Truthiness

Is it possible to draw a straight line from the new $14-an-hour minimum wage to 80,100 job losses in Ontario in a single month? Could it be that all those small business dudes warning they’d have to trim hours and workers in order to stay viable were telling the truth? Maybe the laws of economics actually do apply. Wow. Who knew?

In any case, the awful job stats in the GTA, Ontario and beyond are just more bad news for realtors who now have enough extra time to bomb this site. But it’s not merely the fact the employment scene is wonky, wage gains are also on the decline – just as interest rates go up (the next increase is October 24th).

Against this background the mischievous attempt by the housing industry to pretend prices which are falling are actually rising is a grand piece of theatre. They’re helped by a sheeply media reduced by falling ad revenues to rewriting real estate board media releases. It’s pathetic. And dangerous. If financial guys tried to do what real estate hucksters pull off monthly, they’d be in jail. Or driving Kias, for God’s sake.

When this blog pointed out yesterday that average prices have been softening for months, while the industry claims otherwise, there were intestines and blood all over the steerage section floor. But, facts are facts. There was no spring property rush, the summer sucked and the autumn market is so far non-existent. That may change. But potential buyers should know the reality. Having the official industry numbers compiled, organized, presented and spun by salespeople – with zero regulatory oversight – is appalling. Houses now cost a crazy amount. Families spending or borrowing a million or more deserve some truthiness.

Hanny Elsayed tracks all of this at his site (http://TorontoRealEstateCharts.com). He read the fighting words posted here yesterday and sent along this note:

TREB seems quite cheery this month, saying sales and prices are up. They may only be talking about part of the equation. To gauge sentiment, we need to know if sales/listings/prices are up or down. My site covers 13 cities/housing types. Of those, 12 show either a YoY increase in listings, a decrease in sales, or both.

This appears to have been overlooked in the TREB press release. I’m not saying that this means a bearish outlook. I’m just saying that of the 13 subs covered, only Brampton detached has positive direction on all of supply, demand and price. The rest appear to be less clear.

So here is a representative sample of what actually appears to be happening. Markham is a bustling 905ville, packed with new housing developments and has even been a fav destination for years of the much-maligned (on the blog) Asian community. Prices there were nutso in 2017 along with the rest of the region, and they are now retreating – just like everywhere else.

Prices fell sharply and have not recovered.

Inventory surged in early 2017 and remains.

Supply outstrips demand dramatically.

Is this a market you really want to buy into given the certainty of rising interest rates, the uncertainty of the nation’s trade and the shocking employment news in Ontario? Well, if you’re brave, maybe so. But if you’re buying with a ton of leverage, financially stretching to grab a forever house – or you just read the latest TREB report about the market recovering with sales and prices rising – be careful. They made that up. It’s not reporting, it’s marketing.

You should know that.

 

139 comments ↓

#1 Huy on 09.07.18 at 5:10 pm

Millennial on the long road to financial independence thanks in large part to some of the advice from Garth!
36 years now with in total approx. $450k in assets (Pension + TFSA/RRSP + Non-reg) living a low cost lifestyle in the heart of Liberty Village in Toronto too boot.

#2 islander on 09.07.18 at 5:20 pm

https://www.theglobeandmail.com/opinion/article-a-decade-after-the-2008-crash-were-repeating-its-mistakes/

worth a read………remember – no one selling you a house you can’t afford could care less if you spend the next 20 years eating macaroni (without the cheese).

#3 MF on 09.07.18 at 5:30 pm

“Is it possible to draw a straight line from the new $14-an-hour minimum wage to 80,100 job losses in Ontario in a single month?”

-Possible. But it could also be students returning to school. Plus a 40,400 gain in full time positions that was masked by the loss in part time.

MF

#4 pay your taxes on 09.07.18 at 5:32 pm

Listening to both sides (you and TREB) I get the bigger picture. Are prices up 8.5% YOY? Probably. I can’t see them pulling that number out of their …thin air. Are you correct that prices have been softening, DOM increasing along with the number of listings on the market? Certainly. How is it possible? Prices continued to rise after August ’17 and at some point after that the worm tturned.

I remember being condo poor in my youth and have no desire to experience that again nor would I wish it on anyone else. That being said, I missed most of the greatest bull market YVR has seen. How’s that for advice to the young readers?

#5 Smoking Man on 09.07.18 at 5:35 pm

131 James on 09.07.18 at 3:28 pm
#126 Smoking Man on 09.07.18 at 1:30 pm

One man’s diversity equals another man’s exclusion.
Privilege is attitude not skin color.
Men and woman are different.

Case closed the science is settled.
___________________________________________
Men and woman are different? Did mama hand you back your Jimmy balls? Old man did you just figure that one out?
……

Your life would be real boring if you did not have me around to poke and prod. Doxing me, insulting me, you have no real purpose or value in the comment section. You contribute not much. You do insult others I’ve noticed.

What’s your issue man. Do you want to talk about it.
Do you want me to leave for good?
Then what. No reason for you to be here .

Appart from late night drunken rants I think I’m funny and insitefull at times.

Over too you…..

#6 Brian Ripley on 09.07.18 at 5:36 pm

My chart on Employment & Average Earnings including Overtime seasonally adjusted, for all employees has Ontario, BC and Quebec as well at new peak highs.

http://www.chpc.biz/earnings-employment.html

Alberta peak earnings occurred in Oct 2014

My understanding about hiring is that it reflects demand for products not necessarily wage demand.

Since earnings data is lagging by 2 months we will get a better picture in 4Q.

Minimum wage levels may not be as influential as the replacement of routine labour activity with machines.

If you can do something for employment that a machine cannot easily do then low wage competition dominates.

The U.S. has a pending trade deal with Mexico and according to
https://mexiconewsdaily.com/news/automotive-wages-in-nafta-talks/

“In order to qualify for tariff-free status in the North American market, the United States is pushing for 40% of the content of cars and 45% of the content of pickup trucks to be made by workers who are paid at least US $16 per hour.”

That looks like a good incentive for Mexican auto plants to hire more machines and fewer people – ditto Canada.

If you want to labour at the lower end of the pay scale, you can always move boxes of consumer items in and out of warehouses. But if higher earnings are required, your job security is dependent on your non-routine skills.

#7 Wait There on 09.07.18 at 5:40 pm

Does it pay to be a contrarian? Buy now when everybody is retreating? Maybe and Maybe not.

#8 Dave on 09.07.18 at 5:41 pm

Stop buying, who can afford this non sense. Divide the list price in half and its still tooooo expensive.

#9 Ford is a FAILURE on 09.07.18 at 5:46 pm

Garth you trying to say the minimum wage hit the market 8 months later?? Fact Doug Ford is the reason for the decline. He made it clear Ontario will not honor legal contracts and businesses dropped jobs like it was 2009 again. Conservatives have been proven failures again and again. Conservative times are hard times . Always has and always will be .

#10 Kelowna Price Plunge on 09.07.18 at 5:50 pm

As per the board data out for August:

Kelowna Month-over-Month change:

Detached price dropped $61,000 on average from July 2018 to August 2018 – 1 month. That is 8% drop.

Detached median price dropped $26,050 from July 2018 to August 2018 – 1 month.

#11 Okanagan Ramping Up "Stop the Spec Tax" and "Scrap the Spec Tax" on 09.07.18 at 5:56 pm

Garth, why is the “Canadian Taxpayers Federation” listed as a sponsor on stop the spec tax website?

Scroll to the bottom of the webpage.

http://scrapthespeculationtax.ca/

Every picture on this heavily funded pro housing site looks like Okanagan. What about the tech sector in the Okanagan – I thought it was booming and we don’t need housing jobs?

Now the truth comes out. Whole economy tied to housing and they want to keep pumping it. Great strategy!!

Please, stop the spec tax, so speculators will come back. Let’s keep locals price out and homeless.

#12 Jungle on 09.07.18 at 6:07 pm

The truth is the rest of the GTA is actually very stable: most average prices were up YOY.

York Region prices are STICKY right now, even with 10+ months of inventory.

This is a very prestige for wealthy Chinese, high incomes and some of the strongest employment growth in the region over the last decade.

Like stocks and RE, employment is better measure YOY.

YOY 240k jobs added to economy YOY..

As for Ontario, 41k full time jobs gained, shows the labour market firmer than headline suggest. So don’t worry about housing in the GTA>

Overall, the jobless rate still remains near four-decade lows.

Wage growth 2.9% – nothing wrong with that.

And last month TREB reported 3001 sold detach homes in the GTA of 6.5 million souls, with the average price of 977K.

There’s a lot money here.

#13 Linda on 09.07.18 at 6:12 pm

Regarding $14 per hour minimum wage. If multiplied by 35 hours per week, 52 weeks per year that comes to a gross of $25,480 for full time employment. This is not an income that permits the purchase of a house. Just covering basics like food, shelter & clothing wouldn’t leave much to set aside for emergencies or eventual retirement.

I do feel for the small business owners who may have to be ‘the employee’ because they can’t afford to hire anyone to help out. A question here – if you are working for yourself, do you have to pay yourself minimum wage for income tax purposes?

#14 Jungle on 09.07.18 at 6:14 pm

Condos are so tight in Toronto it would only take 1.6 months to sell 2307 units (that’s all of them)

And this is on stress test, raising interest rates.

That’s crazy. And they’re speculative with 50% new units being sold to “investors” but owners are learning how to make a KILLING renting them on Air BNB, luxary 2 bed rent $450/ night.

Cheese and say “cash flow positive?”

#15 statsfreak on 09.07.18 at 6:16 pm

BC government financial reporting today shows a loss of $250 Million in revenue from the Property Transfer Tax levied on sales/purchases in this province. Going forward they expect another $300 M loss next year and $400 M loss year after that. If that doesn’t tell the true story of the slow down of real estate transactions, I don’t know what does.

#16 Linda on 09.07.18 at 6:19 pm

There may be a way to determine which way housing prices are actually going regardless of hype. What is the annual property assessment? While the property assessment value may not align with the amount any property actually sells for, municipalities collect taxes based on what the assessors say properties are actually worth. So if the GTA collected say 1 billion in property taxes in 2017 but only 900 million in 2018 that in itself should indicate which way property values are going overall.

#17 BeReal on 09.07.18 at 6:20 pm

It would be asinine to draw a straight line between a minimum wage increase that went into effect in January and a loss of jobs in August.

As long as we’re cherry picking single data points, can I argue that minimum wage increases leads to big job gains due to the 60,000 new jobs in Ontario in July?

#18 Long-Time Lurker on 09.07.18 at 6:26 pm

Musk smoking weed on camera: probably not helpful. At least he covered his @ss with his statements.

http://www.dailymail.co.uk/news/article-6142193/Elon-Musk-smokes-JOINT-live-Joe-Rogan-Experience-podcast.html

#19 jim on 09.07.18 at 6:27 pm

U.S. adds 201,000 jobs as worker wages accelerate to nine-year high

https://www.marketwatch.com/story/us-adds-201000-jobs-as-wage-growth-accelerates-to-nine-year-high-2018-09-07

Poloz should have raised…BoC falling behind

#20 Kelsey on 09.07.18 at 6:27 pm

Hopefully Screwed Canadian Millennial had a chance to read the first part of today’s post.

#21 Adrian on 09.07.18 at 6:31 pm

Garth, please stop peddling the ‘higher wages cost jobs’ nonsense. From a PBS discussion about the following research meta-analysis:

https://www.pbs.org/newshour/amp/economy/column-claim-wages-go-jobs-will-go-isnt-theory-scam

“Raise Wages, Kill Jobs? Seven Decades of Historical Data Finds No Correlation Between Minimum Wage Increases and Employment Levels.”

The results were clear: Of the nearly two dozen federal minimum wage hikes since 1938, total year-over-year employment actually increased 68 percent of the time. In those industries most affected by the minimum wage, employment increases were even more common: Fully 73 percent of the time in the retail sector and 82 percent in low-wage leisure and hospitality.

“[T]hese basic economic indicators show no correlation between federal minimum-wage increases and lower employment levels,” the authors write. In fact, if anything, the data suggest that increases in the federal minimum appeared to encourage job growth and hiring.

Perhaps even more striking, of the only eight times total or industry-specific employment declined following a minimum wage increase, the U.S. economy was either already in recession (five times), technically just emerging from recession (twice) or about to head into a recession (once).

Clearly, this handful of employment downturns would be better explained by the normal business cycle than by the minimum wage. “As those results mirror the findings of decades of more sophisticated academic research,” the authors conclude, “they provide simple confirmation that opponents’ perennial predictions of job losses are rooted in ideology, not evidence.”

#22 DON on 09.07.18 at 6:32 pm

#59 will on 09.06.18 at 9:44 pm
i gotta get some more popcorn. this show is really getting interesting now…
Shhhh! Can you please sit down in front. We are trying to watch how this movie unfolds – currently in the denial/anger stage. Get yer pink popcorn!

#23 DON on 09.07.18 at 6:33 pm

#60 crowdedelevatorfartz on 09.06.18 at 9:58 pm
@#46 Jungle
“BTW most detach buyers @ 1m+ price likely moving up the property ladder and already IN the market before, having made killer gains. Even first time buyers on condos have made a killing.”
+++++
Talk to us in 6 months Realtor….. Its a jungle out there.
Jungle better start thinking about…. the Bare Necessities.
“Look for the bare necessities
The simple bare necessities
Forget about your worries and your strife
I mean the bare necessities
That’s why a bear can rest at ease
With just the bare necessities of life”

#24 DON on 09.07.18 at 6:34 pm

#71 Karl (Shyster) on 09.07.18 at 6:47 am
There is no arguing fact re: GTA real estate market.
Sales up yoy.
Prices up yoy.
End. Of. Story. Will it last? Will it see torpor? You can argue that until your blue in the face, but it doesn’t change the August stats.
Both sales and prices are lower than every other month in 2018 (save for snowy January). End. Of. Story. – Garth

The roller coaster ride AIN’T OVER YET! The downward trajectory is picking up steam….YIKES! I need a Scooby Snack.

#25 The eternal thruth on 09.07.18 at 6:39 pm

Sad but honest truth is, renters are collateral damage, read kill if you will.
Always have always will.

I mean,why should someone who pays money and takes risk be treated the same as someone who doesn’t give a shit and just rents it.

Give your heads a shake people.

#26 Ace Goodheart on 09.07.18 at 6:39 pm

Well we also got trade tarriff’d by the Trumpster so maybe some of those lost jobs are in the steel and aluminum industries and remember T2 tarriff’d back so more jobs got squashed because US grown potatoes are now $6.50 per bag and they don’t grow year round in Canada. Tarifffs kill jobs.

In other news Trumpster made a determined pledge to tariff the beejeebers out of the people’s republic of China, a communist state which holds most of the USA’s foreign debt (President Munroe would not be pleased).

China is home to some of the best factory jobs in the world. Aspiring Chinese youth can for example quickly rise to the position of buckle installer on the sandal line, a job that pays almost one US dollar per week. Or reach for the stars in a career in garment manufacturing where, like their fellow workers in Bangladesh, every day is an adventure working in structurally unsound buildings with hazardous chemicals and physically destructive repetitive tasks.

Trump, being the insightful, well informed and well read modern economic scholar that he is, and knowing that the USA is currently already at full employment, has vowed to return these excellent Chinese manufacturing jobs back home state side, so that American youth, instead of aspiring to the academic life and a mentally challenging and rewarding career, can embrace all that factory work has to offer.

After all, why work as a doctor, or a programmer, or a manager or a lawyer or in banking, when you could assemble shoes in a factory?

The great and wonderful factory labour life, being stolen from the youth of the USA and replaced by jobs that actually are fun and rewarding and not just meaningless repetitive menial labour, must be brought back to the USA in order to make America great again.

Trump must tariff Chinese made consumer goods. We need these factory jobs in the USA, where there is full employment and no one is seeking work.

And they must all be union jobs. For the first time in recorded history a Republican president is openly supporting the union movement. Advocating tirelessly for expensive consumer products built by union wage earning labour in American factories.

Why should Americans be able to buy a pair of sandals at Wal-Mart for $12.00?

Those sandals should be made by unemployed Americans (which there currently are none) earning union wages with full benefits and pensions.

Those sandals should cost $400.00 which is a proper price for union make sandals. The price of consumer goods in the USA must be immediately multiplied exponentially and then doubled again, so that everyone pays the proper union made price for everything.

Down with cheap Chinese labour. We want everything to be awesomely and insanely expensive.

The supervisory, economic, banking, management, procurement, and regulatory jobs lost by forcing all consumer goods to be made in the USA, can easily be replaced by menial factory work.

It’ll be amazing to behold. A great America, where a pair of pants costs $500 and people compete to work in the factory that produces them.

Oh, greatness.

Some are born with it.

Some have it thrust upon them.

And some could not find it if it was in a wet paper bag that was being bashed against their heads.

#27 Love Guru's Dad on 09.07.18 at 6:39 pm

Smoking Man, “Appart from late night drunken rants I think I’m funny and insitefull at times.”
——
Garth, maybe a query to the dogs and have them vote for most entertaining blog dog over the years. My vote goes to Smoking Man. Most insiteful as well, if you do that one. I could be overlooking some that haven’t been around in a while.

Flop gets honourable mention.

#28 @ JUNGLE on 09.07.18 at 6:46 pm

Shouldn’t you be out trying to convince potential buyers to keep the ponzi gong show going? Why spend the time on this blog. Like taking a knife to a gun fight. You fail to make a balanced argument. The up trend is over…so many headwinds against you.

#29 Flat Earth Society on 09.07.18 at 6:50 pm

I don’t know if you can draw a straight line between rising minimum wages and a particular month’s job numbers, things take time to sort out. But everyone whose taken an econ 101 course knows that rising prices cause demand to fall, and that includes for labor. It doesn’t matter if the rising prices are caused by limited supply (scarcity) or by government or union intervention, demand for labor will fall to meet the new position of the supply and demand curve dictated by the price.

Normal “free” markets balance supply and demand through the price mechanism. When demand is higher than supply prices rise until demand cools of and supply increases (increasing prices tends to increase supply as producers respond. In the labor market this can be thought of as rising prices encouraging more people to enter the labor market.)

However when the government interferes with the pricing mechanism, in this case by setting the minimum wage higher, they automatically force demand for labor down to the point it would be if prices had naturally risen to that level due to labor scarcity. This results in reduced demand for labor at exactly the time it is increasing supply of labor. The result? Higher unemployment. None of these principles is really in question no matter which economic “school” you belong to. Unless, of course, you haven’t studied economics at all.

There are a variety of reasons why these things occur, but one of them is that there is simply only so much money to go around. If a business has to pay more for one input, they must either raise prices, reduce the amount of that input consumed, reduce the amount spent on other inputs, or lose money until they go broke. Raising prices seems like the easiest route, but unfortunately their customers face the same constraints and demand for their products will drop. This will likely cause the last choice where they lose money until they go out of business.

The net result is that jobs will disappear until the work still being done is actually worth the new minimum wage. The results of this is hardest on the young and immigrants. These groups generally do not have any training or experience and thus may not be worth the new minimum wage to employ. But how do they get the training and experience they require if employers won’t hire them? The fact of the matter is that employers can not employ labor unless they can make at least a marginal profit on their productivity, and the fact is there are some people who are just not worth $14 an hour, based on their skills, training, experience and other factors.

Does this mean there should be no minimum wage? It would be more ideal than setting it artificially high. But ideally the minimum wage should be set based on market rates as a method of protecting groups from discrimination or abuse, not to artificially raise wages for all groups.

But unfortunately politics and economics do not mix. The first rule of economics is that there is no such thing as a free lunch. The first rule of politics is to ignore the rules of economics.

There are other effects that result from arbitrarily raising the minimum wage due to human nature. For example, if we take the case of a fast food restaurant, raising the minimum wage to $14/hour likely means that the least trained staff are now making as much as the front line managers, or at least close to it. This will be perceived as unfair by those managers and they will push for higher wages as well. This effect will go all the way up the line. So whatever balance the “invisible hand” had brought to the labor market will be disrupted at every level.

Or if we take the case of a day care, where there are strict rules on how many children can be supervised per adult, there is no choice for the day care operator to do anything but raise prices. However most people who use day care are not rich or they wouldn’t need it, so that means their purchasing power must necessarily fall. What can they do about it? Well, they can ask for a raise, but they likely won’t get one so they will have to reduce their lifestyle somehow.

In the long term the market balances itself out as inflation gradually takes the true market minimum wage up to wherever it’s been arbitrarily set, so everything is right back where we started, but this can take many years. And there is no stopping the politicians from raising the minimum wage again maintaining the distortion.

When I was a young man I worked summers in the construction industry. I got paid $10 per hour which was above the minimum wage at that time. But I had also grew up with the construction industry so I was useful. I could swing a hammer at an early age.
However, what would have happened if the government had set the minimum wage at $20? Would I have still been employed? Or would the demand for new decks and fences just have dropped to reflect the new much higher costs to build them?

The proper way to tell if the wage is right for a given job is to see if there is anyone willing to do the job for that wage. Employers will naturally raise wages until they can get the work they need done so long as it is still economic.

As long as this response has been, I will add just a little bit more to convince those who can’t follow the concepts above by asking a rhetorical question: “If minimum wages work, why not $50/hour? Why not $200?” Everyone can see that a minimum wage of $200 would be an excellent idea, because then everyone would be wealthy, but in practice it would so distort the price of labor compared to the price of other goods that the economy would simply cease to function. The pricing mechanism is how we tell the relative value of a beer in a pub compared to a dozen eggs in the market and an hour of labor too. If distorting it a lot clearly is a bad idea, why is distorting it a little a good idea? But distorting things a little is what politics is all about.

#30 Jimers on 09.07.18 at 6:53 pm

#5 Smoking Man on 09.07.18 at 5:35 pm

Doesn’t matter what they say about you, your one of the good ones.

High and dry in Niagara,
Jimers

#31 the Jaguar on 09.07.18 at 6:56 pm

“just more bad news for realtors who now have enough extra time to bomb this site.”

Not to worry, Garth. If this happens the Jaguar and like minded folk will fire up the engines of the Gloster Gladiator Bi-Planes ( Faith, Hope & Charity) who bravely defended Malta in WWII. Even that youngster Billy Bob is likely unfamiliar with that heroic story, but it was certainly one for the ages and very inspirational.

It’s true. I was shocked to see the ‘upbeat headlines’ in both national newspapers today about the GTA real estate markets. Gives one pause to wonder what else they are lying about. ( Hint: 40% of what is printed if money is at stake). It can only be 1000 times worse south of the border. Can’t wait to find out who the ‘mole’ is at the White House who chose to sell their soul to the devil instead of voting with their feet and leaving the administration if they could not stomach the decisions made by the duly elected President of the United States.
Call me old fashioned.

#32 theoryAndPractice on 09.07.18 at 7:00 pm

Globalnews:
GTA real estate broker demands commission even after failed house sale

https://globalnews.ca/news/4431658/real-estate-broker-demands-commission-gta/

and Garth warned right here :

https://www.greaterfool.ca/2011/11/13/the-trouble-with-bras/

#33 Timmy on 09.07.18 at 7:02 pm

Trudeau and Notely’s true colors revealed:
https://thetyee.ca/Analysis/2018/09/05/Petro-Politics-Pipeline-Deal/

#34 Ace Goodheart on 09.07.18 at 7:04 pm

So the colony of bacterium living in the corner of our bathroom has given up.

After three weeks of intense searching, which represents 6 million lifetimes in the life cycle of a bathroom bacterium, they have decided they are alone in the universe.

Using all of their available senses, they have not been able to locate a single other life form.

Despite all their attempts at communication (which, because they are bacterium, have been pretty basic), no intelligent (to a bacterium) life form has ever (during the three week period their civilization has existed) ever communicated back.

They have sent out probes which have almost reached the second tile from the bottom, taking days (which to this colony, represent many thousands of lifetimes) to reach incredible distances (they almost got to the third tile).

They have waited and waited for a response. Any sign. Anything that would tell them they are not alone.

Sadly, they have sensed nothing.

They must truly be alone in the universe.

#35 petento on 09.07.18 at 7:04 pm

Ya know many industries that cause financial and emotional harm on a large scale can find themselves facing a class action suit. Just sayin’.

#36 Stan Brooks on 09.07.18 at 7:07 pm


#25 The eternal thruth on 09.07.18 at 6:39 pm
Sad but honest truth is, renters are collateral damage, read kill if you will.
Always have always will.

I mean,why should someone who pays money and takes risk be treated the same as someone who doesn’t give a shit and just rents it.

Give your heads a shake people.

I would agree to some extent in normal circumstances.

But in the current conditions…

1. #13 Linda on 09.07.18 at 6:12 pm
25 k befor taxes to buy a house?
You need 150 k before taxes for a family of 4 just to survive somehow in GTA. No savings. Just shelter, food/GMO, gas, clothes, education.

2. 90 % of the people living in Toronto with houses can not retire there. It is already that prohibitively expensive.

I have friends with 2 houses, another with a house and a condo in GTA who plan to leave the country upon retirement as there is no way to live here even with paid out house.

Both of them complained how expensive it is to live and worry whether they will make it until retirement there.

It is not how much your house is worth, it is how much you need as income to live.

3. Once you rule out the option of retiring in GTA what is left is potential capital appreciation on the house. with prices driven by hormones and FOMO.

How much would a house in GTA appreciate further?
5 millions? 10?

Sure, in Zimbabwean dollars or some other sh.t currency.

In my modest calculations, to have a house and retire in Toronto you need at least $ 3-4 millions currently, with the coming demise of and inevitable introduction of fee based health care system maybe more.

For what, to enjoy increasingly cooler winters, nothing to do except going to the mall and horrendous traffic that was the worst in north america 10 years ago?

Mark my words, the coming crash of real estate in GTA would be the worst ever seen in this world.

Stock on popcorn.

#37 WUL on 09.07.18 at 7:10 pm

Evening Garth,

The other day you mentioned some Cowtown stats on corporeal hereditaments ($10.00 words) or real estate.
Can you share your source or are they the proprietary info of Doug and Ryan.

I could not square them with CREB numbers.

Appreciated,

WUL

Source: CREB. – Garth

#38 Reality is stark on 09.07.18 at 7:15 pm

You don’t have to live your life where you cause yourself so much angst. You can avoid the trauma of economic swings.
Stay single, work your ass off and don’t buy stuff when everyone else is buying.
Rent what you need that way it is always fresh and everything still works.

#39 AGuyInVancouver on 09.07.18 at 7:18 pm

#14 Jungle on 09.07.18 at 6:14 pm
Condos are so tight in Toronto it would only take 1.6 months to sell 2307 units (that’s all of them)

And this is on stress test, raising interest rates.

That’s crazy. And they’re speculative with 50% new units being sold to “investors” but owners are learning how to make a KILLING renting them on Air BNB, luxary 2 bed rent $450/ night.

Cheese and say “cash flow positive?”
___

Your real estate pimping posts are always good for a laugh.

#40 Stan Brooks on 09.07.18 at 7:18 pm


#25 The eternal thruth on 09.07.18 at 6:39 pm

It bugs me big time why prudent people – renters, savers would choose to cover and pay one way or another for the failures of idiots who overextend and buy houses they can not afford ticked by lairs and incompetents.

You took the risk, now pay for it. But sadly several generations will pay for this grand folly with their diminished lifestyle, higher taxes, inflationary economic depression and non retirement.

Global cooling comes as an added bonus.

Marko Kolanovic from JPM just stated that he expects social unrest during the next recession, similar to the one from the late 60-es in US.

If that is the case I can’t really predict what is going to happen here as we are in 3 times worse situation than US.

Societal Armageddon? With T2 elected for another 4 years, for sure.

#41 Happy Housing Stabilization Everyone! on 09.07.18 at 7:20 pm

Listen to Jungle, he knows what he’s talking about.

Happy Housing Stabilization Everyone!

#42 Chico on 09.07.18 at 7:26 pm

#27 Love Guru’s Dad on 09.07.18 at 6:39 pm

Smoking Man, “Appart from late night drunken rants I think I’m funny and insitefull at times.”
——
Garth, maybe a query to the dogs and have them vote for most entertaining blog dog over the years. My vote goes to Smoking Man. Most insiteful as well, if you do that one. I could be overlooking some that haven’t been around in a while.

Flop gets honourable mention.

————————————————————

Freedom First, who goes by “Stan Brooks” now, was the best for sure. You can tell they’re the same because of the rage. Not too bad with basic intelligence, but emotional intelligence is in the toilet.

His best line…”I have mastered humility.”

He used it about half a dozen times and it never dulled my appreciation for his redundant writing style.

I also really like “Happy Housing Crash.” He has an out of control vitriol like Stan’s/Freedom First’s that makes it almost impossible to take him seriously.

Oh yeah, Stan/Freedom First had one last winter that he colluded with the bitter millennial punk on. I think it was referencing Canada in winter as a “Frozen Hellhole,” or something like that.

It was completely over the top, full of rage and angst and really really funny!

#43 Stan Brooks on 09.07.18 at 7:31 pm

#21 Adrian on 09.07.18 at 6:31 pm

Garth, please stop peddling the ‘higher wages cost jobs’ nonsense. From a PBS discussion about the following research meta-analysis:

https://www.pbs.org/newshour/amp/economy/column-claim-wages-go-jobs-will-go-isnt-theory-scam

———————–

In normal circumstances with real economy growth, not when in a depression that follows the biggest credit bubble ever in an bankrupt province.

That link contains political and economic propaganda, it proposes 100 % minimum wage increase quoting past cases without pointing out the conditions for each case (i.e pre-recession, post recession etc) and the actual % increase in each of these cases.

With every wage increase businesses struggle and when this is combined with the worse assault on small businesses by killer taxation, pension theft by the likes of trust fund babies T2 and wild bill it could be lethal.

Job loss in Ontario is caused only by the completely failed provincial and federal lieberal policies, frankly I start missing Paul Martin and Jean Chretien looking at retarded idiots who replaces them.

#44 Dolce Vita on 09.07.18 at 7:32 pm

Just read the Labour Force Survey. Overall, it’s actually worse at -68.7K.

Of course, “Self-Employed” to the rescue with +17.2K (the category that also includes babysitters, newspaper carriers and unpaid family workers – code for: “I lost my job, on severance and looking to be a consultant, so I’m not unemployed.”).

Ontario got slammed with job losses as you say Garth.

Most of the losses from the Services Sector (-71.5K) with the biggest losses in that category:

Professional, scientific and technical services -23K,
Wholesale and retail trade -14.4K,
Information, culture and recreation -11.6K,
Finance, insurance, real estate, rental and leasing -8.1K, and
Public administration -7.9K.

Now don’t get angry Garth but from the above numbers for ON, it does not look overall like low wage jobs were mostly lost which to me is far more troubling (in particular the Professional category job losses which ought to pay well).

Wholesale and retail trade lost big in ON and PQ, small gains elsewhere. Also bad. Means consumer spending slowing down (and in that category, perhaps a fair share of low wage jobs lost).

– – – – – – – – – – – – – –

As I said 3 months ago and well before that:

RE crash, -25%, begins in earnest 4th Qtr. 2018 and and in hand with that, recession.

Naysayers then. Naysayers today.

Let’s talk 1st Qtr 2019…when the “real carnage” begins.

BTW, GREAT POST GARTH and as I have told you before and will again today: They will not listen to your warnings (head in sand preferable).

Try SHTUM instead.

#45 Stan Brooks on 09.07.18 at 7:35 pm

#36 Chico on 09.07.18 at 7:26 pm

I am not Freedom First. Never was.

You arguments suck. You generalize and also completely fail in logic.

I am not angry, just amused.

Quota, dude. – Garth

#46 OttawaMike on 09.07.18 at 7:35 pm

Regarding today’s jobs numbers:
Most of the job loses were in part time casual. Could the soon to be squashed Ontario Bill 148 caused this? Equal pay for equal work. Employers are combining 2 PT jobs into one full time.

Also oil dropped and I read something about a pipeline cancellation so $14 min wage causing the surge?
Nope.

#47 The Real Mark on 09.07.18 at 7:37 pm

Today’s employment numbers made it perfectly obvious that Poloz is behind the curve in [b]cutting[/b] rates in response to the incredibly weak economy. The job losses were enormous. Headline RE prices are cratering in Toronto/Vancouver. Yet another year of graduating college students are finding that their shiny new degrees, after taking the summer off, are practically worthless as new professional-level positions are scarce. No sector has really emerged as being annointed to replace the RE industry as an economic driver of the economy. Banks are tightening spreads as customer creditworthiness is rapidly diminishing along with home equity.

In short, its a slow motion disaster unfolding. Poloz can stick his head in the sand and think that the economy can survive with the currently high interest rates, but so many data points make it pretty clear that the current rate hiking cycle is well past its prime and probably should have been stopped 50bp ago.

Everyone knows the aftermath of the US economy, including the need for a decade long program of QE and stimulus, in its housing crash. The same logic easily applies to Canada. If Poloz wants a CAD$ liquidity crisis on his watch, he can just keep up his current nonsense.

The bank rate is currently negative. It is not going down. – Garth

#48 OttawaMike on 09.07.18 at 7:37 pm

Smoking Man and Ace Goodheart — Always entertaining musings

#49 The Real Mark on 09.07.18 at 7:40 pm

“#19 jim on 09.07.18 at 6:27 pm
U.S. adds 201,000 jobs as worker wages accelerate to nine-year high”

#50 Mattl on 09.07.18 at 7:40 pm

#11 – serious question, how old are you and how long have you lived in Kelowna? Reason I ask is from mid 2009 – early 2016 median house prices in the central Okanagan floated between 350 and 425K. Basically flat for 7 years. It really only exploded here in 2016 and prices are already retreating.

My question how do you sit on the sidelines forever, when homes are cheap and money is free, and then look for government intervention when homes finally appreciate a bit? I mean even today, homes are up only 7-8 percent per annum the past 8 years. What is your goal, homes below replacement? Free homes for everyone? If you weren’t comfortable with Kelowna homes at 350K @ 2% you are never getting into the market pal.

Seriously time to get over it, home ownership isn’t for everyone.

#51 Sam the Sham on 09.07.18 at 7:42 pm

#26 Ace Goodheart on 09.07.18 at 6:39 pm

“…why work as a doctor, or a programmer, or a manager or a lawyer or in banking, when you could assemble shoes in a factory?”
——————————————
The fact is Ace, that probably 25-30% of the population doesn’t have the intelligence or the IQ to perform those positions. I know that no one wants to talk about this, but the truth is a lot of people are really stupid and the only jobs they can perform is repetitive factory or farming positions. We need those jobs for them. Contrary to “fake news” we don’t have full employment when the labor participation rate is only 62%

#52 The Real Mark on 09.07.18 at 7:51 pm

“#19 jim on 09.07.18 at 6:27 pm
U.S. adds 201,000 jobs as worker wages accelerate to nine-year high”

https://market-ticker.org/akcs-www?post=234150

A pretty good read on the allegedly “good jobs report”. Job losses in August haven’t been as bad as since 2011, at 1.4M, and the number leaving the labour force was close to 2 million. The alleged 201k number is heavily related to seasonal adjustments which basically masks the falling participation rate.

The wage growth, as well, is barely above inflation (despite an economy that is allegedly growing in real terms), and still hasn’t helped workers make up any ground after the past nearly 2 decades of malaise. Barely even encouraging. If you follow Denninger’s thesis, the numbers are just as bad as Canada’s which were awful.

Bottom line, the employment market is weakening dramatically and both the Bank of Canada and the Fed, having driven their respective yield curves flat, are playing with fire.

#53 The Real Mark on 09.07.18 at 7:54 pm

“The bank rate is currently negative. It is not going down. – Garth”

What ‘bank rate’? The Bank of Canada policy target is 1.5%, and Bank of Canada policy over the past decade has delivered inflation of 1.49%.

Given that the mandate is 2%, there’s plenty of room to let inflation run a little hotter to match the 2% mean. Additionally, there’s pretty good evidence to suggest that the most recent CPI print was at best transitory, associated with the peaking of the oil market. Oil prices have pulled back considerably since, as have retail petrol prices. And consumers shocked at their loss of home equity are likely to reign in their spending severely going forward.

You need help. – Garth

#54 Chico on 09.07.18 at 7:57 pm

#40 Stan Brooks on 09.07.18 at 7:18 pm

If that is the case I can’t really predict what is going to happen here as we are in 3 times worse situation than US.

Societal Armageddon? With T2 elected for another 4 years, for sure.

——————————————————–

Freedom First/Stan Brooks, you are the best. Societal Armageddon?????

The best comedy writers couldn’t come up with a line like that!

How’s your Mom?

#55 The Real Mark on 09.07.18 at 7:58 pm

“What is your goal, homes below replacement? “

Houses (except a very small number of housing units in very coveted and unique locations) should always naturally trade beneath replacement as most would prefer to pay replacement cost for a new house instead of a used one.

That’s how a normally functioning housing market works. Not this hyper-leveraged extremely overpriced joke of a housing market that persists today. That will only end in tears for so many families who bought at inflated values with credit.

Houses, like cars, depreciate over time. Even land depreciates as land in a contemporary city/town is comprised of a lot of civil infrastructure that itself is naturally depleted and requires extensive re-investment.

#56 The eternal thruth on 09.07.18 at 7:59 pm

Jim, you’re a fu$#&ng goof.
Good weekend everyone.

#57 Ogopogo on 09.07.18 at 8:05 pm

#32 theoryAndPractice on 09.07.18 at 7:00 pm
Globalnews:
GTA real estate broker demands commission even after failed house sale

https://globalnews.ca/news/4431658/real-estate-broker-demands-commission-gta/

and Garth warned right here :

https://www.greaterfool.ca/2011/11/13/the-trouble-with-bras/

For me, the best part of this story is here: “By the time Nemeth finally sold her home on April 29, using a different real estate broker, the housing market had tumbled: The selling price was a disappointing $699,800.”

LOL! From the original $900,000 to $699,800. A 22% haircut. Ironically perhaps, I am on the side of the seller here and against the vile realtor. But I can’t help but cheer for a falling market.

Renter’s revenge is a dish best served with a side of lowball and schadenfreude.

#58 Chico on 09.07.18 at 8:07 pm

#45 Stan Brooks on 09.07.18 at 7:35 pm

I am not angry, just amused.

———————————————————-

You are absolutely killing it tonight Freedom First! Don’t stop, I have really missed your precise writing style!

#59 Caveat Emptor on 09.07.18 at 8:10 pm

You get what you pay for. Even if a lifetime of substandard living is the price you pay. Rent your front door key – it is much cheaper and you will have a great life with less stress and more money to do the things in life you enjoy. Ownership comes at a price. Avoid it if you are thinking. Rent the space you need where you want to live. Consider all factors in the equation. You would be surprised at how much money you could save in the long run.

#60 Evangeline on 09.07.18 at 8:16 pm

I heard Larry “nutbar” Kudlow say today that at present there is one word dominating the NAFTA talks: M-I-L-K

If NAFTA does come to pass, Canada will no longer be allowed to incorporate imported auto parts into the cars it exports to the USA.

I’m guessing the new “rules of origin” will translate into new Canadian jobs in the mining, steel, design, assembly and all other industries that go into creating auto parts.

#61 Shawn Allen on 09.07.18 at 8:17 pm

Land Depreciates?

The Real Mark said:

“Even land depreciates as land in a contemporary city/town is comprised of a lot of civil infrastructure that itself is naturally depleted and requires extensive re-investment.”

****************************************
Civil infrastructure is replaced as needed through property taxes?

City land has appreciated vastly (perhaps) because as Cities grow the cost and inconvenience of commuting grows and so land closer to the City center had gained (dramatically) in value in real dollars. In any case for whatever reason the value of land close to the Center of large growing cities has appreciated dramatically in real dollars.

I understand that to this day many of the ancestors of the original Dutch settlers in New Amsterdam (New York) from 400 years ago are wealthy from land appreciation.

For that matter Canal Houses (based on location, therefore land) built in the 1600’s in Amsterdam have appreciated vastly even in real dollars.

Your claim seems entirely counter to experience of the last 400 years (at least)

Why do you constantly make such claims off the top of your head with no evidence?

#62 Wrk.dover on 09.07.18 at 8:21 pm

Freedom First is married now, and his wife forbids his participation here.

Another misogynist bites the dust.

All is well that ends well.

#63 Old Salt on 09.07.18 at 8:22 pm

I’m not disputing the argument, it is plausible, but one month does make a trend.

Some on Bay Street suggest ignoring the monthly jobs reports as they can be too volatile to be meaningful.

I guess the monthly jobs report needs a stabilizer analogous to bonds in a portfolio for those who are too quick to jump to conclusions

https://business.financialpost.com/news/economy/even-the-politicians-arent-falling-for-this-weak-jobs-report

#64 Gary Santolin on 09.07.18 at 8:22 pm

To Linda

I agree that making $14 an hour for 35 hours a week so $26,000 a year gross income is not a heck of alot.

I started at a $9 an hour job working in a local restaurant for 3.5 years until I was promoted to assistant manager then making $16.75 an hour for 8.5 years until I got married and opened my own restaurant. I am now 36 years old and my wife is 35 years old. My wife and I used all of our life savings and home equity to open up our small restaurant.

However, Liberal governments and NDP in Ontario makes it almost impossible to run and make small business or even some medium business profitable and not able to expand if at all. Government and those especially on the left, Liberals, NDP, Green Party etc. I have no real concept of starting from the bottom and trying to improve their situation, family, without government handouts.

I have 3 employees that have worked for us since westarted the business 4 years ago. We have a small restaurant and earned last year for the first time a profit of $46,000.

We paid our employees last year $50,000 each but they did work 60 hours a week. They are loyal, hard working people and we they appreciate us giving them full-time steady employment. They are smart to not live in Toronto and are really smart with their money. One employee showed that for his family managed to save and have $40,000 in six years in their TFSA. They have only one small car and managed to buy a house with $100,000 in equity in Oshawa. The wife looks after their 2 kids and does not have paid employment.

The bottomline is we risked our house, life savings for a $175,000 business loan and with all the regulation, taxes, fees etc. from the city, province, federal government it is tough to stay ahead making a profit and grow our business.

We told our employees that once we can and of we can keep growing our restaurant, we will give an annual $2,000 employee business once we can get our profit up to $85,000 and above.

I would suggest that inside of the Liberals, NDP using minimum wage as a political football, increase minimum wage by annual C.P.I. which is usually around 2.0% on average over the last decade or so. This is done with C.P.P, OAS, income tax on income thresholds etc.

It is getting ridiculous and insulting to hard working, tax paying, job creating businesses and Canadians.

#65 crdt on 09.07.18 at 8:28 pm

“Is it possible to draw a straight line from the new $14-an-hour minimum wage to 80,100 job losses in Ontario in a single month?”

More like a wiggly one.. People needed way more money to live because of the bubble. Then, the bubble bursts and economy starts shedding jobs.

#66 T on 09.07.18 at 8:30 pm

It seems like many part time jobs were consilidated into full time jobs. Ie. Two or three part time jobs becomes one full time.

As a business owner if you have to pay $14+ an hour you might as well get your money’s worth. At $10 you can justify a part time workforce and the extra management, training, and hr work it entails. Not at $14+.

#67 yvrguy on 09.07.18 at 8:35 pm

Jungle on 09.07.18 at 6:14 pm
Condos are so tight in Toronto it would only take 1.6 months to sell 2307 units (that’s all of them)

And this is on stress test, raising interest rates.

That’s crazy. And they’re speculative with 50% new units being sold to “investors” but owners are learning how to make a KILLING renting them on Air BNB, luxary 2 bed rent $450/ night.

Cheese and say “cash flow positive?”

———————————————–

SHYSTER talk. We’re in a terrible housing crisis and he’s telling you how to screw locals with AirBnB for a few bucks.

This guy would be hocking SNAKE OIL as a cure, at the worst point in the BUBONIC PLAGUE.

Disgusting, heartless SHYSTER.

#68 Linda on 09.07.18 at 8:43 pm

‘Stan’ – my post stated that full time on minimum wage would NOT permit the purchase of a house & that just covering basics would likely result in little left over for emergencies, ditto retirement savings.

As for those who live in Toronto, anyone working full time for minimum wage would be hard pressed to even cover rent, let alone any other expenses. Some might be lucky enough to be in subsidized housing & thus be able to make ends meet (maybe). Most presumably have to pool resources with others in order to have a place to live in.

#69 marcus on 09.07.18 at 8:46 pm

80,000 jobs lost in a month! Holy Crap! That’s like the USA losing almost 2 million jobs in one month taking into account the whole American Population (ratio). Instead the USA added 201,000 jobs yet again. Ontario is gone. Not going ……… gone.

#70 SoggyShorts on 09.07.18 at 8:48 pm

#13 Linda on 09.07.18 at 6:12 pm
Regarding $14 per hour minimum wage. If multiplied by 35 hours per week, 52 weeks per year that comes to a gross of $25,480 for full time employment. This is not an income that permits the purchase of a house. Just covering basics like food, shelter & clothing wouldn’t leave much to set aside for emergencies or eventual retirement.
******************************
Yup. Min wage is not an end goal..or at least it shouldn’t be. Those jobs are for students, or people freshly into the workforce to get experience, not buying a house and raising a family.
———————————-
I do feel for the small business owners who may have to be ‘the employee’ because they can’t afford to hire anyone to help out. A question here – if you are working for yourself, do you have to pay yourself minimum wage for income tax purposes?
*****************************
Nope, you are welcome to pay yourself zero as many do in the beginning.

#71 Willy H on 09.07.18 at 8:51 pm

Wouldn’t get too worked up over Ontario’s August job losses. Likely related to the end of part-time summer employment for students. These folks are not in the market for real estate.

#72 WUL on 09.07.18 at 9:01 pm

Garth,

Thanks, I’ll revisit my figuring on the CREB stats.

That which follows is of no moment.

I have been a bit distressed about the extremely low and deficient level of analysis and commentary on the Trans Mountain decision in the media and commentary (outside of that from the legal community) over the last week and was actually going to compose a very long piece here. I stifled that urge. Doesn’t matter.

Life is simple and in particular political life.

When something goes wrong on the watch of a politician, they wear it. No point looking at the time line of the regulatory process on the TMX matter (stretches way back before Trudeau), no point discussing why the boneheads in Cabinet did not spot a single issue in and send the NEB recommendation back, no point discussing the fact that the Alberta Government had no jurisdiction and only had rhetoric at its disposal. Trudeau and Notley will wear it. The electorate is not too bright. Over 80% of Canadians think they are middle class.

That is fair. Better yet, what goes around comes around. I have worked for provincial and municipal politicians in Alberta. Glad to never have to do it again. There are some stellar people in politics who are good, honest, hard-working, bright and that seek the common good. Most though are venal, small minded, mildly vicious, driven by self interest and only concerned about popularity and re-election.

For example, if you are a civil servant and a high priced consultant is sent in to analyze some issue in your department, rest assured that the person is usually a hatchet man sent in to achieve only a pre-ordained result. If something untoward happened, heads will roll Have the guts to say, when you are selected to speak to the person, that you want to see a cv and examples of previous work before you will speak to them. Be prepared to walk.

I am reaching the decision that I will not vote again. There is no point. If you respond with the facile response, “… you will not have the right to complain.” I will write a 19 page comment in rebuttal.

WUL

#73 Paully on 09.07.18 at 9:02 pm

I love Smoking Man!!

I mean, in an arm-curl, bench-press, hey let’s invade a country kind of way!

#74 steerage steward on 09.07.18 at 9:07 pm

Comes down to the question; what do you need to be happy? Suspect if people did the reasech on human happiness, and spent a year analyzing themselves, the answer to that question would be closer to FIRE then owning a nice house and a boat.

Then again some people need to keep busy to be happy, and what better way then a 30 year mortgage?

#75 David Pylyp on 09.07.18 at 9:09 pm

The graphs are excellent. Thank you.

I think the increasing inventory is reminiscent of 2000 and the price reductions that ran till 2005.

It’s going to get bumpy again.
Job loss, increased b20 compliance and carbon pricing.

David Pylyp
Toronto

#76 Sebee on 09.07.18 at 9:26 pm

Garth,

I hate to defend real estate brokers, but they are nothing but door-to-door mortgage peddlers.

Someone else benefits and is higher up the food chain. Time to start singling them out.

#77 Danny on 09.07.18 at 9:35 pm

Keep telling the truth.
It is always tougher when in any sales market that vendors start to sweat more when sales are down….so yes as you say they start attacking…people like you…and misrepresent the facts….because they can with no ” Regulating mechanisms and definitely no proper independent audit like in other financial markets” in place.

But like a fever….they can only look cool as a cucumber for so long before they have a seizure.

The main problem is that the press….just keeps accepting the misleading propaganda that comes from the real estate board or properly known as the “lying estate board” …instead of asking them to show their real data….before the press passes on their well polished ads.

In which other market does the press basically give “free advertisement”?

I guess one other feather in their cap….is the fact that new boy Ford received so much financial support from developers who cried when they lost their Ontario Municipal Board fortress….that there will not be any way that the Province…will rip open the truth about…the sales lies that come out….month after month.

#78 MarcFromOttawa on 09.07.18 at 9:38 pm

RIP Mac Miller

#79 Fish on 09.07.18 at 9:48 pm

Being a renter is good they cleaned filter system in ac and the heating system is all done didn’t
Have to do any of that and they were very pleasant, quick at getting that big job done

#80 Ponzius Pilatus on 09.07.18 at 10:05 pm

Take that shysters.
33% price reduction in Richmond
https://www.ovlix.com/property/bc314uHO-8311-No-4-Road-Richmond-BC-V6Y2T7

#81 Ponzius Pilatus on 09.07.18 at 10:07 pm

BC added 9,100 jobs.
Way to go pinkos!

#82 Doug in London on 09.07.18 at 10:14 pm

“Is it possible to draw a straight line from the new $14-an-hour minimum wage to 80,100 job losses in Ontario in a single month?”

In mid August I was in Grand Bend and the place was quite busy with lots of people on the main street going into the shops and all the restaurants were open. Similarly, recreational services like flyboarding, jet ski rental, and parasailing operations were quite busy. I was back in The Bend this week and the place was quiet like a ghost town. Here in London, the water park at East Park is now closed for the season. As other commenters here said, quite rightly, a lot of the jobs “lost” were seasonal employment and are finished for the season.

#83 BS on 09.07.18 at 10:21 pm

“It’s not reporting, it’s marketing.”

You can say that about 80% of what is considered News today. Somebody is marketing something. News and reporting today is a few facts spun and massaged with most relevant information omitted to present a message in guise of news or reporting.

#84 Darren on 09.07.18 at 10:31 pm

As they cannot handle the truth I suspect TREB will be serving Hanny Elsayed with papers Monday morning.

#85 Ex-Markham Resident on 09.07.18 at 10:44 pm

We used to live Markham. The house prices in Markham were so nuts that we decided to move to a suburb of Detroit. Yes, D E T R O I T! We bought a detached house with a big yard and a driveway that can park 4 cars for 300k USD, and yes, we pay lower taxes here as well. Many people told me that Toronto is a world-class city and that’s why you have to pay a million dollars for a detached house. I think world-class cities are over-rated.

#86 Ponzius Pilatus on 09.07.18 at 10:52 pm

More and more respected Economists are predicting a serious correction:
http://m.spiegel.de/wirtschaft/unternehmen/william-white-warnt-vor-neuer-finanzkrise-die-noch-viel-schlimmer-waere-a-1227041.html

#87 Smoking Man on 09.07.18 at 11:00 pm

Economists are surprised at the huge job loses in Canada.

I’m not, been calling it for a few years now. Too bad they don’t teach Herdonomics at School.

It’s simple, money and smart people flee when they see communism approching especially when in checked by MSM.

Where is SCM, how is that min wage spike working out.

Dr Smoking Man
Phd Herdonomics.

#88 viorlli on 09.07.18 at 11:56 pm

We can see the society changing rapidly and exploding at its seams all around us. The values of the past are long gone and everyone is just worrying about their bottom line (survival of the fittest). An old friend of mine here in False Creek is pushing 60 now, never got married, travelled all over the world and still goes away every two months or so, got good commercial rental properties here in GVRD, Seattle, Portland, some of them are shared business ventures where he gets a cut. Got an excellent portfolio, diversified, no dependents, no addictions, maybe an occasional date here and there. He will donate it all to a good cause when its time to pass on. I visited his penthouse last week, he got so many forms to be signed by his potential dates or girlfriends: non disclosure agreement, some kind of modified monetary disclosure, promisory notes, no longer than two nights stay form, etc, etc. Everyone is getting lawyers for every little complaint and it getting really ridiculous out there. I feel sorry for the younger guys, most are not looking forward to marriage or even a common law relationships anymore. The excessive political correctness is killing us as a society.

#89 Oft deleted much maligned stock picker on 09.08.18 at 12:02 am

DELETED

#90 T on 09.08.18 at 12:05 am

#82 Doug in London on 09.07.18 at 10:14 pm
“Is it possible to draw a straight line from the new $14-an-hour minimum wage to 80,100 job losses in Ontario in a single month?”

In mid August I was in Grand Bend and the place was quite busy with lots of people on the main street going into the shops and all the restaurants were open. Similarly, recreational services like flyboarding, jet ski rental, and parasailing operations were quite busy. I was back in The Bend this week and the place was quiet like a ghost town. Here in London, the water park at East Park is now closed for the season. As other commenters here said, quite rightly, a lot of the jobs “lost” were seasonal employment and are finished for the season.

——

All of you intelligent people pointing out summer is over, taking seasonal jobs with it, thus the major contributing factor to the job loss.

If this was true we would see this as an annual trend. A quick look at previous years shows this to be false.

https://www150.statcan.gc.ca/n1/daily-quotidien/170908/dq170908a-eng.htm

On a blog post titled ‘Truthiness’. Incredible.

#91 steerage steeward on 09.08.18 at 12:10 am

DELETED

#92 Al on 09.08.18 at 12:12 am

“The proper way to tell if the wage is right for a given job is to see if there is anyone willing to do the job for that wage. Employers will naturally raise wages until they can get the work they need done so long as it is still economic.”

What actually happens in some developed countries is that they do not raise the wages and just bring in migrant workers who will work for less, because you see, there is a worker shortage of course. Yes there is a shortage of residents willing to do hard or menial labor for relatively little pay. Who knew.

#93 steerage steeward on 09.08.18 at 12:20 am

https://www.youtube.com/watch?v=RvehAOCNwp8

#94 steerage steeward on 09.08.18 at 12:27 am

https://www.youtube.com/watch?v=9GnG7R93hfw

Doing it right Garth

#95 The Real Mark on 09.08.18 at 12:36 am

“#61 Shawn Allen on 09.07.18 at 8:17 pm
Civil infrastructure is replaced as needed through property taxes?”

Yes, and property taxes are a charge against land. And there’s a pretty good argument to be made that civil infrastructure has been significantly under-invested in. Thus raising the spectre that the charge against land associated with neglected infrastructure is much larger than might be implied by present property tax rates.

Buying a piece of land from a farmer comes at a negligible cost. Its the improvements to land, and the pro rata share of civil infrastructure that makes it valuable. And the infrastructure depreciates, and hence, the value of the land which, through the power of fiat, is taxed to support the construction and maintenance of that infrastructure inherently depreciates.

The quintessential extreme case is Detroit, where civil infrastructure has essentially been depleted to zero. As in, zero usefulness. No water. Roads are impassible without vehicular damage, etc. And the value of land is arguably even negative because the taxes that would have to be collected against such to refurbish and replace associated infrastructure exceeds any possible benefit that could arise from such infrastructure.

BTW, before you start throwing stones, why don’t you take a moment to consider the argument. If you look at the size of the cumulative infrastructure deficit as suggested by the Canadian Society for Civil Engineering, for example, the implied depreciation of land has been enormous and property taxes have come nowhere near covering such.

For example, in 2016:

https://fcm.ca/Documents/reports/Canadian_Infrastructure_Report_Card_2016.pdf

Figure 5 suggests $80,000 of civil infrastructure exists per household. That is to say, $80,000 per household of land value is directly associated with civil infrastructure. As a deficit in the maintenance of that infrastructure arises, such definitely is subject to depreciation like any other asset.

#96 steerage steeward on 09.08.18 at 12:36 am

https://www.cbc.ca/player/play/1503834631

I regret to inform you, we are in uncharted waters

Shoved all my gold up my ass.

Wish I looked as good a man that knew what the markets would do

https://www.youtube.com/watch?v=EHV0zs0kVGg

#97 The Real Mark on 09.08.18 at 12:45 am

“Instead the USA added 201,000 jobs yet again. “

Only problem with this is that the USA did not “add 201,000 jobs”. 423,000 fewer people are working than in the month before.

https://www.bls.gov/news.release/empsit.t01.htm

July 2018 employment (seasonally adjusted) = 155,965k

August 2018 (seasonally adjusted) = 155,542k

So ~420k fewer people working seasonally adjusted in August.

Additionally the non-seasonally adjusted employment number, from the same source, fell by approximately 1.5M.

Sorry to hear you have been the victim of fake news, but the BLS data is pretty unequivocal. This “jobs” report is an absolute disaster. A proper interpretation would have Poloz’s counterpart in the USA rushing to cut rates before the situation deteriorates even further.

#98 steerage steward on 09.08.18 at 12:46 am

http://www.woodbuffalorcmp.ca/wp-content/uploads/2016/03/Chet-and-Monty.jpg

#99 Ustabe on 09.08.18 at 1:14 am

I am reaching the decision that I will not vote again. There is no point. If you respond with the facile response, “… you will not have the right to complain.” I will write a 19 page comment in rebuttal.

Hey WUL, don’t stop voting but you can start spoiling your ballot. They count those, you don’t just disappear.

And could your 19 page rebuttal be a legal overview of how one might foment a 21st C. Secession of the Plebs.

#100 Oft deleted much maligned stock picker on 09.08.18 at 1:43 am

DELETED

#101 Smoking Man on 09.08.18 at 2:17 am

Jean Chrétien. Best PM Canada ever had
Dude had stroke , talked out of one side of his mouth. Hard to lie

I drove the door knockers to get him into power. He did a good job.

Thinking he’s had another stroke, now the side of the mouth that worked before is broken. Perhaps dementia has set in. Happens to the best.

How can this great man be so quiet now that mental case have taken over once a great party.

If he has not lost his mind. The bastard is suffering alone….

#102 steerage steward on 09.08.18 at 2:43 am

https://www.youtube.com/watch?v=37bi1-ntO6s

As I watch home values go down

#103 steerage steward on 09.08.18 at 2:50 am

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

good to have a tax brake

#104 Smoking Man on 09.08.18 at 2:53 am

DELETED

#105 aa3 on 09.08.18 at 4:42 am

Ontario is putting the cart before the horse. If you look at say Seattle where the economy is just flying, driven by corporations like Microsoft and Amazon.. so the wealth is there in spades.

Once the coffers are overflowing with wealth, a way to spread out a portion of the wealth to the less fortunate is to raise the minimum wage. People in Seattle will still be going to local corporation Starbucks even if coffee goes from $4 to $6.

The problem I see in Ontario is wealth is not actually going up. So if the cost of things goes up, people mathematically speaking have to cut back. Which as they cut back, businesses will have to reduce employment.

#106 neo on 09.08.18 at 6:17 am

#100 Smoking Man on 09.08.18 at 2:17 am
Jean Chrétien. Best PM Canada ever had
Dude had stroke , talked out of one side of his mouth. Hard to lie

I drove the door knockers to get him into power. He did a good job.

Thinking he’s had another stroke, now the side of the mouth that worked before is broken. Perhaps dementia has set in. Happens to the best.

How can this great man be so quiet now that mental case have taken over once a great party.

If he has not lost his mind. The bastard is suffering alone….

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

Couldn’t agree more. Also, Paul Martin was better as a right hand man than the man in charge.

#107 Chico on 09.08.18 at 7:18 am

#73 Paully on 09.07.18 at 9:02 pm

I love Smoking Man!!

I mean, in an arm-curl, bench-press, hey let’s invade a country kind of way!

———————————————————

Well said. Let’s get him back and invade Newfoundland.

#108 Down and out on 09.08.18 at 8:24 am

NAFTA talks: smoking man prices in California compare to Detroit’s gallon of milk $1.29,dozen eggs 79cents,8 ounce pepper jack cheese$1.69 .we can’t do anything about supply side housing but daily products maybe .

#109 KLNR on 09.08.18 at 8:39 am

@#88 viorlli on 09.07.18 at 11:56 pm

____________________

your old friend sounds like he may have some mental illness. paranoia ala howard hughes

#110 Remembrancer on 09.08.18 at 9:01 am

#96 steerage steeward on 09.08.18 at 12:36 am

That sounds painful, personally I keep my Krugerrands in a Gladstone bag just inside the door to the carriage house in case I need to travel in a jiffy…

#111 Remembrancer on 09.08.18 at 9:05 am

#12 Jungle on 09.07.18 at 6:07 pm
There’s a lot money here.

Yep, though its just not very distributed…

#112 Remembrancer on 09.08.18 at 9:19 am

#16 Linda on 09.07.18 at 6:19 pm
So if the GTA collected say 1 billion in property taxes in 2017 but only 900 million in 2018 that in itself should indicate which way property values are going overall.
—————————————————————–

Though it may open another completely different can of worms here, let me help.

The GTA tax collection depends on the thumb suck mill rate for both local muni + school board of your choice + (maybe depending where you live) region who arrives when you call 911 / screws up the roads all summer by digging holes and filling them back in, as well as an assessed value which is a periodic thumb suck (not yearly) based partially on self-reported improvements and land xfer records with a dash of chicken entrails reading for statistical validity…

#113 Remembrancer on 09.08.18 at 9:41 am

#104 aa3 on 09.08.18 at 4:42 am
Once the coffers are overflowing with wealth, a way to spread out a portion of the wealth to the less fortunate is to raise the minimum wage.
—————————————————————–
Ya, that sounds like trickle down economics with social policy mixed in…

A shortage in (skilled) labour is a real driver for wages – example Seattle and Silicon Valley tech booms that drove limited tech skills at the high end consuming more and limited baristas on the services side to wait on them, drove up wages across the board. Similar effect for truck drivers, pipe fitters etc in Fort Mac for different reasons…

RE angle? Check out a sales history along SJC to SFO corridor, not for the faint of heart – and they were making real dough…

#114 Oft deleted much maligned stock.picker on 09.08.18 at 10:27 am

So deleted over truth…..again….some shit is hard to take if your politics ate in the way. Maybe Bloomberg saying exactly what I said about Poloz lying for partisan gain will keep the the truth alive.

https://www.bnnbloomberg.ca/the-daily-chase-bank-of-canada-s-wilkins-surprises-currency-traders-u-s-tariff-watch-1.1134491

I told you your posts will deleted each and every time you refer to people in an abusive, demeaning fashion, regardless of other content. – Garth

#115 Housing a bargain on 09.08.18 at 10:55 am

Loads of varying opinions on the direction of housing prices all based on presumably the same data available to all. Proof that stats can be interpreted
and manipulated to serve any construed notion or aganda.

The fact remains that housing serves many roles , first as as a roof over your head and secondly as a long term appreciating asset which forces the accumulation of wealth by its very nature as an illiquid necessary holding, whether you rent or own. It’s illiquidity is a benefit to its success not a hinderance when you factor in human emotion, being what it is

It is disingenuous for the author of this blog to promote the notion that the average joe blow out there is disciplined enough , sophisticated enough and has the temperament necessary to increase his or her net worth to the same degree as the average homeowner over time has.

It is a simple observation to make that more wealth for more families has been created , accidentally or not, by RE ownership then by investing in balanced portfolios.

#116 Axehead on 09.08.18 at 11:21 am

Garth, please continue the justified deprevative analogy used in reference to Kia; most humerous.

#117 Triplenet on 09.08.18 at 11:22 am

#95 #61
In real estate context, depreciation is a loss in value – from any cause.
Period.

#118 Oft deleted much maligned stock.picker on 09.08.18 at 11:23 am

Yeah…..don’t ask me how I get the information I’ve posted weeks before you do…..but I’m not alone in this….information is my business. I collect it and resell it….I don’t consume ot.

Now….I told you weeks ago about this…..and I guess you thought I was out of line….or you don’t think it’s right to confront the PM…but here it is…..as I told you it was weeks ago…..Canada is not in charge of it’s destiny. Canada is a global.lsughing stock and the message is bring eaten by your media to defend the indefensible.

https://nypost.com/2018/09/04/justin-trudeau-finally-gets-the-trade-trouble-he-deserves/?utm_source=twitter_sitebuttons&utm_medium=site%20buttons&utm_campaign=site%20buttons

Axelrod and Butts cooked up a plan to show Trump as the bad guy thinking Obama would ride to the rescue. Obama came out last night as a confused self destructive narcissist……Canada be damed. The US press waited for this…..they are far left as you know and wIted to perhaps see if Canada had any commercial.or political value…..as you see it is now been decided that Trudeau is a dead figure without game.

The press will now use him to defend against Trump’s attacks on Obama….exactly the opposite of what Butts and Axelrod had hoped. Trudeau wanted to screw Canada and blame Trump…..now everyone knows it was just a big screwed up pair of senior advisors who maybe drank too much of their own stale bathwater.

#119 Smoking Man on 09.08.18 at 11:30 am

ROTFLMAO

Alex jones does George Soros…
https://www.real.video/5831832499001

Looks like youtube has some competition, real video.

#120 Binder Dundat on 09.08.18 at 12:00 pm

100 @ Smoking Man

Chrétien never had a stroke- in his youth he suffered from an attack of Bell’s palsy, permanently leaving the left side of his face partially paralyzed. His brain functions quite well, thank you.

#121 Guru on 09.08.18 at 12:29 pm

Exhibit #1 – 278 Dunview Ave, North York

sold for $3.4mm in Mar 2017
Sold for $2.4mm in Aug 2018

Loss = $1.0mm + other fees/costs.

There is blood on the streets but some buyers are still diving head first into the slaughter house without realizing the market has turned. The Fall/Winter of 2018 will show the telltale stats of the how bad it is.

#122 Shawn Allen on 09.08.18 at 12:43 pm

Land Depreciates says Real Mark at 95

“And the infrastructure depreciates, and hence, the value of the land which, through the power of fiat, is taxed to support the construction and maintenance of that infrastructure inherently depreciates.”

****************************
If only Reality would wake up and conform to Mark’s brilliant theories on deflation.

I believe Yogi Berra said that in theory, theory and practice were the same. In practice they were different.

Mark, in apparent desperation, cites Detroit as a place where land depreciates. Point taken, land CAN certainly depreciate in value. But I thought the discussion was on land in growing Cities. There, I think it is clear that land has appreciated in value (in real dollars) in most cities for centuries at least. There is certainly no natural depreciation of land values in and near the growing cities of the world. Neither practice, nor valid theory suggest such a thing.

#123 Dissident on 09.08.18 at 12:54 pm

#27 Love Guru’s Dad on 09.07.18 at 6:39 pm
Smoking Man, “Appart from late night drunken rants I think I’m funny and insitefull at times.”
——
Garth, maybe a query to the dogs and have them vote for most entertaining blog dog over the years. My vote goes to Smoking Man. Most insiteful as well, if you do that one. I could be overlooking some that haven’t been around in a while.

Flop gets honourable mention.

_________________________________

Before anyone wins anything, you both need to learn how to spell – “INSIGHTFUL”. Jesus Christ.

#124 Gravy Train on 09.08.18 at 1:05 pm

#117 Oft deleted much maligned stock.picker on 09.08.18 at 11:23 am
“[Blah, blah, blah].” How’s your stock portfolio performance this year? Does it suck? I’d be willing to bet that all your investment decisions have been knee-jerk and emotional—not informed or thoughtful. :)

#125 Fish on 09.08.18 at 1:12 pm

I think I said in a conversation way back 2013,
wow that’s an ARTIFICIAL WORM, not A REAL WORM

that’s why I’m Wrinkle old, get know the difference between
An ARTIFICIAL worm and A REAL one,

#126 Myra Andrews on 09.08.18 at 2:11 pm

Real Estate stats for the Greater Vancouver area from realtor Paul Boenisch

Sept 7 New 197 Sold 87 TI:12681
Sept 5/6 New 609 Sold 195 TI: 12,653
Sept 4 New 498 Sold 53 TI: 12,439

Inventory at the end of August was 12,510

#127 Remembrancer on 09.08.18 at 2:25 pm

#114 Housing a bargain on 09.08.18 at 10:55 am
The fact remains that housing serves many roles , first as as a roof over your head and secondly as a long term appreciating asset which forces the accumulation of wealth by its very nature as an illiquid necessary holding, whether you rent or own. It’s illiquidity is a benefit to its success not a hinderance when you factor in human emotion, being what it is
—————————————————————-

Hmm, actually, if you are talking beyond basic shelter, historically residential real estate has been, at best, an inflation hedge and has been touted as a forced savings plan, not an extraordinary wealth generating investment – though that is dubious given roughly 1/2 your forced savings each month goes to someone else as interest on the debt. This is the first time I’ve ever heard illiquidity of an asset as a positive attribute. If the price is always going up can’t you sell at anytime to someone looking to get in?

#128 Karl (Shyster) on 09.08.18 at 2:38 pm

Vancouver is going to see rent increases of 4.5 per cent in 2019, the largest increase since 2004.

You want trend? It’s the sixth straight year that the maximum rent raise allowed has been increased. How’s that for a trend?

#129 Raging Ranter on 09.08.18 at 2:47 pm

@#114, 70% of Canadians live in a home that they or a member of their family owns. Only a tiny percentage of those homeowners are rich. There are plenty of very good reasons to buy a home vs. renting. Stability, freedom to personalize the place to make it your own, to alter the place as you see fit, freedom from having a landlord, etc. I could think of a bunch more reasons to favour owning over renting, all completely valid. “It’s the best way to build wealth” isn’t one of them.

#130 Coles Notes version of Jungle on 09.08.18 at 2:59 pm

…World class city…. High immigration… Growing population… Prices up YoY… Lowest unemployment in in 40 years… Prices sticky… AirBnB…

Memorize those points and you can skip Jungle’s posts. Hopefully I’ve saved him some time so he can get back out there selling houses. There must be a crowd of hungry buyers lining up outside his door while he argues on the Internet.

#131 Tony on 09.08.18 at 3:12 pm

I stated many years ago and have repeatedly stated on this blog Brampton will be the last city to figure it out.

#132 Fish on 09.08.18 at 3:20 pm

try doing maintenance work without any help,

Thanks

Done

#133 Raging Ranter on 09.08.18 at 3:53 pm

The fact that the 80k jobs lost in Ontario were all part time, and that full time jobs actually increased, makes it pretty hard not to point the finger at the minimum wage increase as the primary cause. If it were some wider economic phenomena (or because of Ford) why would the job losses have been concentrated entirely in part time positions?

A higher minimum wage need not cost jobs. But a massive boost to the minimum wage with just a few months warning is the very opposite of how it should be done. Had Wynne raised it by one dollar, then legislated annual increases at, say, inflation plus 1% over the next five years, for a gradual real wage increase, it would have been one hell of a lot more responsible, and a lot easier for the market to absorb. Boosting it by 32% with a few months warning was nothing more than a desperate (and failed) re-election ploy. The consequences will be felt for years.

And those arguing that it can’t be the minimum wage because it was 8 months ago, give your head a shake. As if businesses weren’t going to at least try to make it work before the job losses started to mount. It takes time to increase automation, add more self checkouts, etc. These things can’t magically happen on the first business day of the new year. We are starting to see the effects now.

#134 not so liquid in calgary on 09.08.18 at 4:28 pm

Evangeline

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

So we go back to just being a “branch plant economy”?

That could work

#135 not so liquid in calgary on 09.08.18 at 4:45 pm

@ Smoking Man on 09.08.18 at 2:17 am
Jean Chrétien. Best PM Canada ever had
Dude had stroke , talked out of one side of his mouth. Hard to lie

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

“Dude” did not have a stroke, he contracted Bell’s palsy as a child

#136 TurnerNation on 09.08.18 at 8:00 pm

#88 viorlli so that is Freedom First.

This one weird Smoking Man trick drives casinos crazy!

https://www.blogto.com/city/2018/09/mysterious-light-toronto-prompts-reports-ufo-sightings/

#137 DJIM on 09.09.18 at 10:09 am

The minimum wage increased in January, and there have been healthy gains in job numbers ever since. What happened in August? Hmmm, maybe it was Doug Ford throwing his weight around, firing execs and cancelling contracts, rewriting legislation to make his vindictive actions appear legal, punishing public education as well as universities, and generally scaring off any corporations hoping to open in a province that believes in fair and open markets?

#138 Rob on 09.09.18 at 4:28 pm

“Adrian”

Lol.

Seriously, do you really believe that?

If minimum wage increases are so good historically in Canada why don’t we double them to $30 per hour and really ramp up our economy?

Cancel the pipelines major projects etc.

Let’s just raise the minimum wage really really high!!

It’s the cure all. Then everyone will be happy!

Socialists are so simple!

Adrian the oxymoronic socialist economist!

Lol

#139 Ottawan on 09.10.18 at 11:31 am

It’s possible to draw a straight line between any two points. Doesn’t mean it’s reasonable.

Why would there be a 9-month lag between the minimum wage increase and a monthly loss of 81,000 part-time jobs?

OH, I KNOW! All those minimum wage earners who got a big raise in January decided immediately to have more kids! Basic economics.

Employment is a lagging indicator. – Garth