The law

For most of our married lives, Dorothy and I have abided by rules. Marital guideposts.

I have referenced some of them in the past. (Consolidate. Simplify. Be beholden to no one. Respect your spouse.) Here’s another one, which seems to be relevant in avoiding mistakes:

If you don’t know what to do, do nothing.

Robert should heed this, as we hurtle into a time of greater uncertainty. He and his squeeze are 37, rent in soulless Milton where there used to be trees and happy cows, have $350,000 saved, earn one forty between them, no kids, no debt.

“The landlord will renew our lease for two years come July,” Rob says, “and the current rent is $2,450 which seems like a great deal. So the question is, do we take this extension? Do we change it to one year in hope of a housing meltdown? We might have a child in the next year or two, and the house we live in (and love) is worth $1.2 million.”

Interesting that this landlord is making (after property tax and insurance) a return of 1.7% on the property. If there’s financing in place, the cash flow might even be negative. And now the value of the house is likely in decline, or starting a descent. So the wisdom of ‘having tenants pay the mortgage while appreciate happens’ is kaput.

But that’s his problem. He’s the investor. Rob, the renter, benefits. His housing costs are being subsidized.

Of course if this late-Millennial couple were to buy today, it would require almost all of their liquid net worth, plus a mortgage of $900,000. At current five-year bank mortgage rates (4.3%, and rising) the monthly would be $4,926. Property tax and insurance would boost that to at least $5,600. That is a huge premium over renting. Plus, if you add in the lost investment value of the down payment, the true monthly is closer to seven thousand.

In other words, nuts. Why pay the equivalent of $7,000 to live in the same house you now occupy for $2,450? On what planet does that make sense?

But there’s more. The world is confused and dangerous at the moment. Financial markets are searching for direction. The Ruskies are outta control. China is Covid crazy. My gas this morning (premium) was $2.29. The Libs have failed at fiscal management and the Cons are about to elect a career politician who just discovered passion for anti-vax, illegal truckers and wants to usurp the money supply. Oy.

And did you catch what the bond market is telling us? Rough paddling ahead. This chart tracks the yield on Government of Canada debt which determines the cost of five-year mortgages.

Canada bond yields pushing mortgage rates

Source: Investing.com

But Rob’s question is about a meltdown in house prices, which would make it a good time for them to buy. Maybe in a year. Is that likely?

We have absolutely no idea. Recent real estate corrections have been swift, short and shallow. The dip in 2018 was 20% and lasted a few months. The Covid shock carved off 15% and was even briefer. The drop during the 2009 mess was over before anyone really knew it. And in both the pandemic and the credit crisis, cascading mortgage rates quickly rescued prices.

In fact, as we’ve mentioned recently, the last true correction in Canada started in 1989 and ended around 2003. That one saw prices drop 32% and stay there for years.

What’s different this time?

Lots.

House prices are catastrophic when compared with average, median, after-tax or household incomes. Covid-induced mortgage rates as low as 1.5% did that, while inflating personal debt to a level once thought inconceivable. (I remember the day a senior CIBC mortgage exec told me, with some incredulity, about the $1 million mortgage a branch had just granted. That was 2003. Now it’s routine.)

Second, rates are rising aggressively and will continue for at least a year. After a decade of low-growth, low-inflation and low-rates we’re now battling inflation, amid a supply chain crisis, an escalating war, political instability, asset inflation, tribalism and the lingering tail of a global pandemic. The inverse relationship between real estate values and rates is on full display. CBs cannot and will not let inflation win. This rate roulette has just begun.

So, yes, that Milton house could certainly lose a third of its value. It could lose half. How much depends on human nature and the floor that buyers place under prices. If sales collapse, so will valuations. If people like Rob rush in at minus 25 or minus 30, the bleeding stops. But history has shown us bravado melts as the herd retreats. And it’s probably no different this time. I just heard mortgage application volumes dropped by 40% in April. Historic.

In summary, we don’t know, Rob. Neither do you.

So follow the rule.

About the picture: “On his last shift of a career of dogged police work, Baron never let up,” says the Toronto Police Service. “On April 15, Const. Scott Aikman and General Purpose Dog Baron responded to call in 32 Division after alleged car theft suspects fled from police. Two males, allegedly in possession of two stolen Lexus vehicles, took off on foot when officers approached them. One of them was arrested, while another jumped a fence and ran into a nearby graveyard. “They couldn’t find him, so they set up a perimeter around the cemetery and called for a dog,” said Aikman, who has been with Police Dog Services for the last nine years and Baron’s partner. “When we got there, Baron tracked through the cemetery and found the outstanding suspect hiding in bush beside a gravestone. Once Baron barked at him, he quickly and smartly surrendered and was taken into custody. It was almost the perfect timing for the end of a magnificent career.” Aikman has adopted Baron will continue to care for him in retirement, just as he has brought him home during the course of his career.

The male German Shepherd was trained to be a general purpose dog. “He was trained to search for fresh human scent that included searching for and tracking criminals that ran away from police, missing persons and property that involves human scent,” said Aikman, a 32-year veteran of the Service. Baron joined the Service eight years ago. “He is highly driven, protective and loyal,” Aikman said, of his longtime partner.

146 comments ↓

#1 crowdedelevatorfartz on 05.08.22 at 2:52 pm

Bring on the Real Estate correction.
5 years over due.

#2 Søren Angst on 05.08.22 at 2:56 pm

On what planet does that make sense? – Garth

—————-

Claire.

Pink air.

Plymouth Satellite.

All the trees are red.

———

Happy Domestic Infant Supplier Day!

https://twitter.com/keribla/status/1523279449999155200

#3 Dave on 05.08.22 at 3:03 pm

Don’t commit to two year lease.

Go month to month at same rent.

It’s your right as a tenant.

#4 Shawn on 05.08.22 at 3:04 pm

How to reduce the money supply?

#92 Quintilian on 05.08.22 at 1:04 pm
#83 Shawn on 05.08.22 at 10:49 am
“Are there other ways to reduce the money supply?”

Quite simple….

Central bank can:
-Increase interest rates (moral suasion in Canada)
-Increase the reserve the banks have to hold.
-Stay out of market operations and don’t by junk bonds at premium prices.

**************************
Agreed and all of those involve less new debt. The money supply declines (or at lest grows more slowly) as people, corporations and governments repay existing debt and/or lower the amount of new borrowing.

P.S. There is no minimum reserve amount in Canada as far as I understand it. Lately what the bank of Canada di was pay interest on reserves at the central bank which encourages higher reserves. But it’s not clear to me that this constrains the ability of banks to loan. New loans create new deposits which generally never leave the banks as a group though they definitely leave the originating bank and move around a lot after that.

#5 Søren Angst on 05.08.22 at 3:04 pm

The bankruptcy guy agrees with you Garth on the gap between income and home prices.

In a single word…

https://twitter.com/ScottTerrioHMA/status/1523044153831034880

—————–

For Berkshire Hathaway lovers, anti-Bitcoin people, this is for you:

https://twitter.com/TrungTPhan/status/1523143089640001536

#6 Linda on 05.08.22 at 3:05 pm

‘Baron’ is also very handsome! May his retirement be a happy one full of walks, dog treats & lazy days in the sun.

Given the crazy high RE prices, even a 50% meltdown would still see most housing in the $500K or higher range. Have to say I just don’t see that happening. So those waiting to purchase will presumably benefit from lower prices when & if they decide to buy, but if they are hoping to score a dream home in a highly desirable neighborhood at 50% or more off the list price, all I can say is don’t hold your breath. Best chance of that kind of bargain is in Bunnypatch & probably a distress sale to boot.

#7 HH on 05.08.22 at 3:09 pm

You are one handsome boy, Baron. I could just hug you.
And what a smart, brave boy you are.
I remember a story my mother told me when she was a kid living in Tisdale, Sask. This was way back in the 1930s. The police officer in the town had a smart dog, too. One time they were chasing someone who had a gun and he shot the dog. The dog didn’t, however, lose his focus. After all, he wasn’t about to let a gunshot wound get in his way. He had a job to do and he did it. The dog took the guy down in a field wounded and all. I believe he got an award for his bravery. He recovered from his wound. That same dog use to make daily trips to a cafe to pick up his owner’s lunch. There was probably a doggie snack for him, too. They are truly wonderful dogs.

#8 TurnerNation on 05.08.22 at 3:09 pm

Nothing to see here guys. I opined in 2020 that these global lockdowns were the training period for future “Climate lockdowns”. The Long Game emerges:

.Nigeria is First Nation to Ground Flights as Fuel Costs Soar Nigeria will become the first nation to ground flights on Monday as surging prices for aviation fuel make business unprofitable. (bnnbloomberg.ca)

—– Well well look who’s back. This Tweet is from September 2020. Where have you heard this name, M.M. before…in yesterdays Globe and Mail no less (I posted here) promoting a Kommunuism-lite model for BC.

“https://twitter.com/MarketWatch/status/1308959892292726784?
@MarketWatch OPINION: We may need climate lockdowns to halt climate change, Mariana Mazzucato writes. That might mean governments limiting private vehicle use, banning consumption of red meat, etc. We must do capitalism differently to avoid that.”


— Ahem, also from Sept 2020; and just this week the cell phone tracking details emerged

#153 TurnerNation on 09.24.20 at 10:32 pm
Since March been pounding the table that our travel rights are in the target. The shut downs are cover for the New Green deal.
1. From March from another, a quote from a less- pathetic weblog:
“We’re in an experiment. We’re now getting a glimpse of what a high tech, low carbon, limited mobility civilization looks like. The technocrats must be loving this – they’re going to have so much data to analyze after the experiment is over. Other major interest groups will use this experiment to further their agendas …”

#9 T Dog on 05.08.22 at 3:12 pm

So, what does he do with the $350k in the meantime?

#10 Søren Angst on 05.08.22 at 3:17 pm

The PC party can do no worse than this…

Trudeau in Ukraine doing something he is good at, tying rope knots.

https://twitter.com/CTVNews/status/1523316877983891458

Meanwhile, those that matter are actually planning how to further make Russia a 3rd World Hermit Kingdom.

https://twitter.com/vonderleyen/status/1523338665610555392

CORRECTION Joe, you actually spoke with the other G5 leaders + Ukraine (see TV screen) @POTUS trying to be giving, caring, sharing:

https://twitter.com/POTUS/status/1523354677676412934

U2 got more press that Trudeau in a Kyiv subway today.

https://www.youtube.com/watch?v=m0cofH5sXMs

—————–

In the words of the Ancient Egyptian Mortician…

that just about wraps it up folks.

[or ties it up for Justin]

#11 Prince Polo on 05.08.22 at 3:19 pm

Thank you for your service Baron! In other words, woof woof!!!

#12 Robert S. on 05.08.22 at 3:21 pm

DELETED (Anti-vaccine)

#13 VladTor on 05.08.22 at 3:23 pm

Garth,
Great post today … with analyzing mortgage vs. rent.
When you support yours opinion with numbers it is always interesting and make brain working.

Here is interesting opinion about future stock market :

http://theeconomiccollapseblog.com/is-this-finally-the-end-for-americas-greatest-stock-market-bubble/

#14 OK, Doomer on 05.08.22 at 3:37 pm

I’ll add another rule to the Garth and Dorothy’s Rules:

For major expenditures it takes two to say yes but only one to say no.

It’s amazing how much sanity that interjects into a situation.

33 years and counting :-)

#15 Dogman01 on 05.08.22 at 3:43 pm

Watched the Conservative Debate; did not know Charest took Money from Huawei.

That is I need to know, I do not invest in China, I do not watch Olympics in China, China is a genocidal totalitarian state directly an antithesis to my values and beliefs.

By working for Huawei, an arm of state surveillance and foreign policy of China, Charet has demonstrated his lack of judgment, lack of scruples and lack of integrity. As an establishment political figure he should choose whom he associates with and his employment relationships with a high standard.

If you get in bed with China to make a buck you are no friend of the Canadian people.

It I down to Pierre Poilievre and Scott Aitchison.

However I always love seeing an Eastern European guy, Roman Baber, and how passionate he is about freedom. It seems you do not know how valuable what you have is until you know what life is without it.

#16 Søren Angst on 05.08.22 at 3:45 pm

#8 TurnerNation

Nothing to see here guys.

————-

Nailed it.

#17 West New West on 05.08.22 at 3:46 pm

As a long term owner with no mortgage, I would love to liquidate and pay that much in rent. If you take pride in your home and like to keep everything up to date, it costs far, far more than that to own and live in a house …..furnaces, hot water units, plumbing, utilities….paint, updates….just the stuff that breaks cost twice as much down at the Home Despot than they did a few years ago.

#18 crowdedelevatorfartz on 05.08.22 at 3:48 pm

Gas today in North Burnaby $2.22.9/lt for regular at a self serve.
Gas has jumped 16 cents in a week.

$2.99.9 litre by July 1st Ponzie?

#19 Flaccid Landing on 05.08.22 at 3:53 pm

Can someone explain to my dumbass how housing prices going down 50% but interest rates going up 100%+ makes housing more affordable for the average person?

Seems to me it’s only good for the cash heavy boomers some people on this site seem to love to hate.

#20 In Flat Ion on 05.08.22 at 3:55 pm

Should inflation stack on top of GDP? Does it?

As in…US economy shrunk 1.4%, inflation 8.5%, real economic shrinkage 9.9%?

Calendar Q4 US economy grew 6.9%, inflation was 7%, real economic impact is shrinkage of 0.1%?

Does that make any sense?

#21 Dogman01 on 05.08.22 at 3:56 pm

Inflation SWAG (silly wild ass guess)
A. 25% due to Covid Supply Chain disruptions
B. 25% Due to sophisticated Money Printing (oversupply of money)
C. 25% due to the Covid Re-opening surge demand.
D. 25% % due to the super low cost of borrowing artificially spurring demand.
E. X?? % still to come for Ukraine War Disruptions.

Reasons A,B, and C should go away slowly. I assume supply chains will work themselves out to a new equilibrium, they must be ceasing Money Printing, and re-opening demand should calm down after 12 months.

Regarding D they are raising rates, so that will slow the ship of Real Estate and shelter Inflation.

So give it a year barring any new War with China\Taiwan or further escalation in Eastern Europe.

#22 Barb on 05.08.22 at 4:11 pm

A standing O for Baron’s dedicated 8 years. You’ve earned the easy retirement pace that awaits you. (Scott’s next, as he’ll miss you beside him at work).

#23 Satori on 05.08.22 at 4:20 pm

Have to say, I have no idea.

While eating tons of popcorn, I thought the housing market would come down every year for 20 years nada!!!
Then covid, I thought for sure, people losing work, it would come down… again, Wrong!!

How this works is beyond me, logic, graphs, theories, all just opinions not reality. I am with #6 Linda, doubt things will drop 50%… other than that, who the heck really knows? Who knew anything for 20 years, cause if we all knew what would happen, we’d all be multi-millionaires.

It’s just guessing. You can apply all the logic to a guess – it doesn’t mean that is how things work out.

Good for the guy to keep renting but buy a house when rates are at 7% or 10% and houses are say 20% lower = puts him in the same position he’s in now. Stuck in making the ‘right’ educated decision, trying to predict a ‘good move’… there isn’t one.

#24 chopstix on 05.08.22 at 4:20 pm

is tough for renters nowadays man…i stupidly missed the boat buying in 15 yrs ago…my concern would be the landlord (or anyone of them) now boosting rent to account for inflation and interest rate hikes…i’m here 21 yrs as a renter in vancouver, get along wonderfuly with the current owners like family (but they’re selling in the next 4-6 mo for a larger home)…i’m hustling getting co-op applications out…excellent job refs (27 yrs same company), no debt, excellent credit score…. might take a chance any new owner would keep me; but that is dicey too: they might do a teardown (this home/a vancouver special in east van/lovely area) is 60 yrs old….decisions…housing is so stressful now, whether you’re looking to buy in or rent, esp as a single person.

#25 Satori on 05.08.22 at 4:26 pm

#19 Flaccid Landing on 05.08.22 at 3:53 pm

Can someone explain to my dumbass how housing prices going down 50% but interest rates going up 100%+ makes housing more affordable for the average person?–
—————————————————
Yeah, great question FL … others in the ‘know’ please do tell!
(asking for a friend :D )

#26 DON on 05.08.22 at 4:32 pm

At this point I just hope March weather ends.

Crop issues in Spain, big rains.

South Africa suffering floods as well. Issues in Florida. Ukraine output affected. Floods in North Dakota, Winterpeg. Energy costs rising in Europe. Housing won’t be the main worry this summer. Oh Oh jet fuel prices up…better go on that trip now.

The Ukraine War was supposed to be over now according to some experts and so was inflation.

The moment I received the extra covid child care benefits I knew that I, (we) would be paying it back later (and more) down the road. Basically inflation ate my free lunch. At least it didn’t sink my financial Battleship! I always thought battleships could defend themselves, was everyone on board sleeping Or just a lucky shot?

It’s shaping up to be a long summer and fall.

Why catch a falling knife, because a baby is in the plans…patience. You are in for a life changing experience lmao, no need to make finances a problem, lack of sleep will be enough. ENJOY the security of not having to live paycheck to paycheck for a house.

#27 espressobob on 05.08.22 at 4:35 pm

A cycle of reckoning? Understanding intrinsic value. Perhaps an awakening of need vs want.

We live in interesting times.

#28 DON on 05.08.22 at 4:36 pm

#25 Satori on 05.08.22 at 4:26 pm
#19 Flaccid Landing on 05.08.22 at 3:53 pm

Can someone explain to my dumbass how housing prices going down 50% but interest rates going up 100%+ makes housing more affordable for the average person?–
—————————————————
Yeah, great question FL … others in the ‘know’ please do tell!
(asking for a friend :D )

**********
Think through it a bit.

#29 triplenet on 05.08.22 at 4:45 pm

Flaccid and Satori
#19 + 25
Download this. Enjoy the read.

https://professional.sauder.ubc.ca/re_creditprogram/course_resources/courses/content/352/331_chapter09.pdf

Real estate finance.
Memorize these functions. You’ll be well on your way to your degree and/or financial literacy.

Sorry Faron – perhaps a wee bit too complicated for you.
Have another drink.

#30 Satori on 05.08.22 at 4:46 pm

#24 chopstix on 05.08.22 at 4:20 pm
is tough for renters nowadays man…i stupidly missed the boat buying in 15 yrs ago…my concern would be the landlord (or anyone of them) now boosting rent to account for inflation and interest rate hikes…i’m here 21 yrs as a renter in vancouver, get along wonderfuly with the current owners like family (but they’re selling in the next 4-6 mo for a larger home)…i’m hustling getting co-op applications out…excellent job refs (27 yrs same company), no debt, excellent credit score…. might take a chance any new owner would keep me; but that is dicey too: they might do a teardown (this home/a vancouver special in east van/lovely area) is 60 yrs old….decisions…housing is so stressful now, whether you’re looking to buy in or rent, esp as a single person.
———————————————–
Welcome to my World.

I think the reality is that people don’t realize how hard it is to find a place to rent.

There is 60 people ahead of you, wait lists are miles long, prices over $2300 for a ‘good’ crammed little basement with kids above your head… they are few and far between with Air BnBs all over. And why not Air BnB cause who wants to rent when you can earn in a week what you get in rent per month?? In desperation in finding a place you start to consider buying something.

I rented 37 years… looking for a place for a month and every place I apply for needs proof, references, pay stubs, credit ratings. The big rental buildings, reviews are (for example) ‘thin walls, noise complaints, bad management, no ac”…. so yes, get your butt going, tell everyone you know you are looking! I wish you LUCK cause unfortunately, you will need it.

#31 Ponzius Pilatus on 05.08.22 at 4:47 pm

#96 Satori on 05.08.22 at 2:26 pm
IF men needed abortions, there would be one on every corner, like 7-11s. There would be no debate.

imho
——————-
If men were to bear children, we would have been extinct a long, long time ago.

#32 PeterfromCalgary on 05.08.22 at 4:50 pm

Sort of crazy that the two countries in the world with the lowest population density Canada and Australia also have very high housing costs.

#33 Stone on 05.08.22 at 4:52 pm

There’s another issue with all this that I haven’t seen spoken about.

Porting (transferring) a mortgage to another financial institution when home prices drop 30%/50%/70% or anywhere along the range. No competing bank wants to take on an existing mortgage that is on an underwater property.

That would mean those homeowners will get stuck (become hostage) with their current lender. That would mean current lenders would reduce or eliminate rate discretions on mortgage rates to said customers. What happens with “B” or “C” lenders who as Garth mentioned only provide 1 year terms?

Am I glad I don’t own real estate. My B&D is currently at -5.89% ytd but it pays off a sweet dividend cashflow regardless. Still feeling good about what I’ve got going for myself.

#34 I don’t know on 05.08.22 at 4:53 pm

What’s different this time?

Lots.

For one, our population is about 15 million more than it was in the late 80’s, and we haven’t built anywhere near enough houses to keep up. There are a multitude of reasons why, and none of them have an easy quick fix.

Second, work from home technology didn’t exist back in the 80’s. Many people work from home now, and that accelerated the need for space.

Third, millennials are the largest demographic now, the oldest of which is nearing 40. The entire demographic is in prime family formation mode and looking for backyards and space as well. Most of them grew up with the same setup and expect it in their lives .

Fourth, debt levels are much higher these days. This will put an absolute ceiling on interest rates nowhere near what it was in the 80’s. Speaking of the 80’s, it took rates to rise to the mid teens to early 20’s to see any increase in defaults. Very low probability we get anywhere near those levels.

Fifth -and most important- one of the main reasons for the inflation the labour market, which is extremely tight. We are nearing full employment, right when supply chains are still disrupted. As our weekender spoke about, and Janet Yellen alluded to recently, central banks will raise persistently but gradually.

That doesn’t mean the uncertainty in the market right now isn’t a buying opportunity, which it is. It won’t last.

IDK

#35 ElGatoNeroYVR on 05.08.22 at 4:54 pm

Like everything else RE it all depends on location. I remember 2018 ,out of pure luck we bought our house (SFH) out there in the burbs of GVA on the border of Surrey / Langley at a 25% discount to what similar homes sold 1 year before. It took well over 5 years for the prices to come back in that subdivison.When we sold after 5 years they were still not fully back.
Nowadays due to massive develoopment it is a sought-after subdivision so it may be different, though the obvious is that untill rates start coming down or smaller houses on smaller lots are built (say build 3 houses instead of 2 ) prices of SFHˋs will not meet the floor.

#36 Ponzius Pilatus on 05.08.22 at 5:02 pm

#18 crowdedelevatorfartz on 05.08.22 at 3:48 pm
Gas today in North Burnaby $2.22.9/lt for regular at a self serve.
Gas has jumped 16 cents in a week.

$2.99.9 litre by July 1st Ponzie?
——————-
Personally, I would like it to go to 4 bucks.
And put a buck per litre for building public transit.
Gotta break the addiction to driving.
However, not gonna go past 2.50.
Gubernment gonna step in.
Otherwise lose election.

#37 Observer on 05.08.22 at 5:03 pm

#19 Flaccid Landing on 05.08.22 at 3:53 pm
Can someone explain to my dumbass how housing prices going down 50% but interest rates going up 100%+ makes housing more affordable for the average person?

^^^^^^^^^^^^^
Because purchase price is forever. Rates change over the course of a 25 year mortgage.

#38 Reality Check on 05.08.22 at 5:04 pm

5 Søren Angst on 05.08.22 at 3:04 pm
The bankruptcy guy agrees with you Garth on the gap between income and home prices.

In a single word…

https://twitter.com/ScottTerrioHMA/status/1523044153831034880

—————–

Crazy chart – and that big blip up in Canadian income in 2020 – that was our government giving away a few hundred billion in handouts.

#39 Drewfor on 05.08.22 at 5:04 pm

Why renew the lease at all? For what benefit?
Go month to month.

#40 Ponzius Pilatus on 05.08.22 at 5:10 pm

32 PeterfromCalgary on 05.08.22 at 4:50 pm
Sort of crazy that the two countries in the world with the lowest population density Canada and Australia also have very high housing costs.
———————
Yes, very desirable countries to live in.
But also lots of uninhabitable space.
We used to sent immigrants to those places to make them liveable.
But now every body wants to bundle up in the cities.

#41 Ponzius Pilatus on 05.08.22 at 5:18 pm

#35 ElGatoNeroYVR on 05.08.22 at 4:54 pm
Like everything else RE it all depends on location. I remember 2018 ,out of pure luck we bought our house (SFH) out there in the burbs of GVA on the border of Surrey / Langley at a 25% discount to what similar homes sold 1 year before. It took well over 5 years for the prices to come back in that subdivison.When we sold after 5 years they were still not fully back.
Nowadays due to massive develoopment it is a sought-after subdivision so it may be different, though the obvious is that untill rates start coming down or smaller houses on smaller lots are built (say build 3 houses instead of 2 ) prices of SFHˋs will not meet the floor.
———————
Langley has gone through a growth spurt in the last 5 years.
Tones of new developments and prices about doubled.
Probably taking a breather right now, just like all the areas south-east of the Fraser.

#42 Flaccid Landing on 05.08.22 at 5:25 pm

Because purchase price is forever. Rates change over the course of a 25 year mortgage.

But that doesn’t put people into houses any easier/quicker. It’s still the same or similar monthly payment and they have to pass an even higher stress test.
You don’t need as big a down payment but still need to be able to afford a 6000 dollar a month mortgage payment to own a SFH in Van or Tor. And you need to prove you can afford a 10,000 dollar a month payment to get approved.
These are eye watering numbers for 99% of people.

#43 Debt is Forever on 05.08.22 at 5:28 pm

#19 Flaccid Landing on 05.08.22 at 3:53 pm
Can someone explain to my dumbass how housing prices going down 50% but interest rates going up 100%+ makes housing more affordable for the average person?

Seems to me it’s only good for the cash heavy boomers some people on this site seem to love to hate.

+++++++++++++++++++++++++++++++

Mills can now actually save up for a down payment and work and save pay off a much, much, much smaller mortgage early. That’s the way Boomers did it.

Most Boomers saw their house as a place to live when they bought it, not as an investment/get rich scheme. Weird, eh?

#44 Reality Check on 05.08.22 at 5:28 pm

#34 I don’t know on 05.08.22 at 4:53 pm
What’s different this time?

…….Fourth, debt levels are much higher these days. This will put an absolute ceiling on interest rates nowhere near what it was in the 80’s.
——————-

The Bank of Canada does not control interest rates – period. Interest rates are set on world bond markets. If interest rates go up broadly in other large economies Canada’s will follow.

And the argument that governments are so indebted they will not be able to withstand higher rates does not hold water. Government debt is a mix of short, medium and long term bonds, so a 5% increase in interest rates does equate to a 5% increase in government debt service costs – its much, much smaller.

Central banks will try to raise rates quickly, dampen inflation, and bring rates back down again before there is any meaningful impact on government debt service costs.

Interests rates will be increase around the world as inflation is significant and already entrenched.

Central banks are much faster off the mark this time versus the 1970/80 inflation debacle. So maybe we will get away with 6-7% rates as opposed to 15-18% rates.

#45 Quintilian on 05.08.22 at 5:31 pm

#34 I don’t know on 05.08.22 at 4:53 pm

“What’s different this time?

Lots.”

Robert and squeeze, just read the full post by IDK . Scan it with the BS meter, run it through your logic board, and a calculator, then think about it.

#46 IHCTD9 on 05.08.22 at 5:51 pm

#42 Flaccid Landing on 05.08.22 at 5:25 pm
Because purchase price is forever. Rates change over the course of a 25 year mortgage.

But that doesn’t put people into houses any easier/quicker. It’s still the same or similar monthly payment and they have to pass an even higher stress test.
You don’t need as big a down payment but still need to be able to afford a 6000 dollar a month mortgage payment to own a SFH in Van or Tor. And you need to prove you can afford a 10,000 dollar a month payment to get approved.
These are eye watering numbers for 99% of people
———-

Welcome to Post-Trudeau Canada. Everything is different now, and frankly, it’s probably only going to get worse. Maybe in 4-5 years the sticks will offer a great QOL again. But if not, you’d best start working on your green card. There is a very high probability that Canada is no longer a good place to live for the young and well educated. That era ended in October of 2015.

#47 Flop… on 05.08.22 at 6:00 pm

Everything is fine in Vancouver.

Until it is not…

M47BC

#48 DON on 05.08.22 at 6:10 pm

#32 PeterfromCalgary on 05.08.22 at 4:50 pm
Sort of crazy that the two countries in the world with the lowest population density Canada and Australia also have very high housing costs.

*****************
Australia and Canada are big commodity exporters. We went through the Great Financial crisis rather unaffected as China was on a mass commodity and debt buying spree. We boomed on low rates and blew right past the US housing bubble. People have been gorging on cheap debt since. Inflation is what happened. Recession is the reversion to the mean. So all bets are on when the next recession WAVE will roll into town and the destruction it will do.

Big debt relative to the 80’s
41% of CDN homeowners own more than one properties.
A working generation that had really never experienced a recession or the consequences of leverage.
High use of credit cards in the last 3 months.

The fact the entire World is sputtering is different from the 80’s. The 80’s look pretty good in comparison.

#49 Flaccid Landing on 05.08.22 at 6:11 pm

Welcome to Post-Trudeau Canada. Everything is different now, and frankly, it’s probably only going to get worse. Maybe in 4-5 years the sticks will offer a great QOL again. But if not, you’d best start working on your green card. There is a very high probability that Canada is no longer a good place to live for the young and well educated. That era ended in October of 2015.

—————

Writings been on the wall for about 2 years. Parents just sold their hovel in Richmond for 2mil. I just sold mine in Langley for 1.3 mil more then we paid for it in 2007.
All of us are out of here. Going to stuff the unregistered accounts, move the family business and start the US immigration process.
Florida is the front runner but my mom suffers from terrible TDS so it might be Palm Desert as a runner up.

We know three families doing a similar thing but moving to Calgary first and then deciding wether or not to go south.
Everyday I meet/hear about another family selling and moving to Calgary.

#50 ian on 05.08.22 at 6:15 pm

DELETED (Anti-vaccine)

#51 IHCTD9 on 05.08.22 at 6:18 pm

#40 Ponzius Pilatus on 05.08.22 at 5:10

Yes, very desirable countries to live in.
But also lots of uninhabitable space.
————

If Canada is to ever recover from the Justin Trudeau era, it will be via putting this space to good use. It will require fully functional StarLink high speed Internet, widespread remote employment, and drone hub based deliveries to these remote areas. Small, efficient homes, and minimalist energy strategies, and wood heat/power would open up just about any locale in Canada for good living.

The Federal Liberals have destroyed the good QOL that once existed in our big cities. They now belong to the established long term residents who largely prey off our new arrivals. Our youth and newcomers need options to the high cost, go nowhere situation that Trudeau has created. The North is it. If we can’t make it happen, then we can look forward to a Japan like future where our aging population drags society into bankruptcy, and eventual population decline. I don’t blame anyone for choosing some other country to immigrate to, they’re looking for a good life, not to become a beast of burden for OSC’s in Trudeau’s new Canada.

#52 Rainmaker on 05.08.22 at 6:19 pm

Wrong! Rob is subsidizing the purchase of real property on behalf of the owner. Fixed it.

#53 twisted_sisters on 05.08.22 at 6:23 pm

I feel for Robert and his spouse. In fact for all those out there who think that this housing crisis situation will abate. I mean, it’s been what? 20+ years that real inflation is destroying people’s real purchasing power?

Even within the investment ‘advisors’ circles they seem to think that housing is the best investment idea. But again, not all think they should ‘work hard and save more money’ like PP seems to suggest.

https://www.burnabynow.com/highlights/bc-broker-forged-signatures-to-fund-million-dolalr-okanagan-estate-iiroc-5340824

And GT, you were correct to say that foreign money is not to blame for the higher housing costs. It’s our very banks who have done everything to push savers away with their savings by giving only 0.1% in ordinary savings accounts and to go invest in the ETFs of Blackrock, Blackwater, Vanguard,JPM,GS and all their relatively unknown sunsidiaries who are actually buying up and driving up real estate prices. Most people don’t know the names of these subsidiaries that the Blackrocks hide behind, but the info is out there.

So GT, again you are correct to say that not foreign investors but actual market participants locally are caught up in this vicious circle called the FIRE economy.

#54 Flop… on 05.08.22 at 6:25 pm

How would you like go be in this person’s shoes?

Currently renting for $1,858, lease expiring soon.

Cheapest deal landlord offers is 15 months at 3,385

Month to month at 3,929.

Stuff like this drives renters into realtors arms looking for a hot bottle of milk and a blankie…

M47BC

https://mobile.twitter.com/HousingCrisisW/status/1520166909165064198/photo/1

#55 Quintilian on 05.08.22 at 6:26 pm

#34 I don’t know on 05.08.22 at 4:53 pm
“Second, work from home technology didn’t exist back in the 80’s. Many people work from home now, and that accelerated the need for space.”

Sure, because a laptop and a cell phone take so much space, you need to move to the countryside where kitchen tables can accommodate such huge machinery.

#56 Linda on 05.08.22 at 6:28 pm

Have to say don’t see why someone renting a house would feel the need to buy just because a baby is coming. A baby won’t care whether the parents own or rent. For that matter, I’d bet most young children have no idea if their parents own or rent. Age 5 plus may possibly know, depending on whether the parent(s) talk about owning or renting in their vicinity & the child pays attention to what is being said. In this day of information the majority of children of whatever age are probably unaware of the exact state of the parental finances.

#57 Froggy on 05.08.22 at 6:39 pm

Mortgage rates at 10% would decimate the Canadian economy especially realestate on the other hand 5 to 7 would see a good 50% my opinion and there wouldn’t be any rush to get in they’ll stay flat for many years maybe more than a decade that’ll be good to build on for the next generation and another thing the way things are looking boy you better have a reasonable amount of emergency funds because it’s going to be a rough ride .

Mortgages at 20% did not ‘decimate’ the economy. – Garth

#58 Matthew on 05.08.22 at 6:47 pm

DELETED

#59 NOSTRADAMUS on 05.08.22 at 6:51 pm

REAL ESTATE 1989! REPEAT 2022-23
I fully expect Canadian real estate values to drop 30 to 40%, or more in some cases. The destruction will move through all sectors. One by one. Speculative Condos will be the first to go down (canaries in the coal mine).
Next, the media will turn big time negative on real estate, consumer confidence will shift from positive to negative.
Game over as in tilt. People will become risk adverse and hunker down. The hardest hit will be the top end residential properties, next recreational homes, (secondary homes) including top end waterfront. In addition to all commercial and industrial real estate, they are in for a world of serious pain. A slow bleed out as their tenants vacate or begin backing up on their monthly rent payments. The end comes as there is no possibility of refinancing, Selling is out of the question as there are no buyers.
Truly a bear trap from which there is no escape. The reality, look for the banks to tighten their risk controls. Look for margin calls and cancelled or reduced lines of credit. As I have said, perhaps on too many occasions, with the withdrawal of liquidity the pain begins. Hold on, someone at the door.

#60 T on 05.08.22 at 7:08 pm

#52 Rainmaker on 05.08.22 at 6:19 pm
Wrong! Rob is subsidizing the purchase of real property on behalf of the owner. Fixed it.

————

Thanks!

Can you show us all your math?

#61 Robert S. on 05.08.22 at 7:10 pm

DELETED (Anti-vaccine)

#62 Stroller on 05.08.22 at 7:13 pm

A thing which can be rented for $2450 a month is not worth 1.2 million. It is worth about $750k.

Which Mister Market will now demonstrate.

#63 IHCTD9 on 05.08.22 at 7:28 pm

#49 Flaccid Landing on 05.08.22 at 6:11 pm

Writings been on the wall for about 2 years. Parents just sold their hovel in Richmond for 2mil. I just sold mine in Langley for 1.3 mil more then we paid for it in 2007.
All of us are out of here. Going to stuff the unregistered accounts, move the family business and start the US immigration process.
Florida is the front runner but my mom suffers from terrible TDS so it might be Palm Desert as a runner up.

We know three families doing a similar thing but moving to Calgary first and then deciding wether or not to go south.
Everyday I meet/hear about another family selling and moving to Calgary.
———

Yep. Everyone’s crunching the numbers, Trudeau has made many folks of a certain demographic rich – but it’s a one time deal. The kids and new immigrants will be doing an entirely different sort of math unfortunately.

Myself, I got a life built under Chrétien, Martin, and Harper when Canada still offered an even shot for anyone to achieve prosperity, so I’ll likely keep chilling right here in the sticks as retirement is not far off. I never had to pay the price for Trudeau’s leadership. My kids will have decisions to make that I never had to worry about though.

Sucks that one clown PM can come along and completely wreck a whole country, but that’s what we’re looking at here in Canada. He’s got a better than even shot at winning yet again too – part of the reason I’m hanging around (I like the free cash handouts and hard asset pumping).

For those with years of working yet to do, bailing out if possible, is a no brainer. Take the Trudeau RE money and head on south. The younger you are, the better it’ll be…

#64 Flop… on 05.08.22 at 7:38 pm

Aussie, Aussie, Aussie.

Debt, debt, debt…

M47BC

—————————————————

“Has the interest rate rise broken Australia’s housing market fever?

Prices remain high, but the days of frenzied auction bidding may be numbered with the recent interest rate hike and a slowing market

The days of the bull run are over, said John, standing on the street in Redfern as we watched a tepid auction over a terrace not so much unfold, as haltingly and painfully reach some kind of an ending.

“The end of 2020 you’d have 400 people go through a house in half an hour before it was auctioned. You’d have 60 registered bidders, it was rapid fire and crazy,” he said.

John was filming this auction for a segment on the ABC 7pm news bulletin. And the story? A slowing market. It was the first weekend since the Reserve Bank raised interest rates by 25 basis points and there seemed to be, as they say, a vibe shift. Prices were still stratospheric, of course.

But gone was the craziness, the prices climbing quickly until the house was millions over the reserve, the paddles in sweat-soaked paws and the dilated pupils, the weird feeding frenzy of trying to grab a piece of the hot market that seemed it would surge on forever.

I’d just come from a dud Newtown auction where the house was passed in at $1.5m, and only a few people loitered outside – including the tenants who said they had expected to be turfed out and had already found somewhere else to live.

Afterwards, I had a coffee with my friend Nick, who shook his head and cursed auctions. “It’s a horrible, horrible system – such a stressful process and results in you locking yourself into servitude for decades.”

Maybe not so much now. This weekend the Sydney clearance rate was 59% – down from 80% last October. But it had already dropped ahead of the RBA decision – perhaps in anticipation. It was 66% on the last weekend in March, and 56% last weekend.

Has the rate rise, small as it is, helped break the fever?”

#65 Sail Away on 05.08.22 at 7:42 pm

“If you don’t know what to do, do nothing.”

———-

Fine idea. Closely related to:

‘Procrastinate until someone else deals with it’, and the ‘benevolent neglect’ method of raising children.

All good strategies.

#66 Dr V on 05.08.22 at 7:58 pm

“Mortgages at 20% did not ‘decimate’ the economy. –
Garth”

Well I have to disagree.

Things were rockin’ in Nanaimo in the early 80s. Rates kept increasing with no effect, until……..

Was like a black line on the horizon. Phone went dead. Company I was with still had worked lined up but laid off the bottom staff. Was told my time was limited too but kept on for a few more months as we efficiently completed the private sector work (mostly residential development) then burned through the last of industrial and public contracts.

Went searching for other work. All mills had “No
applications accepted at this time” with a burly security
guard blocking the entrance. Even grocery stores had nothing. When a spot was finally posted it was filled immediately.

Got a few days or a week or two with previous employers, but had to travel and expense on my own.
Finally got back on in the woods about 18 months later.
Camp work, away two weeks at a time up the mid-coast.

What gets me to this day was the abruptness of the slowdown. Have not experienced anything like that since.

#67 Mark on 05.08.22 at 8:06 pm

#62 Stroller on 05.08.22 at 7:13 pm

A thing which can be rented for $2450 a month is not worth 1.2 million. It is worth about $750k.

Which Mister Market will now demonstrate.
————–
Even $750k seems extremely generous. Assuming no property tax, no condo fees, no maintenance costs, and 100% occupancy, that gives you a cash on cash return of under 4%. Add a mortgage, and even if its tax deductible this increases your gross return but moves you in to negative net return and cash flow. You are 100% relying on capital appreciation to make anywhere near inflation or above.
If your estimate has some supporting math behind it, would love to see it. Otherwise, $300k sounds more reasonable for those of us still down here on planet earth. If you’re not making at least 8% NET on cash, you should buy stocks instead.

#68 Dana on 05.08.22 at 8:12 pm

Thank you Garth for your time and logic! Through the pandemic and all the uncertainty after, you’ve been our sage wisdom.

#69 Shawn on 05.08.22 at 8:13 pm

GDP and Inflation

#20 In Flat Ion on 05.08.22 at 3:55 pm

Should inflation stack on top of GDP? Does it?

As in…US economy shrunk 1.4%, inflation 8.5%, real economic shrinkage 9.9%?

Calendar Q4 US economy grew 6.9%, inflation was 7%, real economic impact is shrinkage of 0.1%?

Does that make any sense?

******************************
Response to In Flat Ion and to satori and Don

The increase or decrease in GDP as a percent is ALWAYS stated on a real basis. It’s meant to show the increase in activity if prices remained the same.

I’m not sure however that it is quite as simple as the increase in nominal GDP minus inflation. For GDP I believe they use some kind of constant dollars however. Stats Can talks about “chained dollars” and upon looking into it I was never quite sure the relationship of chained dollars to either nominal or real dollars. I know for sure however that GDP growth is meant to be the real increase not the nominal dollar increase. You do not subtract inflation from the reported GDP growth. Even if various doomers would love that to be true.

#70 Satori on 05.08.22 at 8:20 pm

Because purchase price is forever. Rates change over the course of a 25 year mortgage.
—————————————————–
The consensus here is housing will drop prices by 50%… mortgage rates will increase to 8-10%….Stress tests for mortgages increase so fewer people buy. Then housing listings will increase and there will be 1 buyer for every hundred homes that are for sale at the bargin basement prices…because no one in Canada apparently has any money, every neighbourhood will have hundreds of listings.

Hundreds of homeless, kicked out of their houses that they can’t afford, massive bankruptcy, rent prices sky rocketing because of the impossible demand.

Very soon after the entire families squat together in a one bedroom, because people just refuse to live in their Lexus or Mercedes.

And this ‘theory’ has been running since 1999. Yet to happen…

Seriously? Not happening.

#71 crowdedelevatorfartz on 05.08.22 at 8:37 pm

@#64 Floppie
““It’s a horrible, horrible system – such a stressful process and results in you locking yourself into servitude for decades.””

+++

I’d still pick the Aussie auction system over the “Blind Bid and we hold all the cards” crap that is the Canadian house sale system.

Good to see even the house sales Down Under are “under”.

#72 Nonplused on 05.08.22 at 8:45 pm

37 and they are considering kids? Maybe they can swap genders while they are at it.

Ladies, if you haven’t nailed down the children thing by the time you are 35, consider convincing yourself you never really wanted them anyway. The wall is real.

#73 crowdedelevatorfartz on 05.08.22 at 8:46 pm

@#36 Petrol Pricing per Ponzie
“However, not gonna go past 2.50.”

++++
Well , at the rate the Oil companies are going in the Lower Brain land.
We should hit $2.49.9 per litre by …Victoria Day?

P.S.
Approx $0.12 per liter is the “carbon tax” and $0.38 per litre is the “Transit tax” to subsidize the billion dollar boondoggle that is Sky “high cost” Train.
$0.50 per liter that doesnt need to be there.

Lets see if the politicians here have the nads to nuke those exorbitant cash grabs.

#74 T Rex and the dinosaur clique on 05.08.22 at 8:50 pm

If he is in Ontario he doesn’t have to sign another lease at all.

The landlord can increase the rent by the max % per year as listed in the guidelines (for 2022 it is 1.2%).

He goes month to month and he can stay as long as he likes (landlord cannot terminate his lease without going to the tribunal, unless they want to move in themselves).

Don’t sign that 2 year lease!

#75 Ponzius Pilatus on 05.08.22 at 8:55 pm

65 Sail Away on 05.08.22 at 7:42 pm
“If you don’t know what to do, do nothing.”

———-

Fine idea. Closely related to:

‘Procrastinate until someone else deals with it’, and the ‘benevolent neglect’ method of raising children.

All good strategies.
————————
It all depends:
Some say “Don’t just stand around, do something”.
Or “sometimes doing nothing is the best option”.
And then, of course the best one “Just do it!”

#76 Satori on 05.08.22 at 8:57 pm

Construction costs for labour are up. So is the guy earning $40/hour, soon will take $25/hour? Nope.

Lumber is also up? That gonna be cheaper? Trees getting steroid injections? Nope.

Canada has a structural housing shortage. Is that gonna be fixed next month? This year? Nope.

Population declining? Nope.

Canadian couples not wanting to nest? Going against their entire life and family conditioning that you need to own a home? Nope.

House and Garden HGTV going bankrupt? Nope, in fact there is so much viewing that Magnolia, a new home porn network, just landed.

83% of people are emotionally attached to their homes. Maybe that will suddenly change and the majority of people will look at homes as a purely financial undertaking?… uh, Nope.

So guess we will just have to wait and see if there is a half price sale on all these homes, the 50% price drop that we have expected for over 2 decades.

#77 crowdedelevatorfartz on 05.08.22 at 9:09 pm

@#95 Cowtown Pete
“Yeah that was a good example of our government putting left wing virtue signalling ahead of protecting our health care system from overwhelming demand………………… Now the Liberals tell Americans seeking abortions to come on over and fill up our hospitals and clinics”

+++
Yep.
The “Minister of Families” is starting to get some push back for encouraging thousands ( tens of thousands? Hundreds of thousands?) of U.S. women to “come north for abortions”
….when the clinic operators say they are “too busy” and when millions of Canadian families ….don’t even have a Family Doctor.

https://nationalpost.com/news/canada/canada-united-states-abortion-clinics

Epic Fail for the “speak before thinking” Liberal “Minister of Families”
who promised the Sun and deliver a pants dropping Moon”

#78 Ben on 05.08.22 at 9:24 pm

If you don’t know what to do, do nothing.

If only our health officials and politicians followed this advice

#79 T-Rev on 05.08.22 at 9:26 pm

Asking forgiveness in advance for the fact I’m going to post this same comment for the next week.

I’m doing a GF pole to see what everyone thinks will become of rates and inflation. The winner probably won’t be known until 2023 or even 2024. Grand prize is a summertime visit from me on my Harely. To collect you must provide a dry place to sleep in your garden shed. To participate, please answer the following questions and rage your post with #ratepoll

1. At what rate will inflation peak in Canada?
2. What month and year will inflation peak?
3. What month and year will we see inflation fall back below 3%?
4. At what rate will the bank of canada overnight rate peak?
5. What month and year will the bank of canada overnight rate peak?
6. At what rate will the bank of canada 5-yr bond yield peak?
7. What month and year will the bank of Canada 5-yr bond yield peak?
8. When will the Canadian economy enter recession before December 2023?

I will post the same question every day until May 13th, and tabulate results. Remember, use #ratepoll to mark your post so I can easily search for it and add your response to the results, to be published May 15th.

#80 Inadequate on 05.08.22 at 9:35 pm

#3 Dave

Don’t commit to two year lease.

Actually, I would take the 2 year lease. You have every right to remain in that place for 2 years regardless whether the landlord wants to sell within that period. Let the landlord subsidize you.

#81 Sail Away on 05.08.22 at 9:41 pm

As our boulevard’s daffodils and tulips fade away, the daisies are about to pop, closely followed by the dahlias and hyacinths, then finally the roses on the fence lattice. By midsummer the oak trees will have fully leafed out, shading the clover groundcover through the heat.

Call it ‘almost no maintenance’ landscaping. Surprisingly satisfying.

#82 AM in MN on 05.08.22 at 10:00 pm

DELETED

#83 Infrared on 05.08.22 at 10:07 pm

“rates are rising aggressively and will continue for at least a year. “-
previously stated they won’t raise until at least mid 2023
they can reverse all promises again at any time…

#84 Headed to Calgary on 05.08.22 at 10:17 pm

Now on our 4th move in just over five years due to landowners cashing-in on the ridiculous housing market in Kelowna. Our next move has us paying 50% more for less space! We were waiting for the market to moderate before buying, silly us. Anyway, the math doesn’t add up. It probably never will given the ridiculously low salaries for ‘good’ jobs here. Time to pull the plug on the Smokenagan. We’re headed to Calgary, where families can still afford a stable middle class lifestyle.

#85 DON on 05.08.22 at 10:17 pm

#66 Dr V on 05.08.22 at 7:58 pm
“Mortgages at 20% did not ‘decimate’ the economy. –
Garth”

Well I have to disagree.

Things were rockin’ in Nanaimo in the early 80s. Rates kept increasing with no effect, until……..

Was like a black line on the horizon. Phone went dead. Company I was with still had worked lined up but laid off the bottom staff. Was told my time was limited too but kept on for a few more months as we efficiently completed the private sector work (mostly residential development) then burned through the last of industrial and public contracts.

Went searching for other work. All mills had “No
applications accepted at this time” with a burly security
guard blocking the entrance. Even grocery stores had nothing. When a spot was finally posted it was filled immediately.

Got a few days or a week or two with previous employers, but had to travel and expense on my own.
Finally got back on in the woods about 18 months later.
Camp work, away two weeks at a time up the mid-coast.

What gets me to this day was the abruptness of the slowdown. Have not experienced anything like that since.

**********
Ah the 80s on the Island…jobs were plentiful in forestry and then things went south…no longer could people go from high school to big buck mill jobs etc. When I finished high school that was long gone unless you had family connections. People don’t factor in job loss during a recession.
The 90s were a grind through two recessions.

Mortgages were 20% in 1981, not the Nineties. – Garth

#86 Doing my Part on 05.08.22 at 10:22 pm

Finally found something Trudeau is actually good at, “human shield”, good for him and his crew, I approve.

Also, Satori at #44 needs to research how “supply and demand” work.

#87 In Flat Ion on 05.08.22 at 10:38 pm

#69 Shawn

Thank you. What do you make of this?

>>>
Constant Dollars: weighted by a constant/unchanging basket/list of goods and services.

Chained Dollars: weighted by a basket/list that changes yearly to more accurately reflect actual spending. The basket is an average of the basket for successive pairs of years; example of paired years are 2010–2011, 2011–2012, etc.

https://en.wikipedia.org/wiki/Chained_dollars

And is Canadian GDP growth/shrinkage reported QoQ or YoY? Seems it would have to be YoY, as you can’t compare Q4 to Q1 without some seasonality tweaking in the very least.

We know there is a lot of massaging going on to these reported numbers. It’s not only China doing it. Garth pointed this out about RE reported data long time ago when their numbers got a dose of spin – aka Frankendata. No one trusts the inflation numbers really, but GDP numbers are fully trustworthy?

Do we have any clear summary of GDP number, including calculation methodology and all details that make it up?

Or is that yet another sausage number? They don’t want us to know how it’s made?

#88 Doug t on 05.08.22 at 10:44 pm

So follow the rule

“Welcome to Fight Club. The first rule of Fight Club is: you do not talk about Fight Club. The second rule of Fight Club is: you DO NOT talk about Fight Club!

Glove up – it’s gonna be a banger

#89 DON on 05.08.22 at 11:11 pm

The 90s were a grind through two recessions.

Mortgages were 20% in 1981, not the Nineties. – Garth

*******
Affirmative! The 90’s recessions were a grind.

#90 Overheardyou on 05.08.22 at 11:29 pm

I wonder if there is correlation between stock markets doing poorly and house prices, in terms of mindset anyway.

#91 T Rex and the dinosaur clique on 05.08.22 at 11:45 pm

People don’t remember the late 70s and early 80s likely because they were not born yet.

I was. I lived through that time.

In 1975 you could graduate from high school, walk across the road and get a high paying factory job that would qualify you for a car loan and a mortgage.

Then came hyper inflation and the high interest rates.

Whole thing was caused by oil. A cartel. They turned off the taps. Everything went nuts.

Like a bomb going off. One day it was all swinging and easy. Next day we were driving around in four cylinder crap boxes cause we couldn’t afford the gas for our V8s anymore.

Then all the work was gone. Just like that. No jobs anywhere.

You can still find the old cars. Can’t drive them anymore unless you are loaded. Takes 3-400 dollars to fill the tanks on ’em and it hardly gets you around the block.

Big blocks they used to call them. I still remember that rumbling sound they used to make.

One day it was just all gone…..

Oil is the thing that drives it all.

You see gas going up in price rapidly, that is the canary in the coal mine. That is the sign it is all gonna happen again….

#92 Tom from Mississauga on 05.09.22 at 12:13 am

I know what’s happening.

Globalization to sequestered imperialism (1st trade now health and security), excess workforces to excess retirees and excess carbon and food to shortage, all making free cost of capital permanently very expensive.

Expensive capital will rid us of emerging markets, crypto, weed stocks, IPOs, Robinhood traders, wealth management, capital markets and of course house whiners. The most unexpected? Green tech. Nukes, wind and solar. The costs are all front end loaded, nobody will be able to afford. Fossil fuel plant is cheaper to build and inventory burnt for cash upon taking delivery.

#93 Adam Shien on 05.09.22 at 1:05 am

Why buy a bubble overpriced Toronto home when you’re one phone call away from being banned from it perpetually due to a complaint to the authorities or courts?
Property rights are not high in Canada compared to the USA where home prices are way lower.
Unless you inherited a farm in the middle of nowhere, or you live very close to where you work in a place where you blend in with the crowd, I’d strongly recommend AGAINST home ownership.
Too much liabilities and ambulance chasers waiting for a problem to happen.

#94 EmmEmm on 05.09.22 at 1:34 am

Dear Garth and Ryan – I see the market dips as a good opportunity to max out TFSA and use any unused cash in registered accounts to buy some quality ETFs and build a stable portfolio.
Would you be so kind as to write a blog post with some sample portfolios of ETFs ranging from low volatility, balanced and high volatility sets?

#95 West Coast on 05.09.22 at 1:45 am

That dog means business. He could have taken over the manhunt in NS that had irrational poorly training mentally emotionally unfit RCMP constables firing wildly at churches where civilians had taken refuge, civilians, themselves, their own during the it was “ too dark to see” ( as if that’s an excuse to loose a gun barrage into the community).

Baron likely had the upper hand. Did you read the testimony of the officers who swear they did the right thing by firing blindly”. This incident alone ensures I’d never consider NS to reside. Baron deserves a promotion not retirement and a nice steak every day.

#96 TurnerNation on 05.09.22 at 2:19 am

New Kando construction will remain uppa up…
Haha never heard this before. Our rulers’ Long Game. Get to know it.
(This country know longer exists BTW. It is a fictional entity ruled by the supra-national forces.
Aka an open air tax farm camp. March 2020 it all went into overdrive.)

https://www.bnnbloomberg.ca/canada-needs-to-get-to-100-million-people-by-2100-blackrock-s-mark-wiseman-1.1337065
Canada needs to get to 100 million people by 2100: BlackRock’s Wiseman

—-
— War on Meat/control over our food supply. Newspeak, planting the idea that meat ruins the world.
Oh sure why aren’t these Lefties banning the war in Ukraine? Think of the fuel used, the pollution.

.Can’t afford steak? Veggie burgers won’t help you save either
Swapping your beef burger for the plant-based variety might feel like a good move for the environment. But saving the planet isn’t going to save you any cash. Photo via @globeandmail

— Almost back to normal! I bet our rulers would love this kind of set up.

SHANGHAI, May 6 (Reuters) – China is setting up thousands of permanent PCR testing stations, with 9,000 already completed in Shanghai alone, as authorities seek to “normalise” tough pandemic controls even after the current round of lockdowns end.

#97 Summertime on 05.09.22 at 5:45 am

In the ‘extremely tight’ labour market wages have increased by 3 % compared to last year, while CPI is officially 7 % and real inflation is at least double that, maybe more, judging by Costco dairy prices for example.

In the world in the meantime in a year energy increased by 137 %, food and metals by 28 %.

The interest rate in the meantime is 1 % (one percent) with promises of potential increase to 3 % (likely not gonna happen)


In January 2022, CPP benefits were increased by 2.7%, calculated as an average of the preceding 12 months’ Consumer Price Index.

I was looking for a word for the combination of statisticians and central ‘bankers’ that corresponds to their abilities and skills and I could not find a pleasant one.

Suggestions?

#98 Jane Merkel on 05.09.22 at 5:52 am

Joke of the day. Trudeau flies into Ukraine on his monogrammed jet with his name emblazoned in 19 ft letters to raise the Canadian flag at our embassy. This after flying the flag at half mast for a year in Canada over unmarked graves where not a single body has been proven to exist nor a single body exhumed. Is he the nadir of photo ops or what?

#99 ABC123 on 05.09.22 at 6:28 am

The various comments today , yesterday and throughout the past few years from posters here all “ waiting for a correction “ to buy , or “ swooping in” or “ vulturing” etc etc. when prices “ correct “ suggest that the average Canadian is as horny as ever for real estate and that the price correction will be shallow and uneventful ,if there is any at all.

As for the financial markets , the willingness to sell out , whether they are rising or falling for that matter , as clearly evidenced recentely,is in stark contrast .

I stand by my conviction that real estate enjoys significantly more trust as an asset class , by ‘ brick licking Scott Mcgillvrays and Brad Lamb wannabes Canadians” than a B and D portfolio ever will

#100 NoName on 05.09.22 at 6:47 am

#81 Sail Away on 05.08.22 at 9:41 pm

Clover ground…

Beside you another dude and us i dont know any one who has clover as gras. Only downfall is it does a number on a lownmore deck when cut.

#101 Fortune500 on 05.09.22 at 7:09 am

Thank you for profiling Robert. Finally some more realistic numbers for the slightly above average Canadian couple.

#102 Fortune500 on 05.09.22 at 7:15 am

I have to say, we have been looking at 3 bedroom 2 bathroom homes with at least an acre between Belleville in the West and Hammond Ontario in the East. You know, the somewhat honey spot home for a family that might be able to commute half an hour to a small city. The selection still stinks. Inventory is still really really low. When are we going to see lots of houses coming to market? Is this market different than the big city homes? Everyone seems to say the outer areas, cottage country etc. will sink first. Still not seeing it.

#103 CindyAF on 05.09.22 at 7:40 am

DELETED (Anti-vaccine)

#104 Steven Rowlandson on 05.09.22 at 8:11 am

“CBs cannot and will not let inflation win. This rate roulette has just begun.”

Since lending is the real source of inflation then jacking up rates to encourage debt repayment would be the antidote to inflation. We have some very big debt junkies out there and that would suggest some big interest rates to curb their excesses. Low interest rates have set governments and the house horny and other super debtors up for a very big fall I think.

#105 crowdedelevatorfartz on 05.09.22 at 8:13 am

@#99 ABC123
“I stand by my conviction that real estate enjoys significantly more trust as an asset class , by ‘ brick licking Scott Mcgillvrays and Brad Lamb wannabes Canadians” than a B and D portfolio ever will”

+++
Realtor?

#106 crowdedelevatorfartz on 05.09.22 at 8:20 am

@#91 T Rex
“Then all the work was gone. Just like that. No jobs anywhere.”

+++
Yep.
There’s gonna be a lot of high debt, unemployed, private sector people out there losing everything.

But not the worry.

The massively over staffed public sector, in all it’s multiple pronoun glory, will do just fine.

#107 Sail Away on 05.09.22 at 9:09 am

#100 NoName on 05.09.22 at 6:47 am
#81 Sail Away on 05.08.22 at 9:41 pm

Clover ground…

Beside you another dude and us i dont know any one who has clover as gras. Only downfall is it does a number on a lownmore deck when cut.

——–

Simple. Don’t cut it. Ours gets about 8″ high and feeds the deer. Looks good, too.

#108 Ponzi Lambradi on 05.09.22 at 9:18 am

Now is the best time to invest in rural Ontario real estate. $888,888 for a home in Stratford is cheap.

#109 Dharma Bum on 05.09.22 at 9:28 am

#99 ABC123

I stand by my conviction that real estate enjoys significantly more trust as an asset class , by ‘ brick licking Scott Mcgillvrays and Brad Lamb wannabes Canadians” than a B and D portfolio ever will.
——————————————————————————————————

You do have a point.

THAT”S why you need to own BOTH real estate AND have have a B&D portfolio.

Those that do not, are ultimately financial losers.

Oh, I forgot one more thing: The real estate ownership must be free and clear, and no margin buying on the B&D.

You must carry no debt to screw up the formula.

Winner winner chicken dinner.

#110 IHCTD9 on 05.09.22 at 9:43 am

#102 Fortune500 on 05.09.22 at 7:15 am
I have to say, we have been looking at 3 bedroom 2 bathroom homes with at least an acre between Belleville in the West and Hammond Ontario in the East. You know, the somewhat honey spot home for a family that might be able to commute half an hour to a small city. The selection still stinks. Inventory is still really really low. When are we going to see lots of houses coming to market? Is this market different than the big city homes? Everyone seems to say the outer areas, cottage country etc. will sink first. Still not seeing it.
_____

Draw a line on a Map of Ontario through Ottawa and Bancroft. Everything a little North, and south all the way down of that line is severely overpriced. East/West makes no difference anymore. Heading North to hwy 17, houses start getting affordable with decent bang for the buck. Once you reach Hwy 11, there are deals, but you’re as North as Winnipeg at that point. Think sub -20 average temps 3 months of the year with sub -45 degree extremes.

What Trudeau allowed to happen with housing during the Pandemic is criminal. Now it’s a waiting game – could be a couple years. If higher rates don’t stick for the long haul, then I expect not much will change as the exodus out of the GTA (maybe Ottawa soon on top) will poison RE prices permanently.

Post Trudeau Canada “honey-spots” require some extra effort to find now. You’ll need a compass and a thermometer. Head north in January until the thermometer reads 50 below. There’s your sweet spot.

#111 crowdedelevatorfartz on 05.09.22 at 9:46 am

https://www.reuters.com/business/healthcare-pharmaceuticals/go-home-covid-hit-shanghai-beijing-tell-residents-avoid-social-contacts-2022-05-09/

More lock downs in China.

Their economy is getting hammered.

Car sales down 48% for this time last year.

Speaking if which.
Has anyone been to a car dealership here in Canada lately.
A friend ordered a Bronco ( shaking my head) and he’s been told 6 -12 months for delivery.

He dropped by the dealership yesterday…..
No cars in the show room…. none.
And there were only three staff.

#112 T Rex and the dinosaur clique on 05.09.22 at 10:20 am

#106 crowdedelevatorfartz on 05.09.22 at 8:20 am

@#91 T Rex
“Then all the work was gone. Just like that. No jobs anywhere.”

+++
Yep.
There’s gonna be a lot of high debt, unemployed, private sector people out there losing everything.

But not the worry.

The massively over staffed public sector, in all it’s multiple pronoun glory, will do just fine.

//////////////////////////////////////

Yup.

Last time it happened it was the Arabs that did it. (can you still say that, or is that word banned now)?

They figured they were gettin’ screwed over by the US (they were) and so they banded together, formed an oil cartel and shut things down. Biggest crisis ever. They actually reduced the speed limits on all of Ontario’s highways so as to save gas (that is why you can drive faster than the limit on pretty much any Ontario road – the design speed is above the set limit because they reduced the speed limits).

Big thing this time is we are doing it to ourselves. Last time it was the Arabs that did it. This time, it is us.

Turn our own taps off, print lots of money to pay all the civil “servants” and then transition to a “green” economy.

Which is such a load of bull because the folks running the green machine are putting out CO2 like it is goin’ out of style in China, running their factories there instead of here.

And look at the way they measure carbon emissions? Per capita. These guys aren’t dumb. China has way more people than we do. So give them a pass on emissions, put all your factories there, and then shut down North America and roll out the green revolution.

We are doing it to ourselves. Kids are all up in arms cause there are no jobs and houses cost like a billion dollars and you can’t pay off a mortgage in a human lifetime.

And there is tons of oil. We just can’t burn it anymore, because we won’t let ourselves.

It is unbelievable to watch. It is like watching a person play with a cat chasing a flashlight. Our young folks are excited by “green things” even if it is all a mirage, sold to them by the corporations they appear to worship.

#113 IHCTD9 on 05.09.22 at 10:40 am

#91 T Rex and the dinosaur clique on 05.08.22 at 11:45 pm

…You can still find the old cars. Can’t drive them anymore unless you are loaded. Takes 3-400 dollars to fill the tanks on ’em and it hardly gets you around the block.

Big blocks they used to call them. I still remember that rumbling sound they used to make.
____

The old big blocks actually didn’t go away until the mid 2000’s – they just got plopped into pickup trucks. My daily driver (yes even now) has an 8.1 litre (496 cubic inch) V8. It’s the second largest mass produced factory V8 ever stuffed into a passenger vehicle next to the 500 CI Cadillac. The modern common-rail Intercooled turbo diesel powerhouses finally put the last few nails in the coffin for these old dinosaurs. The Vortec 8.1 in my truck traces it’s lineage directly back to the 396 CI Big Block Chevrolet introduced in 1965.

It’s expensive to run on all fronts, but man it sounds good, and has neck snapping torque. Lights up the 265/75/16’s with ease, even on a 30 km/hr punch. Not bad for a 7000 lb tank. It’s a ball to drive (in a straight line). I won’t have it much longer as I am downsizing. Won’t miss the fuel bill, but definitely gonna miss the power and the sound when it’s gone.

#114 Paul on 05.09.22 at 10:50 am

#103 CindyAF on 05.09.22 at 7:40 am
DELETED (Anti-vaccine)

– – ———————————————————————————————
Wow, this is so 2020!!

It’s interesting how PP is energizing the whackos. – Garth

#115 Defeat on all fronts nothing works we are led by creti.ns on 05.09.22 at 10:54 am

DELETED

#116 ABC123 on 05.09.22 at 11:13 am

am
@#99 ABC123
“I stand by my conviction that real estate enjoys significantly more trust as an asset class , by ‘ brick licking Scott Mcgillvrays and Brad Lamb wannabes Canadians” than a B and D portfolio ever will”

+++
Realtor?
———

No. You fundsalesperson/planner/financial advisor ??

#117 Shawn on 05.09.22 at 11:22 am

GDP questions asked and answered

#87 In Flat Ion on 05.08.22 at 10:38 pm asked
#69 Shawn

Thank you. What do you make of this?

>>>
Constant Dollars: weighted by a constant/unchanging basket/list of goods and services.

Chained Dollars: weighted by a basket/list that changes yearly to more accurately reflect actual spending. The basket is an average of the basket for successive pairs of years; example of paired years are 2010–2011, 2011–2012, etc.

https://en.wikipedia.org/wiki/Chained_dollars

Response: I make of it that it’s complicated but the statisticians use the best measures they can and they are the experts.

Asked: And is Canadian GDP growth/shrinkage reported QoQ or YoY? Seems it would have to be YoY, as you can’t compare Q4 to Q1 without some seasonality tweaking in the very least.

Response: Great questions, they should always clariffy. In general a reported GDP growth is usually year over year. They will take a month’s change or a quarter’s change and annualize it. Yes they do seasonality adjust it to try to correct for seasonality.

Asked: We know there is a lot of massaging going on to these reported numbers. It’s not only China doing it. Garth pointed this out about RE reported data long time ago when their numbers got a dose of spin – aka Frankendata. No one trusts the inflation numbers really, but GDP numbers are fully trustworthy?

Response: Actually, I trust the CPI number as being honestly reported but subject to measurement difficulties and I would say the same about GDP. Statistics Canada is made up of professionals and are not beholden to the government. They have a lot of job security and professional integrity. This is not China.

Asked: Do we have any clear summary of GDP number, including calculation methodology and all details that make it up?

Response: Dig into the reports. But there is complexity to it. I have gone to the trouble of asking Stats Canada few years about some of the calculations and the meaning of chained dollars and they were quite helpful.

Asked: Or is that yet another sausage number? They don’t want us to know how it’s made?

Response: There is no “they” .

#118 Damifino on 05.09.22 at 11:24 am

#99 ABC123

I stand by my conviction that real estate enjoys significantly more trust as an asset class , by ‘ brick licking Scott Mcgillvrays and Brad Lamb wannabes Canadians” than a B and D portfolio ever will
———————————

I completely agree. But it’s not particularly useful information for anyone seeking profitable long term investment. “Enjoying trust” does not speak much to financial realities on the ground.

For that, you must turn to people who eat, breathe, and sleep the wider economic picture, all day, every day.

Doug and Ryan come to mind, not Scott and Brad.

#119 AbC123 on 05.09.22 at 11:31 am

Dharma Bum on 05.09.22 at 9:28 am
#99 ABC123

I stand by my conviction that real estate enjoys significantly more trust as an asset class , by ‘ brick licking Scott Mcgillvrays and Brad Lamb wannabes Canadians” than a B and D portfolio ever will.
——————————————————————————————————

You do have a point.

THAT”S why you need to own BOTH real estate AND have have a B&D portfolio.

Those that do not, are ultimately financial losers.

Oh, I forgot one more thing: The real estate ownership must be free and clear, and no margin buying on the B&D.

You must carry no debt to screw up the formula.

Winner winner chicken dinner.
———-

I agree with every point you made above. The point I was trying to make is that Canadians view real estate as a risk free play , willing to leverage , beg borrow and steal to own and financial assets as a gamble which is for selling out of at the slightest blip or hint of decline. Reference that past few weeks as evidence .

If this is a duplicate comment I apologize as iPhone ‘hiccuped’.

Hopefully elevator farts gets it this time

#120 Observer on 05.09.22 at 11:41 am

It’s interesting how PP is energizing the whackos. – Garth

^^^^^^^^^^^^^

I think it’s mutual.

#121 Sail Away on 05.09.22 at 11:47 am

Oh my, the markets. Red across the board. Sometimes you’re the batter, sometimes you’re the ball.

This has become significant, but… due to no fundamental company weakness. That’s important.

#122 crowdedelevatorfartz on 05.09.22 at 11:48 am

@#116 123ABC
“No. You fundsalesperson/planner/financial advisor ??”

+++
Nope.
Just confused as to why a real estate pumper would come to a financial Blog to spew “Real” estate vitriol.

Multiple real estate mortgage holder?

#123 IHCTD9 on 05.09.22 at 11:53 am

#111 crowdedelevatorfartz on 05.09.22 at 9:46 am
https://www.reuters.com/business/healthcare-pharmaceuticals/go-home-covid-hit-shanghai-beijing-tell-residents-avoid-social-contacts-2022-05-09/

More lock downs in China.

Their economy is getting hammered.

Car sales down 48% for this time last year.

Speaking if which.
Has anyone been to a car dealership here in Canada lately.
A friend ordered a Bronco ( shaking my head) and he’s been told 6 -12 months for delivery.

He dropped by the dealership yesterday…..
No cars in the show room…. none.
And there were only three staff.
____

A local Dodge dealership hastily constructed a parking lot across the road from their lot. A week later, there are a good 50 RAM Trucks parked in there. I thought, Hmm, I guess the shortages are over – at least at whatever plant all those trucks came from. Over the next few weeks, none sold. Then I noticed there are no window stickers on the trucks.

Last week, I was told those trucks are incomplete, and are just being stored there until the missing parts arrive.

The (Big) GM dealer 15 seconds away from this lot has like 4 trucks. Local YAMAHA dealership has four 2022 bikes on the floor. Zero quads, zero SXS’s.

It’s just a mess.

#124 Mattl on 05.09.22 at 11:58 am

#33 Stone on 05.08.22 at 4:52 pm

Am I glad I don’t own real estate. My B&D is currently at -5.89% ytd but it pays off a sweet dividend cashflow regardless. Still feeling good about what I’ve got going for myself.
—————————————————–

Ya thank god you didn’t fall into the RE trap the past 15 years, what a mess it has been; a stable place to live, double digit YOY tax free capital appreciation and at the end no more payments. You definitely read the tea leaves right on RE Stone, really dodged a bullet.

#125 bdwy on 05.09.22 at 12:10 pm

somewhat off topic …last nite I was in a corner store with a bitcion machine/atm and pressed the button for fun.

only $6,500 mark-up on buying a single coin.

i think indicative of the class of ‘investors’ in fairy money.

#126 Damifino on 05.09.22 at 12:14 pm

#117 Shawn

There is no “they”.
—————————-

True. There is also no “cloud”.

It’s just somebody else’s computer.

#127 John on 05.09.22 at 12:21 pm

“Illegal” truckers.
What?
They were protesting because they wanted to work.

Voluntarily. – Garth

#128 cramar on 05.09.22 at 12:25 pm

If you don’t know what to do, do nothing.

“Don’t just do something, sit there!”
― Thich Nhat Hanh

#129 crowdedelevatorfartz on 05.09.22 at 12:37 pm

@#123 IHCTD9
“The (Big) GM dealer 15 seconds away from this lot has like 4 trucks. Local YAMAHA dealership has four 2022 bikes on the floor. Zero quads, zero SXS’s.

It’s just a mess.”

++++

Apparently another “Car crunch” awaits.

Seems the Car rental agencies have flogged all their 2020 vehicles during the Covid lockdown and now are scrambling for replacements.
Nothing available.
Gonna be tons of fun watching tourists this Summer with crying brats and multiple luggage squeezing into a used Prius.

#130 ABC123 on 05.09.22 at 12:37 pm

#122 crowdedelevatorfartz on 05.09.22 at 11:48 am
@#116 123ABC
“No. You fundsalesperson/planner/financial advisor ??”

+++
Nope.
Just confused as to why a real estate pumper would come to a financial Blog to spew “Real” estate vitriol.

Multiple real estate mortgage holder?

——-

Nope is right. You don’t get it lol

#131 Philco on 05.09.22 at 12:38 pm

I think people will see how ignorant the imediate push to lose fossil fuels is.
I ya think lifes expensive now just watch.
Many wont be living to large as they set themselves up for failure in my view.

https://www.cnbc.com/2022/05/07/diesel-fuel-is-in-short-supply-as-prices-surge-heres-what-that-means-for-inflation.html

#132 crowdedelevatorfartz on 05.09.22 at 12:56 pm

@#130 123abc
“You don’t get it lol”
++

Brag to us in 6 – 12 months when “real” estate is at the bottom of the financial pit as Interest rates increases squat over the hole……

#133 morrey on 05.09.22 at 1:02 pm

on 05.04.22 at 11:02 pm I wrote:
https://www.greaterfool.ca/2022/05/04/hard-or-soft/

In Dec. 2021 the house next to my sister’s place went on the Market and in Jan. 2020 sold for $2.2MILL. On Monday a house across the street, same sized lot, went on the market for $2.4MILL! So how can they be asking for such a high price?! Will be watching with interest to see if that house drops it’s asking price by 200-300K ?

Today on May 9th sister reports the house listed at 2.4Mill sold for 2.39! more than the nearby one that sold in Jan for 2.2MILL. Don’t know what to make of this? Van RE still in crazy territory? House listed on a Monday, sold on a Thursday after two buyers came by to view house, one was a builder and was the winning bid. no subjects, no one week cooling off period either. done deal. VanRE still crazy after all these years….

Watch the stats, not single sales. There are always greater fools. – Garth

#134 IHCTD9 on 05.09.22 at 1:03 pm

#129 crowdedelevatorfartz on 05.09.22 at 12:37 pm
@#123 IHCTD9
“The (Big) GM dealer 15 seconds away from this lot has like 4 trucks. Local YAMAHA dealership has four 2022 bikes on the floor. Zero quads, zero SXS’s.

It’s just a mess.”

++++

Apparently another “Car crunch” awaits.

Seems the Car rental agencies have flogged all their 2020 vehicles during the Covid lockdown and now are scrambling for replacements.
Nothing available.
Gonna be tons of fun watching tourists this Summer with crying brats and multiple luggage squeezing into a used Prius.
___________

Sales guy at the YAMAHA dealer says the manufacturing plants are forecasting supply issues right thru 2023. If that holds across the board (cars, trucks etc…), we could be in for a $h!tty couple of years.

#135 Flaccid Landing on 05.09.22 at 1:06 pm

It’s interesting how PP is energizing the whackos. – Garth

Trudeau has energized far more whackos for far longer.

#136 Faron on 05.09.22 at 1:17 pm

#121 Sail Away on 05.09.22 at 11:47 am

LOL @BagholderQuotes

#137 IQ test for liberals on 05.09.22 at 1:20 pm

DELETED (Anti-vaccine)

#138 bdwy on 05.09.22 at 1:34 pm

rome bans picnics to prevent wild boar attacks? sounds lovely!

#139 Quintilian on 05.09.22 at 1:52 pm

Crowdie, just be aware that gadfly realtor ABC123
is a leading indicator of their desperation, I think they finally get it.

But most of them are a one trick pony and just can’t let it go.

#140 Steve on 05.09.22 at 1:52 pm

DELETED (Anti-vaccine)

#141 Theresa Tam is a CHIMESE AGENT on 05.09.22 at 1:53 pm

DELETED (Anti-vaccine)

#142 Sail Away on 05.09.22 at 1:55 pm

#136 Faron on 05.09.22 at 1:17 pm
#121 Sail Away on 05.09.22 at 11:47 am

LOL @BagholderQuotes

——–

Sigh. Titter and giggle, titter and giggle.

You track my portfolio and you know its performance over the last few years. It’s exceptionally poor form to titter and giggle during general market downturns that affect everyone. Meanspirited for no reason.

#143 Philco on 05.09.22 at 1:56 pm

#135 Flaccid Landing on 05.09.22 at 1:06 pm

Yup LOL. The guy that created the divide!

#144 Sail Away on 05.09.22 at 2:03 pm

#138 bdwy on 05.09.22 at 1:34 pm

rome bans picnics to prevent wild boar attacks? sounds lovely!

——–

Wild boars may have their downsides, but they are absolutely delicious. They eat your lunch, you eat them for dinner. Fair trade.

Wary, though: after being hunted just a few times, the rest become completely nocturnal.

#145 bdwy on 05.09.22 at 2:04 pm

I think people will see how ignorant the imediate push to lose fossil fuels is.
I ya think lifes expensive now just watch.

———————-

oil finally takes a hit today after a week of ath’s while the blood flowed everywhere else.

it will come right back. unless the world chooses to starve and freeze rather quickly.

cbc radio has no ads and the news (so i end up leaving it on), wrapped around the most rabid lefty insanity you can imagine. supporting choking off the energy industry was the highest virtue one could signal.

bingo- buy signal. zeo 32 at the time. 5% sale today at 63 and change.

choke off the supply of the most essential good for most of humanity? supply/demand imbalance. putin too.

imbalance will take 1-2 years to fix.

#146 Dr V on 05.09.22 at 2:09 pm

121 Sailo

“Oh my, the markets. Red across the board. Sometimes
you’re the batter, sometimes you’re the ball.”
—————————————————-

Indeed. did some quick estimates on the weekend of gains from markets pre-covid high to current levels.
Got the following:

TSX +16%
SP500 +22%
NASDAQ +25%
R2000 +8%
N225 +12%

None sound unreasonable. Can we even say we are about where we would be historically speaking in a
moderate economy? But what lies ahead?

Made small purchase yesterday for 6% divvy.