Amidst the mayhem, quarantines, self-flagellation and bored, isolated workers chugging hand sanitizer, some people are still buying houses. But not many. In fact, the real estate market is going down for the count as the economy commits group suicide.
Here’s the latest:
- Real estate boards all over everywhere have basically banned open houses. Good thing, because nobody’s going anyway. Even private showings are evaporating as sellers recoil from germy buyers. The latest stats from Van and the GTA show a huge crash in showings over the last week.
- Listings are also dropping, as terminations are requested. Even in Calgary, where things are more terrifying than an Adele concert.
- Mortgage brokers are seeing scores of approvals rejected or overturned by lenders. Why? Layoffs, job loss and income vaporization. A million people just applied for EI in one week. Never happened before. Fifty per cent of businesses say they’ll be laying off. GDP is going down by maybe 20%. Also a record. Would you approve a new mortgage right now?
- The above means deals will start falling apart soon as buyers who thought they had approved mortgages find out otherwise when closing day approaches. Sellers have every right to keep the deposit and sue for damages and future losses. Buyers beware.
- Mortgage rates are going up. Why, when central banks are slashing? Because of credit risk (see the above bullet points). Rates have inflated about a quarter point, and you can be sure there’s more to come.
- Appraisals have gone bust. No more on-site visits, and few drive-bys. So appraised values are reduced, making it harder to get a mortgage approved, or a renewal.
- Bank call centres are melting down, and the main online tool mortgage brokers use has been on the fritz. Quelle mess.
Now what about this mortgage deferral thing? How does it work and do you qualify?
If your mortgage is not insured by CMHC, get in touch with the lender and explain your circumstances. That simple. Most will let you skip one payment anyway (no questions), but if you opt to defer six of them, job loss or layoff will have to be substantiated.
This means half a year of no monthly. But it doesn’t mean you live for free. The interest accumulating on your mortgage is added to the amount outstanding, plus there is interest charged on the interest. “This means your mortgage balance will increase,” says RBC. “Your payments won’t change during the term of your mortgage. Instead, at renewal your monthly payment amount increases to account for the higher balance.”
The bank also makes this point: “Using Skip-a-payment may significantly increase your interest costs over the life of your mortgage, so it’s important to carefully evaluate your financial situation and priorities before exercising this option.”
For mortgages insured by CMHC you don’t need to prove Mr. Virus stole your job, and lenders are basically prohibited from taking legal action against defaulters. But the same terms apply – missed interest is added to the outstanding balance that ultimately must be paid.
And then there’s this:
- Keep your rent. That movement is growing faster than Covid cases. There are calls for a national rent freeze, and apparently a ton of tenants who simply won’t hand over their stipend on April 1. You might have noticed the no-rent guys posting their strident stuff in the steerage section of this blog. It’s all laid out here. Says a regular blog dog, “Sadly, the attack the ‘rich’ movement is becoming more and more tangible and it’s more challenging to be a landlord each day.” You bet. And this is one reason investing in income real estate is a really, really, really, really bad idea. These folks are nuts. And T2 will probably cave.
- Now, Airbnb. It’s collapsed. Bookings have plunged along with travel. Just like hotels (now at 5-10% occupancy) this is doomed to near-zero revenues for months to come. Maybe years. Those who bought condos or houses to rent out for fat profits are now looking at fat losses. No wonder thousands of units will soon flood the market, pressuring prices. More bad news for amateur investors.
- And speaking of condos, yuck. Who’s going to spend seven hundred thousand for a shoebox unit in a downtown tower that now feels like a science experiment? Elevators, hallways, garbage rooms, foyers, security doors – every space outside your apartment is a battleground. Do you really want to trade germs with that deviant down the hall? Nah, didn’t think so.
Well, there ya go. All factors influencing the market now, and likely to do so over the months (perhaps years) to come. Balanced against that are low rates and cheap mortgages, plus the hormonal urges that make people do strange things.
The bottom line: housing is toast. If unemployment hits 15% (it will) and the economy shrinks by an equal amount (likely), credit risk will rise, home loans get more expensive, banks grow risk-averse and buyers retrench. All this will pass in time, of course, but after an adjustment in prices. And not up.
275 comments ↓
Are we flattening the curve or flat-lining the economy? Are we going to wake up later this year and realise the financial pain pushed down on the average Canadian will be too much? I suspect at some point we will need to have a national conversation about the best way to respond to viruses like this one.
Garth,
Good summary but one thing that I think you missed is now that most professional workers are all setup to work remotely from home. Why live in an overpriced filthy downtown condo for $750,000 when you can buy a huge place for less than half that price in a small community? All while maintaining a similar salary.
This is looking like a drawn out crisis. It will probably be years before we get back to where we were – individual countries and the world will likely look rearranged in all kind of ways. Settle in, then buckle up. Thankfully, this will all marginalize the loudest snowflakes.
Wow. Wonder if I actually entered at the absolute bottom? This could be epic. If so, I will be forever grateful to the Corvid and will feed ravens, crows and jays daily.
Watch out Warren.
@ Sail Away
“Hey crowdedelevatorfartz, aka CC, aka Barkingblackdog, aka Blackdog… etc.”
++++
As much as I appreciate the support.
That last post was all mine baby!
I’m at work today (while all around me are taking time off) making money.
Just thought I’d toss out a few troll-ish remarks to annoy the easily offended pink shirt crowd…
Slow day at the office…. :)
Condo towers:
I’m glad to have a townhouse, as humble as it is, where I can at least leave the house without having to go through a common area. But living in large building with shared common spaces is just a reality for city dweller, regardless of whether they own or buy.
That’s the only thing that can kill a housing bubble, loss of income and tightening credit. The slow and costly transactions for RE do work in its favour in the short term.
Though I highly doubt we will see huge reductions on prices (who cares about sales) – everybody and their dog is in on RE. Fire selling would be the last resort – not saying it won’t eventually come to that. If the avalanche of layoffs stay off, RE prices are less of a concern.
#5 crowdedelevatorfartz on 03.25.20 at 3:45 pm
@ Sail Away
“Hey crowdedelevatorfartz, aka CC, aka Barkingblackdog, aka Blackdog… etc.”
—————
As much as I appreciate the support.
That last post was all mine baby!
I’m at work today (while all around me are taking time off) making money.
Just thought I’d toss out a few troll-ish remarks to annoy the easily offended pink shirt crowd…
Slow day at the office…. :)
—————
I’m impressed. You had the tone, the timing, the fakey boasting sarcasm all down perfectly.
My sincere apologies to CC, aka Barkingblackdog, aka Blackdog. Forgive me? Unlike Crowdie’s last persona, I sometimes make mistakes.
“Just like hotels (now at 5-10% occupancy), this is doomed to near-zero revenues for months to come.”
I expect hotels to be used for as “field hospital” for the Covid-19 sick and/or incarcerated population. If so, they will get revenue from the government.
“The bank also makes this point: “Using Skip-a-payment may significantly increase your interest costs over the life of your mortgage, so it’s important to carefully evaluate your financial situation and priorities before exercising this option.”
But TD used it as a selling point:” Morgage vacations!”
every space outside your apartment is a battleground
—————————————————————-
Those insanely priced shoe boxes are defiantly not hermetically sealed .Those HVAC guys are all sworn to silence.. ever seen a duct cleaner in a highrise ?
no n95 filters nor HEPA filters to be found possibly no filters at all. They are all breathing the same air with a slight delay.
https://www.energyvanguard.com/blog/ventilating-high-rise-multifamily-buildings-a-first-look
Real Estate may have potential in 6-12 months.
I think I’m gonna save up a shite load of money this year and vultch vultch vultch sometime in the Fall or next Spring…..
OR just dump more into the markets…..
Tenants keep your rent.
Landlords keep your distance.
We’re not about making landlords suffer. We’re about fairness to renters. The financial system has been ridiculously skewed to favour the interests of real estate speculators instead of ordinary people.
That will now change. Get ready for it.
Good luck finding adequate housing after you burn the current owners. – Garth
The stock market is expressing optimism at least for today. Even CPD is up a buck. Things can turn around but the only question is how badly Trump has screwed up the US response. Trudeau was right to shut the border to the US. They already have twice our rate of contamination and it may get much worse.
Where’s that Uppa fellow to tell us which direction real estate always goes?
GTA housing crash of 50% to come in 1 or 2 years. It is finished! Realtor shysters are doomed. You have not seen fear yet, your houses will be worth half, suckers……. How does it feel to have a house or condo now? Must be peeing your pants. Mortgage brokers and real estate shysters will beg for anything, they are done
kinda like where things are going with real estate.
like to pick up a cottage somewhere in muskoka this summer
residential real estate is finally toast. negative rates on the US 3Month bill today. welcome to the new world.
this virus shock will be over soon, but will have lasting effects on the economy. recession is only starting.
#13 David McDonald on 03.25.20 at 3:58 pm
The stock market is expressing optimism at least for today. Even CPD is up a buck. Things can turn around but the only question is how badly Trump has screwed up the US response. Trudeau was right to shut the border to the US. They already have twice our rate of contamination and it may get much worse.
……………………
Hahaha. It was Trump who shut the border down. Trudolt wanted to keep it open. Trump read him the riot act. Presto. Border shut down.
Now, Airbnb. It’s collapsed. Bookings have plunged along with travel. Just like hotels (now at 5-10% occupancy) this is doomed to near-zero revenues for months to come. Maybe years. Those who bought condos or houses to rent out for fat profits are now looking at fat losses. No wonder thousands of units will soon flood the market, pressuring prices. More bad news for amateur investors.
And speaking of condos, yuck. Who’s going to spend seven hundred thousand for a shoebox unit in a downtown tower that now feels like a science experiment? Elevators, hallways, garbage rooms, foyers, security doors – every space outside your apartment is a battleground. Do you really want to trade germs with that deviant down the hall? Nah, didn’t think so.
…………………………………………………………………
CONDOS are done. You have to be nuts to move into one of these petri dishes. Losses will be massive. I don’t even want to get into an elevator now to go see my doctor or dentist. Can you imagine sharing your breathing space with 12 crusty moisters. Or for that matter Smoking Guy!
#12 Keep Your Rent on 03.25.20 at 3:57 pm
Tenants keep your rent.
Landlords keep your distance.
===============================
Signs of anarchy…
Businesses are closed…now break- ins are occurring.
Bad enough getting insurance for condos…watch insurers claw back on an even broader coverages like theft.
So when you screw the landlord..and they bail on your building…maybe watch the zombie movies for a view of the future.
#10 Doghouse Dweller on 03.25.20 at 3:55 pm
every space outside your apartment is a battleground
—————————————————————-
Those insanely priced shoe boxes are defiantly not hermetically sealed .Those HVAC guys are all sworn to silence.. ever seen a duct cleaner in a highrise ?
no n95 filters nor HEPA filters to be found possibly no filters at all. They are all breathing the same air with a slight delay.
https://www.energyvanguard.com/blog/ventilating-high-rise-multifamily-buildings-a-first-look
…………………………………………………………………
CONDO HELL Exactly. God damn people are dumb as shit about this issue. Darwin will have a field-day with these old cronies in these buildings they will be the first to fall.
Garth, you have become a grocer of gloom. Things must be getting bad indeed.
Only if you live on the 48th floor. – Garth
DELETED
You fail to see that it will not only be housing that will be toast, but stock markets that depend on growth will also be toast for some time to come.
Check out the last two days. More declines are likely, but this is a taste of what’s coming. – Garth
This could be worse than 08/09. Back then our portfolios died. Now we are dying along with our portfolios. The world has changed. Into what remains to be seen. Social media will keep us all freaked out for a good while I think.
I’ve been a renter most of my life. Have always found the monthly cost of renting to be much lower than the monthly cost of owning in the places I’ve lived and I’ve been diligent at saving and investing the difference.
As a result I have enough money to keep paying rent for years even though I’ve been laid off. My landlords are good people who have been attentive to my needs any time there has been a problem. They have not been aggressive in raising rent and I have been diligently paying on time every time, never late, keep their property in pristine shape and having gotten their permission have turned the yard into a strawberry, raspberry, blueberry, mint, basil, sage, garlic, chive, sunflower seed, rhubarb producing oasis.
The world owes me nothing. I am living in a property owned by someone else and for the money I give them every month they give me a beautifully renovated roof over my head, heat and water, a place to park my car… essentially a home. It’s a contract, a deal, an honour clad bond, a person of their word arrangement, a legal obligation with associated rights… a lease.
I would never think that I have the right to live in their property without paying them the rent that is due.
For those without the means to pay rent because they have no savings and now have been laid off, rather than signing up to this nonsense that you won’t pay rent, perhaps have a real discussion with your landlord and see what arrangements can be made. Surely they rely on the rent just as much as you rely on the roof over your head.
It’s unlikely at this time of massive unemployment that they’d be able to find another renter anyway so if you’ve been a good tenant all this time, chances are they’d like to keep you and would understand these are extraordinary circumstances. Be a responsible adult and see what mutual arrangement you can arrive at. Don’t shirk your responsibilities by simply refusing to pay at all as if the world owes you a place to live. It doesn’t.
10 Doghouse Dweller
I meant definitly but defiantly also works. God forbid they do anything that cuts into their profit margins.
Garth what about the argument that if daddy Heir Trudeau is going to keep me under house arrest anyway, I might as well have a rocking shack. Non?
Much of the excess condo supply has been bought by specuvestors renting them out on Airbnb. Now imagine you have 5 or 10 condos and all empty for months maybe longer. No wonder the phone lines are red hot to the big 5 banks.
The keep your rent thing is ridiculous.
What will be next? Not paying for groceries? Not paying for transport? Everything free? Gosh, these guys need to be shipped to Venezuela.
And what this tells to us, potential employers? Do not hire tenants! These people lack morality and personal responsibility.
Hey Troll @12;
“Tenants keep your rent.
Landlords keep your distance.
We’re not about making landlords suffer. We’re about fairness to renters. The financial system has been ridiculously skewed to favour the interests of real estate speculators instead of ordinary people.”
I’ve been on both sides of the fence.
Do us all a huge favour, buy a place, rent it out for a year or two, sell it, then come back and tell us all about fairness.
Either your eyes will get opened, or they *never* will.
I expect the latter, but maybe you’ll surprise me.
My favourite thing right now is visiting internet landlord hives and learning how landlords should be absolved of all risk.
Shawn Allen:
People don’t say that you’re dim, they just say you have a tough time with M&Ms because you refuse to eat the ‘W’s.
“And speaking of condos, yuck. Who’s going to spend seven hundred thousand for a shoebox unit in a downtown tower that now feels like a science experiment? Elevators, hallways, garbage rooms, foyers, security doors – every space outside your apartment is a battleground. Do you really want to trade germs with that deviant down the hall? Nah, didn’t think so.”
——————————–
Heehee Garth, colourful but rather hysterical I think.
I just don’t see the anti-condo stuff as meaningful, long term.
Germs are everywhere, and this virus is basically somewhat worse than a bad flu. It will go away and people will have resilience soon. We’ve had all kinds of germs and diseases, everywhere humans go.
Condos have been a big part of city life for 50 years now. Health-wise, no real issues with any of them. In fact they may be much better places to live for retirees. Most now are much less isolating socially, which is actually a good thing.
If you are saying that it will be so bad that we won’t want to gather in condos again, where you really have barely any daily close contact with people at all, then what else flows from that sense of doomsday fright?
If it is that bad, then will we stop going into office buildings?
Stop taking transit?
Stop flying?
Hide in our bunkers with the Apocalypse dude?
Sounds like it, Garth.
Only that extreme level of long term disruption would make the anti-condo argument hold fast.
And in our bigger cities, they still provide choice.
I think we will be surprised by how big and quick the rebound from all this will be.
alberta turns to century bonds ?
Private Train to Las Vegas Moves Closer to Bond-Deal Approval
Virgin Trains USA has unveiled plans to build a fully electric, high-speed train that would connect Southern California to Las Vegas by 2023. The 170-mile (273-kilometre) high-speed line will link Las Vegas, Nevada with Victorville, California – a town about an hour-and-a-half drive northeast from Downtown Los Angeles.Jan 7, 2020
Garth,
Thanks again for the post in these crazy stressful times.
The ‘Keep Your Rent’ movement is disgusting. Feel bad for the landlords about to get screwed on April 1.
Wonder what your thoughts are on:
1) Will CBs turn on the presses and just print money, for distribution to the masses who couldn’t live responsibly and within their means? Wouldn’t that just mean high inflation? Makes one wonder about whether to hold some metals.
2) Any possibility of widespread government debt forgiveness?
I hope the answer is ‘no’ to both questions. People need to feel the consequences of their decisions. But we live in a system where vote buying is the routine and I’m sure the Liberals will disappoint the financially responsible.
1.25 million people die each year from automobile accidents but we’re still allowed to drive aren’t we. Trudeau legalized dope smoking while 5 million people die each year of smoking. He is allowed to work and to be paid, while the rest of us are forced to stay home and lose our jobs, our homes, and our money. All this because of a virus? Hundreds of thousands died from H1N1 but I was still allowed to go to work every day. It seems to me the people in charge have lost perspective.
@#12 Keep Your Rent on 03.25.20 at 3:57 pm
Tenants keep your rent.
Landlords keep your distance.
We’re not about making landlords suffer. We’re about fairness to renters. The financial system has been ridiculously skewed to favour the interests of real estate speculators instead of ordinary people.
That will now change. Get ready for it.
Good luck finding adequate housing after you burn the current owners. – Garth
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man am I ever glad i never became a landlord.
what a pain in the azz that would have been.
Regarding number 12 “tenants keep your rent”
So here’s a profile of a LL you may not be aware of ; single income 120k per year 3 kids ; Trudeau and you may consider me rich; but living in Quebec I’m not. why do I earn 120k per year; because when you entitled millennial anarchists were smoking dope I was focusing on working and getting a debt free degree in a field of study that actually had a value in the market place. So at 39 years old with a stay at home wife and 3 kids and 200k in investments; I decided to buy a small apartment building ; it is cash flow negative ; but I figure if i could pay it off in 15 years ; I will have 6k monthly income; and I won’t need to wait for government handouts , or stellar market returns to retire … so how do I pay it off on 15 years you may ask…. well I drive for Uberat night and Saturdays…living the dream you might say. I wasn’t born rich ; single mother growing up… so go ahead and rip me off…. but the internet is a powerful tool; and putting together a list of dead beat tenants is a few keystrokes away. Don’t play the victim, anyone could make money if they get up off their asses ; don’t wait for Canada’s most incompetent leader to save your sorry ass
If you have ever been in automobile rollover… time slows .
senses become vivid …as you careen up and then down smacking up ..
While wrenching sideways, left and right until a sickening thud.A soul sickening thud that your body emits as you finally come to a dusty stop. Your ears are ringing, your nose is bleeding and you cannot feel your toes. You know it is over, but you do not yet know what if anything is broken or not. The car is the Canadian economy…you are the passenger..the government is the driver. We are in the earky middle of a national car crash barely a third way into a once in a lifetime ride to hell…and hopefully back from there. Life will not be the same afterward. The great reset is underway and no one will escape.
You must be fun at parties. – Garth
We now have daily sales and listing stats for Vancouver RE Board.
https://www.zealty.ca/stats-daily.html
These are board numbers updated daily. You can add Fraser Valley and Chilliwack and go back half a year.
Averaging about 140 sales per day last few weeks. Last week 100 sales per day as deals already agreed to firmed up and subjects were removed. I expect over the next week daily reported sales and new listings will continue to go down.
So…SHTF….people are laid off….businesses are shuttering….and all our leaders can do is add to the fear porn.
Like the flu$$$h that is the near? far? future…they are more concerned with tightening the noose and self isolating. History has shown that “closed quarters” living lead to such nasty things as Typhoid.
BC is going to provide $500 month for renters for 4 months….whoop dee do.
Then what ???
Good luck getting that “bandaid” cheque….
@#33 Suburban Bob on 03.25.20 at 4:29 pm
“And speaking of condos, yuck. Who’s going to spend seven hundred thousand for a shoebox unit in a downtown tower that now feels like a science experiment? Elevators, hallways, garbage rooms, foyers, security doors – every space outside your apartment is a battleground. Do you really want to trade germs with that deviant down the hall? Nah, didn’t think so.”
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I think we will be surprised by how big and quick the rebound from all this will be.
__________________________________________
exactly this. nothings going to change.
if anything, folks are going to take on even more debt after alls said and done.
I think a cool idea for a thread day would be, as we get near a tradeable bottom, people could post their investment picks and ideas.
Then the dogs could spend the day picking them apart. At the end of the comments, you would have nice selection of vetted investments that people could choose from that are both relatively safe and resonable to buy going forward
The last two days are a good indicator of what is to come when this market does bounce back…Stay invested, be patient and embrace balance in your portfolio all will be good! Garth time to nibble on preferred shares?
#38 Last Gasp on 03.25.20 at 4:39 pm
The great reset is underway and no one will escape.
————–
Damn it’s lonely out here. I must’ve escaped.
Come closer and I’ll whisper the secret to you.
@#12 Keep Your Rent on 03.25.20 at 3:57 pm
Tenants keep your rent.
Landlords keep your distance.
We’re not about making landlords suffer. We’re about fairness to renters. The financial system has been ridiculously skewed to favour the interests of real estate speculators instead of ordinary people.
That will now change. Get ready for it.
Good luck finding adequate housing after you burn the current owners. – Garth
________________________________________
Holy cow, if rent is too expensive you can do the responsible thing by finding cheaper accommodations, including considering “shared kitchen/living space”. Also being cooperative/responsible in your new living arrangement, don’t screw over your fellow residents by not sharing the utilities/rent cost.
For the first time in history, we can save the world by laying on the couch and watching TV. Let’s not screw this up, okay?
Today’s German data has mortality down to 0.3-0.4%, driven by widespread testing on a very high infection rate.
https://www.cnn.com/2020/03/24/opinions/germany-low-death-rate-for-coronavirus-sepkowitz/index.html
For those that didn’t pay attention in math class, when you calculate a percentage, the numerator is the number to be divided – in this case deaths. The denominator is the number you divide by – in this case infected. Every country is limited by its testing throughput at the moment and using mostly hospitalizations and deaths as the denominator (a small number). Germany has a much larger testing capacity and only Germany has made a concerted effort to capture more than those with symptoms. Most countries aren’t counting people that don’t come to them. Germany is and they are finding many of them are infected and are just fine. Dividing a normal number of deaths by a dramatically larger number of infected creates dramatically lower death/ hospitalization rates.
The end result of the math here is that all the forecasts for hospitalizations and deaths are totally wrong. Initial estimates of 10,000,000 US deaths based on a 4% death rate have gone down to 300,000 with a 0.3% and falling every day
A couple more tenths and we get to 0.1% and this thing is just a contagious flu. We still need to manage the surges of high risk groups that will hit the hospital because this thing spreads fast (2x faster than the flu) but most of us should be able to get back to work in short order if we’re in low risk groups. (under 60/ no pre existing conditions)
In plenty of countries around the world, it’s business as (almost) usual. It will be here too, soon–only with the reset upon us. A buck is now a quarter.
For comparison, Japan is still standing. They went through this all before, in the 80s and 90s, with massive devaluations, and yet they still have the largest middle class as a % of population anywhere in the world. Fear not.
As for housing, well, I bought in 08, paid $390k, watched it inflate to $750 or thereabouts, and will now watch it drop to maybe $350. Who cares.
Yard’s the same size. Garden grows just as well. Mortgage payments have gone down.
What, you didn’t think I’d get upset at loosing money I didn’t actually earn or have now did you? That’d be greedy, and I’m not a greedy person.
Now, Airbnb. It’s collapsed. Bookings have plunged along with travel. Just like hotels (now at 5-10% occupancy) this is doomed to near-zero revenues for months to come. Maybe years. – Garth
===============
Garth, why do you think demand for AirBnB is not likely to come back for years? When pent-up demand unleashes (hopefully, in 3-6 months), will this not include demand travel services (e.g. AirBnB)?
Hi Garth, I am curious how many tsx companies do you see chopping dividends in the next year? I live off those divs, so I hope it’s not 50%. Thanks for sharing.
The Canadians get $900 every two weeks. It’s going to be okay for you guys.
#1 Jeff on 03.25.20 at 3:24 pm
“We” didn’t create this pandemic, nature did. Understand that.
“We” caused 9/11, the great financial crisis of 2008, the dot com bust, 70’s inflation, the great depression and so on.
This is different. We have limited options and control over diseases, despite what our complacent 21st century minds think.
The only discussion possibly needed is that maybe something should have been done sooner to prevent the spread, fear, and economic consequences.
Expect this pandemic to change our world economy fundamentally as a result.
MF
Doubtful. – Garth
It’s going to be epic. These types of viruses come in 3 waves. No one really knows where this is all going, and we really need a vaccine …. if we don’t get one soon, we will be comparing Covid 19 with the Great Depression on the economic side, and the Spanish Flu for the body count side.
Central banks have kept interest low since the emergency of the recession of 2008-09 because apparently companies, governments and individuals could not sustain higher rates. What happened in those years is the debt of all those entities skyrocketed.
We are now 12 years into emergency rates, companies have bought back tons of shares, borrowed lots of money, individuals all over the world have binged on RE and other things on credit; now this! The unexpected.
No preparation whatsoever. Very sad.
My portfolio is down a third in a month, i’m desappointed, but it will come back since the governments are spending so much money at everything. I know my taxes will only go up, no restrain by governments. Licence to print money to buy votes from now on.
The tide went out, everybody was swimming naked (from Warren Buffet, i think)
Check out the last two days. More declines are likely, but this is a taste of what’s coming. – Garth
If that’s the case, then my prediction of where we are on your “Emotion Curve” is correct. Bring it on!
Love reading your blogs and it sure does help plan things out. Thank you.
No evictions for BC renters, and a $500/month subsidy through BC Housing.
I imagine that landlords who dodge taxes on their rental income will not be applying in droves. Tenants of said tax dodgers will have a certain swagger in their step when they inform the landlord that they can’t make rent next month.
https://vancouverisland.ctvnews.ca/b-c-imposes-moratorium-on-evictions-offers-500-a-month-for-renters-1.4867923
#12 ‘Keep’ – urging people to break contracts they signed of their own free will simply accelerates the breakdown of systems. Our society is under enough stress already. It doesn’t need more. Further, your airy assumption that landlords will be o.k. despite the loss of income from their tenants is also incorrect. Those landlords likely do not own their properties outright. Mortgages, repairs, utilities, property taxes, property managers etc. will be expecting payment from the landlord. They won’t give the landlord a break because their tenants refused to pay their rent. If the rent being charged doesn’t cover all the operating expenses of owning the unit or units – something that isn’t all that uncommon – landlords are already out of pocket even before the rent is withheld.
Taking advantage of the situation to break a contract isn’t a righteous act. The old adage ‘two wrongs don’t make a right’ still hold true.
@#44 Sail Away
“Come closer and I’ll whisper the secret to you.”
++++
I guess offering total strangers a lick of your ice cream is also in the cards…..?
Here is some positive thoughts, a breakthrough treatment will be found very soon or a vaccine is in the works, at least so far data shows that this virus does not mutate quickly so a vaccine could be the solution. Let’s all hope.
So Trump’s plan, and Sweden’s by the way, is not looking so bad afterall?
@46 Parksville Prankster on 03.25.20 at 4:52 pm
For the first time in history, we can save the world by laying on the couch and watching TV. Let’s not screw this up, okay?
I like your sense of humour. We’re all going to need one. Now more than ever.
What isn’t very funny are comments like the one posted by #12 Keep Your Rent and statements like ‘fairness to Renters’. What a singularly disgusting weasel comment. Life has never been fair, but real people honour their obligations to others. Feds are already willing to help you do that. If this truly is a growing ‘movement’ among some it is a new low. No decent person would wish an association with people who think this way.
As for buyers and sellers, I have followed certain areas of real estate in southern Alberta for a number of years. We could call it a hobby. Listings have fallen off a cliff and that in a spring market. Hardly surprising given the high level of uncertainty for both sellers and buyers.
For those who wish to claim “financial hardship’ at their friendly neighbourhood bank, be prepared to support that claim and pretty sure you still need to pay tax installments and life or disability premiums in the meantime. The smart move is sitting down at the family dinner table and doing a hard analysis of family budget requirements showing zero mercy for anything not deemed a ‘necessity’. Conjure up your grandmother or great grandmother or whoever else in your family went through hard times in years where there was no Starbucks, no Costco, no fast food joints and see if you have it in you to live up to their greatness and sacrifice.
REIT’s that are heavily concentrated in retail (shopping malls) are going to take a big hit. IMHO
Hey Sail Away,
thank you for taking time to give us all your sage advice,
even when we don’t ask you.
Just a cold/flu? Is that what Elon said?
goof
#13 David McDonald on 03.25.20 at 3:58 pm
Trudeau was right to shut the border to the US. They already have twice our rate of contamination and it may get much worse.
—
Do you have selective memory?
Trump March 18th:
“We will be, by mutual consent, temporarily closing our Northern Border with Canada to non-essential traffic,” President Donald Trump wrote on Twitter.
Trudeau March 20th:
https://www.youtube.com/watch?v=CiH6hvrhg8U&t=2m0s
DELETED
#15 Happy Housing Crash on 03.25.20 at 4:05 pm
////////////
Welcome back.
Wasn’t the handle “Happy Housing Crash Everyone”.
I’m sure Smokie missed you too.
How’s your sister? Still in Milton?
Speaking of Milton, Where is the Mayor of Milton?
Missed him
So when does one pull the trigger on buying a house then?
If condos are done then so are European and Asian cities that have them more than Canada. Hotels done too. Gyms? Done. Office buildings? Done? Hospitals? Done. If everything is done and all that is left is houses that are a million that no one can afford don’t we have bigger problems than a seasonal flu that will likely have a vaccine soon? There would be no economy no stocks no banks no nothing. Would we all just live in countryside?
#18 Yukon Elvis on 03.25.20 at 4:08 pm
Hahaha. It was Trump who shut the border down. Trudolt wanted to keep it open. Trump read him the riot act. Presto. Border shut down.
////////////
Although I am no fan of Trudeau I think it was reciprocal. Trudeau had to wait for the big dog to talk first.
Must say though I am very happy the boarder is shut down.
Oh yeah, Sail Away whatever you have to say don’t want to hear it.
What makes Canadian socialism great?
The people that get $2000.00 a month for 4 months are the same people who will tell their landlord they cannot pay their rent for 4 months.
Don’t give them food stamps that only applies for healthy food products, just cut them a cheque.
This is the same bunch that never had the foresight to at least check the temperatures of travellers coming back to Canada at the airport from Europe in the last couple weeks.
Overpaid inept public service administrators who are nothing more than inveterate liars.
We really have such low standards for those earning outlandish lifetime compensation.
We’ve had time since the financial crisis to rectify this pervasive socialist nightmare and collectively done nothing.
You’ve been fleeced and you should demand accountability.
@#52 MF on 03.25.20 at 4:59 pm
#1 Jeff on 03.25.20 at 3:24 pm
“We” didn’t create this pandemic, nature did. Understand that.
MF
___________________________________
meh, humans definitely helped mother nature along on this one.
@#53 conan on 03.25.20 at 5:02 pm
It’s going to be epic. These types of viruses come in 3 waves. No one really knows where this is all going…
_______________________________
lol, in your dreams/nightmares maybe.
#2 Adam
Indeed, I have been pondering the same. We will speak of post-covid days the same way we do about 9/11. Except that affected mainly travel and security in general, covid will hit everything. Depending on how long this goes on, and how decisive the win over covid is, everything will change. The way we work, shop, socialize, entertain, educate, meet, romance, play, etc, everything is on the chopping block.
Two examples of how things will change, regardless of what happens…
Media companies will go all in on streaming. Theatres will suffer tremendously, as they will likely be losing or reducing their premiere exclusivity periods. With theaters, retail real estate will go down. Walmart and Amazon killed the department store, which nearly killed malls. For now, malls remained anchored by theaters, but as those close or downscale, that might be the final nail in their coffin.
Now that many companies sent their workers to work from home, when this is over they will be asking: do we really need all this expensive office space downtown? There are many advantages for companies and workers to working from home. Some changes are required, but I think it will become the standard.
As a result, I expect REITs heavy into commercial real estate to have a rough decade. Perhaps we will see office space to apartment conversions, like we’re seeing hotel to apartment conversions today.
Second, there will be other knock on effects to all this, as you mention. With greater emphasis, acceptance, expectation and enablement of remote working, why not move yourself/your family to a lower cost of living area? In a contract/gig economy, you can easier compete on price when your entire house costs 1000 monthly in flyover country, vs a 2000 studio on the coast. How can you even compete with that?
All interesting things to think about.
“If unemployment hits 15% (it will)…” – G.T.
How long do you think before unemployment hits 15 percent?
So when does one pull the trigger if they’re waiting to buy?
What? An “article” by Tess Kalinowski that isn’t a rehash of realtor newsletter talking points?
Rents could drop 5 per cent — and vacancy rates might climb — in Toronto this year
https://www.thestar.com/business/2020/03/24/rents-could-drop-5-and-vacancy-rates-might-climb-in-toronto-this-year.html
Doubtful. – Garth
How could it not?
The stock market correction we just experienced, or are experiencing, has been very steep. Just three weeks ago everything was basically normal. It’s crazy how much things have changed in just 3 weeks. The speed is key.
The government response is actually not the point. It’s whether businesses will be comfortable continuing to depend on China or elsewhere for their supplies. Or drug makers for their raw materials. Will employers see how efficient it is to have employees work from home? Rent, electricity and water bills will be less. Liability reduced. What about the cleaners, building managers and everyone else who depend on tenants?
The whole system was exposed as tenuous and weak. Rates are zero bound again. Debt now an even bigger threat. There is literally zero room for any shock. Who will be borrowing big for real estate or anything else in the future when they know at any time it could all come crashing down worldwide in a few days?
MF
Keep your Keep Your Rent.
Classic us vs them tribalism.
This is not what I had in mind when I created my handle.
I pay my rent and the owner pays the mortgage, property tax, utilities, maintenance, insurance and provides a living space, occasional renovations, pool, sauna, exercise room, laundry room, wood working shop, indoor parking, garbage disposal, water, heat, electricity. What’s not to like?
I agree with Garth, screw your landlord and you’ll never find a nice place to rent again. Talk about burning bridges.
Wth? News from REAL.US today, for USA
///////////////
Real Matters Inc. has issued the following statement, providing an update on its operations and sharing the latest mortgage market data.
Today, the Mortgage Bankers Association announced that activity remains very high; mortgage applications were up 30.2 per cent from one month ago and 72.3 per cent year over year. Notwithstanding the short-term impact that COVID-19 may have, as of today, the company continues to receive strong volume. Its incoming mortgage origination orders over the past week were stronger than during any week in calendar 2019 for both its United States appraisal and United States title businesses.
…
The vast majority of field professionals on its network continue to accept and complete orders from it and it has not seen any material change in its appraiser or notary capacity. Furthermore, the opportunity to lower mortgage payments and to access equity from homes is keeping homeowners engaged, while respecting social distancing. Both homeowners and field professionals are collaborating well to support mortgage closings.
The company believes that low United States mortgage interest rates will create a large, multiyear market opportunity for it. At recent mortgage rates, the company estimates that more than 14.5 million United States mortgages are incented to refinance, roughly 70 per cent of outstanding mortgages. The company further estimate that even if lenders increase underwriting capacity by 20 per cent annually, it would take approximately two to three years to cycle through this volume.
#41 oh bouy on 03.25.20 at 4:40 pm
Why would people take on more debt when they see how quick the whole system can come to a halt?
MF
Looking at the list of essential services it seems that just about everyone and their dog groomer is considered essential.
Hey Sail Away, didn’t you say you had to close shop?
#29 Blog Bunny on 03.25.20 at 4:26 pm
The keep your rent thing is ridiculous.
What will be next? Not paying for groceries? Not paying for transport? Everything free? Gosh, these guys need to be shipped to Venezuela.
And what this tells to us, potential employers? Do not hire tenants! These people lack morality and personal responsibility.
Interesting statement. Who else is on your list of “(those)people?”
#12 Keep Your Rent on 03.25.20 at 3:57 pm
Tenants keep your rent.
Landlords keep your distance.
We’re not about making landlords suffer. We’re about fairness to renters. The financial system has been ridiculously skewed to favour the interests of real estate speculators instead of ordinary people.
That will now change. Get ready for it.
Good luck finding adequate housing after you burn the current owners. – Garth
——————–
Will you please go away? What you are proposing amounts to plain and simple theft. And you are stealing from other people at the end of the day, because sooner or later the shares of even a big REIT are owned by some granny in her retirement fund, and that is ultimately who you are stealing from. So don’t try and pass your planned theft off as some sort of “social retribution”. It isn’t. It’s not even close. It’s theft plain and simple. You will be evicted and Garth is correct that you won’t be able to get a new tenancy for years to come. I hope you have a nice tent.
——————–
For those who legitimately cannot pay the rent due to financial circumstances, open a dialog with your landlord. Some may be able to offer a deferral say if you are waiting on EI or something, but most will not be able to forgo the revenue entirely, so don’t get your hopes up. They have mortgages and property taxes to pay just like everyone else. And if they can’t pay the mortgage the bank will take the property. And the bank will be even more effective at evicting any current squatters than the previous landlord, because they can afford to hire muscle. After they repossess a property, they literally “trash it out”. Anything still inside when the repossession crew gets there literally goes to the dump. They don’t try and salvage anything (usually the salvage value is pretty close to zero anyway) and there is no compensation. So pay close attention to your eviction date if you take #12’s advice. Best to start pawning anything you think you can now before it goes to the dump.
Widespread squatting will not work because it would destroy a fundamental principle of the legal and financial systems. Nobody is going to offer property for rent if they can’t collect. It’s better to leave the property empty and thus reduce wear and tear, and then try and sell it. An empty property is much easier to sell than one that comes complete with a stubborn squatter.
#49 Herkunft on 03.25.20 at 4:54 pm
Now, Airbnb. It’s collapsed. Bookings have plunged along with travel. Just like hotels (now at 5-10% occupancy) this is doomed to near-zero revenues for months to come. Maybe years. – Garth
===============
Garth, why do you think demand for AirBnB is not likely to come back for years? When pent-up demand unleashes (hopefully, in 3-6 months), will this not include demand travel services (e.g. AirBnB)?
———————————————–
People who have been out of work for months or even years are unlikely to go jetsetting right away once they find a new job and the virus recedes. I believe there will be SOME pent-up travel demand (I was hoping to visit Florence this year!) but it will probably be muted.
And in Toronto and Vancouver, new regulations mean AirBnB is essentially dead anyway aside from renting out spare rooms in a principal residence.
#35 Former Fool on 03.25.20 at 4:30 pm
Garth,
Thanks again for the post in these crazy stressful times.
The ‘Keep Your Rent’ movement is disgusting. Feel bad for the landlords about to get screwed on April 1.
Wonder what your thoughts are on:
1) Will CBs turn on the presses and just print money, for distribution to the masses who couldn’t live responsibly and within their means? Wouldn’t that just mean high inflation? Makes one wonder about whether to hold some metals.
2) Any possibility of widespread government debt forgiveness?
I hope the answer is ‘no’ to both questions. People need to feel the consequences of their decisions. But we live in a system where vote buying is the routine and I’m sure the Liberals will disappoint the financially responsible.
Dudeski,
Much to my detriment I have always been financially responsible. You won’t see me dodging any payments in the upcoming years.
But where were you with all of your disgust during the renovict your tenants movement?
The house prices should go down. This is just not economically sustainable anymore especially in these conditions. But if somehow the govt intervenes to save the “house owners from going bust” or any other similar nonsense, then this country is doomed.
#18 Yukon Elvis on 03.25.20 at 4:08 pm
“Trudeau was right to shut the border to the US. They already have twice our rate of contamination and it may get much worse.”
They also have twice the rate of testing. It is unlikely our “contamination” (that is probably not the right word, it should be “infection”) rate is any lower than theirs considering how much travel there is between Canada and the US and how similar our travel patterns to other countries are. There is no reason to assume Canada is getting a pass on this.
#26 SmarterSquirrel.com
Thanks for your mature, compassionate post!
I’ve been a renter, though we now own a house. I’ve always tried to be a responsible renter because of simple concepts, like the golden rule of “do unto others”.
My elderly parents own rental property.
Based on seeing what they endure, I’d never do it. Never.
Bad tenants know every angle to exploit. Current law is shamelessly skewed against the owner. In the worst cases, a true deadbeat tenant knows exactly how to achieve many months of absolutely free occupancy.
Until the slow court process is over, there is literally nothing the owner can do for remedy — even with a lease-breaking, destructive, deadbeat renter — without getting into even more trouble.
SmarterSquirrel, it is reassuring to know some renters grasp the fact that landlords are flesh & blood humans too, with bills and expenses of their own.
As for the “keep the rent” crowd, good luck finding affordable rentals after making it too dangerous and difficult for landlords to make that investment.
Ottawa, with its runaway 20% price increases YoY is starting to see conditionally sold houses back on the market. People with conditional offers are walking away. The housing market isn’t going to be pretty in a couple of months as more and more buyers balk at those expensive contracts they signed.
#31 mark on 03.25.20 at 4:26 pm
My favourite thing right now is visiting internet landlord hives and learning how landlords should be absolved of all risk.
———————————-
It’s fascinating isn’t it.
During the good times : “Hey man I took a risk and won! That’s the free market! You losers are just jealous.”
One month (ONE MONTH!) into not-so-good times : “Whaaaaa whaaaa! Nobody wants to rent my 400 sq ft bachelor for $2200 anymore! Where’s the government?? We landlords provide an essential service!”
New condos have a fan coil in each suite that provides heating and cooling to the unit and it recirculates the air within that space .
You don’t share air with other suites .
It’s the hall pressurization unit that you would share air with your other tenants . So hallways and common areas could have tainted air .
This air is exhausted but you could be in contact with that air .
As for tenants withholding their rent , hope they are going to be buying a place because they won’t get a favourable reference when they get the boot after this virus thing settles down .
From past experience with tenants , once they get behind in rent they are never able to catch up and end up leaving with unpaid rent .
Argh!! A quick heads-up for those families who need to apply for the federal government’s EI fund (or whatever the formal name of the program is).
My wife is self-employed and the current situation has compelled her to temporarily shutter her business. She applied for the EI fund and today received her access code in the mail. But attempting to complete the next stage(s) of this process was a nightmare. After going through page after page of form-filling and bureaucratic blah-blah-blah we decided to give up for now. This thing is vague, complex, ambiguous and confusing! We worked on it together and have absolutely no idea if it was finished or not; it is that poorly set-up.
Now ol’ Binky Barnes might not be too swift, but believe me when I state that Mrs. Barnes is one sharp lady. She is hitting the red wine as I type–this thing has beaten her for the day. Might try again tomorrow.
Apologies #18 Yukon, I should have addressed my response to #13 David McDonald. I happened to snip his comment out of yours and then messed up attribution.
BC just announced a full eviction moratorium.
Pretty obvious thing to do if you want people to stay at home – you cannot have them out moving, getting rental trucks and packing supplies, going to rental viewings, or worse, ending up on the streets.
And they announced a rent freeze and they will give $500 for each renter up to four months – with the money going directly to the landlords.
So all those people saying don’t pay your rent, the landlords will still get money. For those that continue to pay their rent, watch landlords get that and the $500 bucks. Landlords may win again but at least renters are protected now.
The “everything will be okay” missive from the FDIC.
https://m.youtube.com/watch?v=jdjzIaEDTnw&feature=youtu.be
I guess a stop was triggered and the memo issued.
Banks will have to offer a lot better savings interest rate and soon, like by 4pm PST.
You know FDIC is American, right? That might explain the giant flag in the video. Just a hunch. – Garth
#92 binky barnes on 03.25.20 at 6:16 pm
Argh!! A quick heads-up for those families who need to apply for the federal government’s EI fund (or whatever the formal name of the program is).
My wife is self-employed and the current situation has compelled her to temporarily shutter her business. She applied for the EI fund and today received her access code in the mail. But attempting to complete the next stage(s) of this process was a nightmare.
==============================
I read that..to date..there are over ONE MILLION applicants….and less that 150,000 have been processed.
Good luck…
@#80 MF on 03.25.20 at 5:55 pm
#41 oh bouy on 03.25.20 at 4:40 pm
Why would people take on more debt when they see how quick the whole system can come to a halt?
MF
_______________________________
the average pleb isn’t to bright.
harsh but true.
Our good friend just sold her house in Bolton end of last week the day after listing to the first people who saw it. Got only 20k less than asking. We’re praying it goes through as she’s counting on the proceeds for her retirement (still working at nearly 69). She plans to RENT an apartment, after we’ve constantly being harping on her not to buy one.
#68 oh bouy on 03.25.20 at 5:42 pm
“meh, humans definitely helped mother nature along on this one.”
—————————————————————–
1) Bring 2 cups water to a boil
2) In a separate bowl add 2 cloves garlic + 2 tbsp cilandro + 1 tsp salt
3) Mix well
4) Add in bat
5) Mix well
6) Add bowl + bat into boiling water
7) Boil for 5 minutes
8) Enjoy
MF
This is typical communist thinking for promoting their own agenda, while claiming to help the downtrodden and poor.
http://parkdaleorganize.ca/2020/03/20/keep-your-rent/
Website even comes with its own “statement of principles”.
Things are going to be on sale in the not too distant future
Linda – #58 said:
#12 ‘Keep’ – urging people to break contracts they signed of their own free will simply accelerates the breakdown of systems. Our society is under enough stress already. It doesn’t need more. Further, your airy assumption that landlords will be o.k. despite the loss of income from their tenants is also incorrect. Those landlords likely do not own their properties outright. Mortgages, repairs, utilities, property taxes, property managers etc. will be expecting payment from the landlord. They won’t give the landlord a break because their tenants refused to pay their rent. If the rent being charged doesn’t cover all the operating expenses of owning the unit or units – something that isn’t all that uncommon – landlords are already out of pocket even before the rent is withheld.
Wrong.
Banks and the government are already offering mortgage holders relief.
Cities are already extending payment deadlines for property tax.
Renters are more likely to lose their jobs in all this, more in precarious and retail positions now gone.
Your bias against renters, like that of many here, is terribly harsh, and apparently completely lacking in self awareness.
Congrats to Howard #90 and Mark #31. You both nailed it.
“My favourite thing right now is visiting internet landlord hives and learning how landlords should be absolved of all risk.”
and
“It’s fascinating isn’t it.
During the good times : “Hey man I took a risk and won! That’s the free market! You losers are just jealous.”
One month (ONE MONTH!) into not-so-good times : “Whaaaaa whaaaa! Nobody wants to rent my 400 sq ft bachelor for $2200 anymore! Where’s the government?? We landlords provide an essential service!”
Tenants keep your rent.
Landlords keep your distance.
My mortgage is due for renewal in November, what can I expect?
#83 Nonplused on 03.25.20 at 6:01 pm
——————–
For those who legitimately cannot pay the rent due to financial circumstances, open a dialog with your landlord. Some may be able to offer a deferral say if you are waiting on EI or something, but most will not be able to forgo the revenue entirely, so don’t get your hopes up. They have mortgages and property taxes to pay just like everyone else. And if they can’t pay the mortgage the bank will take the property. And the bank will be even more effective at evicting any current squatters than the previous landlord, because they can afford to hire muscle. After they repossess a property, they literally “trash it out”. Anything still inside when the repossession crew gets there literally goes to the dump. They don’t try and salvage anything (usually the salvage value is pretty close to zero anyway) and there is no compensation. So pay close attention to your eviction date if you take #12’s advice. Best to start pawning anything you think you can now before it goes to the dump.
Widespread squatting will not work because it would destroy a fundamental principle of the legal and financial systems. Nobody is going to offer property for rent if they can’t collect. It’s better to leave the property empty and thus reduce wear and tear, and then try and sell it. An empty property is much easier to sell than one that comes complete with a stubborn squatter.
—————–
If you failure to pay your rent, it is not some forgone conclusion that you will never be able to rent again.
Any reasonable person knows that millions are out of work because of the virus; that all levels of government are bailing out renters and banks are bailing out owners; and that once this passes, a lot of landlords will be desperate for the rental income again if they have not already liquidated their properties.
They will not be shutting the doors on those that did not pay as prospective tenants. The sheer number of Canadians dependent upon ‘mortgage helper’ suites in absolutely astounding. The majority of owners in urban areas can only afford their house because of a mortgage helper.
Regardless, best to pay something to maintain balanced relations between landlords and tenants.
Our house happens to be right under a flight path to the airport. Descents only so not too noisy (they are in glide mode) but you can still hear them. I can confirm that flight traffic is way, way down, the 90% numbers are approximately correct. I usually hear at least one plane an hour, today I only heard one so far.
#90 Howard on 03.25.20 at 6:16 pm
#31 mark on 03.25.20 at 4:26 pm
My favourite thing right now is visiting internet landlord hives and learning how landlords should be absolved of all risk.
———————————-
It’s fascinating isn’t it.
During the good times : “Hey man I took a risk and won! That’s the free market! You losers are just jealous.”
One month (ONE MONTH!) into not-so-good times : “Whaaaaa whaaaa! Nobody wants to rent my 400 sq ft bachelor for $2200 anymore! Where’s the government?? We landlords provide an essential service!”
————————————————————-
Actually the general consensus on this blog is that landlords were heavily subsidizing their tenants. Tenants that are now claiming they won’t be able to pay rent. Garth has been very clear that landlords are getting the short end.
So which is it?
Even if Canada “flattens the curve”, we will need to keep it flat. So that will mean very tight travel restrictions until they have a vaccine.
Quick testing at the border for everyone maybe, but otherwise if you leave then you are quarantined when you come back. Lasting for 12-18 months or longer depending on a vaccine.
This economic shock is both ways, from the Top and now with unemployment, from the bottom.
The 2008 was from the top only, the layoffs came down as a result of the bank problem.
I think the shock causes problems to the top just like 2008, but now we have consumer demand crashed also….
So all that is left is government printing money, there is no consumer, there is no business demand either.
Now no matter how well Canada does with the virus, we depend on the US for the economy.
So where are we really going? All-cash valuations, no more bank credit in the mortgage market?
I wrote plenty of posts over the years indicating that the market would deflate, at the very least back to 2-3X income. I never imagined that we’d experience hyperdeflation. Yet logically, if the Government/central banks try to prop up borrowers by doing enough “helicopter money”, they’ll eventually cause lending to cease altogether as nobody will have confidence.
As for the AirBNB’ers and the notorious “landlord families”, they’re toast. Those properties will go on the market first. I personally hope the CBSA will step up their outbound currency/financial instrument inspections, so they can’t abscond with too much cash/gold that should really be paid to the benefit of Canadian mortgage creditors.
#97 oh bouy on 03.25.20 at 6:27 pm
@#80 MF on 03.25.20 at 5:55 pm
#41 oh bouy on 03.25.20 at 4:40 pm
Why would people take on more debt when they see how quick the whole system can come to a halt?
MF
_______________________________
the average pleb isn’t to bright.
harsh but true.
———————————————
Could be but they might also be playing the “debt jubilee”. To bad they don’t understand that in a debt jubilee the debts are forgiven but the property resorts to the rightful owners (the lenders). Your debts will be forgiven, but you won’t get to keep the stuff you borrowed against.
Why can’t the government do something simple like let people make a RRSP withdrawal, with out paying a withholding tax or ANY tax, one shot deal.
Any additional funds received will be taxed, they do not mention that.
80 billion stimulus package, where will the Canadian Peso
settle at, or will it be equal to Argentinian Dollar
And all of this pain and suffering on all levels (sickness, financial suicide, unemployment, and stress) as a result of not being cognizant and wary that the cultural practices (eating pangolins, bats whatever….) of our close trading partner was a ticking-time bomb. The researchers at John Hopkins sounded the alarm for several years, especially at their pandemic preparation workshop this past fall. Going forward we need major social distance from China, as can we treally rust them to eliminate their dangerous cultural practices, which as we have seen can trigger a fireball down our globalized neighbourhood. How much would it cost the economy to diversify out of China; for companies to seek other sourcing for goods? Surely, a fraction of what this calamity is bringing to all of us.
https://www.reddit.com/r/realestateinvesting/comments/fotvwa/please_help_my_tenants_organized_and_are_saying/
wild times
#13 David McDonald on 03.25.20 at 3:58 pm
The stock market is expressing optimism at least for today. Even CPD is up a buck. Things can turn around but the only question is how badly Trump has screwed up the US response. Trudeau was right to shut the border to the US. They already have twice our rate of contamination and it may get much worse.
————————————————————————————————
Make no mistake Trump closed the border, Justin follow suit.
The result of the whole $2K for unemployed thing seems to me unexpectedly unfair in some cases.
Take your cashiers at Loblaws, for example. I guess they don’t get zip, since they are still gainfully employed.
Even taking into account that princely $2/hr COVID raise that Loblaws recently announced so proudly to such fanfare (after being beaten into it by the union, one must add), aren’t they still making something near minimum wage? Which, counting likely part-time hours, would come out to something like 2 grand a month or less anyway?
So without reaching far for any dramatic, potentially controversial comparisons of people in different income brackets and skill/education/qualification levels…
… just comparing some unskilled poor folks on near-minimum wages to some other unskilled poor folks on near-minimum wages …
… we end up with some getting their two grand for no work at all, while others get pretty much the same two grand, but keep working for it, in an occupation that’s probably the second most hazardous right now in our society, right after healthcare/medical profession?
No?
#85 alf on 03.25.20 at 6:09 pm
But where were you with all of your disgust during the renovict your tenants movement?
—————————————————————-
I assume you are referring to Ontario.
Why shouldn’t a landlord be allowed to take control back of their property once a lease expires?
Why are the laws set up such that a landlord has to go through a renoviction to get control of their property back? That is absurd.
Why are the laws set up to cap rent increases annually, rather than allowing the landlord to renew leases at rates that the free market will bear? The risk they’ve undertaken to rent out a property is high. They should be able to collect as much return as possible.
There should be some laws and regulations in place to protect both landlords and tenants, but to make a LL have to go through some renoviction process to get their property back is asinine. Their name is on the mortgage, they should get the property back at the end of the lease, if they want. Pretty simple to me.
I say all of this as a renter.
Why is it acceptable to “keep your rent”? What if the landlord is a 70 year old man who needs that rental income to put food on the table for him and his elderly wife? Too many think LLs are rich people who take advantage of defenseless renters. That tends to be the exception, not the rule.
If you can’t pay your rent because of CV19, work with your landlord instead of just refusing to pay. If you can still pay your rent, do so.
#54 Zed
Listen to this FED President crazy talk about infinite money printing. This is one of the complete psychos and sociopaths at the helm of this sinking cruse ship. You know, the first ones in the only available life boat to watch the rest of us drown.
I`m no finance pro but I have heard of John Law, Wiemar Germany, Zimbabwe, Argentina and Venezuela . Your stock holdings might be the only thing worth anything at all when the inflation is over and done. Printing too much money always ends in disaster guaranteed !
https://www.youtube.com/watch?v=DUrlNHTxuJM
I think I`ve posted here before (to a chorus of ridicule) that the cheap goods from China and elsewhere would soon end . Our 68 cent dollar is in for a world of hurt.
Just ask an Australian.
Don’t sell that cow.
“ The bottom line: housing is toast.”
You’re persistent, I’ll give you that.
@#74 Legal to Smoke
“How long do you think before unemployment hits 15 percent?”
++++
Ummm, last week?
#105 Mattl
Neither is correct, on its own or absolutely.
The correct, proper, moral, legal and smart thing to do is to talk to your landlord. Your landlord is not the enemy, any more than your taxi driver, doctor, chef, grocer, or anyone else you trade money to in exchange for goods and services. Friendly relations go a long way to get better service, better terms and more leeway. That’s how mutually beneficial transactions work.
If you are having trouble, or foresee having trouble paying rent, the correct number is not zero, and definitely not unilaterally with no notice. Your employer doesn’t just not pay you because the future is uncertain. Many will dip into their own savings and retirement funds to make payroll when things are slow, to avoid laying people off. Landlords are perfectly willing to work with good tenants. Someone who has a “keep the rent” attitude has probably never been a good tenant, or a decent human being to begin with, so I can understand how no one would want to extend any courtesy to them.
@#94 Eviction Prediction
“…..all levels of government are bailing out renters and banks are bailing out owners….”
++++
Enjoy the pathetic $500/month cash handout costing the govts Billions of $$$ they dont have.
Just get ready for Trudeau’s “emergency tax increases” to pay for all this “free money”….
Says a regular blog dog, “Sadly, the attack the ‘rich’ movement is becoming more and more tangible and it’s more challenging to be a landlord each day.”
What a disingenuous statement! The only times I have been “attacked”, online or in real life, for having accumulated some wealth over 70+ years is in this comment section.
Also was a landlord for 30+ years, in Calgary. All I can say is I’m getting a kick out of these takes on being a landlord….you seem to be doing it wrong if it is the pain causing thing as stated.
1) Have a business plan, forecasts, P&L’s, cash flow, everything…like it is a business.
2) Screen your prospective tenants.
3) Screen your prospective tenants.
4) Don’t rent a home you wouldn’t live in yourself. If something needs repair, repair it. Needs paint? Paint it.
5) Doesn’t matter why it needs repair or paint, you are a landlord, not a lifestyle coach.
6) Figure out a reward system to keep retention as high as possible. Churning your tenants is costly. For us it was a yearly BBQ/party for all tenants. Rent a city park, hire caterers and get games, whatever for the kids and hide the beer/wine in go cups.
7) A tenant for 5 or more years? We gave December rent back for families, 1/2 back for singles.
8) Screen your prospective tenants. If a bad one slips through or develops…get rid of them. Surely big, strong, stoic, conservative folks like you can figure that out. And we were never once brought into any form of landlord/tenant dispute resolution in over 35 years.
Did we have the odd unplanned vacancy? did we have the odd bad tenant? did we have the odd bounced cheque? Of course. But we had a business plan, we had clear expectations on both sides and we worked through all of it.
I can tell you that once we reached a certain point the landlord thing was far easier than my front facing work…running small, independent, owner operated restaurants. Mostly cafes/diner types. Never mind daily, way more issues hourly there.
I’d tell you how much I sold the property management company for but that would offend some of you…
9) Being a Landlord is not a short term game.
Still alive.
I’ve gotta get back to essential servicing something…
M45BC
Visualizing the Cost of Food for Two Weeks of Quarantine.
“Many Americans have encountered an unfamiliar sight lately at the grocery: empty shelves. The coronavirus has unleashed panic buying across the country, despite retailers’ insistence that food supply chains are holding up. Even so, it’s good to keep some extra food on hand, as a positive or likely-positive coronavirus diagnosis means a two-week quarantine. What does two weeks of food look like?”
Click on link.
https://howmuch.net/articles/cost-stocking-food-two-week-quarantine
‘Failed liberalism left us without masks’
screw the landlords
Garth,
Thank you Thank you. Your advice and calm assurance are greatly appreciated, every day.
To Sail Away
I am tired of your endless comments.
Please sail off.
@#104 People Panic
” I can confirm that flight traffic is way, way down, the 90% numbers are approximately correct.”
++++
Interesting.
I live on the final approach turning point for YVR in Burnaby (Billy Bob take note…flash your lights when turning north over Burnaby on your descent into YVR).
International and national flights all turn for final approach heading west into Van airport.
I see( and hear) flights throttling back, flaps extending, day and night about every 2 minutes……
Today …..nada.
#38 Last Gasp
“ If you have ever been in automobile rollover… time slows …”
————————————-
Wow. You described it exactly. I was in a roll over (3 times) a few years ago. Coming to a dusty cloud upside down. Lucky to survive.
Hope USA can invoice China for this. Erase debt.
Prolong the end of capitalism. But that can lead to war.
Not just trade war.
#108 Nonplused
People always forget the second part of the debt jubilee. The system was in place to make lenders more prudent (debt forgiveness), but also to prevent borrowers from borrowing more than they could pay off (asset reversion). Elimination of debt slavery and debters prisons was just a nice side effect, the primary goal was preventing the system from spiraling away.
I think there were many lessons we have learned even in antiquity that we will eventually have to relearn, and all because the ancients didn’t have anesthetic dentistry.
#105 Mattl on 03.25.20 at 6:49 pm
Actually the general consensus on this blog is that landlords were heavily subsidizing their tenants. Tenants that are now claiming they won’t be able to pay rent. Garth has been very clear that landlords are getting the short end.
So which is it?
—————————————
I’m not sure what the consensus was here, but the way rents skyrocketed in Vancouver and Toronto combined with government intervention to prop up the market I certainly never believed landlords were subsidizing anything. And now with the mortgage deferral nonsense being extended to landlords, property investment risk is being socialized onto the general public. Should stock investors also get a 6-month reprieve before their losses from the past month are actualized?
@#122 Flop.
I dont worry so much about food as I do about enough booze…….
I’ve noticed that even the worst countries are keeping the booze supply available….
#124 Flop… on 03.25.20 at 7:21 pm
Still alive.
I’ve gotta get back to essential servicing something…
M45BC
Visualizing the Cost of Food for Two Weeks of Quarantine.
“Many Americans have encountered an unfamiliar sight lately at the grocery: empty shelves. The coronavirus has unleashed panic buying across the country, despite retailers’ insistence that food supply chains are holding up. Even so, it’s good to keep some extra food on hand, as a positive or likely-positive coronavirus diagnosis means a two-week quarantine. What does two weeks of food look like?”
Click on link.
https://howmuch.net/articles/cost-stocking-food-two-week-quarantine
————————————–
Intermittent fasting (look it up) is good for the digestive tract in general and gut microbiota in particular. With everyone staying home it’s a good time to try it out.
In addition to daily intermittent fasting, a 48 hour water fast once or twice a month is also advisable.
When the chips are down, you’re going to see what Canadian society is actually like, with the thin veneer of politeness pulled off.
You can already see it everywhere, Libs vs Cons, landlords vs renters, mortgagers vs banks. On top of that, no sports to placate the masses and make them forget about their debt slavery.
This is Canada’s day of debt reckoning. We thought it would never come, but it has.
Oh, and the loonie has more to fall yet. Stay tuned.
DELETED
@#12 Keep Your Rent on 03.25.20 at 3:57 pm
Tenants keep your rent.
————————————–
I’ve been a renter all my life, in various cities across Canada. For the better part of the past 40 years I’ve lived in downtown Vancouver, with a couple of years along the way in Ottawa, East Van and Montreal.
I would never consider not paying my rent because of COVID19 or anything else. If I was having an issue with finances I would talk to my landlord, and chances are something would likely be worked out. Saving myself a month or two of rent money would not be even close to worth the blacklist that would be stamped on my forehead if I ever needed to move and get a new place.
The way I see it, renters and tenants have a mutually beneficial business relationship. Without landlords, who exactly would we be renting from?
As an example, a sister of mine in Ottawa started out years ago working jobs at places like McDonald’s and now many years later, she owns a couple of houses, as well as a walk up rental building. She treats her tenants with respect and hopefully they return the favour. Not all landlords are speculators. Most are just trying to run a business like anyone else.
The bottom line, everyone on the planet is dealing with this pandemic in one way or another. Why anyone would want to blame landlords at a time like this is beyond me.
Why cant the government freeze time and force the criminal banksters to stop accruing interest for 3 months.
No Usury.
No Rentier.
Problem solved.
Sorry to neglect my vigilance. Had to hike up a mountain on this glorious day. I appreciate the kind thoughts in this difficult time.
Penny Henny, you’re welcome. I try to offer good advice from a centrist perspective. Also, my firm: management is on half salary, we’ve laid off 25%, and signed all remaining staff to hourly contracts. Very relaxed workdays now. I’m greatly enjoying this slowdown.
#133 Howard on 03.25.20 at 7:45 pm
Intermittent fasting (look it up)
///////////////
Hey Howard.
Yeah I’ve heard of it.
Here’s my version.
Intermittently, I run out of ice-cream and run fast to the store to replace it…
M45BC
#61 Franco on 03.25.20 at 5:22 pm
“Here is some positive thoughts, a breakthrough treatment will be found very soon or a vaccine is in the works, at least so far data shows that this virus does not mutate quickly so a vaccine could be the solution. Let’s all hope.”
I have some good news, and some bad news.
First the bad news: RNA viruses like Covid-19 mutate at a prodigious rate. Mutation that basically happens every time the thing reproduces.
The good news: This can be used to track back the infections around the world. Take a look at the GISAID tool (based on IBM software for the Human Genome Project that can work out the ancestry of your DNA):
https://nextstrain.org/ncov
The bad news: This stuff has been around for a while and we didn’t notice it. Read this blog post commenting on the genomic tree (he is dubious about a vaccine, not that that means anything): https://www.fagain.co.uk/node/60
The good news: It’s possible that the variation of Covid-19 that predominates in Germany (see tree) is less lethal.
Most places only have one or two of the main strains.
The bad news: The UK has all four strains, probably as a result of slow border closures.
The good news: We are not doomed. This guy has been tracking this for a while and here is his latest posting:
https://medium.com/@tomaspueyo/coronavirus-the-hammer-and-the-dance-be9337092b56
The bad news: I am not an epidemiologist!
So some people didn’t want to do the renters tax credit in the past because of all of the illegal suites in Vancouver.
Government will need details to pay $500 for rent on your behalf?
Now, just checking, do we still have any illegal or non declared suites in Vancouver.
#103 ‘Keep’ – my bias is against those who are urging others to break a contract & withhold income which others may be relying on. I’ve rented & even when I was laid off, had never considered for a moment withholding my rent because I ‘needed the money’ more than the landlord. My financial woes, if any, were not my landlords responsibility. Full stop.
Further, the offering of financial assistance you cite doesn’t mean it will be given. Forms must be filled out, permission granted & funds are unlikely to flow prior to mid-April if that. In addition those mortgage ‘holidays’, if granted, do NOT mean the lender will not be charging additional interest & in fact websites for various financial institutions have noted that the cost of loan repayment & length of term will increase due to taking any such ‘holiday’. I will add the aid packages are not limited to landlords or business but include provisions for those who have lost their employment. Funny how you didn’t mention that in your reply.
Feeling sorry for yourself?
Read this:
https://www.businessinsider.com/coronavirus-greece-prepares-for-crisis-2020-3
“Greece shut down its parks, cafes, and schools on March 11.
After a decade-long financial crisis that shrunk the country’s GDP by 25% — akin to the Great Depression in the US — the local infrastructure will be badly tested by any outbreak, let alone the numbers currently seen in Spain and neighboring Italy.
The Greek government appears convinced that the disaster will exceed its capability to manage.”
Major U.S. retail and restaurant chains, including Mattress Firm and Subway, are telling landlords they will withhold or slash rent in the coming months after closing stores to slow the coronavirus, according to people familiar with the situation.
https://www.bloomberg.com/news/articles/2020-03-24/u-s-retailers-plan-to-stop-paying-rent-to-offset-virus-closures
#133 Howard on 03.25.20 at 7:45 pm
Intermittent fasting (look it up) is good for the digestive tract in general and gut microbiota in particular. With everyone staying home it’s a good time to try it out.
In addition to daily intermittent fasting, a 48 hour water fast once or twice a month is also advisable.
——————–
That’s what I kept telling them in Ethiopia!
You’ve never seen such rude responses.
Well Garth is a reasonable man with reasonable words on this topic.
But he was a reasonable man with reasonable words back in 2009 as well.
Our government and Central Bank pull a rabbit out of their hat!
Housing basically grew ever since , till now.
I hear they’re planning on supercharging their 2009 strategy!
In their minds , housing is too big to fail and the more debt people take on the more they will support it.
To them the Day of Reckoning will be some other time, some other place , some other government.
A problem for our kid’s I guess…
While everyone is freaking out about everything going down the drain a vaccine has arrived.
And Wall Street got the memo before you.
It looks to be a single dose effective for life and has already been skimmed by handlers of it taking it for their families ahead of concluding clinical trials because they already know it works, which is why insiders are grabbing it for unauthorized use and why Wall Street is soaring.
Meanwhile Canadians think that the end of the world has arrived, while the smart money is going all in equities.
@ crowded
“I’ve noticed that even the worst countries are keeping the booze supply available….”
Yeah, I know. Seems funny and not intuitive why booze and drugs must be “essential”. But then, look at it from the point of view of mental health workers and cops.
Do you really want to deal with hordes of people in full cold turkey withdrawal from their favorite stuff? That’s some fearsome, society-collapsing stuff…
Fantastic Greek takeout tonight, with, of course, the standard Corvid $100 tip. Only another couple thousand before Trump gets things back on track.
An amazing, well written, thoughtful blog today Mr. Turner.
It will get better, have faith and recall:
PASS.
Infection rate slowing down precipitously in Italia, WHO reckons by Sunday Italia will have peaked (I think longer but hey, I’m going with the authorities for once).
Hope CANADA that there is light at the end of the tunnel, the thing is, right now the tunnel’s DAMN DARK.
—————————
We are witnessing history being made, all the wrong kind.
Russians and Cubans joint fight against virus in Italy. And you are fighting about rents. Landlords.
Russian flags and military trucks in the center of Europe.
Where is Nato? Otan?
And so you wonder as an investor what good covid-19 may have provided you with. Yes the current state of your portfolio sucks BIG TIME. And yet, covid-19 has provided you with a once in a lifetime opportunity to gauge the original purpose of all the funds you own. Did your low volatility fund behaved as expected? How much of a dive that actively managed MF took? And what about your defensive positions? The list goes on. A unique research/learning opportunity. No pain no gain…
Hey yvr_lurker, were you ever humiliated by a Chinese hooker in your childhood?
So does anyone here think they’ve already had Covid19, or knows someone who has?
My wife was laid up off work for a week in Dec. Very strange illness, a cross between a bad cold and flu. Very sore dry throat, ached everywhere, but that was it.
Lots of folks on Twitterverse saying the same thing. Plus many States had a huge ‘flu’ spike at the end of 2019.
China saw the first cases back in November. Wouldn’t be too long before the virus made its way here.
Regarding the situation in Italy: Most major media falsely report that Italy has up to 800 deaths per day from the coronavirus.
In reality, the president of the Italian Civil Protection Service stresses that these are deaths „with the coronavirus and not from the coronavirus“ (minute 03:30 of the press conference). In other words, these persons died while also testing positive.
https://www.epicentro.iss.it/coronavirus/bollettino/Report-COVID-2019_20_marzo_eng.pdf
Someone dies of heart attack cancer renal failed etc and IF they test positive to the virus bogey man then the media chalking it up as virus kills another.
On another note. The UK government Thursday last week post on its own website that
“ Status of COVID-19
As of 19 March 2020, COVID-19 is no longer considered to be a high consequence infectious diseases (HCID) in the UK.”
So why 4 days later they ram through a bill essentially bringing in martial law.
If they virus is not that infectious why do the government keep scaring the hell out of people to stay 2 meters apart!!
OMG!!!!! Who let the dogs out? The steerage section of the comments lately is insane…….how about this………
REPENT REPENT REPENT NOW! THE END IS NEAR!!!!!!!
ASK YOURSELF……WHERE WILL YOU BE IN ETERNITY?
So I live in a condo near DT Vancouver. Talk in the building is this – paraphrased:
“screw these landlords, we shouldn’t be paying rent right now and the banks should be taking the hit from their billions of profits they’ve made off of us the past decade”
What I hear is that renters think that the landlords shouldn’t be punished for renters not paying rent but this financial problem should go up the ladder one level higher to the banks who, they feel, can absorb this temporary financial hit – not the landlords and the renters.
April 1st should be interesting….
……………..Oh………….I forgot……I’ve decided NOT to pay my income taxes owing………….because I don’t care and because I can!…………so there!
Old news now for most of you but Ford and GM are going to reopen their factories to make ventilators out of the fans that cool their seats. N95 masks too.
Apparently they also have 3D printers that can be quickly reassigned to the task. Trump makes another good deal. Will Trump pay way too much for these ventilators? No doubt. But at least he’s getting something he needs for the bailout money.
So we have test kits on the way, ventilators on the way, and some promising anti-viral medications (don’t eat fish tank cleaner it is not the same thing and you don’t know the dose).
I think this thing is going to last a long time, no way the world is back to normal by April 12th like Orange Man Bad is hoping. But in the same way the US went from being the largest manufacturer of cars to the largest manufacturer of airplanes and tanks in a year during WWII, and all the extra science we have now, we’ll beat this thing. Covid will not win. We’ll lose some comrades, but life will go on.
Never underestimate the human spirit. We don’t even know why we do it, but we always carry on. This will be no different. I am sure BMW and Volvo will both soon also announce plans to make ventilators. America leads again.
However it is also a good time to buy a car, or at least it will be soon. Even with Ford and GM converting to making ventilators, there are a lot of cars on the lots and nobody is buying. The dealers have to get rid of that stock because they are paying interest on it. If you were eyeing up a new car and have the money, wait. 2 months from now the incentives will be incredible. The dealers will be selling them for invoice, and there will be factory incentives on top.
Sensing some DENIAL reading Comments about when things should turn around (optimists can be insufferable in trying times).
YOU are SO 2 weeks (at least) behind Italia Canada…save our Blog Author whom today in modern parlance “NAILED IT”.
NORMAL will be when a vaccine is found and administered to all. 1 year away optimistically.
“Cured” Wuhan videos coming out in the last few days show people with masks be it shopping, working on a car assembly line, you name it AND near empty streets. If that is what China wants to show as a return to normalcy…well, they can keep it.
That’s what it will be like. Slow drudgery. There will be no celebration in the streets. No pent up demand for quite some time to come.
ECONOMICALLY, it will be like starting all over again. And after the Great Depression it took years and years to kick start economies.
Best get used to Canada it until a vaccine is found.
#102 Keep Your Rent on 03.25.20 at 6:39 pm Hey SCM it’s really you. Don’t worry, i won’t tell anybody.
so how’s 2020 going? well someone ate a bat soup and me and the wife lost our jobs so not to bad so far.
#138 Sail Away
That is quite the Pollyanna life you portray.
Of course the shrinks will tell that the probability you are actually like that, expressed as a fraction:
= 1 – P(+/- 3σ).
And, a grandiose ID it is at that (ID not identification abbrev.).
“I’m not sure what the consensus was here, but the way rents skyrocketed in Vancouver and Toronto “
Rents didn’t skyrocket in Vancouver and Toronto. What happened was a butt-load of brand new luxury units were delivered to market, and those naturally had high rents and prices. So in the stats, they ‘crowded out’ the existing pool of rentals and normal flow of resale units. But rents on individual units did not rise much, if at all over the past number of years in Vancouver/Toronto. All the way back to ~2013-ish when the Minister Flaherty slammed the brakes on the CMHC.
A person lives or owns an individual housing unit. They don’t live or buy an ‘average’ unit. Claims of rents skyrocketing were severely exagerated, along with price gains in the GTA/GVR RE markets. Banks and Realtors, of course, happily used the shifting average unit (or ‘rent-mix’ or ‘sales-mix’ as sometimes its called) to their advantage when stating the vibrance of RE, or in the case of the banks, stating their case for solvency. But that charade is coming to an end right now.
The negative equity that is now implied for vast tracts of Canadian RE is going to be an awfully sad story. And will absolutely kill labour mobility at a time when it is most desperately needed to meet the evolving demands of the Canadian economy.
“#137 Bob Dog on 03.25.20 at 7:53 pm
Why cant the government freeze time and force the criminal banksters to stop accruing interest for 3 months.”
They’d have to do the same to those who rely upon payments from the bank as well. You can’t just disrupt one part of the overall “payment chain” without creating severe downstream impacts.
The rent that you pay, is someone’s income. Someone’s income is someone’s mortgage payment. Someone’s mortgage payment is somebody’s retirement income. And so on and so forth. The government, as a condition of supporting the banks with their liquidity problems, should require the banks enact severe austerity programs in their own operations. But if the payment chain is broken, the entire system will collapse into deeper hyperdeflation.
On that note, anyone remember when I was talking about “monetary instability” here a few years ago? I’m gonna have to go search up a few of those posts….
#128 Post on 03.25.20 at 7:28 pm Good thing you had your seatbelt on.
Markets recover faster than housing.
#54 conan on 03.25.20 at 5:02 pm
It’s going to be epic. These types of viruses come in 3 waves.
—————-
No. That sort of thing only happens in books or movies. Actual life is more random.
Sail Away…you said you hiked up a mountain today,yet seemed to have the time to post 6 times. Did you fly up there and back on your wife’s broom or what?
My realtor called me today and asked me if I was “still getting the listings.”
He made it sound pretty bad on their side…..
So here we are at day 100 of the Corona Virus. Latest stats from Cdn gov’t. 3433 cases and 35 deaths (14 BC 13 Ont Qc 6 Ab 2). So 34.3 per day (known) and roughly 1% death rate. Apparently 2000 to 8000 people die each year in Canada from the flu, see link. That is 5.5 to 22 people per day.
https://www.cbc.ca/news/health/flu-deaths-reality-check-1.1127442
So if we go at say 5000 per year that is 13.6 deaths per day. 13.6 x 100 = 1300 possible deaths from the regular flu compared to 35 from this lastest flu.
Why are we not getting the stats from the regular flu. Are they not just as important? Have the regular flu deaths disappeared?
Something doesn’t quite add up here.
If people loose jobs and they are renting and young. Some people will simply move home if that is an option.
Air BNB…units coming on the market, rental or for sale. More competition on both sides.
Not sure what the fine details are about referring mortgages, might only apply if you can prove you lost your job or are temporarily laid off. Does anyone know the fine details?
If a certain about of home owners are dependent on renters for mortgage helpers that could become problematic.
Still – whoever can pay should pay, that means your rent or your mortgage. A deferral on rent or mortgage is just that.
The movement should be “Don’t pay your taxes as it just goes to bail outs” or future…future….future taxes.
#38 Joey Well said. Brought tears to my eyes. Thanks
I live in a condo. There are no more crowded elevators any more as ppl are not going ourside, and my floor seems deserted; have only seen 1 other person on my floor in a week. Building gets cleaned and sanitized every day.
#155 Ronaldo on 03.25.20 at 9:23 pm
So here we are at day 100 of the Corona Virus. Latest stats from Cdn gov’t. 3433 cases and 35 deaths (14 BC 13 Ont Qc 6 Ab 2). So 34.3 per day (known) and roughly 1% death rate. Apparently 2000 to 8000 people die each year in Canada from the flu, see link. That is 5.5 to 22 people per day.
https://www.cbc.ca/news/health/flu-deaths-reality-check-1.1127442
So if we go at say 5000 per year that is 13.6 deaths per day. 13.6 x 100 = 1300 possible deaths from the regular flu compared to 35 from this lastest flu.
Why are we not getting the stats from the regular flu. Are they not just as important? Have the regular flu deaths disappeared?
Something doesn’t quite add up here.
*******************
You are damn right something doesn’t quite add up here.
Great reset for politicians world wide. Get to blame any downturn on a virus.
I am just waiting to see how the credit market reacts to peak debt. Spike in mortgage and lending rates??
Garth,
I appreciate the voice of reason. The unreason out there is astounding. It is like a cult, regurgitating dogma and fear.
Re: British Columbia, just watched daily press briefing.
If everybody stays in their own living space for another ten days to two weeks, I can see BC Health getting their contact tracing done, and specific isolations in place effecively. New infection rates appear to be reduced as a quotient of the total.
Dr. Bonnie Henry is coordinating a strategic response well, similar to wildfires, using testing like infrared, isolating outbreaks. If our communities can stay smart over the next ten days, and act rational until April 15th, we should see dramatically diminished infection rates, excellent recovery rates, and definite steps back to normalcy—with some safe guards. Long BC. Long BC residents and business.
@#138 sail away
“Very relaxed workdays now. I’m greatly enjoying this slowdown…..”
++++
nice.
I’m jealous
I’m still working 7 days/week….and I have several books I want to dive in to but….no time.
Vancouver is supposed to have 6 days of rain starting tomorrow so…..maybe…juuuuuust maybe…..I may be able to kill a few books.
@#156 TERRY
“ASK YOURSELF……WHERE WILL YOU BE IN ETERNITY?”
+++++
hopefully….wearing earplugs…..way…. way…. way…. far away…… from you……. in Hades.
If unemployment hits 15% (it will) and the economy shrinks by an equal amount (likely), credit risk will rise, home loans get more expensive, banks grow risk-averse and buyers retrench. – Garth
I sadly have to agree. Thing is, we knew real estate was priced in an area of medium/high risk before this. All of the new taxes and tighter regs over the last 10 years to try to put a lid on valuations looks pretty darn sane right now. In hindsight, we didn’t do enough and in the back of our minds, we knew it. It’s a question now of how bad it will get.
This brings into question “when” the economy will go back to work. Trump is floating around April 12th. Is he right? Will the virus be seasonal? One can make a case for it with influenza and light radiation charts like this:
https://3kpnuxym9k04c8ilz2quku1czd-wpengine.netdna-ssl.com/wp-content/uploads/2014/11/insolation-latitude-NOV.jpg
At Mara Lago 26.77 N, the amount of solar radiation could be high enough where the blue/green lines intersect in the above chart to think about it, but cases in equatorial nations are still rising and their solar radiation peak is the March equinox, like right now (add a 12 day delay, I don’t much change in numbers). Common sense dictates that if there is ‘any’ seasonal effect to this virus, it will kick in late April (25thish) around 30 N latitude and be more delayed as we move North. First, second week of May around the 49th parallel? There is no precedent for this, we have to guess.
Here’s the problem with theoretical predictions with seasonality concerning a novel virus. As the weather changes filling the skies with more light and heat, the virus has to stay indoors (or outdoors at night) to find hosts. This means that a virus terrorizing (guessing here) 95% of world population with no host immunity in winter, shrinks down to indoor populations (and night life) in summer. I’m spitballing here with numbers… this percentage of indoor pop could be 10 to 20% in poor undeveloped nations but maybe as high as 40 to 50% in developed nations when we factor in seniors and professionals, retailers etc. who work and live indoors 21+ hrs a day.
The problem is, even though the potential aggregate of infected hosts shrinks over summer, this lower percentage has no immunity. Over 3 to 4 years, this lower percentage will build immunity as this population is much more prone to year ’round infection. Once we see immunity build in this 12 month a year higher risk “indoor” group, then we’ll see a marked seasonal contrast like we do with the flu, but only then. In short, we may not see the seasonal drop in the rate of spread we hope to expect.
Still, we have to go back to work. There has to be a plan. A reasonable plan would look like a later start the higher up you go with North latitudes, schools open later than businesses and curfews come on when sun goes down. It’s not going to be business as usual and we should prepare for less seasonal effects than we had hoped.
If I had to speculate (as I always do), we hope for the best but prepare for the worst. I’m hopeful for virus seasonality to some degree, and hopeful for some success with drugs to treat the infected by late fall. If that happens, its a game changer, hopefully followed up with a vaccine ready to launch by March. Otherwise, we have look at what has worked in China, South Korea, Singapore etc. and implement their successes here as much as we can, without hesitation or face the consequences of inferior results.
Hard times call for hard choices. Banks are going to have to look at debt consolidation or see bankruptcies skyrocket (along with more foreclosures). Moving towards a cashless system without plastic where everything is cel paid for as an example, it can’t come overnight but this is what progress looks like, this is where we need to head and the challenges there are formidable.
I haven’t confirmed how accurate these numbers are yet below but if they are ball parked, this gives us some kind of example as to how challenging systemic change like going cashless and cardless (debt consolidation to avoid bankruptcies, the timing is right) would be. Chinese cel phone market share (66.37%):
https://gs.statcounter.com/platform-market-share/desktop-mobile-tablet/china
Now Canada (40.73%):
https://gs.statcounter.com/platform-market-share/desktop-mobile-tablet/canada
In Jan 2016, China was at 39.44%.
Interesting…
Putin calls for 15% tax on offshore funds as part of plan to stabilize Russian economy
Russian President Vladimir Putin outlined a range of measures on Wednesday to tackle the economic impact of the Covid-19 outbreak. They included making sure that everyone pays their fair share of taxes.
At long, long, long, long, long, long last the problem of grossly overpriced housing may be solved.
#12 Keep Your Rent on 03.25.20 at 3:57 pm
Tenants keep your rent.
Landlords keep your distance.
We’re not about making landlords suffer. We’re about fairness to renters.
——————————————
So paying rent is unfair?
Really?
You’ll eventually learn to love the tent you’ll occupy near an industrial site. Because you deserve it.
Oh…and you’ll have to BUY the tent.
Stocks are toast, houses will be toast ! it’s a cycle, both will recover.
Life goes on!!!!
#123 Ustabe on 03.25.20 at 7:18 pm
Says a regular blog dog, “Sadly, the attack the ‘rich’ movement is becoming more and more tangible and it’s more challenging to be a landlord each day.”
What a disingenuous statement! The only times I have been “attacked”, online or in real life, for having accumulated some wealth over 70+ years is in this comment section.
See, I like you. Like any relationship on this planet, If you are respectful of your own needs as well as those of the people you interact with everyone can prosper.
Too much greed and ego in the current system.
We all need to demand more of ourselves than this bullshit form of make believe capitalism can provide.
#169 unbalanced on 03.25.20 at 9:21 pm
Sail Away…you said you hiked up a mountain today,yet seemed to have the time to post 6 times. Did you fly up there and back on your wife’s broom or what?
—————-
I fail to see a discrepancy.
Unless you just did that to insinuate my wife is a witch? I also have two kids; please feel free to insult them as well.
My mother is crippled AND has dementia, so fertile ground there. Please… proceed.
Question:
Hey yvr_lurker, were you ever humiliated by a Chinese hooker in your childhood?
——————————————————–
Nothing against the chinese people…. not the Wuhan virus…. but are you so stupid to think that we should be back to the way it was connected with 100 flights a day from the west to a country that learned nothing from the SARS episode. Why don’t you actually read something useful:
https://abcnews.go.com/Politics/trump-called-coronavirus-unforeseen-problem-warned-potential-catastrophic/story?id=69544158
and the following one which has many interesting links
and warnings from 2013 and 2017.
https://www.businessinsider.sg/wuhan-coronavirus-sars-bats-animals-to-humans-2020-1
Might be too many words on the page for you to wade through though.
I say we close down the damn mass media for 30 days and watch 80% of all our problems go away!
What this manufactured pandemic has done is it has quarantined real science. The average sheepletard has no idea how many people die every year from the flu.
The push to conform is becoming ridiculous. There seems to be no alternative to conforming, whether you believe in the thing or not, whether you want to or not. But not only that, they are starting to enforce it with police and military. How did things get so awful so quickly? This is truly the most bizarre thing I have ever seen in my life. And the vast majority of people are just rolling over for it. What gives? And the real clincher is the “social distance” thing, which is also being enforced now. No assembly for ANYTHING means no resistance. I just can’t get over how easily they are pulling this off.
“Today the fear of contagion gives government cover for its assaults on freedom and poses a question the government does not want to answer: If liberty can be taken away in times of crisis, then is it really liberty; or is it just a license, via a temporary government permission slip, subject to the whims of politicians in power?” Andrew P. Napolitano, a former judge of the Superior Court of New Jersey
#154 Deplorable dude on 03.25.20 at 8:38 pm
So does anyone here think they’ve already had Covid19, or knows someone who has?
My wife was laid up off work for a week in Dec. Very strange illness, a cross between a bad cold and flu. Very sore dry throat, ached everywhere, but that was it.
Lots of folks on Twitterverse saying the same thing. Plus many States had a huge ‘flu’ spike at the end of 2019.
China saw the first cases back in November. Wouldn’t be too long before the virus made its way here.
—–
BINGO!
I am amazed to see someone else saying this here.
I don’t often get sick. In December I contracted something that was like nothing I’d ever had before.
Intense flu, hours of coughing, particularly while lying down. Hung on for several weeks. As the illness dragged on I felt like it was not going to go away on it’s own. Finally, it did.
Several of my friends experienced a similar symptoms this winter.
This occurred in Victoria if anyone was wondering.
Unless it’s gonna be Weimar2… Why not? This movie has been playing out the most unreal scenarios. In that case, the table is turning again…
So let me get this straight…
The country suffers an economic shock and customers contact their banks to try to re-arrange mortgages, withdraw savings and open lines of credit.
And the banks response…..
Close branches and reduce opening hours?
Think about that for a second.
Summarizing some things I learned today: If you feel sick, self isolate, and recover, then you are not a drain on the health system, and are not counted. Only if you call the number and engage a service do you factor in the totals presented next report. We may never know the total infected, however at this stage, daily new cases reported in BC, cases being considered by BC Health, appear to be reducing in ratio to those accumulated.
In theory, people will have to follow a protocol of distancing for two weeks after any “all clear” and longer in areas where recoveries are still monitored.
So I am predicting in 14 days, in BC, if new infections are a smaller percentage than today, containment will be in the 14 days after, the third week in April to be safe.
However, outbreaks may still occur, if transmitted asymptomatically between two people, and no one knows where that is until reported. Social Distancing, which affects business, education, relationships, recreation, work, dogs and investing—will probably be with us consciously for two years, waning as more people consistently present themselves as healthy to friends and associates. Opportunities exist for entrepreneurs and business who provide solutions in this changing market dynamic, at least for the next 24 months. I know that garden centres will be hopping. Cleaning services are up. Perhaps the rv get-away market will be up.
I cringe at the number of fools hoping for a mandatory Covid vaccine.
I’ll never take another vaccine.
My body, my choice. (the feminists taught me that).
Hi Garth,
I’m confused about something in your article today. You said “this is one reason investing in income real estate is a really, really, really, really bad idea.”
Do you normally feel this way? I’ve been reading this blog for a while. My partner and I have been renting and saving (investing) for years. I have been wanting to diversify by owning a rental property (thank goodness I didn’t buy anything!)
What other ways can we make some mula?
Canada?
Save for a rainy day?
FAT CHANCE!
https://www.theglobeandmail.com/canada/article-canadas-failure-to-save-for-a-rainy-day-has-put-us-all-at-risk/
Do you think the REITs will survive this crisis? This is going to be really bad for those looking to retire soon.
#152 spoon_man
Did your low volatility fund behaved as expected? How much of a dive that actively managed MF took? And what about your defensive positions?
————————————————————
eye openers
ZDV – creme de la creme CDN bank and blue chip smart beta fund
40% cliff dive into the abyss ….. surprise , surprise you Doghouse alpha dumb dumb.
all Bond Funds ( the safe stuff) Skewered then barbecued as expected. Who could have guessed ? Looks like no one wants to lend their money for nothing ! GIC`s = 100 cents on the dollar ?
@#174 Condo Bondage
“I live in a condo. There are no more crowded elevators any more as ppl are not going ourside….”
+++++
Sounds boring.
Care to invite me over for a cup of coffee?
I promise to spice things up in the vertical ascending device……..
@#148 Howard Hughes (my hero)
“Do you really want to deal with hordes of people in full cold turkey withdrawal from their favorite stuff? That’s some fearsome, society-collapsing stuff…”
++++
Yep.
It took the “hordes” in PEI about 24 hours to get the booze stores re-opened ….
https://www.cbc.ca/news/canada/prince-edward-island/pei-charlottetown-liquor-store-reopens-1.5509195
and this….
https://globalnews.ca/news/6704088/liquor-store-coronavirus-epidemiologist/
I was in a Halifax liquor store on Saturday and the snotty, ungloved, unmasked, govt employed “cashier” was horrified that I wanted to pay “cash”…. after his sarcastic observations that there were “signs everywhere” stating cash was “verboten” I paid via debit card and ………..left a dime for the paper bag.
:)
Back in Vancouver? ………. govt liquor store happily accepted cash.
Covid 19 Nazis and their domination tactics…
the amazing thing about all this is that so many people are in need to be bailed out immediately
they have no savings for an emergency, just living paycheck to paycheck each month accumulating a little more debt
something is wrong with this economy and the public who work it
#146 – to reinforce what Garth has written listen to Ross Kay, Howestreet, Tues Mar 24th.
#88 Nonplused on 03.25.20 at 6:14 pm
Possibly, but here’s some modelling from researchers at the University of Melbourne and their US colleagues for you to look at. Choose your country and have a look. Compare US and Canada and be glad the border is shut regardless of who takes credit.
https://benflips.shinyapps.io/nCovForecast/
BTW, want to see something terrifying? Have a look at Spain.
#163 Dolce Vita on 03.25.20 at 9:00 pm
That is quite the Pollyanna life you portray.
———————
Really? Investing seems to be going well, fishing is fun, and I’m enjoying the break… but…
I’m not taking salary while my staff are on reduced time/wages and I’m definitely not eligible for any gov’t freebies (although the company is).
So maybe Pollyanna. It’s definitely enjoyable. Telecon at 9 tomorrow then off to the lake with the dory and flyrod.
5) Doesn’t matter why it needs repair or paint, you are a landlord, not a lifestyle coach.
================================
You are a beautiful soul, sir.
156 Terry on 03.25.20 at 8:39 pm
OMG!!!!! Who let the dogs out? The steerage section of the comments lately is insane…….how about this………
REPENT REPENT REPENT NOW! THE END IS NEAR!!!!!!!
ASK YOURSELF……WHERE WILL YOU BE IN ETERNITY?
——-
All world ‘leaders’ officials, spokespersons, authorities etc are bearing false witness, so they will be in Hell
I have to think this whole ‘don’t pay your rent’ thing is going to turn into a disaster for landlords. Many renters won’t be able to pay their rent due to loss of income. Many more just won’t pay because they don’t have to with the non eviction rules. You will end up with a big part of the rental stock with 3 months past due rent.
Those who are past due are not going to have the money to pay the 3 months past due rent and the current rent when all this is over. Is the government going to allow a mass eviction of these tenants? Could be 30% or more of renters. No way. Not a chance. The eviction rules will stick and the past due rent will be forgiven by law. There will be no other option for the government. They are not going to throw say 10% of the population in the streets. If you are a landlord expect to eat the next 3 months rent and lose a lot of the landlords rights going forward.
Oh I just did it again! Every now and them I coin a term and occasionally even Garth picks them up but I think this is my best yet.
The proper response to “Ok, Boomer” is now “Ok, Player 1”. I think that captures it nicely. I’ll be using that wherever I can fit it in in the future. Feel free to do so yourselves.
PS yes I know about the movie “Ready Player 1” which is why I think this slight change I made to “Ok, Player 1” is so brilliant. How did we miss it while our basement dwellers were being all self righteous? Well I have missed it no more. And I think it will spread. It will be the “Ok, Boomer” killer. And PPS I am not a Boomer.
https://www.youtube.com/watch?v=TBuIGBCF9jc
RE: FLOP #141
“So some people didn’t want to do the renters tax credit in the past because of all of the illegal suites in Vancouver.
Government will need details to pay $500 for rent on your behalf?
Now, just checking, do we still have any illegal or non declared suites in Vancouver.”
Exactly. Let’s see all those illegal suite owners brave enough to ask for a gov’t handout…. Ooops. I wish I hadn’t cheated the system.
Condos are vertical cruise ships, full of old folk with shared air. My sister lives in one in Mississauga and only has one small window in the living room that opens. I would live in a trailer park before I lived in a shared building with these events in the future.
I believe that the current huge switch to working from home will open a lot of people’s eyes to the fact that you don’t need to live in a big city to have a career and that business owners don’t need expensive city commercial premises. This will assist in resetting RE down.
I also believe that the virus will restructure employment patterns permanently as employers realise that they don’t need that many workers. Tech and automation can do their jobs and are not impacted by human viruses.
There was a billionaire from Hong Kong on the BBC that said the great Chinese expansion is finished as western companies will never want to have their ‘just in time’ supplies made on the other side of the planet. They will bring their manufacturing closer to home. Once this recovers some I am selling these stocks.
We have an accidental Airbnb on the south coast of England. It is a detached bungalow that we used to live in. We kept it as we are coming up to 70 now and think that at 80 we may want to be in a bungalow again. All our bookings have been cancelled to June but then it is currently busy again for the rest of the year. The difference is that the cancelled bookings were mostly international but the new bookings are domestic so I think many are planning a staycations this year. I believe that the fact it is fully detached on a large lot is helping our bookings as well.
Stay safe everyone, Interesting times that will lead to a very different world.
I like to call him the “Peasant of the United States”
Michael Bloomberg calls him a “Carnival Barking Clown”
Not sure which one is most accurate?
#39 Last Gasp on 03.25.20 at 4:39 pm
If you have ever been in automobile rollover… time slows .
senses become vivid …as you careen up and then down smacking up ..
While wrenching sideways, left and right until a sickening thud.A soul sickening thud that your body emits as you finally come to a dusty stop. Your ears are ringing, your nose is bleeding and you cannot feel your toes. You know it is over, but you do not yet know what if anything is broken or not. The car is the Canadian economy…you are the passenger..the government is the driver. We are in the earky middle of a national car crash barely a third way into a once in a lifetime ride to hell…and hopefully back from there. Life will not be the same afterward. The great reset is underway and no one will escape.
You must be fun at parties. – Garth
Garth…sometimes your wit is priceless!
Kung Fu dog…lol
https://youtu.be/F9dlXBF9_XE
Buyers should be recoiling from telephone number
style price tags.
I’d rather have the covid19 virus than anything more than a land line and a desk top.
#192 Pete from St. Cesaire on 03.25.20 at 11:00 pm
Sometimes people get vaccined not for themselves but for others.
Do you understand that basic concept?
#188 alf on 03.25.20 at 10:51 pm
Congratulations buddy. You had the seasonal flu. Where’s the mystery here?
#187 Wake Up Neo on 03.25.20 at 10:39 pm
Yadda yadda yadda conspiracy theory..yadda yadda yadda
psst: these guys are most dangerous of all. Waay worse than any virus. Stay away. Totally unhinged in the best of times.
#186 yvr_lurker on 03.25.20 at 10:35 pm
Bingo. Big changes to the world economy coming. Anger is growing towards the CCP so expect some geopolitical shifts too.
#182 Barb on 03.25.20 at 10:16 pm
The point went right over your head clearly. The whole keep your rent movement is about free support during a time of crisis. If landlords get it, why don’t renters? How are people so confused about this?
#175 DON on 03.25.20 at 9:33 pm
Agreed. Big influx of rental properties. Down she goes. Even if interest rates are -10%, which is probably what they want!
#152 spoon_man on 03.25.20 at 8:32 pm
Decent opportunity but the not the chance of a lifetime. The debt crisis will be.
I’m out. Some weirdos here. Some gems. Have a good day everyone.
MF
#164 The Real Mark on 03.25.20 at 9:10 pm
“I’m not sure what the consensus was here, but the way rents skyrocketed in Vancouver and Toronto “
Rents didn’t skyrocket in Vancouver and Toronto. What happened was a butt-load of brand new luxury units were delivered to market, and those naturally had high rents and prices. So in the stats, they ‘crowded out’ the existing pool of rentals and normal flow of resale units. But rents on individual units did not rise much, if at all over the past number of years in Vancouver/Toronto. All the way back to ~2013-ish when the Minister Flaherty slammed the brakes on the CMHC.
—————————————-
The last time I lived in Toronto was 2014 and I was renting an apartment in an older purpose-built rental building in midtown. My rent was $1325 for a junior 1-bedroom (plus $100 for parking). More accurately, that was the early-2012 price as that is when I moved in and rent control prevented it from rising much.
I just checked the website of the building where I lived. Junior 1-bedrooms are now going for $1950. So a nearly 50% increase in 8 years. This is mostly thanks to Trudeau’s policies of stimulating explosive demand (including the “policy” of not prosecuting money-launderers) and selfish NIMBY Boomers preventing greater densification.
#210 Jane24 on 03.26.20 at 3:29 am
There was a billionaire from Hong Kong on the BBC that said the great Chinese expansion is finished as western companies will never want to have their ‘just in time’ supplies made on the other side of the planet. They will bring their manufacturing closer to home. Once this recovers some I am selling these stocks.
—————————————-
I think it’s more that governments won’t LET it happen anymore.
97% of our antibiotics coming from ONE hostile country? Madness.
If India’s rulers are smart, and Modi seems to be a highly intelligent man (probably why he can’t stand Trudeau but likes Harper), they will see which product classes the Western world overly relies on China to produce, and get to work building competing supply chains in anticipation of the West suddenly realizing it must diversify its sourcing.
@#187 Wake Up
“I say we close down the damn mass media for 30 days and watch 80% of all our problems go away!”
+++
Michael Crichton ( Jurrassic Park, Andromeda Strain, etc)
Wrote a book called ‘State of Fear”.
The book wasnt all that great but the jist of the book was……
The media, politicians, big business thrive on a population that is in a constant state of fear.
They rely on panic and their ability to provide solutions to it to sell advertising, get re elected, make profits.
Who needs disinfectant when you can kill the virus by eating it……. yummy
https://www.reuters.com/article/us-health-coronavirus-vietnam-burger/eat-it-hanoi-chef-spreads-joy-with-coronaburger-idUSKBN21D0EK
Cough! COUGH!!
Good Morning!
Pardon me while I…COUGH!…just squeeze by you with my puppy in my arms to…COUGH!…press the button down to the coffee shop on the ground floor. I know dogs….COUGH!…are not allowed in the building but I like to hug mine…COUGH!…all day long in these challenging times.
I am so glad to be in…COUGH!…self-isolation with all of you today
People need to realized, only one thing matters now:
The shape of that graph on the tele-screens. You know that chart. That line overrides all laws, rights, constitutions, whatever. It alone, not governments, dictates the future of our rights
I’d bet that A.I. is monitoring all sentiment – online and offline. And that areas showing resistance to this new world order will be shown scarier, steeper, graphs.
Makes sense right? We believe the tele-screens 100%
– Until 2 weeks ago any daily newspaper carried 5-10 stories on carbon/climate. No longer.
Somebody else pointed out that they plunged us now into a low mobility, low travel, low carbon, centralized way of live. And that for a few months the data will be analysed to see how supply chains hold up, and also why types of “news” stories and programming will be required to maintain us.
Air Canada is resuming many routes…but as Cargo only. Good news some some employees there but not flight attendants.
I see this as part of the globalists’ move toward A.I. running the show – well it is but they will tell us scary germ stuff to eliminate most high-touch, human to human jobs:
Flight attendants, ushers, hosts/hostess, cashier, server, cab driver.
Apps and A.I. /self-driving will replace this. They don’t want us interacting.
Man -> Machine. We’re already accustomed to staring at phones at all hours. This is a grand re-programming under way – of us
From the Globe and Mail:
‘Or the bodies could pile up in the United States, with horrific images of patients crowding makeshift hospitals and army trucks stacked with coffins, in which case pressure might grow in Canada for further restrictions on the border, even if it means more economic harm.’
Of course it was a hatchet job article on Trump, using Cov as the hook.
How is the CAD back over 71 cents with WCS at $8.80 and WTI at $23.50? Aussie dollar at 60 cents. When oil was just under $30 in 2016, the CAD at $68.90.
Makes zero sense or cents.
#210 Jane24 I heard years ago that the global plan was a move toward Seven self-contained economic regions. Sounds like this crisis perfectly supports that plan. our would become with North American Union – with its own currency, natch.
“There was a billionaire from Hong Kong on the BBC that said the great Chinese expansion is finished as western companies will never want to have their ‘just in time’ supplies made on the other side of the planet. They will bring their manufacturing closer to home”
#181 Doug in London on 03.25.20 at 10:09 pm
At long, long, long, long, long, long last the problem of grossly overpriced housing may be solved.
———————————————————-
I agree with you, but where will the buyers come from?
I’ve been telling the doomers on this blog forever that a large RE correction likely comes with, or from, a huge market correction or economic event. With markets down 30-40% and UE running 15%, a lot of the folks waiting to Vulch will be looking for work, or will have been hurt in the markets. These types of events are NEVER good for the middle class.
If and when the RE market crashes, expect those that have 10 homes to emerge with 20. That’s what happened in the US, overall HO rates dropped and big landlords got bigger – consolidation occurred.
Careful what you wish for applies here.
#154 Deplorable dude
So does anyone here think they’ve already had Covid19, or knows someone who has?
———————————
I know of three people whom I suspect of having had the virus in the past two months. A sibling and two friends, none of whom I’d been in close proximity with for several months.
All reported the typical symptoms: Sore throat, headache, muscle aches, coughing etc. One said the symptoms were ‘bearable’, like a mid-level cold.
The other two said it was a singularly miserable experience that put them through two weeks of misery.
The wife of one of those didn’t get sick. At least, if she captured virus, she showed no symptoms.
Two are in their sixties, one early seventies.
Garth you really think housing is ‘Toast’?
If we have a down payment and relatively safe jobs, where do you think this lands?
I imagine there are some homes that were purchased BEFORE selling their house, so those will have to list in the spring/summer. If anyone lost of job they will get 6 months deferral though, so I don’t see those being listed.
Don’t you think people will just hang on to what they have. We still have pent up demand and low supply.
#200 april on 03.26.20 at 12:46 am
#146 – to reinforce what Garth has written listen to Ross Kay, Howestreet, Tues Mar 24th.
———————————————————–
It only took a global pandemic for Ross Kay to finally be right on RE. Maybe.
Forgot to add. The way the government is bailing out landlords by providing stimulus to tenants and also mortgage differentials. It feels like real estate investment is the one asset class the government won’t let die. Landlords expect their sky high rents and they are going to get it. While we investors are down big in the market. Sure you hold but if an emergency comes you may need that cash if things get worse. Will real estate see the same fate? I’m still doubtful, if it withstands this, then I’m finally following the heard.
RE: Keep Your Rent
Just as the system will be too overwhelmed to expeditiously handle eviction cases brought by landlords for non-payment of rent, so will it be to handle cases brought by tenants for evictions. No new cases will be heard. The bureaucrats can’t handle the volume.
So, if you are a landlord who is being stiffed on rent, just throw the bums out. Old school. Just show up at the door with a buddy and a baseball bat.
Your case may or may not come up sometime in the next decade.
Problem solved.
#223 Turner Nation
I see this as part of the globalists’ move toward A.I. running the show – well it is but they will tell us scary germ stuff to eliminate most high-touch, human to human jobs:
Flight attendants, ushers, hosts/hostess, cashier, server, cab driver.
——————————————————————–
What took so long. It was invented in the ’60s!
https://www.youtube.com/watch?v=836iIlA-awE
I don’t think anything will happen. In about 6 months this will be something we went through and beat. Everything will be back to normal and the housing lust will still exist in the GTA.
Garth, You stated in some recent posts that this is a financial blog, and you don’t want to see scary comments regarding the COVID-19 situation.
Fair enough.
However, you do have many readers who are very concerned about the pandemic. Some are older or immunocompromised or have family members who are, so are justifiably worried.
Would you be so kind as to also encourage (or better yet delete) comments from people who make light of what to many is a health crisis, regardless your personal outlook on the situation?
I know this is not an empathy blog as you put it, but a little respect and consideration for those who are worried (as opposed to allowing the hounds to get their jollies), would be much appreciated.
“Don’t you think people will just hang on to what they have. We still have pent up demand and low supply.”
There is extreme supply (there has never been more per capita housing per Canadian, with ownership ratios at extreme levels) and whatever demand existed is rapidly evaporating.
“I imagine there are some homes that were purchased BEFORE selling their house, so those will have to list in the spring/summer. If anyone lost of job they will get 6 months deferral though, so I don’t see those being listed.”
The finances of those people are unfortunately toast.
“If we have a down payment and relatively safe jobs, where do you think this lands?”
Your downpayment is likely to represent dramatically greater equity in the housing market going forward, than it would have in the past.
“…So, if you are a landlord who is being stiffed on rent, just throw the bums out. Old school. Just show up at the door with a buddy and a baseball bat. …”
Why do all the tough guys think that they would overpower their opponents? Any landlord that came to my door with a baseball bat and a “buddy” would end up pushing daisies.
The markets are not making any sense anymore, totally disconnected from reality. The politicians and the rich manipulate the timing of the market. They know ahead of time when to get out (aka Feb), then they cue in the media the scare the crap out of the masses, then they move in and scoop the market with the masses bailout money…if that is not brilliant i do not know what is! Criminal!!!
This is just a virus that will pass, imagine if there was a major earthquake, or Yellowstone park erupts….. how would people cope with that?
So markets positive on 3.5 million job losses in 1 week and possibly 15 million by May.
Just making sure I have that right.
Maybe 50 million jobs losses will have the DOW at 40,000. And then we wonder why people are addicted to real estate investing. Who can get their head around this crap? Even Squawk Box is confused.
#221 crowdedelevatorcoughz on 03.26.20 at 8:46 am
Cough! COUGH!!
Good Morning!
Pardon me while I…COUGH!…just squeeze by you with my puppy in my arms to…COUGH!…press the button down to the coffee shop on the ground floor. I know dogs….COUGH!…are not allowed in the building but I like to hug mine…COUGH!…all day long in these challenging times.
I am so glad to be in…COUGH!…self-isolation with all of you today
—————————————————————
LOL, needed a good laugh. Always look forward to your posts. Keeps this blog interesting.
Wow, US markets up between 15-20% from low.
TSX up… 3%. Oh boy.
So, along with purchases made near the bottom, my portfolio is now net positive for the year.
Can’t remember if I’ve mentioned a dozen times before, but… avoid maple like the plague. The real plague, not this economy-destroying machination.
Tater, I’m unsure what you meant by my portfolio never experiencing headwinds in the last 9 years.
Do recent events count? I’m now +1.2% for 2020. Man, if I understood investing, it would probably be way better. A lesson would be appreciated.
CNN puts the deaths and cases on the tv ticker like its stock numbers scrolling past every couple seconds.
99% of these cases are someone who travelled directly from a hotspot and then infected a family member that they live with. You aren’t going to catch this by yelling hi to someone across the street but that’s how we are acting.
#38 Joey on 03.25.20 at 4:38 pm
“……..Don’t play the victim, anyone could make money if they get up off their asses”
Absolutely. One of my many pet peeves is the seething resentment the lazy and unmotivated have for those who build wealth and success. The list of nasty, vicious adjectives they barf out endlessly is the clearest testimony to their repulsive stupidity and sloth.
SJW will always remain the ignorant heap of losers they truly are.
I had a flu at the end of January after returning from Vegas. Headache, fever for 2 days then a dry cough for 3 weeks. I stayed home – oops! “self isolated” for 4 or 5 days. Not too terrible. No one in my circle had it before or after. I haven’t heard of anyone that I know being sick since then.
Do any of you know anyone, personally, that has been sick with a flu? I’ve been asking a lot of people this question (from the required distance) and not one person knows anyone that is or has been sick in the last 6 weeks.
There’s a lot of “a friend of a friend’ or “an aunt’s second cousin’s friend” but no personal knowledge of anyone with a flu.
This all seems surreal.
ps
Thanks Garth, for being a voice of reason.
#234 NoBody on 03.26.20 at 10:33 am
Would you be so kind as to also encourage (or better yet delete) comments from people who make light of what to many is a health crisis, regardless your personal outlook on the situation?
I know this is not an empathy blog as you put it, but a little respect and consideration for those who are worried (as opposed to allowing the hounds to get their jollies), would be much appreciated.
——————
She’s back! And still trying to get crowdedelevatorfartz banned or deleted.
What did you do to earn such undying antipathy, Crowdy?
Hey BC’ers don’t forget to make your principal residency claim to comrade Horgan in the middle of all this or you will get wacked with a huge speculation tax because you have to make the claim every single year despite the fact the government knows damned well your living arrangement hasn’t changed.
Pretty simple. MSM put out mass hysteria as usual, market over reacted, health professionals stunned, other political leaders clueless or in hiding like Trudeau.
Only Trump stood in there and took it on directly. Now he found the cure too which will be mass prescribed next week, economy reopens mid April and all those claimants are back in their jobs by may.
Only thing left to do is find some space on Mt rushmore.
230 Sean
“Will real estate see the same fate? I’m still doubtful, if it withstands this, then I’m finally following the heard.”
I hear you buddy!
This is pretty much the last straw the shock of all lifetimes!
If real estate holds up to this and recovers wetherby because of government bailouts or just some hidden fundamentals I think the writing’s on the wall!
Ok, folks, here were the big jumps:
IEP- 47% (plus 22% divvy. Shut the front door!)
SOM.L- 46%
SU- 40%
STOR- 69%
Plenty more in the 30s. Berkshire, strangely, only +14%. Probably still coming.
Yowza
Trudeaus radical policy directed against the United States security and Trudeaus relentless childish maligning of President Trump has created, for the first time , a need for a military presence on our border.
http://globalnews.ca/news/6735064/coronavirus-militarizing-canada-us-border/
Does anyone else wish we hadn’t allowed American hate groups fund Trudeaus election?
Sorry about the shortages Doc’… we’d like to help you out but had a “knee jerk” moment.
“Canada Gave Away Medical Equipment (16 tons) to China Before Facing Shortages”
https://www.canada.ca/en/global-affairs/news/2020/02/canada-supports-chinas-ongoing-response-to-novel-coronavirus-outbreak.html
#234 NoBody on 03.26.20 at 10:33 am
Would you be so kind as to also encourage (or better yet delete) comments from people who make light of what to many is a health crisis, regardless your personal outlook on the situation?
Uhhg. Censor what little old you doesn’t want to read because you don’t like reading it, even if others do?
Classic.
Let me ask: what should happen if folks want comments making ‘heavy of the situation’ deleted as well?
#247 Richmond will be underwater by 2014 on 03.26.20 at 11:26 am
Hey BC’ers don’t forget to make your principal residency claim to comrade Horgan … despite the fact the government knows damned well your living arrangement hasn’t changed.
________________
The bureaucracy must be justified.
The offshore myth must be perpetuated.
Socialist propaganda must become normalized.
Don’t ask questions.
#245 Ivadi Nuff on 03.26.20 at 11:19 am
I had a flu at the end of January after returning from Vegas. Headache, fever for 2 days then a dry cough for 3 weeks. I stayed home – oops! “self isolated” for 4 or 5 days. Not too terrible. No one in my circle had it before or after. I haven’t heard of anyone that I know being sick since then.
Do any of you know anyone, personally, that has been sick with a flu? I’ve been asking a lot of people this question (from the required distance) and not one person knows anyone that is or has been sick in the last 6 weeks.
There’s a lot of “a friend of a friend’ or “an aunt’s second cousin’s friend” but no personal knowledge of anyone with a flu.
This all seems surreal.
ps
Thanks Garth, for being a voice of reason.
_____
I know several, my 75 y/o Dad, two SIL and one BIL – all sick, and one SIL tested for CV-19 and came back negative. Ambulance came to check Dad out, 99% he’s got it based on symptoms, but since he’s not in any danger of complications he will not be tested – so we’ll never know.
Tested SIL is back at work, untested B+SIL are working from home. Dad’s doing fine.
#234 NoBody on 03.26.20 at 10:33 am
With all due respect, no one’s forcing you to be here. And there’s more than enough virtue-signally feel-good communities online if you can’t handle the grownups talking freely here.
Read a few #PlankTheCurve tweets and get back in the game
So, all these people calling for empathy, how about empathy for the millions upon millions of people who are going to be unemployed and go bankrupt because of this government-enforced globally coordinated economic shut down and social lock down? The UBI pittance looks good right now, “oh we get to watch TV, eat pizza & get free money, yay!”, but the truth is this 1. a human being who is in touch with his true soul essence does not want or need a free income, he wants the freedom to earn his income using his unique God-gifted talents. And 2. there is NO free lunch. If you think these “free” pennies will not come with strings attached, think again. Look up China’s draconian social credit system. Facial recognition cameras everywhere. A million + citizens barred from traveling because of “bad social credit”. What our governments are doing is a gut punch to the smallest family businesses and those they employ ie the most vulnerable type of commerce of our society. You think the multi-national business cartels (sorry, I mean “corporations”) are going to pay any price for this, ultimately? They are strong, they will weather this. But the bulk of our economy is small businesses. People are complaining that those talking about the economy only care about the stock market. The stock market will recover. Nobody who has money invested in the market for the distant future (ie who doesn’t need to liquidate XPF to buy toilet paper) is going to suffer, as long as they don’t panic sell at the end of a red week. It’s the poorest, the lowest strata. So make sure you save some of your empathy for them. People making desperate calls to Metro. “Sorry, we are not hiring”. Hope you’ve got some empathy for them.
If you think, this fear-demic virus from the world governments is anything other that either sublimely stupid or a massive globalist power grab, think again, and very, very seriously. Do not outsource your critical thinking to others. You sleep inside a blanket of perception woven by mainstream media. Question its narrative. Any one presenting you with a choice between life and liberty is presenting you with a false choice. It is not health VS privacy and freedom, it is AND.
Wake up.
So the Imperial College scientist who started this worldwide panic, Neil Fergerson….with his proprietary mortality models….
…..is walking back his UK death estimates…..by over a factor of ten. 250,000 down to 20,000
https://www.newscientist.com/article/2238578-uk-has-enough-intensive-care-units-for-coronavirus-expert-predicts/
This is going to be the biggest over reaction in human history.
My god…..what has this man done to the world economy.
@#246 Sail Away
“What did you do to earn such undying antipathy, Crowdy?”
++++
People never seem to forgive or forget a long, putrid elevator ride.
But I’m ok with that.
257 Wake Up Neo on 03.26.20 at 12:53
TLDR
Oh…and by the way, the world economy was weak before the virus. Wake up.
MF
#28 not 1st on 03.25.20 at 4:22 pm
Garth what about the argument that if daddy Heir Trudeau is going to keep me under house arrest anyway, I might as well have a rocking shack. Non?
Much of the excess condo supply has been bought by specuvestors renting them out on Airbnb. Now imagine you have 5 or 10 condos and all empty for months maybe longer. No wonder the phone lines are red hot to the big 5 banks.
………………………………………………………………
CONDO HELL Imagine your tucked away in your tiny concrete petri dish when you find out that your new neighbours are renters and almost every bunker beside you is rented.
Second is when the specuvestors have to sell guess who gets stuck with them? Banks, wait until the unsold portions are unloaded at a fat discount. Your stuck with a worthless investment because your an owner. In the mean time you get to make up the differences in the strata. Like I say buy a CONDO lose your shirt. Oh and get sick in your vertical cruise ship as another blogger so aptly mentioned.
#221 crowdedelevatorcoughz on 03.26.20 at 8:46 am
Cough! COUGH!!
Good Morning!
Pardon me while I…COUGH!…just squeeze by you with my puppy in my arms to…COUGH!…press the button down to the coffee shop on the ground floor. I know dogs….COUGH!…are not allowed in the building but I like to hug mine…COUGH!…all day long in these challenging times.
I am so glad to be in…COUGH!…self-isolation with all of you today
………………………………………………………………
Hilarious, but clearly twisted.
When I was at the dentist two weeks ago I had to ride down three floors and someone coughed in the elevator. It was like watching oil and water. A very uncomfortable group of us moved away to the outer limits of the elevator walls automatically. I immediately held my breath and exited ASAP. Washed my hands at the sanitizer three times on the way out.
Down the road …So when a bank/mort co. ends up with the title, they pay the strata? Insurance? How does that work?
#233 Dharma Bum on 03.26.20 at 9:51 am
RE: Keep Your Rent
Just as the system will be too overwhelmed to expeditiously handle eviction cases brought by landlords for non-payment of rent, so will it be to handle cases brought by tenants for evictions. No new cases will be heard. The bureaucrats can’t handle the volume.
So, if you are a landlord who is being stiffed on rent, just throw the bums out. Old school. Just show up at the door with a buddy and a baseball bat.
Your case may or may not come up sometime in the next decade.
Problem solved.
———
Really? One call to 911 will take care of your buddy with the bat and yourself. Enjoy prison…by all means.
Your tenant may even visit…to laugh at you.
#188 alf on 03.25.20 at 10:51 pm
Congratulations buddy. You had the seasonal flu. Where’s the mystery here?
Thanks for the diagnosis doc!
#233 Dharma Bum on 03.26.20 at 9:51 am
RE: Keep Your Rent
Just as the system will be too overwhelmed to expeditiously handle eviction cases brought by landlords for non-payment of rent, so will it be to handle cases brought by tenants for evictions. No new cases will be heard. The bureaucrats can’t handle the volume.
So, if you are a landlord who is being stiffed on rent, just throw the bums out. Old school. Just show up at the door with a buddy and a baseball bat.
Your case may or may not come up sometime in the next decade.
Problem solved.
—-
Great solution. Property owners are not the only ones with buddies, baseball bats and more.
12 Experts Questioning the Coronavirus Panic:
Here’s one:
Dr. David Katz is an American physician and founding director of the Yale University Prevention Research Center
QUOTE:
” I am deeply concerned that the social, economic and public health consequences of this near-total meltdown of normal life — schools and businesses closed, gatherings banned — will be long-lasting and calamitous, possibly graver than the direct toll of the virus itself.
The stock market will bounce back in time, but many businesses never will.
The unemployment, impoverishment and despair likely to result will be public health scourges of the first order. ”
– “Is Our Fight Against Coronavirus Worse Than the Disease?”, New York Times 20th March 2020
Hi Garth,
Great insight as always. Greatful if you could post on how we can take advantage of this downturn to reap the benefits of the rebound as life normalizes again.
#95 Eviction…..you’re wrong. The tenant applies for the $500 rent reduction from BC Gov and pays $500 less rent while Gov sends the $500 to landlord. OK?
So many people misreading the flurry if announcements has caused a lot of confusion.
Not sure why I worked so hard for so may year to make sure my family and I would not be concerned with what is happening to the job market today, when the government just back stops every financially ignorant dumb ass in the country.
Obviously I’m the dumb ass.
Markets won’t matter soon. Capital gains and dividends are going to be punitively taxed to try and fill in the smoking fiscal hole created by this misguided attempt to thwart nature. Ants like me who worked, saved and invested are going to be devoured by a horde of grasshoppers who were too dumb to look after themselves or just couldn’t be bothered. Now the grasshoppers are hungry and T2 has told them dinner is served. Sucks to be an ant.
The last article left me wondering. Just got laid off from the airline industry. Initially for the next 3 months however I fear this could completely kill Westjet. I have enough savings to support myself for now should I not be applying for EI? Could anyone chime in please?
#274 Lidia on 03.27.20 at 1:15 pm
The last article left me wondering. Just got laid off from the airline industry. Initially for the next 3 months however I fear this could completely kill Westjet. I have enough savings to support myself for now should I not be applying for EI? Could anyone chime in please?
—————–
Yes, you should apply for EI immediately.