‘Nobody thought that’

Irony. Part deux.

In mid-February, before Putin, China lockdowns and trucker-squishing in Ottawa, the average Canadian house was selling for $816,720.

It was a record. This blog said we had peak house. And we did. Every government in the land agreed there was a real estate crisis. Valuations had to fall – whether by taxing investors more or drastically increasing supply. Politicians lined up to do both.

In March the Bank of Canada started to tighten. The CB rate edged up a quarter point, bond yields accelerated and mortgages rose. The average house price across the nation dipped to $796,000.

In April, a bigger rate hike. Mortgages crossed 4% for the first time in years. House sales fell 40% in Toronto and 25% nationally. The average Canadian property dropped to $746,000. Listings increased. Buyers retreated. The price decline accelerated.

So here is the scorecard: in two months average sale prices declined $70,720, or 8.65%. That means buyers in February who put 8% or less down may well have slipped into negative equity by the end of April, owing more than the home was worth. And let’s not forget that a drop of 8.65% in sixty days is equivalent to an annual decline of 52%. Ouch.

By the way, the sales plop across Canada from March to April was 12.6%. A month from now we’ll likely see a number equal or larger. And remember this is all of the country, including those few markets (like Calgary) where high commodity prices have actually goosed sales and valuations. In the GTA or the LM, things are far more consequential.

Okay, back to irony. Check out this news item, breathtakingly reported Monday morning by the newsy gnomes at Bloomberg:

Canadian consumer confidence recorded its sharpest weekly decline since the depths of the pandemic, with inflation and a deteriorating outlook for housing weighing on sentiment.

The Bloomberg Nanos Canadian Confidence Index has been losing ground since last July, and just dropped to the lowest point since the end of 2020, when we were all going to die from Covid. It just took its biggest dump since the early days of the pandemic.

What are people worried about?

Inflation and rising prices, natch. The Ukraine war, of course. But also the “housing reversal.” Only slightly more than half of us now expect real estate to continue to rise in value, down sharply from 64% last month. Despite full employment and rising incomes, plus billions in government support programs, almost four in ten say their personal finances are worse. Like on this pathetic blog, pessimists outweigh optimists three to one. Fully 50% of Canadians think the economy will worsen as house prices drop and only 18% think things will be better.

Wow. What can you say?

We had a national crisis in February when real estate prices topped out, listings were scant, competition among buyers was brutal and millions of homeless, house-lusty Mills were beating on politicians to ‘do something.’

Now ‘something’ happened. And we have a new crisis. A ‘housing reversal’ that has sapped consumer confidence and made half the population think we’re in an economic death spiral. All because properties are cheaper – which is exactly what folks were desperate for two months ago. Suck. Blow. Suck.

In the meantime, all the moaning, wailing, gnashing and snorting has emboldened politicians to unleash a torrent of market-bending policies. For example, when Doug Ford ascends to another majority mandate in June, Ontario will have a crushing 20% tax on non-local buyers and formally support new municipal taxes on under-utilized properties. Every party in that election has committed to rent controls, fresh levies on multiple-property owners or extra taxes impacting real estate. It’s a pile-on at a moment when none is needed. Mr. Market is doing a fine job of self-correction. So good, in fact, we now have a “housing reversal” crisis.

Says crusty mortgage broker Ron Butler: “Just as rates under 2% caused a RE Boom rates over 5% will cause a RE Bust. Not 60% down from the Feb 2022 high in Ontario but the regions where the prices soared will see the worst damage… Prices went up far higher and the process continued much longer than anyone thought. Did anyone in 2018 really think a 2500 sqft detached on a 40 ft lot in North Ajax would sell for $1.6M? Really? Be honest…. nobody thought that.”

No, we did not.

Nor did we expect an entire nation to be this tenuous and gullible. More reasons to like dogs.

About the picture: “Meet Bane,” says Randy. “Lover of all things made of wood and champion log cabin builder. It’s not actually raining in this shot but rather this is Bane’s outfit of choice as he prepares for his daily romp through the steerage section. Years of exposure to the bowels of your blog has turned him into a bit of a doomer. However, on the upside, since he got neutered he now runs with a well-balanced and diversified pack.”

113 comments ↓

#1 Rick Fast on 05.16.22 at 3:14 pm

GTA will crash by 50% when all is said and done top to bottom! 12-18 months to go!

#2 Alan Schwartz on 05.16.22 at 3:16 pm

I remember the days when rent for a 1-bedroom in London, ON was $800 a month in 2015. Now it’s advertised for $1,800 a month.

I can’t even buy a 1/4 acre plot 500 miles away from the GTA proper, because even that is being sold for $250,000 for a piece of grass where the risk of Rabies is high.

I hope that things go back to normal. It’s insane.

#3 Tom on 05.16.22 at 3:20 pm

So prices went up 50% since the start of the pandemic and they drop a few percent and everyone is panicking. The Bank of Canada created the housing bubble with low rates and now that housing drops a few percent, the Tiffster says the rate increases will depend in part on the effect on housing. That suggests to me that even though the Bank of Canada is supposed to be impartial, the govt won’t let housing pop, so why would we see a huge price cut?

#4 Faron on 05.16.22 at 3:22 pm

#152 James on 05.16.22 at 2:05 pm
#141 Faron on 05.16.22 at 1:09 pm

I’m in full support of responsible efforts made toward fulfilling true autonomous transportation technology. There are incredibly talented computer scientists, computer engineers and mechanical engineers that are working on this problem and have been for decades. They fully acknowledge how incredibly hard this is, how far we are from large-scale application and the responsibility that comes alongside the efforts. More so when training the AI on public roads.

Musk’s/Tesla’s efforts fail these standards horribly and have seen an ongoing brain drain from the company. The resulting crappy software will/is eroding public confidence in autonomous driving to the ultimate detriment of society. The current software is composed of half-cocked hacks aimed solely at keeping TSLA’s stock price afloat by selling a product that actually doesn’t (and probably never will with his approach) exist. Kinda like his Cybertruck fraud and Tesla’s new acceptance of $20k pre-orders for its semi ($15k will be non-refundable) and his current attempt at rugging investors in Twitter.

#5 Kurt on 05.16.22 at 3:24 pm

This has been building for over a decade. It could have been stopped by the BOC at any time. The reasons it wasn’t:
– housing is specifically excluded from the CPI (“because it’s so volatile.) Excluding the number one personal expense from a measure of the cost of living is bat-shit insane.
– “we don’t want to adopt a measure that will punish the whole economy to address a problem that is confined to a small area”. So you let it ride until it becomes a big problem – great idea that.
Can I really blame the governors of the bank? Not really. Canadians voted for the people who appointed them, childish whiny Canadians who refused to believe that the party had to end, and the longer they waited the worse it would get. Canadians need to GTFU.

#6 Re-Cowtown on 05.16.22 at 3:24 pm

And remember this is all of the country, including those few markets (like Calgary) where high commodity prices have actually goosed sales and valuations. – Garth

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

I’m watching the Calgary housing market very carefully and things are not what they appear. Certain highly desired neighborhoods are seeing prices hold (so far), but the rot started at the ‘burbs and has been slowly working it’s way to the inner city.

Two months ago, sales above listed price were very common. Now they only happen when the realtor lists the property well under the market value.

Much more common are price reduced and back-on-market re-listings after the crickets or the deal falls apart on financing.

I’ll estimate that around 20% of the houses go price reduced, some within a week or so after listing.

Price reductions are around 5% to 7.5%, with 10% not uncommon. I’ve seen a few at almost 20% after they’ve been on the market for 6 weeks or so.

I doubt that the high oil prices have had much of an effect. The huge increases (after equally huge losses) in personal wealth have been concentrated in a few wealthy investors hands so far. There has been very little trickle down effect to date.

Oil companies have been lean to the point of anorexia and large scale hiring has not yet taken effect. In some ways, quite the opposite; smaller companies are putting themselves up for sale, so no new hiring taking place.

#7 Faron on 05.16.22 at 3:35 pm

#154 Sail Away on 05.16.22 at 2:35 pm

Don’t feed the coke-monkey.

Awww, you’re no coke monkey Sail Away. Here, I’ll change it for you:

Don’t feed the coke-monkey trolls.

#8 Doug t on 05.16.22 at 3:36 pm

This nation has a mental health crisis – stress is peak – my brother had a heart attack on the weekend – people are FRIED – They don’t know where to turn, they don’t trust the government, they don’t trust the financial institutions, they don’t trust the media, hell they don’t trust each other – suicides are off the chart, overdoses off the chart – people are scared and people are exhausted

#9 THE DANDADA on 05.16.22 at 3:38 pm

Only one problem.. RENT keeps increasing which makes it more desirable to own even with the added maintenance, utility, and tax costs.

The majority don’t have whats in them to “save and invest”. Their best bet is buying a home to build equity. The bank won’t give you a loan to buy anything unless you have collateral.

We didn’t create this system….. the Banksters did.

Without capital appreciation renting wins. Run the numbers. – Garth

#10 T Rex and the dinosaur clique on 05.16.22 at 3:51 pm

Bought 14 houses in my lifetime.

Never had a home inspector in any of ’em.

Waste of money.

Mandatory inspections= another completely unnecessary industry held up by Gov’mt.

Read ’em. “We can’t tell ya if the roof leaks. May or may not. Looks like sum drippin’ goin’ on. Hard t’tell. Was sunny when we were pokin’ around”

What a load.

I’ll tell ya. Wanna know if a house is dodgy? Stand outside. Walk around. Spend an hour or so doin’ the pokin’ y’self.

Find nothin’? That ain’t why you are there.

Hopin’ is that you meet a neighbour. Ya will. They’ll come out an talk t’ya.

When they do, take ’em out for a beer. You are payin’

Trust me it’s worth the $40.00 pitcher of bubbly.

I took one of tha neighbours out on the one they tell me can’t tell if the roof leaks or no.

He knew. Whole damn street knew. Leaked like a rusty water tank. Rained in the attic.

I found out more ’bout that house with an hr of talk than was in the whole inspect report.

That is how you inspect ’em.

#11 tkid on 05.16.22 at 3:57 pm

Does ‘non-local buyer’ mean if I want to buy in Toronto and move there from Niagara Falls, I should expect a 20% surcharge? Or does it only apply to those living outside of Ontario?

#12 Linda on 05.16.22 at 3:59 pm

‘Bane’ looks very natty in his yellow bonnet:)

So a drop in RE values of 8.65%. Is it at all realistic to believe RE values will continue to erode at this rate for a prolonged period of time? The expectation is that the BoC will add another .50 to the central bank rate come June. The CPI data for April will be released this week. If it increases from March, probably a .50 increase in the central bank rate will be a no-brainer. Meanwhile gas prices continue to climb upwards, just in time for the prime vacation/summer season.

Regarding households whose financial balance sheets may suffer, I wonder if any of them have made any effort to limit expenditures? Does it truly matter if the RE they may own is worth less if they have no intention of moving? I would think their main concern might be having to renew a mortgage or any other financing that might see the interest rate increase such as credit cards.

#13 Adam on 05.16.22 at 4:00 pm

The problem is that even if house prices crash, they probably won’t get any more affordable because rates will go up. So serious question – how do crashing prices help younger folks “get into the market” who couldn’t get in before?

$1,000,000 mortgage @ 1.5% costs less than a $700,000 mortgage @ 5.0%. So even once prices drop, say, 30%, if rates are around 5.0% for a mortgage (or higher) the monthly costs to carry a mortgage will be identical. The real winners are the ones who have CASH on hand or can access liquidity. This is why stock prices will probably continue to drop, because if stock prices were to go up in price while housing dropped, then people would liquidate investments (at highs) to buy real estate (at lows).

#14 Sail Away on 05.16.22 at 4:06 pm

Oh what fun it is to watch the one-horse housing party.

Such complexity people add to their lives.

Symptoms of this self-creating malady manifest as miring oneself in debt, renting mini storages, owning endless toys, bringing 12 suitcases on trips, and being perpetually too busy.

We, the minimalistic-ally efficient, chuckle sadly. Accumulate knowledge, not stuff.

#15 PeterfromCalgary on 05.16.22 at 4:11 pm

Higher interest rates are doing exactly what they are intended to do reduce demand in the economy so inflation moderates. This is never a pleasant process just remember how hated Paul Volcker was in the 1980s. Although his tough medicine helped knock out inflation for the next 40 years! Cheap Chinese goods, fracking and the demise of unions also helped.

Fortunately, interest rates will probably not have to go to double digits this time around. The declines in real estate prices show that higher single digit rates might be enough to get the job done.

#16 RichardTO on 05.16.22 at 4:12 pm

You might be a 30-something nester if you have or said the following:

“Historically, homes only go up”

Household income: $80k
Home price: $800k
Downpayment: $18.5k

“Rent is flushing money down the toilet”

“Honey, check our our Zestimate™!!!” (US thing)

“We just purchased as highly qualified buyers”

“Emergency fund? Haha, what’s that?”

“It’s worth what we were willing to pay for it!”

“My uncle’s brother’s friend’s dog bought a house in the upper beaches in TO back in 1980. He paid $80K for it and recently sold for $1.2 M. Our house is totally going to 10x too. A TFSA? What’s that?”

Debt-to-income Ratio: 48.4%

#17 Jenna on 05.16.22 at 4:19 pm

Canadian home owners are sticky about the value of their homes and selling price.

Majority will sit on owned property until next federal election and conservative party take over. Up she goes !!

#18 Shawn on 05.16.22 at 4:27 pm

CPI haters

#5 Kurt on 05.16.22 at 3:24 pm
This has been building for over a decade. It could have been stopped by the BOC at any time. The reasons it wasn’t:
– housing is specifically excluded from the CPI (“because it’s so volatile.)

**********************************
Excluded? As I just told you (again) this morning housing (shelter) is fully 30% of CPI.

Proof:

https://www150.statcan.gc.ca/n1/pub/71-607-x/2018016/cpi-ipc-eng.htm

Also housing costs and home prices have not been “volatile”. They have risen fairly steadily over the last 20 years or so.

#19 Sail Away on 05.16.22 at 4:31 pm

#7 Faron on 05.16.22 at 3:35 pm
#154 Sail Away on 05.16.22 at 2:35 pm

Don’t feed the coke-monkey.

——–

Awww, you’re no coke monkey Sail Away. Here, I’ll change it for you:

Don’t feed the coke-monkey trolls.

——–

Get off my leg, Foron. It’s unseemly.

#20 Søren Angst on 05.16.22 at 4:32 pm

Well that was cheery news today for Cdn RE Speculators.

What I am curious about is what the Home as ATM/Retirement Income (HELOC) people will be doing with rates going up?

[$168 billion Nov. 2021 or $8120 of debt for every working person in Canada]

As for me, 3/5 ETFs, ETNs down today as I type all except for:

yeah ⛽

+1.6%, +2.5% so far

And Musk keeps shooting his mouth off: reportedly says Twitter deal at lower price ‘not out of the question’.

-8.1% so far today

What a butt orifice. Still, no one to blame but myself for buying TWTR.

Threadbare portfolio, despite TWTR, still +9.5% past 30 days. To me, that’s miraculous.

Bought more shares today of a US outfit with outrageous dividends. We’ll see on that one.

#21 Inflation on 05.16.22 at 4:41 pm

Most houses in the GTA and throughout Ontario will fall be an average of 40% when all is done, we have a worse housing bubble then the US had in 2007-2008 and it’s not even house, their houses fell by around 35%, this will be the biggest housing drop in Ontario history

#22 macduff on 05.16.22 at 4:44 pm

@17 Jenna
This isn’t what happened in the bust of 1989 to 1996 in Toronto, when similar economic conditions prevailed. During this time, housing prices declined and stagnated for quite some time after that. There is no reason to believe that now is any different, regardless of which political party prevails.

#23 Bezengy on 05.16.22 at 4:48 pm

#8 Doug t on 05.16.22 at 3:36 pm

– people are FRIED – They don’t know where to turn,

———————

I seeing some stressed out folks making terrible financial decisions. It’s getting real for many close to the edge.

#24 OK, Doomer on 05.16.22 at 4:49 pm

#17 Jenna on 05.16.22 at 4:19 pm
Canadian home owners are sticky about the value of their homes and selling price.

Majority will sit on owned property until next federal election and conservative party take over. Up she goes !!
+++++++++++++++++++++++++++++

I agree; most will sit on their owned property. But they will be riding the rollercoaster down.

As the Americans found out, it only takes 10% of the homeowners to get into trouble and crater everything it for everyone else. Think 30% drop nationally and up to 66% in some areas.

Also bear in mind that the average homeowner moves every 7 years, so there’s a 14% turnover baked in, and these will take whatever the market offers. Ooops…..

The market does what it wants. Understand that or get run over.

#25 Bezengy on 05.16.22 at 4:52 pm

#12 Linda on 05.16.22 at 3:59 pm

Regarding households whose financial balance sheets may suffer, I wonder if any of them have made any effort to limit expenditures?

———————-

I wonder if they have ever had a monthly budget, or just fly by the seat of their pants and hope things work out.

#26 catralph on 05.16.22 at 4:53 pm

I love it. Homeowners cheer when prices inflate and cry when they deflate and non-owners are expected to feel sad for them. The sad part for non-owners is that the BoC is listening

#27 Fox on 05.16.22 at 4:55 pm

lol. The CEO of Toronto’s public transit got a 22% raise despite falling ridership, because you know — inflation isn’t real.

Petty. – Garth

#28 Nick on 05.16.22 at 4:56 pm

.
Any update on lower Brainland? Launderers sitting on side to invest.

#29 Cash is King on 05.16.22 at 4:56 pm

AUTOMATION AND OUTSOURCING TO OTHER COUNTRIES WILL EAT CANADIAN JOBS

#30 Editrix on 05.16.22 at 4:57 pm

#1 Rick Fast on 05.16.22 at 3:14 pm

GTA will crash by 50% when all is said and done top to bottom! 12-18 months to go!
___________________________________

And that’s when I’ll pick up another rental house. All those Mils with a couple of kids who have lost their houses from a power of sale will need to live somewhere.

#31 HaySeed on 05.16.22 at 5:00 pm

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

This book is a miserable failure:
https://www.amazon.ca/Big-Shift-Canadian-Politics-Business/dp/1443416452

Was scrolling through the steerage from the weekend.

Here is some enlightenment for the audience.

Hayseed

#32 Sovavia on 05.16.22 at 5:03 pm

Residential investment will tank as real estate prices decline, which hurts GDP.

Consumption is up for grabs, as many parts of the economy depend upon household leverage.

Exports of natural resources are unaffected.

#33 THE DANDADA on 05.16.22 at 5:04 pm

Without capital appreciation renting wins. Run the numbers. – Garth
___________________________________________

If you don’t save and invest like most Canadians don’t and you don’t own a home then your net worth is ZERO at best.

During times of falling home prices you lose but eventually that will turn around. Think long-term……..

#34 Miller on 05.16.22 at 5:11 pm

I could lay out numerous arguments as to why the Canadian dollar will weaken past its weakest ever levels, back when $1 USD bought nearly $1.60 CAD in 2002. Breaks that level in future and moves closer to $2.

This country is completely cooked. On track to be some kind of cross between Argentina & South Africa.

Commodities yes, but skyrocketing inflation that’s just kicking off, growing social strife, combined with very weak productivity and business investment & massive debt levels (personal, provincial and federal) and growing red tape re ESG factors.

Canada was a country of the 20th century. It no longer is what it was and it will continue to deteriorate markedly. We can all feel it over the last few years; this is just the third inning or so.

There is a reason we all feel crummy, w/ limited economic mobility, few quality job options relative to the US, skyhigh fuel and food and shelter and clothing prices, division amongst society and politicians like never seen before, etc. That is the mark of a deteriorating nation, not a rising one.

The only reason CAD has sustained itself somewhat is because global traders don’t realize we are no longer a Switzerland of North America.

#35 NOSTRADAMUS on 05.16.22 at 5:12 pm

POLAR BEARS DON’T HIBERNATE.
I suspect shortly that stock and real estate speculators will be seriously thinking about rejoining the labor force in order to help solve labor shortages.
Maybe I am a bit on the gloomy side for having had the audacity to suggest that perhaps getting your financial house in order would be prudent.
I have been spanked on far too many occasions for promoting the heretical idea that cash is not trash. Now that liquidity is in the rear view mirror it would appear so. So often, history has shown that brave men often pay the price for taking principled stands. It would appear that I have the contrarian curse, and I have it bad.
Add this analogy to the list that cash is not trash. You see, unlike other bears, the polar bears don’t hibernate in the cold, even though they are in the coldest of cold environments. They just grow longer fur to get ready for it. Steady lads, hold the line.

#36 Jenna on 05.16.22 at 5:12 pm

#22 MacDuff

I lived through the downturn of 1986 to 1996 in Toronto and those that owned their homes waited until prices increased…and skyrocketed.

Those that ate to much debt were suckers and drowned because of poor personal finances and judgement.

Also, Stephen Harper changed everything in housing. Remember conservative policy…buy a house with no down deposit. This transitioned Harper from leader of opposition to Prime Minister.

Today the state of the economy does not parallel with 1986…at all. New economic territory and unchartered waters.

Jenna #17

#37 tc-contra on 05.16.22 at 5:13 pm

Honestly, I never expected such an enormous RE bubble in Canada since we witnessed how things went down in the US during their ‘bust’ in 2007-12 (where prices corrected as much as 60% in the most overvalued areas.)
But no, we went even further into uncharted waters of debt and leverage – yet ‘we’ expect a different outcome?

If the LM and GTA hotspots don’t lose 60-70% of their value (in real terms), I will be surprised and disappointed.

March and April stats mentioned here are good start I say. RE corrections tend to last years, not months – so I expect to be bottom-feeding on distressed sales in 2024-5.

#38 Shawn on 05.16.22 at 5:15 pm

#29 Cash is King on 05.16.22 at 4:56 pm
AUTOMATION AND OUTSOURCING TO OTHER COUNTRIES WILL EAT CANADIAN JOBS

***********************************
We’ve been hearing this prediction for at least 50 years years and yet we are about full employment.

Check out the shopping malls. Busy!

What you are complaining about is called efficiency.

The only question is how to achieve a somewhat equitable distribution of income while not stifling investment and effort. Equitable will always be far from equal.

#39 yorkville renter on 05.16.22 at 5:17 pm

housing is negatively correlated to interest rates. period.

the past 100 years tells the story and it’s not different this time.

#40 Faron on 05.16.22 at 5:19 pm

#19 Sail Away on 05.16.22 at 4:31 pm

Here’s a banana:

So, you are agreeing that

1) the Steele Dossier is kinda old news that has been appropriately prosecuted and left to the historians?

2) it was viewed for what it was at the time it was handled by appropriate authorities?

3) the recent rise in profile is a distraction tactic to lure people like you away from having to look at the far-right horrors of the so-called “replacement”, muh gun rights, and the outcome in Buffalo?

Cool. I thought we were divorced, but thanks for that.

#41 Dogman01 on 05.16.22 at 5:40 pm

#31 HaySeed on 05.16.22 at 5:00 pm

‘Laurentian elite’?
Canadian “upper classes” from the corporate, state sponsored media , academic and political /civil service walks of life, residing in the triangle between Ottawa, Montreal and Toronto.

Definitely growing Alienation in Western Canada.

Terry Glavin: Justin Trudeau went all in on China a decade ago — and nothing can shake his resolve | National Post

“While Harper’s vision was to establish Canada as a “global energy superpower,” which would shift the centre of Canada’s political gravity westward, Trudeau’s was just as straightforward: Beijing’s promise of a win-win relationship would unlock untold riches for Canada’s middle class. The power would not shift westward, but would rather entrench itself in the Liberal party’s bastions within the Montreal-Ottawa-Toronto triangle.” – Terry Glavin

https://nationalpost.com/opinion/terry-glavin-4

“If you heard of some third world dump where a linguistic minority of less than 20 per cent held a permanent, legally-protected monopoly on all of the country’s top jobs, you’d probably think it wasn’t much of a democracy”. (in Canada) “Above a certain rank, most federal bureaucrats (regardless of what province they work in) invariably hit a promotional glass ceiling unless they know French. This is an awful lot of power to concentrate in just 17 per cent of the population.” JJ-Mccullough

https://www.huffpost.com/archive/ca/entry/bilingual-elite-canada_b_4977174

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

#42 Ustabe on 05.16.22 at 5:50 pm

#35 NOSTRADAMUS on 05.16.22 at 5:12 pm

POLAR BEARS DON’T HIBERNATE.

They also do not kill their prey first, they just start eating.

#43 pPrasseur on 05.16.22 at 6:00 pm

#34 Miller – This country is completely cooked. On track to be some kind of cross between Argentina & South Africa.

You got that exactly right! This country’s pathetic lack of productivity has been hidden by a mountain of debt, one of the worse debt ridden place on earth behind only Japan (an industrial powerhouse) then France and … Greece (both protected by the Eurozone).

https://www.bnnbloomberg.ca/debt-strapped-canadians-brace-for-a-risky-rate-hiking-cycle-1.1711107

One international investor realize what’s going on I see a debt crisis much worse than 2002 as well. No GST will save us this time! Prepare for IMF…

#44 pPrasseur on 05.16.22 at 6:08 pm

#37 tc-contra – Honestly, I never expected such an enormous RE bubble in Canada since we witnessed how things went down in the US during their ‘bust’ in 2007-12 (where prices corrected as much as 60% in the most overvalued areas.)

US home prices have now surpassed 2007 levels (in today’s $)

Yet that bubble is completely dwarfed by what is going on in Canada.

Expect a bloodbath led by the imminent tsunami of small business bankruptcies!

#45 jane on 05.16.22 at 6:19 pm

pffft rates are nothing compared to the early eighties…get a grip! Kill two birds with one stone….inflation and RE. RE is too expensive.

#46 OK, Doomer on 05.16.22 at 6:30 pm

#39 yorkville renter on 05.16.22 at 5:17 pm
housing is negatively correlated to interest rates. period.

the past 100 years tells the story and it’s not different this time.

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

I agree. The physics of money will decide. Governments can dick around on the edges but the bond market is the 800 lb. gorilla.

#47 crowdedelevatorfartz on 05.16.22 at 6:37 pm

Hmmm
Politicians of all stripes dog piling on to raise taxes, vacant levy’s, etc etc etc AND inflation forces the B.O.C. to raise interest rates….

The perfect storm to eviscerate the Real Estate industry aka the Canadian economy.

Should be an interesting 12-24 months leading up to the next election.
If not sooner due to a toppling of the minority govt
Who will lose the unpopularity contest?

#48 Km on 05.16.22 at 6:49 pm

I hope it drops significantly. I was at my storage locker and ran into a woman in her 70s who was living in a shelter and is unable to find even a one bedroom to share with her sister in law. Too see someone so obviously in despair and too old to work not even able to find a home is humbling and makes me extremely angry at the mess greed has gotten this country into. I could care less if there is blood in the streets with the over leveraged buying up investment properties, driving up buying and renting for those who just want a place to live.

#49 JJ on 05.16.22 at 6:53 pm

Imagine owing a bank over a million in a variable mortgage and be down 50% … a lot of young families lives will be destroyed.

Mortgage rates should never of been allowed below a floor… cap valuations; this was a trap.

Reminds me of the last scene of Margin Call… https://www.youtube.com/watch?v=LtFyP0qy9XU

“We can’t help ourselves, we can’t stop it or even slow it. There always have been and always will be the same % of fat cats and starving dogs”.

#50 kommykim on 05.16.22 at 7:04 pm

RE: #13 Adam on 05.16.22 at 4:00 pm
$1,000,000 mortgage @ 1.5% costs less than a $700,000 mortgage @ 5.0%. So even once prices drop, say, 30%, if rates are around 5.0% for a mortgage (or higher) the monthly costs to carry a mortgage will be identical.

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

Well, a 20% down payment (the minimum amount needed to avoid paying mortgage loan insurance) would be $140K for the $700,000 house vs $200K for a $1,000,000 house… So there’s that.
Then if you make extra mortgage payments, it makes more difference on a $700K loan vs a $1M loan.

#51 PeterfromCalgary on 05.16.22 at 7:09 pm

#6 Re-Cowtown

“Certain highly desired neighborhoods are seeing prices hold (so far), but the rot started at the ‘burbs and has been slowly working it’s way to the inner city.”

The market is really hard to get a handle on. Detached housing has year to date increased in price by 12% but sales volume is down 10%. Semi detached prices only increased YTD by 5% so about the rate of inflation. Transactions for Semis were up only 2%.

Townhouses and Condos are selling like hot cakes with transaction up 42% and 46%. However, it seems their is enough supply of Townhouses and Condos because prices rose 12% and 4%. I think this is because they are building lots of new townhouses and Condos.

I suspect as higher interest rate kick in the market is probably slowing down but it won’t be reflected in the statistics yet.

As for $100 oil it won’t super charge the housing market like last time because of the Liberal war on fossil fuels and pipelines. Putin’s probably secretly happy with the Liberals for protecting his energy monopoly from Canadian energy. The whole situation is kind of sad because restraining supply in Canada only helps dictators pick up more business. If we want to reduce CO2 we have to decrease demand for fossil fuels rather than shift it over to dictators. Even Elon Musk tweeted we needed to produce more fossil fuels at home because of Putin’s invasion.

https://wowa.ca/calgary-housing-market

#52 leebow on 05.16.22 at 7:17 pm

It is exceedingly apparent to the intelligent majority that Tiff and Tifflings are on a crusade against Canadian Prosperity.

#53 Sail Away on 05.16.22 at 7:22 pm

#40 Faron on 05.16.22 at 5:19 pm
#19 Sail Away on 05.16.22 at 4:31 pm

So, you are agreeing that

——-

What?

No. By no means do I agree with anything you wrote.

And stop trying to build a strawman linking me to the tragic US shooting. You’ve insinuated that 3 times now with your usual ham-fisted subtlety. It’s downright ghoulish.

#54 My Body My Choice on 05.16.22 at 7:30 pm

#2 Alan Schwarz

“I remember the days when rent for a 1-bedroom in London, ON was $800 a month in 2015. Now it’s advertised for $1,800 a month.I can’t even buy a 1/4 acre plot 500 miles away from the GTA proper, because even that is being sold for $250,000 for a piece of grass where the risk of Rabies is high. I hope that things go back to normal. It’s insane.”

Sorry to break the news, Alan, but things will never go back to normal in Kanada.

With a real estate supply/demand equation that has been out of balance for decades, supply will never catch up to demand.

Add to that: 6 months of winter, radical-left neo-Marxist bullies renaming everything and tearing down Canadian flags, peaceful truckers being demonized while terrorist church-burners are largely ignored …

If I was a young person (under 50) with a small nest egg wanting to buy some affordable acreage, I would start looking in southern France where prices are vastly cheaper than all of Kanada. I’ve been to southern France and there are wide open spaces. Sure, France has it’s problems too, but at least real estate is way more affordable.

https://www.french-property.com/properties-for-sale?regions=auvergne&currency=EUR&maximum_price=600000&land_size_unit=m%C2%B2

#55 My Body My Choice on 05.16.22 at 7:38 pm

Re: #8 Dave

“This nation has a mental health crisis – stress is peak – my brother had a heart attack on the weekend – people are FRIED – They don’t know where to turn, they don’t trust the government, they don’t trust the financial institutions, they don’t trust the media, hell they don’t trust each other – suicides are off the chart, overdoses off the chart – people are scared and people are exhausted”

Sad, but true. Have you seen the dystopian sci-fi movie THX 1138? There are chilling similarities to what is going today.

“Your identity is a number …”

https://www.youtube.com/watch?v=rO99j_Ty4Hc

#56 Grunt on 05.16.22 at 7:46 pm

Say a 3 day royal tour with chuck and cam!
But only to mangy parts of like Ott Lab & Yuk.

#57 The Regulator on 05.16.22 at 7:56 pm

Where’s the big news about Alberta oil flooding into Europe to replace all that sanctioned Russian oil? Or B.C.’s abundant gas? Oh, right, E.U. refineries can’t process dil-bit. And we dropped the ball on building liquified natural gas facilities in a timely manner. Plus, Alberta oil goes south to the U.S.of A. at a discount, since the rest of Canada doesn’t want our dirty oil. What a country!

#58 Faron on 05.16.22 at 8:05 pm

#53 Sail Away on 05.16.22 at 7:22 pm

Oh, okay. So why is it that you suddenly dug out a 6 months old article about the Steele dossier and then falsely claimed that an entire nation has it on its radar?

It’s common for Fox and other conservative news sources to surface content when unfavourable events take place until such time they can fabricate a response.

And you don’t even agree with this:

you’re no coke monkey Sail Away

?

Just checking. Also, please let me know if you are annoyed yet. I can’t tell. I’m having fun.

#59 Neo on 05.16.22 at 8:16 pm

In any legitimate country an average home is worth 3-4 times the average family income. Pretty simple formula. It has been working for a hundred years until financial terrorists took over central banking.

Unfortunately this is not a legitimate country.

War is Peace
Freedom is Slavery
Diversity is Strength

#60 Concerned Citizen on 05.16.22 at 8:23 pm

Imagine a war where one side wins every battle for two years, decimating its opponent. Then, finally, the opponent wins a minor skirmish, and declares victory. That is this blog post.

Housing is more unaffordable now than it was in February. Sure prices have gone down some, but interest rates have gone up – new mortgage payments are more expensive now.

Don’t get me wrong, rates ought to go much higher. The BoC was negligent in keeping so low for so long. But if house prices don’t come down a lot – like 30-40% – then millenials have no hope of ever owning. That’s how far out of whack market prices are with local incomes. The economy remains thoroughly broken.

#61 IHCTD9 on 05.16.22 at 8:25 pm

#43 pPrasseur on 05.16.22 at 6:00 pm
#34 Miller – This country is completely cooked. On track to be some kind of cross between Argentina & South Africa.

You got that exactly right! This country’s pathetic lack of productivity has been hidden by a mountain of debt, one of the worse debt ridden place on earth behind only Japan (an industrial powerhouse) then France and … Greece (both protected by the Eurozone).

https://www.bnnbloomberg.ca/debt-strapped-canadians-brace-for-a-risky-rate-hiking-cycle-1.1711107

One international investor realize what’s going on I see a debt crisis much worse than 2002 as well. No GST will save us this time! Prepare for IMF…

———

The OECD expects Canada’s GDP growth per capita will be right at the bottom of G7 countries for the next 40 years.

https://betterdwelling.com/young-canadians-wont-have-the-same-opportunity-as-past-generations-oecd-forecast/

I agree for the most part, I even think I see it happening. In decades past, I could mop the floor with a US company competing for US work. Our labour was competitive, hydro was cheap, our corporate taxes were low, and the Loonie was on sale most of the time.

Today, everything is expensive. Even with 20-30% off on the Loonie, I’m hopelessly high on every bid. The domestic supply chain is half the size it was in the early 2000’s, and there’s also a lot less domestic work to look at.

Then we elected Trudeau who doubled the cost of shelter and doubled our debt. He’s making energy more expensive which in turn drives everything else up. He’s set the stage for hardship, who’s going to stick around to live it? We are already 100% reliant on huge immigration to do any kind of growth. They’re looking to escape hardship, not immigrate sideways.

We’re headed for a low productivity, high debt future with a thick layer of red tape and big government keeping it going. Eventually we will start reading about our talent and youth packing out, and our sliding net immigration rates.

#62 mike from mtl on 05.16.22 at 8:29 pm

#41 Dogman01 on 05.16.22 at 5:40 pm
“Above a certain rank, most federal bureaucrats (regardless of what province they work in) invariably hit a promotional glass ceiling unless they know French.

I might add that particular skill seems to be some sort of conformity exercise. Watching parliamentary affairs and news snippets, wow, for supposedly official figures, so many have student-level French pronunciation even reading from a script.. makes my toes curl. Who are they kidding?

Yes the majority of us around the Laurentian river basin have a very good level of both languages out of necessity, honestly it seems insane to officially extrapolate that ‘culture’ as far as V.I. to P.E.I.

Languages (as far as a government is concerned) should be a tool of communication, not some low hearted attempt at culture.

#63 JSS on 05.16.22 at 8:34 pm

#6 Re-Cowtown on 05.16.22 at 3:24 pm

Few key points:
– oil corporation’s priorities are: balance sheet repair share buybacks, dividend increases
– provincial and federal governments benefit greatly from royalties and taxes
– many oil related jobs in both office and field were made obsolete due to software mechanization, field automation, offshoring work, and job loss due to amalgamation of two corporations from mergers
– corporations are not in the business of providing social programs. They will only hire staff if absolutely necessary and there is no choice
– house prices in Calgary (and Edmonton) have gone up due to investors piling in from Ontario and BC. They’re pulling out now as we speak

#64 wallflower on 05.16.22 at 8:47 pm

Re these comments below, I just spent 8 days in Dordogne. signs everywhere. Only saw one except in Bordeaux itself where I saw a mix. But in that countryside you reference and in the related wee towns, all sold. So, the jig is up. ‘They’ know, whomever they are, scooping up these cheapies.

However, it remains ridiculously cheap as compared with the dumpy smaller southern Ontariowe city I inhabit in which scabby domiciles sell for $850K minimum. And land near here is also crazy money.

#54 My Body My Choice on 05.16.22 at 7:30 pm
If I was a young person (under 50) with a small nest egg wanting to buy some affordable acreage, I would start looking in southern France where prices are vastly cheaper than all of Kanada. I’ve been to southern France and there are wide open spaces. Sure, France has it’s problems too, but at least real estate is way more affordable.

#65 crowdedelevatorfartz on 05.16.22 at 8:54 pm

@#43 pBrasseur
“Once international investors realize what’s going on I see a debt crisis much worse than 2002 as well. No GST will save us this time! Prepare for IMF…”

+++
Yep. 1980’s
Trudeau and his socialist hordes can promise Canadians the Sun and deliver the Moon…..
But our financial day of reckoning will be decided by foreign money markets that don’t like what they see and demand either we raise rates and tighten govt spending… or watch our dollar drop to the value of a peso….

Trudeau and Freecash will learn that the hard way….on the indebted taxpayers flayed backs…

#66 Ustabe on 05.16.22 at 9:02 pm

#53 Sail Away on 05.16.22 at 7:22 pm

#40 Faron on 05.16.22 at 5:19 pm
#19 Sail Away on 05.16.22 at 4:31 pm

So, you are agreeing that

——-

What?

No. By no means do I agree with anything you wrote.

And stop trying to build a strawman linking me to the tragic US shooting. You’ve insinuated that 3 times now with your usual ham-fisted subtlety. It’s downright ghoulish

Suddenly you are the aggrieved party?

Might I remind you that previously two of your now departed comrades and you joyously piled on and are responsible for the Faron we now see.

There are a million other things to talk about so I agree with Faron, why, out of the blue do you feel a need to talk to the Steele dossier?

All you have to do is answer that question.

But, but, but her emails; but, but, but his laptop.

Don’t you have a multi-million dollar business to run?

#67 HUNGRY BEAR on 05.16.22 at 9:12 pm

BANNED

#68 Armpit on 05.16.22 at 9:27 pm

“And let’s not forget that a drop of 8.65% in sixty days is equivalent to an annual decline of 52%.”
———————————————————–

Garth, “equivalent” does not mean it has already occurred. Played numbers have the blogdogs already believing house prices have declined over 50 percent. A bit of fear mongering??? or blood thirsty salivation happening.

Those that just bought with a 5 year amortization will have the time to make adjustments. Who knows what will happen, but they have some time on their hands. Or at the end, they can just hand in the house keys as some did in the early 80’s.

The bigger problem is higher food costs, heat, gasoline and anything related to the obscene increase in oil. That extra $300-$500 monthly expense, plus taxes will hurt the most for now.

#69 morrey on 05.16.22 at 9:51 pm

i think Canadians are pooched when it comes to housing. SFH are so over in Canada.
Affordability has no meaning to politicians. It’s just a buzz word.

#70 morrey on 05.16.22 at 9:56 pm

PS to all you weirdos pushing Cryptocurrency like the PeePee Brained PP:

Why This Computer Scientist Says All Cryptocurrency Should “Die in a Fire”
google it

#71 Cowtown Cowboy on 05.16.22 at 9:57 pm

Just saw a cbc story on a couple of knuckleheads from Vanouver(are there any other kind???) who bought a house, sight unseen in Sudbury of all places only to find that the pics didn’t quite match the reality…too funny, you literally can’t make this stuff up, truly a nation of idiots

#72 The real Kip (Ret) on 05.16.22 at 10:04 pm

Wow. Sure are a lot of people with a lot of stress over my paid off house. Oh well, bed time now, sleep tight, I will.

#73 Quintilian on 05.16.22 at 10:13 pm

crowdedelevatorfartz on 05.16.22 at

“ or watch our dollar drop to the value of a peso….

Trudeau and Freecash will learn that the hard way….on the indebted taxpayers flayed backs”

Crazy talk.

Canadian Public debt is not a problem.

Private debt is because it will eventually lead to diminishing aggregate demand.

Won’t be good for RE or equities

#74 Elsa Rose Jade Naraine on 05.16.22 at 10:39 pm

Pierre is a bad person. He once argued viewpoints similar to Tucker Carlson.

#75 AJ on 05.16.22 at 10:39 pm

Probably that was peak, you’d think, and yet, how many times has that been said wrongly.
Just as casual observer, e.g. this cubby-hole just went for 28K> asking: C5596701.

#76 DON on 05.16.22 at 10:44 pm

#60 Concerned Citizen on 05.16.22 at 8:23 pm
Imagine a war where one side wins every battle for two years, decimating its opponent. Then, finally, the opponent wins a minor skirmish, and declares victory. That is this blog post.

Housing is more unaffordable now than it was in February. Sure prices have gone down some, but interest rates have gone up – new mortgage payments are more expensive now.

Don’t get me wrong, rates ought to go much higher. The BoC was negligent in keeping so low for so long. But if house prices don’t come down a lot – like 30-40% – then millenials have no hope of ever owning. That’s how far out of whack market prices are with local incomes. The economy remains thoroughly broken.

*************
The movie isn’t over yet!

Things remain unaffordable for now…but this is a roller coaster ride powered by inflation. Did that happen in the last 14 years…nope. Peak debt…and it only takes a few to really wreck the party.

#77 Stone on 05.16.22 at 10:45 pm

#34 Miller on 05.16.22 at 5:11 pm
I could lay out numerous arguments as to why the Canadian dollar will weaken past its weakest ever levels, back when $1 USD bought nearly $1.60 CAD in 2002. Breaks that level in future and moves closer to $2.

This country is completely cooked. On track to be some kind of cross between Argentina & South Africa.

Commodities yes, but skyrocketing inflation that’s just kicking off, growing social strife, combined with very weak productivity and business investment & massive debt levels (personal, provincial and federal) and growing red tape re ESG factors.

Canada was a country of the 20th century. It no longer is what it was and it will continue to deteriorate markedly. We can all feel it over the last few years; this is just the third inning or so.

There is a reason we all feel crummy, w/ limited economic mobility, few quality job options relative to the US, skyhigh fuel and food and shelter and clothing prices, division amongst society and politicians like never seen before, etc. That is the mark of a deteriorating nation, not a rising one.

The only reason CAD has sustained itself somewhat is because global traders don’t realize we are no longer a Switzerland of North America.

———

You’re so silly. The answer to your obvious anxieties is simple.

Have a balanced and globally diversified investment portfolio. The B&D nullifies every single item you have raised. Mine sits at -7.41% ytd. I’m quite content.

It’s funny to see how bitterness eats away at so many of you. It’s also a wonder why you don’t solve for these things that eat at you. But then again, people also don’t ensure they get enough fibre in their diet resulting in them huffing and puffing while they try to pass a bowel movement.

#78 crowdedelevatorfartz on 05.16.22 at 10:53 pm

@#73 Quinty’s Quantitative Tightening
“Canadian Public debt is not a problem.”
++++

Canada’s debt is obscene.
And our “leaders” dont care.
Sky’s the limit on our debt.
Until the foreign lenders dont want our Bonds or trust our money.
Lets see what the next few years bring.
More inflation. More govt. More taxes. More rules and regs.
Business will flee this country until the voters come to their senses.
I lived in Alberta in 1980-81 and then moved to BC
Not pretty.
If that takes 2, 4 or 6 years of hard times here..
So be it.
Big business doesnt care if you suffer under a govt that would sell their soul to get re-elected.
Big Business has shareholders to answer to…. not socialist experimenters like Trudeau, who has never had to worry for one minute about what a tank of gas cost or where his next meal was coming from.

#79 AJ on 05.16.22 at 10:56 pm

Stocks and housing are taking a dive too, likely by design to dampen iinflation, so why pick on crypto. What do you think will happen to the price at the next halvening? No one has a crystal ball, those buying the dip may do well. Not me, I just have a small nominal amt I bought at an A’
TM for fun. Don’t knock if you haven’t at least tried it. The beauty of it is the freedom. If they go after cash in an attempt to impose digital identity serfdom, we may yet see a resurgence.
Every idiot knows crypto has been rife with scams but the mainstay bitcoin concept is a laudable ideal whose death may be getting proclaimed prematurely.

#80 bubu on 05.16.22 at 11:23 pm

Prices didn’t go down yet… Only the average price for what the houses are sold for… people borrow less and buy cheaper houses

#81 HUNGRY BEAR on 05.16.22 at 11:44 pm

BANNED

#82 baloney Sandwitch on 05.17.22 at 12:10 am

Lots of doom and gloom today. I need a drink.

#83 Didn't you leave a thousand times on 05.17.22 at 12:12 am

#58 Faron on 05.16.22 at 8:05 pm

Just checking. Also, please let me know if you are annoyed yet. I can’t tell. I’m having fun.

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

What a child. Do you feel no shame as a supposed grown man. Of course it would be Ustabe as your only backer, explaining away your psychopathy as victimhood. Yuck.

So weird your constant lies about leaving. Like an STD that never really goes away. Least it’s still amusing watching the Sail guy own the both of you. Be nice though if you just consummated your crush on him and got it out of your system so we could all move on.

#84 Russ on 05.17.22 at 12:53 am

Faron on 05.16.22 at 5:19 pm

#19 Sail Away on 05.16.22 at 4:31 pm

Here’s a banana:..

=========

Okay, that was pretty funny. :)

Cheers, R

#85 Sail Away on 05.17.22 at 1:12 am

#66 Ustabe on 05.16.22 at 9:02 pm

Might I remind you that previously two of your now departed comrades and you joyously piled on and are responsible for the Faron we now see.

——–

Just call me Daddy

#86 Faron on 05.17.22 at 2:00 am

#66 Ustabe on 05.16.22 at 9:02 pm

You know, I appreciate your support and it’s cool and all that you throw me under the bus when you swipe at Sail Away. But, you could just confront him on his own “merits” or lack thereof. His attack surface is bigger than Fenway’s Green Monster. No need to cow to the masses here and decry my sometimes badgering approach to him.

I like what you represent here. I think you are a good and interesting person. That is all. Carry on.

#87 Dozer on 05.17.22 at 5:11 am

Have you noticed the $C crash against the USD? It’s gone from $1.20 to a sniff away from $1.30. We used to benefit from energy, not since the Trudeau era. Our debt is strangling our country . Even the distant Thai Baht has soared against the $C. Is Trudeau keeping you licked down? Keep in mind the drop is on top of a commodity spike.

Plus, all your imports, baby formula, food, manufactured goods from the US and Asia are all way more expensive This is on top of the Trudeauflation we already see in everything. The internals of the $C indicate a sick patient. I mention Thailand to show you how broad the drop in the dollar is.

This is no stealth temporary drop. It’s been long and sustained while out commodity economy should be lifting the currency. The Trudeau Put is really killing our balance of trade.

Where’s the media on this? Where is the Loyal Opposition? We’re like a dying patient with a doctor who won’t come to the hospital because you hurt his feelings at a truck rally earlier in the year .

Did you read in OilPrice.com how Ukraine is putting the screws to Europe gas by shutting off the pipes exiting Ukraine until the EU agrees to take them into the EU and NATO alliances? We’re getting played in all kinds of ways.

#88 under the radar on 05.17.22 at 5:52 am

Meanwhile , the national mortgage delinquency rate is about .30% . Values are coming off their highs but people are paying … for now.

#89 I don’t know on 05.17.22 at 6:16 am

Everyone and their brother expected interest rates to rise. That’s why there was such a flurry of activity in Nov-Feb as smart buyers locked in rock bottom rates.

If you were planning on flipping in the next year or bought a condo in the boonies, it obviously wasn’t a smart move.

Everyone else who bought a house to live in can go to sleep and enjoy their fixed monthly payments. In 5 years it’s unlikely last February will be anywhere near “peak house”, as prices will be higher.

IDK

#90 Do we have all the facts on 05.17.22 at 9:19 am

I stopped contributing to this blog several months ago when it became evident that most Canadians had accepted the premise that low interest rates and the escalation of asset values would continue without consequences.

After 2019 the historical relationship between Canadian GDP and the percentage of revenue extracted from GDP by the Government of Canada through taxation was thrown out the window. In the infamous words of our Finance Minister “It would have been irresponsible not to have borrowed $600 billion when interest rates were so low”.

Ten years ago the World Bank, a reliable unbiased source, recorded the GDP of Canada at $1.846 billion US dollars. Today the World Bank is projecting that Canadian GDP in 2022 will approach $1.740 billion US dollars. This represents a decline of 5.7% over the last ten years.

Over the same period Government of Canada expenditures increased from $277 billion Canadian to more than $500 billion Canadian, an increase of more than 80% over the last ten years. Since taxation revenue generated from GDP growth has been minimal the primary source of revenue for the Government of Canada has been debt. Between 2013 and 2022 the GOC debt has increased from $609 billion Canadian to $1.16 trillion Canadian, an increase of 90% over the last ten years.

Now that the rate of 5 year bonds issued by the Government of Canada is headed north of 3.0% the additional cost of servicing $1.16 trillion of existing debt combined with projected future GDP growth of less than 2.0% after 2023 has all but eliminated any possibility of debt reduction in the foreseeable future.

In conclusion I ask only one simple question and that is will the Government of Canada ever be able to cover their
projected expenditures without incurring additional debt?

Based on actual facts the economic future of Canada does not look quite as promising as our governments would have us believe.

#91 Linda on 05.17.22 at 9:26 am

#48 ‘KM’ – sadly, homeless shelters have been reporting a marked increase in the number of seniors using their facilities for years now. I think I first read of the phenomenon about 8 years ago. This is the ugly consequence of running out of money, aka living on a fixed income. The age old solution was finding cheaper accommodation, except there isn’t much if any of that available. Certainly not enough to provide housing for the plethora of seniors who require it. An earlier column of Garth’s mentioned that some 2 million seniors are considered impoverished in Canada. I rather doubt there is sufficient housing for said seniors, let alone the hefty chunk of the Canadian population whose income would qualify them to join the low income housing list.

#92 Dharma Bum on 05.17.22 at 9:37 am

#74 Elsa Rose Jade

Pierre is a bad person. He once argued viewpoints similar to Tucker Carlson.
——————————————————————————————————-

Soooooo……you’re really saying he’s a GOOD person.

#93 The Totally Unbiased, Highly Intelligent, Rational Observer on 05.17.22 at 10:39 am

“PS to all you weirdos pushing Cryptocurrency like the PeePee Brained PP:” — #70

Imagine

Imagine if someone like P.P. got in control of Canada and put its money into a criminal scam like Bitcoin (sometimes pronounced Dungcoin) and gambled it all away even faster than someone like Justin Trudeau can print it and spend it all away. Sometimes, the so-called “Conservatives” come up with even worse ideas than the Liberals, if you can even imagine that.

Practical Realities

History shows that what works well in politics is a short, memorable name that people can pronounce and spell, like Adolf (meaning “Noble Wolf”) Hitler or Joe (the Noble Murderer) Stalin, for example. They become famous. Nobody knows how to spell P.P.’s name and nobody knows how to pronounce it. History will forget it. So, try not to worry too much about P.P. and his inexperience. Unless, of course, he becomes affectionately known to everyone as PeePee. That could really catch on.

#94 dragonfly58 on 05.17.22 at 10:58 am

Sail Away, # 14. I get the feeling from your comment of stuff vs knowledge that you are the sort of Engineer who I personally find very limited.
Knowledge yes, by all means. But until you can also walk into a shop full of ” stuff ” and put that knowledge to work you are only half way there in my world of Engineering.
The paper side of the mechanical world is just the preliminary step. Then you have to prototype, test, refine, and finally end up with something that works. And all those steps requires ” stuff ” .
Now that I am retired I get to concentrate on my stuff rather than company work. Much more rewarding when the focus of all the learning and doing is of my own area of interest.
But to get here is a process of decades of work, on the job and at my property. A usable property, that functions both as a residence and as a working situation.
House, shop building , storage area, tools, equipment, transport . You name it, eventually you need it. Without a well stocked workshop you might as well just twiddle on Autocad all day.
To get to a satisfying , post retirement work on what you want to situation requires time, money , a fair bit of space, and STUFF.
I get the impression you are happiest with your dogs and Squirrel gun out in the forest. Nothing wrong with that, but hardly where I expect to find a real Engineer.

#95 My Body My Choice on 05.17.22 at 11:06 am

Re: HUNGRY BEAR being banned

I want to reach out to HUNGRY BEAR, who has been banned from this forum for an incendiary comment a couple of days ago.

Dear HUNGRY BEAR, it sounds like your anger has been stoked by various news reports. Please take a deep breath, calm down a bit and read the following articles. Please keep an open mind.

https://tnc.news/2021/07/12/six-things-the-media-got-wrong-about-the-graves-found-near-residential-schools/

https://tnc.news/2021/12/19/the-misleading-claim-that-150000-indigenous-children-were-forced-to-attend-residential-schools/

#96 The Regulator on 05.17.22 at 11:20 am

There are many wise truth-tellers commenting here. Living in the real world, and cutting through the B.S. The C.B.C. website commenters remind me of a kindergarten class past their nappie time. Hail, Garth, our fearless leader!

#97 Faron on 05.17.22 at 11:45 am

#83 Didn’t you leave a thousand times on 05.17.22 at 12:12 am

Be nice though if you just consummated your crush on him

He won’t let me. In fact, he wants a divorce. Love is complicated Satori.

#98 Zxcvbnm on 05.17.22 at 12:03 pm

Prices cut in half are still too expensive. There needs to be blood

#99 Philco on 05.17.22 at 12:32 pm

Doug t your the best. Sorry to hear about your brother.
Yes turn off all the news dump your social media.
Covid doest even exist where i am. My god the news is a fearmoungering machine.

People do it to themselve beccause they are incapable of critical thinking. Sheeple if you will.
Look at RE and those pelaton stocks…lmao…monkey see monkey doo.
5 mil for a tear down. After i put 5 mil in my project i will have $600,000 net cash flow a year.
Housings is not over valued here. But the crazies that bought in those crappy cities are going to be in the red for a while..
Have a wonderfull day cause im going to cut some more header beams for my RV storage building and have a weinie roast on the fire with the crew.. Thats fun to me.
Garth you should come out take a week off of the nonsense.
You can crash in the 5th wheel. Is big full load with beers and wine stocked bring Dorthy.

https://financialpost.com/executive/posthaste-home-prices-are-falling-and-heres-where-they-are-falling-the-most

#100 Ponzius Pilatus on 05.17.22 at 12:36 pm

#87 dozer
Where’s the media on this? Where is the Loyal Opposition? We’re like a dying patient with a doctor who won’t come to the hospital because you hurt his feelings at a truck rally earlier in the year .
————————-
Haha,
“Loyal Opposition”.
Good Freudian Slip.
I’m afraid, will be loyal again after the next election.
Right CEF?

#101 Yukon Elvis on 05.17.22 at 12:41 pm

#95 My Body My Choice on 05.17.22 at 11:06 am
Re: HUNGRY BEAR being banned

I want to reach out to HUNGRY BEAR, who has been banned from this forum for an incendiary comment a couple of days ago.

Dear HUNGRY BEAR, it sounds like your anger has been stoked by various news reports. Please take a deep breath, calm down a bit and read the following articles. Please keep an open mind.

https://tnc.news/2021/07/12/six-things-the-media-got-wrong-about-the-graves-found-near-residential-schools/

https://tnc.news/2021/12/19/the-misleading-claim-that-150000-indigenous-children-were-forced-to-attend-residential-schools/
+++++++++++++

Thank you for providing those links. I hope people take the time to read them and pass them around.

#102 Philco on 05.17.22 at 1:16 pm

#93 The Totally Unbiased, Highly Intelligent, Rational Observer on 05.17.22 at 10:39 am
————————–
I listened to the debate. PP said people should have the right to choose.
I agree but printing like crazy guy does or investing an such a volatile asset (Sorry bitcrap not an asset lol)
Are both bad for the middle class financial health.

#103 Sail Away on 05.17.22 at 1:22 pm

@dragonfly

Good points, I hear what you’re saying, and personally very much enjoy metal fabrication, woodworking, epoxy/fiberglass work, and noodling out electrical puzzles. So, yes, the proper tools are needed and it’s always easier to own than rent so the tools are there when needed. I’ve built a number of boats, a few hunting camps, worked on many homes and have redone most of our house. CAD falls firmly in the tool category and is an excellent planning and design aid for even the home projects.

We put our new engineers in the field and fab shops about 1/2 time for their first several years to see the way equipment and construction works so they can create efficiently buildable designs in CAD. Design plus hands-on is the best- and we also hire contractors as ‘construction advisors’ to review and vet logistically complicated designs before going to tender. They know construction capability best because that’s their job.

Yes, as engineers, our official job is to know the materials and design side best… but most of us can also fabricate- usually not as well as the fabrication specialists, granted, but hey: when in doubt, make it stout… and know enough to bring critical weldments to the pros with specs identified.

#104 Observer on 05.17.22 at 1:27 pm

#94 dragonfly58 on 05.17.22 at 10:58 am
Sail Away, # 14. I get the feeling from your comment of stuff vs knowledge that you are the sort of Engineer who I personally find very limited.
Knowledge yes, by all means. But until you can also walk into a shop full of ” stuff ” and put that knowledge to work you are only half way there in my world of Engineering.

^^^^^^^^^^^^^^^^
Ha! This should be good. I’ll be back with my popcorn.

#105 Sail Away on 05.17.22 at 1:28 pm

#97 Faron on 05.17.22 at 11:45 am
#83 Didn’t you leave a thousand times on 05.17.22 at 12:12 am

Be nice though if you just consummated your crush on him

——–

He won’t let me. In fact, he wants a divorce. Love is complicated Satori.

——–

I’d be in favour and have in the past suggested a multi-day offshore sailing trip. Just the two of us. The offer stands.

#106 Sail Away on 05.17.22 at 2:03 pm

Consider this: a good friend of mine who owns over a dozen houses and rents them on AirBNB has been installing EV chargers in his rentals, bumping the price and offering free charging. Immediate full bookings through the summer for all homes with chargers.

That’s the way this opportunity, leverage, reaping business works.

#107 dragonfly58 on 05.17.22 at 2:47 pm

It would seem then Sail Away ,that you are somewhat backing away from your statement of keeping life minimalist and free of stuff.
I would like to have had a big brother or someone else in my life who owned, paid for and maintained all the stuff I need. And then I could just drop in and used , created with the stuff as I needed.
But there is no free lunch. Property and all the things I find essential in my life are 100% bought and paid for by my wife and myself.
She doesn’t care about the stuff, { one way or another } but would like a bit more than a soggy old farmhouse out here in the Frazer Valley.
Getting very difficult in B.C. these days. Incomes haven’t even come close to keeping up with costs.
Doesn’t help money from outside keeps seeking shelter in B.C. land.
Almost any property I would find useful as a residence and base for my activities has become someone’s investment / place to hide $
I have a place , but now that I am retired and using it full time, really too small. The next size bigger needs another $ Million + in equity. Nuts compared to what a couple of acres sells for almost anywhere else in North America.

#108 Faron on 05.17.22 at 2:48 pm

#105 Sail Away on 05.17.22 at 1:28 pm
#97 Faron on 05.17.22 at 11:45 am

The offer stands.

Sure, sounds dreamy. Set it up. Some true offshore experience would be great. How’s July for you? I’ll be hiking a PCT section the second week, but the week after would be fine.

#109 Sonny Kang on 05.17.22 at 3:43 pm

Powell says the Fed will not hesitate to keep raising rates until inflation comes down

Fed Chair Jerome Powell said he will back interest rate increases until prices start falling back toward a healthy level.

“If that involves moving past broadly understood levels of neutral we won’t hesitate to do that,” the central bank leader told the Wall Street Journal

https://www.cnbc.com/2022/05/17/powell-says-the-fed-will-not-hesitate-to-keep-raising-rates-until-inflation-comes-down.html

So does mean Canada keeps raising as well?

#110 Sail Away on 05.17.22 at 4:08 pm

#108 Faron on 05.17.22 at 2:48 pm
#105 Sail Away on 05.17.22 at 1:28 pm
#97 Faron on 05.17.22 at 11:45 am

The offer stands.

———

Sure, sounds dreamy. Set it up. Some true offshore experience would be great. How’s July for you? I’ll be hiking a PCT section the second week, but the week after would be fine.

———

Perhaps. My previous boat, rigged for offshore, is in Pedder Bay. I think the owner’s planning a circumnav of VI this summer, so I’ll check about renting for an excursion.

#111 Allan on 05.18.22 at 3:36 am

” …INFLATION, fed by a crapped-out supply chain, surging energy costs and the unleashing of hundreds of billions in consumer spending”
That’s very lame explanation used by government.
But WHO produced excess money chasing limited supply of goods and services?

#112 Satori on 05.18.22 at 12:13 pm

#36 Jenna on 05.16.22 at 5:12 pm

Keeping in mind while you read the comments that most have ‘missed’ the boat in purchasing RE and have been sitting on the sidelines, watching it grow exponentially over the past 20 years. (saying it’s a bubble, and they have been wrong for 2 decades).

What is forgotten, is population growth, increasing lumber/labor costs, labor shortages, mills wanting to start families and that RE is not always an investment, its a home, a place of your own, you can relax in, spend time with family and friends in and do any ‘HGTV’ thing you desire.

The big reason the wish here is that housing will drop 50-60% is because there is so much ‘joy’ invested in getting cheap prices because these commenters missed the boat to make a big windfall in RE 20 years ago…but more importantly, from my observation, they really wanted their ‘own’ home.

There is nothing wrong with renting, and nothing wrong with owning… but when you convinced yourself that one is better than the other, and you were too fearful to jump in years ago ‘when it was affordable’… there is regret. And that is what many of the folks have here.

RE will go up and down, but it is NO loss, unless you move and sell at less than you paid. Also Rents will and have been going up like Nuts, but will not affect you unless you move and have to get back in the rental market.

So if you are happy, don’t move, unless you want to jump into the ownership pool.

Another thing to ponder… rent at $3000 a month for a ‘nice’ place is $108,000 in 3 years … so really, if you buy, and in 3 years it goes down $100,000, so what. That was the loss of your rent.

Nope. You forgot the lost investment potential of the house equity plus all the overhead renters don’t pay – like property tax, big insurance premiums, lawn care, closing costs (including land transfer tax) and maintenance. But nice try. – Garth

#113 Satori on 05.18.22 at 12:31 pm

#83 Didn’t you leave a thousand times on 05.17.22 at 12:12 am
#58 Faron on 05.16.22 at 8:05 pm

Just checking. Also, please let me know if you are annoyed yet. I can’t tell. I’m having fun.

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

What a child. Do you feel no shame as a supposed grown man. Of course it would be Ustabe as your only backer, explaining away your psychopathy as victimhood. Yuck.

So weird your constant lies about leaving. Like an STD that never really goes away. Least it’s still amusing watching the Sail guy own the both of you. Be nice though if you just consummated your crush on him and got it out of your system so we could all move on.
—————————————–

Faron, if you think I posted this – lets be crystal clear, the only thing I caught, as I was skipping yet another of your stupid posts, was Satori and the rest of your BS and lies I COMPLETELY SKIP.

What this looks like – is that you have others who don’t want you here. Not surprising! Does that ‘hurt your inflated ego’??? – Really Don’t Care.

Applause to the original #83 commenter!!! Absolutely Agreed!!!