of 35 year amortization
– qualifications at the 5 year posted fixed rate
– new loan valuations and equity withdrawal rules
– new bank capitalization requirements
– new down payment requirements

All teeny tiny tweaks that had the opposite effect each and every year. Yawn. They should just call any ‘cooling measures’ stimulative from this point on as after 8 years of unintended consequences, these measures have simply supported a stronger and more robust housing market.

The only people right in calling this market after the introduction of emergency rates were the uneducated, self-interested realtors.

#23 IKnow on 05.16.16 at 6:44 pm

The market is always more right than one’s opinion.
Fundamentals have changed, those people heed fundamentals lightly have become millionaires many times over.

I myself thought Vancouver had been discovered by moneyed Chinese in 1986.
His wrong I was that could not believe in The Next Wave.

If a suburb ‘there’ is selling for over $2k per sqft CAD after a 15% correction, then that will be the target of Vancouver value.

#24 Mean Gene on 05.16.16 at 6:47 pm

Dave’s parents should investigate housing co-ops, if such a thing exists in their area.

#25 OttawaGuyRenting on 05.16.16 at 6:49 pm

To the guy in comments yesterday- Ottawa has been a buyers market for awhile now

http://www.chpc.biz/uploads/9/7/9/5/9795010/8929597_orig.png?722

MONTHS on market

#26 johnnny on 05.16.16 at 6:52 pm

#17 : Just curious,health insurance : do you belong to a plan,or have a bank account that handles your medical needs.
I checked out plans,and if you are 65 or older,they are
very steep(if they will take you).
In Thailand chances are a vehicle accident could over rule
good genes.

#27 tundra pete on 05.16.16 at 6:54 pm

Uh huh. Yup. Smoke another one……

#28 west is the best on 05.16.16 at 6:57 pm

How is life and job market in CharlotteTown or Halifax? RE seems to be priced cheap compared to Tor and Van, i would think to move there even if as a familly we drop from 150.000 / year to 120.000… housing would cost us 250K top compared with 750k in YVR …
any thoughts?

#29 crowdedelevatorfartz on 05.16.16 at 6:59 pm

You didnt fail Garth.
You’re the lone voice of sanity in a world gone real estate mad.
You opened the eyes of thousands of people who almost drank the koolaid.
Thanks again for spreading the “Gospel of Greaterfool’ and dont let the xenophobes get you down.

#30 Ed on 05.16.16 at 7:05 pm

I sold my chipboard a few years ago and put all the proceeds into a sailboat. No taxes…no job anymore…no problems

#31 BOOM! on 05.16.16 at 7:08 pm

Busy ass day here. Between MD. appointments we managed to do some car shopping. It has been a few years. No the 1993 Caddy stays put it isn’t nearly worn out yet, but the 1994 Chevy has seen better days. So that goes to the curb with “for sale” on it, and the 2010 Fusion hybrid gets downgraded to go-fer status.

A new 2017 Fusion Hybrid Energy may replace it. Costs are up… what DID you expect, silly people. with a decent down payment I’m thinking (10-15G) I can get .9% financing for 36 months.

Garth, I will bet a balanced portfolio will better than that cost over the next 3 years, besides we could pay cash, but why??…. thoughts?

#32 Scumop on 05.16.16 at 7:09 pm

Regularly in these comments, someone says something along the lines of “Took your advice, Garth, and {declaration of success, reduced debt, profit, etc}.”

If some OC driven person was to grind through the comments of the past few years, count these up, and put some value on each of those ‘advice taken’ ones, what would they come up with?

My guess is that Garth’s “failed blog” has produced between $20 million and $100 million in benefits for his readers.

Not a bad failure at all.

#33 valleyrenter on 05.16.16 at 7:12 pm

Family members just sold their condo recently. Over asking. They figured it was time as the insanity is at a full froth. Choosing to rent, can’t find anything they like. Need more space. What I found interesting was it seems credit might have dried up a little. About a year ago they were mulling selling, as [email protected] figured with their income they would be pre-approved for X amount. Now when they talked to [email protected] she said they don’t do pre-approvals anymore. Now the potential borrower needs to find a property of interest first, then approach the bank to see if a mortgage will be approved. One of the banks stipulations is that it can’t be a property that is in a bidding war and/or a situation where a sellers realtor uses tactics to build hype for top dollar (over asking) in an auction type/held bids environment.

#34 james on 05.16.16 at 7:17 pm

Sat down last night to do some financial planning with my better half. 6 more years of work, build up the non-registered investment portfolio, and high tail it to someplace warm. Neither of us have any interest in using our house as a retirement vehicle.

I can’t imagine signing up for a 509k 440sqft condo. Insanity. At wage rates in Vancouver that is a lifetime of paying interest to a bank for a badly built birdcage that will fail in 20 years.

To each their own.

#35 common sense on 05.16.16 at 7:23 pm

You will have only failed Garth IF a correction NEVER happens…and we know the odds of that.

It’s not IF but eventually WHEN…financial markets too.

November 2016?

#36 Lana on 05.16.16 at 7:24 pm

I’m one of those people who did take Garth’s advice, and I am now renting, having invested the profits from the sale of my house. Lots of friends think I’m crazy, but it was the right decision for me. One to two years to retirement, and I won’t have to live on CPP and OAS alone. Who could?

#37 Chopper Dude on 05.16.16 at 7:24 pm

“My work here may well be done. This blog failed. We’re screwed.”

Oh ya Garth…. because of you…I sold my house for 100k over ask….

because of you I have a million bucks in the bank…

because of you I am now renting…happily!

because of you I can consider retiring at 54! (I won’t cuz I love my job)

because of you I no longer have to worry about house tax, maintenance, cutting the lawn, hydro, gas, water ect ect ect…

because of you! Oh ya Garth…you are a total failure!

SAID NO ONE…..EVER!!!!!

I love you Man!

#38 VICTORIA TEA PARTY on 05.16.16 at 7:25 pm

A SELLER’S STRIKE IN YVR AND YYZ? I ONLY WISH

In real estate everyone pays attention when a “buyer’s strike” breaks out.

That’s when prospective real estate “investors” detect that prices are too greedily high and then sit on their hands to wait for lower prices to break out.

Well, this day, CREA announces some sellers are now sitting on their hands especially in Vancouver and Hog Town.

I interpret this to mean that a “seller’s strike” is either occurring or in the offing. A seller’s strike is a big, big deal. It could alter the real estate business in ways we’ve not seen for decades.

So, can that “news” be true?

Here is a piece from the BNN folks:

http://www.bnn.ca/News/2016/5/16/Toronto-BC-boost-home-sales-to-record-mark-CREA-.aspx

IF there is a seller’s strike it means, as the above story implies, that sellers are sitting on their hands because there is nowhere to go once they’ve made their pile as home prices just keep on getting higher and higher.

Some of these people may have to become real estate “refugees” and move, but where? Victoria (Global TV featured some yuppie mom and her two kids who vacated Vancouver for the “City of the Living Dead” during the weekend)? Nanaimo? Spuzzum, in the Fraser Canyon?

Exactly where?

If what CREA says is actually coming true, then what is it trying to accomplish because it is such a defacto promoter of ever higher home prices? You’d think it would want to keep the ball rolling.

Hmmm. Let’s review this.

So sellers can’t buy elsewhere because prices keep going up in their markets and buyers face ever higher prices and lives of unimaginable debt and, one day, will poop out.

So, is CREA floating a trial balloon of some sort or is it actually sounding the alarm bell because it senses a market top? And if so then, why?

Somewhere in these wooly real estate shenanigans, lies a conflict of interest. It rests inside CREA.

Does it suddenly have a conscience and is trying to cool some fevered brows?

Or does it sense the Feds are planning something new to “dicipline the market” and bring the industry to some kind of heel, because it’s not happened yet inspite of government actions?

Greed and fear are opposite sides of the same coin.

We’ll have to wait on this.

#39 mark on 05.16.16 at 7:27 pm

Global interest rates to stay low, U.S.A. may try to raise rates but it will fail and economy stall if they do……..according to this BNN analyst Larry Berman on Bermans call.

http://www.bnn.ca/Shows/Bermans-Call.aspx

#40 FormerSaskie on 05.16.16 at 7:27 pm

There are many, many people you have influenced so that their real estate decisions benefited them (and their retirement). Unfortunately, you don’t know many of those stories. I don’t know why so many people are so delusional about the value and purpose of real estate, or when reality will slap us, but your blog serves up a warning that some do heed and a great financial education for many of us regular readers. I would really miss reading Greater Fool and learning from it. The time you put in writing the article and then reading the massive # of comments is staggering and unrecognized by most readers of the blog. My unsolicited suggestion is to shut down the comments section or restrict access to it more than you do, now. I am being completely selfish and focusing on my self interest because there really isn’t another blog like yours that puts the money information out there so succinctly with a dash of humor like you do (with great pics, too). But whatever you decide, thankyou, you have helped me make better financial decisions (maybe take a break from the blog and write a book ).

#41 gut check on 05.16.16 at 7:31 pm

Real Estate should not be a commodity, nor should it be a part of the globalization / financialization of the economy. This is all coming to a head.

Listen to one CEO describe her company at the Canadian Real Estate Forum’s conference last year:

https://www.youtube.com/watch?v=C-tmCAe2yDU

also, CBRE has some interesting things to teach us all:

http://www.cbre.com/research-and-reports/global-prime-logistics-rents

#42 ole Doberman on 05.16.16 at 7:33 pm

Garth can you really compare housing with .com stocks
Stocks are a nessesity like food, clothing and shelter
Plus you still seem to discount and not mention corruption and money laundering in your equation

#43 nonplused on 05.16.16 at 7:34 pm

I don’t think the blog failed Garth, you’ve probably helped countless people who just didn’t reply but I bet even the numbers who did reply are impressive. Not even Jesus could convert everyone, or heck even most people.

I coach youth sports and find that sometimes I really make a difference for a certain kid, sometimes it’s one of my co-coaches that helps another kid, and sometimes there is a kid we just can’t seem to figure out how to help. That is how mentoring goes.

The question about supporting your parents in old age is a tough one. I mean, they provided you with free rent for 18 years. Is there a return obligation? On the other hand nobody sent me to Mexico every winter. I think this is another example of human nature. People will do whatever they can get away with, even if it amounts to quilting their kids into subsidizing their trips to Mexico.

Human nature quite rightly sucks. It’s weird because sometimes people do nice things but then that same person will sell you a car when they know the tranny is bad or something and not tell you. Or the housing market. I guess you at least know when you buy a house that the furnace is 25 years old but they still want top dollar and won’t replace it first.

My personal theory is that I never want to be a burden on my children. It was my decision or possibly mistake to create them, and I have to own up to it. They can’t owe me anything since they didn’t get to participate in the decision. Sure they have to look after themselves but I question whether that’s even fair because they didn’t have a choice in the matter. I’m now leaning towards the idea that you shouldn’t have kids if you can’t at least get them going in life, and then you shouldn’t ask for anything back.

#44 ole Doberman on 05.16.16 at 7:34 pm

And thats was suppose to read ‘not’ a nessesity like stocks

#45 AB Boxster on 05.16.16 at 7:35 pm

Had a meeting the other day with [email protected]

Talking about levels of debt and she mentioned that the banks now have many creative ways to keep people in their homes.
Allowing them to skip payments, pay interest only for a while.
Banks do not want to own your crappy real estate.
They would prefer you pay for it, preferably forever.

One reason why the bubble has not, and may not burst.

Different than the US banks.
They foreclosed hard and fast.

Canadians are so polite.

#46 LifeXpert on 05.16.16 at 7:41 pm

Ottawa is toast, have some family there, market is stagnant.

Anything within an hour away from the big smoke is literally on fire!! Insane valuations and nothing sells under asking anymore.

http://www.theglobeandmail.com/news/national/ontario-to-spend-7-billion-in-sweeping-climate-change-plan/article30029081/

Btw new climate plan from Wynne, we are all screwed anyways. All homes on electric heat?? With prices doubling every year, it’s an interesting proposition.

#47 Westvan on 05.16.16 at 7:44 pm

Hey Garth how come your buddy Ross Kay never makes it onto this blog anymore ? You featured him all the time before…. Is it because he’s calling a foreign investment Ponzi scheme in van these days ?
http://www.bnn.ca/Video/player.aspx?vid=871456

#48 Brydle604 on 05.16.16 at 7:49 pm

Garth, you did not fail.
Some of us listened, and are most appreciative.
Comes the correction we are in a position to take advantage of the bargains to come.
Interesting times to be sure.

#49 Popeye the sailor man on 05.16.16 at 7:49 pm

Garth “My work here may well be done. This blog failed. We’re screwed.”

____________________

The Starfish Story

A young man is walking along the ocean and
sees a beach on which thousands and thousands
of starfish have washed ashore. Further along
he sees an old man, walking slowly and
stooping often, picking up one starfish after
another and tossing each one gently into the
ocean.

“Why are you throwing starfish into the
ocean?,” he asks.

“Because the sun is up and the tide is going out
and if I don’t throw them further in they will
die.”

“But, old man, don’t you realize there are miles
and miles of beach and starfish all along it!
You can’t possibly save them all, you can’t even
save one-tenth of them. In fact, even if you
work all day, your efforts won’t make any
difference at all.”

The old man listened calmly and then bent
down to pick up another starfish and threw it
into the sea. “It made a difference to that one.”

#50 greyhound on 05.16.16 at 7:50 pm

“When people lined up for hours on Yonge Street to buy ounces of gold at the most inflated price ever in 1980, it seemed like a no-brainer way to make money and beat inflation. Everybody did it. Then bullion lost 82% of its value, and has never recovered.”

Depends what you mean by “recovered.” In January 1980 gold peaked intraday at US$870 or so. In January 2008 gold rose through 870 again. So you “got your money back” after almost exactly 18 years. That doesn’t include lost opportunity cost, etc.
Now gold is around US$1275, a 31% rise from 870; that’s not a recovery?

Inflation-adjusted, not a chance. — Garth

#51 ILoveCharts on 05.16.16 at 7:51 pm

@valleyrenter

Something smelly about that story. Pre-approvals were always contingent on appraisals anyway.

I assure you that credit is flowing freely.

#52 rainclouds on 05.16.16 at 7:52 pm

Scumop “My guess is that Garth’s “failed blog” has produced between $20 million and $100 million in benefits for his readers.”

Was thinking along those lines myself.

#53 hope & ruin on 05.16.16 at 7:55 pm

I’m joining the ex-pats in about 5 more years. I’ll be damned if I’m going to spend half of my next 60 years living in -30 weather, shovelling out for the benefit of being overtaxed in this socialist mania.

#54 Andrew Woburn on 05.16.16 at 7:57 pm

Fans and detractors of Elon Musk will love this each for their own reasons.

“Step by Step: How Elon Musk Built His Empire”

http://www.visualcapitalist.com/how-elon-musk-built-his-empire/

#55 BobC on 05.16.16 at 7:59 pm

HEY keep them up there!

https://www.theguardian.com/business/2016/may/16/chinese-pour-110bn-into-us-real-estate-says-study

#56 Michael King on 05.16.16 at 8:00 pm

Writing from Vancouver. The link is to a G & M opinion piece from today. It makes some excellent points regarding the BC real estate industry. There are certainly many ethical and competent individuals working in the field. However, recently I’ve met a few that made me want to take a shower afterwards. There are too many of these clowns and they are reeking havoc here on the west coast.

http://www.theglobeandmail.com/opinion/when-realtors-have-their-way-a-crisis-follows/article30020302/

#57 Pierre on 05.16.16 at 8:02 pm

Starfish Story: the rest of those starfishes bought real estate in vcr and saw it’s value increase 100%

#58 Brazil ex-pat on 05.16.16 at 8:03 pm

#47 Westvan on 05.16.16 at 7:44 pm
Hey Garth how come your buddy Ross Kay never makes it onto this blog anymore ? You featured him all the time before…. Is it because he’s calling a foreign investment Ponzi scheme in van these days ?
http://www.bnn.ca/Video/player.aspx?vid=871456

++++++++++++++++++++++++++++++++++++

EXCELLENT video. “It would take ONE Fintrac arrest to stop this whole thing. One”

Govt? Anyone anyone? Govt are you listening? No……Govt is too busy collecting land transfer taxes which trumps “enforcing” the law. Your Govt….not at work.

#59 Life among the Stars on 05.16.16 at 8:05 pm

54 Andrew Woburn on 05.16.16 at 7:57 pm

Fans and detractors of Elon Musk will love this each for their own reasons.

“Step by Step: How Elon Musk Built His Empire”

http://www.visualcapitalist.com/how-elon-musk-built-his-empire/
—-

Awesome stuff!

#60 Mak the investor on 05.16.16 at 8:06 pm

“That politicians will never let house values fall? ”

I hear this argument a lot of times and always try to ask why. The replies are amusing. One classic reply is because Canada’s economy is based on Real Estate :)

#61 ww1 on 05.16.16 at 8:09 pm

“My work here may well be done. This blog failed. We’re screwed.”

On the contrary, when the bubble eventually bursts (albeit maybe in 10 years), you will have your hands full with sage advice for those “underwater” about how to salvage their ruined lives and finances.

Not to mention finally having the satisfaction of saying “I told you so but would you listen?”

#62 raging aging on 05.16.16 at 8:10 pm

Similar situation to the example – but say the parent has no assets other than monthly CPP/OAS, $100K in assets – 2/3 cash, 1/3 RRSP. Health is in decline, and a future of [expensive] assisted living could be a few years away. Kids won’t be able to afford the $3K/month or more for assisted living once the assets run out. Say the parent and kid can put up a downpayment now for a reasonably priced condo where parent can potentially age in place. Parent pays rent to kid, covering mortgage. Kid pays condo fees. Numbers are similar to the example, but the condo fees are much less. What would you do?

So where’s the assisted living? — Garth

#63 Damifino on 05.16.16 at 8:11 pm

#40 FormerSaskie

“My unsolicited suggestion is to shut down the comments section or restrict access to it more than you do, now”
—————————-

My unsolicited suggestion is to follow Garth’s own advice and steer clear of this comment section if you believe there is no value in spending time here.

I’m sure Garth will quit moderating comments on the same day he’s finally had enough. And like the great correction we all expect, it’s futile to speculate on when that might be.

#64 westcdn on 05.16.16 at 8:13 pm

I have not much to say recently regarding finances so rather than post another personal sob story so I thought I would shut up. Today I have saved enough thought to post financial stuff.

I frankly don’t know where this excuse of a financial train is going. People have recently paid far too much for RE in Vancouver and Toronto – nice places to live though. I am surprised Calgary RE has held up as well it has done. I suspect Calgary is home to most as what not the case back in the 80’s – add in pensions, severances and EI, people are willing to stick it out besides this is their home province.

I remember posting that the price of WTI (US$) should be $50 plus/minus $10 but it will not enough – see Connacher O&G Ltd. Debt levels for both individuals and companies are far too high for many – pray for lower interest rates. Generally, I am more often right than wrong but then I think 2 out of 3 is a good day for me so I listen to what other people say – I would like to be recognized as very good and bat over .900%.

At the end of the day, I think avoiding massive losses in the Stock Market or RE is the key to financial success – not massive gains. I like this quote from the [email protected]
“There was a day in age when hedge funds were respected for their stock picking talent. They found ways to access information that they layman could not even dream of accessing. It was a world filled with serious people out to make some serious money. All of that has changed, especially with the Fintech revolution that has evened the playing field for the average Joe, sputtering around in his Toyota Camry, trying to grow his nest egg.
I am dead serious about this.
The tools and sites and people sharing ideas online have truly empowered people to the point that paying attention to the once cherished 13-f filings, by some of our most prestigious hedge funds, is pretty much a non-event. Some of the new positions of mega-titans, like Buffett or Tepper, will always draw interest and perhaps lift the shares for a day or two. But, for the most part, people don’t give a shit what Tiger Global or Viking are buying and selling anymore.”

Hope he doesn’t sue me. I still don’t like Hillary – Trump is a buffoon but at least you can read him. Integrity matters a lot to me so speaking your mind is fine even though it is wrong. I hope he can step on his ego and listen. We Canadians thought we were trapped by bad choices in the last election – woe to the Americans.

#65 crowdedelevatorfartz on 05.16.16 at 8:13 pm

Well Garth now that you’ve got the historic Belfountain General Store up and running.
Time for a new project.

19.8 million will get you into this “fixer upper” in Point Grey in Vancouver.

http://thetyee.ca/Video/2016/05/16/Inside-Vancouvers-Empty-Houses/

#66 Squish on 05.16.16 at 8:14 pm

Holy bleep, Dave.

No. No, Dave. Nope.

#67 gut check on 05.16.16 at 8:18 pm

really?
legit links to TWO legit international Real Estate corporations with information of interest to people here, relevant especially to the rental markets and you won’t post it?

that’s twice now that I’ve put reasonable, real world, hard-core business, top of the line, non-tinfoil, primary research onto this blog and you’ve decided against sharing it.

makes me think that you’ve only “failed’ on this blog from the P.O.V of those who can’t think critically and aren’t paying attention.

The only post of yours not punished repeated a link provided a dozen times earlier. Chill. — Garth

#68 crowdedelevatorfartz on 05.16.16 at 8:19 pm

@#58 Brazil Expat
Govt? Anyone anyone? Govt are you listening? No……Govt is too busy collecting land transfer taxes which trumps “enforcing” the law. Your Govt….not at work.
*******************************************

Perhap is your former President-now-impeached in Brazil had focused more on collecting taxes instead of handing out money like it was mosquito repellant….the economy there wouldnt be swirling in the toilet.

Please remind me…..How many Olympic tickets are still available?

#69 gut check on 05.16.16 at 8:19 pm

oh dammit. there it is. I’d take it back but…
I’m probably already banned. :(

#70 gut check on 05.16.16 at 8:21 pm

@ #53 hope & ruin on 05.16.16 at 7:55 pm
I’m joining the ex-pats in about 5 more years. I’ll be damned if I’m going to spend half of my next 60 years living in -30 weather, shovelling out for the benefit of being overtaxed in this socialist mania.

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

me too.

#71 We're screwed on 05.16.16 at 8:38 pm

My work here may well be done. This blog failed. We’re screwed.

Even with the balanced portfolio?

Btw, it was an irrealistic expectation to think that suddenly everyone is going to change and go from one herd mentality to an other, which this school of investment would become if everyone would have followed suit.

#72 will on 05.16.16 at 8:38 pm

I care about the people who drank the kool-aid but I don’t.

This is off topic Garth but is commercial real estate in a bubble as well? If you could blog a little bit about the market for commercial real estate and of course reits that would be very much appreciated.

#73 wallflower on 05.16.16 at 8:45 pm

OMG. Just got the phone call.
Parental units have (finally) found a rental apartment that meets their requirements and will be listing their 100% equity $1.7M small house in C4 Toronto.

Phew.
(Savings are almost zilch.)

#74 raging aging on 05.16.16 at 8:46 pm

Parent is based in Toronto. Because family is in Toronto, assisted living would need to be in the GTA. Condo in a good building, central downtown, with amenities that might prolong mobility – saltwater pool, sauna, exercise room. Priced at $250K. Looking down the road at the parent’s current and future quality of life here.

#75 Cici on 05.16.16 at 8:48 pm

But, but…this is the best blog on the net Garth!

#76 MF on 05.16.16 at 8:49 pm

#22 Toothless Measures on 05.16.16 at 6:40 pm

Yup. That’s because the policy makers are inept and clueless.

Just wait when this thing starts to collapse. You will hear cries for help from the indebted idiots, greedy developers going bankrupt, greedy politicians who have benefited from the laundered money and property increases etc.

The leaders will step in with stimulative measures which will fail spectacularly like they always do. Then it will be headlines in The Star like this:

“Government stimulative measures for GTA real estate fall short as interest rates and debt levels already at astronomical levels. Homeowners rush to the exits in panic”.

Just watch when the media starts printing that message daily.

MF

#77 Brazil ex-pat on 05.16.16 at 8:53 pm

#68 crowdedelevatorfartz on 05.16.16 at 8:19 pm
@#58 Brazil Expat
Govt? Anyone anyone? Govt are you listening? No……Govt is too busy collecting land transfer taxes which trumps “enforcing” the law. Your Govt….not at work.
*******************************************

Perhap is your former President-now-impeached in Brazil had focused more on collecting taxes instead of handing out money like it was mosquito repellant….the economy there wouldnt be swirling in the toilet.

Please remind me…..How many Olympic tickets are still available?

+++++++++++++++++++++++++++++++++

1. I agree

2. I don’t know. I don’t follow the Owe Limp Pics. My wife and I are poly extreme athletes.

#78 Bottoms_Up on 05.16.16 at 8:55 pm

Dave–sure glad I have kids, in 50 years they can buy me a condo and subsidize my life!

Michelle, read this:

http://mobile.nytimes.com/2005/12/25/business/yourmoney/take-it-from-japan-bubbles-hurt.html?referer=

And this:

“By 2004, residential real estate in Tokyo was only worth of 10% of its late 1980s peak, while the most expensive land in Tokyo’s Ginza business district had fallen back to just 1% of its 1989 level in the same year.”
http://www.thebubblebubble.com/japan-bubble/

#79 gladiator on 05.16.16 at 8:57 pm

I am surprised this has not yet been posted here:

http://www.zerohedge.com/news/2016-05-16/what-capital-controls-chinese-buyers-flood-us-real-estate-market-110-billion

You ain’t seen nuttin’ yet. Expect houses to at least double in the next 5-10 years.

#80 Barb on 05.16.16 at 9:03 pm

Maybe house-hornies believe T2 will bail them out when interest rates climb and they have to declare bankruptcy.

No responsibility, no accountability, instant gratification.
They share that with T2

#81 raven69 on 05.16.16 at 9:08 pm

I’ve heard you, Garth. I am a happy renter in insane VanCity. Not having a mortgage has allowed me to go back to school mid career while working less than full time and not stress about money. It’s a penny pinching life, but doable. My plan is finish debt free then reboot my savings/investment program in a job I actually love. No way am I taking on ridiculous life and choice choking housing debt. There are more important and varied forms of wealth than owning (which you don’t, the bank does, usually) a postage stamp sized condo. And, there is still a soul to this otherwise property-mad city, despite contrary reports. Which is I why I will stay, and just not buy into the home ownership insanity.

#82 Linda on 05.16.16 at 9:15 pm

Garth, I wouldn’t say the blog failed. If you only saved one person from financial suicide your work here is done; I’m fairly sure you have saved more than one so you get to pass Go & collect your $200.

As for the housing craze, that is exactly what it is. A craze. No rational person could explain why people are willing to indenture themselves for the rest of their lives or until bankruptcy occurs. The craze is what it is. Tulip mania, East India Trading company, the stock market up to 1929, the great financial crisis of 2008 – pick your time & place & there will be some historical example of people collectively losing their minds. Maybe its genetic because for sure we don’t seem to learn from history, not even recent history.

Regarding teacher Dave, say what? The parents could live another decade or two. What happens when they do die? Plus, what is to stop them from blowing the money from their house sale & then not being able to make the rent? Do Dave & his bro’ then get to evict their own parents? What if the parents think they own the unit by then? Possession being 9/10’s of the law & hey, what if they are having medical issues, like dementia? Does Dave want to take on $200K in debt at age 54?

As for the ‘great pension’, what if the pension rules change before Dave begins to draw on it? He has a spouse & 2 kids to help him spend it as it is. Does he intend to work to at least age 65 or even 70 (which he might have to do, to ensure costs are covered because the pension is not likely to stretch that far) so the parents are taken care of? I’ll add that if the parents house is only valued at $275K that renting might be an issue, because small towns don’t tend to have a lot of suitable rental units going unoccupied & that house price sounds small town to me.

#83 acdel on 05.16.16 at 9:16 pm

Hey Garth, you have helped many but I am with you. Take a break and enjoy your retirement.

The chips are going to fall; it may take a few years but fall they will.

There would be no Asian or foreign buyers from afar if people were not willing to sell, flip, sell, flip; you’ve reaped what you sowed.

For those of us that followed Garth’s advice; all the best!

#84 Bottoms_Up on 05.16.16 at 9:26 pm

Another must read for Smoking Man….although Ontario had been in a cold snap, basically the rest of the world has been warmer than normal:

April breaks global temperature record – http://www.bbc.co.uk/news/science-environment-36303046

#85 Future Expatriate on 05.16.16 at 9:26 pm

#2 You could always pay teachers the low pay they make in the states, where teachers don’t care about the kids either. Beyond wanting to date them.

God save the world from conservative “logic”.

#86 BOOM! on 05.16.16 at 9:27 pm

“My work here may well be done. The blog failed. We are screwed.”

One man’s opinion, and he is entitled to HIS opinion. I may disagree in part, if you don’t mind.
It is merely MY opinion to which I am also entitled.

Your work here may well be at, or near, its conclusion. The financial advice has been first-rate. While not all of its translates perfectly to this American because of tax law differentials, the main themes resonate with the pure sounds of reasoned experience, and quality.

Did the blog fail? I don’t know, Garth, how do you “test” for that? Certainly, some readers have cashed out, are now renting, and living huge!! Others, no doubt, are waiting for the market to go up a ‘little bit more’ before cashing out, or they’re to dam lazy to move 3 years before retirement. Unfortunate for them, as another 3 years might mean the difference between cashing out near the rim, rather than when the same glass is merely 2/3 full… maybe even less -who is to know now?

As for “We are screwed.” Who is we? You got a mouse in your pocket? I can absolutely tell you, real estate could fall by HALF tomorrow, the dollar plunges, Trump is elected, the markets tank, Interest Rates rise, and a Zombie apocalypse begins … I will not be too adversely impacted.

Would I worry, dam right, my name is NOT Alfred E Newman (from MAD magazine) the “what me worry” kid.

I would be FAR more worried about those newly minted homeowners, and those newly retired who have not done a good accounting of their resources, perhaps including a paid for home. These are the ones with far more to lose in the gamble than I ever will.
They may have listened.. but heeded not.

You have told a great story. A great story of how to invest, how to grow one’s future, and how to avoid high risks, both in investing as well as RE.

I seemed quite evident to me, but perhaps I am more interested in the subject matter than average.

Wherever happens to this Blog, its been a hoot, and Garth, I wish you only the BEST!

#87 Bottoms_Up on 05.16.16 at 9:39 pm

#46 LifeXpert on 05.16.16 at 7:41 pm
—————————-
Actually if you read the article it mentions new homes (as of 2030) will have to be on electricity OR geothermal, and that the difference in cost vs. Nat gas will be subsidized so as to not cost more. And it means a 16 year old today purchasing a brand new home by the age of 30 will be the first to experience this new building code. About time for real action on fighting global warming.

#88 East Coast Bias on 05.16.16 at 9:41 pm

Hi Garth,

We are a family of 5. My wife and I were both brought up to be fearful and greedy about money, and so the subject was a touchy one for both of us. Your writings have had a massively positive impact on our lives over the last 6 + years and it’s largely due to your influence that we packed up our lives and left the wet coast and moved to the east coast.

Our children’s lives are already richer. We are 5 people who are touching many other lives. Thank you very much for what you’ve done and the incredibly repetitive nature of your message.

#89 gut check on 05.16.16 at 9:41 pm

@ Garth
re # 67
“The only post of yours not punished repeated a link provided a dozen times earlier. Chill. — Garth”

punished, eh? :D

I am sheepish as I’ve shown but that Freudian slip of yours has brought out my cheeky side again! ;) I mean just look at that beauty!

#90 Observer on 05.16.16 at 9:53 pm

Has Poloz even addressed these bubbles to date? Carney would at least get out there and talk about it.

#91 WalMark of Sadkatoon on 05.16.16 at 9:55 pm

huge increases in real estate prices in YVR and YYZ are fuelling this race to oblivion

http://www.cbc.ca/beta/news/business/crea-housing-april-1.3583942

u YVR and YYZ ppl buying homes are dum

#92 WalMark of Sadkatoon on 05.16.16 at 9:59 pm

#17 Wicked as it seems on 05.16.16 at 6:29 pm

i luv success stories like this. congrats and enjoy! u deserve it

#93 WalMark of Sadkatoon on 05.16.16 at 10:05 pm

the only reason this blog may have ‘failed’ is cuz u can’t reason w dum ppl drunk on free money

those ppl are beyond saving

#94 JR on 05.16.16 at 10:14 pm

Love the sage advice Garth.

If Garth ever shuts down the comments section, we can all meet at Smokey’s blog. The only reason some of us are still here is because when he’s not at the Seneca, he’s over here!

#95 Smoking Man on 05.16.16 at 10:18 pm

#84 Bottoms_Up on 05.16.16 at 9:26 pm
Another must read for Smoking Man….although Ontario had been in a cold snap, basically the rest of the world has been warmer than normal:

April breaks global temperature record – http://www.bbc.co.uk/news/science-environment-36303046
…….

You read the BBC? that explains it.

Look at Venezuela. The results of socialism. Coming to a province near you.

#96 TurnerNation on 05.16.16 at 10:18 pm

Social Cocooning: was a an early stated goal of Facebook’s. Imagine: you spend 80%+ of your online time following your friends and their feeds. Also on Instagram, Snapchat etc.

Monkey see monkey do. They all bought homes and it’s working out okay right?
When the elites unleash an idea or even fake news story its spread around social media can be predicted using software models.
Like a virus can.
Every like, eyeball, click and swipe is being analyzed in near real time.
The battlefield is staring right at you.
Legions of intelligence personelle from many places with unlimited budgets are writing history online.
All you have to do is follow and do not think or judge.

Liberalism has taught us judgment is bad, mmkay?

Remember this term in coming years:Weaponized Debt.

#97 MF on 05.16.16 at 10:28 pm

#84 Bottoms_Up on 05.16.16 at 9:26 pm

“But in terms of its departure from the 1951-1980 temperature average used by Nasa, April was equal with January 2016.”

I’m still on the fence with the whole climate change thing, but I know the Earth is billions of years old. When we are comparing a global temperature increase against a supposed average range that makes up .0000000000000001% the earth’s history it’s hard to be taken seriously.

MF

#98 Annek on 05.16.16 at 10:28 pm

#65 crowdedelevatorfartz
I just watched your link/ video.
I cannot believe this nightmare is listed for $19.5 Million. This is nuts!

#99 jay on 05.16.16 at 10:36 pm

Where are our leaders in this country . http://vancouversun.com/news/local-news/drop-in-vancouver-area-home-sales-suggests-owners-spooked-by-rocketing-prices-crea

#100 mountain guy on 05.16.16 at 10:45 pm

Garth, every week I turn people to explore your blog. Millennials, recent empty-nesters, retired…. Most of them “get it”and a lot come back later to thank me. You are guiding a lot of people away from risk and toward a balanced portfolio. Keep up the good work.

#101 NoName on 05.16.16 at 10:53 pm

#31 BOOM! on 05.16.16 at 7:08 pm

4000$ federal tax credit for 2017 Ford fusion energi.

#102 Metaxa on 05.16.16 at 10:55 pm

#85 Future Expatriate writes:
God save the world from conservative “logic”.

With a few exceptions most of those on this blog who self identify as “conservative” wouldn’t know what a true conservative is if you Googled it for them.

Neoliberalism bordering on fascism…seems to be re-branding itself as conservative these days in both US and Canada.

As a life long Progressive Conservative I long for the days when folks were a little less interested in bathrooms and a lot more interested in smaller, more efficient government.

Look at universal healthcare! Proposed by a CCF-er and adopted by a Conservative government because it was a good idea. For all Canadians, not just the ones who voted the right way.

Can you imagine the mouth breathers that call themselves conservatives going along with that today?

#103 jefferson on 05.16.16 at 11:12 pm

you saved me at the perfect time Garth, I’ve been reading daily for over a year…..

inherited our house 12 years ago with 2 other siblings, after our father passed away…..it’s now come time to go our separate ways…(north of Toronto, inherited when 220k, now apx. 490k)

after living in the house mortgage-free all this time, had the wonderful opportunity to buy out my siblings share this year and go into 325k debt , you know, to help “keep the house in the family”…and other sentimental reasons that should be discarded from this kind of decision making.

…needless to say it’s going on the market hopefully in the next month or so, and I will be looking forward to renting, at least short term, within walking distance to work, and investing the proceeds and living debt-free…you must shake your head a lot at the masses, but please keep spreading the word, and thank you sir!

#104 Love My Kia on 05.16.16 at 11:18 pm

I for one don’t think this blog is a failure, but realistically it doesn’t carry any legal power to effect change. On the other hand, you have a loyal readership that does appreciate and takes to heart your common sense on debt issues. I just wish you could give gold a chance. I think its all going to hell in a hand basket anyways, so why not?

Maybe its time for a break, you’ve mentioned shutting this down a few times so maybe its time to relax and enjoy life at its basic best. Your new store sounds like a slice of heaven on earth, enjoy it.

#105 Vundo on 05.16.16 at 11:34 pm

I would be as ridiculous as the guys lined up for the x8 if I never discovered this blog. I might have been in the market, ready to put everything on the line, this year if not for the fact that I no longer believe RE is magic and the stock market is a crooked casino. Garth didn’t fail me. He saved me from a life sentence of debt.

#106 Fed-up on 05.16.16 at 11:39 pm

My work here may well be done. This blog failed. We’re screwed.
——————————————————————————-

This blog may have failed in some/many ways, but none of that had to do with your good intentions coupled sound financial sense along with an attempt to expose fiscal insanity.

I think we were all guilty of refusing and failing to accept that this was much bigger than any of us could have imagined. Banks, governments at every level, CREA, CHMC, developers, insurance companies all working in tandem to engineer and keep this party going all costs. Turning blind eyes to grotesque over-valuation, shady lending and business practices, illegal number crunching and yes, huge amounts of uncontrolled foreign money funneling into our major cities with little to no regard toward the average Johnny Canuck who was too busy being stupid with his money to even notice.

Seniors aren’t saving enough? No problem, screw young buyers into paying 3 times more than what their pile of crap is worth!

Canadians not spending? No problem, screw savers by lending out their cash to borrowing losers (now the new winners) so they can spend their collective asses off. Then savers will have no choice but to join the madness themselves.

Canada not making anything anymore? No problem, have 25% of the population freshly minted working in the “industry” to finance, develop and erect flimsy, eyesore, particle board crap, everywhere and anywhere that they can shoehorn that garbage into. Then screw the lemmings (buyers) hard with a publicly insured $850,000 mortgage at never-seen-before emergency rates that remained at emergency levels 8 full years after the emergency.

We were, are and continue to be wrong regardless of how much sense we make when looking at the hard numbers.

Will we be right one day? I really don’t know anymore. But as I posted a few times before, most of us may be too old and sick to give s&*t by then.

15 years and counting, is a considerable chunk of your adult life. You can join’em or leave. The latter may be the way to go.

#107 45north on 05.16.16 at 11:52 pm

The similarities to the dot-com era grow more noticeable by the day. Only this time it’s way more serious.

My work here may well be done. This blog failed. We’re screwed.

yeah we are. established, professional people in Vancouver are selling their houses and leaving – why bother working for the next 10 years when you can just sell your house and leave?

we are headed for an epic crash. Epic. Yet the government can still slow it down – raise interest rates and tighten CMHC regulations.

#108 fleabitten monkey on 05.16.16 at 11:55 pm

Hi Garth,
I will hope you weave in Ross Kays latest statements about Vantown massive price appreciation today on BNN in a later blog this week. Seems he is pointing to Chinese capital flight almost conclusively, though he did say 100 pct for sure, but almost a certainty. I trust you too are still in close contact.

#109 fleabitten monkey on 05.16.16 at 11:56 pm

Sorry, I meant DIDN’T say conclusively, but almost a sure thing.

#110 Valleyboy on 05.17.16 at 12:01 am

Question:
Everyone is building suits these days. Where are all these renters appearing from? Almost every house in my area is listed as suit potential or suited. serious where are the people comming from filling these basements its baffling.

#111 Gramps on 05.17.16 at 12:08 am

Hey Dave, you n your brother might as well just buy your parents place.

#112 45north on 05.17.16 at 12:16 am

LifeXpert: from your link: talking about the Ontario Government It will also require that gasoline sold in the province contain less carbon,

require that gasoline contain less carbon!

you got to be kidding!

The bulk of a typical gasoline consists of hydrocarbons with between 4 and 12 carbon atoms per molecule (commonly referred to as C4-C12)

https://en.wikipedia.org/wiki/Gasoline#Chemical_analysis_and_production

I told the story how I rounded the Ontario Parliament Buildings and was face-to-face with the Premier ( Bill Davis ). No security. No nothing.

Wynne is basically going to war with the people of Ontario. Same as the NDP in Alberta, when she feels the heat, she’s gonna cry.

#113 Bob Dog on 05.17.16 at 12:22 am

The new minister of finance must be as smart as the old minister of finance. Why is the government of Canada doing this to the general population? This is not an accident. Can the federal government be held criminally responsible?

#114 Toothless Measures on 05.17.16 at 12:45 am

While many have been helped, and financial literacy raised to a new level amongst the Canadian population, the failure to acknowledge the role of foreign buyers has been a huge detrimental oversight.

We live in a global economy with global – not local, regional or national – transfers of wealth. The saying ‘all real estate is local’ is moot when foreign buyers never have to leave their homes to buy your local house – listings are all on websites overseas, locals will help facilitate the purchases, and our FIRE sector looks the other way.

Even Ross Kay, the one time featured analyst here, has hit the nail on the head by acknowledging the foreign buyer ponzi scheme in Vancouver. Many posters have been saying this for years, and even giving similar examples, only to be shunned and ridiculed.

Prices rising 30% in a year – seriously? Look around the globe and see in what countries those types of ridiculous annual RE increases take place. Take a wild guess.

This issue of foreign buyers is coming to a head and it will be an election issue in the coming provincial BC election. The elephant in the room is too large to ignore.

Everyone now knows that markets are shaped by only a small percentage of buyers and sellers, so that 5% of foreign buyers can, and does, have an influence. And that influence in one class of homes then has a trickle down influence on the next class of homes, and so forth, as that new infux of capital gets to put increased pressure on all prices.

http://www.bnn.ca/Video/player.aspx?vid=871456

That being said, this blog has provided invaluable advice on portfolio management, estate planning, insurance, debt management, and general financial well-being.

An invaluable service in these debt fuelled and uncertain times.

#115 millenial1982 on 05.17.16 at 12:47 am

http://www.cbc.ca/beta/news/canada/toronto/ontario-climate-change-1.3584402

What do you say Smoking man? I think you called this one a long time ago. Nobody in my part of the province even THINKS of heating their homes with electricty. The less electric fixtures and alliances the better.

#116 Stomper on 05.17.16 at 12:53 am

and when the SHTF the uprising will be brutal and ugly…..

#117 observer on 05.17.16 at 1:00 am

I believe , when age 65 retirement was first introduced the average life span for a person was around 67 years old. Now we are living well beyond that. I say 80s sound about right.

That mean the milleniums will have to fund the old wrinklies

The boomers has just won a lottery. Houses have never been higher. The can take their winnings off the table and have a nice nest egg and confortable living til they die.

But for the people in the article. They have about 250,000 if they sold their house. Otherwise they are broke. They are just 70 and will have to make it last for another 10 years or more. Also note they are still healthy now but that can change in an instance. Problem is they have a expensive lifestyle. Can they change that and live within their means

#118 Home Grown on 05.17.16 at 1:01 am

Four Corners is good journalism. They reported on the Panama papers.
Did the people cause the bubble?

https://www.youtube.com/watch?v=Zl9VzTQ6p9g

#119 DON on 05.17.16 at 1:34 am

#96 TurnerNation on 05.16.16 at 10:18 pm

Social Cocooning: was a an early stated goal of Facebook’s. Imagine: you spend 80%+ of your online time following your friends and their feeds. Also on Instagram, Snapchat etc.

Monkey see monkey do. They all bought homes and it’s working out okay right?
When the elites unleash an idea or even fake news story its spread around social media can be predicted using software models.
Like a virus can.
Every like, eyeball, click and swipe is being analyzed in near real time.
The battlefield is staring right at you.
Legions of intelligence personelle from many places with unlimited budgets are writing history online.
All you have to do is follow and do not think or judge.

Liberalism has taught us judgment is bad, mmkay?

Remember this term in coming years:Weaponized Debt

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

I get a creepy feeling about face book.

#120 Australia- we feel your pain on 05.17.16 at 1:41 am

Same journalism program that exposed the Panama papers.

https://www.youtube.com/watch?v=Zl9VzTQ6p9g

#121 DON on 05.17.16 at 1:50 am

#97 MF on 05.16.16 at 10:28 pm

#84 Bottoms_Up on 05.16.16 at 9:26 pm

“But in terms of its departure from the 1951-1980 temperature average used by Nasa, April was equal with January 2016.”

I’m still on the fence with the whole climate change thing, but I know the Earth is billions of years old. When we are comparing a global temperature increase against a supposed average range that makes up .0000000000000001% the earth’s history it’s hard to be taken seriously.

MF
*******************
I’m with yah, man.

Apparently, the human race is only concerned about the last 100+ years of record keeping. Aren’t we special and ultra relevant to the earth itself. The one thing that we can be sure of – human nature repeats.

For me…I’m going for the much sought after ‘Greater Fool’ award. I’m waiting for peak to prepare for the big belly flop (financially that is). Yup gonna buy at peak, besides I wouldn’t be caught dead living in a 2 million Vancouver special, I need me a 15 million 1956 one bedroom bungalow, with potential on west side that I can flip, once i put some granite and stainless.

I believe the tipping point is near, no new bright spots in the world or economies, sounds like a slow grind is upon us.

#122 jane 24 on 05.17.16 at 3:45 am

I don’t understand why Canadians are content with such a life of cold and drudgery? My family in Canada get up, go to work, come home, make supper and watch TV. What kind of life is that? Don’t even go down to the local pub after dinner to watch a band. Don’t go away for weekends either. Never just jump in the car to go ‘walk around’ and return a few days later. Just exist.

Most of them are now middle age and have never left North America. An exciting holiday to them is exchanging the strip malls of TO for the strip malls of Florida.

They can’t afford to do anything or go anywhere due to the high cost of living in Canada yet they are on at me all the time about living in the world of milk and honey. How Canada is the best place in the world, having been exactly nowhere. What kind of brain washing is this?

What kind of life will my nieces and nephews and young cousins have? They won’t own their own home, that is for sure.

If anyone can answer this please try.

#123 CHERRY BLOSSOM on 05.17.16 at 7:27 am

Canada should have taught Financial Awareness from Kindergarten on even if it was putting a penny in a piggy bank every morning. We used to open the morning class with a prayer but now that money is God it is fitting that class opens with a bow to the Piggy Bank.
WE are all suffering from over population. We need to have a war which is most likely on the horizon. that might put things into perspective for these foolish stupid self indulgent Millenials. The only person willing to speak about the problem of over population is Elizabeth May cause she tells the truth. So probably not a good politician.

#124 Bottoms_Up on 05.17.16 at 8:05 am

#120 DON on 05.17.16 at 1:50 am
——————————–
Sorry guys, that’s a false argument. It’s like saying there’s no housing bubble in Vancouver because for 99.9% of the time of the existence of housing there hasn’t been a bubble.

The issue with what we are currently experiencing with global warming is the RATE of change. Temperatures have shot up faster than NEVER before. Explain that.

“Climate is local; warming is global”

#125 Bottoms_Up on 05.17.16 at 8:09 am

#114 millenial1982 on 05.17.16 at 12:47 am
——————————–
Ontario now has clean electricity. So yes it makes to begin to change our way of thinking. The government has also indicated they will subsidize any extra cost via cap and trade proceeds. So new builds that contain electric (or geothermal) heating will also be subsidized.

#126 busman7 on 05.17.16 at 8:10 am

All Dave’s parents have to do is follow #17’s advice.

Sell the house, invest a couple hundred k, move to Mexico either buy with the excess or rent, live the good life in a decent climate in the tropics.

That’s what I did plus also bought a used Kia.

#127 TurnerNation on 05.17.16 at 8:41 am

121Jane let me try and answer. I know what you mean. Growing up with immigrant parents (Europe) our life was like that
TV was for news, hockey games. We had family walks, drives, shared chores at home. Shopping was perfunctory task. Exploring neighborhoods. School programs now cut due to budget issues. Still, Ontario govt set to steal 7B from us in green theft while every local hospital holds yearly begging charity drives for basic equipment.

Everyone has had their culture removed. Great areas like Chinatown, Greek town on Danforth, and now even Little India past Leslieville are being turned over into hipster joints like brewpubs with $8 pints and $17 hamburger and fries. A slanty semi here costs 600-750k.
That weapon of cheap debt is obliterating ma and pa businesses. Condo development swept it.

I could go on but the fabric of Toronto culture has been torn from us through fear. What’s in your wallet. ..

#128 Idiot Realtors and 45% ROI on 05.17.16 at 8:45 am

This moron of a realtor can’t even spell properly if you look at his chart that he mailed out to EVERYONE. Mortage and Apprciation??? Kinda proves he put together this scam with no thought.

This made me laugh!

“The sender of this email recommends that buyers, sellers or renters of real estate products/services consult appropriate professionals for legal or other professional advice. ”

YES!! NO KIDDING!!

Also, where are the maintenance fees in his glorious chart of 45% returns?

http://imgur.com/5zL0WA3

http://imgur.com/PmIhDFY

Ryan Coyle Toronto Real Estate Agent, Broker, The Condo Store Realty Inc., Brokerage. 416‑800‑9272

Matt Elkind, Sales Representative, The Condo Store Realty Inc., Brokerage. 416-800-9272

Not intended to solicit buyer currently under contract with another brokerage

© COPYRIGHT 2016 FOR CONNECTASSETMANAGEMENT.COM. ALL FUTURE PRICES ARE BASED ON HISTORICAL ASSUMPTIONS FOR INFORMATIONAL PURPOSES ONLY, CONNECTASSETMANAGEMENT.COM MAKES NO WARRANTY OF THEIR ACCURACY

*45.5% is based on historical assumptions and for informational purposes only. CONNECT asset management and its affiliates make no warranty to the accuracy.
*All figures are provided are estimates only and none of these figures are guaranteed. E.&O.E. 2016.
The sender of this email recommends that buyers, sellers or renters of real estate products/services consult appropriate professionals for legal or other professional advice.

#129 NorthOf49 on 05.17.16 at 8:48 am

US Consumer Price Index stats released this morning 8:30:

“The price Americans pay for goods and services jump 0.4% in April — the biggest gain in more than three years — on the higher cost of gas, food, rent and medical care, the government said Tuesday.”

http://www.marketwatch.com/story/us-consumer-prices-jump-04-in-april-2016-05-17

A June Fed bump is getting closer to reality.

#130 Gonkman on 05.17.16 at 8:49 am

Will the BOC do something stupid next week like drop rates another 0.25%??

No comments from Garth on it….

I know raising won’t happen…. so it will be Hold or Lower…

Smokey?? Thoughts?

I need to pick up some more US$ for Vegas coming up. Might pick some up before our PESO drops again if they lower…lol

#131 Grey Dog on 05.17.16 at 9:05 am

Dave, did your parents never read to you the Aesop’s Fable The Ant and the Grasshopper? Did you not read this to your own children? Prepare and save today for a prosperous tomorrow?

Is your brother really as well off as he thinks? He has no pension and has to save significantly more especially if he has become accustomed to living high off the hog.

What if your inlaw’s need and expect the same handout?

Dave you need to face reality about your own lack of savings! You need to do the math…Establish what exactly your pension payout will be…then SLASH your current spending and live on that amount til the day you retire. Save and INVEST the delta. Are the TFSAs fully topped up for both you and your wife?

Your wife may need to get out there in the working world too.

You need to work for more years than you expected.

You and your brother are low hanging fruit that your parents came up with the bright idea to sponge off. It’s one thing to be in ill health and in poverty, your parents spent their way into their current harsh reality with no regrets as they still want to carry on their Mexico lifestyle with you and your brother subsidizing their life that they are in extreme denial about.

Good luck, get financially strong and be informed. You have time to still help yourself. You parents need to realize the error of their ways. No guilt trip on their kids putting them into poverty…THEY DID IT QUITE SUCCESSFULLY ON THEIR OWN. Time to face the consequences.

#132 salonist on 05.17.16 at 9:13 am

So where’s the assisted living? — Garth

here

https://cmhc-schl.gc.ca/en/co/acho/acho_013.cfm

#133 Grey Dog on 05.17.16 at 9:21 am

Garth, I absolutely love the advice and wisdom you share daily with us. Your blog helps me to stay the course and save, save, save, for our retirement years which will start a year from now.

You are balancing a lot of balls in the air these days, my selfish advice to you, continue your blog writing, IT IS MAKING A HUGE DIFFERENCE TO THE BLOG DOGS. However, it may be time to shut us down by not indulging our comments. It is unbelievable the amount of time you must spend indulging the peanut gallery.

THANK YOU GARTH.

#134 fancy_pants on 05.17.16 at 9:51 am

the reason we are all screwed is losses are socialized, even more so under left wing gov’ts. The good news for Ontario is it will be so green with windmills and solar panels and electric heating that when they bury us all, we will produce the nicest flowers. till debt do us part. rip.

#135 };-) aka Devil's Advocate on 05.17.16 at 9:51 am

The similarities to the dot-com era grow more noticeable by the day. Only this time it’s way more serious.

Nothing terribly unique from one bubble to another. History may not repeat but it certainly does tend to rhyme.

SHIFT happens… learn to ride the tide.

BTW… Kelowna South is beginning to look a lot like Vancouver as bidding wars ensue. Vancouverites moving here in hoards with big smiles on their faces and a wad of cash in their back pocket.

#136 Toronto_CA on 05.17.16 at 10:01 am

Finally convinced my partner to sell the condo for $150k more than bought for 5 years ago. It’s a shitty one bedroom condo with a bad layout and a balcony that is on the 2nd floor overlooking a busy section of King street with constant streetcar noise.
$150k gains on a crappy 1 bedroom? You know the world has gone nuts. Glad to get out. If we have to buy again rather than rent something awesome for less money, we’ll buy in a market that’s not insane (eg anywhere but GTA/GVA).

#137 Sean on 05.17.16 at 10:03 am

Serious question Garth — What was the media saying in the 90s, what were the government and economists saying about the housing market then? Right now there are a lot of people saying the markets are overvalued by many metrics, but pretty much they have defied expectations for many years now. I’m just trying to understand if SOME people saw it coming. Maybe things won’t drop until even you are on board that it feels different this time, then maybe we are over the edge then ;)

#138 Yanniel on 05.17.16 at 10:09 am

Garth, you have not failed.

#139 sparks on 05.17.16 at 10:13 am

If you quit the blog now it will be like going home 5 minutes before the fireworks start after waiting patiently for two hours. just a gut feeling

#140 fancy_pants on 05.17.16 at 10:22 am

this blog is more relevant now than ever. Any homeowner in YVR or YYZ who steps back to see the bigger picture has a sign on his her lawn now. This getting downright ridiculous. timing the top is getting inherently riskier as we move forward

#141 lee on 05.17.16 at 10:28 am

#139 Fancy Pants,

This will go on for another 5 years at least in TO, if it will ever end. There is tons of money flowing in Toronto. IT people are getting paid in the six figures at 25, government employees keep getting pay raises in the 4-5% range when you include lump sum payments and of course pension contributions, and construction people keep feeding at the trough. Add in well off boomers, entrepreneurs, professionals, etc, and there will never be enough SFHs in TO to meet demand. This isn’t the 90s. I don’t expect 15% a year like this year, but a smooth 3-5% a year is going to happen. Just accept it and move on. Everyone whose buying is.

#142 Ole Doberman on 05.17.16 at 10:45 am

Looks like Soros is betting on gold and selling the S&P
Wonder what he knows that nobody else does:

http://www.cnbc.com/2016/05/17/soros-fund-management-outlines-new-allocations.html

That he has enough money to gamble on highly speculative positions. Do you? — Garth

#143 TnT on 05.17.16 at 11:10 am

#121 jane 24 on 05.17.16 at 3:45 am

I don’t understand why Canadians are content with such a life of cold and drudgery?

If anyone can answer this please try.

I’ll give it a try :)

1) Canada – the name really comes from an old Portuguese map. On the map, over Canada is written Ca Nada. Means Nothing Here in Portuguese (true story, google it)

2) After the US revolution from Britain all the Loyalists marched north of the 49th parallel. Britain then filled Canada with docile families that would never “go against the grain”. This is the original DNA of Canada – “Don’t rock the boat eh”

3) A handful of families that dominated the beginning of Canada still have a dominant control of everything – government, land, laws, policies & businesses etc.

4) Canada is so large and underpopulated that competitiveness for resources does not exist. Iron sharpens Iron to better ourselves but we have no one to sharpen our Iron.

5) Canada lives in the shadow of USA, our cousins down south have the DNA of fighters and entrepreneurship, Canadians suffer from USA envy

6) Being so far North means we don’t get enough Vitamin D. Lack of Vitamin D creates Seasonal Affliction Disorder. Mix that with our DNA of being docile = unmotivated humans content with the status quo.

7) The Liberal Machine weakens the human spirit to be too dependent on hand outs. This creates a permanent lower tiered society that would ever bite the hand that feeds them.

#144 fancy_pants on 05.17.16 at 11:11 am

#96 TurnerNation on 05.16.16 at 10:18 pm

facebook is a voluntary census that at some time in the future will be used to convict or commend in the new world order. be politically correct or use at your own risk

#145 Terry on 05.17.16 at 11:22 am

#142 TnT on 05.17.16 at 11:10 am

wow , what a sharp answer!!!

#146 fancy_pants on 05.17.16 at 11:40 am

#140 lee on 05.17.16 at 10:28 am

true, as long as there are enough like minds as yours out there, this will never end.
oh, and every taxpayer in Ontario is quite aware of the money flowing into the centre of the universe. Wynnie is sucking the rest of the province dry to feed her core voter base.

#147 UR right on 05.17.16 at 11:57 am

It looks like now there is no new highs, The prices may not rise a lot however interest rate will definitely rise which makes same effect on the pocket of buyers… or are you saying that prices will drop (!) which will be surprising to me as there are huge numbers of new immigrants coming and becoming eligible for their first home in GTA (Supply is limited). As per me cooling down will not make it easy for buyers… requesting some comments…

http://www.huffingtonpost.ca/2016/05/16/toronto-vancouver-housing-topped-out-crea_n_9994224.html

#148 Life among the Stars on 05.17.16 at 12:15 pm

Are hipsters still wearing Chavez t-shirts…

https://www.washingtonpost.com/news/wonk/wp/2015/01/21/venezuela-should-be-rich-but-its-government-has-destroyed-its-economy/

http://news.nationalpost.com/news/world/the-death-of-a-baby-is-our-daily-bread-devastation-in-venezuelas-hospitals-as-economy-collapses

#149 Ole Doberman on 05.17.16 at 12:22 pm

That he has enough money to gamble on highly speculative positions. Do you? — Garth

————————————————————-
It sounds like a big bet, and just because someone has a lot of money doesn’t mean they want to lose it and tarnish their reputation.
I think something is a foot.

#150 some old coot out west on 05.17.16 at 12:28 pm

Your blog has and continues to be useful for those who read it and now have a better understanding of the situation. If the housing lunacy has you down, how ’bout focusing on how to build and manage one’s portfolio, ween people like me off stupid mutual funds?

#151 Denials is here, not in Egypt on 05.17.16 at 12:33 pm

As a local Vancouverite, it’s becoming increasingly clear the Lower Mainland should hold a separation referendum and move for independence.

Since we get zero help from Ottawa and Victoria anyway, why not?

#152 BOOM! on 05.17.16 at 12:44 pm

The Dawgs have given a nod to the great financial advise provided here.

The majority also indicate the Blog has not failed. Of course the Blog has not failed. Only the readers of the Blog who failed to take action to protect their interests have failed, and there is no way to know a quantifiable answer to that.

There have been numerous “success stories” where a bad purchase has been avoided, of others getting on with their investments, and now achieved financial freedom. Still others who have cashed in on their RE to fund the next portion of life.

I would call that a success, wouldn’t you? Sure, not everybody can see the possibilities, or the realities of what you Garth have helped construct here since March 2008 but, it has been invaluable. Perhaps, read with hindsight a decade from now it will stand up even better.
Maybe many of us will still be here to assess it at that time. Who can tell? In the interim we struggle daily with the issues that confront us, many trivial to be sure.

I will help transplant flowers today, enjoy some ice cream, a nice day here, maybe wash the car, as the birds have been enjoying it too much!

Enjoy the day!

#101 NO NAME

Thanks for the Fed TAX TIP own the Fusion energi – helped sway my decision toward that vehicle!

M64WI

#153 Denials is here, not in Egypt on 05.17.16 at 12:47 pm

“That he has enough money to gamble on highly speculative positions. Do you? — Garth”

Lol, right. In the age of HFT, anyone not in control of the HFT machines will lose.

It’s farcical that main street money is supposed to compete with laser HFT algorithms, or George Soros, for that matter.

#154 Toothless Measures on 05.17.16 at 12:55 pm

No offence, but the end is near meme has been raised ad nauseam for the past 5 years. And each time when logic dictates that this cannot go on any longer, there market receives a fresh round of price increases.

Here is the fundamental reality for those on the sidelines that cashed out and thought they were smart and those that have been patiently waiting for years and years:

You will have to wait another decade for prices to actually get back to a point where they are ‘affordable’ if prices actually decline.

As it is well known by all sides of the debate, prices are sticky on the way down (look at Calgary’s ‘huge’ single digit decline.) A 30% increase this yearin YVR or GTA will not be wiped away similarly in one year of declines.

In the mean time, all the newly minted renters who sold their house and those still renting will have to wait a long time to actually vultch. I am sure that your soon to be developed balanced portfolios will give you comfort as prices decline, but many of you will learn that 7% annual returns are not always realized.

Enjoy the next decade of waiting…

#155 farsyd on 05.17.16 at 1:02 pm

Dave is screwed no matter what he does. Michelle on the other hand is in the pink as long as she keeps renting. Either prices come down her way at some point or insanity continues. Either way she is not saddled with onerous debt. Freedom is worth something Michelle….Seriously, Dave is screwed.

#156 family beagle on 05.17.16 at 1:18 pm

#136 Sean on 05.17.16 at 10:03 am
Serious question Garth — What was the media saying in the 90s, what were the government and economists saying about the housing market then? Right now there are a lot of people saying the markets are overvalued by many metrics, but pretty much they have defied expectations for many years now. I’m just trying to understand if SOME people saw it coming. Maybe things won’t drop until even you are on board that it feels different this time, then maybe we are over the edge then ;)

Not trying to interject, but here in BC we’ve been planning the real estate economy since pre-Expo ’86. My grade nine socials teacher advised us that the world would discover what we took for granted.

From what I understand, the housing market in 604 is constantly ‘reinflated’ many times to cover costs and avoid ‘debt deflation’. The buyer psychology adds to the aggregate demand and underlying price solidity in a dense tangle of leverage, investment, and public infrastructure. People will have to run out of credit, or the banks have to. Sellers won’t voluntarily ask for less if they have no need for liquidity. Right now they see RE as money in the bank. Just an opinion.

https://en.m.wikipedia.org/wiki/Debt_deflation

#157 Dups on 05.17.16 at 1:18 pm

Do not give up Garth.
You can write once in two days, we will still read it.
It is hard to see a change when the majority are ignorant.

#158 family beagle on 05.17.16 at 1:23 pm

Sir Garth Turner,

Beneath the wings of a fly, or the rotors of a helicopter, is a small doodad that counter balances momemtum. Without this wingnut, the fly couldn’t, and the helicopter would spin out of control.

This is the role of the rebel in society. Without dissenters, we could not grow. Without protest, we would become corrupt and complacent. You, Sir, are this nation’s rebel. You are the wingnut beneath our wings.

Thank you

‘Society’s wingnut.’ I am honoured. — Garth

#159 Damifino on 05.17.16 at 1:35 pm

Let’s see if I’ve got this right.

A liberal MP (Doug Eyolfson) disagrees with his own party’s legislation (Bill C-10) and votes against it at second reading. Stout fellow! Good for him, ignoring the party line for what he believes is right.

Then comes third reading. Thanks to government disregard for ensuring attendance at important votes in the commons, Eyolfson’s vote becomes the single deciding factor. The legislation he publicly opposes could be dead in the water with a single stroke.

What does he do? He votes in favor at third reading.

Interesting… What would you do?

#160 Ace Goodheart on 05.17.16 at 1:36 pm

RE: “My work here may well be done. This blog failed. We’re screwed.” – but we have almost legal pot, the world’s sexiest PM and tons and tons of borrowed cash. So party like it’s 1999, everyone get that cool “Justin” windy hair look, and live for today.

#161 Smoking Man on 05.17.16 at 1:36 pm

#114 millenial1982 on 05.17.16 at 12:47 am
http://www.cbc.ca/beta/news/canada/toronto/ontario-climate-change-1.3584402

What do you say Smoking man? I think you called this one a long time ago. Nobody in my part of the province even THINKS of heating their homes with electricty. The less electric fixtures and alliances the better.
…..

Wynne won’t be around long enough to implicate it. It’s shear madness.

As far as BOC dropping the rate. With Alberta pumping smoke and the shit trade balance.

BOC would be insane not dropping. T2 Can’t fix the trade deficits by spending on social infrastructure.

Smokey reporting live from bean town

#162 dontcallmeshirley on 05.17.16 at 1:41 pm

Why would CMHC make any restrictive changes when mortgage default rates are running below historical averages?

#163 onpar22 on 05.17.16 at 2:05 pm

Garth,
If you don’t think you are making a difference in the financial lives of many, give your head a shake. Thank you for your constant insight, honestly, and razor sharp wit!

#164 Steve on 05.17.16 at 2:06 pm

Don’t give up the good work Garth, although it was to late for me.
Wife got all horny and we jumped the gun on a house we didn’t need, no kiddies(yet), two years ago. We were insanely approved for a 600k mortgage when our net monthly income was 5000. Only ended up with a 250k mortgage. Our price to rent ratio is 15 so borderline, although it’s way more room than we need. And the maintenance bills are already piling up.

And the inlaws live down the street.

But I’m using your blog to try and convince them to sell so they can have a great retirement and travel to their hearts content. They bought for around 200k 18 years ago and should be able to get 500k or more now. After interest paid, inflation, renos, maintenance and realtor fees maybe they made a couple k. So while I may have gotten to your blog too late to stop us from jumping into the housing market it will hopefully help my inlaws to jump out, which will help me. As long as they decide to rent instead of staying in my basement when they get back from Mexico.

You did help me to dump all of my mutual funds and get a nice balanced etf portfolio and put our extra money into that instead of our 2.9% mortgage.
And if our family dynamics stay the same and housing market in the Peg doesnt change to drastically in a year I might have grown a big enough pair to convince TWOMBO to sell.

Found a hilarious article on cbc
http://www.cbc.ca/beta/news/business/crea-home-prices-foreign-buyer-economy-1.3580780
It’s good for a laugh. Most of the comments on that article are from the type of people who go by the saying “when life hands you lemons…blame the government”, the rest blame foreigners.

Keep up the good work, try to ignore all the kooks who comment.

#165 james on 05.17.16 at 2:07 pm

#160 Smoking Man on 05.17.16 at 1:36 pm

#114 millenial1982 on 05.17.16 at 12:47 am
http://www.cbc.ca/beta/news/canada/toronto/ontario-climate-change-1.3584402

What do you say Smoking man? I think you called this one a long time ago. Nobody in my part of the province even THINKS of heating their homes with electricty. The less electric fixtures and alliances the better.
…..……..
Wynne won’t be around long enough to implicate it. It’s shear madness.
As far as BOC dropping the rate. With Alberta pumping smoke and the shit trade balance.
BOC would be insane not dropping. T2 Can’t fix the trade deficits by spending on social infrastructure.
Smokey reporting live from bean town
……………………………………………………
Who the hell do you think you are Geraldo Rivera? Thanks for telling us your in Bean Town now please stay there.

#166 NoName on 05.17.16 at 2:15 pm

#152 Denials is here, not in Egypt on 05.17.16 at 12:47 pm

Actually HFT it help an average shmuck like, because it narrow a spread greatly and brings liquidity, down fall is maybe bit more volotilty comes with it but that OK.

Try selling fisical gold back to same Bank that you bought it from.

#167 Toothless Measures on 05.17.16 at 2:42 pm

Oh look, a little market volatility after concerns that the Fed minutes might – operative word being might – be hawkish.

This is becoming all to familiar and if I was a day trader I would be having a hey day with this stop and go market that wavers the second the feds might increase.

And on goes the vicious cycle – feds say they might increase, the market freaks and backtracks, and the feds listen to the market and put the hike on hold for the next few months, years, and coming up to a decade now apart from Decembers little tease.

I don’t think that interest rate increases have not been priced into market expectations as fully as some suggest.

#168 WalMark of Sadkatoon on 05.17.16 at 3:11 pm

canadian teachers are paid a lot and our student results suck

http://www.economist.com/blogs/graphicdetail/2016/04/daily-chart-18

#169 Life among the Stars on 05.17.16 at 3:28 pm

#164 james on 05.17.16 at 2:07 pm

#160 Smoking Man on 05.17.16 at 1:36 pm

#114 millenial1982 on 05.17.16 at 12:47 am
http://www.cbc.ca/beta/news/canada/toronto/ontario-climate-change-1.3584402

What do you say Smoking man? I think you called this one a long time ago. Nobody in my part of the province even THINKS of heating their homes with electricty. The less electric fixtures and alliances the better.
…..……..
Wynne won’t be around long enough to implicate it. It’s shear madness.
As far as BOC dropping the rate. With Alberta pumping smoke and the shit trade balance.
BOC would be insane not dropping. T2 Can’t fix the trade deficits by spending on social infrastructure.
Smokey reporting live from bean town
……………………………………………………
Who the hell do you think you are Geraldo Rivera? Thanks for telling us your in Bean Town now please stay there.

hey smoking dude.. there was massive fireball in the skies of new england yesterday… was a drunken pilot driving the spaceship?

#170 Entrepreneur on 05.17.16 at 4:14 pm

Just say “No” Dave, your parents partied now want you to pay their mortgage, no way would I go for that. Maybe offer them some cash for them to figure things out but do not, I repeat, do not sign on the dotted line.

#6 pathcontrolmonk…already signed the online petition, foreign regulation on real estate.

Good answers #142 TnT…especially point 5 and 7. It seems to me that the powers that get in is all about the resources, and not about the small businesses, then give the people social services instead of jobs. The people here look at the U.S. and drool but our leaders are in la,la land.

Oh excuse me except B.C. our economy is at the top???from real estate in Vancouver???while many are leaving???half the streets are empty???

Maybe get someone to take over this blog and take a nice long holiday, let the wind hit the face, the toes dig into the sand. Come here all the time, the connections and the freedom.

#171 TnT on 05.17.16 at 4:16 pm

#167 WalMark of Sadkatoon on 05.17.16 at 3:11 pm

canadian teachers are paid a lot and our student results suck

It’s so Canadian to blame the Union Teachers for their kids short comings.

Funny how the New Canadians have no issues with marks, it’s only the generational kids lacking.

“Everybody gets a Gold Star” generation are now parents and their kids are failing big time because they tied the teachers hands in the classroom.

It’s only generational Canadians complaining about Teachers wages where the New Canadian are fine.

New Canadians have the proper respect for Education, they compete and strive to be the best. Tiger Moms exist and their kids will rule, the rest will serve fries.

#172 Freedom First on 05.17.16 at 4:29 pm

#151 BOOM!

Great Post!

#173 Brydle604 on 05.17.16 at 4:31 pm

Social Engineering at its finest!
First Ontario, heading for Bankrupcy.
Then Canada, Thanks T2, and G Butts
The Socialists will ruin Canada.

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/fp-comment/kevin-libin-ontarios-big-green-assisted-economic-suicide-plan&pubdate=2016-05-17

#174 Freedom First on 05.17.16 at 4:35 pm

Dave, there is “Helping” and there is “Enabling”. Get some counselling and learn the difference. Sincerely, Freedom First.

#175 bdy sktrn on 05.17.16 at 4:55 pm

#114 millenial1982 on 05.17.16 at 12:47 am
http://www.cbc.ca/beta/news/canada/toronto/ontario-climate-change-1.3584402

What do you say Smoking man? I think you called this one a long time ago. Nobody in my part of the province even THINKS of heating their homes with electricty. The less electric fixtures and alliances the better.
…..……..

that woman is evil. i feel so sorry for what was once great ONT. she is kinda sick and twisted the way she is raping the provincial treasury and making foolish green spew. (FREE THE GAS!) (crowded go take a few rides up at queens park)

it will be a deep and severe wound (wyund?) that will take a long time (decades) to heal.

BC still is pretty awesome everyday. This from an ex-gta/muskoka/down leamington way resident. Just leave ontario behind. You will fit right in. there is more genx from ont here than from anywhere else, even native bc’ers.

outside of housing. it’s much, much cheaper to live in bc. in taxes, elec, food alone you save a bundle.
save 50% on heat –
winter boots/coats/etc spending goes to ski gear.
free ocean /mtn/wildlife by the truckload.
motorcycle season approaching 8 months.
certain green dried flowers 1/2 price or better
usa access close fast and cheap and is not detroit or buffalo.
whatever problems our dear christy has are a PLEASURE to suffer compared to you poor bastards in the big province.

-maybe- the americans will be flooding the 604 like never before after trump wins. Get out here before them and you will win on anything you buy. Unlike the chinese, the americans will buy all areas, not just hyper urban.

#176 Me on 05.17.16 at 5:28 pm

172-Province is not going bankrupt. They’ll just keep taxing you. The new union/government trick is to pass illegal laws that deny the right to strike and then let the union sue and the court strikes down the law and grants the union members wage increases as compensation for the wrong. In this way the government can blame the courts. Taxes go up. Government can say it didn’t agree to wage hikes. Smooth.

#177 rainclouds on 05.17.16 at 5:39 pm

#121 Jane 24

Where to start? Perhaps “your family” hasn’t achieved the level of pomposity you have. The Moron gene seems to have been passed on though…..

Admit it, you go to the pub because they have central heat.

Would love to hear the “family” and their opinion of the great international jetsetter who graciously bestowed herself upon them.

Give. It. A. Rest

#178 Riding the Pine on 05.17.16 at 6:15 pm

So tired of the race card being played when it comes the issue of foreign money flooding the real estate market. It’s happening, and yes, it’s predominantly mainland Chinese money fleeing a communist country (oh, is that racist too?). And yes, the local market is contributing, but they are not the gas on the fire.

Just watch the rise in prices end (and fall) the instant the Chinese money stops flowing into BC – the easy credit tap has already started to turn off in China.

What’s been allowed to happen in Canada with respect to foreign real estate speculation is wrong. It’s basic economics that outside money distorts markets. That’s why we have tariffs, taxes and duties across borders.

Canada has avoided a 2008 crash by promoting housing, and letting foreign speculators to feed off local residential markets is only going to cause a bigger correction. The Canadian economy and people will be the biggest losers (jobs,services, taxes, equity evaporating).

Let’s put economic reality before nonsensical PC BS.

#179 crowdedelevatorfartz on 05.17.16 at 7:22 pm

@#124 jane
Let me guess.
You’re just like my “jetsetting” niece that has spent her last 20 years like a grasshopper jumping from mcJob to mcJob in third world countries at “all inclusive resorts” making shit for wages and now she’s suddenly 40 and has no money saved, has contributed almost nothing into CPP and still doesnt realize how financially f##ked she is….
I cant wait for the day when she comes scratching at the door wanting a handout from one of us “boring” worker bees that actually prepared for retirement.
I’ll say to her what I’m about to say to you…

“Enjoy working for the rest of your life.”

#180 willworkforpickles on 05.17.16 at 7:29 pm

And to think, across the border we don’t have those pressures. All i worry on is the rising cost of bullet proof glass. So-what me worry? .,. hell no – the bullet proof glass on the front of my house is worth as much as the house ,but I’d like to get the sides done next.

#181 sue in calgary on 05.18.16 at 1:04 am

I feel sad today, it has not been a great day for me and reading these posts it seems to be getting darker all of the time. The tone in the comments has changed not sure why, but re read some older posts and comments, something has changed. Perhaps we are at the bottom of the cycle or a reset of sorts, certainly been a longtime coming. we can only hope! People are different, everyone out for themselves, especially our government. Being nickle and dimed everywhere we turn. Where has all the common sense gone? We have truly lost our way I see it too Garth. Hang in there Garth. We need you to be the voice of reason when nothing seems to make sense anymore. I understand why your transitioning to the ice cream/ candy business but if you start a puppy farm I’m selling my stocks.

#182 Sean on 05.18.16 at 10:15 am

#156 family beagle on 05.17.16 at 1:18 pm

Great point. The CAD market was flooded with cheap money because we had to match the US but housing never felt the same effects as them. We will continue to go up until someone runs out of credit, I don’t even think it will take rates moving to do that the way things are going.

#183 Snoopy on 05.18.16 at 11:16 am

Question: Those who bought Urbancorp condos, are they loosing their deposit?

I’m hearing yes. Money going to bond holders.

Loosers:
– Atrium: 7.5M
– First Capital: 50M
– Bond holders
– Condo buyers

#184 salonist on 05.18.16 at 3:43 pm

then there’s the micromansion built on the wealthier brother’s property

http://www.frank-mckinney.com/micro-mansion/

wonder if this one qualifies for cmhc granny flat subsidy