And just when you thought the central bank would chicken out on interest rates… Well, forget it. With the latest jobs stats there’s no way the cost of money’s going down in 2019.
Economists expected 5,000 new hires in January. We got 66,800. More people joined the labour force (103,700) that in any other month in the past decade. Private sector employment surged 111,500. The number of self-employed dogwalkers and hot yoga instructors dropped by 60,700. Yes, more people had real jobs. And this brought the number of new workers over the past year to 327,000.
Does that sound like an economy needing stimulus?
Right. No rate drop. Maybe a hike April 24th. Just in time for the spring rutting season.
And here’s some key news: lots of companies are hiring, but wages are still stuck in the snow. Pay for permanent employees is increasing at just 1.8% annually. But inflation is 2% – even with cheap gas. Disposable income is going down, not up, despite more people with jobs.
You can come to your own conclusions as to what this means for the autumn election plus the housing market. But it’s unlikely that elevated mortgage rates, swollen taxes and static wages will be changing this chart any time soon:
Van’s wild ride: sales-to-listing ratio plunges
Just over two years ago, with FOMO running hot and Vancouverites being told hungry foreign buyers would Hoover up every available property, there was a buying frenzy. About 70% of all listings were snapped up as they hit the market. That’s now plunged to less than 10% – which means nine of ten listings remain unsold. This is a recipe for further price declines.
Meanwhile the very outfit that may soon be instructed to restore default insurance (and cheap down payments) to $1 million+ properties is warning that the nation’s real estate market is “vulnerable.” In fact, CMHC has now said this ten times – once every three months for the past three years. Being vulnerable means an imbalance – overbuilding, overheating or unsustainable prices.
Given the above, plus a furious lobbying effort by the real estate-industrial complex, we should expect that Election ’19 will have a serious real estate component to it. The three issues are a raiding of inured property values (as above), a return to insured 30-year mortgages (decried here yesterday) plus some diddling with the stress test.
On that note, this comment just poured in:
Was reading your blog yesterday and thought to provide my two cents on something you wrote, for future consideration. Wrt the stress test, my understanding of the tests (one for the insured and one for the uninsured), the goal is not to “fix expensive markets”.
In particular, for the uninsured stress test, the intent is prudential — to support resilience of regulated financial institutions. To the degree borrowers are less levered, the better they are prepared to navigate unexpected shocks; institutions are less exposed to the type of situation that occurred south of the border ~10 years ago.
My belief is that neither test is designed to (or capable of) addressing house prices — which is very much influenced by interest rates, housing supply, incomes, demographics, and did i mention interest rates? That the Canadian demographic is characterized by older rich folk (in diapers, no less) means their bigger marginal dollars (and very lower interest rates) are a huge influence.
Anyway — pretty big fan. Keep up the blog. You’re a Canadian institution!
Well, despite the tepid suck-up, this is absolutely correct. The stress test was instituted by the federal bank regulator (with the support of the banks) in order to protect the integrity of their mortgage portfolios, especially from the destructive influence of the Bank of Mom. By gifting Junior a bag of money, borrowers had been able to put 20% down and skirt the requirements of mortgage insurance. So the banks found they had a worrisome number of loans made to people who were actually high risk – and they were unprotected. OSFI acted, ensuring everyone is tested. In so doing they punted about 20% of potential borrowers.
Without a doubt, the test has helped crash sales and grease a price decline. It’s been more acute in markets where the economy blows (hello Calgary) or (like Vancouver) where the mushy-headed rule. This was not the point of the test, but certainly anticipated. As long as it remains in place, expect more charts like the one above.
When the sales ratio plunges it says buyers expect lower prices. And so it shall be.
92 comments ↓
Hi Garth
If you analyze the jobs report further you’ll realize that as more jobs were booked, hours worked has been on a downward trend cancelling out the job gains. People are actually working less.
Just sayin’.
Total hours worked increased 1.2% in January year/year. – Garth
.
Stress test will be killed by Turdo in 2019, or by CONs in 2020 when they come to power. One way or other, it will be gone in 2 years. And BC folks will welcome back money laundering corruption Queen Cristy Clark.
So, BUY Now or MISS OUT the big future gains in Vancouver RE !!!
In BC and looking more now Canada-Ottawa truly are a banana republic fascist kleptocracy run by insider buddies of all stripes.
Gordon Campbell said we wouldn’t recognize BC when he is done with it and now look at what’s coming down the pipe. Same thing said by Trudeau when he got in. Greedo’s now in Ontario, fleecing all you Ontarians for all you’re worth.
If there is no JUDICIAL inquiry in money laundering across Canada, supported by the FEDERAL gov’t then we know that there are also criminals running the Fed. Just look at SNC-Lavalin.
How come the BC RCMP said at the time Gordon Campbell was voted in office (same time as BC Rail sale scandal), that organized crime had infiltrated the legislature only to hear nothing else about it, ever?
The following story confirms the legacy of BC Liberals rule in BC from 2001-2016.
Absolutely corrupt and we have to find out what they have done to BC and Canada. This includes our police forces.
https://vancouversun.com/news/local-news/investigation-only-10-convictions-for-money-laundering-in-b-c-since-2002
If not, then make sure you get your guns before they outlaw them in Canada to try to save their skins when TSHTF.
That’s a brave chick in today’s pic.
Could she be Sarah Palin’s daughter?
We have snow on the Island too. It is brutal. Almost 3 full inches and the temperature is only 1C.
Nobody is looking at a house for sale today. Gotta get off work early and get home before the traffic builds.
Cheers, R
The Alberta employment number continue to suck.
Zzzzzz. So gta and van house prices have fallen to 2016 levels. That’s simply a fall from ridiculous to stupid high. And Montreal and Ottawa are rising at double digit pace. Garth: how about a contest: where will house prices be when the new government is formed. I vote, no change from current since it’s just a white noise series for the next two years
happy friday everyone
Its all about psychology.
If the feds reinstitute million dollar CMHC insurance, extend the amortization to 30 years to allow more borrowing, and hence higher prices, and cap the stress test, the government has sent the biggest signal to the market.
Its telling the masses – time to invest in real estate because we will intervene to prevent price declines. Its a government guarantee.
And industry will launch a blitz on the new changes, pumping up the young and old alike, and prices will surge forward.
The forthcoming price surge is utterly predictable – we have seen this happen time and time again. Just when the market has some weakness with the hope of sane lower prices arising, like now, some measure takes place that boosts the market further.
This is no different than when interest rates were cut in 2015 by a measely 50 basis points, leading to everyone buying with prices surging 30-40% in the hottest markets. After years of warnings from the BOC about the risk of rising rates, people saw the opposite happen. Those on the sidelines in 2015 that decided to buy gambled correctly, and have been rewarded.
Pontificating on which measure, including BC taxes, will actually prick the market into deflating is moot.
If the government is telling you to buy, the masses will follow, and the masses dictate the direction of the market regardless of how over leveraged, debt filled, and stressed out the buyers might be.
Vancouver death watch?
# 161 Shawn Allen (from yesterday)
Your argument is typical of a Canadian banker/policy maker who is attempting to justify, for example, Toronto’s extreme price run-up (3.5 times – while gains in incomes barely moved) since 2000 when policy makers began implementing bubble-blowing mortgage lending standards in Canada.
For decades in Canada (until 2000) gains in house prices were (approximately) supported by similar gains in incomes. Before lax lending standards changed things dramatically in 2000, this ratio, (approximately 3.5 (within the 3.0 to 4.0 range)) had been in effect for decades. It had been a tried and true ratio.
Before 2000, if house prices doubled over a certain period of time, incomes would have likely also double (approximately) over the same period to maintain the same 3.5 ratio. This is a general way of looking at it. It’s easy to understand.
Thus we can safely and fairly accurately say that until 2000 Canada’s long-term house price to income ratio had been (approximately) 3.5, or not far from that number.
So 2000 represents a fair starting point when considering Canada‘s long-term house price to income ratio. In fact, it is probably a generous starting point considering that Canada lowered the minimum down payment from 10% to 5% 8 years before that in 1992 – which added 8 years of market interference/stimulation with a near-zero minimum down payment rule in effect to boost house prices.
We are looking at a general long-term average or slope for the price to income ratio in Canada – BEFORE lax lending standards were brought in (starting in 2000) and BEFORE emergency interest rates were brought in (in 2009), etc. It would simply be impossible to put forth a reasonable argument that 2000 isn’t, in general, a year that fairly represents Canada’s long-term house price to income ratio.
You argument is basically that today’s historically low interest rates have pushed down monthly payments, completely and permanently changing the game and making Canada’s long-term price to income ratio of 3.5 obsolete. Such an argument goes hand in hand with thinking that a decade of historically low rates has fixed all of the major problems (extreme debt, etc.) Canada has acquired as a result of lowering lending standards (starting in 2000) and bringing on a massive 19 year debt binge / housing price run-up. And this of course is completely false.
On the contrary, it can be argued that 10 years of historically low rates has put Canada in a precarious position. Canadians have simply maxed out on debt at today’s rates and Canada‘s debt problem has worsened. Canada‘s economy has become dependent upon today‘s low rates. Policy makers no longer have the option of lowering rates enough to stimulate the economy enough to bring it out of the next recession when it hits. All of this adds up to a much bigger potential housing price correction that in 2006, for example, when prices weren’t as high, debt levels weren’t nearly as extreme and, with rates at approximately Canada’s long-term average, policy makers had more arsenal with which to throw at the next recession/housing price correction.
Simply put: the longer a housing bubble is maintained and the more stimulus that is used up over time to maintain it – the less stimulus there will be to throw at the inevitable major price correction when it does hit, making that correction significantly bigger than it would have been before.
And a bigger price correction will be necessary to restore house prices back to Canada’s long-term house price to income ratio of approximately 3.5. In other words, the bigger the bubble, the bigger the correction.
(continued)
As I’ve said, for decades before 2000 houses in Canada were valued at approximately 3.5 times income. Again that was for decades – a long-established house price to income ratio that worked for a reason.
Claiming that suddenly slashing rates to almost zero and keeping them there completely changes the game and makes it safe for mortgage holders to suddenly buy homes at 6, 8 or 12 times income is a dangerous premise upon which to implement future policy. It is simply more of the same kick the can down the road thinking that justifies today’s massive housing/debt bubble. The same dangerous thinking that brought about policy to inflate Canada’s housing bubble in the first place. And the same dangerous thinking that will result in Canada lowering lending standards again.
Overall and in general the longer commute argument holds no water. Sure it can be used in special cases, for example, for houses near downtown Toronto or Vancouver. However, in general, it can’t be used to justify Canada’s overall massive housing price run-up. Commutes in Winnipeg and Victoria, for example, have not increased a whole lot since 2000, yet those cities experienced price run-ups of 3.25 times and 3.5 times respectively in just 19 years while incomes barely moved in comparison.
And history provides no example of a country that fixed its housing bubble problems with an extended period of historically lower rates to successfully avoid the major inevitable (bubble) price correction from taking place.
Again, there is no argument that shows that 2000 can’t be used to fairly represents Canada’s long-term house price to income ratio. Using 2016 instead of 2000 would be completely unfair since 2016 had 7 years of emergency rates and 16 years of lax lending standards to create an environment in which house prices skyrocketed while gains in incomes barely moved in comparison. This disqualifies 2016 from fairly representing the long-term relationship between house prices and incomes in Canada. Anybody who attempts to argue that 2016 is a representative year would be exhibiting short-term, biased thinking while ignoring all of the big picture/long term facts that actually matter.
All housing bubbles deflate and prices always fall enough to restore the (general) long-term/long-established house price to income ratio. And in most cases, the price correction overshoots this level.
There exists plenty of long-term fact based points to argue that 2000 fairly (even generously) represents Canada’s long-term house price to income ratio. The same long-term fact based points show that 2016 represents a massively inflated (and completely useless) house price to income ratio.
You have failed to provide a fact-based argument to justify that 2016 (or whatever year you may have in mind) fairly represents Canada’s long-term house price to income ratio. You’ve also failed to provide a fact-based argument to prove that 2000 doesn’t fairly represent (in general) Canada’s long-term house price to income ratio.
I nominate Jody Wilson Raybould as the new PM !
Trudeau can retire to a senior position with SNC Lavalin………
Seems to me back in the yesteryear of my first home purchase there was a simple guideline to debt and home buying DON’T exceed 3 x your gross pay or 4 x your net.
no need for stress tests and people shared a little common sense.
At the same time the government massively increased the eligibility for hiring with wage subsidy.
Merrill Lynch downgraded BMO and put out a warning on banks and bank shares this week.
Not as solid as you are lead to believe.
Gee, guess what ML’s business is? – Garth
Sure looks like RE sales are down, and soon to be followed by prices. Well, there was a lot of EZ money and lots of speculation taking place. And of course, lots of that EZ money also made it into other markets at well. Now that the signs are we are bottoming out, the talk turns to “growth fears” and anticipation is building that the bears are waiting around the corner. Some of my pals have been selling the rips (January bounce) and moving to higher ground.
You really have to give it up to the canadian banks. Spend 20 years driving up real estate prices, locking more and more people into monster mortgages, then reset the rates on all the debt slaves just enough that they don’t go bankrupt,
Get ready to hear a generation of over indebted mortgages holders and the RE industry kick and scream for the government to save them. Enjoy the show.
Garth good thinking. There is little doubt that reversion to the mean for interest rates will happen.
How about you Keynesians here explain the tax load being passed to the dead taxpayer. In the Keynesian model balance existed. Low costs in good times and programs in bad.
Now all we have is programs leading to higher tax burdens. Canada has no room left for bad times. It pigged out this decade and is now trapped by rising interest rates like everyone else.
Of course your champion says the budget will balance itself
I’d be curious about your explanation of big fat government and apparatchik bureaucracy swallowing the taxpayer like a tiger eating a gazelle heart.
You lived in a Keynesian wet dream for decades. The rise of socialism has occurred. If you choose to deny it’s your choice.
I prefer to prepare. It’s why I left. Only a crisis will curb this porkfest.
There was a time when public sector workers made 20-30% less than private sector because of job security and gold pensions which evened it out.
No more…
These entitlements went unchecked for 2 decades and now the government is eating it’s taxpayer.
But again go ahead and dream your Keynesian dream.
One day you will wake up.
#170 What happened in here? on 02.08.19 at 1:27 pm
Garth?
Your comments section has been taken over
by the lunatic fringe.
———–
You must be new here.
Welcome
I would love to see the government grow some backbone and actually allow prices to fall
It frustrates me that the measures you mention (30 year amortizations, allowing more withdrawals from RRSP) result in people spending more on interest or saving less. I think we can all agree that the average Canadian makes poor financial decisions when it comes to debt. The government shouldn’t be actively encouraging Canadians to take on more debt than we already have
5 Loaves. 2 Fish.
1,000’s fed utter bull shit by Statistics Canada and swallowed HOOK, LINE & SINKER by Cdn. MSM (including you Garth).
Here are the UNADJUSTED Labour Force Survey numbers (StatCan link below):
Employment -198,500
Full-Time Employment -226,300
Part-Time Employment +27,900
Unemployment +6.16%
Unadjusted are the ACTUAL survey results, undoctored.
The Cdn. MSM WONDERS why UNEMPLOYMENT WENT UP with such STRONG job numbers per Garth’s 2nd paragraph = voodoo math.
StatCan claim they use a 3 month moving average when calculating Seasonally Adjusted numbers and that it ought not to be that much different from the Unadjusted numbers…from the horses mouth (LFS = Labour Force Survey):
“Studies have shown that LFS standard errors for seasonally adjusted data are close to those for unadjusted data, particularly when estimates are for larger populations and domains.”
…And Planet Claire has pink air.
Here is the link to the LFS data table to play with (to view the Unadjusted survey data, click on the Data Type tab, deselect Trend-cycle, select Unadjusted, then click Apply):
https://www150.statcan.gc.ca/t1/tbl1/en/cv.action?pid=1410028701
The 5 loaves, 2 fish Seasonally Adjusted data can be calculated from the above table, so you can verify for yourselves that I’m not full of StatCan’s BS…they are.
We’re headed for a recession folks, buckle up, batten down the hatches with Unadjusted Dec. and Jan. job numbers being all negative, big time.
And they say it was a complete surprise when a recession hits…no it isn’t, you just have to hunt for the actual data.
BTW a simple way to increase the minimum wage is to increase the minimum personal exemption for people making it.
Oh but wait then government would lose billions. Better to wreck small businesses
Some interesting observations about Vancouver’s detached listings: there’s a well-pronounced 3-month cycle where listings surge into the market in one month, followed by steep drops in the third month, as stale listings expire.
In December, the number of detached listings in Delta declined 67% over the previous month. In January, detached listings were up 394%.
In North Van, listings were down 67% in December, then back up 418% in January.
Vancouver Westside: down 52% then up 240%
Vancouver East: down 47%, then up 231%.
Old Real Estate pros say that when ‘sales to listings’ ratio is 16% or less, it’s the time to buy. But don’t be fooled: this is only true if the ratio has been 16% or lower for more than 3 months in a row.
But sales-to-listings ratios (sales/listings) surge when listings come off the market, and crash when listings bloom. Best to wait for a few months and see how the 3-month listing cycle plays itself out.
Curiously a lots of brankruptcies by these days: Cirque du Soleil is full debt, Caroline Neron brankrupt (jewel), Theo taxi bankrupt, Sears bankrupt, a guy selling ink bankrupt (I don’t remember his company name..Cartridge something), and so on.
#102 Smoking Man on 02.08.19 at 1:12 am
My attempt at drunken poetry
In your darkest hour you can’t see the flowers all around. The sweet aroma of life to you smells like the summer armpit on a crowded subway car.
When you are on top of the world and you know you can’t lose. You lose on purpose to releave the bordome and loneleness of success.
What do you dogs think? Should I focus on poetry or stay the course to defeat a one world communist govt.
>Tweet the poems. You might actually get a lot of readers. General craziness is appropriate here.
Nice report. Don’t know if its a trend, or a one-off..but nice none the less.
Huge contrast with all the moaning we hear on here. Maybe that’s why there is so much moaning after all? All the employed successful people are busy at work, or happily retired enjoying life. Everyone else is posting on here about how they failed while blaming everyone else (usually government or banks).
Here’s a great example:
#18 expat on 02.08.19 at 6:12 pm
“I prefer to prepare. It’s why I left. Only a crisis will curb this porkfest. There was a time when public sector workers made 20-30% less than private sector because of job security and gold pensions which evened it out.
No more…These entitlements went unchecked for 2 decades and now the government is eating it’s taxpayer. But again go ahead and dream your Keynesian dream. One day you will wake up.”
-This great pontificator appears to be stuck in 1995 when all “government jobs” paid stellar wages while providing great benefits and job security. News flash: those days are long gone. Other news flash: Canadians don’t need to “wake up” since we already get it and don’t need you to tell us what we already know.
Remember T2 only got 4/10 votes.
MF
canada doing well, sell now before rates go up.
Canada doing poorly, sell now before there are no more jobs.
Same old, same old.
Recent Twitterverse investment advice, in case of recession:
1. Be Poor.
2. Chill.
Beat that Garth.
And why it won’t matter what Gov. does to goose RE and GDP.
If the last 2 months of Unadjusted job numbers are correct and the last 3 GDP reports, not even the SECOND COMING can save us now.
Polishing portholes on a sinking ship.
Bad for all of us.
PS:
#2 above easy to do in balmy Western Canada tonight, including La La Land (the latter where you use the lawnmower to shovel the snow, that lawnmower will need a block heater this week and 5W30 oil).
Buonanotte
For all those debt laden, cappachino sucking, know-it-all Canadian millennials who are struggling and sweating to make ends meet daily and find themself in worse financial shape every month as the rates rise and return to normal – YOU DESERVE IT!!!
““In the financial crisis, in the aftermath of that when we were trying to help the economy, we engaged in these quantitative easing policies, and an important question is, should those always be in the tool kit — should you always have those at your ready — or should you think about those are only tools you use when you really hit the zero lower bound and you have no other things you can do,” Daly told reporters after a talk at the Bay Area Council Economic Institute.”
i hate these Keynesian communists and their welfare programs. lock them up trump. drain the swamp.
Employment rates in Alberta and Calgary are the highest in Canada but are down over the last 10 years by 6.7% and 10.4% respectively (Dec data). They are indeed in a long term down trend since the July 2008 Crude Oil price peak.
My chart: http://www.chpc.biz/earnings-employment.html#Rate
#2 Mike is pumping again..
#11 Victoria Real Estate Update on 02.08.19 at 5:50 pm
As I’ve said, for decades before 2000 houses in Canada were valued at approximately 3.5 times income. Again that was for decades – a long-established house price to income ratio that worked for a reason
Why did real estate crash in the late 80s?
“Economists expected 5,000 new hires in January.”
How the hell can economists expect only 5,000 new jobs per month when we take in like 300,000 new immigrants a year + 50,000 refugees + 100,000 TFWs (that we don’t need because there’s no labor shortage)?
Just a question! Doesn’t make me a racist!
On the whole Trudeau/Morneau 30 year mortgage thing… I find it a bit rich to hear Cons complaining when it was originally Harper and Flaherty who in their infinite wisdom (aka none) brought in 40 year mortgages. Lest we forget.
That’s all for today! I gotta ease you boomers in! Hi Garth!
Gee, guess what ML’s business is? – Garth
Hasn’t it always been? What changed?
Recent sale report.
Is this one good value in Delta?
Dunno, you tell me, seemed reasonable with all the other nuttiness going on.
The details…
9303 114A STREET Delta
Sold 730k
Originally asking 749k
Assessment 806k
Two bits of information I can pass on, firstly, REW states that for similar homes in that area the median list price is 1.09,although could be based on just one house.
Secondly, I couldn’t find the usual listing on Zolo, but for that area they state that the average list price is 1.25, so maybe someone bought a fixer-upper in a half-decent hood…
M44BC
No Zolo link as usual, a picture on my blog will have to suffice.
https://pinksnow103480648.wordpress.com
https://www.rew.ca/insights/368319/9303-114a-street-delta-bc
The writing’s on the wall. I know someone who has worked for Cisco systems and its subs for almost 20 years. Cisco sold his division for a billion back to the hedge fund raiders that they bought it from 5 years prior for $5 billion and now their new bosses are closing their division quarters in the silicon valley in Mountain View CA. Who takes a $4 billion bath unless they know it’s going down.
He will be unemployed for the first time in his life!
They have laid off most of Canada, except a pocket in Toronto area and a couple salesmen in Van.
TSIDGTHTF. (The shite is definitely going to hit the fan).
“Economists expected 5,000 new hires in January. We got 66,800.”
=====================================
Fake News !!
Victoria Real Estate Update on 02.08.19 at 5:50 pm
As I’ve said, for decades before 2000 houses in Canada were valued at approximately 3.5 times income. Again that was for decades – a long-established house price to income ratio that worked for a reason.
———————————————————
And that was 3.5 times 1 income and not family income as today. The inclusion of the second income in the family I believe happened in the 80’s when realtors were crying to the government that first time home buyers were unable to qualify for a mortgage and so the second income (usually the wife’s) should be included. The result was higher home prices.
Why did real estate crash in the late 80s?
====
Seriously? Mortgage rates went from 11 to 17% in 1.5 years
Real estate prices crested in 1989, eight years after mortgages rates were 17%. – Garth
Some medium-heavy reading to go with your Saturday morning coffee:
https://www.theatlantic.com/magazine/archive/2019/03/how-kleptocracy-came-to-america/580471/
Summary: in the late 1990s, as the former Soviet union dissolved, billions of dollars in capital assets were divided up by criminals, and carted off to be laundered abroad. London, New York, LA, Miami were all highly destinations for laundered money.
Eventually, after September 11, 2001, the PATRIOT act enacted strict controls (and penalties) for banks that did not report suspicious transactions, and that did not implement safeguards against the flow of corrupt cash.
But there was one loophole in the PATRIOT act: the Real Estate industry had lobbied hard for a temporary exemption from the stringent monitoring measures of the PATRIOT act, pleading that suburban moms selling Real Estate as a second income were ill-equipped to investigate and report on the finances of every buyer.
Cue the growth in sales of luxury high-end Real Estate, mostly bought anonymously, using shell companies….
Hmm. Where have I heard that before?
#30 – I’ll say it once, slowly, so you understand…
Trump
is
the
Swamp
Just look at the company he keeps.
Replacing bad actors with other bad actors leaves you with bad actors
Its funny to see how people seem to be happy in the comments section. The people who are underwater are our neighbors. If they suffer we all will be suffering. Finding a solution to minimize the pain is much better than scorn.
If you wanted to destroy Capitalism in 10 years you do what T2 is doing and what OAC suggests. Exposed, the climate change bs is all about killing capitalism.
Been saying it for years. Here is proof.
A shocking statement was made by United Nations official Christiana Figueres at a news conference in Brussels. Figueres admitted that the Global Warming conspiracy set by the U.N.’s Framework Convention on Climate Change, of which she is the executive secretary, has a goal not of environmental activists to save the world from ecological calamity, but to destroy capitalism. She said very casually:
“This is the first time in the history of mankind that we are setting ourselves the task of intentionally, within a defined period of time, to change the economic development model that has been reigning for at least 150 years, since the Industrial Revolution.”
She even restated that goal ensuring it was not a mistake:
“This is probably the most difficult task we have ever given ourselves, which is to intentionally transform the economic development model for the first time in human history.”
Read more at https://sovereignnations.com/2019/02/07/global-warming-destroying-capitalism/#jY0gv0uhRYAUb9jk.99
#22 Expat on 02.08.19 at 6:18 pm
BTW a simple way to increase the minimum wage is to increase the minimum personal exemption for people making it.
Oh but wait then government would lose billions. Better to wreck small businesses
——–
Here are some facts and reality for you, which are far more important than your FEELings.
Ontario unemployment rate hits 18-year low, six months after minimum wage hike
https://www.theglobeandmail.com/business/economy/jobs/article-ontario-unemployment-rate-hits-18-year-low-six-months-after-minimum/
Higher minimum wage doesn’t hurt small business, it boosts small biz because workers have more disposable income to go out and SPEND money. You boomers are so goddamn entitled to your precious beloved CHEAP LABOUR, it makes me sick.
You want to know what kills small business? BIG BUSINESS. Nothing destroyed more small businesses than Amazon and Walmart. Bezos and Walton destroyed thousands upon thousands of small businesses. NOT THE MINIMUM WAGE. So take it up with them.
Oh and I do agree instead of cutting corporate income taxes all the time, we should be raising the basic personal amount to $25,000. That would actually help working people but since when do conservatives care about them? Never.
Man some of these steerage section posts are getting long. How about a word count limit Garth?
# 39 Ronaldo
Let’s assume it was in the 1980s that that a second income was first allowed to be considered on a mortgage application.
What’s your point?
House prices likely increased as a result of allowing a second income on a mortgage application. That’s probably true.
However, you missed the entire point of my posts. We are not talking about house prices only. We are talking about the house price to income ratio.
House price to income ratio = average (median) house price DIVIDED by average household income.
If the average or median house price suddenly increased significantly AND incomes increased at the same time by anywhere near the same amount – the price to income ratio wouldn’t have changed significantly.
If there was a change in Canada’s price to income ratio in the 1980s as a result of a second income, it wasn’t a significant amount and wouldn’t have suddenly caused a dramatic change to Canada’s long-term house price to income ratio that remained at approximately the same level until 2000 when policy makers began to introduce lax lending standards.
The major market intervention that began in 2000 with the introduction of lax lending standards brought about a dramatic change in Canada’s house price to income ratio because house prices skyrocketed while gains in incomes barely moved in comparison.
Autumn…yes. Lovely word, and glad you, Garth, like I, prefer it to calling the season “Fall”.
Keep on keeping it real.
And best regards…rt
#40 Screwed Canadian Millenial
communist. i have a meeting with a couple members of the walton family next week. we’re planning to put major pressure on provincial governments to lower the minimum wage and create a programs to support our workers like the us does. we employ so many people we deserve it. small business is useless in an era of globalization, it’s all about volume, corporate streamlining, lobbying and messaging. grow up kid.
if you want to take me on you have to think money 24/7, nothing else. lance armstrong is a good role model. he dabbled with dope and got cancer, did that stop him, no way jose. he went through the best medical procedures and learned how to be sophisticated about his doping. when he recovered he was laser focused, worked hard, paid off the best doping doctor in the world for exclusive services, made donations to the governing body for special favours and he triumphed like nobody else ever has or will. big balls and a brass neck, cunning, committed, the patron. do you think you got what it takes punk. give it your best shot.
# 33 Leo Trollstoy
Again, we are talking about Canada’s house price to income ratio – not just Toronto’s. Not all housing markets in Canada crashed along with Toronto’s in the late 80s to early 90s.
I mentioned that Canada’s house price to income ratio remained approximately at 3.5 (within a range of 3.0 to 4.0) until 2000. This implies that it did fluctuate, but it didn’t deviate much from 3.5 until lax lending standards were implemented after 2000.
#12 crowded – This woman has integrity that appeals to me. Jody Wilson Raybould has class, and gets my vote for PM too. In fact, keeping with the new normal agenda may vote for her often.
Boys and Girls; check this story out…..sad.
https://www.cbc.ca/news/canada/british-columbia/belcarra-speculation-tax-1.5011196
LB
#21 Dolce Vita
Actually, all of the numbers are estimated- both unadjusted and adjusted. The Labour Force Survey is completed by around 100,000 Canadians and is extrapolated from that to reflect the whole country.
This means 0.33% of the population gives the info that creates the official numbers- or 1 person out of every 303. Seems like a low bar for accurate representation, no? I’d say the numbers might not be completely fabricated, but are definitely highly suspect.
#7 yorkville renter
Happy Friday to you as well! :)
Stay warm fellow Canucks.
On the way down (accelerating) after jumping from the 70-th floor of a high-rise.
Still no impact, the pavement is in distant view, life is great, there must be no gravity, everyone pointing out to it is a failure, a denier, a troll.
#36 For those about to flop…
Actually, it is one of your postings that I feel that they did ok with there purchase. I am not very familiar with Delta, did some work upgrading a house a few years back on the upper/higher level of Delta, what a beautiful view they had!
Yesterday’s pathetic weblog page pixelated on Crypto sticks then BTC rockets 10% while LTC alights 30% today.
TELL US O BLOG which other asset class(es) otherwise hex, vex or perplex you :) :)
The outlook is hazy.
Fund Manager: Why The Housing Market Won’t Bounce With Lower Interest Rates
https://www.investmentwatchblog.com/fund-manager-why-the-housing-market-wont-bounce-with-lower-interest-rates/
#44 Smoking Man
Most of us know that it is a total farce. This morning in Regina -42, last week in Winnipeg -40. What is interesting although the Prairies have always dealt with extreme temps but most of the weather records date back from 1890 to 1910; so obviously there was a fenomena that cause record breaking temps back then.
As I mentioned many times before, the most important focal point is clean drinking water for all humans.
Want to make a difference, plant a tree, numerous so called no mans land have become rich in diversity due to communities recognizing the problem, often taught by one who understands the geography etc and are now thriving. There are so many links on the Web that substantiate this. Why is not more of this posted?
So many doing great things but all is ignored by the Greenies political/lying, uneducated views; they are incredible hypocrites!!
#8 Spring Resurgence on 02.08.19 at 5:40 pm
Its all about psychology.
If the feds reinstitute million dollar CMHC insurance, extend the amortization to 30 years to allow more borrowing, and hence higher prices, and cap the stress test, the government has sent the biggest signal to the market.
Its telling the masses – time to invest in real estate because we will intervene to prevent price declines. Its a government guarantee.
———————————————————
Well stated, could not agree more.
I believe this is concrete demonstration of how our politicians are owned by, and beholden to, the REIC.
Recent sale report.
Although a bit rough and ready on the inside here’s another detached on a decent block of land that went well below a million in Vancouver
The details…
1578 e22nd ave,Vancouver.
Sold 925k
Asking 998k
Assessment 1.26
So pretty much at the bottom of the detached market in Vancouver it went 27% less than assessment.
No laneway.
That means no one going through your rubbish at 2 o’clock in the morning looking for a 5 cent can…
M44BC
https://www.zolo.ca/vancouver-real-estate/1578-east-22nd-avenue
#49 Godth on 02.08.19 at 8:41 pm
#40 Screwed Canadian Millenial
communist. i have a meeting with a couple members of the walton family next week. we’re planning to put major pressure on provincial governments to lower the minimum wage and create a programs to support our workers like the us does. we employ so many people we deserve it. small business is useless in an era of globalization, it’s all about volume, corporate streamlining, lobbying and messaging. grow up kid.
if you want to take me on you have to think money 24/7, nothing else. lance armstrong is a good role model. he dabbled with dope and got cancer, did that stop him, no way jose. he went through the best medical procedures and learned how to be sophisticated about his doping. when he recovered he was laser focused, worked hard, paid off the best doping doctor in the world for exclusive services, made donations to the governing body for special favours and he triumphed like nobody else ever has or will. big balls and a brass neck, cunning, committed, the patron. do you think you got what it takes punk. give it your best shot.
…..
trolling is a fine art that you ain’t got.. last week you were an eco-commmie.. this week a trumpaholic… sad.
https://www.cbc.ca/news/canada/calgary/statscan-statistics-canada-employment-unemployment-recession-tombe-jobs-alberta-1.5011422
Meanwhile all the greenies are clapping there hands! Ha!
Good-luck!
#61 For those about to flop
I lived on the West Coast for a few years. All these posts/links that you are educating us greatly appreciated by me that I got my ass out of there. Unbelievable that anybody would pay that much for such crap, thanks.
My limit for this evening, stay warm folks..
Economics Publications
What’s New
The Global Week Ahead (February 8, 2019)
://www.scotiabank.com/ca/en/about/global-economics/economics-publications.html
Expect five more interest rate increases over the next two years. With less disposable income for Canadians it will be difficult for many families.
The real estate market is getting thinner by the day. Demand is low and home prices are falling lower. With a huge number of new homes coming onto the market I can only see prices falling further.
Jobs are everywhere the problem is that the “Drive Through” doesn’t pay much.
Not about RE per se, but all are related.
I enjoy reading Howard Marks – I hope some of you do as well:
“The purpose of this memo is to describe what happens when political behavior collides with economic reality, as illustrated in one area where the government is taking steps – tariffs – and another in which debate among politicians is heating up – restrictions on the capitalist system.”
https://www.oaktreecapital.com/docs/default-source/memos/political-reality-meets-economic-reality.pdf
[16 pages]
TCC
I’ve been diversifying my portfolio by buying more bond funds but the prices keep going up. Higher interest rates so bond funds can go on sale? Bring it on!
Just over two years ago, with FOMO running hot and Vancouverites being told hungry foreign buyers would Hoover up every available property, there was a buying frenzy. About 70% of all listings were snapped up as they hit the market. That’s now plunged to less than 10% – which means nine of ten listings remain unsold. This is a recipe for further price declines.
—-
A recipe that will never get to be backed and have a fork stuck in it because the feds will be telling everyone to buy this Spring once they implement those hormone inducing changes to the stress test, CMHC cap, and amortization. When there are more realtors than there are oil and gas workers, you know how this market will play out – up and up and up again this year. Some markets like Victoria had declining sales for three years now but prices have rocketed up 40%.
How many times have we been on the verge of a market fall only for the market to come back with a fury. It sure likes to tease these bears for the better part of a decade now. Just when renters think they will be vindicated for being ‘smart’ and renting, the market pulls the rug from out from under them. This Spring will be no different.
#44 Smoking Man
these modern scientists are such pansies. look at the risk real men grappled with:
A leader of the Manhattan Project recalls a discussion of whether the Trinity test would ignite Earth’s atmosphere and destroy the planet
https://blogs.scientificamerican.com/cross-check/bethe-teller-trinity-and-the-end-of-earth/
did that deter them – hell no! ignite that bad boy. nothing bad happened. i lament what a bunch of ninnies people are these days. nimby babies.
#59 acdel
i planted a tree but it got so big it had to be cut down!
https://www.google.com/search?q=british+columbia+clearcut&source=lnms&tbm=isch&sa=X&ved=0ahUKEwi0nvuC263gAhWULH0KHe5OC7kQ_AUIDigB&biw=1366&bih=657#imgrc=H8hBXHriypHv5M:
That’s a great image, thanks Garth. We’ve heard of toxic masculinity, but who is speaking for frozen masculinity?
I remember an old adage – “he knows the price of everything but not the value”. It neatly sums up my view of markets, particularly Real Estate, that prices have greatly outplaced value.
I dread the consequences of deflating asset prices and I know the controlling minds dread the same. Imagine the horror they would experience if told to put their gum boots on, grab a shovel and move the outhouse.
Now I hear MMT (modern monetary theory) is being promoted. Even I can hear Keynes rolling over in his grave. If instituted, it will be the greatest can kicking exercise ever by our fearless leaders.
https://en.wikipedia.org/wiki/Modern_Monetary_Theory
“God” help us because such a policy will only make it worse after the sugar high wears off. I only have to look at Venezuela to see who suffers. What went wrong? In my mind it was corruption at all levels.
I know for a fact that some days are colder than others and debt is really a promise.
To #8 Spring Resurgence
50 points mean quite different things in different contexts. If it is from 10 to 9.5 that is a 5% drop. In 2015 it was from 1 to 0.5 it means a 50% drop, the biggest of all times. This is why prices surged the most after that.
SCM
What a pathetic waste of youthful energy you exhibit. Savimg the world, is your cape blue or red.
I’ll let you in on a little secret, everything in the universe is a bolleen, a yes or a no, a 1 or 0.
Every single human on the planet has the ability to become wealthy beyond belief. You just need to make a few successive correct bets.
When you get there then you can help others, create jobs and prosperity for everyone around you.
Your love of socialism is a false construct planted in your brain by teachers who go through life living in a safe space and to frightened to make a bet. Taught by teachers.
Grow up, use your energy and create something the world wants.
Social justice woriors are a dime a dozen with no upside for personal property.
Just look at triggered teacher James comments.
Do you really want to turn into that.
Dr Smoking Man
PhD Herdonomics.
Who many of the jobs created were actually valuable? I’d say under $32,000 I’d still consider poverty wages. Wal-Mart or Managing a Tim Horton’s isn’t meaningful work for anyone with any dependants. The numbers of jobs added mean very little if all that crops up is new little brick & mortar franchises of brands X,y,z paying slave wages. Where are the real stats & how many good paying jobs were created?
10/11 VREU – If the increase in RE prices is due to ZIRP and lax lending standards, would this not have a fairly consistent effect across Canada? According to the demographia study, many Canadian markets are at a multiple of 4.1 or lower, including Montreal, Quebec, Halifax, Ottawa, Winnipeg, Calgary and Edmonton. Toronto, Vancouver, Hamilton and Victoria are the ones that seem out of whack (also some smaller centres).
Also, as noted, would not the low rates make housing
in these affordable centres much cheaper on a debt
servicing ratio than in time of higher rates (ie most of the last 40 odd years)? So we could conclude that
housing costs may now be less than the historical Canadian average in those markets.
I might also suggest leaving Victoria.
Ronaldo 39 brought up a good point. Sometime in my lifetime, two-worker families became the norm. But was this an effect of higher living costs, or did it simply increase what was accepted as the norm?
#45 Screwed Canadian Millenial (I’m back did you miss me) on 02.08.19 at 8:21 pm
Here are some facts and reality for you, which are far more important than your FEELings.
Ontario unemployment rate hits 18-year low, six months after minimum wage hike
https://www.theglobeandmail.com/business/economy/jobs/article-ontario-unemployment-rate-hits-18-year-low-six-months-after-minimum/
Higher minimum wage doesn’t hurt small business, it boosts small biz because workers have more disposable income to go out and SPEND money. You boomers are so goddamn entitled to your precious beloved CHEAP LABOUR, it makes me sick.
You want to know what kills small business? BIG BUSINESS. Nothing destroyed more small businesses than Amazon and Walmart. Bezos and Walton destroyed thousands upon thousands of small businesses. NOT THE MINIMUM WAGE. So take it up with them.
===================
Best. Post. Ever. Sums it up clearly.
Note: Some of us boomers/GenX get it.
Silver lining in Labour Force Survey Unadjusted for ALL of 2018, Jan. to Dec. [Seasonally Adjusted in square braces]:
Labour Force: 352,600 [227,200].
Employment: 537,000 [260,400].
Full-time Employment: 393,600 [134,700].
Part-time Employment: 143,400 [125,700].
2018 added a huge number of net jobs (+537,000) and easily absorbed the 352,600 increase in the labour force.
What is worrying are the job numbers from Aug. 2018 to the end of 2018, best described as jittery – see the
“Labour Force Survey Unadjusted: Month to Month Changes, ‘000’s”
chart that I created using StatCan data and draw your own conclusions:
https://i.imgur.com/PL6mpU8.png
Just got the cash grab second property letter from BC Dippers. Given that every property owner in BC is already registered at Land Titles, I smell a scam . The government already knows who owns what. Horgan wants to catch a few percent of non English reading citizens and lots of seniors who won’t understand the consequences of the Byzantine regislation formality. This is stealing and fraud. Way to go Dip voters. Snowbirds like the many are being given short notice. The government also knows who’s out of the country and for how long. Horgan obviously wants to catch retirees napping while away.
I had a small amount of money in QuadrigaCX exchange.I complained why it took so long to get my money out and I got a email cancelling my bank transfer.He said get my money out by buying bitcoin then transfer to a wallet then to a bitcoin atm.The transition costs and travel to the atm machine was costly and time consuming.Never again,I still have a few dollars in my crypto wallet which lost more in half this year.This video sums up bitcoin.
https://www.youtube.com/watch?v=XmMQAuO62gI
#62 Trumpaholic trolls
i was converted by all the deep, verifiable, prescient analyses by the trump crowd among others around here. long time lurker, not 1st, etc. really showed me the light. i couldn’t help be persuaded by their enlightened gravity. how can anyone resist the allure? https://www.youtube.com/watch?v=U-PHPMPXnQA
acdel just reminded us winter is cold and global warming is a scam. how could that be wrong? duh.
It’s national pizza day! i bet trump eats pizza today, i think i should too.
#4 Russ on 02.08.19 at 5:23 pm
That’s a brave chick in today’s pic.
————————————————
Braver of the guys, for obvious reasons. Also, since women have a higher percentage of body fat than men and smaller surface area, they can usually withstand cold better than men.
#74 Smoking Man on 02.09.19 at 12:13 am
“… I’ll let you in on a little secret, everything in the universe is a bolleen [sic], a yes or a no, a 1 or 0….” I assume you meant to write the word Boolean, and not baleen. You’re as cryptic as James Joyce, but without an ounce of his intelligence and talent as a writer. It’s too bad your dreamboat Donald Trump can’t see the world in terms of true and false! :)
Rexx Rock on 02.09.19
Hahaha that video is hilarious. Good post.
MF
Re: #68 Doug in London on 02.08.19 at 10:26 pm
Long term bond funds and gold. Soon interest rates will be negative in both America and Canada.
so will canadians need one of these in the near future?
the business cycle —–rinse lather repeat …poor governance, industry structure, systemic misconduct ,prudential risk —> R’s response
royal commissions recommendations rebuild rules
https://www.smh.com.au/business/banking-and-finance/the-regulators-failed-bank-customers-but-they-are-now-being-trusted-to-fix-this-mess-20190204-p50vnk.html
Commissioner Kenneth Hayne’s 1000-page final report
While his referral of 24 misdeeds for possible criminal and civil prosecution will help in righting past wrongs and perhaps focus the minds of directors and executives, the impact will be generational rather than permanent.
https://theconversation.com/haynes-failure-to-tackle-bank-structure-means-that-in-a-decade-or-so-another-treasurer-will-have-to-call-another-royal-commission-110437
https://en.wikipedia.org/wiki/Royal_Commission_into_Misconduct_in_the_Banking,_Superannuation_and_Financial_Services_Industry#cite_note-113
https://www.smh.com.au/business/banking-and-finance/the-regulators-failed-bank-customers-but-they-are-now-being-trusted-to-fix-this-mess-20190204-p50vnk.html
Commissioner Kenneth Hayne’s 1000-page final report
While his referral of 24 misdeeds for possible criminal and civil prosecution will help in righting past wrongs and perhaps focus the minds of directors and executives, the impact will be generational rather than permanent.
https://theconversation.com/haynes-failure-to-tackle-bank-structure-means-that-in-a-decade-or-so-another-treasurer-will-have-to-call-another-royal-commission-110437
NAB bad boys…staged retirements ?
The regulators failed bank customers but they are now being trusted to fix this mess
https://www.smh.com.au/business/banking-and-finance/the-regulators-failed-bank-customers-but-they-are-now-being-trusted-to-fix-this-mess-20190204-p50vnk.html
Fake job reports.
And the cycle will continue over and over again because the labomized public has a 3 month memory at best.
I used to think it was just because people are uneducated; but last year I started asking people about big news events that happened just last year. Only about 5% of people responded with an accurate recall of said news. People have poor retention of even recent history. Things will never change.
#69 Spring Resurgence
A recipe that will never get to be backed and have a fork stuck in it because the feds will be telling everyone to buy this Spring once they implement those hormone inducing changes to the stress test, CMHC cap, and amortization. When there are more realtors than there are oil and gas workers, you know how this market will play out – up and up and up again this year. Some markets like Victoria had declining sales for three years now but prices have rocketed up 40%.
………
What are you talking about? Great example of “Fake News”!
https://househuntvictoria.ca
# 76 Vampire Studies
It’s no secret that many think that Demographia’s information doesn’t reflect reality.
If, as you say, Demographia has Winnipeg, Montreal and Edmonton at a price to income ratio of 4.1 or less, that information would suggest that gains in incomes have basically matched gains in house prices over the last number of years.
And if that were the case, why would Teranet’s index show that house prices have basically tripled in Winnipeg, Montreal and Edmonton since 2000 while incomes have barely moved in comparison?
Housing price gains (from 2000 to peak):
* Winnipeg…( 3.25 x) … (more than tripled)
* Montreal…….( 2.9 x) … (almost tripled)
* Edmonton……( 2.9 x)
Phoenix………( 2.9 x)
Los Angeles…(2.8 x)
San Francisco…( 2.6 x)
Seattle…………( 2.6 x)
San Diego….….( 2.5 x)
Las Vegas…( 2.35 x)
Miami……..( 2.25 x)
Sources: Teranet’s Index, Case-Shiller Index
Regarding interest rates, you obviously didn’t understand my two posts, #10 and #11 above. Try reading them again.
Lower monthly mortgage payments due to historically low rates doesn’t remove all of the problems associated with a housing bubble. It simply isn’t a game changer as you suggest. History has shown this to be the case.
Regarding Ronaldo’s post: I asked Ronaldo what point he/she was trying to make. Apparently there wasn’t one. Ronaldo failed to address what my posts were actually about.
Allowing two incomes on a mortgage application would have increased the price to income ratio, not decreased it. This would have pushed Canada’s historic price to increase ratio higher, no lower.
As I mentioned in my posts, the year 2000 (which was well after two incomes were allowed on a mortgage application) actually generously represents Canada’s long-term house price to income ratio (after the minimum down payment was reduced from 10% to 5% in 1992).
The idea that bringing up the fact that two incomes were allowed on a mortgage application in the 1980s doesn’t make any of my points invalid – in fact it actually supports the fact that 2000 generously represents Canada’s long-term house price to income ratio.
@Tony, post #85:
The time to buy gold was 20 years ago, when it dropped below $300 and actually got as low as $240 per ounce in mid 1999. Adjusting for inflation, if gold gets around $600 per ounce it will be on sale and I will scoop some up. As for interest rates below zero, I wouldn’t bet more than a dime on it.
Canadian Banks, Canadian real estate industry and liberal politicians will set us up for a huge government bailout by severely weakening mortgage stress tests and providing inexpensive CMHC insurance after the election and eventual catastrophic hard landing for real estate. Hopefully Conservative party wins and they put Canada on a path to deleverage and a softer landing.
“The Bankers’ New Clothes underscores that there is perhaps no reform more important and central to a stable financial system than capping the ability of financial institutions to take excessive risks using other people’s money.”—Sheila C. Bair, author of Bull by the Horns and former chairperson of the U.S. Federal Deposit Insurance Corporation (FDIC)