A collapsing Canadian real estate market with Garth Turner and Rob Carrick

[aliforghani1353]

We have been hearing these bullshit for few years now but nothing has happened.. There might be some adjustments but nothing close to what seen in US...I think these talks are all political; not sure how they benefit from it but they do..

[MyOwnYTAccount]

@aliforghani1353 Nothing has happened because the politicians are just kicking the can down the road meaning WHEN it happens, it will be much, MUCH worse. The Bank of Canada basically takes it's marching orders from the US Federal Reserve. If the Fed keeps interest rates at zero for 3 years, the BOC will do the same. That tap gets turned off (which it will) - Canadian real estate prices will fall through the floor.

[snatchhog]

land and houses are over-valued and will be worthless very soon.

[Meathead36]

patience people, we've got a global finincial collapse coming, housing will drop big in canada

[MyOwnYTAccount]

@Meathead36 I agree.

[TheThomasnorman]

as long the Chinese it coming they can push your property higher. win win win.

[Albertanator]

Can anyone tell me what the real estate market is like in Calgary...I live near there and I was wondering have prices fell or gone up or stayed the same roughly overall in the last few years? Thanks...

[gcaronzoratto]

We are all still waiting for this "crash"...

[ImbueUOdotcom]

The thing that he is missing is that we have sooooo much land. Housing may go down, but our population is so low, we can build houses anywhere for dirt cheap.

[phliperphil]

this guy is a fucking lying piece of shit Its 2012 in Canada and the real estate market is stronger than ever

[MegaCreativekid]

this guy has been talking about a crash for years - still hasn't happened - nothing good comes out of negative predictions Garth, and so far you've been completely wrong! (even with all of the problems around the world in late 2011!) - Just stop talking because you know no more about the future than anybody else!!

[weibing9999]

Great prediction dude. Its like 2 years later and Vancouver's market is still hotter than $hit. When's this 40% drop happening?

[Clichyabarbes22]

Also in Canada, if you cant afford a house u cant buy a house. Simple. Hard luck stories need not apply. America wanted to make sure even the hopeless cases had a home. Further, all mtgs in Canada r insured by either NHA or CMHC. This is not a requirement in the US. Having said all this Canada cud have a huge correction, but people will just hunker down until its over. U cant be without shelter when it gets to minus 30.

[moviematcanada]

@Clichyabarbes22

I'm afraid your completely wrong NOT all mortgages are insured, If you have over 25% down you don't need or require CMHC guarantee.

The banks take the 75% as collateral for 100% of the loan.

I had the 25% down and didn't have to get any guarantees!

[openyourmindbrother]

@Clichyabarbes22  Almost anyone can buy a house in canada , it's not very hard.

[Clichyabarbes22]

Thr r several differences btwn the US market & the Cdn market. We never had a sub prime bubble bcuz we never had sub primes, we're not over built, houses outside of Toronto & Vancouver r reasonably priced, Cdns have a lot more skin in the game when it comes to mtgs & Cdns take paying down thr mtgs very seriously. Also u cant just hand over the keys & walk away. If the mtg still has an outstanding balance u still have an obligation whether u have a house or not.

[mortgagegenius]

this was 10 months ago... the bond went down when these 2 said it would go up.... Bank lending rules have been very difficult for getting new mortgages. these guys are selling thier names, not the right info.

[Himapke]

im just waiting for it to burst before buying actually....

[quadcatfly]

"collapse" has been predicted for 7 years now. Since then average house here in Vancouver grew from 500K to 1.7M. Still waiting.....

[bodizone1]

the real problem in toronto and vancouver is this: immigrants from india, china and arab countries live 6-10 people in a house, so when they each pitch in and only need to spend $100 a month for the mortgage, they drive prices up. People dont buy house prices, they buy mortgage payments, so who cares if a house is $1.2 million? if they can pay $120/month x 8 people, it will be affordable for them.

[Aaaaarrrrrrggghhh]

@bodizone1 I am not too sure about that. Most of the Canadian immigrants have a fairly deep pocket.

[2551bali]

@Aaaaarrrrrrggghhh ..... DEEP pockets with money from "hot sources" -

fuels the major cities market and they are "patient" , can wait 5-10 yrs

because prices will bounce back regardless of the severity of the "FALL".

there's NO recession in those overseas "hot sources" !!

[TorontoBoi]

I find my city of Toronto to be insane. Tons of condos and housing going up everywhere, so much in fact that you can't even see the SkyDome anymore, and there are no significant increases in jobs. The ONLY jobs are the booming construction industry, which is the snake eating its own tale. The more you build, the bigger the collapse will be. I'd RENT for now, BUY in 2012 then you'll be living like kings ;-)

[Aaaaarrrrrrggghhh]

@TorontoBoi Your observation is exactly the same as mine. They keep building, I will just wait. I am sure the rate of vacancy will go up.

[ItalMafioso]

There is a big misconception about HST, apparently it does NOT apply to the resale price of real estate...

[unpredictable420]

@mike8004jones plus mikey, nothing in this life is a guarantee. Plus I am not dreaming, these are just some simple facts you do not accept. I do not dream these things up. These topics are finally trickling into news headlines, but the sad fact is, this is really not new news at all!

First rule of thumb, never believe what a salesmen says to you. Just the listings on local Kijiji are overflowing for homes new and old.

[unpredictable420]

Now we are heading towards USA markets before they collapsed. Wages go up about 26% since about 1998. Housing goes up 100%. The math doesn't make any sense. We need intervention to the markets before they get out of hand.

[unpredictable420]

What will happen and this is just a guess, A small correction in housing prices and wages are gonna have to catch up to the house markets. It happened in the 90's and will have to happen again.

[elimar008]

can we short that market,?

[dave777blaster]

West of Quebec the collapse will be great and swift

[mike8004jones]

Where is the 40% decrease in Vancouver house prices??? The HST is here, interest rates are slightly higher.. how about Mr. Carrick comes back, more than one year later, and eats his words. Thanks.

[unpredictable420]

@mike8004jones Not smart,Canada cannot sustain a balancing sheet that is completely seeing red lines and low interests rates for too much longer.I have seen our Canada's debt almost double in4-5years. 300Billion560billion currently.Dont be a fool,inflation has set in and gas went up from 89.9-119.9/L in under 6 months.Energy prices are beginning to go up and yes,that thing they call inflation never goes away.Bank of Canada should raise their rates to 5% LOL just to see where we truely are.

[mike8004jones]

@unpredictable420 Does an interest rates hike along side inflation mean real estate prices in Vancouver drop by 40%? They definitely affect each other, but Vancouver is still seeing new investors and continued immigration. I am not talking about Canada in general, but Vancouver (metro). The RE market is cyclical, and to say prices will do down is easy. Nay-sayers are always waiting for the "bubble to burst." Garth Turner is just trying to sell books.

[unpredictable420]

@mike8004jones Funny I lived through the booms and busts. The thing that helped Canada was federal spending and Feds taking over all bank loans dealing with morgages. LOL, giving the banks a free balance sheet to loan more. Gas just went up to 1.30/L and UK dumped 5Trillion into world markets to keep them afloat, the only thing I like to see what harper promised was wage increases of 6%/year will keep us very stable, till then pray.

[unpredictable420]

@mike8004jones Ok buddy, I am on the frontlines of Housing constuction. I work for a week, i sit for a week. The cycle continues in Edmonton Alberta. Rates WILL GO UP, and payments will increase for these over valued homes. Government jumped in and Insured every morgage out there and basically bailed out AIG and CMHC therefore wiping out their balance sheets and creating new money with s secured(LOL) loans. US defaults we will crumble.

[mike8004jones]

@unpredictable420 So you're a construction worker in Edmonton Alberta... cool. Mr. Carrick said house prices in Vancouver will decrease 40%. Since his comments, prices have increased another 15%. Does this mean house prices will decrease 55% now? Homes in vancouver have more than doubled since 2000. Does this mean prices will decrease more than 100%? Vancouver prices go up because there is demand and no overabundance of supply. Please talk when your pessimistic dreams become a reality.

[unpredictable420]

@mike8004jones That would be a doomsday senerio with Vancouver homes dropping 40%. But hey anything can happen plus i could care less for Vancouver, that market I am not in. I have seen housing prices drop here in Edmonton massivley in the 80's. Peepz were selling their morgages for a dollar, some were just passing the keys into the banks and walking away. With new rules since then, people cant so easily walk away from their homes now even though the Banks are insured for such a situation.

[JohnnyHorton]

i think he's been crying the same tune for 10 years now.

[vinceconditioning]

I meant annual average household income.

[vinceconditioning]

Something I dont understand is how a house that was worth 180k$ in 2001 now worths 330 k$ in 2011. The salary of the people has not increase by that much since those years. Fine if you had a house and you're buying another one but for first time buyers the situation is ridiculous. Im never gonna pay an ammount like that for a house, I prefer renting. Under the name of what would houses be 200% more expensive and annual average household be almost the same. Completely illogical.

[alyr315]

@vinceconditioning That's why it's called a BUBBLE. This was another real estate game to mask the export of our jobs. Party's almost over. My wife is from Africa. I'm seriously thinking of selling my place and moving to Congo and with that profit I build myself a MANSION over there and live for free. As Gerald Celente says, "THE GAME IS RIGGED". It's over.

[TheREIMaverick]

Hey, I just wanted to comment on your video....I really like it and I have shared it with some of my firends on some of my social networking sites! NICE!!!!

[rent2purchase]

People will always need housing and with the influx of new immigrants each year, I think that the real estate market will remain stable, not growing but stable.

[malaka143]

The 2 people that dislike this just bought a home

[Pwrdbywoody]

We were shopping the KW area for a home but prices have scared us away. Currently 1500 sq ft homes are selling for over $300k that's $200 a sq ft. Ridiculous, but they are selling like hot cakes. I look forward to foreclosure sales soon.

[flagship21]

condo going for 800000 on yonge street?????? I don't get it. 

[flagship21]

Also these agents keep saying the real estate is a great investement because of immigration. Lets have an independant study prove this, not some guy trying to sell you real estate.

[teebrron]

you know it Garth, the cost of real estate is way too high, hoping ur right n it goes dwn so i can finally afford a home.

[Brucejosephlive]

Garth Turner is the man. If you advice based on logic and fundamentals with out emotion you can see the obvious coming crisis. But most advisers have their head up their ass and can only say what they feel will benefit their pocketbooks rather than doing what will create trust. If you say the market is hot based on the last years data your and idiot and clearly dont study history. The market is always hot before it drops just look at charts. Cheers.

[flagship21]

Double Top

[tomabc2003]

HST kick in July we see 30% drop in housing volume. It is bad in July 2010 but housing price is stable. The last four quarter the housing volume and price increase is support by stimulus money and near zero interest rate. It is moral corrupt to have housing price so high, but the market will correct itself. But stay the banks try in July low mortgage rate in five year while interest rate going up.

[modafcker]

ya.. don't listen to those real estate people, it's their life. They always say "this is still the best time to buy Toronto homes".

When do you ever hear them saying "please wait for lower price, so I will lose the business from you"? They always say they are the expert, because they are in the market.

Please tell us, real estate is expert? Or all those economy analysts (all of them saying housing market is going down) are expert?

[karveljay]

Housing and land values in canada especialy in areas that actually have jobs is a complete farce and a joke. If it wasn't for my girl friend I would live in a travel trailer in the wall mart parking lot before ever buying or paying rent again in this rigged market place. I can't wait to see the whole pyramid scheme come crashing back to earth LOL. What's worse is I can't believe how stupid people are to pay those rediculous prices for homes. Idiot Slaves!!!!

[cannuckistan]

I've long agreed with Garth's views on the RE market. You've been getting mulitple offers on homes of no particular distinction in the midst of record provincial and fed deficits, when our main export market is experiencing high unemployment, and with an uncompetitive dollar?? Huhhh? It's all been driven by generational low interest rates, which can't and won't last. Sell the house, and just rent; it does't mean you're a loser if you do that.

[Klothex]

Unless you bought your home before 2005, you are going to see a correction in housing prices that will make you very, very angry, things are about to tumble in a HUGE way. If you think real estate is stable here in Canada...you are only fooling yourself. Housing needs to become affordable again, bring on the crash!!

[snappyware]

Are you Canadian...just curious, because I am, and I'm living in the froth...In fact rates went up today. With that I got a slew of property profiles that have been reduced by around -2%. First day!!! This is just the beginning.

Im a trader too, I understand were your coming from, but I respectfully disagree with your view. Our hoods are hitting a all time high for resale....at the moment. And Canadian's are in debt more than ever before. I smell a correction.

[partyhouse88]

excellent video

[REDDAWN2010]

Buy NOW Buy Now! Pay a PREMIUM and wait for the crash! Thats what you tell excited new home investors! Thank God there are sheep otherwise nothing would fall off a cliff! Let realestate become affordable again one day soon! Bring on the crash!

[caiaphas]

In the US, the trigger for the collapse was a wave of mortgages that reset to levels higher than what the owners could afford. What will the trigger be in Canada? Our exposure to the subprime market was minimal (3% as opposed to 30% in the States). You can't just say properties are overvalued and therefore they will fall. What specifically will be the trigger? There is still room to squeeze more debt out of people if you ask me. All time high doesn't mean it can't go higher.

[taineasy]

Canada is exactly where the US was in 2007. This bubble is about to burst and it will be very ugly. This reminds me of 1988 when everyone thought housing would go to the moon. Within a 2 years it had been wiped out. Housing did not come back to 1987/88 levels until 1999/2000.

[juzu4me]

@taineasy Well then what an uneducated pissant you are. My house is worth 25% more than it was a year ago. These idiots just wanted to be on youtube. Canada is strong, our market is booming

[carter102]

I am not sure I agree here, the inflation we are experiencing is quite steep, and the increase in taxes will only compound the problem. We have seen development charges in housing in most areas increase 50% within the past 4 years. DC's in my area went from $27000 per SFD to $45000. The older houses appreciate in value as a result of this, as cost to build new goes up.

Lets do a suburban house, DC = $45000, land = $80000, avg price $225000, I see little wiggle room for prices to move....

[cypcom]

@ carter102: I disagree, canadian inflation is at 1.8%, the target was 2% so in fact we have lower inflation than the target. Also development costs and land costs can all change. But lets take even the costs that you showed of 125k, compared to 225k price, 100k profit? no wiggle room? really? To give you an example of what happened in the US people are buying 2 bdr 2 bath, 1200 sqft brand new condos for just under $50k in florida! I bet it cost more to build them...

[mortgagedebttaxrelie]

Who else, but I liked it!