Ready?

parking modified

Remember today. It could be a memorable one. The lowest point for interest rates in your lifetime. From here there’s only one direction in which to travel. So, be prepared.

On both sides of the border there was an unexpected surge in jobs – 59,000 in Canada and a whopping 280,000 in the US. As a result bond yields surged, US variable mortgage rates increased immediately and the people lined up in a distant northern GTA suburb to buy $2 million unbuilt homes (yes, they were there again) looked like horny anachronisms.

So, here’s what happened and what it means.

The Canadian economy rose from the dead to churn out almost 31,000 new full-time jobs and about as many part-timers while the number of overall hours worked also spiked. Yes, the oil guys got hit again, but manufacturing gained 21,500 new positions, on top of ten thousand last month. This is exactly what the Bank of Canada was looking for – evidence most of the oil shock is behind us and that a 79-cent dollar’s doing the job on the factory floor.

In the US, there were more new jobs in May than the previous five months, and they came with higher wages – the biggest increase in two years. Over 280,000 new paycheques were turned out, coming after 221,000 more in April. In fact there have been in excess of two hundred thousand new jobs in 15 of the last 16 months – showing you how miserably off-base the America-bashers on this pathetic blog have become.

It proves the economic recovery is intact, that the first-quarter setback was a weather-thing after the Winter from Hell, and corporations are planning on further expansion. At the same time, automakers are enjoying record volumes, manufacturing orders are growing at the fastest pace in five months and there are more new housing being built than at any time since November of 2007. Average wages are 2.3% ahead of this time last year, real estate prices have increased 5% while car sales are at a 10-year high.

It ain’t perfection, of course. In fact, this is the slowest economic recovery on record and the damage to the middle class inflicted by the housing crash may never be undone. But, there’s no doubt the US economy is growing again, there will be no recession and the Fed will act accordingly.

So expect this:

  • No rate decrease by the Bank of Canada. Ever. Well, not for a whack of years, anyway. Even the rate bears are running for cover after the latest data. “Overall, this latest employment report supports the Bank of Canada view that the January rate cut was enough insurance against the oil price shock,” says Capital Economics’ David Madani.
  • The bond market thinks so. Within moments of the latest employment data being released, the yield on the benchmark 5-year Government of Canada bond spiked impressively. Remember, it’s the bond market and not the Bank of Canada which is the determinant of fixed-rate mortgage costs.

BONDS modified

  • Ditto in the US. It was only a few weeks ago that 30-year fixed mortgage loan rates were 3.6%, and on Friday they had soared to 4.25% with the expectation of more to come.
  • Unless the next month or two yield a massive amount of negative data – and there is no reason to believe it will come – the US Fed is on track to raise its benchmark interest rate for the first time since 2006, likely in September. This is a big deal. It will signal the beginning of a years-long process, and you can bet the Bank of Canada will eventually follow suit.
  • The impact on real estate should be obvious. It has bloated commensurate with interest rates shrinking. This direct and irrefutable correlation means you can expect the opposite to develop as rates gently increase. Sadly as house prices come down, the amount of money people have borrowed will not.
  • A US real estate consulting company offers this formula: each 1% drop in interest rates increases the amount house sellers can ask by 12%. Flip that, and figure out what happens when 2.5% five-year mortgages in Canada become 4.5% loans a couple of years from now.

Did you never think this day was coming?

Better stop reading the comments section.

205 comments ↓

#1 Victoria Real Estate Update on 06.05.15 at 5:57 pm

As Garth has talked about, move-up buyers have been increasingly more active than first-time buyers in Canada lately.

We’ve certainly noticed this in Victoria:

•. SFH sales (number of sales) in more expensive areas have increased significantly more (year over year) than in less expensive areas.

•. A number of condos at the bottom end of Victoria’s core area condo market are sitting on the market at up to 26% below assessed value.

Examples:

**** 13% below assessed value ****
**** # 108-3215 Alder St. ****
* 1 bed, 1 bath condo
* minutes from downtown
* wood burning fireplace
* sauna, guest suites
* separate storage
* cats allowed

**** 13% below assessed value ****
**** # 403-3277 Glasgow St. ****
* 1 bed, 1 bath condo
* minutes from downtown
* top floor unit
* some pets allowed

**** 11% below assessed value ****
**** # 311-2100 Granite St. ****
* 1 bed, 1 bath Oak Bay condo

**** 26% below assessed value ****
**** # 307-1035 McClure St. ****
* 1 bed, 1 bath Victoria condo
* pets allowed

Without enough fresh newbies entering at the bottom end of the condo market, lower end prices fall and this sucks prices down across the entire condo market.

The weakness at the bottom end of Victoria’s core area condo market could worsen substantially by this fall. Those sellers who must sell will eventually be forced to lower their expectations in order to get a deal done. The clock is ticking for them. They may think they have plenty of time since it is only the beginning of June but waiting for a better offer in a falling market is always a bad idea.

The condo market supports the SFH market which is flat year over year across Greater Victoria, despite record low mortgage rates and upward skewing of the average price.

Year over year average prices of detached houses are up 9.4% in Vancouver and 18.2% in Toronto (416).

Victoria’s market is seriously underperforming in comparison.

So far in 2015, SFH sales have been significantly below Victoria’s long term average (charts coming soon).

So far it’s been another below average year for Victoria real estate, despite emergency rates.

#2 TurnerNation on 06.05.15 at 5:58 pm

Kicking things off…

#3 Randy Randerson on 06.05.15 at 5:59 pm

First! Oh yeah baby.

Seems like it’s all good news, if Canada and US are improving, then rising rates in both countries will be good news, and our loonies won’t get clobbered.

#4 NextYear on 06.05.15 at 6:00 pm

Maybe it is time for them to stop talking about raising rate and raise them… Haven’t they been talking about raising rate for 5 years??

This time it is diffeent though… well It will be next year

#5 Smoking Man on 06.05.15 at 6:20 pm

It does have a feel of turning point. Perhaps tax farm slaves can ask for raises

But being the best lier I know, and it takes one to know one.

The low GDP yes its trailing I know. But I can’t see how you have such dismal growth, yet we have a jobs orgy.

Something is fishie.

#6 Mark on 06.05.15 at 6:23 pm

“•Ditto in the US. It was only a few weeks ago that 30-year fixed mortgage loan rates were 3.6%, and on Friday they had soared to 4.25% with the expectation of more to come.
•Unless the next month or two yield a massive amount of negative data – and there is no reason to believe it will come –

Isn’t a severe spike in the 30-year mortgage rates profoundly negative for the US economy?

The long end of the curve (ie: 30 years) has only moved up 20bp at worst over the past month. So it seems that the lenders are merely tacking on risk premia for the increasingly high probability of housing default rates spiking severely, especially at current nosebleed prices in the USA. Not an actually strengthening economy with higher inflation expectations (which would also be reflected significantly in US 30-year T-Bond yields).

Additionally, the spike in variable rate mortgages — again, risk premia, lenders pulling back as they feel that the market has become dramatically riskier at current prices. Not a sign of accelerating demand on funds.

This ‘recovery’ story, still not buying it. I get job postings sent to me from an US university’s engineering college mailing list, and it hasn’t been this weak activity-wise in quite a while — the very high dollar, and weakening economy continuing to have its effect, with capex in the economy substantially truncated in favour of share buybacks. Those who think the FIRE sector will drag the US economy out of weakness, as the latest buzz in the media is, are smoking the funny stuff as well.

#7 Blogbitch on 06.05.15 at 6:26 pm

Love it when you get the blog dogs all hyper and howling with joy.

#8 Andrew on 06.05.15 at 6:26 pm

@1 Victoria Real Estate Update

The comments section of this blog isn’t for your constant bleating about the Victoria real estate market. Nobody here cares what you have to say as it is not the right place to put it. Make your own blog on real estate in Victoria if you want to blabber on about it every single day.

#9 pathcontrolmonk on 06.05.15 at 6:27 pm

My friend just moved in to his $800k East Van townhouse in Feb, and 3 months later is getting unsolicited offers for over $1 mil. I no longer have any sympathy for the Greater Fools, debt and misery will be just punishment for their collective insanity.

#10 Mishuko on 06.05.15 at 6:28 pm

Bit late but as a late 80’s baby I seriously question my ability to live the same standards as my parents do right now with what I have. This coming from someone in a permanent position that has benefits and a defined pension at a big corp.

#11 Scatjet on 06.05.15 at 6:33 pm

With the U.S. Economy seeming to be turning up and interest rates on the rise it will be good news for the banks. They make a lot of cash on the spread. I believe the head of Bank of America is quoted as saying that a one percent rise in interest rates means $3.5 billion in profits for the bank. Canadian banks should get a similar tailwind.

#12 ILoveCharts on 06.05.15 at 6:33 pm

So how long once the interest rates start rising until it will be a good idea to buy again? In theory, I will be advised to wait until interest rates hit their peak. Couldn’t that be 5-10 more years? I don’t know if I can fend off the wife that long.

#13 Love my Kia on 06.05.15 at 6:34 pm

What about Greece? That’s the wild card. We’re not out of this yet.

#14 Realtor007 on 06.05.15 at 6:38 pm

The same song and dance continues……

No rate rises worth talking about, they have raised rates a couple of times by one or two basis points before just to revert back a few months later, this time will be no different, short lived.

#15 Balmuto on 06.05.15 at 6:46 pm

Bad day for the deflation prophets. Their whole thesis is unravelling.

#16 CJBob on 06.05.15 at 6:47 pm

I almost made it through the whole blog agreeing with every single word until here:

the US Fed is on track to raise its benchmark interest rate for the first time since 2006, likely in September. This is a big deal.

No it’s not. Not yet. A 1/4 point increase from nearly zero is really, really not a big deal. If it happens there are months to go for many variables to play out before there is even a second another 1/4 % increase.

#17 Greg on 06.05.15 at 6:49 pm

Horny anachronisms

#18 North Burnaby on 06.05.15 at 6:52 pm

Great! The Canadian economy is finally picking up steam again, let’s go buy houses!!!

#19 yeehaa on 06.05.15 at 6:58 pm

AWesome now canadians can buy more american pick up trucks.

Canadians just love their american pick ups!

#20 Joe Schmoe on 06.05.15 at 6:59 pm

#8 Andrew,

I disagree and find the data interesting…small market, lots of wealth…Victoria is a relevant canary in the coal mine.

#21 james on 06.05.15 at 7:00 pm

#6

“Isn’t a severe spike in the 30-year mortgage rates profoundly negative for the US economy?”

Probably not. Check out US mortgage rates over the last 2 years. This is not a severe spike.

However, it is much needed. The US has a weird pattern going on where select cities (e.g., SF, San Diego) are back into bubble territory, while others are flat or lagging. I really hope rates rise enough to choke off or deflate these local bubbles, even if it means my home’s market value goes lower.

#22 Greg on 06.05.15 at 7:00 pm

Realtor007

Good point. What else can you tell us?

#23 Lurker on 06.05.15 at 7:01 pm

Long time reader that enjoys everything you have to say Garth, but didn’t you just say very recently that the Bank of Canada could reduce interest rates again?

I said it was possible, depending on the data. Now, we know. — Garth

#24 Leo Trollstoy on 06.05.15 at 7:09 pm

Isn’t a severe spike in the 30-year mortgage rates profoundly negative for the US economy?

No.

Housing, and housing-related industries are not as large a component of the U.S. economy.

They’ve also been purged from their debt binging ways.

#25 JohnL on 06.05.15 at 7:10 pm

Hold on to your shorts, someone’s about to get pants’d.
With the glodal dislocation in rates, sovereign bonds have lost $625 billion since their peak in March. This kind of action can and will reach across markets.

http://davidstockmanscontracorner.com/stay-out-of-harms-way-the-casino-is-fixing-to-blow/

#26 Hug on 06.05.15 at 7:11 pm

No more rate decreases BoC … Ok, is this your final line in the sand?

#27 rampant inflation on 06.05.15 at 7:15 pm

five years from now, the Canada 5-year Treasury will yield somewhere between 4-4.5%

inflation is rampant.

#28 Leo Trollstoy on 06.05.15 at 7:15 pm

What about Greece? That’s the wild card. We’re not out of this yet.

Greece has a flea sized economy. Nobody really cares.

#29 greyhound on 06.05.15 at 7:18 pm

As long as the rise in interest rates is slow & gentle, fine.
There’s a group of financial folks that each make more in a day than I do in a year, and an increasing number of them are saying they’re worried about what happens if rates rise faster and higher than most now expect.

#30 cramar on 06.05.15 at 7:19 pm

If you are correct and Sept. is the rate hike, this means that the U.S. is telling the IMF (who wants it delayed to 2016) to take a hike.

#31 Canada's job growth on 06.05.15 at 7:26 pm

Let me just say

ROFML LOL HAHAHA LOL

Sure and unicorns are flying out of my butt.

Double fudged and very soon adjusted and revised downwards.

Like Smoking Man says above:

“Something is fishie”

If it doesn’t add up, it is usually because the numbers are bogus.

Juncker: “If it gets bad you have to lie”

Enjoy the warm fuzzy feeling while it lasts.

#32 Macrath on 06.05.15 at 7:26 pm

If everything is so honky dory why on earth would the the FED wait till September. Why wasn`t the lift off to escape velocity nirvana launched this afternoon ?

All we get is years of yap , remember Carney and his constant “watch out rates are going up” BS.

Banker credibility just got flushed down a Greek W.C.

#33 Ben on 06.05.15 at 7:30 pm

#28 greyhound

guess what they make money on? renting money. And when rates are low you get to rent a lot of it.

They don’t want rates to go up and end the rentier paradise. They want to keep labour as worthless.

Boomers: are you excited?

#34 bob on 06.05.15 at 7:34 pm

Do you still maintain a balanced portfolio should be 40% fixed income? Should we reduce it to, e.g. 30%? Our should we just reduce our holdings in bonds and rebalance within Fixed Income to hold, e.g. preferreds, REITS, etc.

Keep in mind, most of us don’t have 7 figures and access to juicy yields as institutional investors do. We’re just holding ETF bond funds which, as you say, will likely mean capital losses.

#35 Balmuto on 06.05.15 at 7:39 pm

#6. Mark

“The long end of the curve (ie: 30 years) has only moved up 20bp at worst over the past month. So it seems that the lenders are merely tacking on risk premia…”

First of all, 30yr mortgages are actually benchmarked off the 10yr Treasury yield, not the 30. But more importantly, they follow Treasury yields with a lag. The move in mortgage rates is merely catching up to the move in the 10yr Treasury, which is up over 70 basis points from its YTD low. You’re grasping at straws.

#36 John on 06.05.15 at 7:39 pm

Bunds and Treasury yields were already moving up before the jobs news broke. Bond dumping is galloping and liquidity to buy the bond sales is MIA; also means margin calls on the massive wads of debt playing the game are rolling out. Then, the IMF LaGarde lady said, yesterday, that there should be no fed rate hike for 2015 because the economies are too weak! Wiplash rollercoaster. Keep watching. Some folks feel that Janet Y will have to move sooner than September or be even further behind the curve and reveal that the fed is just following the bond market up the slope.

#37 Sheane Wallace on 06.05.15 at 7:42 pm

interest rates are going nowhere. real market rates today would be 5-8 %. We will never get there but instead destroy the real economy through capital miss-allocation, we will also destroy the savings.

When inflation shows up and the bond market revolts it would be game over. German 10 years bonds moved from 0.05 to 1 % (20 fold) in few days.

#38 Porsche on 06.05.15 at 7:44 pm

On both sides of the border there was an unexpected surge in jobs – 59,000 in Canada and a whopping 280,000 in the US.
……………………………………………………………………….

If the U.S. had created 590,000 jobs it would be equivalent to our job surge

10 times the pop… just saying

Consistency. Over 200K in 15 of the last 16 months. — Garth

#39 Sheane Wallace on 06.05.15 at 7:51 pm

#26 rampant inflation

They will loose the bond market in a heartbeat when inflation is recognized by the stupid.

They will lie about it, massage statistics but once the obvious truth and the theft is recognized there will be stampede into certain assets classes and currency will tank.

Ca dollar is going to be destroyed.

#40 Daisy Mae on 06.05.15 at 7:51 pm

#9 Path: ” I no longer have any sympathy for the Greater Fools, debt and misery will be just punishment for their collective insanity.”

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

I agree…but, unfortunately, most are listening to parents and peers and not Garth.

#41 Ponzius Pilatus on 06.05.15 at 7:54 pm

#5 Smoking Man on 06.05.15 at 6:20 pm
It does have a feel of turning point. Perhaps tax farm slaves can ask for raises

But being the best lier I know, and it takes one to know one.
The low GDP yes its trailing I know. But I can’t see how you have such dismal growth, yet we have a jobs orgy.
Something is fishie.
—————-
From what I gather, mostly Asian tourists related summer jobs.
Gone in 4 months.

#42 Questions on 06.05.15 at 7:55 pm

Canada’s LFS report is pretty unreliable on a month to month basis. I wouldn’t put weight into it unless it was smoothed in some way. Positive yes, amazing no.

I’m also wary as we approach election.

#43 David Lee on 06.05.15 at 8:03 pm

Again, it’s all about the data!

http://www.vancouversun.com/opinion/columnists/Cayo+Policy+decisions+made+without+facts+only+fall/11113180/story.html

#44 Porsche on 06.05.15 at 8:10 pm

Yikes! Mortgage rate spikes-what it means for you

http://finance.yahoo.com/news/yikes-mortgage-rate-spikes-means-180508566.html

#45 Sheane Wallace on 06.05.15 at 8:15 pm

real interest rates on Ca dollar are -3 to -4 % minimum.

#46 Andrew Woburn on 06.05.15 at 8:17 pm

“Building up Africa’s infrastructure would be mutually beneficial, with Africa receiving the foreign investment needed for its growth and development and China being able to tap the low wages and huge population in Africa. China’s President Xi Jinping in 2013 and Premier Li Keqiang in 2014 have emphasised that the transfer of labour intensive industries to Africa will be a top priority for China over the coming years”

http://ftalphaville.ft.com/2015/06/05/2131157/chinas-defence-against-supply-chain-disruption/

#47 Bytor the Snow Dog on 06.05.15 at 8:18 pm

Dubya O Dubya! Fifty nine thousand new jobs! Reported by the Harper Government™!!!! What a coincidence.

Say, is there an election coming up?

#48 The American on 06.05.15 at 8:19 pm

At #37: Porsche, sorry, but wrong thinking. You’re taking a single point in time and trying to multiply it by ten. That’s not how it works. Look at the running last twelve months (hell, look at the last 18 in Canada), and job reports have been MISERABLE there. The single point in time demonstrates 200,000 jobs created in the U.S., still a positive number, which by far exceeds Canada, even if you multiply it by ten. In fact, I dare you to find the multiplier over the last 15 months. Your “argument” will fly right out the window. As for the jobs created in Canada, they were as follows:

9,000 New Mortgage Lenders
4,000 New Mortgage Processors
10,000 New On-Site Developer’s Agents
2,000 New Street Sweepers
6,000 New Burger Flippers with salaries high enough to purchase three new homes in Vancouver (according to Canadian banking lending standards)

#49 John on 06.05.15 at 8:20 pm

Going with Smoking Man…. something is fishie…
Bond market rates climbing while Janet’s baking cookies. Not good press. Bond Market rates climbing cause Janet’s calling the shots. Good Press. Christine waves stop sign; Janet makes pies. Train wreck. If someone out there finds reality……… ask him for the score. (In other news: Black Hawks rule; the rest drool)

#50 Suede on 06.05.15 at 8:22 pm

The comments section is my favourite part!

I’m trying to figure out a way to capitalize on the absurdity in here.

When ppl around me start locking in fixed rates bc they’re scared of the rates rising, then I know the table have turned with the herd. Not there yet, maybe close. But who knows

One black swan and markets go bananas. Diversify and conquer

#51 Montellino on 06.05.15 at 8:29 pm

Will REITS and PFDs continue to get hammered?

#52 Investorz on 06.05.15 at 8:31 pm

Colleague’s dad called him at work panicked about paper bond losses.

People are realizing rates have an effect on asset prices of all kinds.

REITs looking bleak too. Better own some growth stocks. Couche-Tard, CGI, HomeCapital, Avigilon, companies that don’t pay big dividends.

REITs are fine and reset preferreds look great — Garth

#53 Ray Vasquez on 06.05.15 at 8:32 pm

About 5 years, 2 months ago, 30 year U.S. bond yields were around 4.75%, U.S. 10 year were around 4.00%, U.S 5 year were around 2.7%.

We are not even close to this and when or if they get that high, they will not be there long.

In 4 to 7 years, we will be lucky with 3.2% to 3.7% yields at best.

#54 Sam on 06.05.15 at 8:32 pm

Garth, you dont understand one thing. if interest rates hurt the housing the boc and govt will stop increasing them. why do you say now ?

Enjoy your beer. — Garth

#55 Nora Lenderby on 06.05.15 at 8:36 pm

#8 Andrew on 06.05.15 at 6:26 pm
@1 Victoria Real Estate Update

The comments section of this blog isn’t for your constant bleating about the Victoria real estate market.

Why so crabby, friend? Her Majesty is doing just fine.

God Save the Queen!

#56 cramar on 06.05.15 at 8:38 pm

#18 yeehaa on 06.05.15 at 6:58 pm
AWesome now canadians can buy more american pick up trucks.

Canadians just love their american pick ups!

—————————-

Yup! Just bought one last month. But good ones are hard to get. Saw a nice one at a small independent dealer and stopped to inquire. It was sold and I was told that the business is now focusing on buying used trucks from the lease auctions, cleaning them up and selling them in the U.S. “A truck that will fetch $25k in Canada will fetch $25K in U.S. dollars.” Apparently there is a shortage of used trucks in the U.S.

#57 Marc in Montréal on 06.05.15 at 8:39 pm

@ #13 Love my Kia

For what its worth, according to (somewhat serious) Euro market analysts :

– A deal between ECB and Greece could translate into a 5% euro market jump. But who’s willing to take that risk right now.

– Grexit wouldn’t be cataclysmic at this point but Euro market would shred about 10 %.

– Euro QE has accentuated differences among countries: more of the same for countries stuck with deflation while others are emerging.

– US putting pressure on Germany for a deal. Germany dealing with domestic pressure not to concede to Greece’s demands.

http://bfmbusiness.bfmtv.com/mediaplayer/video/jacques-sapir-vs-cyrille-collet-12-crise-de-la-dette-grecque-le-salut-viendra-t-il-d-allemagne-0206-543578.html

#58 Joseph R. on 06.05.15 at 8:51 pm

“Did you never think this day was coming?”

FIFA Execs getting charged? Women’s World Cup in Canada? Canada adding full-time jobs this quarter?

None of it, sir!

#59 Realtor007 on 06.05.15 at 8:54 pm

#21 Greg on 06.05.15 at 7:00 pm
Realtor007

Good point. What else can you tell us?
——————–

I’ve already made many good points, thank you, when will you make your first contribution?

#60 Washed Up Lawyer on 06.05.15 at 8:59 pm

Nice to see the salubrious job numbers today.

The Ft. McM Real Estate Board numbers, less so.

http://www.fmreb.com/sites/5098200ae7e1b41bc50042de/content_entry50bf9565e7e1b41bc501133d/5571e6a05918ad3c650005fe/files/May.pdf?1433528078

My office changed locations so instead of a 9 minute walk to work (I have not bought gasoline in 21 months hence I have the lowest carbon footprint in NE Alberta) is now a 9 minute walk and a 20 minute bus ride.

So I am exploring new rental possibilities so I can walk to work again. Vacancies in the “Mortgage Helpers” are increasing nicely and the rents are going down (20% to 25%). Yay!

I hope the hotplates and toaster ovens have moved on from Avacado to stainless.

America might get another bump in its national mood tomorrow with the first Triple Crown winner in 37 years.

GO AMERICAN PHAROAH GO!!

#61 Estrella on 06.05.15 at 9:02 pm

http://www.cnbc.com/id/102737185

This guy says that we could be in a recession by the end of the year.

Something smells fishy with the job reports in canada. I was extremely surprised today. I have to wonder if they made a mistake like the misfire last summer !

#62 S.Bby on 06.05.15 at 9:08 pm

Can Toronto top this?

http://www.news1130.com/2015/06/05/burrard-bridge-to-be-closed-for-big-yoga-class-premier/

It just gets goofier and goofier in Lotus Land.

#63 profligate on 06.05.15 at 9:13 pm

Wishful thinking on the part of the savers won’t make it so. The BOC will add more punch to the bowl at the end of the summer and the HELOC party will role on.

Smoking man is right about the fishy smell, doesn’t anyone else detect it?

#27 Leo Trollstoy on 06.05.15 at 7:15 pm

I think they’re more worried about Spain and Italy following Greece’s lead.

#64 stealth on 06.05.15 at 9:15 pm

Garth,

Understanding that rising interest rates increase bond yields and lower bond prices, what usually happens to stocks during this time?

Thank you

They typically react negatively to the spectre of higher rates and the competition from bonds, but adjust since higher rates flow from enhanced economic growth and, therefore, the potential for greater profits. — Garth

#65 Nemesis on 06.05.15 at 9:16 pm

“Better stop reading the comments section.” – HonGT

But watching is OK, isn’t it?… Seriously. Watching is OK? Oh, never mind then…

#Ready?… #You’reKiddin’Man… #EvertangGonBeeAwRight?,oR… #WhatBob,Rita&ZigZagSaid…

https://youtu.be/Su2pOkFagAs

#66 8102 on 06.05.15 at 9:23 pm

Garth is bang on – again.

The only “dangerous” wild horse I see is the Federal Election and what the PM will do to limit damage to the Ruling Party.

Next year, about this time should be interesting…

#67 Smoking Man on 06.05.15 at 9:30 pm

#48 Suede on 06.05.15 at 8:22 pm
The comments section is my favourite part!

I’m trying to figure out a way to capitalize on the absurdity in here.

When ppl around me start locking in fixed rates bc they’re scared of the rates rising, then I know the table have turned with the herd. Not there yet, maybe close. But who knows

One black swan and markets go bananas. Diversify and conquer
…..

People don’t see the obvious. Interest rates have been falling for 30 years.. Loans bring spending and growth forward, fun now pay later.

I see no catalyst for back to normal.

The big one in my mind. Building 7 NIST a govt agencey , it was fires that brought down an 80 Story steal and concreat building at free fall speed .

So now we have the department of Stats , ADP. Job numbers.

Way I see it, the bull shit is all about trying to bring a sembalace of confidence so people start spending.

The wound from 2009 and 9 has not healed. Without reckless spending , growth and GDP go no where.

If this fails( look we are raising rates, please belive us, the economy is health, so go spend) to get the herd spending .

If it don’t work.. The last bullet in centrel bank gun…

Helicopters dropping hundred dollar bills.

But the herd is dumb , this might work.. But don’t expect anything significant in terms of spikes over the next ten years..

Thinking about buying a shit load of long bonds.

Dr Smoking Man
PhD Herdonomics.

#68 Kreditanstalt on 06.05.15 at 9:31 pm

“It proves the economic recovery is intact, that the first-quarter setback was a weather-thing after the Winter from Hell, and corporations are planning on further expansion.”

Garth Turner must be working for Bloomberg or CNBC.

With MASSIVE Fed-caused malinvestments having gone on for DECADES, how can anyone think this is a “recovery”? You can’t even tell what’s justifiable on the basis of sound supply and demand fundamentals and what is froth. It’s smoke and mirrors, a Potemkin economy: the minute the cheap credit stops watch the bubble pop.

“The weather”?? Last I heard we get snowstorms EVERY winter…but it’s a good fallback for the MSM, isn’t it?

And those glorious capex-spending corporations? Where’s the final demand? Where are the solvent customers – the more so with a high US dollar?? Conditions just do not justify expansion, which is why they’re so busy buying back their stock with borrowed money. May they be hung out to dry when THE MARKET – not the central bankers – raises rates.

No one knows the exact timing but the denouement is baked-in-the-cake mathematical certainty.

Playing with yield-producing paper “investments” here is picking up pennies in front of…you know.

You lose. — Garth

#69 Victoria Real Estate Update on 06.05.15 at 9:33 pm

#8 Andrew

Not the right place to put it?

Do you run this blog?

I present important facts about Victoria’s real estate market.

You sound threatened by these facts.

Victorians have easy access to the local board’s limited view and notional home price index stats. I am one of several regulars who post comments on this blog about Victoria’s market for those who may be interested.

I plan to continue as long as Garth doesn’t mind. There are plenty of other regulars who post a lot more comments on this blog than I do.

#70 Rexx Rock on 06.05.15 at 9:33 pm

Garth is right,with trillions of dollars of stimulus the U.S. economy is improving.Canada doesn’t care if the USA raises interest rates,Canada will have a 5 year fixed rate for under 1.75% in the next 2 years.Our government policy hopes to return to a 64 cent dollar by next year to improve our exports.House prices will continue to rise until it is no longer affordable for families to carry a mortgage.There you have it.

#71 BillyBob on 06.05.15 at 9:34 pm

#8 Andrew on 06.05.15 at 6:26 pm
@1 Victoria Real Estate Update

The comments section of this blog isn’t for your constant bleating about the Victoria real estate market. Nobody here cares what you have to say as it is not the right place to put it. Make your own blog on real estate in Victoria if you want to blabber on about it every single day.

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

On the contrary as an overseas reader who follows the Victoria market closely, I find the data and postings very interesting and unlike your comments, valuable.

Perhaps you could start your own blog and then you would have the authority to moderate comments made?

#72 Goldie on 06.05.15 at 9:35 pm

Victoria Real Estate Update.

You keep right on posting. Ignore the haters. You add ten times more value to this comments section than they do.

#73 DON on 06.05.15 at 9:44 pm

#19 Joe Schmoe on 06.05.15 at 6:59 pm

#8 Andrew,

I disagree and find the data interesting…small market, lots of wealth…Victoria is a relevant canary in the coal mine.
*******************

Agreed!

The poster provides relevant data. I am sure the local realtors don’t care for the bit of reality. Activity in Victoria is down. The sense in the air is of an impeding storm. Governments aren’t replacing every worker who retires.

Relevant data is always a privilege to read in the comments section. Keep it coming or until our host says stop. House rents are also going down in Victoria slowly but surely. Lots of people have second properties here. Some young and some older folks. Talk of real estate has diminished. One realtor in the area got his license taken away and was fined. Easy to recognize when you advertise weekly in the local papers.

#74 Leo Trollstoy on 06.05.15 at 9:44 pm

First of all, 30yr mortgages are actually benchmarked off the 10yr Treasury yield, not the 30. But more importantly, they follow Treasury yields with a lag. The move in mortgage rates is merely catching up to the move in the 10yr Treasury, which is up over 70 basis points from its YTD low. You’re grasping at straws.

Not content with demonstrating his lack of money, Mark shamelessly displays his ignorance regarding the relationship between 30 yr U.S. mortgage rates and Treasury yields.

#75 crowdedelevatorfartz on 06.05.15 at 9:53 pm

@#8Andrew
“Nobody here cares what you have to say as it is not the right place to put it….”
+++++++++++++++++++++++++++++++++++

Uh I do .
As for “speaking for everyone here”.
I think everyone else can do that….not you.

#76 crowdedelevatorfartz on 06.05.15 at 9:54 pm

@#17 North Burnaby realtor
“Great! The Canadian economy is finally picking up steam again, let’s go buy houses!!!”
++++++++++++++++++++++++++++++++++++

You first.
Unless, of course you’re already “margined” to the max and the bank won’t loan you a dime.

#77 Entrepreneur on 06.05.15 at 10:03 pm

When Premier Christy Clark ignores Major Gregor Robertson on restricting foreign ownership isn’t that the same as ignoring the people. Provincial elections in two years, time to vote the Liberals out!

Victoria Real Estate Update is doing an excellent job, facts & figures. Keep it coming, develop tough skin.

I think everyone is getting tired of the interest rate tune. The interest game, interest up, down, oh, keep playing with the interest rate. Who cares anymore, you played with the youths lives, ruined them if bought or not, so who cares anymore. People are human and can only take so much of this crap.

#78 Sydneysider on 06.05.15 at 10:04 pm

Maybe the turning point is approaching in Sydney’s Eastern Suburbs too. Last week the local real estate agent who grew up nearby sold his old family house for $2.8M according to one of my neighbours, who was having a garage sale prior to selling his (for $2M plus, he hopes). My neighbour plans to rent until the crash is over – the first Sydneysider that I have met who has lost the faith in housing.

#79 Washed Up Lawyer on 06.05.15 at 10:10 pm

From Garth’s HELPFUL REMINDERS FROM YOUR FORUM HOST, GARTH TURNER:

Please submit only once!
**********************************

OK, I will breach the tough on crime rules.

Victoria Real Estate Update:

Keep ’em coming. Much appreciated.

Now, for me, to the sin bin for 2 minutes.

#80 crowdedelevatorfartz on 06.05.15 at 10:11 pm

@#18 yeehaa
“AWesome now canadians can buy more american pick up trucks.

Canadians just love their american pick ups!
++++++++++++++++++++++++++++++++++++

You, of course, include Toyota in your description of american pickups?

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=5&cad=rja&uact=8&ved=0CD8QtwIwBA&url=http%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DzBhAqzXXJ5E&ei=c1ZyVZWqBpawogSct4GABw&usg=AFQjCNE2SamUFWvmFba3oVkX_uMAVkwzHg&bvm=bv.95039771,d.cGU

God bless Toyota Texas Trucks.
zero down
zero percent interest.

Yeehaa!

#81 Johnny d on 06.05.15 at 10:16 pm

Preffereds, REITs and the like all getting pounded. Temporary knee jerk reaction or more long term, unrecoverable pain to come? XPF, XRE, XEI, XTR to be particular. All high yielding fixed income etf’s that suck to own now. Should I run away?

Dividend yield on XRE is 4.98% and on XPF it’s 5.05%. You buy and hold these for stable returns and long-term appreciation. Run away? Don’t make such an amateur mistake. — Garth

#82 Freedom First on 06.05.15 at 10:20 pm

Who’d a thunk? I’ve seen people buy houses with a 20% mortgage rate AND a 25% 2nd mortgage on their house. I’ve seen people pay $1,000,000 for a crack shack with $$$$$$ from the Bank of Mom with record low mortgage rates.

I’ve seen housing crashes world wide in both cases, low rates, high rates, doesn’t matter, millions of bankruptcies have happened and will keep happening due to the same financial illiteracy. That never changes. Stupid is as stupid does.

#83 Zig M. Freud on 06.05.15 at 10:29 pm

#83 4 AM Sunrise on 06.04.15 at 11:43 pm
…….The St. Bernards who pose with tourists for a living are the sweetest creatures. What you don’t see is the scene the dog is gazing at: tour buses, cacophonous tour groups, back-up St. Bernards and their hawkers, an Indian restaurant….”

Lemme guess, you want to form a union for the St Bernard’s. I can just see them lined up for treatment and counseling on the pooch couch at the Sigmund Freud St Bernard Mental Health Center….

#84 Smoking Man on 06.05.15 at 10:33 pm

Elysium. I’ll never get an invite. That’s why I’m so kind to the homeless. They are the outsiders to my Elysium. And I don’t give to fks who’s watching.

Humans, the herd, from the top of the pyrimad to the swamp. We are all the same.. We live on various levels or floors on the pyramid.

Floor 25 won’t associate with floor 24, frightened that floor 26 will see 25 and 24 getting along. And forever banish 25 from 26. Killing the dream of 24 making it to 1.

I was born number 1, marketing skills need a bit of work.

#85 Mark on 06.05.15 at 10:34 pm

“Not content with demonstrating his lack of money, Mark shamelessly displays his ignorance regarding the relationship between 30 yr U.S. mortgage rates and Treasury yields.”

Simply not true. The spread between the 30-year US treasury and 30-year term mortgage rates is a function of the risk premium the lender community demands, not of bond market rates.

Expansion of this spread is a perfectly normal part of increasing deflationary expectations, as lenders now believe that defaults will increasingly be part of the marketplace, particularly on mortgage credit.

Which is to be perfectly expected — instead of letting the housing bubble fully liquidate, the central bankers pumped it up even further with QE, TARP, and various housing-targeted stimulus programs.

What this rising spread is actually telling us is that the US economy is getting weaker, and lenders just aren’t as confident that they’re going to get their money back.

Additionally, if you look at what’s happened to the US 30-year Treasury bond debt yields, they’ve done nothing other than the ordinary month-to-month volatility recently. Nothing to be alarmed about, no major shift in expectations for inflation or economic growth.

If anything, the fact that private sector credit is getting a lot more expensive relative to government credit is a sign of deepening deflation worries. A similar thing happened in the 1930s as well, when government bonds did quite well, but corporate/private sector debt performed incredibly poorly on account of credit-worthiness concerns.

Every time you you choose to insult me without getting your facts straight, you further diminish whatever little credibility you had.

#86 kommykim on 06.05.15 at 10:38 pm

RE: #151 Mark on 06.05.15 at 2:49 pm
“What? XIU is an ETF. Canadians have about 1 TRILLION in mutual funds vs about 70 billion in ETFs so XIU is a splash in the bucket.”

ETFs are mutual funds. Just a different method of distribution

No they are not. They are similar, and have many things in common, but are not the same. You may as well say a Harley is the same as a Kia.

#87 Nagraj on 06.05.15 at 10:38 pm

SOMETHING IS FISHIE
The dyslexic and dentally challenged vulgar drunkard (with a predilection for fibbing) has got it quite right re this thrilling Canadian jobs report.

HERR KREDITANSTALT
really ought not to be so summarily dismissed as in “You lose”. The stock buyback circus will leave town.

GT: “Sadly, as house prices come down, the amount of money people have borrowed will not.” Couldn’t agree more. Except that SADLY understates BRUTALLY.

THE AMERICAN
who has a great sense of humour had me working hard to forego writing a four act musical featuring his “2000 street sweepers”.

#88 juno on 06.05.15 at 10:40 pm

There will be a day that the bond returns will match or exceed what the banks can get from the mortgages.

You What do you think the banks will do. Its a no brainer, Raise interest rates. Because its risk against no risk. Remember Greece and the German dollar was once at par with each other . The hedge fund managers went on a rampage borrowed Greece and bought german . And we all know how that story is ending for Greece

#89 Retired Boomer - WI on 06.05.15 at 10:44 pm

Babble on those headlines dear, Babble-on…

We will see higher interest rates…someday…. maybe.

Much like Wimpy, Popeye’s burger munching friend, he will “gladly pay you Tuesday, for a hamburger today.”

WHEN interest rates begin to rise, Canadian Real Estate (might) begin to deflate. Of course, a lot of crap can, and will happen between now, and whenever THE DAY the FED finally decides to add that glorious .25 point officially to the short term rates. You DO realize long rates, recently goosed- are set my world markets, not the Janet lady.

It will be whatever hit will be. In the meantime, transports suck, a leading indicator, oil sucks, utilities are soft, and the DOW is below 18,000.

All abord for the “Bull Express?” Uh, no, I’ll walk-thanks.

#90 Karma on 06.05.15 at 10:46 pm

#57 Joseph R. on 06.05.15 at 8:51 pm
““Did you never think this day was coming?”

FIFA Execs getting charged? Women’s World Cup in Canada? Canada adding full-time jobs this quarter?

None of it, sir!”

————————————–

LOL! Comment of the day!

#91 r.u.sure on 06.05.15 at 10:49 pm

there are lies,damn lies and then some statistics.

yawn…wake us up when those rates actually go up.

#92 IKnow on 06.05.15 at 10:54 pm

Until drastic things happen, Vancouver house prices will continue to follow the Hong Kong track, 100% correlation now. What used to be the mentality there is now here. Canadian fundamentals means nothing.

#93 Waterloo Resident on 06.05.15 at 10:54 pm

With 4.5 Million unemployed people in the U.S. who have all but given up trying to find a non-existent job, and with interest rates in the U.S. being at all-time lows, and with the state of disrepair that the bridges in the U.S. are these days (many are close to being closed down due to the fact they are ready to fall down), why won’t the government just borrow a few $Trillion at zero interest rates (like the Chinese are doing) and build a whole whack of new bridges (Like the Chinese are doing) ?

#94 Brydle604 on 06.05.15 at 10:55 pm

Victoria Real Estate Update.
I appreciate your efforts, most informative.
Thank You

#95 Mark on 06.05.15 at 10:59 pm

“First of all, 30yr mortgages are actually benchmarked off the 10yr Treasury yield, not the 30. “

Not really. And in a rising rate environment, duration on mortgages tends to expand, as prepayments basically become nil (borrowers tend not to refinance into mortgages with higher interest rates!). Hence, 30-year fixed mortgages tend to more closely resemble 30-year T-Bonds, than a 10-year notes. The worst nightmare for the people on the other side of this debt, the lenders, the US financial system, is that actual experienced duration on mortgage portfolios expands at the precise time when holding long-duration assets in a rising interest rate environment is profoundly damaging to the value of the mortgages.

My original point stands, there has not been any meaningful change in US T-Bond yields over the past year, whether you use the 30-year bond or 10-year bond, that would justify such a dramatic expansion in retail mortgage rates. YoY, the 10-year is still down 20bp (source: http://data.cnbc.com/quotes/US10Y) What is clearly going on here is an expansion in risk premia on account of rapidly diminishing consumer credit-worthiness. A sign of a deflating, stagnating economy set to get much worse. Not a sign of accelerating growth as alleged.

#96 Macrath on 06.05.15 at 11:09 pm

unexpected surge in jobs –79-cent dollar’s doing the job on the factory floor.
——————————-

Sure debase the currency to create a few jobs ! Brilliant !
Problem is the cost of living just went up 30% for the cash strapped debt junkies. Visa just raised their rates to just shy of 29% on balances. The ZIRPed snowbirds have to freeze at home this winter. Its a BoC sponsored sheep shearing contest.

#97 Squirrel meat on 06.05.15 at 11:14 pm

#94 Mark on 06.05.15 at 10:59 pm

Where the farck do you get the time to spew this anti-reality nonsense day in day out all day.

#98 Sheane Wallace on 06.05.15 at 11:19 pm

David Stockman:

http://davidstockmanscontracorner.com/stay-out-of-harms-way-the-casino-is-fixing-to-blow/

There you have it. The world’s markets are on fire with financial asset inflation, but the recycled French political hack running the IMF, who apparently learned economics from the Wikipedia page on Keynes, does not even understand an obvious truth. Namely, that the single most important price in all of capitalism is the money market interest rate because its the cost of gambling stakes in the casino.

#99 cyclist on 06.05.15 at 11:29 pm

8 Andrew – buddy u r takin it on the chin!

But I do kinda agree with you. She bleats. So try this

SCROLL BABY SCROLL…..

what I do find interesting is all the bloggers that find VREU interesting. They must all want to live there.

RIDE BABY RIDE……

#100 Glanton McEsters on 06.05.15 at 11:30 pm

REITs, preferreds, XEI, all on sale, add in small amounts, never sell, live for another 60 years, enjoy the dividends, and live very cleanly.

#101 Market Man on 06.05.15 at 11:38 pm

#216 raisemyrent on 06.04.15 at 5:33 pm

Smokey, sign me up for a book mate, I’m happy to pay full value though.
===============

full value…heh

#102 Leo Trollstoy on 06.05.15 at 11:42 pm

Where the farck do you get the time to spew this anti-reality nonsense day in day out all day.

And therein lies the 2 reasons behind his struggle with legitimacy and poverty: ignorance and delusion.

Aside from foreign money, Mark has been incorrect about virtually everything.

#103 Dee on 06.05.15 at 11:58 pm

@#49 — I pay less than that a month for a 3 1/2 storey townhouse in (trendy) Leslieville. And I don’t have to deal with Liberty Village traffic, people, or spending an hour every day trying to catch a 504 to get downtown.

The G&M wants you to buy real estate. They’re going to pick the worst of all examples.

#104 Made in BC on 06.06.15 at 12:20 am

Ah yes….P/T low wage Mc Starbuck 20 hour per week jobs. The economy is booming again…..

Go Recovery Go !!

#105 high on high on 06.06.15 at 12:34 am

Remember today. It could be a memorable one. The lowest point for interest rates in your lifetime.

========

Why do you make it sound like that high interest rate is a great news?

#106 Ed on 06.06.15 at 12:40 am

So the bond rate spiked .07% ….madness!!!! I think your graph y axis is drawn by a politician.

#107 Nagraj on 06.06.15 at 1:04 am

GT: “The Canadian economy rose from the dead . . . ”
Great. So now it looks like Joe Oliver.

GT: No BoC rate increase for “a whack of years”.
After meeting with Harpo, Poloz, notes the press, appears with badly swollen ears.

GT: “The bond market thinks so.”
The bond mkt has the brains of a potato. Like the stock mkt. Still ahead of the PMO which is just braindead. (Mr. Bondmkt is still friends with Granny Wynne!)

GT: “as rates gently increase”
There is not now nor has there ever been such a thing as a gently slit throat.

#108 job "growth" grants on 06.06.15 at 1:12 am

Our company was laying off people a year ago.

Now we are about to hire many people – about 50% of the current staff.

The only reason why we do it, because the government is going to cover half of the salaries – from taxes.

You can get government grant even for preparing applications for grants to “create” jobs.

If it was not for the politician’s “job creation”, paid by taxes, we would never hire those people. They will be with the company as long as the government is subsidizing their wage, then they will be gone.

So much for the recovery.

#109 dm in c on 06.06.15 at 1:12 am

We’re ok in Cowtown. Got a raise and a bonus this year. Spouse got a job paying $14k more than last one. No debt but the mortgage which is 30% income. Putting $2500/month into TFSA until we’re caught up, then topping up the RESPs and savings.

The fruit and veggie gardens are in, we are hunkering down for the long hot summer.

Now if the MIL would just stay away.

#110 JimH on 06.06.15 at 1:14 am

Re: Victoria Real Estate Update

Enjoy your great posts! Please continue to keep the updates coming!

#111 Nagraj on 06.06.15 at 1:20 am

Nagraj typo: that (1:04 AM) should read – no BoC decrease.

#112 millenial1982 on 06.06.15 at 2:15 am

A little off topic but seems the shortfall for hydro, hospitals and teachers are getting sweatier by the year. Bet Dr. Herdonomics had an answer here.

#113 BS on 06.06.15 at 3:16 am

When Premier Christy Clark ignores Major Gregor Robertson on restricting foreign ownership isn’t that the same as ignoring the people.

Laughable. Gregor Robertson is not representing the people. He is lobbing on behalf of his financial supporter Bob Rennie.

First of all, Gregor Robertson is not proposing to restrict foreign ownership. Gregor Robertson’s latest proposal to the province is to tax high end properties and give that money to buyers of lower end properties. The net effect of such a proposal on the lower end properties would be similar to lowering interest rates. The price of the lower end properties would increase by the amount of the subsidy and likely more if it qualified more buyers. How has the government intervening into housing affordability worked out so far with CMHC? The more CMHC intervenes the higher prices go and the less affordable housing becomes.

The only beneficiary to Gregor Robertson’s latest proposal would be current property owners and those selling the properties. A person like Bob Rennie who sells micro condos would benefit greatly because 90% of what he sells would fall into this category. This proposal is about subsidizing the condos Bob Rennie sells.

I can’t believe how naive some people can be.

#114 observer on 06.06.15 at 3:46 am

Realtor007 on 06.05.15 at 6:38 pm
The same song and dance continues……

No rate rises worth talking about, they have raised rates a couple of times by one or two basis points before just to revert back a few months later, this time will be no different, short lived.
========
The last time they lowered interest rates the market went on a feeding frenzy and went up about 8 percent. So a small .25 percent should revert that change. And also note. I don’t think the market has experienced a rise. So its Optic. People who thought rates will never rise will have to step back and rethink their logic.

BTW its the banks who loans the cash not the government. Their mandate is in the interest of the shareholders and not the people who borrowed

#115 TRT on 06.06.15 at 4:38 am

Good Grief people.

Canadian rates are not going up. If you haven’t learned about central bank bluffs (carney), then there is no hope to your stupidity.

#116 groovin123 on 06.06.15 at 5:38 am

Dead-cat bounce.

#117 SWL1976 on 06.06.15 at 6:13 am

Wait for the revisions on those job numbers as we have heard and seen this song and dance before. Will it be human error again, or something new?

I don’t doubt the US Fed will raise rates. After all they are not in the business of doing what is right for the economy. They are in the business of stealing from the middle class. Next up, the upper middle class, and so on.

The system has been carefully skewed over the years to favor corporations and the ruling class. There is plenty of evidence to support this, but people refuse to believe it. It’s like telling the housing horny that the price of houses does not always rise. It just doesn’t sink in.

Something smells fishie alright.

The soon to be extinct middle class and next generation of wage slaves have every right to be upset, and things didn’t get this way because they are lazy or entitled little brats. We are in the mess we are in simply because most refuse to acknowledge the mess and think more of the same will produce different results.

Our current debt based economy is designed to fail

It’s all about corporatocracy and complete control

Free markets and true capitalism are gone

#118 rampant inflation on 06.06.15 at 8:07 am

REITs are fine and reset preferreds look great — Garth
______________________________________________

reits are a disaster in the making. they will get crushed this year. at least 20% more downside. same with utilities and perpetual preferrds, and bonds.

reset preferreds however, DO look promising

#119 Dave in Kincardine on 06.06.15 at 8:34 am

Why don’t the employment numbers add up. The economy in the US and Canada shrank dramatically last month and yet we created woaping amounts of jobs? Someone is playing with the numbers. You can bet both countries laid off boat loads in the resource sector for starters. And consumer demand is weak so are they really hiring?

#120 Nefariously Indifferent on 06.06.15 at 8:48 am

Denninger’s take on the US jobs numbers:

https://market-ticker.org/akcs-www?post=230212

#121 LL on 06.06.15 at 9:28 am

@1 Victoria Real Estate Update

8 Andrew

The comments section of this blog isn’t for your constant bleating about the Victoria real estate market. Nobody here cares what you have to say as it is not the right place to put it. Make your own blog on real estate in Victoria if you want to blabber on about it every single day.

I am interested by his comments.
It shows the RE is going down…finally!

#122 Pre-retiree on 06.06.15 at 10:06 am

Stop reading the comments section?!
But this is where the true entertainment is!

#123 Investorz on 06.06.15 at 11:14 am

“REITs are fine and reset preferreds look great — Garth”

Yes preferred look fantastic. That recent pullback looks like a gift considering rates are now moving up.

It’s hard to deny that RIOCAN’s pullback doesn’t look attractive, and the yield is about 5% which is higher enough from bond yields to attract income seekers. It’s the momentum that doesn’t look so healthy. I’ll be buying some CAR-UN for sure if it pullbacks more.

#124 Rainclouds on 06.06.15 at 11:28 am

#110 DM in C
“we are hunkering down for the long hot summer”.

In Calgary? All relative of course, You might be hunkering down but it wont be for “long” or likely “hot” summer unless your summer is in Invermere or ends right after Stampede………………

Are you a realtor? :-) juuuuust kidding

#125 Edith on 06.06.15 at 11:49 am

West Vancouver Single Family Home sells for $1.1 million more than list price in hours. Current assessment is $1,937,200 and it sold for $4,100,000 by a non-resident offshore buyer.

http://globalnews.ca/video/2039887/real-estate-bidding-wars

#126 Nemesis on 06.06.15 at 12:03 pm

#ChangingNeighbourhoods,Or… #Hint:They’reNotYourFriends…

…“you can’t expect an MP to scrabble around on a salary of £67,000”…

[Independent] – Adam Afriyie: Conservative who says MPs shouldn’t ‘scrabble around on £67,000’ could make millions on sale of his home

…”Adam Afriyie, MP for Windsor, had bought the six-storey, grade II* Listed Georgian house in November 2005 for £7.25m, the Times reported. The home is now listed on upmarket estate agent Hathaways for £16.75m.”…

http://www.independent.co.uk/news/uk/politics/conservative-who-says-mps-shouldnt-scrabble-around-on-67000-could-make-millions-on-sale-of-his-home-10301703.html

#127 Edith on 06.06.15 at 12:29 pm

#122 LL said “It shows the RE is going down…finally!”
————————–
If you keep interpretting her so-called statistics the way she wants you to, you may believe the Victoria Real Estate market is going down.

But, it’s not. It had a pause over the last few years and cooled off. So far this spring sales are stronger than they’ve been in 8 years, prices are close to their peak and listing have dropped substantially. The market is balanced and healthy. Not over heated and not setting new records – it has just been steadily improving after a 5 year slowdown.

https://househuntvictoria.wordpress.com/

#128 prairie Cassandra on 06.06.15 at 12:39 pm

newbie

GenX 1966 tip of the spear, in Winnipeg, renting,

**want** rates to go up, think it would balance things, even with low rates, listings sitting here in Wpg, or dropping list price 5k every 4-5 weeks

agree with #120 Dave that something is strange in that cx demand down, everyone being laid off or hours cut, and agree with something fishy #118,

agree with #116 don’t think rates will rise because it is a hologram economy in many ways

#109 nailed it I think…Sept 2015 down a tick, not that I think it is good…

was briefly married to Japanese national in the 1990s and watch rates tick down to zero there after 1989 stock market implosion. but different there, you think twice, or did then, about borrowing a lot of money for mtg or something, because if no pay, guy with punchperm and missing left pinkie finger come by to remind you….

#117 hope comment is figurative and not literal

…and to everyone whose comments have made me laugh out loud (which is everyone)… thank you for tax free serotonin release.

#129 Leo Trollstoy on 06.06.15 at 1:20 pm

Not really.

Yes really.

Stop flaunting your ignorance. Or get some basic knowledge before commenting.

“Mortgage rates often follow the yield on the 10-year note, so they could trend higher.”

http://www.usnews.com/news/business/articles/2015/06/04/average-us-rate-on-30-year-mortgage-stays-at-387-percent

#130 José on 06.06.15 at 1:21 pm

“Even the rate bears are running for cover after the latest data. “Overall, this latest employment report supports the Bank of Canada view that the January rate cut was enough insurance against the oil price shock,” says Capital Economics’ David Madani.”
——————–
David Madani is an economic hack. Wasn’t his prediction just a few short days ago that the BOC dropping would be dropping rates by another .50 by Christmas? He’s also been calling for a 30% correction in Canadian real estate for over 8 years. Schooled at Economic powerhouse Universities like UVic and a college in New Zealand. His prognostications on almost everything have continously been wrong year after year.

Put him in the same column as all the other doomsdayers like Mark Faber, or Nouriel Roubini – but with much less intelectual firepower. Actually, it’s probably better to describe him as the new Jeff Rubin, another famous Canadian Bank chief economist.

#131 DM in C on 06.06.15 at 1:54 pm

#125 Rainclouds.

I was being facetious. Sounds better than, “Three weeks of hail and rain, two weeks of sun, then wait for the snow to come back.”

:-D

#132 bill on 06.06.15 at 2:05 pm

#47 The American on 06.05.15 at 8:19 pm
good one- caught me completely off guard….
I needed a new key board anyway.still havent learned.sip of coffee -swallow THEN read comment.
keep on commenting.

There is no terror [Nay Sayers] in your threats,
For I am arm’d so strong in honesty [ hey GT you too! ]
That they pass by me as the idle wind,
Which I respect not.
-with apologies to the bard…

#133 Mark on 06.06.15 at 2:06 pm

“Stop flaunting your ignorance. Or get some basic knowledge before commenting.”

If you had one iota of common sense, you wouldn’t have responded in such an ignorant and uninformed manner. The duration of a 30-year term mortgage is somewhere between the duration of that of a 10-year US T-Bond, and a 30-year US T-Bond. In a rising rate environment, prepayments are expected to be rather minimal, so such instrument will more closely resemble that of a 30-year bond, than a 10-year.

The fact that you sit here picking fights over relatively meaningless semantics show that you’re more interested in trolling, than having a meaningful discussion. Both the 30-year T-Bond and the 10-year T-Bond have moved a similar amount in the past month. The real story, as I’ve maintained all along, is that risk premia is rising. On account of diminished credit-worthiness amongst mortgage borrowers, and a recognition that US housing is quite overvalued relative to economic fundamentals. Hardly the signs of an improving economy as alleged.

#134 Mark on 06.06.15 at 2:16 pm

“Where the farck do you get the time to spew this anti-reality nonsense day in day out all day.”

Its not nonsense, and its most certainly not anti-reality. Risk premia is rising much faster than rates. This indicates a market concern with a specific type of investment, in this case, residential mortgages. Rather than systemically higher rate expectations.

The long-term bond market is still priced higher than it was a year ago (ie: lower yields). There were no rate hikes imminent a year ago. So to freak out today about imminent rate hikes, especially when the economic data mostly continues to weaken notwithstanding one or two data points, is something that has no basis in reality. Daytrader mentalities, focussing on short term noise rather than looking at the big picture, rarely win the game, that’s for sure.

As for Trollstoy’s comments claiming I’m impoverished, couldn’t be anything further from the truth. Why he makes stuff up as he goes along and lies through his teeth (fingers) is probably a mystery, but I can’t fathom what I’ve done to raise his ire. The guy probably just needs to get a life.

#135 Victoria Real Estate Update on 06.06.15 at 2:28 pm

I appreciate that so many of you took the time to post a positive comment about my posts.

Imagine how much Canadians and others around the world have leaned about Canadian real estate by reading what Garth has posted on his blog since 2007. He provides a valuable source of information.

A note for all of those who complain about what I write: please go back to the (Garth bashing) blog where you came from.

A whole army of angry realtors couldn’t stop me.

#136 Balmuto on 06.06.15 at 2:53 pm

“And in a rising rate environment, duration on mortgages tends to expand, as prepayments basically become nil (borrowers tend not to refinance into mortgages with higher interest rates!). Hence, 30-year fixed mortgages tend to more closely resemble 30-year T-Bonds, than a 10-year notes.”

Are you seriously trying to educate me about duration extension risk when you don’t even know the basics of how mortgage rates are set? Amazing. Anyway, of course mortgage durations tend to extend in a rising rate environment but if even without refinancings their weighted average lives are significantly less than 30 years. They are amortizers, remember? You can’t compare an amortizing bond with a bullet bond of the same maturity as if it was like for like. That’s Fixed Income 101. The benchmark is the 10yr, period. You would know this if you worked in the industry as I do.

#137 Time is #1 on 06.06.15 at 3:00 pm

Buy CPD(rate reset preferreds)u get 5% div and upside as rates rise. They are on sale at 8% off YTD.

#138 Squirrel meat on 06.06.15 at 3:24 pm

#135 Mark on 06.06.15 at 2:16 pm

You just make stuff up on the fly and let er rip. Spewing forth. Of course your howler that the Canadian dollar will rise is the best nonsense.

#139 Squirrel meat on 06.06.15 at 3:28 pm

#132 DM in C on 06.06.15 at 1:54 pm
#125 Rainclouds.

I was being facetious. Sounds better than, “Three weeks of hail and rain, two weeks of sun, then wait for the snow to come back.”

:-D

——
That was way too optimistic. Summer in Calgary is about 48 hrs tops.

#140 Squirrel meat on 06.06.15 at 3:39 pm

#91 r.u.sure on 06.05.15 at 10:49 pm
there are lies,damn lies and then some statistics.
———-
And then there is what Mark spews.

#141 Mark on 06.06.15 at 4:07 pm

“Are you seriously trying to educate me about duration extension risk when you don’t even know the basics of how mortgage rates are set? “

I know perfectly how mortgage rates are set. So please spare me your belligerence and yourself the embarrassment.

Anyway, of course mortgage durations tend to extend in a rising rate environment but if even without refinancings their weighted average lives are significantly less than 30 years.

Of course, but the answer is somewhere between the 10-year and the 30-year T-bond in terms of duration. Therefore, using either is completely appropriate.

Anyways, you’re really trying to argue with me over a bunch of nonsense. The 30-year UST has gone from 2.91% last month to 3.04% yesterday. The 10-year has gone from 2.18 to 2.31. Literally 13bp for both. So whichever one we use for the purposes of discussion is irrelevant. The key take-away point of mortgage rates rising is not a story of US T-Bond rates rising (they have, but only minorly), but rather, of risk premiums increasing.

(source for rates: http://finance.yahoo.com/bonds)

“That’s Fixed Income 101. The benchmark is the 10yr, period.”

Simply not true. That might be what you use in your particular context, but using either that or the 30-year is completely appropriate. In any case, it really doesn’t matter what is used to make the point that its risk premia, not inflation/interest rate expectations that are rising.

You’d make your case, if you had one, much better if you toned down the belligerence as well. Nobody, nevermind a professional as you claim, uses language like you have, in expectation of participating in a respectful debate.

#142 Entrepreneur on 06.06.15 at 4:23 pm

The “don’t have a million” petition are professionals that are the backbone of a community & when they cannot afford a house/home then something is wrong.
Time to look at all avenues. A lot of the petitioners are calling on a tab of foreign ownerships. Mayor Gregor Robertson has mentioned that he receives daily call about the issues. His only solution now seems to be a speculation tax (one point). As for the Rennie closeness isn’t that what politicians do? Like I said from the petition ALL AVENUES should be looked at.

One should not be so blind of what is really going on.
Putin to the north of Canada, Chinese intertwined in our system, PM Stephen Harper updating the biometric screening. “It us better to be safe than sorry.” Your call.

#143 Rexx Rock on 06.06.15 at 4:30 pm

I feel sorry for The Victoria real estate.She probably didn’t get in early 2000 on owning a home.$1000 a week in profits for years.Kinda like the lotto a thousand a week.He or she is very angry and jealous on this no brainer way to gain huge wealth.Hey Vnacouver and Toronto are carrying the torch now.I am also angry of not buying in Vancouver in the mid 90’s,heck I’d be retiring at 48 and rich like thousands of Vancouverites every year.Its sad but life goes on.I’m very happy for all the young rich retirees in Vancouver and Toronto.

#144 S.Bby on 06.06.15 at 4:41 pm

I see Edith the realtor is back here.

#145 Washed Up Lawyer on 06.06.15 at 4:56 pm

As you prepare to watch American Pharoah win the Belmont and the Triple Crown, a bit of Canadiana.

Northern Dancer is his great, great, great grandfather on his sire’s side and on his dam’s side.

http://www.pedigreequery.com/american+pharoah

In the horse breeding business, we call that hybrid vigour. Elsewhere it is called shady and other names.

Victor Espinoza is far more than a rider. He is a horseman.

To get back on topic, real estate in Ft. McM is flat.

#146 BS on 06.06.15 at 4:57 pm

The “don’t have a million” petition are professionals that are the backbone of a community & when they cannot afford a house/home then something is wrong.

Yes right. Professionals like Eveline Xia who started the donthave1million campaign who don’t happen to have a job, have almost no work experience and are currently “seeking new opportunities”. Was there ever a time when someone in this position at age 29 could afford to buy a house in Vancouver? If she could ‘afford’ it then something would be wrong. If Gregor Robertson gets his way people like this will be able to buy a condo off Bob Rennie (with a little help from the government).

https://ca.linkedin.com/pub/eveline-xia/17/566/650

#147 Leo Trollstoy on 06.06.15 at 6:01 pm

Are you seriously trying to educate me about duration extension risk when you don’t even know the basics of how mortgage rates are set?

Mark the clown. Always trying to educate his betters.

Fail.

Seriously, stop misleading the newbies on this blog with your shameless displays of ignorance. It’s wrong.

#148 Bobby on 06.06.15 at 6:21 pm

#127 Edith, just think you are quoting a blog that has only been existence for a few weeks. Pretty thin, even for a realtor. Just a rehash of the VREB statistics. Remember these are the clowns that said if interest rates go up, prices will rise so you had better jump in.
You are incorrect my dear, Victoria prices are down. Have a look at bcassessment.ca at any property you wish. You will see the sales, if there has been one, in the last three years. You will see many houses are listed, and not selling, at significantly less than many sold for in 2012.
I was out looking at a house recently and the realtor said it was such a great deal as it had sold for some much more in 2012. I showed her the website, and she said oops, I meant another house.
Some realtors shouldn’t open their mouths. It just confirms how little they know.

#149 Balmuto on 06.06.15 at 6:36 pm

#139 Mark

“I know perfectly how mortgage rates are set.”

No, you obviously don’t. Knowing which Treasury yield to price a mortgage off of is as basic as it gets. You wouldn’t last long as a mortgage originator if you kept getting that wrong.

“Nobody, nevermind a professional as you claim, uses language like you have, in expectation of participating in a respectful debate.”

Really? I’m pretty tame by this forum’s standards, lol. You know Mark, people would respect you more if you simply acknowledged the limitations of your intellect every once and a while. You don’t have to know everything. The issue of the Treasury benchmark yield wasn’t central to your argument and you could have either passed over what I said in silence or acknowledged that I was right and moved on. But instead you decide to flat-out contradict me, when a simple Google search would have proven what I said was true. You try to prove how “theoretically” right you are, trying to impress with your bond knowledge when you obviously just don’t know. You take a similar approach every time that you debate someone. It’s your refusal to learn from anyone else that people find so irritating.

#150 Mark on 06.06.15 at 6:49 pm

“Seriously, stop misleading the newbies on this blog with your shameless displays of ignorance. It’s wrong.”

Try adding something useful to the debate instead of just going on and on with your completely uncalled for trolling. I haven’t misled anybody on this blog, nevermind the newbies. And I am most certainly not the ignorant one. The ignorance most likely lies with posters who engage in ad hominem instead of debate of the issues at hand.

#151 Entrepreneur on 06.06.15 at 7:26 pm

Eveline Xia & many others are making a statement that should be looked at beyond the inside box. BS, have you read about PM Tony Abbott new tough laws on foreign property ownership in Australia?

His words “about giving locals a fair go” and “level the playing field.” Enforcing “stronger policing” with fees and fines to foreign ownership as well as to agents, lawyers and accountants. PM Tony Abbott said “crack down on illegal activity.” A leader who is watching his territory.

As for Gregor Robertson, he is just playing the game. Another problem, another issues. But he did speak out about the unaffordability.

We need a Tony Abbott.

Van prices would not come down one dollar even if all your xenophobic fury were unleashed. — Garth

#152 Daisy Mae on 06.06.15 at 7:45 pm

#120 Pre-retiree: “Stop reading the comments section?! But this is where the true entertainment is!”

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

I admire Marks’ tenacity. ;-)

#153 Daisy Mae on 06.06.15 at 7:47 pm

#110 DM in C
“we are hunkering down for the long hot summer”.

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

In ALBERTA?

#154 jess on 06.06.15 at 7:53 pm

chinese firewall ?

4 year investigation by Italy’s financial police
discovered that more than 4.5 billion euros ($4.9 billion) — the proceeds of counterfeiting, prostitution, labour exploitation and tax evasion — had been smuggled out of Italy to China in less than four years using a money-transfer service…”

http://www.therecord.com/news-story/5664281-italy-china-stymied-money-laundering-probe-chinese-bank-s-commissions-under-investigation/

#155 Squirrel meat on 06.06.15 at 7:57 pm

#143 Washed Up Lawyer on 06.06.15 at 4:56 pm

As you prepare to watch American Pharoah win the Belmont and the Triple Crown, a bit of Canadiana.

Northern Dancer is his great, great, great grandfather on his sire’s side and on his dam’s side.

http://www.pedigreequery.com/american+pharoah

In the horse breeding business, we call that hybrid vigour. Elsewhere it is called shady and other names.

Victor Espinoza is far more than a rider. He is a horseman.

To get back on topic, real estate in Ft. McM is flat.
——————————–
Fun link. Good diversion. RE is boring as all shit.

#156 DON on 06.06.15 at 7:59 pm

#141 Rexx Rock on 06.06.15 at 4:30 pm

I feel sorry for The Victoria real estate.She probably didn’t get in early 2000 on owning a home.$1000 a week in profits for years.Kinda like the lotto a thousand a week.He or she is very angry and jealous on this no brainer way to gain huge wealth.Hey Vnacouver and Toronto are carrying the torch now.I am also angry of not buying in Vancouver in the mid 90’s,heck I’d be retiring at 48 and rich like thousands of Vancouverites every year.Its sad but life goes on.I’m very happy for all the young rich retirees in Vancouver and Toronto.
*************************************

I don’t feel sorry for Victoria Real Estate at all> She/he is smart and will get into the market when it bottoms out – with a smile. Just imagine what it will be like moving into a neighborhood at a fraction of costs than the recent move ins. Ouch!!

#157 Nemesis on 06.06.15 at 8:25 pm

#MPAA”R”… #TheGreaterFoolWeekend… #LeaderIllustrationInspired… #Top10DoucheBagEdition…

https://youtu.be/UF-Z7WlwjTo

#158 Victoria Real Estate Update on 06.06.15 at 8:27 pm

#141 Rexx Rock

Probably this and probably that.

You obviously can’t refute anything I’ve written so you, out of anger, have attempted another approach that didn’t work. You know nothing about
my personal situation.

You continually post comments that assume that the paper gains of some homeowners in some Canadian cities are in the bank.

As I’ve shown, prices in Vancouver fell 12% in 08-09 and would have kept falling if emergency rates hadn’t suddenly been brought in.

Vancouver’s next major price decline will be much deeper and won’t be stopped by a sudden drop in rates (rates are already at emergency levels).

#159 Nemesis on 06.06.15 at 8:47 pm

#AWellDeservedAddendum… #AngelaLansbury’sGoldenCherry,OrA… #ParabolicGoldenGlobe… #For”PriceDropsSheWrote”… #StellarQuantitativeAnalysis&Updates… #OfFantasyIslandRE…

https://youtu.be/OHQHA0uDXxM

[NoteToGT: George,Lynda,Joan,Sharon&kate looked pretty good back in the day, wouldn’t you agree?]

#160 Mark on 06.06.15 at 9:02 pm

“No, you obviously don’t. Knowing which Treasury yield to price a mortgage off of is as basic as it gets. You wouldn’t last long as a mortgage originator if you kept getting that wrong.

Again, you’re the one mistaken. Mortgage originators price off of the market for mortgages (ie: MBS), not on the market for US treasuries. The market for mortgages is not just the market for treasuries + a fixed spread. The spread itself expands or contracts with market conditions including the perception of risk premia. In essence, they are two different markets, although they have a relatively decent amount of correlation.

The duration of a 30-year term mortgage, if paid according to the underwritten schedule is somewhere between a 10-year and a 30-year US T-Bond. Whichever one you use is just an academic exercise, although if you want to be more precise, perhaps using the 20-year yield on the curve is the most appropriate.

What we’re seeing is that risk premia is becoming an increasingly significant input to the mortgage pricing equation — a divergence between the US T-Bond market, and the US MBS market. A completely natural and expected part of the asset pricing cycle — the expansion of risk premia telling us that the lending community has some profound concerns about the credit-worthiness of US mortgage borrowers in the not-so-distant future. Why would the market have concerns about credit-worthiness? Perhaps because there’s now a glut of housing in the US? Perhaps because the economy really isn’t improving? Or maybe even that the economy is improving so much that lenders have decided to chase other lending prospects rather than mortgages. We don’t have to read entirely negative outcomes into such.

It should also be noted that risk premia expanded significantly prior to the 2007-2008 mortgage market collapse. With the riskiest loans, the subprime loans, cut off of new credit altogether (ie: risk premia had expanded to infinity), and even prime credit spreads were creeping up as market confidence disappeared in a falling house price environment. Ultimately causing a panic in the markets as unrecognized mark-to-market losses on the books exceeded the equity capitalization of the lending institutions.

BTW, any mortgage originator that priced mortgages off of treasuries, rather than off of the actual market yields applicable to mortgages at the appropriate term on the curve, wouldn’t last very long on the job.

#161 TRT on 06.06.15 at 9:02 pm

Taiwan has just approved a 45% Capital Gains Tax on foreigners buying their property. Prices in the capital city, Taipei, triple in the last 12 years.

Sound familiar Vancouverites? Looks like the Taiwanese are becoming racists due to incoming Chinese funds. Lol

#162 Leo Trollstoy on 06.06.15 at 9:07 pm

You know Mark, people would respect you more if you simply acknowledged the limitations of your intellect every once and a while.

The irony is that if one refuses to acknowledge the limitations of their intellect, they inadvertently acknowledge that their ignorance is unlimited.

You don’t have to know everything. The issue of the Treasury benchmark yield wasn’t central to your argument and you could have either passed over what I said in silence or acknowledged that I was right and moved on. But instead you decide to flat-out contradict me, when a simple Google search would have proven what I said was true. You try to prove how “theoretically” right you are, trying to impress with your bond knowledge when you obviously just don’t know. You take a similar approach every time that you debate someone. It’s your refusal to learn from anyone else that people find so irritating.

He irritates people because he passes off falsehoods as fact. This is irresponsible to financial rookies that read this blog. Fraudulent behaviour.

#163 Andrew Woburn on 06.06.15 at 9:19 pm

“Last month I referred to this recovery as “the economic recovery that can’t get any respect”. And it’s true. If you look at a lot of the data things are actually pretty good. In fact, if you look at this recovery compared to past recoveries and adjust for how long and smooth this recovery is then it actually shapes up pretty well. But there’s no convincing all the pessimists who continue to see this as a glass half empty recovery. Unfortunately, this is the sort of thinking that has led many investors to miss the boat.”

http://www.pragcap.com/the-glass-half-empty-recovery

#164 Obvious Truth on 06.06.15 at 9:25 pm

Good call WUL!

#165 Mark on 06.06.15 at 9:27 pm

“Vancouver’s next major price decline will be much deeper and won’t be stopped by a sudden drop in rates (rates are already at emergency levels).”

I wonder, can you paint us a picture of what a bottom in Vancouver housing prices might look like?

Will lending for residential/consumer purposes have mostly disappeared except to people who bring massive downpayments (ie: >50%)? Will Vancity Credit Union be nationalized and parted out to the big-5 national banks as a quid pro quo of CMHC bailouts?

What about at the “street” level? Other than the excesses of luxury cars seen on Vancouver’s streets disappearing, what other changes do you see happening?

#166 Mark on 06.06.15 at 9:40 pm

“He irritates people because he passes off falsehoods as fact. This is irresponsible to financial rookies that read this blog. Fraudulent behaviour.”

What falsehood have I tried to pass off as fact?

I’m happy to debate the issues, and participate respectfully. However, you need to do your part by actually making some arguments in defense of your position(s) in support of them. Otherwise, people like myself effectively win by default, even if we are, as you suggest, wrong.

As far as calling my posts “fraudulent”, fraud requires deception, injury as the result of deception, and intent by the fraudster to mislead. I honestly believe everything I write (even if, in the short term, it has lost me money). I back up all of my posts up with facts. And I have not injured anyone in the limited number of highly qualified prognostications for the future that I have offered. Therefore, your use of the term “fraudulent” is entirely inflammatory and completely uncalled for. Everything I post here is in good faith and is in pursuit of the truth. Which can’t be said of your bizarre and unfounded claims that the “sales mix” doesn’t exist.

#167 Smoking Man on 06.06.15 at 9:54 pm

And in this corner we have Leo Trollstoy a fiesty word Smith who never backs down to a challenge.

In the other corner Mark, often confused as the tin man from wizzard of ozz.

They have been exchanging blows all day today..

I’m cheering for Leo.. Go get him.

#168 Cici on 06.06.15 at 10:00 pm

I too smell something fishy and expect this is a farce.

Looking forward to the revised Canadian job numbers (has happened before in the recent past). And another rate cut in Canada.

Hope I’m wrong, but am not going to get my hopes up.

#169 DisgustMadeMePost on 06.06.15 at 10:19 pm

#60 S.Bby on 06.05.15 at 9:08 pm
Can Toronto top this?

http://www.news1130.com/2015/06/05/burrard-bridge-to-be-closed-for-big-yoga-class-premier/

It just gets goofier and goofier in Lotus Land.

….

Gotta say, when I heard about this I nearly vomited.

Bring on the higher rates already!!

#170 Paul on 06.06.15 at 10:45 pm

I suppose the job numbers will surge until the fall election. What a bunch of BS!

#171 Smoking Man on 06.06.15 at 11:21 pm

I’m a wooden spoon surviver…

Boomers get it..

Millennials not a chance.

Dr Smoking Man
PhD Herdonomics

#172 Smoking Man on 06.06.15 at 11:32 pm

My youngest son gets it, Wyatt . our artistic beuty fantastic dog.

He still craps in the house, he always will. He’s mentally challenged.

Son 3 Says , it was ment to be. Can you imagen if he was with any other family…

He’s lucky, so are we.

Screw sons one and two… 3 gets it and he gets it all.

Where is the will.

#173 Ponzius Pilatus on 06.06.15 at 11:38 pm

Go Victoria Real Estate Update (VREU)!
I love your posts!

#174 HJD on 06.06.15 at 11:38 pm

Garth, I suspect many of us would appreciate your expert take on Mark’s comments. Does he know what he’s talking about?

#175 Debtfree on 06.06.15 at 11:44 pm

@#13 lmk what about Greece ? Greece represents 0.39 % of global GDP . Thanks lmk . I’m not reading any more comments . Greece oooooooo it’s not over .

#176 Sheane Wallace on 06.06.15 at 11:59 pm

#139 Mark

There could be no respectful debate with a financially illiterate person like you, who is ignorant at the same time.

#177 Debtfree on 06.07.15 at 12:02 am

Also lmk # 13 just to illustrate how silly the Greece thing really is . Here are a few cities that have a GDP a little richer than is greeces . Atlanta , Miami and Toronto .

#178 Drill Baby Drill on 06.07.15 at 12:10 am

Mark

Months ago I stated that you needed to go away. You truly do not know of which you speak. Please go tell your mom you are finally moving out of her basement and you are going to find a place of your own. This will then enable you to actually find out what making it on your own is all about. Then come back in about 10 years and blog when you actually know something.

#179 Drill Baby Drill on 06.07.15 at 12:13 am

I do not trust the Canadian job numbers one iota. They actually stated that Alberta actually created jobs (though minimal). Anyone who works in downtown Cowtown knows this is BS !!!!!!

#180 Spectacle on 06.07.15 at 1:05 am

Well, had to post a thanks to “Victoria Update” myself.

Re:
Victoria Real Estate Update on 06.06.15 at 2:28 pm
I appreciate that so many of you took the time to post a positive comment about my posts.

Imagine how much Canadians and others around the world have leaned about Canadian real estate by reading what Garth has posted on his blog since 2007. He provides a valuable source of information.

A whole army of angry realtors couldn’t stop me
*************************
So: The takeaway should involve last days Turner post: a young guy asked Garth for advice, because a real estate gobbling parent wanted to borrow a large sum of his grown child’s money $90-$100 thousand to gamble on some island real estate. ( obviously, explained by G.T that they likely have recycled dog biscuits for credit…)

Part 2, we have a dedicated blogger Victoria Update, some appreciate greatly for his/her diligent input here, warning anyone who care to read and comprehend; Investment in the Island real estate at this time is a stupid gamble! A steaming pile of an idea…

Thanks Mr Turner for your blog, and all the other blog dogs with similar appreciation and input.

Regards all

#181 BS on 06.07.15 at 1:10 am

BS, have you read about PM Tony Abbott new tough laws on foreign property ownership in Australia?

Yes and it has had no impact on affordability in Australia. Housing prices in Australia have continued to increase since the restrictions were brought in. Australia has just as big of bubble even with the restrictions as Vancouver does without them. The foreign ownership restrictions are for optics the government is doing something about affordability when in reality the government policy has created and sustained the bubble. Australia has the same driver of the bubble as Canada (and it is not foreign investors)

There’s only one party to blame for Australia’s unprecedented house price bubble. And it’s not buyers, vendors, developers, immigrants or local councils restricting new approvals. While they have all contributed to the underlying demand and supply dynamics, the unsustainable price growth across Sydney and Melbourne since January 2013 is squarely the responsibility of the monetary policy mandarins residing in the Reserve Bank of Australia’s Martin Place headquarters.

http://www.afr.com/personal-finance/rba-to-blame-for-australias-housing-bubble-20150605-ghe6tb

#182 raisemyrent on 06.07.15 at 1:58 am

It’s been a grim couple days blog dawgs. A good friend of mine and husband perished in a car accident in southern France. It’s all over the news because he was a famous sportsman. I just told them Monday that we would come and visit them. Rammed by a bus after car failure. One minute they’re travelling with their 3 month old daughter and the next minute they’re both dead and she’s in critical condition, orphaned.
We sit here and complain. Let’s focus on important things and everyone cherish their loved ones and drive safe.

#183 Dragonslayer on 06.07.15 at 2:18 am

I think Victoria Real Estate Update is getting defensive as she knows the facts are against her. Note how she cherry picked the softest part of the Victoria market (condos) and focussed on those.

Saanich is doing really well. Seeing a lot of quick SFH sales, near or above asking. And no, not a realtor. And no, not going to do your homework for you by providing links, but if you spend some time investigating you’ll come to the same conclusion.

How long this state of affairs will last is another matter. Long term, Garth is right and storm clouds are gathering over RE, but at the moment, at least here in Victoria, it’s doing well.

#184 Steve French on 06.07.15 at 3:16 am

Smoking Man: “Something is fishie”

I too can smell something brewing in the global economy…

… we are heading for a break in the system somewhere, i can feel it, taste it in the air. But i don’t know where or when or how.

That which cannot be sustained, will not be sustained.

There is a disturbance in the force.

#185 Steve French on 06.07.15 at 3:25 am

Who’s the more foolish; the fool, or the fool who follows him?

Say what you will about The Smoking Man.

Laugh him off. Dismiss him. Ignore him. Pity him.

…. But the force is strong with this one….

#186 Turtle on 06.07.15 at 3:55 am

Not everyone has a talend to say as Garth says, and to write as Garth writes. But I see few people here trying really hard to put themselves up there.

Victoria… please. I love to read everything about Greece debt problems, but with 0.2% size of Europe economy … nobody really cares.

Mark… Canada is a great country where you can speak freely everything you want to say… “when you have to say something”… or … “when you have something to say”.

Smoking Man… “Something is fishie.” I second that.

#187 devore on 06.07.15 at 4:15 am

#140 Entrepreneur

Mayor Gregor Robertson has mentioned that he receives daily call about the issues. His only solution now seems to be a speculation tax (one point). As for the Rennie closeness isn’t that what politicians do?

Robertson is playing for the voters. He knows there is nothing he can do, and he knows there is nothing the premier will do. He’s like a kid trying to impress his friends asking mom if he can watch the late night porn channel.

As for Rennie’s closeness, sounds like conflict of interest, which is not what politicians should be doing.

#188 PM on 06.07.15 at 5:04 am

I’m a wooden spoon surviver…

Boomers get it..

Millennials not a chance.

Just 60s kid things. DAE domestic abuse? LOL!

Guess what doorknob? Boomer are the parents of millennials. The ones that got spanked turned around and spanked their kids. It didn’t die with JFK.

#189 Kevin on 06.07.15 at 6:41 am

Jobs created should exclude all public sector jobs. They are bogus.

#190 PistolPete on 06.07.15 at 9:24 am

I think one intention of the article was to illustrate the US is beginning a period of economic growth – albeit slow, and Canada, although in a weaker economic state, will not be in a position to lower mortgage rates to spur on economic activity. And in Canada -increased rates for fixed-rate mortgages are in our future with all of the stressors to individuals and the economy. Yikes.

#191 gut check on 06.07.15 at 9:58 am

lol @ “wooden spoon survivor”

me too.
I’m not a Boomer though.

#192 Setting the Record Straight on 06.07.15 at 10:18 am

#168 Paul on 06.06.15 at 10:45 pm
I suppose the job numbers will surge until the fall election. What a bunch of BS!

$$$&&&&&
Since the civil serpents hate the Conservatives, why would they fudge the numbers to benefit them? Surely incompetence would be selected as the preferred explanation using Occam’s Razor.

#193 NoName on 06.07.15 at 10:44 am

#woodenspoon

https://www.youtube.com/watch?v=wyrKnsKVsio

#194 Paul on 06.07.15 at 10:46 am

Re-189
You can layoff a lots of people between now and October ang going forward nobody should bite the hand that feeds them.

#195 april on 06.07.15 at 10:55 am

#179 – How do we know we can believe you? You could be a realtor. Provide links to show proof.

#196 Smoking Man on 06.07.15 at 11:02 am

#181 Steve French on 06.07.15 at 3:16 am
Smoking Man: “Something is fishie”

I too can smell something brewing in the global economy…

… we are heading for a break in the system somewhere, i can feel it, taste it in the air. But i don’t know where or when or how.

That which cannot be sustained, will not be sustained.

There is a disturbance in the force.
…….

Steve, I’m certain you figured out how to tap into the UCC. Congrats….

#197 Karma on 06.07.15 at 11:04 am

Learned a new word today: “Darning”

“Millionaires Who Are Frugal When they Don’t have to Be”

http://www.nytimes.com/2015/06/06/your-money/skimping-on-the-splurges-even-as-a-millionaire.html?action=click&pgtype=Homepage&region=CColumn&module=MostViewed&version=Full&src=mv&WT.nav=MostViewed&_r=0

#198 Snowboid on 06.07.15 at 11:16 am

#154 DON on 06.06.15 at 7:59 pm…

I agree with Victoria Real Estate as well, we sold our Victoria mini-McMansion in early 2011.

Those around us thought us crazy to sell, but they are the ones now stuck with homes in a relatively prime area (100 metres to Inner Harbour) that will now have several years to catch up to what they paid in 2008-9.

We watched the prices falling over the last four years, and our former home would sell for about $ 75K less than what we sold for.

The information from VRE matches what we have observed.

Here in Kelowna there are also many delusional owners – we have watched the market here carefully for 4 years, and followed multiple stale listings/relistings.

We set our goals for price and location and patiently waited, despite the continual hype from the RE pundits that we would be priced out forever.

That patience paid off, and at the price we negotiated from a desperate seller, we aren’t worried if we haven’t yet reached the bottom.

#199 Cyclist on 06.07.15 at 11:30 am

179raise my rent – very sorry to hear that.

177 Spectacle – look beyond Victoria – rest of the island isnt so expensive compared to rest of country.

http://www.vireb.com/assets/uploads/05may_15_vireb_stats_package_60996.pdf

#200 Nemesis on 06.07.15 at 11:35 am

#MoreTalesFromTheCrypt,Or… #FromHeroinAddictToLandLord?… #EasyPeasy…

[Telegraph] – Irvine Welsh: ‘I was a heroin addict – then I found buy-to-let’ – Fame and Fortune: Author Irvine Welsh has first-hand experience of the drug addiction and poverty his gritty novels often deal with

…” My big break was falling out of the top deck of a bus when it toppled over in a traffic accident. I was in Scotland for a cup game and the bus was involved in a collision. I received £2,000 in compensation. If it had happened 18 months before, I’d have spent the lot on drugs, but instead I secured a mortgage on an £8,000 flat in Hackney and sold it for £15,000 18 months later.

I then bought a house for £17,000 in south-east London and, again, sold it for £52,000 18 months later. In three years my working capital went from zero to £40,000. I’d shown no entrepreneurial skills whatsoever; I was just exceptionally lucky to be living in London during the Eighties’ property boom.

From then on I became a postcode sociologist, buying flats in emerging areas. You could see the gentrification starting in Camden and slowly creeping through Islington and Hackney.”…

http://www.telegraph.co.uk/finance/personalfinance/fameandfortune/11653606/Irvine-Welsh-I-was-a-heroin-addict-then-I-found-buy-to-let.html

#Oooops…

[Telegraph] – The plight of the asset-less 40-somethings who cannot get on the housing ladder

Fact: Over 65s in England and Wales now hold almost £31.2 trillion of equity in the homes which they occupy – 45pc of the total equity held by homeowners across the country.

Fact: By contrast the under 35s hold under 5pc.

http://www.telegraph.co.uk/finance/property/11656027/The-plight-of-the-asset-less-40-somethings-who-cannot-get-on-the-housing-ladder.html

#201 DON on 06.07.15 at 11:35 am

#179 raisemyrent on 06.07.15 at 1:58 am

It’s been a grim couple days blog dawgs. A good friend of mine and husband perished in a car accident in southern France. It’s all over the news because he was a famous sportsman. I just told them Monday that we would come and visit them. Rammed by a bus after car failure. One minute they’re travelling with their 3 month old daughter and the next minute they’re both dead and she’s in critical condition, orphaned.
We sit here and complain. Let’s focus on important things and everyone cherish their loved ones and drive safe.
********************************

The most precious moment in life is the present.

I am sorry for your loss and the loss of two parents.

Take care!

#202 Rainclouds on 06.07.15 at 12:15 pm

I give you “Dick from the internet”

http://dilbert.com/

Remind you of any inordinately prolific and adamantly self assured contributors to this pathetic blog?

Dick does provide links though………….

#203 Mike T. on 06.07.15 at 12:51 pm

Just a quick note to the alternatively minded folks that read this great web-blog

If you think politicians lie….try scientists.

The sun is getting hotter. Try to find out why. It’s amazing!

In rapport we thrive.

#204 waiting on the westcoast on 06.07.15 at 1:23 pm

Wow – go to Toronto for a couple of days and miss all the action. ;-)

Mark – enjoy the battle. I agree with some of the posters that it might be prudent to express your ideas prefaced with… “I believe or I think or I feel”. This will reduce the friction that you are experiencing.

Victoria RE Update – I have said it before… thanks for your weekly updates. I do agree with the trends but this spring does seem a little better for housing in Victoria. It is normal for mini drops and lifts in a trend line. Do not let the day trader mentality people bait you from watching the overall movement. At the same time, you might want to accept that there may be some short term lift in house prices due to spring hormones… ;-)

#205 Setting the Record Straight on 06.07.15 at 5:32 pm

Germany buys World Cup vote with RPGs.

http://www.haaretz.com/news/world/1.659900