I couldn’t let this article go without posting it. Its funny how many people I meet who have no real estate experience but think its super easy to flip a home or they think homes just always go up in value and use their house as a HUGE part of their retirement plans. Can’t we learn from the Americans? 10s of Trillions of dollars of equity was wiped off peoples retirement plans and balance sheets because they thought their house would always go up in value. I spend a great deal of time in Michigan, trust me when I tell you that very few people believe that anymore in that area of the country. Anyways, here in Canada we are heading to a huge correction in the market, I know many people who are literally buying high right now and think that they are gonna make huge money off their house continuing to go up in value. Instead I fear the market is literally starting to adjust now and I think it will be quite a violent adjustment, maybe even more violent then the US, especially in certain markets like Toronto and Vancouver. Here in Halifax, our housing market is going bonkers. Homes for sale are in bidding wars and people feel that they have 25 years of prosperity locked in because the government just awarded a huge shipbuilding contract. I was part of the military when PM Chretien ran on the pledge to cancel the expensive helicopter program, and with his win he did!! Spending billions to cancel the contract and get nothing for it. What’s to stop the next person who runs from cancelling the jet or ship purchases? I know many will say its a signed contract or give me some other “for sure” reason that the shipbuilding contract will survive 25 years of changing government priorities………as they purchase their bigger newer home as part of their retirement plan!!!!

Financial Post | Business

Home Capital Group Inc. said it’s capturing mortgage business from Canadian lenders including Toronto-Dominion Bank and Canadian Imperial Bank of Commerce that are retreating from the $200 billion nonprime market amid signs of a housing downturn.

“The big banks are sort of juggling around their mortgage strategy and as part of that, they’re tightening up in certain areas,” Home Capital President Martin Reid said in an interview. “We’re seeing some of the fallout.”

Canada’s banks have been exercising more caution on higher- risk mortgages after Bank of Canada Governor Mark Carney warned that record household debt remains the biggest domestic risk to the economy. Carney this week signalled the potential for interest rate increases that would cool off a housing market that has seen prices almost triple in some Canadian cities over the past decade.


“While interest rates have been at historic lows recently, the inevitable climb looks to…

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25 thoughts on “

  1. I did like that your Finance Minister is in favor of allowing the market correction to actually happen. Not allowing that has been a huge factor in prolonging the our recovery here in the states, and our Fed is still talking about keeping interest rates artificially low. Until they learn that the bad debt and bad assets need to liquidate and let it happen, it will take longer for the market to turn and it will only get worse. I guess this is one of the reasons that Canada is ranked higher in economic freedom than America.

    See you in Clumbus.

  2. Hi Claude,
    Thank you for the post. It’s amazing to hear people say that they’re going to get into flipping homes (part-time) as they work full time to literally allow they’re families to survive from paycheck to paycheck. I think that Nova Scotians in general are not used to any kind of ‘boom’, therefore we’re not sure what a ‘bust’ will do to our future Nova Scotia. Unfortunately, as we see regularly, those who depend on these hand-outs, never learn to make things happen themselves and will forever have their fiscal freedoms dictated to them. Thank you again for your leadership in many of these areas. Always educational and enlightening.


  3. Thanks for the update, insight and good advice. Looking forward to seeing you, as well as the rest of Team this weekend at the major (=^_^=)

  4. Great post Claude. It’s crazy how many of us think we make intelligent decisions on our own when infact we are guided by media hype.

  5. Hi Claude, I remember you predicting big banks getting out of the mortgage business over 2 years ago! The power of having the right information. Thanks for your insight and advice! Curious to see what the Ottawa market will do following the Gov. cuts!

  6. And this is information that you won’t find unless you seek for it. Thanks for bringing this to light, Claude. It should help me protect those closest to me (including myself!).

  7. So agree. Live in vancouver, downtown you can find 700 square feet for about 1.3 million. Sustainable? Investment? I think not!

  8. Wow!
    I can agree with you Claude that we are just seeing the beginning of what may be a shake up in our economy that i know i have not seen in my 48 years.( ontario for sure )
    I worked with a fellow recently that is up sizing in his house with his young family, cautions i have given him, but there is something good about moving he tells me.
    I think in some ways we have been led astray by ( media) lots of information shared telling everyone in Canada that we are going to be just fine with maybe a few small bumps.
    The economy we are told is speeding up and our Bank of Canada Governor has been warning our dear country of possible interest rate hikes and our debt loads since Nov. – Dec. 2010. ( matter of fact twice in the 1st week of Dec.
    It will be interesting to see.
    Thanks so much Claude for your amazing knowledge in finances and economic conditions
    I have learned so much and continue to look forward to learning from your wisdom.
    about changing lives

  9. This is a great post Claude! I was just speaking about this to two people in my office. One wanted to flip houses, the other wants to go in real eastate in the next five years. This’ll give them something to think about!

  10. I can tell you … being in peoples homes many nights a week confirms that Americans … at least those in the northeast and southeast … believe that residential real estate is not going to return soon or maybe ever to the levels experienced in the past 20 years. Thanks for the post Claude.

  11. Great post Claude! As others have said, you totally predicted this a few years ago and you’ve continually shared this info to remind us of what’s coming. We’re very grateful to be following your leadership.

    André & Dominique DeGrâce

  12. Thanks for the info pal, you are like Nostradamus when it comes to this kind of stuff!!! I remember you predicting this stuff like 5 years ago….haha!

  13. Claude… I don’t know anything about the Canadian political or financial community. All I know is that I am honored to call you my friend and to be in this fight for our kids and grandkids together! God Bless

  14. Great article, thanks for sharing and helping so many people see the truth. Your always willing to share information with people even if they don’t want to hear it right then, and if it’s not of popular opinion. However, it eventually circles around and happens, and the difference is you’re prepared for it and their not – thanks for leading from the front. Thanks pal, Wayne (http://waynemacnamara.wordpress.com)

  15. Funny how misinformed people still think they’re doing the right thing by getting into real-estate. After spending a few days this week in Ottawa with family members it just confirms my fears.

    My brother who I Love very much has it all planned out, he just bought his first condo and says his plan is to live in it for a year then buy out the neighbours until he’s bought out the entire row of condos.

    My father thinks my brother is an absolute genius, I’m sincerely scared that they’ll find out the hard way.

    Claude thank you so much for all the wisdom you share with us to allow us to avoid these mistakes.


  16. Hey Claude

    I love it when you dive into the financial talks. Especially when it comes to the real estate market since it affects so many of us. It goes to show how you can make the right decisions with the right information…for many years I would just do what the popular concensus would say is right. I love reading your blog and can’t wait for any other timbit of knowledge that you are willing to share with us!

    Denis & Lisa Leger

  17. Amazing article Claude! I appreciate you doing the research on these things! It makes me realize that the things that i thought i didnt like, were really just a lack of information!

  18. Thank you for taking the time (and for working at getting it back!) to educate yourself and us to important and valuable good information like this. I know I don’t get much from the Zombie Box in my living room!

    You are living as an inspiration for many of us, and I, for one, surely appreciate it.

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