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A few short years ago cult leader Don Campbell was leading his disciples to the Promised Land. Alberta. Specifically, investment rental properties in that province. Campbell’s Real Estate Investment Network was happily taking oodles of money from ‘students’ and others splayed before him, begging to know how they could buy a duplex, triplex or just a lowly condo, with no money down and grow rich, rich.

So he sold them books. And tapes. Exclusive access. Learned speakers. And seminars. Lo, so many seminars.

Of course we now know Alberta real estate was at peak levels, the top of the curve, and would soon be defeated by an oil bust, employment crisis, plus a swarm of socialists. Suddenly buying properties with 100% leverage and negative cash flow didn’t look so cool when values stopped rising and tenants disappeared. Now we have some proof that, incredible as it seems, you can’t create wealth by borrowing.

A leading tenancy management firm in the province has grim news for all of Mr. Campbell’s baby capitalists, flippers, specuvestors and amateur landlords. In the 90 days ended with October, there were 8,102 homes available for lease in Calgary alone, with an average rent of $1,477 (which is going down).

Of these homes, a staggering 37% (or 2,998) were empty. Vacant. No revenue. The loss represented to landlords is $4,430,000 a month, or about $148,000 per day.

Things aren’t much better in Edmonton, considering the population differential. There 5,211 homes were available to rent on any given day during this three-month period, and of those 31% were vacant (1.094 units). The landlord loss was $1.3 million a month, which is being reflected in lower rental rates (the average now is just $1,168).

Says the CEO of the company (Hope Street) behind the stats: “Times are hard for every single Landlord with whom I’ve spoken in the past 8-12 months. Empty rental properties abound and no obvious solution to the province’s empty rental property phenomenon exists. Landlords need to engage a carefully executed plan to weather this storm, and to adjust their expectations on their property ROI.”

But most amateur property investors don’t have a plan, nor any idea of what to do when conditions change – and they’re leveraged to the pits. It’s not just Albertans at risk. The fact 52% of all condos sold in the GTA (about 30,000 of them a year) are going to people with no intention of living there, shows how much rank speculation has infected the marketplace, thanks in part to pumpers & dumpers like REIN. These days, even in the splendidness of Toronto, it’s impossible to buy a condo, pay the monthly fees, financing and property tax and be cash flow positive. Worse, any net gain a landlord does eke out is taxed 100% at his or her marginal rate – compared with 50% on gains flowing from most financial assets.

By the way, what’s Don Campbell doing now that Alberta has tanked and his flock is flocked?

Selling Victoria!

vic

“Victoria an optimal place to invest,” is the new pitch. “Understand Victoria’s key economic indicators and what they mean to safe and secure investment opportunities.” Meanwhile, flooded with refugees from an inhospitable and unaffordable Vancouver, the Victoria area has seen a temporary 24% surge in prices in the past year. In other words, the market has buzz. When values rise, people rush to buy. And where those juices flow strongest, you will find Mr. Campbell’s proboscis.

And just to underscore the fact we live among the over-extended and under-diversified, who are living proof you can own a nice home and still be a financial cripple, here’s another survey to ponder. This one by Manulife. It really sucks.

According to the poll, this is the current state of Canadian homeowners. When asked if they have an emergency fund, a quarter didn’t know, and an equal number have nothing or less than a thousand bucks. So half would probably be screwed if things went south. And the other half? The average amount of savings these days is… (drumroll)… $5,000.

About half (46%) say they’d have trouble making their mortgage payments in less than six months if the primary job in the household was lost. Another 16% say if their mortgage payment went up at all (thanks to higher rates) they’d be in financial difficulty.

Meanwhile (as you know), bond prices are falling, bond yields are rising, the Fed is 13 business days away from hiking and Canadian banks are already increasing their loan rates. In short, kids, rates are rising. And the people living on your street ain’t ready.

Are you?

 

200 comments ↓

#1 Gary on 11.24.16 at 6:41 pm

Alberta is toast. Harper and the Conservatives screwed up that province so bad. 40 years of Con rule and where did the money go? What happened to the Heritage trust fund? What were they doing with all the money when oil was over 100/barrel? Thanks to Harper Alberta is more or less dependent on oil which is not like
Y to come back any time soon. They think that building a few pipelines will magically lift them out of the funk and create jobs for everyone. It’s going to get ugly. Pity those thT listened to Don Campbell. Maybe he’s now pimping real estate in BC?

#2 Excellent !!! on 11.24.16 at 6:42 pm

Housing crisis to punish Canada !! Take the tsx to a double digit beat down with it !!

Sell sell sell !!!……only oil can save the day !!!

#3 Dave on 11.24.16 at 6:45 pm

Prices are steadily decreasing in Metro Vancouver but will trigger a crash?

#4 Randy on 11.24.16 at 6:46 pm

I’d rather have a 2017 Z06 Corvette than a house

#5 VREU Triggered on 11.24.16 at 6:46 pm

Uh oh, you just triggered VREU. She has lived in a world of denial on Victoria prices and she will not be happy to read a 24% increase in prices in Victoria.

“Meanwhile, flooded with refugees from an inhospitable and unaffordable Vancouver, the Victoria area has seen a temporary 24% surge in prices in the past year. In other words, the market has buzz.

Now, now VREU. Everyone told you that prices were up, sales were strong, and your predictions of a collapse around the corner in Victoria were just fairy tales.

What can you possibly revert to now to explain the situation…

#6 Toronto is Horrible on 11.24.16 at 6:46 pm

Just when you thought Toronto couldn’t get any worse we will be the happy recipients of a whole new set of taxes because I guess we aren’t taxed enough in this horrible city. No wonder houses on my street aren’t moving. The housing T.O crash has begun – are you ready?

#7 Rexx Rock on 11.24.16 at 6:47 pm

Lots of homeowners in Victoria say they will have a great nest egg when they sell their houses when they retire.It seems Victoria will be the next Vancouver and cash out millionaires!You see people who make $40,000 a year and are driving bmw and big expensive trucks because they own houses and it just a cash cow that keeps going up.

#8 Smoking Man on 11.24.16 at 6:47 pm

I got a funny felling Poloz is going to chop rates.
Bet Accordingly

#9 South Etobicoke Trump Campaign Field HQ on 11.24.16 at 6:47 pm

It appears the storm is on the horizon. In these difficult times, it is proper to praise the Emperor – Trump.

The Emperor of Mankind is the Light and the Way, and all his actions are for the benefit of mankind, which is his people. The Emperor is God and God is the Emperor, so it is taught in the Lectio Divinitatus, and above all things, the Emperor will protect…

#10 HellYeah on 11.24.16 at 6:52 pm

Someone get great-grandpa a beer, stat!

#11 Just a renter on 11.24.16 at 6:53 pm

“And where those juices flow strongest, you will find Mr. Campbell’s proboscis.” Simply classic…

#12 Toronto Bites! on 11.24.16 at 6:53 pm

I have noticed that many of the renovations on the 100 year old slanty semis on my street in Toronto have all mysteriously stopped recently. I guess credit exhaustion has reared its ugly head. I bet those speculators are rethinking their decision to buy these dilapidated overpriced houses by enslaving themselves in debt.

#13 No Money Down on 11.24.16 at 6:53 pm

And so it goes. Tear down in Kitsilano: 2375 W8th Ave

Listed Aug 3 $2.5M
Reduced Aug 11 $2.25M
Reduced Nov 23 $1.65M

2015 Assessed value: $1.56M
Almost back to June 2015 assessed value

Pre-Chinese Dudes’ tax:
2785 W8th (3 doors up) Same sized lot/zoning
Sold June 2016 $2.6M

#14 Greg on 11.24.16 at 6:55 pm

I’m ready. REIN was in the room next to me when I was at another event at the BMO Centre (roundup centre) in calgary a few years ago.

They suits in the lobby (presenters?) just made your hair stand up when you walked past. It all seemed so fake.

I bought 8 condos In phoenix instead. Simple math – they were cashflow positive, and calgary was not.

#15 Mike p on 11.24.16 at 6:58 pm

I always thought only goofs who attended those REIN bs seminars. I did buy property in 2013 though. A few actually. In Hamilton. Both Less than 300k. They bring in $2000 in rental income. I was 26 and I’m not taking any equity out of them. Keep equity in, weather a storm or two and sell them when my rental income is less than 4% of what the property is worth.
I thought of yanking equity out borrowing at 2.7% to put more into a balanced portfolio but then I figured I might make a few percent during those years and then still have a large mortgage when rates inevidibly go up. So not worth it

#16 Debtslavecreator on 11.24.16 at 7:00 pm

We are likely in the 1st inning of what will turn out to a dramatic and tragic bond market collapse that will see a 1980-1981 ish spike in yields due to what will eventually be looked back on as a global sovereign debt crisis and a devastating economic collapse
For many recent borrowers it will be lights out. No amount of crying will help
Then will face much higher rates on renewal which will render the payment completely unaffordable and rage will be at a fever pitch as property taxes, insurance and user fees etc all escalate explosively
RE was the foundation of the neoliberal control fraud that saw the greatest debt based Ponzi scheme ever devised to enslave the masses by fooling them into thinking they were getting rich when in fact they are being taxed

#17 Victoria Real Estate Update on 11.24.16 at 7:00 pm

Victoria’s recent significant price downturn that started in 2010 happened while 5 year fixed mortgage rates were falling. It surprised many.

Immediately before that you would have heard realtors and the media pumping the market, saying prices could only go higher ( think now).

Looking at 2010, sales of detached houses fell approx. 50% from April to September. It was a sign of what was to come – falling prices.

In 2016 we’ve seen an almost identical sales dive of detached houses – approx. 50% over the same 5 month stretch.

2016’s sales drop happened before the new mortgage rules were brought in and before rates began moving higher.

Since 2013, those taking on new mortgages in Victoria have stretched themselves as much as those in Vancouver. The proof of that is in a chart Garth posted showing that a third of all new, insured mortgages in Victoria since 2013 have been of the dangerous 450% sort – requiring a debt to income ratio of at least 450% (similar to Vancouver).

No bubble in history has ended happy.

It won’t be different in Victoria and Mr. Campbell will soon be talking about Victoria the way he’s talking
about Calgary and Edmonton now. Many Victorians will
be financially crushed as the market corrects (crashes?).

#18 Alero01 on 11.24.16 at 7:04 pm

Absolutely awesome family photo – love it!

#19 crowdedelevatorfartz on 11.24.16 at 7:06 pm

The sheep are fleeced then flocked

#20 crowdedelevatorfartz on 11.24.16 at 7:09 pm

@#4 Randy
“I’d rather have a 2017 Z06 Corvette than a house’
********************************************

If that vette is worth more than 150k and you live in BC. The govt insurance will no longer cover your collision or comprehensive…….

http://www.google.ca/url?url=http://vancouversun.com/news/local-news/icbc-admits-42-per-cent-in-rate-hikes-possible-for-basic-auto-insurance&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwitw8f7zsLQAhUBzGMKHa6bB80QqQIIHjAA&usg=AFQjCNHwUmj2s-Rp3y-aTbttPDKMUALi6w

#21 Mark on 11.24.16 at 7:11 pm

Bram,

“Here’s an economics professor looking at the financial reserves of CMHC.

There’s a logical fallacy in the argument that the professor makes:

“2009 was a bad year for CMHC losses. But despite that $1.1 billion in Net Insurance Claims expense, CMHC reserves increased by over $1 billion both in 2009 and in 2010. It would take something much worse than 2009, at least 10 times worse, to wipe out CMHC’s reserves.”

For starters, the housing market was able to recover fairly rapidly from the 2009 freak-out because of BoC policy action. The BoC will not be able to engage in meaningful policy action as housing prices decline this time around, as the BoC is already at a policy rate of 50bp. Sure, they can lower another 50bp, but that’s not likely to move housing prices meaningfully.

If the BoC failed to provide a policy response to the deflating Canadian economy in 2009, or was already at the zero bound of interest rate policy, then the price declines would have been sticky, and the defaults against the CMHC would have been significantly more significant.

Additionally, the Canadian RE market, 7 years later, is substantially more physically overbuilt than it was at the time. CMHC’s size is dramatically larger than it was in 2009, a fact the professor acknowledged. So to compare against 2009, and to use the logic that “it didn’t happen in 2009 so it can’t happen in the future” is highly problematic.

“Wrong. — Garth”

How so Garth? When you and spend more than we take in, our debt rises. This is the very definition of a deficit. The debt of Canada increased significantly under Harper’s last 7 months in office. Yes, there’s seasonal adjustments that can be made, corresponding to the payments made or due the GoC, but Treasury Bills and Bonds are the proverbial “bank account” of the Government of Canada, and changes in T-Bill/Bond issuance (“the debt of Canada”) correspond to deficits or surpluses run by the GoC.

Trudeau has proposed to run a deficit of $30B this year, ie: increase the debt of Canada by $30B. This is not meaningfully different than the Harper government ran with an average of $26B/year over the roughly decade of the Harper “Canada’s New Government”. So those who are crying about Trudeau running up debt, but hold Harper out as some savior, are really being hypocritical. The Bank of Canada figures for the Debt of Canada are non-partisan, and represent an unbiased representation of the deficit/surplus position of the GoC.

#22 For those about to flop... on 11.24.16 at 7:11 pm

Props to Andrew Woburn for posting this article yesterday #19.

My only problem with this article is I thought everything revolved around Vancouver and Toronto in this country…

M42BC

#23 Mr Reality on 11.24.16 at 7:14 pm

Welcome to mean reversion Sheeple. Just imagine how far past the mean rates will go befire they normalize.

Since people were so cocky and arrogant about debt and home prices i find it hard to be sympathetic with the people i warned for years about what was coming.

Mr. Reality

#24 Forzudo on 11.24.16 at 7:15 pm

Black Friday shopping will solve all of your problems.

#25 Arfmooocat on 11.24.16 at 7:16 pm

World’s worst traffic jam? Cars stuck in Thanksgiving getaway ‘gridlock’

http://www.telegraph.co.uk/news/2016/11/23/worlds-worst-traffic-jam-cars-stuck-thanksgiving-getaway-gridlock/

#26 Roial1 on 11.24.16 at 7:20 pm

Funny how much this is like the gold rushes of old.
Very few miners kept their gold but the fleecers did well.

#27 Victoria Real Estate Update on 11.24.16 at 7:21 pm

Also, by 2010 Victoria’s vacancy are has increased a lot as jobs disappeared and people left for greener pastures on the mainland, in Alberta or other parts of Canada.

It’s been a thing in Victoria for a long time – when the economy slows and jobs are lo people bolt.

As Victoria’s housing market continues to cool, sales fall and construction activity slows, the rest of the economy will be negatively affected. Jobs will be lost just like in 2010.

When an economy relies too heavily on overactivity in real estate (and related industries), it’s only a matter of time before it slows dramatically. Relying too heavily on housing is no permanent solution for an economy that is otherwise weak.

Victoria is the perfect place to buy a rental property now if crushing your financial future is your goal.

#28 Victoria Real Estate Update on 11.24.16 at 7:23 pm

* vacancy rate increased

* jobs are lost

#29 Happy Housing Crash Everyone! on 11.24.16 at 7:24 pm

Watching CP24 and al shyster and Vince G are crying like liklttle babies. Happy Housing Crash Everyone! :-)

#30 Still employed in AB on 11.24.16 at 7:25 pm

I upgraded my rental digs in Edmonton recently. 1375$ for a 2 Bed, 2 Bath, tandem underground parking, gym, view of downtown, and directly across from a park with multi use path system. This building has a condo fee of over 600/month and it would cost me over 2200/month for a mortgage, condo fee, and property taxes.
Next year economic destruction may be unreal between falling rents, bankrupt landlords, and various construction projects finishing.

#31 Long-Time Lurker on 11.24.16 at 7:28 pm

Another nice article, Garth.

A lot of people aren’t going to know what hit them by this time next year.

Don’t shoot the messenger guys.

#32 crdt on 11.24.16 at 7:29 pm

Out here in the sticks, Langley BC the hope that the prices will hold is alive and well. Everyone knows there is no better place to live anywhere in the universe and any price is reasonable. Almost all the houses that were for sale, even some of the most stale listings have found a new owner, with a little bit more time given to the foolish buyers who recently needed a bit more time to consider the move. The cracks are just beginning to show, soon the conversations will be focused on how prices can never retreat below what recent mortgage owners signed for…

#33 E-mail wild bill on 11.24.16 at 7:34 pm

CMHC is the ONLY reason for high housing prices. Shut it down and let the banks take the risk. Then we will we see what happens to housing prices. Email wild bill and other politicians to get them to shut it down. Don’t just complain here.

#34 no empathy on 11.24.16 at 7:34 pm

for Canadians. Reep what you sow. Central bankers are the true architects of the pending global disaster. They have backed themselves into a corner. . Zero interest rates for how long was it? large scale asset purchases ….to no avail.. Did they learn?nope–doubled down!! negative rates. Fed thinks they can raise rates?..they have a new inflationary loving president– MASSIVE increase in public AND tax cuts. WOW.WITH INCREASED RATES!?!?!…..pass the popcorn…..

#35 Londoner on 11.24.16 at 7:35 pm

#8 Smoking Man on 11.24.16 at 6:47 pm
I got a funny felling Poloz is going to chop rates.
Bet Accordingly
____________________________________________

Called it last month. I said that oil was going to struggle to stay above 50 (or something like that) and that Poloz would cut. Fed move may negate that but you know what he’s thinking.

#36 Don Regan on 11.24.16 at 7:36 pm

There are so many properties dropping in value between
$100K and $200K on the West and East side of Vancouver
that there are too many to list. However, this listing
#R2108905 is a 33×122 at 3980 West 10th Ave

LP $2,990,000
Now $2,498,000
Loss 492,000

I wonder what they will eventually get!

#37 Fleabitten Monkey on 11.24.16 at 7:36 pm

Central 1 Credit Union’s Chief Economist Helmut Pastrick stated in October that prices in Victoria will only slip about 5%. To me this would be a “best case” scenario, after all, he wouldn’t want to be alarmist.

“Active listings will initially increase while sales will decline, bringing about softer market conditions,” he said.

“Prices will come down, though by a smaller percentage than sales, because new listings will adjust to the evolving market reality.”

– See more at: http://www.timescolonist.com/business/lower-house-prices-fewer-sales-in-capital-region-predicted-1.2365054#sthash.mFXpmRj0.dpuf

#38 Robert on 11.24.16 at 7:42 pm

All thanks to Harper and Flaherty’s move to goose real estate on the coat tails of the great US bubble. Buy their way to a majority, devil take the hind most. Now our current PM genuflects to the mandarins in Beijing, the satrap of Canuckistan selling land and pipelines to the gathering vultures. Meanwhile south of the border, Don “Berlusconi” Trump slides onto the Potomac throne. What a world.

#39 alberta guy on 11.24.16 at 7:44 pm

Solution to Alberta hole dug…

Set Sales tax annually based on price of oil on Dec 31 previous year…all taxes collected must be put away into heritage fund cannot be touched unless in times of recession and or when price of oil below 50

9% over 100
8% between 90-100
7% between 80-90
6% between 70-80
5% between 60-70
4% between 50-60
0% under 50

#40 Randy on 11.24.16 at 7:45 pm

John Maynard Keynes once said, “I will gladly pay you Tuesday for a hamburger today”…..or was that Wimpy ?

#41 jay on 11.24.16 at 7:45 pm

#1 Gary I Agree with you ,how about selling perogys. I’m sure the NDP will bankroll a perogy industry and subsidize exports to China.

#42 Riffmeister on 11.24.16 at 7:46 pm

Victoria is oozing the rampant arrogance Vancouverites were spewing a mere few months ago. It’s sad to see a beautiful city turn into the next bubble epicenter that’s about to disintegrate. Their greed and self centered attitude blinds them from what’s about to hit them right between the eyes. It’s different here they say.

#43 Self Directed on 11.24.16 at 7:49 pm

Rate prediction… this one’s easy:

Wed, Dec 7: CDN BOC Announcement — 0.00 % Hike
Wed, Dec 14: US FOMC Announcement — 0.25 % Hike

POLOZ WON’T HIKE… PERIOD!

#44 Prairieboy43 on 11.24.16 at 7:50 pm

I’m Ready. Let her buck.

#45 Context on 11.24.16 at 7:54 pm

Smoking Man just checked Amazon concerning your book sales and they are recommending that a promotion is badly needed. They say you need some buzz by buying gifts to give away in the form of a contest.

#46 bigtowne on 11.24.16 at 8:01 pm

B.C. and Alberta have a financial vibe closer to the states than more bucolic Ontario and the West is more dynamic on the way up and on the way down. Canada is not knitted together with the “We are one fabric” America embraces. Western Canada is too far from Ottawa in more ways than geography and is manifested in politicos like Brad Wall Premier of Saskatchewan. Hard to fault Brad Wall in his counterpunch against the “carbon tax and climate change rhetoric” considering heavy polluters like Potash continue to cut production and jobs.

Toronto Mayor Tory gave a caustic admonition to his constituents today to the effect he was harassed with paying the freight from those “dogon suburbanites” getting on his road to his town and sure as the DVP is clogged with those out-of-towners 24/7 they will pay their fare share on “well managed Toronto toll roads of the not to distant future”. Mayor Tory’s normally placid demeanor gave out serious signals of distraught.

Today was a real departure from his studied calm but getting across to the village folks from Oakville and Markham he had to add some heft to the all around nice guy replacement from our now departed but not forgotten Mayor Rob Ford.

#47 X on 11.24.16 at 8:02 pm

Had to listen through Al Sinclair on CP24 trying to explain how raising the downpayment levels to 10% as CMHC recommends would just cause more home owners to miss out on real estate gains that are happening now.

Apparently the risk for the average tax payer is far less risk when you own a brokerage.

I don’t think the reporter was even buying that line from him.

#48 Robbie Burton on 11.24.16 at 8:03 pm

Yes I am ready. Been ready for a long time.

#49 jay on 11.24.16 at 8:05 pm

This is the way the money is made in other countries . http://www.infojustice.com/Topics/29%20Photos%20of%20Drug%20Lords%20Home%20after%20Raid.html

#50 common sense on 11.24.16 at 8:06 pm

What’s a mortgage? LOLOLOLOLOLOL

#51 Ole Doberman on 11.24.16 at 8:07 pm

Garth what about variable rates on LOC’s?

Will those go up with Bank of Canada rates?

Looks like gold is taking a beating tonight

#52 daveyboy on 11.24.16 at 8:08 pm

Moving to arkansas from toronto in the new year. Going to be interesting to watch from the sidelines. Hope the best for the people who are over their heads, this is not going to end well.

#53 Millenial-falcon on 11.24.16 at 8:11 pm

Does a higher usd not bring deflation? How will all this wonderful inflation happen with all this money flowing into the usd ? What macro implications does a steep rise in usd bring ? For some countries holding massive amounts of usd denominated debt is this not very very bad ?

#54 common sense on 11.24.16 at 8:13 pm

#49 Jay

Just imagine if he wasn’t caught and the gov’t like India banned $100 Bills?

Unreal. Thanks for sharing!

#55 Millenial-falcon on 11.24.16 at 8:16 pm

Also this blog comment section is a bit of an echo chamber, vancouver market is still hot , hate to break it to all of you, no ones getting a deal an prices have to fall massively to even get in the same universe of reasonable. Speaking of Calgary all the despair this blog has been speaking of in the market an nary a hint of price drops , Canadians don’t bail on their house. Ever

#56 bdwy sktrn on 11.24.16 at 8:17 pm

east van report.

new tonight is a sold sticker on the only decently located sub 2m sfh in our area.

nothing left for sfh. zippo. unless you want to live in traffic.

new listing today 1/2 duplex, new, big, 1.6m.
seems that only one of the 4 built is for sale, i guess the other 3 sold pre-completion.
http://ruthanddavid.com/property/1890-grant-street-front-unit/

when were duplexes selling for 1.6m around here??? that’s right, never.

s-l-o-w market, but no supply and prices ever skyward.

#57 Ned on 11.24.16 at 8:25 pm

I’m ready..
I wanted to buy some land for small farm (1/4 section in Alberta is small)

Nothing nice under 750 and I’ve put in a few offers around 700 and got laughed at..

Hopefully I’ll be the one laughing soon.

#58 Wrk.dover on 11.24.16 at 8:30 pm

CTC has those big yellow car tents on sale at the lowest price of the year. I bought one today because I’m planning to set it up as a SFDH rental when all of this foolishness ends.

#59 Andrew Woburn on 11.24.16 at 8:31 pm

Meanwhile, flooded with refugees from an inhospitable and unaffordable Vancouver, the Victoria area has seen a temporary 24% surge in prices in the past year.
==================

We have also seen steady price increases over the last couple of years in Nanaimo and nearby Vancouver Island communities. Judging by the relative absence of “Chinese Dudes”, I assume prices are being driven by retirees like us. When we were shopping in 2012, a pleasant “executive” SFH in a decent neighbourhood with good schools would have cost about $400k. Today the same house would probably sell in less than 60 days for $600-650k. Nanaimo has a stable, low-unemployment economy but not enough local demand to drive that kind of price shift.

I would advise caution for anyone buying into Island markets today. They can be volatile. Our house was offered at $850k in 2008. We paid $550k four years later and the vendors had waited months to sell at a $100k loss. We could probably get $750k today if we wanted but I would’t be surprised to see a drop to the low $600’s in the near future if (or when) the supply of GVRD “lottery winner” retirees dries up.

Even after a GVRD price correction, I expect many Vancouver retirees will still want to move to the Island. There are too few viable downsizing options in the lower Mainland. You can try the brief thrill of a downtown condo where you can enjoy knowing exactly when and how often your neighbours flush or you can schlep out to Siberia aka Abbotsford, Chilliwack or Surrey.

However as windfall gains start blowing away, the buyers’ pencils will get a lot sharper. The thing to remember about Victoria real estate is it now has a lot of competition on the Island in terms of price and amenities. The Island is bigger than you think it is and there are quite a few development sites on line targeted directly at retirees. We love Victoria but we would rather drive there once a month than pay a big premium to live there.

#60 Tiger1960 on 11.24.16 at 8:36 pm

https://en.m.wikipedia.org/wiki/Burn_rate
So mutch bigger than the Fort Mac fire for a lot of people
out there in canaduh.
Enjoy the weiner roast folks and enjoy shopping on Black Friday!
And I’m shure most of you will be fried and jonesin !

#61 Nothing will happen on 11.24.16 at 8:41 pm

Nothing will change, the market will still stay strong in Toronto. Everyone is building everywhere and nothing will stop this. It’s the new way of R/E

#62 VS on 11.24.16 at 8:42 pm

#8 Smoking Man on 11.24.16 at 6:47 pm
I got a funny felling Poloz is going to chop rates.
Bet Accordingly
==================
would make sense so he could keep balance of trades in better shape; assuming Morneau’s plan will work. I also think Poloz hopes OPEC will cut or at least freeze supply. seems nobody wants to cut, but they will try to come up with some promise

#63 FinancialPoodle on 11.24.16 at 8:48 pm

@ #1Gary
Explain how getting a pipeline for Alberta to move some product ANYWHERE east or west is bad for Alberta/Canada, please. And how, exactly, did Harper screw over Alberta and the heritage trust fund? Personally, I think everything went south provincially after Premier Klein left the room. I don’t recall any other provinces (or states, for that matter) balancing the budget and erasing their deficit. The Alberta Advantage is good for *everyone*.
My $0.02 worth.

#64 Andrew Woburn on 11.24.16 at 8:53 pm

#55 Millenial-falcon on 11.24.16 at 8:16 pm
Canadians don’t bail on their house. Ever
=======================

I could be accused of playing the age card here, but yes they do. Ask anyone over 50. We’ve been there or seen it. It’s not about intestinal fortitude or positive thinking, it’s about cash flow.

#65 hope & ruin on 11.24.16 at 9:00 pm

flooded with refugees from an inhospitable and unaffordable Vancouver, the Victoria area has seen a temporary 24% surge in prices in the past year.
———————————

I don’t understand this stat. Can I get it in a dumb, text-based graph? that should help.

#66 meslippery on 11.24.16 at 9:03 pm

rates are rising. And the people living on your street ain’t ready.

Lets vote on that. I don’t understand why you want higher
rates. Just cause of real estate?
No one save the banks wants higher rates. Helps no one.

#67 Andrew Woburn on 11.24.16 at 9:07 pm

Mark Dec 4 on your calendar. The Italians are holding a referendum on reforming their system of government. Matteo Renzi, their prime minister, has said he will resign if it doesn’t pass. Current indications are voters may well choose to “Trump” the establishment, especially the poorer regions in the south who have missed out on the benefits of trade.

Why should you care? Well Italy has Europe’s third largest economy (without the UK) and has its most perilously overstretched banking system. If you want to judge the public mood in Italy, the head of one of its leading political parties is a clown/comedian TV personality. Sound familiar?

Wednesday could be interesting, especially in Brussels.

#68 earlybird on 11.24.16 at 9:07 pm

I did see a Bungalow in Cowtown with a ReMax sale sign posted on the front yard with a For Rent sticker slapped overtop…not sure what to make of that!

#69 bill on 11.24.16 at 9:11 pm

#4 Randy on 11.24.16 at 6:46 pm
me too…
you may enjoy this:
https://www.youtube.com/watch?v=ezibVeeg4Pw

#70 TCContrarian on 11.24.16 at 9:11 pm

#24 Forzudo on 11.24.16 at 7:15 pm
Black Friday shopping will solve all of your problems.
—————————————————————-

ha ha – that was funny!

TCC

**********************************************
#16 Debtslavecreator on 11.24.16 at 7:00 pm

We are likely in the 1st inning of what will turn out to a dramatic and tragic bond market collapse that will see a 1980-1981 ish spike in yields due to what will eventually be looked back on as a global sovereign debt crisis and a devastating economic collapse
For many recent borrowers it will be lights out. No amount of crying will help
Then will face much higher rates on renewal which will render the payment completely unaffordable and rage will be at a fever pitch as property taxes, insurance and user fees etc all escalate explosively
RE was the foundation of the neoliberal control fraud that saw the greatest debt based Ponzi scheme ever devised to enslave the masses by fooling them into thinking they were getting rich when in fact they are being taxed

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

Agreed!

TCC

#71 GFD on 11.24.16 at 9:12 pm

When you start receiving fliers and email soliciting real estate, you should know conditions of the market. Here is one email I received today from Toronto realtor David Ortino of RE/Max, with ton of FOMO targeting millennial buyer. Give David a call or send him email with your opinion and don’t be shy doing so. Here it is:

“Good Morning,
I wanted to share this news article with you to highlight the urgency to get first time buyers into the market now. A proposal by the crown corporation to increase the minimum down payment would unfairly harm an important home buyer cohort, argues one professional.

“I think it’s crazy. If he wants to contain house prices from rising, I guess you could do that,” Vas Anton, a mortgage broker with Excel Mortgage, told MortgageBrokerNews.ca. “But how do you argue you can address affordability by increasing the minimum down payment?”

Late last week Evan Siddall, CMHC’s chief executive officer, suggested to an audience in London at the Bank of England panel on housing finance policy that minimum down payments should be increased in a bid to address housing affordability issues.

“Politicians are tempted to help first-time home buyers enter the market, but low down payments may be part of the problem adding to affordability pressures and macroeconomic vulnerabilities,” Siddall said in the speech, which was published on CMHC’s website.

But it’s first-time homebuyers that should be given a helping hand, according to Anton.

“I see day in and day out people are having issues scraping by with 5% and then they would have to do double that. So you’re putting home ownership even further away from your average Joe,” he said. “People buying a $6,$7,$800,000 property would probably be fine with a 10% down payment, but if you’re buying between $250,000 and $300,000 I think they would (struggle).”

According to Anton, Canadians who already own homes could pony up the extra cash by tapping into equity they have already built. The same can’t be said, however, for first-time homebuyers and new Canadians, however.

“But ask my son who is 21 and graduating from college next year if he’d be able to handle that. Unless I step in and say here sonny boy, here’s $13,000, go buy yourself a house,” Anton said. “What about new immigrants? How much money do you expect them to put aside?”
Broker: CMHC suggestion is ‘crazy’
by Justin da Rosa | Nov 23, 2016

Please let me know if you have any more questions or concerns regarding this proposed mortgage change. Feel free to call me, e-mail me or meet with me to discuss it over a cup of coffee.

Have a good day!”

David Ortino M.B.A.
Broker of Record @ Re/Max Platinum Pin Realty — # 1 Broker @ Re/Max Platinum Since 2007
Office: 416.222.SOLD | Direct:647.260.4350 | http://www.davidortino.com

#72 Smoking Man on 11.24.16 at 9:19 pm

Bond Junky.

Thanks for the book review yesterday. Much appreciated. Up to 40 sold. Had quite a few today. Thanks garth for letting him post it.

Get this, this pathetic blog has reach far beyond our boarders. Not giving out names. No deal at the moment. But got an email today. Then followed up with a call.

50/50 chance the book Deplorables becomes a movie. They want to make some changes. Anyone out there ever write a movie script. Or has samples of the format. I don’t think it will be that hard to turning into a movie script. EMAIL samples to [email protected]

#73 Danger Dan on 11.24.16 at 9:26 pm

So the pigeons have finally come home to roost… or however the saying goes. I’m starting to really wonder what is destined to happen to all those condo buildings that have been and are planned to be built in Toronto.

Is it just me or do these first-time real estate “investors” sound more like the prospectors of old who thought the path to wealth was a river full of gold dust?

#74 Smoking Man on 11.24.16 at 9:26 pm

35 Londoner on 11.24.16 at 7:35 pm
#8 Smoking Man on 11.24.16 at 6:47 pm
I got a funny felling Poloz is going to chop rates.
Bet Accordingly
____________________________________________

Called it last month. I said that oil was going to struggle to stay above 50 (or something like that) and that Poloz would cut. Fed move may negate that but you know what he’s thinking.
……

Canada is governed by clueless idiots. Idiologs with no brain power or logic.

Country is doomed now. Poloz will have no choice but to cut rates. At leased he knows a bit more about the export market that wynee , she just keeps making stupis mistakes and the rest of Canada pays the bill. A hedge fund took on canada for a cancelled bird killing wind farm. So now we will just be exporting money to the usa with nothing on return.

#75 };-) aka Devil's Advocate on 11.24.16 at 9:36 pm

#188 Atrate on 11.24.16 at 6:12 pm

I think Nancy Reagan said it most eloquently and succinctly;

“Feminism is the ability to choose what you want to do.”

And that ability ought to be respected by all as inalienable for all.

#76 liquidincalgary on 11.24.16 at 9:48 pm

@ Gary on 11.24.16 at 6:41 pm

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

first off, the Heritage Savings and Trust Fund is still there:
http://www.finance.alberta.ca/business/ahstf/history.html
second, where was the money going when things were booming?
ever hear of Equalisation Payments? oh right, you probably live in a province that receives, yet believes you are a net contributor of, these payments
a few pipelines lift us out of this ‘funk’?
actually, due to Trump, the business climate south of the border may become the most friendly in the free world, causing mass exodus from here to there.

#77 Context on 11.24.16 at 9:50 pm

Smoking Man knew a successful author in SF who wrote fiction with a small publisher. Any book on Amazon goes into two stages in USA and Canada, and the buyers look at what is sold in a specific category during the last 30 days under new releases. She would send us checks to pump it for sales and positive reviews. Its marketing to catch the buyer’s eye to buy the book or kindle addition. She said to give the books away and pocket 10% as a fee.

#78 Millenial-falcon on 11.24.16 at 9:50 pm

#64 Andrew Woburn on 11.24.16 at 8:53 pm
#55 Millenial-falcon on 11.24.16 at 8:16 pm
Canadians don’t bail on their house. Ever
=======================

I could be accused of playing the age card here, but yes they do. Ask anyone over 50. We’ve been there or seen it. It’s not about intestinal fortitude or positive thinking, it’s about cash flow.
******************************
Yes in the 80s when interest rates were 18%
What’s the default rate lately ? O.5 percent.
People will eat dogfood before defaulting on their mortgage. Prices are incredibly sticky Calgary is a prime example.
How will van and t.o prices drop when Calgary can’t even move the needle down during a jobs genocide.
Tell me why prices have not dropped in Calgary ? Ei ran out a long time ago .
There is still a tight supply of homes in vancouver and people moving here by the thousands. To the tune of 45000 a year. 200000 to lower the lower mainland. If you can afford 4 percent mortgage. Buy that house.

#79 Ret on 11.24.16 at 9:58 pm

#1
Alberta got the government that they voted for then just as they have what they voted for now. You bought it, you got it!

I don’t see the current NDP government trying to be fiscally responsible faced with the new financial realities of the global oil and gas markets.

The people of Alberta must really want a 5-10% provincial sales tax, road tolls and carbon taxes because they sure don’t want to give up their programs, a bloated overpaid public sector or spending on windmills and solar initiatives.

On another note, I’m hearing that lawyers in Calgary are unexpectedly busy. They are as busy or busier than when things were ramping up. Once businesses start fighting over assets and contracts in a deteriorating economy, the legal beagles get called in to sort out the mess. Lots of personal law cases too with bankruptcies and personal matters to get settled.

#80 RIL on 11.24.16 at 10:05 pm

SMOKES:

I hope the movie comes to pass. I’ll ask the Ft. Mac librarian to round me up a copy of the book. Now a joke. I hope it offends some people.

Fella gets home from his doctor’s appointment and tells his wife, “Look Dear, I got a prescription for daily sex!”

Wife says, “Honey, that prescription is for dyslexia.”

#81 Steven H on 11.24.16 at 10:07 pm

#36 – Don Regan
However, this listing
#R2108905 is a 33×122 at 3980 West 10th Ave

LP $2,990,000
Now $2,498,000
Loss 492,000
———————————————
Lowering a pie in the sky asking price is not a loss. It is just bringing it down to a more reasonable value. Not saying current asking price of $2.498 is reasonable either.
The 2015 assessed value of the property is only $1.7 million.

#82 YLTNBoomerang on 11.24.16 at 10:11 pm

I calculated my net liquid worth today versus monthly expenditures at current full employment level supporting a family of 3…15.8 years. Of course, after 16 years we would be flat broke and to be fair, if I lost my job I wouldn’t be buying the $30 bottles of wine but would stick with $13 plonk so probably could stretch it to 20; just in time to collect CPP, ha! BTW, this assumes no interest income.

#83 RiseandShine on 11.24.16 at 10:11 pm

Interesting qualitative analysis but you do know that for the past 5+ years that you have been talking about this tightrope of peril, the rate of bankruptcies and solvencies hasn’t changed? I get that you will condescendingly rebut with how it is all going to change with the rise in interest rates but maybe the bond market imploding is telling us something different? Do you realize that the shift in bond prices has erased approx 1.5 Trillion in economic value whereas the increase in the stock period over that same period of time is $240 B. Thus, there has been a net loss in overall wealth of over $1.2 T. My sense is that far exceeds any wiggles in the real estate market. I wonder what the future social impact will be?

Bankruptcies are irrelevant. Distressed people sell properties for what they can get. Values fall. All are impacted. Worry about that. BTW, you equity number is wrong. — Garth

#84 Smoking Man on 11.24.16 at 10:14 pm

45 Context on 11.24.16 at 7:54 pm
Smoking Man just checked Amazon concerning your book sales and they are recommending that a promotion is badly needed. They say you need some buzz by buying gifts to give away in the form of a contest.
……

Screw amazon. They take the biggest cut. I only make 2 bucks they take rest. unreal.

Note to self: buy some more shares. Thieving bastards.

#85 Keith on 11.24.16 at 10:38 pm

#36 Don Regan

The house you mentioned in your post wasn’t valued at 2.9 million, it was priced at 2.9 million – overpriced. Price is what you pay, value is what you get.

At 2.4 million, it’s still well overpriced based on last years assessed value of $1.7 million. Overpriced products, including real estate don’t sell.

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwMDFaRA==

#86 Smoking Man on 11.24.16 at 10:44 pm

Garth something is wrong with your blog. I hit the refresh button. Nothing.

Only way to new posts is to post..or mabey it’s my phone.
This is a test.

You failed. — Garth

#87 Brian on 11.24.16 at 10:47 pm

Pff everyone talking tough like they were right. Rates will tick up maybe 1 full point over 2 or 3 years then hold for a decade. Canadian big cities to remain a rip off. No deal for you!

#88 RIL on 11.24.16 at 10:47 pm

#79 Ret on 11.24.16 at 9:58 pm

On another note, I’m hearing that lawyers in Calgary are unexpectedly busy. They are as busy or busier than when things were ramping up. Once businesses start fighting over assets and contracts in a deteriorating economy, the legal beagles get called in to sort out the mess. Lots of personal law cases too with bankruptcies and personal matters to get settled.

justicejusticejustice

My Indeed trapline for legal positions in Calgary reflects what you stated. Natch. Soured deals, foreclosures, insolvency, collections, divorce and disputatious nastiness generally are all on the upswing. The law biz has you coming and going.

The diamond miners in securities law have time on their hands as IPOs ain’t occurring. However, their might be an uptick in oil and gas M&A and asset purchases with the more solvent companies still on their feet vultching.

Common in every recession and oil and gas bust at bigger firms is that the lowly litigators earn their keep and keep the corporate and securities dudes in the lifestyle they have grown accustomed to. Diversification.

Witnessed it about 4 times in private practice in Cowtown since ’83.

#89 desperate landlord on 11.24.16 at 10:48 pm

Garth,
consider this interim solution to vacancy rates for desperate property owners: become short term property rental hosts on airbnb or vacationrentals. The estimated net worth of these companies is skyrocketing. The competitive pressure is on the hotel industry now…forget bankruptcy we’re capable of amazing ingenuity. Desperation is the mother of invention!
What do you think?

Vacation rentals in Edmonton in January? What could go wrong? — Garth

#90 The Wet Coast on 11.24.16 at 10:50 pm

#1 Gary.

If you check a sizible amount of Alberta’s wealth went to “have not” provinces like Ontario. God I live saying that. Then there is the +100 billion that went to Quebec. Where did you think the tranfer payment money came from? PEI?

#91 DON on 11.24.16 at 10:52 pm

#7 Rexx Rock on 11.24.16 at 6:47 pm

Lots of homeowners in Victoria say they will have a great nest egg when they sell their houses when they retire.It seems Victoria will be the next Vancouver and cash out millionaires!You see people who make $40,000 a year and are driving bmw and big expensive trucks because they own houses and it just a cash cow that keeps going up.
***********************
I take it you missed the word “temporary”. The rest of Garth’s post points to over indebtedness and families will not able to absorb an economic shock or job loss. I take it your are betting on a quick recovery, I hope you’re right, but it sure feels like we are on a roller coaster ride nearing the top and you can feel the angst.

Greaterfools rushing in, last minute, intelligent people who just don’t care to do their research. Ouch, rents falling in Calgary and Edmonton. Lots of Albertans own real estate in BC. I wonder which homes they will put up for sale as the squeeze deepens.

#92 Smoking Man on 11.24.16 at 11:03 pm

Just deleted linkedin on my phone.

The temptation of going full on smoking man on these pathetic bull shitters and suck ups on two knees and hands is overwellming.

Am I the only one that sees that. I hate these suck ups ball lickers. Shitty sales people at best.

I’m one to talk. 40 book sales with such a huge following on GF.

Attention LinkedIn, no matter how much bull I spew.

So long as I don’t pick a trigger word I’m safe. People do you have any idea how hard this is for me.

Never figured on my 8 years of building a brand on here, people don’t read books anymore.

Never saw it.

It’s all about the movies.

Sad. Even from a dyslexics prospective.

#93 Damifino on 11.24.16 at 11:04 pm

#73 Danger Dan

“Is it just me or do these first-time real estate “investors” sound more like the prospectors of old who thought the path to wealth was a river full of gold dust?”
——————————————

When the gold rush begins… sell shovels!

#94 chapter 9 on 11.24.16 at 11:05 pm

#1 Gary

Are you familiar with transfer payments? Good old Alberta shipped to Ottawa over $200 billion plus between 2000-2014 on a net basis, that is nearly twelve times the heritage trust fund. Without Alberta’s energy wealth Canada would have been a financial basket case a long time ago.We don’t get to keep all the wealth we generate in this province. Not even close!

#95 Smoking Man on 11.24.16 at 11:06 pm

You failed. — Garth

It’s a glorious place.

#96 Tiger1960 on 11.24.16 at 11:06 pm

https://en.m.wikipedia.org/wiki/Burn_rate
I guess that a few don’t what the burn rate really means .
I’m really hoping this doesn’t get brushed under the bus again!
My second try!
Burn rate you should know about this Canadaha

#97 common sense on 11.24.16 at 11:07 pm

I really don’t think it’s up to Poloz to call…..let’s guess what TPTB are thinking re Canada’s future..

#98 Andrew Woburn on 11.24.16 at 11:12 pm

#78 Millenial-falcon on 11.24.16 at 9:50 pm
Canadians don’t bail on their house. Ever

Yes in the 80s when interest rates were 18%
Tell me why prices have not dropped in Calgary ? Ei ran
===================

It doesn’t actually matter whether you’re paying 3% or 18%. Most Canadians carry as much mortgage as they can get away with. In the Eighties, monthly carries were about the same % of monthly income as they are now. People were just paying more interest on smaller mortgages.

I don’t know why Calgary prices haven’t dropped as much as you would think except it always takes several year for these things to work through. Another likely factor is that Calgary has a much more diversified economy than Easterners would believe. I have read that oil only accounts for 6% of Alberta direct employment. Overall I believe the Alberta unemployment rate is around 8%, painful but not fatal.

I agree that people will keep coming to the Lower Mainland but the limiting factor will be jobs. Employers cannot keep compensating for increasing housing costs when there is little done in Vancouver that couldn’t be done just as well in Victoria, Kelowna or Calgary.

#99 willworkforpickles on 11.24.16 at 11:13 pm

Your house will one day be taken away from you and sold to the Chinese to go toward paying down the national debt.
If you can afford to rent it from your new landlord you may not have to move.
It will start with the land your house sits on. First they will take that and you will pay a sizeable fee per month to remain there on top of exorbitant property taxes for the building…your home, sitting on the land you no longer own.
This will prepare you for when you don’t/won’t own the house after complete expropriation
We will all be renters eventually.
Tent sales will sore. So will the cost to buy them.
There will be no alternatives left to pay the doubled even tripled by then national debt.
A new world reserve currency will cripple the dollar with panic level hyperinflation rampant and out of control.
But for now… as long as there’s food…it’s all good.

#100 Doug in London on 11.24.16 at 11:14 pm

Rates are rising, an I ready? I think so, as I patiently wait for the generous yield on those preferred share ETFs to become even more generous. Some time in the next year or so I may sell some of them and buy bond funds which may be even cheaper than now.

#101 RIL on 11.24.16 at 11:18 pm

#90 The Wet Coast on 11.24.16 at 10:50 pm
#1 Gary.

If you check a sizible amount of Alberta’s wealth went to “have not” provinces like Ontario. God I live saying that. Then there is the +100 billion that went to Quebec. Where did you think the tranfer payment money came from? PEI?
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Don’t get me started on this common and mistaken refrain and lament from Albertans (not this one). The province of Alberta does not cut cheques to Que., N.B. and PEI. Never has. All Canadians pay federal income tax at the same rates. From those monies received by the Exchequer, payments are made to havenots (soon to include Alberta).

Now, assume for a moment the equalization program stopped tomorrow. Do you think our federal tax remittances would go down?

Stop it.

#102 Master Blaster on 11.24.16 at 11:22 pm

Ok,
So I bought Smokey’s book, just finished it now. Overall, imagine that the guy who writes here as Smokey got to publish what he really wanted to say instead of having to play nice for Garth’s sake….and then add aliens.
It’s more along the lines of Heinlein instead of Thompson by my reckoning…
Personally, I think it needs more drugs, the variety of drug use just isn’t there, the best (only) hallucination is the result of low nicotine levels not drug abuse.
He definitely takes a few blows at the PC education system and the cult of climate change. And feminists. So if you’re a hard leftist don’t buy the book, you’ll get triggered! If you are sane (i.e. right leaning) then you can read it and enjoy it if you like Smokey’s comments. And aliens.

-MB

#103 willworkforpickles on 11.24.16 at 11:28 pm

I might add, tent sales will soar…living in them will only make you sore.

#104 IHCTD9 on 11.24.16 at 11:29 pm

I’m ready. No Consumer debt, no Mortgage debt, fat portfolio (relatively speaking), fat emergency fund, no car payments. Tax avoidance strategies are well developed, and ongoing – even into the realm of the unconventional. Even though I face the real possibility of job loss due to employer insolvency (again) in the next couple years, this time I can coast a long time, maybe indefinitely.

In fact, it took about 14 years to be ready according to my definition. Folks can’t watch the SHTF and then start making a plan, it’s gotta be game on from day one. You kids just starting out best gird up your loins for the race that lies ahead, and sprint for the finish line with purpose and conviction.

It’s getting pretty scary out here in private sector, blue collar Ontario, and I don’t see any way things can be turned around – it’s simply too little, too late. The massive contraction in my industry over the last 10-15 years can’t be repaired within the remainder of my working career. Really, it’s pretty much gone for good.

#105 DON on 11.24.16 at 11:32 pm

#64 Andrew Woburn on 11.24.16 at 8:53 pm

#55 Millenial-falcon on 11.24.16 at 8:16 pm
Canadians don’t bail on their house. Ever
=======================

I could be accused of playing the age card here, but yes they do. Ask anyone over 50. We’ve been there or seen it. It’s not about intestinal fortitude or positive thinking, it’s about cash flow.
*************

Nicely put.

Even people under 50 remember the times as we watched our parent’s and their friends go through it. Jobs are lost and high rates of divorce. Disheartening all around.

#106 DON on 11.24.16 at 11:41 pm

#78 Millenial-falcon on 11.24.16 at 9:50 pm

#64 Andrew Woburn on 11.24.16 at 8:53 pm
#55 Millenial-falcon on 11.24.16 at 8:16 pm
Canadians don’t bail on their house. Ever
=======================

I could be accused of playing the age card here, but yes they do. Ask anyone over 50. We’ve been there or seen it. It’s not about intestinal fortitude or positive thinking, it’s about cash flow.
******************************
Yes in the 80s when interest rates were 18%
What’s the default rate lately ? O.5 percent.
People will eat dogfood before defaulting on their mortgage. Prices are incredibly sticky Calgary is a prime example.
How will van and t.o prices drop when Calgary can’t even move the needle down during a jobs genocide.
Tell me why prices have not dropped in Calgary ? Ei ran out a long time ago .
There is still a tight supply of homes in vancouver and people moving here by the thousands. To the tune of 45000 a year. 200000 to lower the lower mainland. If you can afford 4 percent mortgage. Buy that house.
*************

You are still thinking short term.

also in the 80’s houses prices didn’t reach the insane levels they have today and with the cost of living rising on a monthly basis it is only a matter of time. Plus a lot of people got severance in Alberta, and some might be living off credit, savings etc. From the outside everyone appears fine, but what lurks inside. When it comes to human nature never always seems to happen.

#107 Steerage Bilge on 11.24.16 at 11:51 pm

#86 Smoking Man on 11.24.16 at 10:44 pm

Garth something is wrong with your blog. I hit the refresh button. Nothing.

Only way to new posts is to post..or mabey it’s my phone.
This is a test.

You failed. — Garth


Yeah the blog is psychotic of late…Smoker dude is actually right for once and not just drunk and seeing things!!

Hit refresh a bunch of times and still the post counts don’t match and posts don’t appear til a new batch.. weird…

Ok actually it is devastating to my well being and I need pet therapy to get over it all.. maybe they have to get screened by Trump first….. I know I know you don’t give a flying crap…

#108 Ronaldo on 11.25.16 at 12:05 am

#85 Keith on 11.24.16 at 10:38 pm
#36 Don Regan
At 2.4 million, it’s still well overpriced based on last years assessed value of $1.7 million. Overpriced products, including real estate don’t sell.
==============================
Most of the homes being sold in the Mt. Pleasant area are being priced at 1 million over the assessed value and strangely they are finding suckers at these inflated prices because the supply is so low. This could go on for quite a while as long as there are greater fools around to get sucked in by these shysters.

#109 OttawaMike on 11.25.16 at 12:06 am

Smokingman,
I looked and looked but can’t find your book on the website:
http://paperback-paradise.com/

#110 WalMark of Sadkatoon on 11.25.16 at 12:24 am

#8 Smoking Man on 11.24.16 at 6:47 pm
I got a funny felling Poloz is going to chop rates.
Bet Accordingly

when SM talks posters better listen

his hunches are better than most poster’s full blown text vomit

#111 Bobdog on 11.25.16 at 12:33 am

Living in Canada the last 10 years brings into question the very definition of the word government. Who is the enemy of the people?

#112 Rentin on 11.25.16 at 12:40 am

When money is cheap, things are expensive. When money is expensive, things are cheap.

Pretty simple.

#113 darkselling on 11.25.16 at 12:45 am

I’m surprised you wouldn’t take Hope Street’s publication with a grain of salt? These guys have been on AM radio pumping up the “tough market” when oil had only dropped 15%.
Their main pitch was “with the oil market down, if you want to move rent your current place out (we’ll manage it) and buy a new house of your dreams”
Next pitch was “if you can’t sell consider renting with Hope Street and then sell in a few years when the markets recovered”
“then it was don’t sell now and take *below market value* when you can rent it out with Hope Street and make money selling later”
Recently it’s been “with the glut of rentals on the market the best bet for renting out your house is with Hope Street”

They’re a horrible organization and I wouldn’t trust a single thing they say since they’re about as self serving as your average local realtor or broker.

#114 BS on 11.25.16 at 1:06 am

#78 Millenial-falcon on 11.24.16 at 9:50 pm

People will eat dogfood before defaulting on their mortgage.

True, it usually starts with eating dog food. Then they default and lose the house. If people were smart they would just skip the dog food part. But then again if they were smart they wouldn’t have bought the house they can’t afford in the first place.

#115 jay on 11.25.16 at 1:12 am

No problem getting financing for your mortgage,you can just call this gentleman and get one for 11%. http://vancouversun.com/business/mortgages/metro-in-debt-non-bank-or-private-lenders-feed-or-rescue-debt-addicted-homebuyers

#116 calgaryPhantom on 11.25.16 at 1:17 am

Garth something is wrong with your blog. I hit the refresh button. Nothing.

Only way to new posts is to post..or mabey it’s my phone.
This is a test.

You failed. — Garth
—————————————

I noticed that too. Cannot refresh your blog on my phone.

Probably caching issue on mobile browsers. should be an easy fix.

#117 liquidincalgary on 11.25.16 at 1:18 am

@ 79
a PST would be a hell of a lot better than carbon taxing our number one products (and soon a doubling of our electricity rates)
there is an old saying, that i am about to butcher, “when oil is less expensive on the trading floor, than it is to go out and find it…”. this is when lawyers get busy, M&A’s baby!

#118 I See Right Through Trump and many other conmen on 11.25.16 at 1:27 am

Seriously you are going to allow this repetitive, foolishness to continue? We’ve seen it 20 or 30 thousands times before. We get it, the author is blinded by this stupidity and wants to daily make sure everyone knows it. This makes the most puzzling posts look smart. Yet it’s repeated daily.

So much for cleaning the comments section up.

“#9 South Etobicoke Trump Campaign Field HQ on 11.24.16 at 6:47 pm
It appears the storm is on the horizon. In these difficult times, it is proper to praise the Emperor – Trump.
The Emperor of Mankind is the Light and the Way, and all his actions are for the benefit of mankind, which is his people. The Emperor is God and God is the Emperor, so it is taught in the Lectio Divinitatus, and above all things, the Emperor will protect…”

#119 Paulo on 11.25.16 at 1:30 am

My Call:

No rate cut from boc – next move is up

Look for at least 30 more basis points in mortgage rates
before years end

Oil: 45-55 Range bound next 36 months at least

#120 Newcomer on 11.25.16 at 1:43 am

A new comp for the hood.

4248 Slocan Street

July 2015 Assessed: 875
Original list -1.359M
Reduced – 1.199M
Sold – 800K

http://www.rew.ca/properties/R2097515/4248-slocan-street-vancouver

#121 Invest west on 11.25.16 at 1:44 am

In defence of mr. Campbell

– all proceeds from book sales go to habitat for humanity… it’s not all about the money like other get rich quick programs
-he has been way more accurate predicting trends and areas for investment then this blog has
-his investment strategy done right, (following cash flow and dudiligence finding the right deal can handle the Alberta enonomic downturn just fine).

Would suggest getting your facts straight before throwing someone under the bus

#122 Bram Stolk on 11.25.16 at 2:29 am

You can tell from the overgrown weeds covering the realtor sign, that the Vancouver RE market has changed.

Days-on-market is high for this RT-2 zoned house.
Not so long ago, houses would be sold *before* a sign could be placed.

https://pbs.twimg.com/media/CyF0aX_VIAQavQX.jpg

#123 NEVER GIVE UP on 11.25.16 at 3:03 am

#33 E-mail wild bill on 11.24.16 at 7:34 pm
CMHC is the ONLY reason for high housing prices.
————————————————————-
There is magic in money!

Say for example there were only 10 houses on earth.

The houses were worth 1000 hours of time to make. we made a currency and called it 1000 dollars to equal 1000 hours of time.

The Government decides that in order to buy votes they will start a CMHC to guarantee loans to banks who then would lend $1800.00 ($200.00 deposit) to someone to buy one of those houses.

Result is: Bank has a customer by the balls for a mythical piece of exchange paper (Currency called a dollar) ($2000 less a down payment).

There are only still 10 houses on earth but the value of the 10 houses is now $11000.00 just because the CMHC said it was a guaranteed loan.

Essentially everyones house went up 10% in value because the bank lent money irresponsibly because the Government created a thing called CMHC.(Center for Money Humping Criminals)

Do this a few more times and all of a sudden the bank has $10,000.00 worth of receivables to collect, indebting people who should have just bought the house for $1,000.00 in the first place for cash.

All the houses are now worth $2000.00 each.

Some of the people think they are rich because their house seems to be worth more for doing nothing. As long as they don’t sell sell at once they may be able to get out with the profit.

The Bank now has bound and tied several people to debt servitude.
Namely those who borrowed $1800.00 each with a $200.00 deposit to purchase a home that was worth $1000.00.

This is the sick and twisted life we have created for our children.

#124 Future Expatriate on 11.25.16 at 4:52 am

Wow. Sounds just like Trump U.

#125 RiseandShine on 11.25.16 at 6:44 am

Bankruptcies are irrelevant. Distressed people sell properties for what they can get. Values fall. All are impacted. Worry about that. BTW, you equity number is wrong. — Garth

What do you think the numbers are? Are you suggesting that an enormous amount of wealth has been wiped out by the bond market activity?

#126 ANON on 11.25.16 at 7:10 am

incredible as it seems, you can’t create wealth by borrowing.’

Beg to differ. :)
What is really incredible, and going against all our core beliefs, is that wealth was, is, and will be (sometime in the future, if/when the dust settles and another expansion cycle begins) always created by making arithmetically impossible to keep promises of more non-existent interest at some point in the future, reinforcing a narrative in a positive feedback loop.
When a hypothesis explains the past and present observations, no matter how outlandish it may seem, it is most likely the correct one.

#127 I feel you Randy on the Corvette on 11.25.16 at 7:30 am

To the naysayers here worried about of all things, insurance, clearly you have never driven a ‘Vette.

Mine was the Supercharged version, well over 600 bhp of neck artery exploding, passenger fingernails embedded in the dash, pure exhilaration. Mine was black in color, I called it Black Death.

If it was a kid, I would have put it thru University.

Then again, anybody worried about insurance on a ‘Vette is pedestrian and far too sensible/boring to say the least.

Live life on the edge I say and die with a smile on your face, no matter what happens and with no regrets.

bsant

#128 Smoking Man, agreed on Poloz on 11.25.16 at 7:38 am

It’s all one trick pony Poloz knows to do: cut rates. He’s been doing it now for 3 years with nothing to show for his efforts other than creating asset bubbles which are now beginning to burst in the worst way possible.

Still hasn’t figured out he is trying to pump a NDE Manufacturing/Oil & Gas sectors that has been decimated.

He’ll cut rates alright, ’cause that’s all he knows to do. There goes the dollar down, up goes inflation.

All Poloz will be able to claim in the end is that he lowered the cost of money for T2’s Keynesian $80 billion stimulus and this years $30 billion deficet.

Go figure.

Birds of feather, working hand in hand.

bsant

#129 landlessinvan on 11.25.16 at 7:42 am

Not everyone agrees with you on the Dow

http://www.cnbc.com/2016/11/22/david-stockman-doubles-down-on-his-sell-everything-call.html

Stockman is still trying to sell his disaster book. — Garth

#130 Stendz on 11.25.16 at 7:44 am

Hey Garth… My balanced portfolio has quickly become unbalanced based on the dip in bonds and rise in equities. Can you do a post on when to rebalance? I imagine you don’t want to try and “time” rebalancing the same you don’t want to try and “time” buying stocks.

#131 Italians are holding a referendum... on 11.25.16 at 7:58 am

As one of those Italians that will be voting, you are correct, it is about reforming the Senate.

True, the No side is ahead but last time I checked, the undecided’s were about 20%.

Italians are pissed off about 4 years of near 0 growth due to Fraulein Merkel’s austerity program. The French are pissed too. UK will be out of the EU, so who cares what they think. Spain the same and they as of late, are on the comeback like gangbusters with NO government.

Do not count Renzi out. When he goes on RAI TV and argues his YES points vs. his fervent NO opponents, polls right after give him a 67% favorability.

But if you ask us would we secede from the EU, polls (sondaggi in Italian) report a 70% resounding NO.

Then again, polls are fake, per one of our Signature posters.

So we shall see. As for me, I like all of it except that the lower house appoints the 100 Senators. Italians recall WWII and how Mussolini took over the then centralized Government easily. Why the YES side may yet lose.

It will be, in the end, a trust issue.

Ciao d’Italia.

bsant

#132 Smoking Man, Publish on Lulu.com on 11.25.16 at 8:06 am

I had 5 books published thru book publishers. As you say with Amazon, you get nothing, they get everything.

Try Lulu.com and self-publish, electronically or hard cover.

I switched to them once my publishing contracts were up.

On every $1, they take $0.25 (as of a couple of years ago) – retired now, so I don’t know what their latest cut is. They pay quarterly and will direct deposit to your PayPal account if you have one. For tax purposes, you can take a printout from there. Did that for 10 years and no problemo with Revenue Canada.

Just an alternative for eeking out a few more cents for your writing efforts.

bsant

#133 crowdedelevatorfartz on 11.25.16 at 8:09 am

@#27, 28 Victoria Real estate Update
“jobs are lost”
********************************************

Victoria is currently tied with Quebec City for the lowest unemployment rate in Canada at 4.6 %

As for Victorians moving to Alberta for work…..time to revise your stats…..its the exact opposite if all the Albertan license plates on vehicles driving in Vancouver are any indication.

#134 Renter's Revenge! on 11.25.16 at 8:17 am

Are there any “have” provinces left in Canada, or are they all “have not” now?

You would think that in any country with a federal transfer payment system, the goal of every province would be to become “have least”.

#135 coopoiler on 11.25.16 at 8:21 am

So #1 Gary thinks Alberta is toast! Maybe it is, and it is fair to ask what they did with all the money. It is also fair to ask Ontario and especially Quebec what they did with all the transfer money they got from Alberta. At least Alberta knows where some of their money went.

#136 crowdedelevatorfartz on 11.25.16 at 8:24 am

@#78 Millenial Crow
“Tell me why prices have not dropped in Calgary ? Ei ran out a long time ago .”
********************************************
Denial?
Waiting for the repossession?
Private loans from parents, friends, etc?

The sh*t hit the fan in Cowtown aprox 6-12 months ago. I dont consider that “a long time ago” .
Your like all those Brits that voted to leave the EU. …” See? I told you Brexit wouldnt be a big deal….”

Give it a bit more time ( since most mortgages are for 25 years)
Lets see what the Spring- Summer 2017 sales numbers tells us before you start crowing
Banks dont like repo-ing houses in a falling market.
When Garth is showing us stats for vacancy rentals and dropping rental rates in Cowtown and Edmunchuck that would make any landlord weep.

I dont see a positive up side on housing sales.

#137 IHCTD9 on 11.25.16 at 9:58 am

Being an Ontarian, I am trying to decide who to vote for Premiere in 2018. Last two times I voted Conservative, both times they should have won. But the Libs scared the fragile Citizenry of Ontario with Religion and lay-offs in the public sector, and that was all it took. Bad God fearing, government shrinking Cons were out, and money burning, industry destroying Libs were in.

Now we have Wynne with a solid majority barely 2 years old – and her approval rating is currently 15%.

Clearly, I live and work among some of the dumbest voters on Earth. Clearly, I can’t expect our miserable financial and jobs situation to ever improve if my fellow voters run off screaming in terror at the slightest provocation.

At this point, the GTA/Ottawa/Kingston will vote Liberal even if Wynnie spikes their drinking water with the Black Death, as long as she promises to protect those public jobs. Those public workers know things are bad, and they know the writing on the wall. They’ll vote Liberal no matter what to save their jobs.

So what does a financial conservative do? At this point, there is no repairing the damage without 3-4 Conservative Majorities with just the right guy/gal at the helm – yeah right, that’s going to happen. Seesawing between governments will just take us nowhere fast as one tries primarily to undo what the previous had done just for its own sake (like T2).

I am starting to think about a strategic vote. I am well prepared for tax increases (I won’t be paying them), and potential job loss due to continuing business closures and relocations South. I live rurally so I have a lot of options. It may well be quicker to resolve the issues here in Ontario by voting for the worst candidate (like Wynnie) out there, rather than the best. Trying to fix things will take a decade+ of excellent management and barrels of luck. OTOH, we are closer now (with Trump down south) than ever to entering a complete free fall that will last years and be a one way street. I’m talking about one even the CBC can’t ignore.

It may be time to admit that Ontario’s Citizenry can no longer help itself. To admit that Governments who support Union and Public Sector workers are going to get in regardless of what the implications are in other areas.

#138 ROTFL on 11.25.16 at 10:04 am

#83 RiseandShine — “Do you realize that the shift in bond prices has erased approx 1.5 Trillion in economic value whereas the increase in the stock period over that same period of time is $240 B. Thus, there has been a net loss in overall wealth of over $1.2 T.”

I think you should rethink your outlook. If you want an event that erased economic value, think about the Ft. Mac fire. Another way of erasing economic value is to build something which isn’t worth what it cost to build.

But if you own a bond, which is a promised series of future cashflows, and the borrower is still making his payments, have you “lost economic value” just because you can’t sell the bond for as much as you could have last month? When you bought the bond, you did so because you valued the stream of cashflows more than the cash you had to stump up for them. Now, just because others won’t pay what you paid, you’ve “lost money?” It seems you want to have your cake (cashflows) and eat it too (present value). The only way to truly lose economic value is to get inflation higher than you were bargaining for.

Same deal with homeowners. Presumably, they wanted the house more than the series of cashflows that they promised to trade in exchange for it.

#139 IHCTD9 on 11.25.16 at 10:05 am

#134 coopoiler on 11.25.16 at 8:21 am
It is also fair to ask Ontario and especially Quebec what they did with all the transfer money they got from Alberta. At least Alberta knows where some of their money went.
___________________________________________

We used to have that info, but those emails got deleted.

#140 NoName on 11.25.16 at 10:14 am

eu is in a real trouble

http://www.dw.com/en/erdogan-threatens-to-open-borders-after-european-parliament-vote/a-36518509

#141 ROTFL on 11.25.16 at 10:20 am

“The Top’s In” David Stockman Warns — Aug 7 2015
David Stockman Sees “Signs Of The Bubble’s Last Days” — July 2014
David Stockman Blasts “It’s 2007/8 All Over Again” — Nov 2013
OMB’s Stockman: “We’re At The Fiscal Endgame” — July 2012

He’ll be right one of these days, I’m sure. But how much will you have lost in the mean time?

#142 ROTFL on 11.25.16 at 10:40 am

And geez, Garth, how could you write about Alberta real estate without mentioning that Brad Lamb is behind on his mortgage? The puns write themselves…

http://www.mortgagebrokernews.ca/news/syndicated-mortgage-payments-delayed-217108.aspx

#143 For those about to flop... on 11.25.16 at 10:42 am

Stockman is still trying to sell his disaster book. — Garth

//////////////////////////////

And so is Joking Man ,apparently…

M42BC

#144 Smoking Man on 11.25.16 at 10:52 am

Bat shit crazy.. Who in there right mind would toss money away and attend these institutions of mind twisting..

Backlash is coming my girls.. Can I say that.. Oops that’s going to be a hate crime soon. I’ll try again.. Backlash is coming my things. Huh.. Not sure I can use that either..

So confused.

http://www.nationalpost.com/m/wp/news/blog.html?b=news.nationalpost.com/full-comment/christie-blatchford-ubc-prof-who-denounced-u-of-t-colleague-in-gender-debate-has-skeletons-in-her-own-classroom&pubdate=2016-11-25

#145 Smoking Man on 11.25.16 at 10:57 am

#131 Smoking Man, Publish on Lulu.com on 11.25.16 at 8:06 am
I had 5 books published thru book publishers. As you say with Amazon, you get nothing, they get everything.
….
I did publish via lulu.. But it gets sent out to the other retail outlets.. The biggest thief is kobo they take 60%. Then amazon.

#146 Smoking Man on 11.25.16 at 11:01 am

Breakdown of the cut retailers makes on e-books. That’s why I own Amazon, they do nothing and take a huge cut.

$5.09 LuLu
List Price $6.99
Hosting Fee -$1.34 Help
Lulu Share -$0.56 Help
You Make $5.09

Processed Help Apple iBookstore
$4.40
Price $6.99 Help
Distribution Fees -$2.10 Help
Lulu Share -$0.49 Help
You Make $4.40

Processed Help Barnes & Noble NOOK
$3.15
Price $6.99
Distribution Fees -$3.50 Help
Lulu Share -$0.34 Help
You Make $3.15

Processed Help Amazon Kindle
$2.69
Price $6.99
Distribution Fees -$4.00 Help
Lulu Share -$0.30 Help
You Make $2.69

Processed Help Kobo and Everything Else
$2.81
Price $6.99
Distribution Fees-$3.87 Help
Lulu Share -$0.31 Help
You Make $2.81

#147 Context on 11.25.16 at 11:01 am

#131 Publish on Lulu:- He did publish on Lulu. The book selling business is the most difficult of all to make money and takes many years. Success is earning $50,000 but most don’t make the cut and there is the few that any book will make $millions with a series over decades. The first attempt is a learning exercise and marketing, distribution, and first chapter look are critical. The preview peek of narrative must be without fault to captivate the buyer or all will be lost.

#148 Damifino on 11.25.16 at 11:05 am

Rob Carrick in yesterday’s Globe & Mail says…

“One of the justifications for high house prices in Toronto and Vancouver is that they are […] superstar cities. They draw in people and capital from around the world and thus have the economic fundamentals to justify expensive houses.”
————————————

What then, is Victoria’s excuse? Or even Hamilton’s?

#149 tkid on 11.25.16 at 11:16 am

http://business.financialpost.com/personal-finance/family-finance/out-of-work-years-before-planned-retirement-and-more-than-30000-in-debt-single-womans-future-rests-on-careful-planning

Woman cries poor (and is terrified from the sound of things). She’s balancing her budget, and has a house worth $750,000 and she’s wondering if she can afford any unseen emergencies.

Lady needs to sell the house, live off the proceeds.

#150 NoName on 11.25.16 at 11:19 am

@Steerage Bilge, SM, calgaryPhantom

its on going thing for some time now, and noone noticed until yesterday… random makes it more addictive!

#151 n1tro on 11.25.16 at 11:20 am

“…incredible as it seems, you can’t create wealth by borrowing.”

But borrowing money from the Fed in excess of $10T in the last 8 years to “stimulate” the economy is different right? Because the government can always raise taxes from the people to pay it down?

#152 Cici on 11.25.16 at 11:28 am

Hey Garth,
Smoking Man at #8 may be right again about a rate chop. How else other than through bloated real estate could Kanaduh ever hope to double the number of its millionaires over the next five years?

http://business.financialpost.com/news/economy/credit-suisse-expects-canada-to-have-50-per-cent-more-millionaires-by-2021

#153 Smoking Man on 11.25.16 at 11:32 am

Trump is winning them over. While loon Micheal Moore wants to start a revolution. That guy is whacked.

https://therealstrategy.com/12-signs-trump-making-america-great-already/

#154 Wrk.dover on 11.25.16 at 11:45 am

So the Jehova folks caught me on my driveway today.
I always try to boost their esteem so they can go away happy.

I asked if they were here to boost Trump or Jehova as the driver got out of the car. He quickly read off a bible passage called Timothy2/3. It had every word in the dictionary that you could possibly describe the Donald with.

So, I said “it looks like Trump read that passage and volunteered to be that guy.” We had a real good laugh and away went that car load of Jahova Winesses, that quick and easy!

#155 Wrk.dover on 11.25.16 at 11:47 am

I was a Stockman groupie until he went pay for view of his site. What the hell does he need more/my money for?

#156 Tony on 11.25.16 at 11:47 am

Are the Millennials that stupid in Canada? When one city goes down it’s supposed to take down all the surrounding cities. Apparently its only akin to Canada and no other country in the entire world. The Millennials need a reality check and education in economics.

#157 Wrk.dover on 11.25.16 at 11:56 am

And good luck getting more than halfway through the Great Deformation book by Stockman. Yawner right there folks. It stops making any point and turns in to pages of random words.

#158 Riffmeister on 11.25.16 at 12:01 pm

“Victoria is currently tied with Quebec City for the lowest unemployment rate in Canada at 4.6 %”

#132,

Actually it rose to 5% but whose counting. Jobs are tough in Victoria unless you like slinging burgers or swinging a shovel.

#159 coopoiler on 11.25.16 at 12:06 pm

How about renaming the GREAT BEAR RAINFOREST “The rainy wasteland invested with bears” Then it becomes a perfect route for a pipeline.

#160 InvestorsFriend on 11.25.16 at 12:25 pm

Vacant Homes for Rent? The horrors!

“In the 90 days ended with October, there were 8,102 homes available for lease in Calgary alone, with an average rent of $1,477 (which is going down).
Of these homes, a staggering 37% (or 2,998) were empty. Vacant. No revenue.”

*****************************************
Why is it staggering that 37% of the homes available for lease are empty (vacant. no revenue)?

Should we expect mostly already occupied homes to be advertised for lease? I am surprised that as many as 63% are advertised while the current tenant is still there.

Yeah, when you rent out a home or apartment you usually get at least one vacant month between tenants. That’s hardly cause for alarm.

Never been a landlord, have you? — Garth

#161 Polls R Phake on 11.25.16 at 12:37 pm

It was rumoured that Apple would finally put some of its junk on sale today.

Nope.

Get ready for another crappy quarter from Apple. Sorry but no one can afford a $1000 smart phone anymore.

#162 The Wet Coast on 11.25.16 at 12:37 pm

#100 RIL

When you take money from one province and give it to another you deplete the resources of one province and expand the resources of another. Don’t you recall the NEP. Transfer payments at their finest. Alberta has enjoyed the bounty of its natural resources far less than say, Alaska. Where folks are actually cut a check every year by the state. The cartoon from the 1930’s with a cow standing over Canada grazing in the west, being milked in Ontario and with its butt over the maritimes is true today as it was then. The question in many Albertan’s minds is if they would be treated better as the 51st state. The answer would appear obvious.

#163 InvestorsFriend on 11.25.16 at 12:38 pm

What Alberta Transfer Payments? It’s a Myth

#93 chapter 9 on 11.24.16 at 11:05 pm commented to Gary:

#1 Gary
Are you familiar with transfer payments? Good old Alberta shipped to Ottawa over $200 billion plus between 2000-2014 on a net basis, that is nearly twelve times the heritage trust fund. Without Alberta’s energy wealth Canada would have been a financial basket case a long time ago. We don’t get to keep all the wealth we generate in this province. Not even close!

*********************************************
Not really true. And note I have been in Alberta for 27 years and my kids were born here.

The Alberta government certainly did not send any taxes or oil royalties it collected to Ottawa.

As far as I know, transfer payments just mean that some Federal taxes collected in Alberta were spent elsewhere. So what? Those are federal revenues. Why should anyone expect the feds to spend its taxes collected precisely in each province, city or street collected from?

Are you familiar with OPEC? Without OPEC having colluded to push oil prices higher than the free market level for most of the past 45 years, Alberta would never have benefited from high oil prices. Alberta has ridden the coat tails of OPEC and Saudi Arabia. Should Albertans be proud of that?

And why do you think there is some “we” when it comes to Alberta. What do you have to do with the federal income taxes that Ottawa collects from me and other Albertans? What do you have to do with the federal income taxes that Ottawa collects from all the businesses in Alberta. There is no we.

Are YOU getting a raw deal from the economy and the governments of Alberta and Canada? Really?

#164 InvestorsFriend on 11.25.16 at 12:44 pm

The We Myth

We don’t get to keep all the wealth we generate in this province. Not even close!

**********************************
Strange, all a person has to do is move to Alberta and suddenly they are somehow part of the Alberta team that creates oil and gas wealth and they are entitled it seems to their share of that wealth just for moving to or being born in Alberta. After all, everyone born in or living in Alberta is helping create that wealth. Right?

Why should any of that wealth flow to the rest of the country? Ask not what your province can do for your country! Ask to do nothing for your country?

#165 common sense on 11.25.16 at 12:50 pm

Well time for a BOC rate cut….The OPEC ministers, sorry LIARS cancelled their meeting Monday to talk up oil prices more….now the slide down to $42 when they can start the lies and manipulation all over again!

What a complete and total joke….as always…

#166 common sense on 11.25.16 at 12:54 pm

#162 InvestorsFriend

My dear deceased pappy would always say when Alberta was squawking about sharing their oil profits with other provinces “Gee, I guess they forgot the times when prior to oil, the other provinces helped them out when their farming and crops went to pot due to bad weather?”

Everything is rosy when your on top but funny how short the memory is when things turn south…

#167 45north on 11.25.16 at 12:55 pm

Toronto is Horrible: first of all Toronto is not horrible

Just when you thought Toronto couldn’t get any worse we will be the happy recipients of a whole new set of taxes

I know a young lady, hardworking and dedicated to her job. the proposed tolls on the Don Valley Parkway and the Gardiner Expressway will increase her costs by $300 a month. There is a chance she may relocate to San Fransisco in which case not only does the government not get the $300 a month, it doesn’t get her income taxes or sales taxes. Her landlord won’t get the rent she currently pays either.

https://www.thestar.com/news/queenspark/2016/11/23/tory-set-to-announce-tolls-on-the-dvp-and-gardiner.html

#168 InvestorsFriend on 11.25.16 at 12:57 pm

My Landlord Experience

From above Garth asked me:

Never been a landlord, have you? — Garth

***************************************
I always knew you wanted to know more about me.

I owned a Triplex on Windsor Street Halifax (Strawberry Hill) from 1989 to 2002.

I had a rental house in Edmonton renting basement and main floor from 1995 to 2002.

I was quite a bit exposed to my family’s thriving and growing Motel business in Nova Scotia from construction of the first 20 rooms in 1965 (I was 5) through to today. We also had a four unit rental property.

So, actually I do know a bit about rentals and vacancies.

Good. Then you know that tenants have to give (on average) 60 days notice of intent to vacate, and so it units are still vacant when advertised it means they are several months in limbo. The stats are meaningful. — Garth

#169 Calgary Guy on 11.25.16 at 1:02 pm

#120 Invest west on 11.25.16 at 1:44 am
“In defence of mr. Campbell”

Invest west, I have to agree with your post based on my personal experience. I have been investing (stocks, bonds, REITS, farmland, duplexes, strip malls, land, office space, multi family) for over 25 years and have seen many, many hucksters along the way in every asset class. I even keep a list of local Calgary real estate failures and fraud, and just over the past 10 years I have a list of 13 companies that have brought down many, many investors – there are some very sad stories attached to these companies where people lost their entire nest egg. Sad. Maddening.

But based on my personal experience Don Campbell does not belong in this camp and has actually added some value to my investing business. In his book there are quantifiable, actionable, and detailed examples of how to reduce risk and increase your chances of reward when investing in real estate. I’ve read many books on all sorts of asset classes and Don’s book was definitely one of the better ones. Are his REIN meetings a little markety and salesy? Yes, I think so, so I avoid those. But his book has some real meat in it.

One thing to note is that I completely agree with Garth’s message of diversification. I have investments in a wide variety of asset classes and as I get older I methodically move money from illiquid investments (ie real estate) into liquid investments. Being diversified means you can weather storms and live to fight another day and grow slowly over time. You don’t hit massive home runs, but you don’t go bankrupt either.

#170 InvestorsFriend on 11.25.16 at 1:06 pm

OPEC fails to collude?

#163 common sense on 11.25.16 at 12:50 pm said:

Well time for a BOC rate cut….The OPEC ministers, sorry LIARS cancelled their meeting Monday to talk up oil prices more….now the slide down to $42 when they can start the lies and manipulation all over again!
What a complete and total joke….as always…

***********************************
How sad that Alberta and Canada are HOPING that the likes of the OPEC countries will please get back to colluding to push up oil prices.

Are we to be upset that they promise to collude but then fail to do so? Should we not instead condemn the plan to collude?

My own investments do far better when OPEC successfully colludes, but that does not mean I should cheer for such market manipulation.

Very sad.

#171 wrong? on 11.25.16 at 1:22 pm

“The Top’s In” David Stockman Warns — Aug 7 2015
David Stockman Sees “Signs Of The Bubble’s Last Days” — July 2014
David Stockman Blasts “It’s 2007/8 All Over Again” — Nov 2013
OMB’s Stockman: “We’re At The Fiscal Endgame” — July 2012

He’ll be right one of these days, I’m sure. But how much will you have lost in the mean time?

just a 1% increase in rates and the US deficit increases by $190 billion…5% increases by $950 billion.

there are consequences to gross fiscal irresponsibility. The negative rate game is over. Mr Trump may rapidly change the landscape with gross inflationary pressures. No one saw 2008 coming….will anyone see the next debacle?……keeps your fingers crossed and hope for the best ..:)

#172 Barb on 11.25.16 at 1:26 pm

“…Alberta got the government that they voted for then just as they have what they voted for now. You bought it, you got it!

I don’t see the current NDP government trying to be fiscally responsible faced with the new financial realities of the global oil and gas markets.”
————————————————–

The phrases “NDP government” and “fiscally responsible” should never be used in the same sentence.

Two NDP reigns of terror in B.C. should remind everyone of that.

#173 ROTFL on 11.25.16 at 1:46 pm

#136 IHCTD9 — [re: Ontario government] “So what does a financial conservative do?”

You write to the provincial Conservative leader, and everyone in his brain trust whose name you can find, and you say that other than vaguely promising better government and talking about Liberal scandals, mismanagement, and the price of electricity, keep the leader’s damned mouth shut! Many would’ve gladly voted Conservative in the last election had the leader not said he’d fire 100,000 civil servants. Ditto in the previous election, had the leader not mused about public funding for any religious private schools, which was quickly labelled cash for madrassas by the grateful Liberals. Unforced errors.

Rule #1 in politics. If you’re running against an incumbent that the public hates, promise nothing except to do a better job. Personally, I think the Cons are a shoo-in in the next election, IF THEY KEEP THEIR MOUTHS SHUT. Wynne gambled that Ontarians would gladly pay extra on their “hydro” bills to do their part. Most voters will be painfully reminded of this folly every month or two between now and the election.

The ironic part is that much of the hydro cost problem isn’t really the current government’s fault (though much is). Subsidizing hydro, writing bad contracts and giving the hydro unions a bit too much of what they wanted has been an Ontario government tradition going back 100 years.

#174 Eks dee Sipal on 11.25.16 at 2:11 pm

So, a few things: Toronto (and Ontario) realize that taxes from gasoline sales will soon fall off a cliff and are looking for new revenue sources (tolls etc..). Actually, they’ve planned it all out a few years ago and are gently sliding it down our throats via the fake media. As usual.

Now, it appears that Albertans en masse are finally beginning to look in the mirror and know that it’s all over. Even InvestorsFiend who makes money as a financial parasite is distancing himself from the oil guys, and the other Albertan CONS on this blog being a little more nice now. Great.

Next on the agenda: those folks who think the BofC lowering rates will have any significance to the economy: IT WON’T. You’re not paying attention. Garth has correctly pointed out that the central bank is irrelevant now, as the bond market is pushing rates higher. Is there even an export economy to help us out anymore?

#175 Context on 11.25.16 at 2:14 pm

The citizens of Newfoundland are fine people and asked my friend what he thought of Trump. He smiled and simply stated: The man is nothing more than a blowhard, and asked his lady who replied a blowhard for sure.

#176 ROTFL on 11.25.16 at 2:21 pm

#160 The Wet Coast — “When you take money from one province and give it to another you deplete the resources of one province and expand the resources of another. “

Gawd, really? When you dig or pump the resources out of the ground in one province and put it in a pipe or on a train and send it elsewhere in exchange for fungible cash money which is invested the world over, you deplete the resources of that province. Full stop.

Let’s approach this from another angle. A lot — and I mean A LOT — of the equity in Alberta oil companies is owned by people living in Ontario, Texas and the UK, among other places known to be inhabited by rich people. You can think about the energy flows, or you can think about the money flows. But if you think that Alberta built its energy powerhouse independently, based on its entrepreneurial spirit and can-do attitude, you’re nuts. Alberta is just like every other BF-Egypt type place where resources were discovered, and foreign capital, labour and expertise flooded in to exploit it. Sorry to have to be the messenger on that one.

#177 TurnerNation on 11.25.16 at 2:25 pm

I hope you shorted the close today boys.

#178 Canada's hope... on 11.25.16 at 2:25 pm

is indeed that another commodity boom saves her. A protectionist was elected in USA. ouch

#179 Master Blaster on 11.25.16 at 2:29 pm

Dear Garth have been thinking about your advice to use a HELOC to borrow then invest in a preferred for an easy win. How about sticking the dividends in an RRSP? in my case the wife is not working so I think using a spousal RRSP works well. Thing is this involves skipping a lot of taxes would it trigger GAAR? Thanks.

#180 For those about to flop... on 11.25.16 at 2:40 pm

I posted a story the other day on how certain pension funds are in trouble in the U.S,in particular Dallas.

Here is a link to a story about how the largest pension fund in the world has benefited from the recent market rally…

M42BC

http://www.msn.com/en-us/money/markets/worlds-biggest-pension-fund-gains-dollar21-billion-as-stocks-rally/ar-AAkJSEL?li=BBnbfcN

#181 Context on 11.25.16 at 2:50 pm

#165 45North:- Your friend is in for a rude awakening as just went to the Rental Jungle for SF adjusted for the latest decreases. A one bedroom on average goes for $3,373 per month and a two bedroom on average goes for $4,576 per month. I know SF and you wouldn’t want to see what on average looks like; not to mention the transportation costs are high.

#182 ROTFL on 11.25.16 at 3:08 pm

Good. Then you know that tenants have to give (on average) 60 days notice of intent to vacate

One month by statute in AB.

#183 rainclouds on 11.25.16 at 3:10 pm

#152 WDOVER “So the Jehova folks caught me on my driveway today.”

Cold Burnaby Winter Day. 30 plus yrs ago. Knock Knock.

Open the door, 2 JW’s eagerly standing there waiting to launch into the script, or is that scriptures:-)

I kept those 2 on the doorstep freezing their proverbial tushes off whilst I debated the likelihood of me getting into their heaven given the amount restrictions. Kept circling back to my core argument anytime they attempted deflection. Some exasperation was evident as it was eventually realized I wasn’t a mark AND I wasn’t letting them escape. I wanted a religious discussion damn it!

Eventually their peers showed up sitting in a warm car, Impatiently idling outside for several minutes.

Gods ambassadors freezing by now, kept casting envious glances back to the warm escape vehicle.

After 45 min I finally let them flee and have never had my door darkened by those well meaning whack jobs and their imaginary friends again.

Am thinking there must be some invisible dont bother sign (only recognized by the cult) somewhere on the property

#184 Ponzius Pilatus on 11.25.16 at 3:13 pm

They wanna put trolls on the bridges and highways.
Any volunteers, blogdogs?

#185 grutif on 11.25.16 at 3:14 pm

“Victoria an optimal place to invest,” is the new pitch. “Understand Victoria’s key economic indicators and what they mean to safe and secure investment opportunities.”

Never understood the appeal of Victoria….drab featureless town without any culture or decent restaurants(applies to most of the island actually)

#186 I HATE STUPID CONs on 11.25.16 at 3:18 pm

#136 IHCTD9

You deluded CON clueless to reality? It the stupid CONs like Mike Harris who deregulated hydro and started a domino effect which ruined ontario. Here is a little history of when conservatives looked out for the people …..like Garth tried but evil corporate pig Harper hated Garth for being a true blue conservative. Read this story about our past and now a horrible future thanks to CONS.
http://cupe.on.ca/archivedoc2694/

Did I mention that I hate CONSERVATIVES and their clueless supporters.btw I am not a cupe worker good history lesson

#187 AguyInVancouver on 11.25.16 at 3:20 pm

#52 daveyboy, you have my sympathies. Remember, if you hear banjos, RUN!

#188 RiseandShine on 11.25.16 at 3:21 pm

“The Top’s In” David Stockman Warns — Aug 7 2015
David Stockman Sees “Signs Of The Bubble’s Last Days” — July 2014
David Stockman Blasts “It’s 2007/8 All Over Again” — Nov 2013
OMB’s Stockman: “We’re At The Fiscal Endgame” — July 2012

He’ll be right one of these days, I’m sure. But how much will you have lost in the mean time?

Lol. Reminds me of this blog predicting the pending economic consequences of a real estate correction….

Like those I wrote about yesterday? — Garth

#189 Victor V on 11.25.16 at 3:50 pm

Calgary landlords facing ‘grim’ times as almost 40% of rental properties sit empty

http://business.financialpost.com/news/property-post/calgary-landlords-facing-grim-times-as-almost-40-of-rental-properties-sit-empty?__lsa=687a-ee8b

Close to 40 per cent of Calgary’s available rental listings are unoccupied, according to a local property management company which says the weak market has become a major source of financial stress for small, private landlords.

Hope Street Real Estate Corporation, which directly manages the tenancies of 3,600 landlords in Alberta, released a report this week based on data from its own operations as well as Internet listing sites such as Kijiji and RentFaster. According to its report, 37 per cent of the advertised rental properties in Calgary do not currently have a tenant living in them, and the average property spends 59 days on the market before being rented.

#190 Victoria vist on 11.25.16 at 4:45 pm

#5 VREU

I just got home after spending the last 6 weeks in Victoria looking at real estate. Of all the properties I looked at over the six weeks not one sold. I looked at many properties in James Bay and Fairfield priced from 799,000 to 1.5 million and a few over 2.5 million. I spoke to two agents that both told me prices have gone past what people can pay. One asked me what my schedule was for my move from the Okanagan to Victoria and I told him I am in no hurry. He said that he thinks if I wait about a year I will save myself about 2 hundred grand over what is being offered now. So he thinks James Bay and Fairfield million dollar homes will be in the 800 thou range by this time next year. I think I will take his advice .

#191 anti-CON on 11.25.16 at 4:55 pm

TORONTO, ON – Hydro rates are sky high. Industry and business are being gouged. People have trouble paying their hydro bills and the economy is very weak.

http://cupe.on.ca/archivedoc2694/

#192 RiseandShine on 11.25.16 at 4:55 pm

Like those I wrote about yesterday? — Garth

Yup. No doubt there is blood in the street Garth! I am afraid to go outside because of the social strife created.

Or….like Stockman….the vast majority have seen appreciation levels over the past 5+ years by being invested that they would view your projections of. 5 – 10% correction as nothing but healthy for the market?

#193 Smoking Man on 11.25.16 at 5:02 pm

#145 Context on 11.25.16 at 11:01 am
#131 Publish on Lulu:- He did publish on Lulu. The book selling business is the most difficult of all to make money and takes many years. Success is earning $50,000 but most don’t make the cut and there is the few that any book will make $millions with a series over decades. The first attempt is a learning exercise and marketing, distribution, and first chapter look are critical. The preview peek of narrative must be without fault to captivate the buyer or all will be lost..
…..

Ha, I never did it for the money, fame or fortune.. Blog dogs created the monster that types with one thumb.. I did for you guys.. If you bought it you would know Mark Crunt is you.. Email me if you want a free copy you cheap bugger..

Holly crap where is my Tylonal makes a camio.. What happend to him.. It’s like he just dropped of the face of the earth.

#194 GFD on 11.25.16 at 5:25 pm

#185 AguyInVancouver on 11.25.16 at 3:20 pm
#52 daveyboy, you have my sympathies. Remember, if you hear banjos, RUN!

Might be Bela Fleck and Flecktones in town. . . . don’t run, get a pass. Not your mainstream sound, but you might lovin’ it.

#195 GFD on 11.25.16 at 5:35 pm

#184 I HATE STUPID CONs
Yeah, give it to them. . . . . . .and ORNGE too, why is nobody talking about that fiasco anymore?! It wasn’t STUPID CON’S those were SMART THIEVES aka Chris Mazza from the LIBERAL side.

#196 InvestorsFriend on 11.25.16 at 5:36 pm

Eks dee Sipal on 11.25.16 at 2:11 pm said:

Even InvestorsFiend who makes money as a financial parasite is distancing himself from the oil guys…

***************************************
I laugh at this this comment…

But if taken seriously, it hardly seems called for. (I don’t think “financial parasite” was meant to be a compliment or even a neutral term.)

I wonder how this person made or makes their money.

As far as oil, in over 25 years of investing I have very rarely owned any oil companies or commented on them. Commodity producers are not my thing. I did however get hit by the lower oil prices as the likes of Canadian Western Bank and even Stantec declined.

#197 InvestorsFriend on 11.25.16 at 5:50 pm

Is That A Lot?

According to its report, 37 per cent of the advertised rental properties in Calgary do not currently have a tenant living in them, and the average property spends 59 days on the market before being rented.

*****************************************
When my kids were small and I mentioned any figure at all $100 or $50,000 dollars, or $2 million dollars they would usually ask “Is that a lot”?

It was a VERY good question because without context it impossible to know if a figure is a lot or not.

So with regard to the 37% of advertised to rent properties being vacant and the 59 days to rent, what is the normal or historic level? I am not going to judge these numbers as being high without some context.

#198 'Atta go Smoking Man on 11.25.16 at 6:07 pm

Thanks for the pricing updates, lots happened since a few years ago.

Best of luck guy.

Keep writing, its good for the mind and soul.

bsant

#199 Micheal Moore is 2 Faced on 11.25.16 at 6:24 pm

Used to like him until I saw Angry Brit Righty Paul Watson rip him to shreds using Moore’s own footage and not taken out of context (Watson is very colorful and can be offensive):

My take on Moore is that he knows who butters his bread, the Left, which is fine by me.

But when he goes to visit Assange, demands a pardon for him and says WikiLeaks (regarding Hillary) telling America the truth, revealing all the lies…you have to wonder about Moore.

He’s like Dr. Jekyll and Mr. Hyde. You never know which one is going to show up.

bsant

#200 corburterilio on 11.27.16 at 4:48 am

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