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Analyst: Canada poised for biggest housing crash in history

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Canadian Realestate Magazine | 19 Mar 2015, 09:55 AM Agree 0
Canadian home prices are about to fall by nearly 50 per cent, says a new book, but its author says some investors are well placed to weather the storm.
  • jamie johnston | 19 Mar 2015, 11:14 AM Agree 2
    You can only write a book calling for a market crash - in anything! If you said there would be no change for the next two years, then that would not be a book worth buying. Remember 2004 and Garth Turner telling us there was a big crash coming in real estate. And he sold lots of books too. How long do we have to wait? 10 years? 25 years?
    • Gian Bhamra | 11 Dec 2017, 12:31 PM Agree 0
      As long as immigration is concentrated in 3 major cities and jobs are plentiful, do not expect a crash, but slowdowns every so often will still happen.
  • Mitch Parker | 19 Mar 2015, 01:32 PM Agree 3
    It's ironic that a publication which promotes Canadians investing in real estate would promote such a scare tactic book. Without have read it, I feel it's safe to assume it's most likely full of the same bs as all the other ones that have come before it. Investing (not speculating) in real estate has proven itself throughout history to be one of the greatest vehicles for creation of wealth. I'll take my chances utilizing proper due diligence, a long term investment strategy, and hard work over someone yelling from the bench that things are about to come off the rails. Your seat must be really warm by now...
  • Freeman Yee | 19 Mar 2015, 01:42 PM Agree 1
    If you ask a realtor where to invest money, they would say real estate, and not stocks because realtors get paid to sell real estate. If you ask a financial advisor the same question, they'll tell you to put your money into the stock market instead of real estate, because they get paid to sell stock-based investment products. Always understand how people get paid before you put any weight on their advice.
    • Diane | 29 Apr 2016, 01:31 AM Agree 0
      Real estate has always proven to be a solid investment long term and tha's why realtors will tell you its a good idea to invest in real estate and not because they get paid to sell houses.
    • Jose Castillo | 18 Apr 2017, 03:43 PM Agree 0
      I´m a Real Estate agent, so take this with a grain of salt. When you invest $20,000 worth of stocks, your gain is based on those $20,000 you invested. When you invest $20,000 (5%) in your down payment, your gain is based on the nominal value of the property you buy (ex. $400,000). If you see a real estate purchase as a short term strategy, obviously you will have concerns about a potential shift in the market. When you see it as a longterm strategy (10-20 years) the market shifts don´t impact you until you sell. During the last 20 years home prices have gone up and down in Toronto, yet here we stand with prices rising again. Many people try to time and second guess the market and lack action (paralysis from analysis). Do your own research about inventory availability, employment, immigration, exchange rate, occupancy rates, etc. and don´t just read articles or books. Of course, anything that will generate a return will have risk, just be informed and see if buying/investing in real estate is something that meets your long term goals personally and financially.
  • John P | 19 Mar 2015, 02:32 PM Agree 1
    I love the fear tactics some people play. I'm a realtor and I hear this sort of thing all the time, only to be conflicted by opposing evidence. Everyone is entitled to an opinion, but to say some markets in Canada could drop as much as 50% is a serious comment. I have not read the book, nor do I plan to, but I hope it's not full of speculation based on mediocre evidence. To Freeman Yee, I do agree with you, however, a good service provider should advise their potential clients appropriately, not just because they're in a particular business. I certainly do not encourage people to invest in real estate just because I'm in the business - it would have to make sense based on their particular goals.
  • Sylvia | 19 Mar 2015, 02:35 PM Agree 0
    What again is the specialization of this author? He's a Financial Adviser and of course he tells everyone to diversify...diversify to which products? His products...just saying
  • Goods | 19 Mar 2015, 04:27 PM Agree 1
    I love all these posts... "I haven't read the book but this guy is wrong." I know Hilliard personally and he has ZERO agenda other than to warn ppl not to get in over their head. The guy is a class act and could be making a lot of money doing other things with his time - he's just genuinely concerned that the cdn housing market is due for a correction and that those with lots of debt (or bank stocks, or tax payers) will get hurt. Read the book before you shout him down.
    • Skeptic | 24 May 2017, 12:16 PM Agree 0
      Hilliard may be 'genuinely concerned that the cdn housing market is due for a correction', but his comments about the over supply in the Toronto condo market is totally off base. In the past 6 months, competing offer is a common practice in Re-sale and condo market in Toronto. Leading research group in new condo supplies are reporting a serious shortfall. I don't doubt that the housing market would encounter a correction at some point. But 50%?
  • | 19 Mar 2015, 06:31 PM Agree 0
    This is all about the household debt levels and the very precarious situation of low interest rates and people pushing themselves to their cash flow limits . A 1 % increase on a 3% mortgage will incur a 33% increase in monthly payments And that's a tough increase. Real estate investment is a solid decision it is not a brilliant decision if your bring up a family buying a house makes a lot of sense if your speculating then live with the ups and downs but understand the market runs it self . There was a recent report from a Harvard Economics Prof that showed over a 60 year period house prices probably returned 4.5-6 % annually not a bad return if your in a tax free situation on selling but not the Golden Goose that the realestate professionals would have you believe .
    If there is an adjustment in house prices and or a rate increase people will be hurt no question and most of them will look back and see they probably should have been more conservative or realistic on what they could have handled .
    • John | 28 Mar 2015, 03:52 PM Agree 1
      Hmmm...only 4.5-6% annually over a 60 year period, is that good or bad? The Golden Goose shows up if you actually understand that a professional real estate investor would have that property leveraged at 80% giving them 5X that return. We won't even discuss the additional return they get from mortgage paydown by their tenants and the monthly cashflow that is earned by any real estate investor that has half a clue about what they're doing. What does that total return add up to???
      Sure a price correction can temporarily eat into your equity, but as you said over a 60 year period the housing prices have returned about 4.5-6%. As long as you continue to cashflow and can service the debt you don't need to sell and take a loss.
    • David | 23 Mar 2017, 01:17 PM Agree 0
      Your math is wrong. Go find an am schedule calculator.
  • Todor Yordanov | 19 Mar 2015, 10:09 PM Agree 0
    What a joke. A poorly written and researched joke!
    A book full of useless information. Read quite a bit on it on different social media channels today - no thanks!

    Todor Yordanov
  • Andy | 19 Mar 2015, 11:03 PM Agree 0
    Real Estate will only crash if there is a drastic event occurs otherwise it is the safest investment over the long term.
  • Hans | 20 Mar 2015, 01:43 PM Agree 0
    I read the book , very similar to another book called a greater fool about the crash , I think the oil rich market area will have job reductions and the same way that this local market caused great real estate demand and price increases, lessening demand will cause a decrease in perceived value so prices will come down. If I was vested in this market I would hold on for the long haul and not panic . Oil prices will go up , and soon we will all be complaining at the gas pumps again. We have had lumber wars, grain price wars,dairy price wars etc.they all made us more self sufficient and were resolved in a reasonable time period of a year or less.
  • Gerry | 20 Mar 2015, 04:22 PM Agree 0
    Everyone likes to make predictions. Weathermen do it everyday....
  • Rhys | 20 Mar 2015, 06:03 PM Agree 0
    Hmmm!?, I reg'd for the forum due to the depth of insight many comments displayed, and while perhaps I should, I can't bite my tongue on the issue. I'm a few years old, more than I'd prefer, and have seen a couple dandy cycles. It only takes a few minutes today for a cycle to be altered, and suddenly anyone on the wrong side of the coin gets flattened.

    Real estate can be a great investment, or one that wipes you out. Leverage & leverage alone made it the passion of many, as they book their returns on a cash-basis. Fully-paid-up, at full value, real estate holds a low position as to past returns and is merely a good investment diversifier... if investment is what you think you're doing.

    There's no better investment than owning & operating a successful business. It's the cash-flow provider that allows you to finance diversification successfully. Failing that, being fully-employed at a great-paying job, and having a spouse or life-partner in a similar circumstance.

    As I'm also a financial advisor, in Victoria. I do have a vested interest in the things I provide for my clients. Those clients all own real estate, some are very unhappy about their purchase-timing, but that's not my point. Many have successfully used leverage to invest in more real estate, other businesses, or any of a number of tax-reduction schemes or diversified investments.

    I too am concerned about the values of real estate at this time, but not excessively, as a great deal depends on what it's being used for, and where it is. If it's for agricultural production, great. If it's to mine or strip lumber from, great. If it's a rental murb, great. Leverage is the primary issue... If everything goes to hades for a year or two?.. Can you handle the payments, maintenance, rapidly-increasing taxes and obligatory imposed government costs, and, perhaps as importantly, do you see the directions governments are looking to secure tenants "rights" & "entitlements"?

    Are you prepared for the imposition of separate water-use taxes in your spreadsheets? Are you prepared for a variety of other unknown, but "writing on the wall" costs? Chances?, very few are.

    Stock markets have risen over 13% during the first two months of this year. Clearly, continuing that rate of increase is not sustainable for 2015, as that would mean a $100,000 investment Jan 02'15 would grow to become $320,000 by Dec 31. While not impossible if holding that magic stock, it's not possible by holding any particular index. Using that same perspective how far & how quickly can real estate values climb?.. A great deal higher if your clientele/purchasers are wealthy global citizens seeking to park their cash in something which they believe won't lose too greatly, and is highly-liquid when they want their money to take back home... But, that only affects the higher-end trophy residences.

    It boils down to what the government & regulators are hoping to achieve, and that's a far bigger issue than merely the subject of said book.

    What a real estate "investor" ought to be is a very, very long term investor, for distant family members, sort of like buying life insurance.

    Subsequently at least a vague awareness of history's economic trends must be present.

    Real estate in Canada got its' break in the early '70's to '80's as a simple result of demographics. $8,000 homes blew through $160,000 and all owners were sudden geniuses. (stock markets basically sucked during that period) Keynesians were sudden geniuses and politicians flocked to sit at the feet of his theories. Keynes' theories were a success only due to the boom of births, and the extended longevity of elders. Knowing that, you ought to study monetarist (Austrian) theories, or Malthusian economics, to see if the current process Keynes laid down, and which central bankers slaver over, can be sustained in your financial outlook & plans.

    As I personally believe there is a difficult change very soon to hit in the future tides of residential real, I also believe there are extraordinary opportunities for developers of very specific types of building... Done right.

  • Colin Cambel member of NBFN in Calgary | 22 Mar 2015, 12:18 PM Agree 0
    Watch where the money goes. If it leaves Canada for safer locales, the markets here may well crash. When money flow in, they boom.
    If we had 30 year mortgages in Canada, like the USA at rock bottom rates, I'd run to the lender and lock them in, then calculate my 'real rate of
    return on the asset/liability into the future.
  • Omer Quenneville | 23 Mar 2015, 03:24 AM Agree 0
    "The sky is falling", "the sky is falling". Henny Penny is most like the best investment book ever written. Based on my experience the market will correct when you least expect It. When all signs say there is no reason for a correction that's when you will get a correction. When you consider that real estate is leverage with very little down, 5% return is excellent on an asset you control with very little actual cash invested. Only about 20% of the market gets effected when a market corrects, those who bought for a place to live because it is close to work or schools and won't need to sell will do fine long term. It will only be those that speculate and forced to sell that will actually suffer the lose. "Don't worry", "be happy" as the song goes.
  • Samual | 27 Mar 2015, 01:51 AM Agree 0
    As bleak some make it sound. The problem there are what you might call lot of exports out there. My gut feel that it is not a perfect science. We know there are may factors that might affect the economy. it is not a local or regional. it is global. Just look at the stock market, one day is up one day is down. I think some manipulate by one day buy selling the next. Have you heard of the Herd Mentality?
    Real Estate in Canada over all is stable, Yes there will be a down turn in Alberta because of the price of the oil. But markets such as Vancouver and Toronto, it is a demand and supply market. As long as foreign investor flock to Vancouver and new immigrants come to the GTA. there is no chance of sharp correction or slow down. Montreal is so so, with a glut of condos and affordability is an issue, Bargains to be had. My son just got transferred to Montreal and was be able to bargain and pay quite a bit below the asking price. In TO good luck with the bidding war.
    I am a Real Estate investor and I will continue to invest in Real Estate almost anywhere in the world. You tell me, where can you have a rental (tenant) pay your mortgage and over time build your Equity with an average conservatively growth of 3-4% a year and claim all your expenses including the interest on the mortgage as a tax deduction
    I am concerned about lot of people are being priced out of some markets. One reason they come to the GTA because of the job market, may work in service jobs which make it very difficult to be able to purchase a home, Income is not keeping up with the price of the homes
    I think the government should impose a levy on foreign real estate investors and that levy to be used to create jobs in infrastructure for CANADIANS
  • Samual | 27 Mar 2015, 01:51 AM Agree 0
    As bleak some make it sound. The problem there are what you might call lot of exports out there. My gut feel that it is not a perfect science. We know there are may factors that might affect the economy. it is not a local or regional. it is global. Just look at the stock market, one day is up one day is down. I think some manipulate by one day buy selling the next. Have you heard of the Herd Mentality?
    Real Estate in Canada over all is stable, Yes there will be a down turn in Alberta because of the price of the oil. But markets such as Vancouver and Toronto, it is a demand and supply market. As long as foreign investor flock to Vancouver and new immigrants come to the GTA. there is no chance of sharp correction or slow down. Montreal is so so, with a glut of condos and affordability is an issue, Bargains to be had. My son just got transferred to Montreal and was be able to bargain and pay quite a bit below the asking price. In TO good luck with the bidding war.
    I am a Real Estate investor and I will continue to invest in Real Estate almost anywhere in the world. You tell me, where can you have a rental (tenant) pay your mortgage and over time build your Equity with an average conservatively growth of 3-4% a year and claim all your expenses including the interest on the mortgage as a tax deduction
    I am concerned about lot of people are being priced out of some markets. One reason they come to the GTA because of the job market, may work in service jobs which make it very difficult to be able to purchase a home, Income is not keeping up with the price of the homes
    I think the government should impose a levy on foreign real estate investors and that levy to be used to create jobs in infrastructure for CANADIANS
  • DoomStar | 01 Apr 2015, 01:51 AM Agree 0
    Hey gang one does not have to pay too much attention to another chicken little to realize that we are in the midst of the greatest economic debacle unfolding worldwide. Come on think real estate has risen to incredible heights in the free world yet in Europe patches are stuck in the doldrums. When the music that is easy money stops by all means run do not walk run for the hills because there will be no stopping the tidal wave of correction throughout the system. People all over the world will awaken indeed are awakening to the fact they have been duped and robbed by governments and central bank policy which has favored the wealthy and banks at the expense of seniors and savers! Yea that
    s what they've done they have ripped gramma and grampa to the tune of hundreds of billions of dollars the world over through ZIRP. So fellow posters just remember whom to blame when it hits look to your friendly neighborhood politician and bankster. We may in a relatively short while begin to see politicos and banksters hanging from street corners as they were at the end of WWII. I intend to enjoy the carnage on a most greedy generation.
  • assumpta | 03 May 2015, 12:24 PM Agree 0
    All money advisers of note are indicating a real estate correction in Canada. (yes there are towns in which values are low anyway but lets think major cities)
    Immigration will not sustain the asset bubble that Canadians are in denial over. Immigration will require future investment into schools hospitals etc. It is a little like borowing money today to juice the market.
    Canadians who have their mortgaes payed off are still borrowing on lines of credit.
    Young people of Canada cannot afford education, or housing because of declining wages and less job prospects.
    Canada is a vassal state of Washington which will inevitably bring down the entire economy since the US fed is printing money along with its vassal states. Think overall instead of just real estate.
    My advise:
    If you dont have your mortgage payed off and it is in large figures sell and get out now before your "investment" goes into negative equity!
    Think Ireland, US, Japan and elsewhere.
    If like some out there you simply dont care no problem just let the bank suck it up when the collapse begins.


  • jonathan | 03 May 2015, 12:58 PM Agree 0

    interesting article

    Canada has the Most Overvalued Housing Market in World

    In every inflating bubble, there’s usually two camps. The first group points out various metrics suggesting something is inherently unsustainable, while the second reiterates that this time, it is different.

    After all, if everyone always agreed on these things, then no one would do the buying to perpetuate the bubble’s expansion. The Canadian housing bubble has been no exception to this, and the war of words is starting to heat up.

    On one side of the ring, we have The Economist, that came out last week saying Canada has the most overvalued housing market in the world. After crunching the data in housing markets in 26 nations, The Economist has determined that Canada’s property market is the most overvalued in terms of rent prices ( 89%), and the third most overvalued in terms of incomes ( 35%). They have mentioned in the past that the market has looked bubbly for some time, but finally Canada is officially at the top of their list.

    Of course, The Economist is not the only fighter on this side of the ring.

    Just over a month ago, the IMF sounded a fresh alarm on Canada’s housing market by saying that household debt is well above that of other countries. Meanwhile, seven in ten mortgage lenders in Canada have expressed “concerns” that the real estate sector is in a bubble that could burst at any time. Deutsch Bank estimates the market is 67% overvalued and readily offers seven reasons why Canada is in trouble. Even hedge funds are starting to find ways to short the market in anticipation of an upcoming collapse. Canada’s housing situation could give rise to the world’s next Steve Eisman, Eugene Xu, or Greg Lippmann.

    On the opposing side of the ring, who will contend that the Canadian housing market is just different this time? Hint: look to the banks and government.

    Stephen Harper, Canada’s Prime Minister, has tried to dispel fears. He recently told a business audience in New York that he didn’t anticipate any housing crisis in Canada.

    Just this week, the Bank of Canada also tried its best to deflate housing bubble fears. “We don’t believe we’re in a bubble,” says Stephen Poloz, the Bank’s Governor. “Our housing construction has stayed very much in line with our estimates of demographic demand.”

    Poloz suggested that housing costs do not necessarily have to contract to match the incomes of Canadians. Instead, he expects growth in the economy to raise wages and make housing more affordable.

    Strangely enough, by the Bank of Canada’s own estimate, the housing market is overvalued by as much as 30%. It is hard for housing to become more affordable when prices are rising in double digits in a year. Combine this with the fact that household debt rates keep setting new records, and one side of the fight might get tilted sooner than later.

    Courtesy of: Visual Capitalist
    • Nick E. Mississauga | 08 May 2017, 07:31 PM Agree 0
      And here we are May 2017. Home prices have doubled since you wrote this. Incomes have remained stagnant and single family detached homes are beyond the reach of the average Canadian family.
  • Jan | 12 May 2015, 01:05 PM Agree 0
    I hope the book sells well. Then when everybody loses their house I as a real estate investor will buy it as in 1990. Just read the book for a good laugh. If you manage your real estate portfolio correctly you will make more money than giving it to a financial advisor (who I fired 15 years ago) who buys crappy stock because he gets some kind of kickback. Real estate is the only place I have made money in 35 years of buying tangible goods. Everybody needs a home to live in and with inflation alone (what will a dollar buy you in ten tears)you will get a much higher return in the long run. Real estate is a passive investment that over time you will cash a big cheque.
  • Lewis1234 | 13 May 2015, 07:49 PM Agree 0
    anyone who says they can predict the future is a charlatan.
  • Mortgagefree | 18 May 2015, 04:51 PM Agree 0
    For all those Bucking real estate investing you just have to pull real estate advertisements from the 1980's and 90's then look at RRSP growth since the same period. Many homes in regular civic setting has grown 200 to 700% yet RRSP growth has not. Balk at it again but the savvy real estate investor who researches neighborhoods, commercial growth and property values does stand to gain in this buyers market.
  • jon | 20 May 2015, 07:51 AM Agree 0
    I owned investment real estate in the Gta in 1989. My house in mississauga dropped 30 percent in value. Condos dropped 50 percent. Those are real figures........... I know, because, I lived thru it.

    I dont see such a large risk today. But many similiarities exist between that market and todays. Buyers are over extended, bidding wars are common, investment properties are being bought with little regard for their real rate of return based on real expenses, there is an unquestioning expectation of constant price increases, real estate has once again become very sexy and in vogue. And once again there is the agruement, that, "this time its different".

    I would be suprised if there isnt some correction.
    • Nick E. Mississauga | 08 May 2017, 07:28 PM Agree 0
      What have you to say now ? MAY OF 2017 ..Prices have doubled in the two years since you wrote this..This is not normal .Not sustainable.
  • Yyzpete | 22 May 2015, 01:57 PM Agree 1
    Mr. macBeth, ( or is it Mrs?), unimaginitively joins the sad and never-ending parade of glass-almost-empty geniuses calling for a big correction in the Canadian housing market. Although this is indeed a polarizing discussion, it's easy to identify the two camps, and which camp you fall into. One key difference between the two, though, is that the proponents of investing in real estate do not tend to stand on our little soap-boxes and bang on about how compelling our projections for the future are, and how everybody needs to heed our advice, in the way the chicken-littles of the bubble-camp ooze their pessimistic notions of impending financial calamity upon the rest of us. I find their simplistic and narrowly-considered theories rather amateur, and akin to the sort of pop-culture thought processes one finds on a Dr.Phil wall calendar, or perhaps the tedious and uninspired vitriol of Kevin o' leery... As well, the implication is that those of us in the other camp, ( the landlords), are being foolish to hold the beliefs we do, and we need to pay attention to the bubbler's own learned prognostications; probably sell while we can, and go out and buy some, what, stocks? There are simply too many irrefutable facts that support the validity of owning real estate as an investment, too many to get into here..regardless, we landlords are abundantly familiar with them, and that's all that counts. Like any investment, knowing what you are getting into, and why, as well as sensible debt levels, and thoughtful monitoring, are essential.But I find the bubble-camp quick to assume that we r.e. investors are unaware of demographic and economic trends, risk factors, etc., and have foolishly managed our finances by not sharing their gloomy notions of the future. If I had any measurable ammount of respect for these herd-thinkers, I would be offended.
    Most landowners like myself do not actually refute that their could indeed be a correction. Within this camp, there are those that are ill-prepared for it, and those that are well prepared for it, should it indeed materialize. In fact, for the latter group, it would present a nice little opportunity to enhance our wealth.
    I have been an owner/ landlord of multiple properties, in vancouver, for about 25 years..I currently own 4 condos, which my tenants have very kindly paid off for me. Not a big portfolio, a couple of million, but manageable, and sensible. These have been far and away the best investments I could have made, as they captured all the principles of successful wealth-building: leverage, taking advantage of tax-incentives, using other people's money to make me rich, and being an owner, and not a mortgageer, as Vanita van Kaspel would say. The results speak for themselves, over the mid to long run, far outperforming the financial markets. ( and in fact insulating me from the markets, as well).
    We in the glass-almost-FULL camp, are cautious, prudent, long-term investors, who own bricks and mortar, and pay attention to our investments, and the factors affecting them. Like me, most experienced r.e. investors are not trying to get rich quick. Real Estate is only one component of our finances. We know it is a long road to true wealth, and we are happy to embark upon it. Those greedy and impatient condo-flippers, who are partly responsible for distorted valuations, are most at risk for disappointment, as they have inflated expectations, shorter timelines, and inappropriate leverage. Should the bubble-camp eventually be seen to have called it correctly, ( which, if ones timeline is long enough, is statistically almost inevitable), I look forward to picking up another unit or two at a great price, (probably from some poor distressed condo-flipper), and having another renter or two making my retirement that much more spectacular. With the probable high interest rate environment, unaffordability will still be an issue, and vacancy rates will be low, as more people will be renters than owners....history repeats itself. ka-ching. And what will mrs MacBeths precious equities be doing? ( let's just say that with falling net worth, and higher debt servicing costs, there won't be a rush to the markets, in fact quite the opposite, and we all know what happens then).
    Most of us owner/ landlords don't say a correction ISNT going to happen; we acknowledge the possibility....we simply don't assume it's inevitable, ( ie a soft-landing could be just as likely), or that it will be calamitous, as do the MacBeths, of the world. With a long time-line, prudent debt-levels, and thoughtful management, a correction represents little danger, and in fact great opportunity....just like any investment.
    Lastly, I will just remind the nay-sayers that on the back of every Andex chart, there is a list of reasons, year by year, that would pursuade us NOT to invest, whether in the stock market, real estate, or whatever. Those that did, though, have been rewarded handsomely. Those that didn't, and I know a couple of them, still rent their homes, in their mid-50's. I wonder if Mrs. macBeth is one of them? Anyway, sometimes the greatest risk is not taking one. So be smart, know your stuff, and listen to yourself, not MacBeth, o'Leery, or Dr.Phil.
  • talkcondo | 22 May 2015, 04:57 PM Agree 1
    Nah...not listening...I'm going to keep on investing.
    • Jerrycurl | 14 Jul 2015, 05:53 PM Agree 0
      Till it's too late...
  • jon | 22 May 2015, 07:08 PM Agree 1
    “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” (Warren Buffett)

    There is a real estate euphoria in Toronto. People are clambering over each other to buy real estate, (any real estate).

    I AM a long term investor and have investment properties.

    Time will tell.
  • Realtor/Investor | 20 Jun 2015, 12:20 PM Agree 2
    Real estate is cyclical . I have owned rental properties and invested in Stocks/Bonds/Mutual Funds.
    I have to say from personal experience, over 30 years, I have made far more in appreciation
    of my Real Estate than I have ever made in the Stock/Mutual Fund Investments I hold.
    I am a Realtor and give advice based on personal experience. If you are buying Real Estate to
    hold as part of an Investment portfolio, you will weather through up's and downs but at the
    end of the day, 10 years down the road, you will come out smiling.
  • Jerrycurl | 14 Jul 2015, 05:52 PM Agree 0
    Get real, people. Canadian residential real estate is horrendously overvalued, and about 7 years overdue for a correction, especially in Vancouver where home prices are no longer tied to intrinsic value factors, but instead, only speculative values. Once foreign real estate investors realize the Vancouver is no longer a growth market, they will pull their money out of the city in the blink of an eye. Sorry, Vancouver, you are an excellent city but your real estate market is not invincible, and you are not a major world city like NYC, London, or Hong Kong that can justify those valuations.

    Vancouver (and most of BC) is basically just a real estate chess board / pyramid scheme.
  • Serge | 16 Jul 2015, 09:03 PM Agree 0
    In 2003 I was reading a book predicting American market crash. It did happen 5 years later. it is a matter of when not if that Canadian bubble bursts. It is bubble make no mistake. It is clear people who entered the market when prices already were high or who benefited from real estate rise are in the grip of wishful thinking.
  • | 07 Aug 2015, 02:52 AM Agree 0
    I would say Household DEBT is the # 1 Contributor to this FEAR mongering when there is a Downturn in the R.E. Market. When there is some kind of control of how many Credit Cards are issued to an Individual or couple on MAXIMUM Amount based on the NOA's just like when you apply for a Line of Credit or Mortgage. Credit is too easy in this world and this is the source of the Disease that in todays world people think they can afford with especially the low interest rates. There was a time not too long ago when the average Family Debt was less than 20 % in North America. Now its over 80 % with the average Debt load of $ 30,000 on the average family in Canada.

    Calgary, AB
  • Ross, BC. | 25 Aug 2015, 01:09 PM Agree 0
    ... And sometimes information surfaces which can be of huge value to an investor, and reveals that not everyone has their head stuck in the sand. It's been abundantly obvious for years that the world economy has been on the verge of crumbling.
  • | 09 Sep 2015, 01:20 PM Agree 1
    The author reaches a very self-serving conclusion. It's an equities salesperson predicting a real estate crash, and advising us all to diversify into stocks.
  • Rosa Powell | 25 Sep 2015, 02:44 PM Agree 0
    The sky is fallen again. another book promotion. Always find out the motives and who is saying it.
  • Tony | 29 Sep 2015, 02:34 AM Agree 0
    That would mean a fall of about 70 percent in Toronto, Vancouver and Victoria to balance out the smaller markets that never increased in price. Just like in America Toronto and Vancouver should fall about 70 percent like Stockton and Fort Myers did.
  • derek | 01 Oct 2015, 12:28 PM Agree 0
    I can't believe that " Toronto and Vancouver are Balanced markets " as they mentioned in the article, or did I read that wrong . Time for people to get out of the cities , smaller communities are not seeing these changes and the affordability factor is great for those that are smart enough to stop renting and become owners
  • Faheem Bukhari | 06 Oct 2015, 12:50 PM Agree 0
    Although, as mortgage broker, for over 12 years, I am not scared but do share his concern because the way GTA market being appreciated 25% or 50% or in some cases over 70% in last 10 years, I really believe the historically lowest rate is biggest factor driving the market & value of real estate.
    What if??? rate goes up, may be just a notch??
    Unless, lowest interest rate are new reality of Western economies and stay here for unforeseen future, then absolutely nothing to worry about but if isn't then, we may be due for down cycle in near future, as this has always been the case for last 40 years
  • lethbridge | 08 Oct 2015, 03:39 AM Agree 0
    i'm still waiting for this crash to happen? glad i didnt waste my time and money on this book.
  • lethbridge real estate | 08 Oct 2015, 03:41 AM Agree 0
    If you don't believe there is a crash coming and you are interested in actually investing in a solid and stable residential real estate market, i would ask you to consider Lethbridge Alberta. Get in touch with me at and i can share some local listings and show you how property here still cashflows better than most anything else you can buy.
  • Jeff D | 26 Oct 2015, 01:55 PM Agree 0
    One has to wonder ....Oil Prices are here to stay at $100, The stock market always goes up ! Everything returns to the mean ? The housing market is already correcting in Alberta- Beware the "Complacency Bias"
  • Ronald Alphonso | 27 Oct 2015, 12:46 PM Agree 0
    The present GTA housing market is not sustainable. Historically, house prices were tied to family income. That is no longer true. People buy houses based on very low interest rates, average family incomes are not going up as fast as the house prices. what happens when the interest rate goes up.

    If you are buying for the long term and get a 5 year mortgage you are probably safe, be careful with a variable mortgage.
  • Patrick B. | 25 Nov 2015, 03:33 PM Agree 0
    As with anything, whether you invest in oil, stocks & shares or property, prices will always go up and come back down to some degree. Property has proven to be one of the most robust investments you can have over the long term minimum 5 years. Prices will go down but will go back up over time. It's the way of the land and people are forever trying to predict when things will change. I will buy any book that could give me dates when things could change but until that time, I'll keep it invested in property for now.
  • Duncan McLean | 30 Nov 2015, 02:40 PM Agree 0
    The reason why the market won't crash is that when your interest rate is 2.3% your principal recapture is dramatically accelerated. In 5 years if interest rates were to double you can still afford your mortgage (basically the same monthly payments) as your balance owing is much less and that's even IF real estate values drop by 2% a year. if interest rates were to triple you can always amortize over a longer period of time. I may write a book on why the real estate market is going to soar.... continued low rates, 2 % annual increase in value, lack of supply of certain asset classes, higher construction costs, higher development charges on new construction equals real sale values will soar...I have no idea whether that will happen but it could...
  • DF | 03 Mar 2016, 03:05 PM Agree 0
    I wish I could reply to some of these comments.
  • marketpundit | 17 Mar 2016, 11:53 AM Agree 0
    Many preach about real estate correction, which I too think is inevitable at some point. However, to say that the correction will be 50% or 30% is a complete guesstimate and nothing but a headline attention grabbing figures. There is too much attention being placed on the record low interest rates and household ever growing indebtedness. As much as it is true and should be a big concern for the government and institutional lenders, there are other areas I would equally be concerned about.

    1)Employment/Unemployment: recent employment stats have shown that the unemployment rate keeps rising. This trend will only intensify going into the future. It will not matter where you live - GTA, VAN or some other area. Obviously, some areas will be worse than the others.
    2)USD/CAD exchange rate: Recently, newly elected government has stated that they will shift from resources driven economy to manufacturing . Now, to be competitive in the world arena CAD to US should be considerably lower (roughly $ 63 cents US). Main manufacturing competitor is Mexico. However, lower Cad will also considerably inflate local prices pretty much for everything. Thus, leaving households with less disposable income.
    3) Taxes & Interest rates: Local governments are hugely underfunded and "broke" somewhat. The only way governments can fund their current liabilities and bloated future proposed budgets are through an increase in current taxes, implementing new taxes and through sale of government bonds ( federal, municipal). In order to attract potential bond buyers, higher yielding rates would have to be provided. Thus driving fixed rate mortgage rates up.

    I already have big concerns about some new condo development projects in the GTA. I strongly believe that with the exchange rate going not in favor of Canadian dollar will launch the cost of construction cost to the sky. Just the cost of a simple 2 by 4 lumber has more than doubled in the past 2 years.

  • MillionnaireREInvestorFromRichmondHill | 04 Apr 2016, 11:51 AM Agree 0
    I heard the same story for 12 years since my first rental investment. 50% drop in price?! Come on, give me a break. This guys wants to sell books only.

    If the governments of the world keeps printing money, land value will never go down!!
  • SPELETZ | 13 Aug 2016, 01:49 PM Agree 0
    Well looks like he was 100% wrong (not surprised)
  • Guy | 15 Aug 2016, 12:36 PM Agree 0
    His book is now toilet paper, he should stay out of speculating Toronto will drop by 50%. Actually he should hang up his license since obviously he doesn't know what he is doing.
  • Cashed out | 24 Aug 2016, 06:59 PM Agree 0
    Predicting the exact timing of economic events is a fruitless endeavour. There are simply too many variables at play. Economics is as much an art as a science. If I had heeded his advice and in anticipation of a large real estate drop had sold my Oakville property in early 2015 instead of mid 2016, I would have missed out on a truly massive tax-free gain. In this inflated real estate market, I cashed out of the GTA and bought a much cheaper home (but equally nice) in an area further away that did not have the built-in premium for accessibility to the GTA job market. I for one am among those that handsomely benefited from the exorbitant real estate prices we are seeing today. It's the greater fool theory at work. It's not doom and gloom for everyone.
  • Barclay Bolton | 29 Aug 2016, 07:55 AM Agree 0
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  • SE222 | 27 Sep 2016, 06:58 PM Agree 0
    Housing in Greater Vancouver is extremely expensive and the economics of participating in homeownership here are unsustainable. The socio-economic ramifications are really quite catastrophic long term. That said, demand both domestic and foreign, exceeds supply and until supply exceeds demand by a large margin we will not see a meaningful sustained correction in housing prices. One report indicates we will need 20,000 house listings, up from the current 9,000 house listings, before it becomes a buyer's market. Vancouver is bound by the sea to the West, the mountains to the North, the US border to the South and the Agricultural Land Reserve to the East. Our developable single family land inventory is absolutely finite so large scale home development is not possible. At the same time, for all reasons other than real estate prices, Vancouver is the most desirable place to live in the world and we have only experienced the tip of the tip of the iceberg in terms of foreign capital and people moving here. Even high earners cannot buy the house they want in the neighbourhood they want and that is about to get worse. This bastion of long term financial planning and well being called "home ownership" is being taken off the table for millennials. Governments are focusing on social housing, rental housing, and mutli-family but nothing is being done to enable young families to get into single family homes. The 15 % foreign buyers tax is a stop gap measure and the real solution to making single family homes in Vancouver neighbourhoods more affordable to buy and own has evaded everyone.
  • PNJ Property Group | 17 Oct 2016, 03:15 PM Agree 0
    Vancouver and Toronto were well under-valued when comparing to other world class cities. This recent rise has only brought these two cities up to par. Yes folks were listing too high at the end of the peak (unlike during the peak where list price was reasonable but getting 'over-asking') and hence you will see very skewed stats coming out soon showing prices are dropping but this is simply due to over priced listings recently. Market is stabilizing now in Vancouver after a rise and will likely stay this was for 6-8months, but don't foresee any crash folks.
  • DDZ | 25 Nov 2016, 07:26 AM Agree 0
    These comments have little to do with the fact that debt levels in some Canadian markets are at the tipping point. Do you really believe that the federal government would take measures by implementing mortgage regulations if they felt that real estate values are under inflated? China itself is on a critical real estate bubble right now. It has been reported that the Chinese government is late in implementing measures to try and temper the market. Vancouver was in a decline before the foriegn tax came into the market place. Calgary twelve moths later is now feeling the effects of the decline in the energy sector. Face the facts. Real estate has been fueled by one thing. Low interest rates. But as the debt becomes higher a small change in rates will have a big effect. The result will be a decline in real estate values which in turn will mean loss of equity for owners. Add secured lines of credit with consumers managing this debit paying interest only and there is a serious problem. If you have cash to invest in rental properties that is a good investment. And anyone that believes Toronto and Vancouver world class cities should really think again when they attempt to draw that comparison. Canada is about the population of the State of California and we all saw what happened there in 2008. Back in 1988 I heard the same comments about Toronto being undervalued compared to other World Class Cities. The only reason Toronto and Vancouver have boomed is because there they are the only two large cities in this vast country.
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    • ammythomas95 | 02 Feb 2017, 03:08 AM Agree 0
      My mothers neighbour is working part time and averaging $9000 a month. I'm a single mum and just got my first paycheck for $6546! I still can't believe it. I tried it out cause I got really desperate and now I couldn't be happier. Heres what I do,

  • Oh really | 08 Mar 2017, 04:56 PM Agree 0
    I find this article laughable.

    It stated that there is an over supply in the Toronto condo market. Why then are purchaser bidding on suites and paying over asking price?

    I have a hard time seeing 3/4 of the mortgages carry some form of government insurance. I sell pre-construction condos in Toronto. Builders require the purchasers to provide a mortgage pre-approval letter with their purchase, showing at least 20% deposit. Granted, there are rare situations that the builder would accept a lower deposit amount if the purchaser can demonstrate financial capacity to complete the sale. But these constitute a very small percentage.
  • Joseph Norkus | 10 Mar 2017, 09:35 AM Agree 0
    What everyone is missing in these doom reports is that Canada is the new Switzerland. I have been telling people for well over 10 years about this theory I came up with. Right now there is a lot of money being made around the world especially in and around Asia. That region is very unstable and so smart investors know that they need a safe place to put something away in the event of a regional conflict. Europe is also now seeing the effects of uncontrolled immigration so investing there is risky. The US is not always friendly to investors (just ask anyone who has dealt with the IRS). Where else in the world do you invest SAFELY? Canada! It has room to grow, it is a great place to live, has every natural resource anyone could ever need and has a stable political system. It is in many ways superior to what Switzerland was. I wonder if those naysayers are ready to sell because I have a buyer ready to take over your solid investment!
  • divy ratnasamy | 15 Mar 2017, 05:49 AM Agree 0
    All these analysts and so called economic Gurus sit in the confinement of a room, pour over some statistics,graphs,market trend reports and a generous serving of expensive cognac and come up with these absurd statements to cause worry in the market. AS realtors we have a touch and feel of the market.There is so much of disposable cash that is being pumped into the market by first and second generation immigrants. It is not all overseas money.

    If it so that the market is going to crash should not these Prophets of Real Estate start selling their portfolios?

    There could be a softening of the market but definitely not a 50% crash.
  • ethanwilson | 20 Mar 2017, 02:03 AM Agree 0
    On the off chance that you ask a budgetary guide a similar question, they'll instruct you to put your cash into the stock exchange rather than land, since they get paid to offer stock-based speculation items. Continuously see how individuals get paid before you put any weight on their recommendation.
  • ethanwilson | 20 Mar 2017, 02:05 AM Agree 0
    <a href="">help</a>
  • accountant | 02 Apr 2017, 09:11 AM Agree 0
    There are several warning signs of a bubble:
  • | 17 Apr 2017, 11:46 AM Agree 0
    please get rid of this post. It continues to pop up first before anything else and considering it is a post from 2015 shows how dated this data feed is.
  • Jeremy | 05 May 2017, 04:59 PM Agree 0


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  • Nick E.-Mississauga | 08 May 2017, 07:00 PM Agree 0
    Well we are in May of 2017 and the market not only hasn't crashed home prices have gone up by nearly 50% in these two years..
    What do you have to say now?
    • Bo Kauffmann | 12 May 2017, 10:27 PM Agree 0
      I agree... but the 'experts' just continue to predict that the sky is falling. Some day, they might be right, and we will all hear "See, we told you so"
  • Laurie B | 31 May 2017, 01:44 PM Agree 0
    I don't think you should give a guy like Hilliard MacBeth the time of day, they need to cry doom and gloom to try to sell their wouldn't be worth writing if they were pumping us up on the economy etc.....what a bunch of BS
  • JandJ | 12 Jun 2017, 11:34 AM Agree 0
    The largest correction the Canadian Housing market has experienced is 8%. In the GTA 100,000 move into the area each year. So I am willing to take my chances with real estate.
  • CanadaRocksBaby | 14 Jun 2017, 11:08 PM Agree 0
    How do I buy this book? Can't wait for the crash to come. Sale of a lifetime!
  • L | 19 Jun 2017, 03:28 PM Agree 0
    MacBeth thinks "The surplus of condos in Toronto that is developing is dangerous too, as an oversupply of units [...]" Toronto developers have been building fewer and fewer condos year after year and can't keep up with demand

    Oversupply, are you kidding me? according to CMHC, Toronto vacancy is at 1%

    Global news ran an article talking about Vacancy rates in Canada mentioning Saskatoon at 10.3% and Calgary at 7.0%

    I guess 'boring' high-school economics doesn't sell books as much as MacBeth's fearmongering...
  • Mike | 21 Jun 2017, 03:39 PM Agree 0
    Hey! Is 2017 and nothing happened so bad, as is predicted, actually the market keeps climbing. Maybe this guy should start predicting earthquakes. At least if a big one is not happening, a small one could save his reputation. Right?
  • Observer | 02 Jul 2017, 08:05 PM Agree 0
    He will be right one day unless he passes on before the time arrives.

    I do not mean to be rude but there are so many guesses on the real estate market every day and one day someone will hit it right.

    Nothing against the author or anyone else.
  • Mustafa | 07 Aug 2017, 07:39 PM Agree 0
    We've been hearing this same song and dance for over 10 years, every one of them has a book to sell on their dire predictions.
  • S. Gilmour | 12 Oct 2017, 09:07 AM Agree 0
    Look back in history, real estate has always been a very safe investment! If you are looking for a quick buck--any type of investment--is going to be risky. You still can't live in an RRSP, or any type of FUND. Only real estate can be rented out in time of crisis, there is no need to dump it as it is worthless, or out of business (so to speak). Real estate can provide the owner with income (unless it has been financed to the ceiling), and you can live in it. I am a realtor, but I also believe in what I do, and take my own advise, for 30 years now. The RRSP money didn't go too far, but my real estate has gone up more than 4 times it's original value in 20 years, since I have owned it.
  • Sue Paguibitan | 11 Dec 2017, 12:00 PM Agree 0
    They have been saying that for several years, but look at where we are now. Do we continue to procrastinate or should act now?
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