GreaterFool.ca -predictions of a canadian RE crash

greater-fool-coverthumbnail.jpgMP Garth Turner has a new book out called “Greater Fool – the troubled future of real estate“.   He argues that the Canadian real estate market is due for a collapse similar to the one currently happening in the US.

He recently started a blog at greaterfool.ca that looks like yet another source of negative news about real estate markets in North America.

The following is an excerpt from his book blurb:

The timing couldn’t be better for Garth Turner’s newest book on real estate and its impact on personal finances. At a time when the US is clearly heading for recession, stock markets roil, a global credit crunch overwhelms banks and a climate crisis lurks, can the Canadian real estate market withstand the threat? Do we really think we’re immune?

More than 400,000 US families lost their homes last year and more than a million more are threatened. House prices have collapsed as much as 30% in some markets, amid predictions of another 25% slide. New home sales are down over 40%. There are 20,000 new, empty houses for sale in Phoenix, streets of foreclosures in California and desperation in Florida. What happened? Will it hit here?

Sort by:   newest | oldest | most voted
Burden of Proof
Guest
Burden of Proof
I am very happy about Garth, his book and his blog. Here is is summary of where we are now in the Canadian RE Bubble: Where are we now? • In January, sales of pre-owned homes in Canada fell 6%, or an annualized rate of more than 70%, says the Canadian Real Estate Association. • The number of people saying they are very likely to buy a new home within the next two years has hit the lowest point in 15 years, says the Royal Bank. • Home resales in Toronto last month crashed by 11%, says the Toronto Real Estate Board. • The number of people trying to unload their houses has suddenly mushroomed. Listings soared to a new record in January across Canada, up 9% in a single month, says CREA. • Meanwhile, three million families in the… Read more »
Dosh
Guest
Dosh

Great, just what we need, another blowhard crying wolf about the real estate market.

DaMann
Member
DaMann

As opposed to the blowhards ( main stream media) pumping it up to oblivion?

Tony Danza
Guest
Tony Danza

Dosh get off the internets and go sell some more condos you greasy used house salesman.

Drachen
Member

I dunno, the guy couldn't predict that the Conservatives would be a crappy party to be in, even with preppy overachiever written all over the party leader's face.

On the other hand, anyone who disagrees with Dosh must be at least moderately intelligent.

So Dosh, can you inform us when you're out of business and have to collect welfare? I really want a picture of THAT!

visio
Guest
visio

What happened? Will it hit here?

No. We are different here. We have rain, mountains, some debt games in 2010, + no major company headquarters established here.

Carioca Canuck
Guest
Carioca Canuck

Well…..

I'd say Garth is probably correct.

In Calgary for example, condo sales are off 40% versus last year for 3 straight months in a row……and prices are flat……SFH sales are off 30% and prices are flat. This month it will be probably 50%.

Prices overall have dropped 10% in the last 6 months.

In both cases listings are waaaaaay up, something like 40%…..setting a never before recorded all time high record, and it is only March.

In addition to that, over 15,000 new homes./condos are being built as we speak, most on spec.

We are going to look like Cleveland in 18-24 more months if this keeps up. The buyers are disappearing out here…….

moldcity
Guest
moldcity

What happened is painfully obvious – speculators thought they had discovered the secret to huge gains without any risk, they bid up prices and borrowed demand from the future and now the bill is due. When the bill comes due here I sure hope the inevitable government bail-out is thimble sized. That's more capacity than I'll ever need to hold the tears I shed for the speculators losses.

Disbelief
Guest
Disbelief

Good call moldcity… Vancouver is very heartless when it comes to homeless regardless of how they became that way I don't think it will be any different. Cash is king!!! It always was and always will be. Heloc is the only way to touch false equity. Beware it can and will happen here too

MATHAMATICAL
Guest
MATHAMATICAL

True, Vancouver has changed over the past 4 years. Especially today, very heartless indeed. Don't have the money to buy a house or a condo? Too bad! You should have bought back in 2002-2003. Don't blame me for making good choices with my money. Love hearing that! Makes me so happy people care.

Think I care if a housing crash hits here like in the US. Too bad! Don't blame me for making good choices with my money.

krrish2
Member
What a *****"SOLAR ECLIPSE"***** and that is one and the only Vancouver Real Estate, while some markets in the world have had shaken by powerful stroke of 'subpeemess'Vancouver r.e.got a SUPERSTAR,"A HERO EMERGES" as single largest winner of all time high without shreding a single penny from it's HUGS the eclipse turn around like "A DIAMOND RING"wow just vancouver from decades in a row- WOW***** Just Another Example prices were and prices are *STEAL*,we are still at rock bottom pricesOfficial*Hpi* http://www.realtylink.org/hpi/rebgvhpistats.cfm?d… Q-type:"no major company headquarters established here". A type:What company are you looking for and what headquarters? I am sure some of you are going to forget this question for future. Office what office? headquarters what headquarters?would you like to go to live in any other country?if yes,for what purpose.if no,that would be the answer to all "quarters b.s." man… Read more »
read on
Guest
read on

MATHAMATICAL (but not "literate", it seems, from your attempts to spell):

Yes, I should have bought in 02-03, when I was living 10,000 kms from here. Oh foolish foolish me for not having the foresight to purchase Vancouver RE whilst I was in graduate school in another country. What on earth was I thinking?

Vansanity
Guest
Vansanity

Garth is awesme, just shows character when a politician has the cahonays to stand apart. I've heard him compare our 40 year zero down mortgage to the US's subrime or more accurately to the Alt-A's. "Assets? Nah, those are optional, here's another $500K".

For the bulls out there: He has been saying this for some time now and it hasn't happened.

For the bears: He has just released the book and timing is everything when you're making such bold predictions. Smells like peak.

blueskies
Guest
blueskies

Great, just what we need, another blowhard crying wolf about the real estate market.

another slap in the face from reality…

dosh i'm gonna predict that 2008 is gonna suck big time

Jack
Guest
Jack

I find it interesting that people with bull or bear sentiment only read what they want to read. The biggest problem with Garth is what he believes as the best hedge – 750-1500 sq.ft condos.

Personally I think RE is based on supply vs. demand, quality and location.

If you look at the recent stats, multi-family housing starts outpaced SFH 8-1 and it is going to get bigger when newer buildings start coming up.

Biggest price decreases IMO will be condos because there will be an abundance.

Garth Turner really doesn't know much. It seems like he wrote a book to please the Bears, hope that it does crash so he can say he was some sort of prophet.

blueskies
Guest
blueskies

out of 5 people commenting on robs blog one of them was satv… 🙂

umdesch4
Guest
umdesch4

I'll believe it when I see it, as far as Vancouver is concerned. Actually, I'll buy it when I see it. As prices in much of the GVA approach the $1000/square foot mark, I figure some kind of crash is long overdue. I'm just not seeing it any time soon though…

Disbelief
Guest
Disbelief

Question; Where are you from originally? Invest in spell check… just a suggestion. Pass the info on to your illiterate buddy SATV also. We will all thank you in advance.

Anonymous
Guest
Anonymous

I don't understand why Dosh is upset? He has his name on the front cover of a new book?

casual observer
Member
Just in case you get the idea that Garth Turner's predictions carry any more validity than anyone else's, here's a quote from his 1998 book "The Defence". On pg. 211 of the paperback edition, Garth says this about the prospects for RE, "Bad idea. Here's why: Traditional residential real estate is unlikely to appreciate much, if any, over the next decade or two, so kiss away the potential of getting a capital gain on the property." BTW, I happen to mostly agree with what he's saying today, but his past calls on RE have been anything but correct. He was also predicting that the Canadian dollar would continue to fall below the U.S. dollar, and recommending that people convert their C$ into US$ in order to preserve their wealth. It just goes to show that predictions are very difficult to… Read more »
krrish2
Member

Disbelief,

My comments are like a doctors prescription not for kids to read the discription.Sorry if you are offended by whatever just simply ignore me next time."Where are you from originally?" Oye thanks i can read and understand you very clear, so if i am good in essay writing competition i will be same like you i think, shame on you dum head.

scullboy
Member
Krrish, I have to say you are the exact epitome of a bull. It's like we're in musical chairs… the music has stopped, people are rushing to find seats and there you are flailing around like some kind of seizure victim insisting the music is still going. You've completely lost your mind. I'd say something like "God I hope you have to sell you kid to some kind of pedophile ring" but what's the point? You are exactly the kind of person we were talking about in another thread. You obviously have no education… at all. I'm thinking grade school at this point. You work as a laborer, which would be fine and respectable but Mommy and Daddy bought you an asset, and because it's skyrocketed in paper value you think you're Donald Trump. Flail away, you wretched 'tard. Your… Read more »
ReductiMat
Member

Two questions:

Can someone show me an example of a city that caters to their homeless? Or at the very least, isn't 'heartless'?

Secondly, is it a right to live in the city one desires?

krrish2
Guest
krrish2
Hi Sonika, Your concern is not legitmate as we have disscuss in the past your income is affordable somewhere in Vancouver. My dad was expired in 91 and my mum is housewife all of my brother and sisters bought a place for them self since we start working. I am never feel like Donald Trumph but I have heard that he was only 19 year old when he has purchased his first property. I like to read all of your comments because socially those fits right on daily life but what makes them off beat is strategy game,all decent and fools are divided in to bears and bull so it is good to present facts rather than emotion. On your blessing regarding time you should have knock down your friends those who keept you out,I was here to assist all… Read more »
scullboy
Member
Reductimat: Hell no, it's not a right. People from my neck of the woods always end up moving west. The cost of living back east is cheaper, but jobs are tough to find so a lot of people move away. But most Nova Scotians think that's "the best place on earth". In other words, one of the big reasons people relocate is affordability. Wether salaries are too low in a region or the cost of life is too high (which come to think of it are EXACTLY THE SAME THING), the effect it the same. When people can live better somewhere else, they move. I wonder how many young people have been leaving Vancouver. That was always the downfall of the Maritimes… young people can't afford a good life so they leave. As a result, the brainpower ends up elsewhere.… Read more »
wpDiscuz