The fizzle

Was that it? Peak house?

There’s a wee chill in the air. Perchance you’ve felt it.

Maybe all of the greater fools have been used up. Perhaps as the herd’s dosed and bosses reopen offices, everything changes. Could be that we’ve simply hit a price wall. Maybe inflating rates and a tougher stress test have buyers thinking twice. Or maybe realtor recklessness, blind auctions and vendor avarice have pushed things too far.

Dunno. But look at the numbers.

This week we learned there were 13,663 monthly sales in the mighty six-million-souls GTA. “A new record for April and amounted to more than quadruple that from April 2020,” crowed the realtors. But wait. Sales back in March were 15,652. So this is a 13% plop in what, traditionally, has been the strongest month of the entire year for house lust.

Not only did the level of deals decline, but prices flatlined in April, after plumping continuously month/month during 2021. Here’s how the real estate board justified the surprising news: “We’ve experienced a torrid pace of home sales since the summer of 2020 while seeing little in the way of population growth. We may be starting to exhaust the pool of potential buyers within the existing GTA population. Over the long term, sustained growth in sales requires sustained growth in population.”

But wait. The population of the GTA has indeed grown over the past year – by 57,000 people. There are 6.25 million little beavs in the sprawling metropolis now – so this meme of a stagnant base of potential buyers looks like realtor bunk. And while monthly sales were flat, listings have blossomed over the last two months, adding 7,382 in March and 7,664 in April.

Hey, look at Vancouver. In April there were 4,908 deals – a decline of 14% from March. And while fewer buyers took the bait last month, way more homeowners decided this was the time to bail. “There were 7,938 detached, attached and apartment homes newly listed for sale in Metro Vancouver in April,” say the realtors. “This represents a 243.2% increase …and is the highest new listing total ever recorded in the region in April.”

Plus, check this out: the sales-to-listings ratio for detached homes on Van in March was 53%. But last month that dropped considerably to 37.4%. Think this might have something to do with the fact the benchmark detached home price is now $1,755,500 – up 21% in a year? Duh.

Same in Victoria, by the way, one of the go-to WFH refugee hot spots on the coast. Sales in April fell about 5% from March. Market activity declined but prices continued to increase – often a classic sign of a market top. Higher values, lower sales.

What’s going on?

Let’s assume a lot of buyers have decided to sit on their hands and wait for the greedstorm to abate. After pummeling each other in appalling, casualty-strewn and lethal bidding wars, many have given up. It’s emotional to craft an offer for tens (or hundreds) of thousands more than a listed price, certify a $100,000 cheque to go with the bid, then wait to see if your name is chosen in a process as opaque and dark as an agent’s heart. It’s no way to buy the biggest asset of your life and plunge into heroic debt.

And now that an exit from the pandemic becomes more certain, higher numbers of owners are looking at insane valuations, concluding if there were ever a time to bail, this be it. As stated, peak house.

Oh, and did you catch this?

US Treasury Secretary Janet Yellen – a towering Wall Street figure who used to be the boss of the American central bank – this week said interest rates are probably going up. The reason is simple: “to make sure that our economy doesn’t overheat.”

Yellen is stating the obvious. Her boss, Joe, is spending $6 trillion on Covid relief, reopening assistance, infrastructure and enhanced social programs. At the same time households have a giant pile of savings to unleash after a year of pandemic inactivity and lockdowns; corporate profits have soared; and an inevitable growth in global GDP will fuel trade as billions are inoculated. Already out CBers have indicated rates will rise a year sooner than previously anticipated because we’ll soon see official inflation bubble higher, along with employment rates.

In summary: houses cost so damn much young people cannot afford to buy. The real estate industry has reached a new dirtbag low with ubiquitous hold-back offers and auctions. Listings are flooding onto the market, significantly increasing supply. The cost of money has but one direction in which to move. WFH has only one way to go. New regs reducing the borrowing power of buyers will soon arrive. Sales in April – the pinnacle – fell in our landmark markets.

Peak house? We’ll know in a while. It’s still a seller’s market. So, sell.

About the picture: “Hey Garth, long time reader of the Blog, love it and thanks for the free Education,” says Ryan. “Here’s a picture of my Rescue Mutt, 8-month-old Diesel. I got him in early Dec after he was picked up in Northern Manitoba with his brother a month earlier. Now happy to give him a home in Squamish, BC. He is (in my eyes) the perfect Dog. We just need to get him used to the West Coast rain. Feel free to use on your Blog.”

131 comments ↓

#1 Felix on 05.05.21 at 12:52 pm

Nasty and revealing photo today.

A selfish mutt, lurking under a chair, waiting for a senior to sit down and then flip them over and kill them.

Probably thinks he can inherit the estate (see The Folks blog May 3) and swim in dog biscuits for the rest of his meaningless existence.

Dogawful.

#2 Immigrant man on 05.05.21 at 12:56 pm

Two question, if you please:
1. How much will the average price come down? Ballpark 5%, 10%, 25%?
2. When will the next gain begin?

#3 Dan in Nanaimo on 05.05.21 at 12:59 pm

Instability due to unlimited QE and the inability and fear to raise interest rates has distorted price discovery in all assets.

This is a RE seller’s market for sure – reinforces the old ‘sell in May and go away’ mantra.

#4 Dashing Hope on 05.05.21 at 1:07 pm

Hmmm….seems the glimmer of hope of rising rates has been snatched away once again as Yellen walks back her comments.

https://www.wsj.com/articles/yellen-says-interest-rates-may-have-to-rise-to-keep-economy-from-overheating-11620151101

For over a decade, it has been a never ending stream of fiscal hope coming from the central banks, feds, economists and banks that financial prudence would materialize with rising rates.

But each year – like clock work – the hope is dashed and replaced with the stark realism that the real estate industry is too big to fail in Canada, and that the 70% that own are on the right side of history.

As for the minuscule lull in sales, its called a breather and consolidation before prices resume their parabolic increase again.

The next leg up arises when the doors open again to tourists, hundreds of thousands of backlogged immigrants, temporary works and international students. Next Spring everyone will be lamenting the fact that prices kept going up after the boomers listed their homes, demand was brought forward by 1st timer buyers, and rates rise a wee little bit.

#5 Prairieboy43 on 05.05.21 at 1:10 pm

“Maybe all of the greater fools have been used up”. Nope……..Just picked up couple toys . Suzuki King Quad ATV, and Honda CRF450x. Both were Millenials, both were selling assets “Cheap”, for downpayment on a home. Both parties were about 28-33, common law, and single mother. Both were buying this month. I smiled . Now I know how Banksters feel………

#6 Andrewski on 05.05.21 at 1:11 pm

Here’s an article from out West. This man’s guess is as good as the next guy’s.

https://www.bcbusiness.ca/Vancouver-housing-market-expert-Ryan-Berlin-weighs-in-on-COVIDs-impact-supply-versus-demand-and-where-prices-might-go-next

#7 Leftover on 05.05.21 at 1:14 pm

Millennials aren’t as dumb as they look. Shoveling money they don’t have into the laps of greedy boomers gets tiresome, and many have called it quits.

They realize that some of their peers who “won” housing bids recently might not be feeling so good once things get back to normal. Many are feeling just fine renting, and plan to stay there for a while.

And don’t underestimate social media:

https://twitter.com/SabrinaMaddeaux/status/1389594323260428301?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet

#8 G on 05.05.21 at 1:16 pm

Some might be interested 16min. May 5th.
Of course I’m not smart enough to know how much of ‘this option’ is fact based or not.

Ep. 2469a -[CB] Panics Over Inflation, Moves To Counter It 70’s Style, Big Fail [mirrored]
https://www.bitchute.com/video/EVx3P6Fd4fFX/

#9 Dave on 05.05.21 at 1:27 pm

If housing cools off and the vaccine is rolled out.

Trudeau will open the immigration gates and wealthy folks will trigger another frenzy of sales and increased prices

Newcomers did not trigger the last one. Stop beating a dead horse. – Garth

#10 Mark on 05.05.21 at 1:36 pm

I’ve been wondering why all the realtards have been flogging y/y numbers. Really? You are comparing April 2021 with 12 months ago when the country was shut down, stocks were tanking and open houses were banned? k

#11 Dolce Vita on 05.05.21 at 1:38 pm

New regs reducing the borrowing power of buyers will soon arrive.

——

All that will do is pump the RE market even more as buyers that feel they might be disqualified from buying “precious” will jump in right away to buy, rather than wait, before the regs come into being.

Let the market decide on its own the value of a home. Too high, prices will adjust the same if the value is too low.

Gov gerrymandering of the RE market has had little impact other than the fall of 1982’s

21.46%

mortgage rate.

It took THAT to kill off RE FOMO in Canada.

Leave the market alone. Let it decide.

Nothing save the above has every stopped it dead in its tracks since then, not even a Global Pandemic.

————————

Accept Canada is a nation of RE Gollum’s determined over and above all rational financial thinking to acquire at least one “Precious” for themselves.

It’s what is. Leave it alone. Accept it and the truth shall set you free.

#12 Ken on 05.05.21 at 1:39 pm

Garth – This just feels like the late 80’s all over again. Prices kept going up and everyone was saying if you don’t buy now, you will never get in. Between 1990 and 1997, house prices fell about 30-40%, all the while interest rates were FALLING. The government couldn’t help because they were hard at work getting rid of deficits after years of excess spending. Sound familiar.

#13 TurnerNation on 05.05.21 at 1:44 pm

#100 Steve French on 05.05.21 at 10:32 am
Last evening I was mulling that Smoking Man left at the best time. What would be his life without going out, bozzing, and Cash on the buds in the Casino? All shut down in Kanada.

…..

Man this new world order is brutal isn’t it? All for our health .

“Canada’s lockdowns nearly as strict as communist China, Cuba: Oxford University

Canada’s current lockdown measures are some of the most stringent in the world rivalling authoritarian communist states like China and Cuba, Oxford University’s COVID-19 Government Response Tracker (OxCGRT) suggests.
Included in the tracker is a COVID-19 stringency index which measures the strictness of government protocols meant to handle the pandemic. (tnc.news)
https://covidtracker.bsg.ox.ac.uk/stringency-map

—-
—- Hay want to go cruising? Wear your tracking bracelet/collar. In one year the elites got us hogtied up like cattle.
There absolutely is no way to health these days outside of injections and tracking. Wish I knew this years ago
Nothing else of which you partake, intake, or re-uptake will provide or sustain health.

“Tracesafe Inc. has entered into a two-year wearable technology agreement with Fred. Olsen Cruise Lines on board its fleet of cruise ships.
As Fred. Olsen Cruise lines returns to cruising, TraceSafe is proud to support the cruise line’s health and safety protocols for guests and crew. The partnership will see TraceSafe’s intelligent wearable technology initially deployed on three of Fred. Olsen’s ships: Borealis, Balmoral, and Bolette. With over 15 million contacts per day, TraceSafe’s cloud processing can facilitate contact tracing for even the world’s largest enterprise – and its unique wearables are built with low energy connectivity, making them a perfect choice for environments such as cruise lines.”

#14 Phil Indablanque on 05.05.21 at 1:58 pm

Anecdotal news from the hood in Victoria… a recently listed estate sale received an asking price “bully offer” last Tuesday that was kindly declined as offers were not being looked at until Sunday. Sunday has come and gone. Crickets.

#15 islander on 05.05.21 at 2:03 pm

https://www.straight.com/news/realtor-warns-canadian-home-prices-could-fall-40-percent-in-major-housing-market-correction

Teaser rates….interest rate increases…..unsustainable prices…..bank renewals…..

#16 G on 05.05.21 at 2:07 pm

Just wondering if anyone in Canada has been taking a really hard close look at the nose swabs we are importing? I believe there are not all the same or even coming from the same places in the world, but who knows.
If this link is ‘factual’, maybe someone claiming to be in charge and looking out for the greater good, should be looking at this today!! 12.5min posted May 5, 2021.

Twist and Shout. We shove it up your nose and twist it…you shout in pain. The fake Covid PCR test
https://www.bitchute.com/video/7ABh1hL7G3ik/

#17 Linda on 05.05.21 at 2:21 pm

Poor Diesel looks like he is being paparazzi’d against his furry will:)

‘houses cost so damn much young people can’t afford to buy’ – not just young people. Pretty much any people of any age. In a world when nearly half of Canadians are within $200 of not covering their monthly bills, the pool of potential buyers isn’t infinite. When those who sell are concerned they can’t buy again without 1) resuming mortgage payments if they were previously mortgage free; 2) if buying again, likely having to settle for smaller digs because they can’t afford a place that was the same size as the one they just sold; 3) committing to renting for the rest of their lives since the RE sale was meant to fund their retirement. That last being especially scary, since far too many folks have trouble managing money.

#18 IHCTD9 on 05.05.21 at 2:24 pm

Maybe the rest of the Mills are starting to catch on:

https://nationalpost.com/opinion/sabrina-maddeaux-millennials-are-fleeing-canadas-big-cities-as-big-government-coddles-boomers?__vfz=medium%3Dtray_notification#vf-1384a738-e21c-44f3-820f-7bc19b060067

Nothing new here except the outrage, glad to finally see some. A bit ageist for now, but eventually they will come to see the real source of the problem: Trudeau and the BOC. It’ll be too late though. Us older folks are just sitting here doing nothing – and getting richer. Trudeau is doing all the work, not us.

The situation was malleable, even improving a little thru the first part of 2015, but Trudeau changed all that. There is no quick fix. It’s way, – way past too late now.

Hopefully the Mills will also realize this too: That their youth will pass them by before the damage inflicted by the Trudeau Liberals can be repaired – even if they never got elected again. The hole dug by Trudeau is just too damn deep to fill in one lifetime, or even two.

Kids, you’re basically down to alternate lifestyles – or leaving Canada. Good luck!

#19 Brian Ripley on 05.05.21 at 2:35 pm

My Charts for both Vancouver and Toronto housing data are up with the April data: http://www.chpc.biz/

FOMO 2.0 interruptus ?
Sell in May and go away?

Irrational exuberance?
Toronto condos posted a new average price high and are now priced at 50% of the average price of a detached house.

1 Van-SFD = 1.9 T-houses or 2.7 Condos
1 Tor-SFD = 1.6 T-houses or 2.0 Condos

#20 Roc on 05.05.21 at 2:40 pm

Beautiful dog Ryan! Your dog will love it wherever you are.

#21 T-Rev on 05.05.21 at 2:42 pm

As a privileged white male millennial (old millennial), who’s had the privilege of working for a wage since I was 12 (yup) and the privilege of working long hours in dangerous and strenuous conditions for much of my early adulthood while I put myself through university and started a family, I’m fortunate enough to be able to buy pretty much whatever house I want. The banks love people like me and will give me scads of money if desired. Been looking for a new place for 6 months now, and have just kept my money in my pocket. Yes I have a big house to sell, but I don’t feel like participating in the musical chairs greatest fool contest.

Lots like me who are happy to sit on our wallets while the madness stabilizes. Pity the last fool standing.

#22 ogdoad on 05.05.21 at 2:42 pm

Too bad, really. I would never pay 1M for my own house. Nor would I pay 1M for a house in all the charming little places across Canada, that one may want to someday retire – Thanks germ amplified FOMO disaster :).

OAN, patients has worn so thin over the generations I would hate to be part of the FOMO cohort right now – always in states of unrest – no way to live, sorry. Hugs! GoFund for psych bills?

Og

#23 Bob on 05.05.21 at 2:43 pm

Newcomers did not trigger the last one. Stop beating a dead horse. – Garth

So you’ve said, but I think you’re over-simplifying the situation. Here are some things I’d like to know:

Out of all the money spent buying real estate:
* How much is borrowed?
* How much comes from the sale of Canadian real estate?
* How much comes from Canadian savings or the sale or other Canadian assets?
* How much was “gifted” by family or other sources?
* How much comes from off shore sources?
* How much comes from proceeds of crime?

I’d also like to know more about the people doing the purchasing:
* What is the average household income of people purchasing real estate?
* What portion of that income is earned in Canada?
* What portion of newly purchased homes are then occupied as a principal residence by the purchaser?

#24 Faron on 05.05.21 at 2:46 pm

Thanks for the blog post today Garth.

W/re realtors: If only they understood that any sliminess on the way up will be met with equal amounts of mercilessness on the way down when they have to sell their Teslas.

Victoria: We have started to get flyers from RE agents trying to drum up business. That means there is too little business for too many agents and a good sign that the frenzy is backing off.

As I’ve said before, we are ready to be underwater. We can afford the monthly because we purchased a very modest home and don’t rely on renters to make the balance of the morgage. Time will tell if we can take the psychological pressure of dumping money into an underwater asset. But, like stocks, hold ’em to eke out gains.

#25 IHCTD9 on 05.05.21 at 2:51 pm

#12 Ken on 05.05.21 at 1:39 pm
Garth – This just feels like the late 80’s all over again. Prices kept going up and everyone was saying if you don’t buy now, you will never get in. Between 1990 and 1997, house prices fell about 30-40%, all the while interest rates were FALLING. The government couldn’t help because they were hard at work getting rid of deficits after years of excess spending. Sound familiar.
___

The big difference between then and now, is back then we elected Politicians with brains, compare that to whatever you wanna call the 3 ring circus we’ve currently got running the country.

Do you see Trudeau buckling down to un-do the damage he has done over the last 5+ years?

Nah, me neither. Making things even worse seems much more likely.

#26 jenna on 05.05.21 at 2:53 pm

Interest rates will not rise ! LOL !!

The house of cards will come tumbling down.

#27 Relieved in Victoria on 05.05.21 at 2:53 pm

Update on the Near Miss Rodent House

Two days ago I posted about my almost FOMO disaster with a rodent infested house. My realtor informed me the house has sold. $100k over asking or about $80k more that I would have spent given the cost of mediation. As my pest control guy says, some people will just move in and leave the rat pee/poop behind the walls and live there happily. If those are the type of people that got the house, they got a good deal (for this morbidly inflated market) and assuming they were fully aware of the problem. If they were not aware of the problem and/or cannot live with the rat crap in the walls they will get a surprise delivered to them by FOMO.

#28 Billy Buoy on 05.05.21 at 2:56 pm

Janet “ole Yeller” Yellen said “What?”

Didn’t you see she walked back her remarks hours later as it caused the markets to dump…????? The TRUTH was too hard to handle and her masters told her to keep quiet and retract her statement. I posted this YESTERDAY here.

Rates will go up, stimulus will stop. The question is when do the big boys want the party to end.

Great reporting Mr. T. but can we learn the entire story vs. just what you want us to read that fits the daily blog theme?

Respectfully, Thank you.

Yellen’s walk-back was pure politics. Changes nothing. Ignore it. – Garth

#29 IHCTD9 on 05.05.21 at 3:01 pm

“…then wait to see if your name is chosen in a process as opaque and dark as an agent’s heart”
____

Nicely done.

#30 WTF on 05.05.21 at 3:07 pm

Anecdotal for sure but the condo I’m renting DT Van was listed 2 weeks ago, Inspection Mon, we will find out if it sold (likely) this weekend. Been perusing and visiting DT rentals to be proactive if we have to move.

Lots of inventory out there, incentives and places sitting empty. I plan to throw out less than asking offers and see if I get a bite. I have 3 larger places lined up to see this weekend with similar or better amenities at $2500 per month. My current rent? $2440, 30% shortfall to their payments.

Did a back of napkin calc on this place, Assume 900k purchase, 25% down, mortgage of 675k, 5 yr term 1.9% amortized 25 yrs $ 2855 + $400 maintenance fee + $200 tax = $3455, missed investment opportunity of the assumed DP of $225k @6% = $13,500

Annnnd a Note in elevator about 2 “special assessment payments due NOW” (Building is 12 yrs old). Might have been the common property water leak that poured down from the 8th floor into walls suites and fried the elevator circuitry only 1 worked for months while Strata and Insurance battled about liability:-)

If they (young millennial couple) decide to continue renting to us, same rent applies, we cannot be evicted, if they plan to kick us out and continue renting the financial/legal hit to them based on the Tenancy Act would be brutal.
An end run is possible but if caught ? Screwed. Besides the rent wouldn’t be much higher and we are probably the best tenants they will get (based on us going to the front of the line with EVERY viewing we have attended)

Meanwhile the B+D Portfolio is growing as advertised.

#31 Dolce Vita on 05.05.21 at 3:12 pm

Off topic.

VAX Calc naysayers, skip on by. Avail yourselves.

—————–

The Seychelles, highest Worldwide vax rate (69% single, 60% double vs. Canada at 35%/3%) has gone into lockdown as new infections climb.

https://www.bnnbloomberg.ca/world-s-most-vaccinated-nation-reintroduces-curbs-as-cases-surge-1.1599208

Just means herd immunity > 69%/60%.

Probably 76-80% single and double per Vancouver Skid Row and The Lancet (Manaus, BR):

https://www.ctvnews.ca/video?clipId=2193127
https://www.thelancet.com/article/S0140-6736(21)00183-5/fulltext

At current Canada vax rates 76% herd immunity on these dates and vax rate needed:

Jul 1, 2021 = 659K doses/day
Aug 1, 2021 = 427K doses/day

If by miracle Canada vaxes 1 dose J&J starting tomorrow, above changes to:

Jul 1, 2021 = 233K doses/day
Aug 1, 2021 = 150K doses/day

Vax rate chart so far:

https://i.imgur.com/VUq50Kf.png

——————

I’m all for the miracle starting tomorrow.

#32 S.Bby on 05.05.21 at 3:13 pm

The bloom is off the rose, that’s for sure.

#33 S.Bby on 05.05.21 at 3:15 pm

Yellen’s walk-back was pure politics. Changes nothing. Ignore it. – Garth

She doesn’t want to rock the boat just yet. I’ll bet she got in trouble for her comments so she backtracked.

#34 Alice in LockdownLand on 05.05.21 at 3:17 pm

Canada, the Lockdown Wonderland….

https://www.juliusruechel.com/2021/04/whos-in-charge-rule-makers-power.html

A good and almost academic level explanation on what is happening in the retardland populated by barely functional simpletons called Canada.

A Country that will be uterly destroyed in the next 10 years, socially and from an economic point of view..

I love it!!!

#35 Tizz on 05.05.21 at 3:30 pm

DELETED (Anti-vax)

#36 WTF on 05.05.21 at 3:30 pm

#6 “Here’s an article from out West. This man’s guess is as good as the next guy’s.”

Err No. A Bob Rennie paid economist shill answering softball questions lobbed gently in his biased direction? No conflict here. Laughable puff piece not worth the fish wrapper its printed in.

#37 mj on 05.05.21 at 3:36 pm

I agree that the housing market has hit the top. Seems right now the housing market is holding up the economy. Are you not worried if the housing market cools down, so does the economy

#38 S.Bby on 05.05.21 at 3:40 pm

https://www.citynews1130.com/2021/05/05/bcrea-2022-projections/

#39 Shortymac on 05.05.21 at 4:08 pm

Good, this has gone on long enough and sanity needs to be restored to the market, it’s gotten impossible to get a house without a massive inheritance or being born with a silver spoon in your mouth.

#40 wallflower on 05.05.21 at 4:12 pm

When Line 5 shuts down (which it will, after the court order), Ontariowe gas prices to the moon. So all these newbie overmortgaged RTWs (return to workers) gonna get slammed between gas and uppa interest rates.
Decompression. Whoosh. Helium leaving the balloon.

#41 GrumpyPanda on 05.05.21 at 4:23 pm

Went to my public school reunion about 10 years back. Missing was a guy who had failed 2 elementary grades. A lot of kids picked on him. I don’t think he even tried high school.

His Dad backed him and he started a pig farm. During the 70’s banks were throwing $ at smart farmers to expand. It didn’t make sense to him. When rates rose people lost their farms. Banks couldn’t give farms away. That’s when he walked into the bank.

I always feel sick when I tell this story. And avoid calculators.

#42 45north on 05.05.21 at 4:24 pm

Was that it? Peak house?

Look at the number of single family houses in the GTA . According to the Census 2,135,910 X 0.396 = 845,820. So suddenly 845,820 households just got $100,000 each. Except now some of them want to cash out. It’s pretty obvious that they all cannot get their money.

I think there will be chaos. The market will freeze up. Buyers won’t buy. Sellers won’t sell – they are going to find out their houses are illiquid. Maybe in six months, we’ll start to see some order.

#43 Rook on 05.05.21 at 4:26 pm

How does this square with your ‘If it drops it will only be by about 19%, not a crash’ statement from a month or so ago?

Do we still say that, even if prices don’t go upwards, they plateau, and maybe you get $300k off a $1.5 mil place?

Or do we now expect them to come down to some sort of rational level?

#44 Ponzius Pilatus on 05.05.21 at 4:26 pm

The World will soon be awash with vaccines.
China is bribing its citizens with 40 bucks.
In the States the vaccinations have stalled.
They’re giving away Superbowl tickets.
I probably get my second in June instead of August.
A lesson for the linear extrapolators here. (Sailo comes to mind).
Don’t count your chickens before they come home.

#45 Ponzius Pilatus on 05.05.21 at 4:29 pm

#32 S.Bby on 05.05.21 at 3:13 pm
The bloom is off the rose, that’s for sure.
—————
Mine are just starting to bloom.

#46 Kurt on 05.05.21 at 4:30 pm

#31 Dolce Vita on 05.05.21 at 3:12 pm

Thanks! Great food for thought!

#47 45north on 05.05.21 at 4:39 pm

IHCTD9 The situation was malleable, even improving a little thru the first part of 2015, but Trudeau changed all that. There is no quick fix. It’s way, – way past too late now.
Hopefully the Mills will also realize this too: That their youth will pass them by before the damage inflicted by the Trudeau Liberals can be repaired – even if they never got elected again. The hole dug by Trudeau is just too damn deep to fill in one lifetime, or even two.
Kids, you’re basically down to alternate lifestyles – or leaving Canada. Good luck!

Let’s take the Federal Government at its word. If housing is a human right then all parties who have blown up the housing market are guilty. Which would include the Bank of Canada who has introduced the Mortgage Bond Purchasing Program (CMBP) and CMHC who guarantees the mortgages. How about the Federal Government itself who has launched the biggest spending program ever. The spending program has increased the value of assets like housing. The Federal Government has a problem here. Pricking the bubble would be a major government action but in the context of fundamental human rights, it invites examination of the role of the parties. But there’s another problem. You cannot un-prick the bubble. You don’t know the result. What if you prick the bubble and there’s nothing left but a soapy wet spot?

#48 IHCTD9 on 05.05.21 at 4:43 pm

#24 Faron on 05.05.21 at 2:46 pm

…Time will tell if we can take the psychological pressure of dumping money into an underwater asset. But, like stocks, hold ’em to eke out gains.

—————

Hopefully your original plan was for the place to be a home, rather than an investment.

When we bought, there was no concept of sitting in the thing and watching the equity rocket upwards well past the pay down. How times have changed…

By rights, maintaining and improving a primary residence for decades should be a loser. All it takes is good monetary and fiscal policy and you just can’t win. I was about even for a good 15 years – and I even did all the work myself. From there, stupid low rates and dumb buyers conspired to pump up my paper gains 100’s of percent. Stupid.

I wouldn’t sweat the equity situation, we never did and never will. The B+D is our asset, and you are obviously investing as well – I’d worry more about how your stash is doing.

#49 Rook on 05.05.21 at 4:44 pm

#18 IHCTD9 on 05.05.21 at 2:24 pm

Hopefully the Mills will also realize this too: That their youth will pass them by before the damage inflicted by the Trudeau Liberals can be repaired…

———————

You understand the oldest of The Mills are pushing 40 now, yeah? That’s mid-life? The youngest are pushing 30? Their youth is, well, not gone, but not there, either.

So I’m not sure where you’re getting ‘their youth’ from.

Be sad for the ones born after 9/11. They’re the ones truly pooched from The Dauphin’s policies, not mills.

#50 suburban coyote and pup on 05.05.21 at 4:47 pm

#34 Alice in Lockdown Land

thx that was a great essay….

#51 Faron on 05.05.21 at 4:53 pm

#33 S.Bby on 05.05.21 at 3:15 pm

Yellen’s walk-back was pure politics. Changes nothing. Ignore it. – Garth

She doesn’t want to rock the boat just yet. I’ll bet she got in trouble for her comments so she backtracked.

I believe that it was a calculated move to begin to warm various markets to the coming taper. Bernanke approached the issue too abruptly after the GFC and caused a taper tantrum. Having a first official message come from the Sec. Treas. and gently at that gives the Fed good experimental results. Expect more gentle urgings along these lines with an ever so slight hint at tapering at the next fed meeting.

However, the Fed has boxed itself in by not starting this process sooner as the GDP growth was ramping up. If the economy plateaus or equities decline, tapering will be a harder sell. Tapering is needed with bubbles popping up everywhere, huge GDP growth, beyond booming equity prices, and steady return to employment. Printing has done its job.

#52 DDR Grenztruppen on 05.05.21 at 4:53 pm

There is no rent control in Ontario anymore. Ford and his cohorts renoviction loophole lanced it. Pension funds are quietly buying up rental stock.

Wouldn’t it be something if Pickering had a melt down and it wafted all over prime Toronto real estate. Can you imagine our mayor on breakfast tv trying to smooth talk contain it? Or our premier blushing around in radioactive undies in a state of denial. “Folks mask up and scrub down.”

#53 Guelph Guru on 05.05.21 at 4:55 pm

Tide has turned? Too early to tell.
Houses still selling like hot cakes in Guelph. New sites are going up. Dont see any slowdown yet. Will report when I sense fear in sellers. I still feel greed everywhere.

#54 Luca on 05.05.21 at 5:08 pm

Isn’t this due to the 3rd Covid wave lockdown? I’m sure prices/sales will rise again when things open up both in Canada and around the world. I wouldn’t count the housing market out just yet everyone’s been wrong past 20 years anyhow.

#55 Faron on 05.05.21 at 5:19 pm

#48 IHCTD9 on 05.05.21 at 4:43 pm
#24 Faron on 05.05.21 at 2:46 pm

Those are good points. Yeah, we are in it for the roof over our heads rather than frothy flipping although it’s a little tempting to sell now for a potential quick gain. Our loose plan is to live here for 20 years and then retire to the remote parts of the Oregon Coast with a herd of Basset Hounds (one of the world’s least physically capable dogs but with fantastic personalities). We’ll feel like we came out ahead if we retain any equity. I take pleasure in the maintenance which offsets some of the cost and overall I think we’ll about break even relative to renting.

#56 Genbizx on 05.05.21 at 5:26 pm

Easy solution to the mess of the last decade.. eliminate realtors. Sound impractical? Maybe. But we have online tools that could replace these schmucks and provide all the protections needed legally and maybe even ensure that laundering through real estate is eliminated….but maybe the Audi dealers would protest?

#57 45north on 05.05.21 at 5:26 pm

Relieved in Victoria

reminds me of a case outside of Ottawa, where a family bought a house infested with bats

in your case, the buyers still don’t know the situation.

I’m fishing for legal recourse but I’m coming up short. If you sent a letter to the real estate agent, the shit would hit the fan.

#58 Humbled ◇ Broke on 05.05.21 at 5:30 pm

That is the great inherent beauty of modern woke “crapitalism.”

It is elegantly self-correcting, because like the predictable effects by nanny government meddling, everything you swallow eventualy turns into … well you know what.

#59 Freedom First on 05.05.21 at 5:50 pm

Garth, your Blog remains my favourite source of value and truthful info on the internet, as well as being written with such entertaining wit.

To the Blog Dawgs, enjoy reading everyones contribution to the Blog. I simply take what I like, and leave the rest.
Woof, Woof!

Freedom First

#60 8102 on 05.05.21 at 5:51 pm

Here in Victoria, friends are selling their house.

The Realtor told them ” We will have an open house on the weekend and then open and look at the offers on Monday” They had one “low ball” offer from the Weekend and received one “Full Price” offer a few days later, which “Collasped” today. I was surprised, it is a nice house in a really quiet and beautiful part of the City and I thought it would sell on the weekend for sure. Funny how anything less than “Over Asking” is almost considered disrespectful. Use to be that it took a few weeks to sell a home…

#61 Concerned Citizen on 05.05.21 at 5:52 pm

Garth, how much of my portfolio should I put into crypto? To be conservative I’m thinking 20% in the big names (10% bitcoin, 10% ethereum) and then maybe 10% in more speculative plays (say 8% Dogecoin, 2% ScamCoin – yes, that’s a thing). Then for extra growth I’m looking at starting my own crypto coin. Just thinking for the right name for it – how about WealthyCoin? Bah, that’s probably already taken. If my coin gets popular, I could turn into a billionaire overnight!

Don’t be concerned though, the rest of my portfolio will be in modern-day blue-chips like Tesla, Gamestop, and Peloton. I’m not crazy, after all.

Coupled with my real estate holdings (I just bought a sweet $720,000 garage in Toronto) I should be set for life!

#62 IHCTD9 on 05.05.21 at 6:08 pm

#47 45north on 05.05.21 at 4:39 pm

…But there’s another problem. You cannot un-prick the bubble. You don’t know the result. What if you prick the bubble and there’s nothing left but a soapy wet spot?
——-

I think that pricking the bubble has a solid and predictable result – disaster. All the foreign and domestic specuvestors get skinned alive. All the recent stretched-out buyers plunged into negative equity situations. All the amateur landlords who subsidized renters while banking on appreciation, forced into selling. Billions in revenue lost. Millions of jobs gone. Piles of listings and massive reductions in values. I won’t even comment on what happens if rates go up in the meantime.

The BOC and federal policy blew this thing up, it’s their problem to unwind it. IMHO, too much reliance has been placed on F+M policy to handle issues in our economy. The RE market blowup is just a consequence thereof. Maybe it’s time to start thinking of other ways to get the economy in good shape other than crashing rates and fuelling purchasing power.

Monetary policy is just about tapped out, and what Trudeau does with Fiscal policy can perpetuate the bubble pretty much to infinity. To me, the ultimate concern is draining the youth of Canada to the USA. The current Libs (IMHO) are total nimrods, but even I assume they have to be concerned about this also, lest we turn into a nation where 75% of the population is retired…

The most logical conclusion is to determine what is more important, the economy, or affordable housing. I think Japan and Hong Kong bear witness to that debate. Post Trudeau, we have been “locked-in”. Our total government debt is now irreconcilably huge, the RE bubble possibly the largest that has ever existed anywhere, anytime. The BOC is easily convinced to drop rates, and Trudeau prone to cranking buying power even more. Conclusion: Politicians will nurse the current situation until forces beyond their ability to control take over. From there, we are all just along for the ride.

TLDR: It’s gonna blow. Maybe in 5 years, maybe 20. Unless Canadians vote to fix the problem, understanding much pain will be inevitable. Not likely…

#63 Yorkville renter on 05.05.21 at 6:27 pm

we gave up on buying… looking at renting a bigger place.
at these valuations we’re going to pay 50% off the cost of ownership and bank the difference for a year and start searching again next year.

no rush… not when it can potentially save $ix figures. BONUS – we get to try out the neighborhood and see if we like it before we buy!

#64 Sal Eclair on 05.05.21 at 6:28 pm

Got a two seater outhouse out at $795,000 this week. We’ll be looking at offers a week from Thursday. This one won’t last folks. No showings cause of the pandemic, same with inspections and questions.

#65 Bob Dog on 05.05.21 at 6:31 pm

Why do a bunch of worthless parasite realtors have so much control over something as important as housing.

They have as much influence over our lives as central bankers and there seems to be no regulations in place.

I dispise them.

#66 S.Bby on 05.05.21 at 6:34 pm

Apparently used car prices are off the charts high.

RL lumber up big today as well up over 4% to $1,545

#67 westcdn on 05.05.21 at 6:38 pm

My parents where the greatest influence in my life. They gave me latitude to learn, mainly mistakes. They kept me alive.

I find it very strange what is going on in Alberta. Covid seems to be raging out of control, real estate sales are surging, unemployment is high and Kenney is struggling to establish himself as a leader.

I say quit chasing rabbits – shoot them instead. My thinking is you set your destination and try to enjoy the ride because you are going to have to buckle up now and again. Few do not have to struggle to move forward and fewer of them admit they are not geniuses but merely lucky.

Lets face it. Few are exceptional. Most of us are just average with a belief we are better than most. I see it all the time yet I don’t see much point to be miserable. So most of us plebs, it is important to enjoy the simple things, not envy or crave influence/power but it may be necessary to get things done. Be wary of karma and where you were put.

That is what I see as wrong with elites. They actually believe they are special and irreplable. Try and get them to admit they were wrong and they will choke like the Fonze. It seems their main motive is to keep the status quo. Losers.

Change is inevitable though the dark ages did last several generations. If you get a chance, read “Life in a Medieval Village” or watch a video – those that forget the past are doomed to repeat.

I am not willing to keep accidental wealth and unrecognized heroes. The division between have and have nots is too big but some deserve their fate. The big difference between now and then is abundant cheap energy – makes average people today live better than kings of yore. Power is still an elixir. Pyramids have not gone away.

Build back better – ha. I do know climate change and Covid exist. I just don’t get fear of risk – in my mind, defeat or death is a problem for the survivors to deal. I admit, nice to think you are important and will be missed.

#68 Happy Renter on 05.05.21 at 6:40 pm

#52 DDR Grenztruppen on 05.05.21 at 4:53 pm
There is no rent control in Ontario anymore. Ford and his cohorts renoviction loophole lanced it. Pension funds are quietly buying up rental stock.
——————————-

Not sure what renoviction loophole you think there is. The reno has to have permits, they have to offer the unit back to you at the same rent.

#69 Jessica on 05.05.21 at 6:44 pm

Maybe the vancouver market is down because all the buyers moved to Kelowna, where prices increased $100k in last 2 months and $200k in last year.
https://www.castanet.net/news/Kelowna/332954/Single-family-homes-in-Central-Okanagan-up-100K-in-two-months

#70 crowdedelevatorfartz on 05.05.21 at 6:45 pm

The Flopster’s been M.I.A. for a while.
Where are ye Floppie?

#71 Sunny Daze on 05.05.21 at 6:50 pm

Central bankers talking out of both sides of their mouths as always. Ten year could easily fall out of bed here as everyone now screams inflation and rising rates. Interesting times.

#72 Drill Baby Drill on 05.05.21 at 6:58 pm

Why, why, why barely a whiff of Enbridge Line 5 planned shut down by Michigan on May 13/21 ? Enbridge stated that hey will keep the oil flowing no matter what the Democratic Michigan governor says. Bring on the lawyers and Ontario pray to god that this line does not shut down. A Karma what a wonderful thing.

#73 leebow on 05.05.21 at 6:59 pm

#61 IHCTD9

May be the collapse won’t be such a disaster. The 1989 and 2008 real estate collapses incurred a cost but didn’t cause unreparable damage in Canada or US. This is a counterexample to Japan. It’s diligent to focus on post-bubble recovery.

Economists among us could argue that 1989 and 2008 were beneficial because they caused deleveraging and (mandatory economic cliche) improved capital allocation.

There is no dichotomy between affordable housing and economy. In fact, great things often come out from low cost of living areas.

Would it be ethical to artificially preserve erroneous risk/reward preferences of flippers? No. Therefore, the bubble collapse is not only inevitable and reinvigorating for the economy, but also a compassionate act.

#74 will on 05.05.21 at 7:01 pm

Fear of interest rates rising. Utilities like Brookfield Renewable and Algonquin have been pricing this in for a while now. Both way off their highs. Interest rate harbingers.

#75 Ponzius Pilatus on 05.05.21 at 7:02 pm

#79 crowdedelevatorfartz on 05.04.21 at 11:20 pm
#@73 Ponzie’s Perplexing Political Paradigm

“How can a citizen of another country become an elected official in Canada?”

++++

Well kinda like Hitler ( an Austrian) became Leader of Germany?
————-
You’re right.
But as the Austrians see it, Hitler was German and Beethoven was Austrian.

#76 Tudval on 05.05.21 at 7:04 pm

First half of April was spend worrying about the budged, the second half in lock-down. So, sorry, no luck for you, 13k sales figure is stellar. Inventory in most segments is less than a month. Some plop.

#77 Ponzius Pilatus on 05.05.21 at 7:10 pm

Went to pick up some bricks for building a barrier in my veggie garden.
1.15 a brick.
Not an expert, but that seems quite reasonable.
With the cost of lumbar (Smoky’s spelling) being so high,
could brick become an alternative?

#78 Oakville Rocks! on 05.05.21 at 7:43 pm

Malian woman gives birth to 9 babies after only expecting 7.

https://www.theglobeandmail.com/world/article-malian-woman-gives-birth-to-nine-babies-in-morocco/

Inflation… obviously.

In other news… good on the Biden administration for suggesting intellectual property rights be waived for the Covid-19 vaccines to allow a more equitable and timely production of vaccines throughout the world.
This pandemic is not over until the world is vaccinated and this is the right move.

#79 Galt on 05.05.21 at 7:48 pm

I’m sorry to sound flippant but Canadians are friking stupid.

https://dailyhive.com/vancouver/9-jaw-dropping-french-chateaus-for-the-price-of-1-vancouver-tear-down

#80 Jake on 05.05.21 at 7:50 pm

Yellen’s walk-back was pure politics. Changes nothing. Ignore it. – Garth

Her statement was premature and undermines what Powell has worked to solve. The market is not ready for higher rates yet. We need to get through this coming Fall/Winter without rising cases again before we can declare victory.

#81 Wrk.dover on 05.05.21 at 8:00 pm

#77 Ponzius Pilatus on 05.05.21 at 7:10 pm
Went to pick up some bricks for building a barrier in my veggie garden.
1.15 a brick

___________________________________

I bought 1200 for 55 cents each in 1981, if that helps your idea. (then I learned how to make a chimney, starting at the bottom). Still there, in use as I type.

#82 TurnerNation on 05.05.21 at 8:27 pm

And so it begins. UN troops coming? Don’t call it a Takeover Lite, yet.

The Soft Coup was in March 2020 – after being distracted with Railway Blockades. This smells like the same script.
(Don’t worry I’m sure we’ll have some sort of ‘mail in ballot’ election. Ask NFLD, apparently the test zone how well that went)

https://nationalpost.com/news/we-have-no-other-choice-n-s-mikmaq-chief-to-request-un-peacekeepers-ahead-of-lobster-fishery
We have no other choice’: N.S. Mi’kmaq chief to request UN peacekeepers ahead of lobster fishery

— Alberta just tied payment of “Covid fines” to renewal of Drivers Licence etc. This ain’t going away folks it’s a PERMANENT state of affairs in Kanada.

Even Joe Rogan (A paid sht disturber I bet) is lampooning Kanada.
Why us…It’s been said that Kanada, Australia are the test beds for all of this nonsense.


— From the Control over our Breeding dept. It’s working.

https://www.cnbc.com/2021/05/05/us-birth-and-fertility-rates-dropped-to-another-record-low-in-2020-cdc-says.html
U.S. birth and fertility rates in 2020 dropped to another record low, CDC says
PUBLISHED WED, MAY 5 202112:01 AM

#83 april on 05.05.21 at 8:35 pm

#53 – We only hear about the homes that have sold. How is it that we never hear a word about approx 70% across the country that haven’t sold

#84 NickS on 05.05.21 at 9:10 pm

Would be curious to know the ex-Ontario home sales figures… Canada’s largest market was likely dampened from the draconian measures that started early April.

#85 greaterfool on 05.05.21 at 9:40 pm

No, too soon, this is not the pivot point. There has been so much FOMO and uptrend wishes accumulated in last 10 years also, too many people have set the mind that house price will never go down. It will take a while, probably several years. The burst will be triggered by something that looks like irrelevant at the beginning.

And when house market goes down, so does the stock market. there will be no winner,we Canadians have gone too far. Time to buy USD and reduce your exposure to Kanada…

#86 tbone on 05.05.21 at 9:41 pm

ENB hit 49.00 today . Me likes as i have a pile of it .
All this with line 5 shutdown looming .
Hope not … lol

#87 kommykim on 05.05.21 at 9:54 pm

RE: #61 Concerned Citizen on 05.05.21 at 5:52 pm
Garth, how much of my portfolio should I put into crypto?

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

I can guess what Garth would say: ZERO.

#88 crowdedelevatorfartz on 05.05.21 at 9:59 pm

Goodness Gracious
Seems the Cullen Commissions Inquiry into BC Casino Money Laundering is recalling former Attorney General and ex RCMP officer
Rich Coleman

Seems there were “inconsistencies” in his testimony last week.

https://globalnews.ca/news/7836071/bc-former-minister-gaming-rich-coleman-recalled-cullen-commission/

“Rich” Coleman will be returning May 14th.
Stay tuned

#89 DON on 05.05.21 at 10:01 pm

All that savings sitting in peoples accounts isn’t expected (Bank of Nova Scotia) to be unleashed on the economy all at once. People are getting accustomed to having a safety net…different life choices…cooking at home and spending more simple low cost time with family and friends. For some Covid has been a life changing or near death experience.

Have to wait and see how this plays out.

#90 Tru-Anon Exposed on 05.05.21 at 10:04 pm

Talk about fun with faked numbers/ flat out lies, whatever. Vancouver Sun today reports that Trudeau Team claims of 34% of Canadians vaccinated turn out to be 3% if looked at by an adult.

Only 3% have received a full vaccination, not the 34% Tru-Amin has claimed. An adult knows that one shot is useless without the booster shot. Tru-Anon wants you to see a vaccination program without actually providing an effective one. If Tru-Anon makes you wait 120 days between shots it renders the first wholly ineffective, leaving millions exposed and vulnerable. Who’s the liar here?

Still cheerleading? People are dying.

#91 S.Bby on 05.05.21 at 10:11 pm

Google softens their WFH position:

https://www.citynews1130.com/2021/05/05/google-says-20-of-workers-will-be-remote-many-more-hybrid/

#92 Dr V on 05.05.21 at 10:36 pm

81 Wrk.dovr

“I bought 1200 for 55 cents each in 1981, if that helps
your idea. (then I learned how to make a chimney, starting at the bottom). Still there, in use as I type.”

Well, that kinda sucks. It’s 730ish on VI and my patio door is open….

#93 Cici on 05.05.21 at 10:38 pm

#27 Relieved in Victoria on 05.05.21 at 2:53 pm

You should be VERY grateful that house got away from you. Rodent droppings in housing is very unhealthy and can cause numerous health problems, especially this one:

Who gets Hantavirus Pulmonary Syndrome?

Anyone who comes into contact with rodents that carry hantavirus is at risk of HPS. Rodent infestation in and around the home remains the primary risk for hantavirus exposure. Even healthy individuals are at risk for HPS infection if exposed to the virus.

https://www.southernnevadahealthdistrict.org/Health-Topics/hantavirus-pulmonary-syndrome-hps/#:~:text=Hantavirus%20pulmonary%20syndrome%20(HPS)%20is,identified%20throughout%20the%20United%20States.

#94 Suami on 05.05.21 at 10:40 pm

#2 Immigrant man on 05.05.21 at 12:56 pm

Two question, if you please:
1. How much will the average price come down? Ballpark 5%, 10%, 25%?
2. When will the next gain begin?

_____________________________________________

Sure, no problem.

House prices will come down 23%.
The next gain will begin on March 19th, 2022.

I hope this helps.

And remember. .. there’s no such thing as a stupid question, just stupid people!

#95 Brick Wally on 05.05.21 at 10:44 pm

#81 Wrk.dover on 05.05.21 at 8:00 pm
#77 Ponzius Pilatus on 05.05.21 at 7:10 pm
Went to pick up some bricks for building a barrier in my veggie garden.
1.15 a brick

___________________________________

I bought 1200 for 55 cents each in 1981, if that helps your idea. (then I learned how to make a chimney, starting at the bottom). Still there, in use as I type.

_______________________

Yeah, well anyone can do that! Had you started from the top, I would have been really impressed.

#96 IVoteIndependent on 05.05.21 at 10:47 pm

I remember the good ol’ days when CBers were cool dudes who spoke a special lingo on radios mounted in their trucks.

#97 Nonplused on 05.05.21 at 10:47 pm

#76 Ponzius Pilatus on 05.05.21 at 7:10 pm
Went to pick up some bricks for building a barrier in my veggie garden.
1.15 a brick.
Not an expert, but that seems quite reasonable.
With the cost of lumbar (Smoky’s spelling) being so high,
could brick become an alternative?

————————————-

You still need some sort of studs to hold the insulation, which is why brick typically isn’t used for residential. Also I assume you are talking cinder blocks? It takes a lot of $1.15’s to make a wall that way. And the floors, roof, and interior walls are still going to be wood. You could go with steel I suppose but I don’t think that will be cheap either.

It is pretty amazing that we are even talking about it, though. Who would have thought the absolute cheapest way there is to build a house would suddenly triple in price? Because in the case of lumber, the stuff really does grown on trees.

I wonder if the price of pulp products is going to be similarly affected? If so, here we go, another run on toilet paper. And up goes the price of Ikea furniture as it is mostly made of particle board and shipped in large cardboard boxes.

I have a large library and desk made out of walnut with solid tops and fronts. I can’t imagine what that would cost to build today. Also most of the trim in the house is solid oak, which I am also guessing is nearly unaffordable today. Some of the flooring is hardwood. (I like wood.) Most of the rest is tile but you need 2 layers of plywood glued and screwed for that or the tiles crack at the joints (typically, there are other ways to do it).

So I think anyway you look at it builders are screwed until lumber prices come down. Eventually. Assuming they do.

What next? A run on firewood? Those wood pellets that go in an automatic smoker? Charcoal briquettes? Who knows? Maybe it will finally price Costco out of those flyers they send me every month?

#98 Nonplused on 05.05.21 at 10:57 pm

#81 Wrk.dover on 05.05.21 at 8:00 pm
#77 Ponzius Pilatus on 05.05.21 at 7:10 pm
Went to pick up some bricks for building a barrier in my veggie garden.
1.15 a brick

___________________________________

I bought 1200 for 55 cents each in 1981, if that helps your idea. (then I learned how to make a chimney, starting at the bottom). Still there, in use as I type.

————————————–

Do you have an insert with a fan? Such a thing greatly increases the efficiency as compared to an open brick fireplace as was popular in the 70’s and 80’s, well I guess all the way back to the invention of the chimney.

#99 AM in MN on 05.05.21 at 11:32 pm

#62 IHCTD9 on 05.05.21 at 6:08 pm

… Monetary policy is just about tapped out, and what Trudeau does with Fiscal policy can perpetuate the bubble pretty much to infinity. To me, the ultimate concern is draining the youth of Canada to the USA. The current Libs (IMHO) are total nimrods, but even I assume they have to be concerned about this also, lest we turn into a nation where 75% of the population is retired…

————————————————

I don’t know why people think like this. Unless someone un-invents the printing press, monetary policy can never be tapped out.

More printing to bail out the RE market is basically a wealth tax on everyone, but not evenly distributed. A big blow to those who earn a paycheck, or young people who are hoping to, and a gift to those with capital and assets and know how to play the markets.

There are other options which many people just don’t consider, partly because it would take a huge political change…. but politicians could let the industrial economy expand.

Right now a province like BC is pulling in about $300M – $400M a month extra in lumber exports due the high prices over historical norms. Almost that much more in Copper and other metals. Ag exports booming as well. Oil soon to be back at C$100/barrel.

Let them grow, and encourage more tech driven value add to the exports. That will keep young Canadians from leaving, although many of the best jobs are in the more remote parts of the country.

Instead we have a huge industry in putting a stop to any industrial investments.

Decisions, decisions. All it would take is for a percentage of arrogant white liberals who mostly draw govt. paychecks, to stop hating everyone who produces something for a living and vote for change. The parties will swing with the mood of the voters.

#100 Yukon Elvis on 05.05.21 at 11:33 pm

#86 tbone on 05.05.21 at 9:41 pm
ENB hit 49.00 today . Me likes as i have a pile of it .
All this with line 5 shutdown looming .
Hope not … lol
………………………

I bought some last Friday at about $46.5 . I think the new “ tunnel line “ will increase capacity and therefore revenue and i am being paid 7ish % dividend to wait.

#101 cramar on 05.06.21 at 12:32 am

“London, Ontario remains the fourth most affordable market of all major cities in Canada, surpassed only by Windsor-Essex, Calgary and Edmonton.”

https://www.brantfordexpositor.ca/news/local-news/region-recorded-more-housing-sales-records-in-april

Hmmm! Two cities in S-W Ontario and two in Alberta. Always thought the East Coast (especially NL) was the most affordable?

Here in Windsor-Essex price increase is almost 44% higher than last year!

https://www.iheartradio.ca/am800/news/average-home-selling-prices-climb-further-in-april-1.15132114

So buy now or forever miss out! If it is super-affordable now, it’s going to go up another 44%! And you thought inflation was just 2%. One house near me sold immediately last month for 29% above list.

#102 Tdot on 05.06.21 at 12:34 am

Love the blog Garth. I’ve been following you for 10 years now. Not sure why you hate on real estate so much?? I’ve kept a balance with investments and investment properties for 20 years. Maybe I’ll make enough so my kids don’t have to spend there 60 best years being a slave.

#103 happygolucky on 05.06.21 at 12:37 am

#31 Dolce Vita on 05.05.21 at 3:12 pm
Off topic.
VAX Calc naysayers, skip on by. Avail yourselve

I’m all for the miracle starting tomorrow.
—————————————————

Why would you put so much “faith” in those numbers and charts? and then expecting “miracles”, you know what I mean, don’t you?
The fact is, we might have much higher herd immunity, then you “believe”, achieved in natural course of this pandemic, and the only one which will protect and last.
Vaccines are still in a very experimental phase (which doctors reluctantly though, will admit), and don’t guarantee immunity, and next fall we might go into the same ordeal again. And I don’t wish to go farther here, and I won’t attach those endless links, who has a time to read them all…anyway.
Garth last year “virus porn”, proved to be true again, and again… we have to be more selective sifting tru all this pile of “information”, selective I mean based on “cool reason and logic”
Was your post off topic? No, neither economy nor this Pandemic exist in vacuum.

#104 Thuggish Ruggish Bone on 05.06.21 at 2:07 am

Can you believe there are 1646 detached listings for sale in the ghetto of BC known as Surrey?

A small 3600 sq. feet asking $1,699,000. This is truly outrageous Garth.

#105 Don Guillermo on 05.06.21 at 2:08 am

#75 Ponzius Pilatus on 05.05.21 at 7:02 pm
#79 crowdedelevatorfartz on 05.04.21 at 11:20 pm
#@73 Ponzie’s Perplexing Political Paradigm

“How can a citizen of another country become an elected official in Canada?”

++++

Well kinda like Hitler ( an Austrian) became Leader of Germany?
————-
You’re right.
But as the Austrians see it, Hitler was German and Beethoven was Austrian.
**************************
Yes, remember Ben Johnson was Canadian until busted, then he was that Jamaican ba$tard. I used to see him driving around Scarborough with his license plate 9.78.

#106 Don Guillermo on 05.06.21 at 2:13 am

I used to see him driving around Scarborough with his license plate 9.78.
——————————
Sorry, I believe it was 9.79. He used to drive fast too.

#107 Duh on 05.06.21 at 2:18 am

Two question, if you please:
1. How much will the average price come down? Ballpark 5%, 10%, 25%?
2. When will the next gain begin?

Why not ask Garth for Friday’s winning lottery numbers?

#108 Jane24 on 05.06.21 at 2:36 am

Well Garth you have been pushing for a back to the office 2019 economy and other blog contributors and myself have been saying that 2019 inner city life will never return.

Well Google announced today that their 140,000 global employees will be returning to a permanent 3 day a week WFH schedule. Here in Britain the huge accounting firm KPMG has announced that it’s 16,000 London based office staff will also be working permanently 3 days a week from home.

The UK govt has also announced that it is passing legislation to make it much easier to convert empty shops, offices and other unwanted pre-2020 RE into housing. The great post-Covid city re-set has begun.

Yes use bricks for garden work as you can reuse them again and again. I have been using the same bricks for about 20 years for many projects. Bricks suit the Cdn climate much better too.

#109 Bdwy on 05.06.21 at 2:50 am

#83 april on 05.05.21 at 8:35 pm

……
What does Ross kay think about that?

#110 Toronto_CA on 05.06.21 at 3:49 am

Oh look
https://www.bbc.co.uk/news/business-56972207

“Almost all of 50 of the UK’s biggest employers questioned by the BBC have said they do not plan to bring staff back to the office full-time.

Some 43 of the firms said they would embrace a mix of home and office working, with staff encouraged to work from home two to three days a week.”

It’s almost like everything I’ve said since last summer is correct about hybrid WFH/WFO; and predictions that everyone would be coming back to work like its Feb 2020 were wrong.

We don’t need to wait, these decisions are already made.

#111 Wrk.dover on 05.06.21 at 6:43 am

#94 Brick Wally on 05.05.21 at 10:44 pm

#81 Wrk.dover on 05.05.21 at 8:00 pm
___________________________________

I bought 1200 for 55 cents each in 1981, if that helps your idea. (then I learned how to make a chimney, starting at the bottom). Still there, in use as I type.

_______________________

Yeah, well anyone can do that! Had you started from the top, I would have been really impressed
———————————

I did try that approach, but it took too much effort figuring out where the 1st brick goes from that end. Besides, I like working with gravity, not in contravention of it.

#112 crowdedelevatorfartz on 05.06.21 at 7:55 am

@#109 TO/CA
“about hybrid WFH/WFO; ”

+++

Yep.
Seems a tad anachronistic to force white collar plebes into work everyday to bang away on a computer when they have been doing it from home for over a year with the same results.
Kinda makes the 40 year old Liberal “National Child Daycare Program” promise into a nonstarter.

Speaking of which, have the Woke idiots in charge issued any more recommendations as to which vaccine would be best to avoided while we wait for another?

One again the

#113 crowdedelevatorfartz on 05.06.21 at 8:00 am

@#108 Jane24
“Bricks suit the Cdn climate much better too.”

+++

Says the lady who spends half the year in Blighty and the other half in Italia….
Or do you rely on the observations from unfortunate colonials back in the frozen tundra to keep you abreast of the situation.

#114 Dominoes Lining Up on 05.06.21 at 8:01 am

Bang on, Jane #107 and Toronto_CA #109.

“The great post-Covid city re-set has begun.”

“….predictions that everyone would be coming back to work like its Feb 2020 were wrong.

We don’t need to wait, these decisions are already made.”

I am hearing from Gta contacts and reading myself many hints of big change about to happen in commercial real estate and WFH.

The half-empty buildings and vacant offices will have to be accounted for and this will have a serious impact across the real estate sector. Perhaps people fleeing from ridiculous prices for slanty semis will find new, cheap opportunities to live in former office buildings.

Take a look at this – it’s a script I have seen several times lately in City of Toronto news items as well as career postings online:

“The City of Toronto is embarking on a strategic initiative, which will optimize the use of the City’s office real estate portfolio while driving workplace transformation. This key initiative will optimize the City’s physical office environment by reducing the number of locations and improving the overall efficiency of the office footprint.”

Friends who work for that city and others in the Gta tell me that over 90% of spaces are still empty and about 80% will probably remain that way. It won’t be just government offices affected like this.

This could be a huge, unexpected domino that tips over the real estate status quo from another surprise direction.

#115 the Jaguar on 05.06.21 at 8:07 am

Re Jane24 & Toronto_ca comments above about WFH.

Most of what I have read supports the hybrid model, at least initially, and probably in part to reduce people density in current office environments now that the radar will be up permanently on ‘office health’.

Fair enough. What I don’t read much about are the long term repercussions of that strategy to jobs, commerce, transit, social connections, etc. I just don’t see turning downtown office towers in residential spaces as some kind of ‘easy solution’. Doesn’t ring true as ‘well thought out’.
Can’t imagine many of those tall glass towers will lend themselves to residential retrofit that many would be interested in either.
If people like WFH and their employer endorses it then do it and don’t hand wring or cast shade on those who prefer the structure of an office and separation of personal and professional life. There are many significant changes underway where Covid has acted as an accelerant, however the impacts and long term consequences are getting the scrutiny they deserve. At least everyone is free to make their own choices, and they will.

#116 Dominoes Lining Up on 05.06.21 at 8:08 am

Bang on, Jane #107 and Toronto_CA #109.

“The great post-Covid city re-set has begun.”

“….predictions that everyone would be coming back to work like its Feb 2020 were wrong.

We don’t need to wait, these decisions are already made.”

I am hearing from Gta contacts and reading myself many hints of big change about to happen in commercial real estate and WFH.

The half-empty buildings and vacant offices will have to be accounted for and this will have a serious impact across the real estate sector. Perhaps people fleeing from ridiculous prices for slanty semis will find new, cheap opportunities to live in former office buildings.

Take a look at this – it’s a script I have seen several times lately in City of Toronto news items as well as career postings online:

“The City of Toronto is embarking on a strategic initiative, which will optimize the use of the City’s office real estate portfolio while driving workplace transformation. This key initiative will optimize the City’s physical office environment by reducing the number of locations and improving the overall efficiency of the office footprint.”

Friends who work for that city and others in the Gta tell me that over 90% of spaces are still empty and about 80% will probably remain that way. It won’t be just government offices affected like this.

Even before Covid, in September 2019, a strategic report was under review for Toronto. Here’s a quote:

“The direct application of the City-wide Real Estate Strategy is the Office Optimization Plan, developed to address a large, outdated and inefficient office footprint. The proposed plan aims to reduce total office locations from 52 to 20 over a 5-year period

Revised: RA8.1

Real Estate Strategy and Office Optimization Plan Page 2 of 15 (2020-2025), while modernizing municipal work environments”

That’s about a 60% new vacancy rate just for office space. Given shift timings and other employment logistics, the new % of WFH jobs will definitely be even higher.

This could be a huge, unexpected domino that tips over the real estate status quo from another surprise direction.

#117 the Jaguar on 05.06.21 at 8:09 am

that should read ‘not’ getting the scrutiny…damn

#118 Wrk.dover on 05.06.21 at 8:17 am

This out to throw NonPlussed into a spin!

Here is what my electric meter says after more than a year now of grid tie solar.

A weekday 7am-11,
B cheapy hours weekends and 11pm-7am
C winter peak mornings and evenings Dec-Feb.

A——–B——C
2442 1146 0355 delivered (3945)
1500 3057 0111 returned (4649)

All of the power directly consumed at time of production is not reflected on the meter.

Notice my total parasitic winter peak needs are only 244 kwhrs. with the help of hot water heater timers.

My biggest deficit is when the grid is idling in the middle of the night, with excess available. I’m doing the grid a favor buying those hours.

So much for the theory that home solar throws the balance the grid into a conundrum.

The 12 month consumption portion of the bill was around minus $30.00.
Previously $1300. (= 10% of the cost of the installation)

#119 Wrk.dover on 05.06.21 at 8:21 am

I goofed that up, A is the cheap rate Bis weekday

#120 Dominoes Lining Up on 05.06.21 at 8:58 am

Millennials and others, including retiring folks, may find some very interesting new housing options with conversion of office space to residential. There may be desperation in that sector to offload properties before it’s too late. Any price may be possible, I wouldn’t be shocked to see the smallest spaces available for $25,000 or so in the darkest moments.

Perhaps we may go back to the early 1990s, when condos were having a fire sale?

Right now, I see a general likelihood of office condo conversions in Toronto coming on market for $50,000-150,000 in the next few years. (After listing initially higher of course, then having a reality check)

On another trend scale, I think we will also see a smaller but determined cohort of Millennials and pre/post retirees actually creating new, small suburban/rural enclaves, buying cheaper land and building homes and co-ops that will make all those $1.2 million Milton shacks look even more ridiculous.

Altogether, this could provide a long pause in housing inflation, and take a lot of oxygen away from the Gta bubble, as people start to look more objectively, and ask, what really are the benefits of living in a crazy expensive tiny glass condo, or in the soulless 905 with so few cultural assets and so little sense of community?

The next problem will be, what happens when commercial property valuations drop so much, and property tax revenues crash in places like Toronto……

#121 IHCTD9 on 05.06.21 at 9:22 am

#99 AM in MN on 05.05.21 at 11:32 pm
#62 IHCTD9 on 05.05.21 at 6:08 pm

… Monetary policy is just about tapped out…

————————————————

“I don’t know why people think like this. Unless someone un-invents the printing press, monetary policy can never be tapped out.”

When I say tapped out, I mean that slashing rates is no longer effective at stimulating the economy much anymore. I’ve never bought into the idea that the BOC is lowering rates to help out homeowners, that’s a side effect. Their job is to chase 2%.

Fiscal policy on the other hand…

“More printing to bail out the RE market is basically a wealth tax on everyone, but not evenly distributed. A big blow to those who earn a paycheck, or young people who are hoping to, and a gift to those with capital and assets and know how to play the markets.”

Yep, this will be Trudeau’s legacy through his FP inaction. Making the rich MUCH richer by not doing anything to control asset inflation, and screwing 2 generations out of a standard issue Western lifestyle.

Trudeau has severely wounded the middle class in Canada, effectively chopping the bottom half, and dropping them permanently into the renter class, creating the “nouveaux pauvres” of Canada. We’re going to smell the stench of Trudeau’s time in office for decades.

#122 Dharma Bum on 05.06.21 at 10:04 am

The kid got a 5 year variable at 1.4%.

That is free money.

That is why house prices are through the roof.

Period.

#123 IHCTD9 on 05.06.21 at 10:13 am

#73 leebow on 05.05.21 at 6:59 pm
#61 IHCTD9

May be the collapse won’t be such a disaster. The 1989 and 2008 real estate collapses incurred a cost but didn’t cause unreparable damage in Canada or US. This is a counterexample to Japan. It’s diligent to focus on post-bubble recovery.

Economists among us could argue that 1989 and 2008 were beneficial because they caused deleveraging and (mandatory economic cliche) improved capital allocation.

There is no dichotomy between affordable housing and economy. In fact, great things often come out from low cost of living areas.

Would it be ethical to artificially preserve erroneous risk/reward preferences of flippers? No. Therefore, the bubble collapse is not only inevitable and reinvigorating for the economy, but also a compassionate act.
____

Don’t get me wrong, I’d love to see it all blow – but no one would escape the fallout, so I don’t wish for it. But it HAS to turn around some day – so it will. We can choose to try and land it gently, or let mother nature handle it…

We are now basically the largest RE bubble that has ever existed. Our debt is insane on both the personal and government fronts – and at the lowest rates ever.
IMHO, if Canada has a full on meltdown, it will be epic. I don’t think banks would fail, but there would be big honking trouble from sea to shining sea – on all fronts.

It has to happen, and I agree once the pain has passed things will be better than they are now by a long shot. If our governments want to keep kicking the can down the road though, that’s asking for the worst possible outcome, and longest possible recovery period.

#124 westcdn on 05.06.21 at 10:32 am

I am rebalancing. 1st priority is to wind down my registered accounts. I would rather have gains/losses in my non registered accounts where I have much more control.

I now have happy problems where the gains in my registered accounts exceed my withdrawals and my preferreds are trading above face value.

I have decided to buy down margin as I can’t find things I want to own. I am glad to have bought US equities on margin a while back because of the current exchange rate which I really do not get. I don’t set prices.

Cybercurrencies – you really have to wonder. I missed the boat on that one and I still refuse to play that game. Another learning lesson because my opinion does not matter as to perceived value by others.

In baseball, I play small ball first and rely on steady defense. The long ball is a bonus. Go Jays, go – even though you are not welcome home.

#125 Ponzius Pilatus on 05.06.21 at 10:40 am

#123 Dharma Bum on 05.06.21 at 10:04 am
The kid got a 5 year variable at 1.4%.

That is free money.

That is why house prices are through the roof.

Period.
————————
Sure, it’s almost free money.
But, be ready to help out when rates are climbing due to inflation.
I was there in the early 80s.
Not pretty.

#126 Catalyst on 05.06.21 at 10:59 am

Meanwhile, this guy is 29 y/o, has 3 investment properties and lives with mom.

https://torontolife.com/city/i-saw-a-one-bed-plus-den-in-liberty-village-for-575000-and-i-scooped-it-up-why-this-insurance-advisor-bought-an-investment-property-downtown/

Almost everyone I know has at least one investment property. Until amateur landlords are tackled, housing has no hope to correct. Look at downtown TO. Complete ghost town, no reason to be there for 18 months, and still selling properties for $1k/sqft. Just absolute insanity.

CMHC just came out with a dousy predicting further house price growth for the next 3 years. All clear signal sent to the investors!

https://twitter.com/CMHC_ca/status/1390308095579017220

#127 mike from mtl on 05.06.21 at 11:28 am

#116 the Jaguar on 05.06.21 at 8:07 am

Can’t imagine many of those tall glass towers will lend themselves to residential retrofit that many would be interested in either.
//////////////////////////////////////////////////////////

Exactly. I don’t know where these armchair experts get their long term RE goals from (probably House Hunters)? Commercial RE is a completely different animal to Residential; the market, taxes, regulations, permits, laws are not at all comparable.

Never in our lifetime, for example, 1 Place Ville Marie have residential inhabitants. The costs would be astronomical and the city would pitch a fit about changing its tax base.

#128 DON on 05.06.21 at 12:02 pm

@#125IHCTD9

Don’t get me wrong, I’d love to see it all blow – but no one would escape the fallout, so I don’t wish for it. But it HAS to turn around some day – so it will. We can choose to try and land it gently, or let mother nature handle it…

We are now basically the largest RE bubble that has ever existed. Our debt is insane on both the personal and government fronts – and at the lowest rates ever.
IMHO, if Canada has a full on meltdown, it will be epic. I don’t think banks would fail, but there would be big honking trouble from sea to shining sea – on all fronts.

It has to happen, and I agree once the pain has passed things will be better than they are now by a long shot. If our governments want to keep kicking the can down the road though, that’s asking for the worst possible outcome, and longest possible recovery period

*************
Agreed.

Good post.

#129 leebow on 05.06.21 at 12:29 pm

#124 IHCTD9

Yeah, the choice is between bad and worse. We can only look at the bright side and hope for this to pass soon.

#130 G on 05.06.21 at 12:34 pm

This short discussion on fossil fuels is worth thinking about, if you haven’t thought about it before.

You will never believe what Elon Musk said about oil and gas. May 6, 2021 5min.
https://www.youtube.com/watch?v=1BeGsmwi2pY

(PMT take a listen. BTW, is the PMT working for Canadians or the UN reset? That’s right it’s …)

#131 Where's My Money Going Greedeau? Not To Make Plebs Ends Meet! on 05.06.21 at 12:49 pm

Re: #52 DDR Grenztruppen on 05.05.21 at 4:53 pm
There is no rent control in Ontario anymore. Ford and his cohorts renoviction loophole lanced it. Pension funds are quietly buying up rental stock.
+++++++++++++
Same thing happening here in BC/Abbotsford. Rentals up from $700/month to $1100 in just 2 years (60%+). Every rental spike causes a bottom price to rent the next one. Just toss a new fridge or dishwasher in and it’s paid off in 2 months with the increase. Rental Tenancy Board of BC (RTB-BC) says it’s the city’s responsibility and the city says it’s the Housing Authority, both of which cannot be bothered.
It’s all a plan.
Here’s more grist for the mill in purchasing and FOMO:
Seller beware: Real estate agents can collect their fee even when a buyer defaults on a sale, B.C. man learns
https://www.cbc.ca/news/canada/british-columbia/bc-commission-real-estate-lawsuit-1.6015748