Stuff happens

Here we go. Hang on.

As the cost of money goes up, as credit becomes more expensive and exclusive, as lenders adopt caution, as monetary policy is tightened, as bond yields rise with inflation and as investors, homeowners and borrowers see this is neither shallow nor fleeting, stuff happens.

You already know about stock markets. Fat input costs, war, a crappy supply chain and higher debt charges threaten the profit outlook. Plus Covid’s fading. The meme stocks with it. Crypto’s toast. Meanwhile inflation and energy costs are hitting consumer spending, which is 70% of the US economy and 60% of ours.

A US stock portfolio is down about 18%. Maple has done much better. And folks with a B&D account have been shielded by about 50%. The good news is that corrections bring better value to equities. And so far in history, all reversals have been reversed, ten times out of ten. So, wait.

Of greater consequence to most Canadians is real estate. And here the rising cost of money has only started to wreak some havoc.

You saw the inflation stats this week. They will be worse for May. So this is the latest forecast from the econs at Scotiabank (where forecasters have been deadly accurate):

Three 50bps hikes in June, July and September followed by quarter-point hikes in the final two meetings of the year… If I were them I would not be as confident in ruling out the need for a bigger move in June. The BoC’s policy rate should be at neutral—and beyond—under current circumstances, let alone months or quarters from now. The economy is in excess aggregate demand with inflation more than tripling the target, jobs nearly a half million higher than pre-pandemic levels with strong hiring intentions, fiscal policy continues to heap on stimulus by contrast to the US, Canada is importing a positive income shock through its terms of trade and the commodities boost.

Whazzat mean?

Simply that the chartered bank prime rate of 3.2% now will be 5.2% by December. Variable-rate mortgages now at 2.6% will be almost 5% and fixed-rate fivers could be pushing 7%, up from the mid-fours at present.

Remember all those folks telling you – loudly – that rates could never rise? That ‘the government’ would never allow it? That elected officials would also ensure real estate values were protected? Well, they were wrong.

So far the CB rates has increased a grand total of 75 bips and look at the carnage. This chart shows in its right-hand column the change in average prices by community since peak house in February. This could be just the start.

Prices from Feb peak have now dropped up to 50%

Source: Toronto Regional Real Estate Board; Multiple Listing Service.
Click to enlarge.

Declines of 20% and 30% are common. Even 50% has happened. And the greatest slaughter is taking place, as we forecast, in Bunnypatch, The urban areas are doing relatively fine – drops of single-digits. The hick cities and exburbs are a disaster. The faster the advance, the bigger the fall.

Suddenly the whole thing is coming into the sunlight. Social media is rife with tales of buyer remorse. Now the mainstream and financial media are all over the story as the market flips.

Reported Bloomberg on Thursday:

One of the world’s bubbliest housing markets is tilting from sellers to buyers with dizzying speed… Whether it all amounts to Canada’s long housing boom facing just another dip or something more severe will depend on how many people find themselves in trouble, and whether that trouble develops a momentum of its own. So far, the sudden market shift has been uneven, with places that saw less extreme run-ups holding onto their gains or even strengthening, while the cities and towns in Ontario that were at the forefront of the pandemic boom are suddenly tumbling… That pain could only be getting started if the Bank of Canada continues to raise interest rates at its recent pace.

Meanwhile we hear that the feds are ramping up plans to ban the use of HELOCs for the purchase of investment properties, effectively ending 100% financing. That move had been expected in the spring budget. Just one more nail in the coffin.

Here are some inescapables. First, rates are going to rise aggressively and I sure hope you heeded this pathetic blog’s advice to grab a 10-year when it was at the lowest point ever or a fiver six months ago.

Second, we don’t have a supply problem. Never did. Prices aren’t too high because there are too few houses. The politicians lied about that one. With a couple of dinky rate increases demand has wilted and values are tumbling – without a single new residence built. Just like blaming Chinese dudes was so fashionable (and wrong) three years ago, so is believing in this straw-man myth of too-few houses.

Third, a mortgage at 5% today is just as painful as the 18% rates faced by Boomers in the 1980s. That’s because homebuyers have borrowed epically, with $1 million home loans commonplace. Used to be that a debt of $250,000 on a house you bought for three-fifty was a crippling burden at 12% or 14% interest. Now a $800,000 mortgage on a so-so townhouse won in a bidding war for $1.1 million costs almost $5,000 a month at just 5%. Plus property taxes, utilities and maintenance that requires an income of almost $220,000. And you have three hundred large in equity losing altitude monthly.

Bank appraisals are coming in below sale prices. Condo assignments are being blown up. Mom & Pop investors are in negative cash flow, now losing capital value. The stress test at 6.5% is punting buyers. Media has turned negative. The seller’s market is now for buyers. But the buyers are too scared to offer, fearing prices will fall more. So they do. And meanwhile inflation in May will top 7%. So the CB goes macho.

And it was all predictable.

About the picture: “This is Kepler,” writes James. “We adopted him from the Toronto Humane Society in late 2016. Neither of us grew up in households with dogs, but now we can’t imagine life without him! When we take him for walks around the neighbourhood in midtown Toronto, people often comment how beautiful he is. Nobody ever says how beautiful I am, but I’m not jealous. Thank you for providing valuable financial education and hand-holding for free, every day. It has helped us to remain flexible so that we can respond to whatever life throws at us, secure in the knowledge that there will always be more kibble and treats than we need.”

160 comments ↓

#1 Dave on 05.19.22 at 3:52 pm

Is it fair to say that the cities with the most aggressive growth in real estate will also be hut the hardest with a decline in prices ie Vancouver Kelowna and Toronto?

#2 Ponzius Pilatus on 05.19.22 at 3:57 pm

Reports from the States (which should also be relevant to Canada) suggest that rents in major cities are rising sharply.
Which of course makes sense, as higher mortgage costs drive would be buyers into renting.
This trend will probably continue until rent also becomes too expensive in relation to buying, so that the would be buyers are getting back into the market.
So, in effect, rising rental prices should act as a bottom to house prices.
At least, in theory.
This shows that RE markets are rational and follow Mr. Market.
However, what will happen with the specu investors with empty units?
Will they get rid of their units or rent them out?
My guess is, rent them out, and therefore lower rents overall.
But, of course, that depends on how many empty units there are.
Which nobody seems to know.
In any case, archiving equilibrium is what this is all about.
When steaks gets to expensive, you buy hamburger meat, until the butcher has to grind the steak into hamburger meat, and so on.

#3 Prince Polo on 05.19.22 at 3:58 pm

The CB will only be considered macho if they hike 1+% in June, July, August, Sept!

#4 Ponzius Pilatus on 05.19.22 at 3:59 pm

#198 Shawn
Alberta imports many many things. You need exports to pay for the imports. Wind and solar will never replace those export dollars.
——————————————
That’s why Alberta should diversify.
Before the other customers of Alberta oil will be energy self sufficient.
Russia’s threat to cut off oil and gas is already speeding up this process.
Be creative Cowboys, before time runs out.
How about Buffalo meat exports?
Lure Disney World away from Florida, where they are having problems DeSantis.
Make it a Rodeo theme.
Or build convention centres to attract the LGTBQ communities and tourists.
Just kidding of course.

#5 Frank Fred on 05.19.22 at 4:01 pm

“Crypto’s toast”- ‘MOST’ crypto is toast. Yes coins like dogecoin, teather, XRP are garbage…and will go to zero. Just like at bubble .com peak etoys.com had a higher marketcap than toysrus. However- AMAZON, EBAY, GOOGLE went on to make many millionaires. Very obtuse thinking- Do you even know what blockchain guarantee’s? Math smart contracts assures truth. TRUTH>TRUST 1000’s of years of trusting someone will do what they say they will do has turned into math based certainty. SN=SN Every time you speak of crypto(and politics) you show your dinosaur ignorance.

#6 Captain Uppa on 05.19.22 at 4:02 pm

“… I sure hope you heeded this pathetic blog’s advice to grab a 10-year when it was at the lowest point ever or a fiver six months ago.”

I asked you (via multiple comment posts) if I should grab a 10 back in April of 2021 and you never answered!

However, I did read between your blog’s lines and grab a five’r for 1.79% that matures in 2026. Maybe they’ll be cutting by then lol.

#7 YVR Renter on 05.19.22 at 4:03 pm

Well yesterday’s comments have flipped on their head. Here in Georgian Bay South bunnypatch price reductions are happening at last. Today that crappy, $1.25 million, brand new, teeny tiny bungalow went to $1.099- a $151,000 haircut! Guess all the open houses had crickets. His competition in the hood, similar crappy brand new bungalow with neighbors watching ya cook dinner through the windows is at $1.05. It’s off from original list of $1.15, …poof…$100,000 shaved off. Other reductions abound but there are still too many listings $300,000 too high. A renovated 60’s staged bungalow with no yard and single garage ain’t worth over a million on a crappy street filled with ugly apt buildings. Prices are still in Lala land. Speaking of which, you can probably get more in LA for a $Mill, and better weather and real jobs. Hey, did anybody tell them ski season is over?

#8 Faron on 05.19.22 at 4:04 pm

#216 IHCTD9 on 05.19.22 at 3:30 pm
#190 IHCTD9 on 05.19.22 at 12:30 pm

Try intellectual honesty.

Uh. Let’s review the indisputable facts of the cases here.

Tamara Lich, hero of vehicle-oriented screen name users everywhere, was arrested and has been charged with the crime of intimidation.

Observer stated a hope that intimidation may change a SCOTUS ruling or at least provide some public airing.

Intellectual honesty would require us to decide if these kinds of intimidation are the same, or if we can establish that Observer was cheering for criminal intimidation. Simply, we can’t. In fact, given Observer’s overall gentle stance on things, it’s likely “intimidation” in his mind referred to lawful and peaceful protest. i.e. innocent until proven guilty. Or, in Tamara’s case, until charged (she still may be found innocent).

IHCTD9, you have not been able to show that these are comparable instances of intimidation. Thus, intellectual honesty is not on your side even though the same word has been used.

This is a kind of nuance that the is lost on the internet. Especially in the Trudeau hating (seriously, you write the same garbage about him 3-4 times a day) man-camps that you hang out in, angrily stroking your cat while stoking your fireplace and digging yet another bunker.

Regardless, your intellectual honesty cudgel fails here. Sorry.

#9 PeterfromCalgary on 05.19.22 at 4:11 pm

“Third, a mortgage at 5% today is just as painful as the 18% rates faced by Boomers in the 1980s. ”

Well that is in a strange way comforting. The high rates of the 1980s ended the great inflation and started a bull market in stocks.

#10 Catalyst on 05.19.22 at 4:13 pm

“Remember all those folks telling you – loudly – that rates could never rise? That ‘the government’ would never allow it? That elected officials would also ensure real estate values were protected? Well, they were wrong.”

LOL, Garth…it’s a little early to claim victory on this one. We haven’t even started yet and BoC is out hedging saying its watching housing.

Nope. That topic was covered here last week. Check it out. – Garth

#11 Franco on 05.19.22 at 4:13 pm

“a mortgage at 5% today is just as painful as the 18% rates faced by Boomers in the 1980s.”

Absolutely correct and in relative terms could go much higher. This could get very ugly.

#12 Faron on 05.19.22 at 4:20 pm

#217 Dr V on 05.19.22 at 3:45 pm

190 IHCTD9

Nope, these are two different things. It’s intellectually dishonest to conflate them no matter how hard IHCTD9 bellyaches.

#13 X on 05.19.22 at 4:23 pm

Yes, amazing what a small rate increase has done to the RE market, in what are still remarkably low rates. Gotta wonder how slow things get.

Not sure if Toronto will see 20% declines or not. It seems like everything right now is going unsold, then the listing gets terminated. Not sure if sellers are hoping this passes quickly like it did in 2017, and are planning on relisting in a few months, but I really think this depressed RE market is here for at least 2 years.

#14 Hurtin' Albertan on 05.19.22 at 4:24 pm

No comment on Kenney resigning or the complete gong show in Alberta politics?

The UCP have been a disaster for Alberta. Every portfolio Kenney and his minions have touched they have willingly or unwillingly sabotaged or bungled (COVID-response, healthcare, opioid harm-reduction, education, parks/environmental protection, pipelines… the list of their scandals and blundering is endless)

We need a provincial election ASAP to bring back some political stability, hopefully with a chastened and much wiser and more pragmatic and civil Notley government at the helm.

Or perhaps Alberta is just ungovernable…

#15 Old Ron on 05.19.22 at 4:26 pm

@ PeterfromCalgary :

You are absolutely correct. The US Fed under Volker and the B of C’s John Crow bit the bullet and tamed inflation.

Subsequent governments reaped the benefits for 3 decades by slowly lowering the rates to prime the economy, until we hit Zero %, and ran out of room to cut further.

#16 Ferryboy on 05.19.22 at 4:27 pm

#5 Frank Fred

Agreed. Blockchain is attracting all the smart minds and huge Venture Capital $$

Sure there will be a massive shakeout of the weaker coins but the technology is here to stay.

I think some of the old financial establishment might be worried

#17 crowdedelevatorfartz on 05.19.22 at 4:27 pm

Could a 0.75% rate increase be possible June 1st?
Only if the rate masters at the BoC have the cojones to slay that inflation dragon quickly.

Realtors should return the Leased Audis now while they still can.

#18 Doug t on 05.19.22 at 4:28 pm

Covid is so yesterday – can you say MONKEY POX – LMAO seriously though we are a pitiful species – the fact that we may get 80 years on this rock (if ypur lucky) and we run around like chickens with our heads cut off worrying about things we can’t control – welp get the popcorn ready cause the chickens are just warming up

#19 I don’t know on 05.19.22 at 4:29 pm

#6 Captain Uppa on 05.19.22 at 4:02 pm

Smart move locking in. The media sensationalizes everything, including real estate. A nice house in a nice area will always be in demand, and this is still the case. There isn’t a shortage of homes in Canada per se, but there is in our large urban areas where demand is highest and economies support prices.

If someone made a poor choice and bought in Dec to flip within a year they deserve a reality check. Everyone and their brother knew rates would rise. Those that locked in for five or ten years can go to sleep and enjoy life with fixed payments. It’s a good bet in five years house prices will be higher, regardless of rates (which aren’t going up anywhere near what everyone thinks).

Anyone catch the article about homes valued over 1.5 mil still selling quickly? As expected, the average potential home buyer was priced out a long time ago. The rate hikes are making monthly payments worse than they were before. Only high earners will be able to withstand large monthly payments, and that’s why these homes are continuing to sell.

Rate hikes don’t help with affordability. They will just further cement the divide between existing home owners and everyone else. You buy when you can afford to.

IDK

#20 Squire on 05.19.22 at 4:30 pm

Meanwhile inflation and energy costs are hitting consumer spending, which is 70% of the US economy and 60% of ours.
———————–

So that leaves 30% for real estate. We are doomed
Maybe the remaining 10% in energy will save us.

How does it go again? Oh yes, never catch a falling knife….

#21 Caffeine Monkey on 05.19.22 at 4:33 pm

Guys guys guys… everything’s going to be just fine! TRREB’s CEO wrote this earlier this month:

“Policymakers should not assume that because home sales are off their record peak, we can ignore the
lack of inventory in the market. Buyers who have moved to the sidelines will not remain there forever,
and the population of our region will continue to grow on the back of immigration. In the absence of new
supply, we will build a significant amount of pent-up demand that will need to be satisfied in the not-too-
distant future. The ability to increase and diversify our housing supply needs to be a key area of debate
in our upcoming provincial and municipal elections,” said TRREB CEO John DiMichele.

I, for one, believe that a Realtor would never lie.

#22 Dominoes Lining Up on 05.19.22 at 4:37 pm

Anyone else noticed this ?

– banks and credit card companies are putting “alert notifications” on cards and lines of credit, seemed to just begin last month or so when any account is close to a certain level. Email and text messages are going out like crazy now.

They seem worried.

#23 Ponnaps on 05.19.22 at 4:38 pm

Mississauga you beauty why do you continue to hold up?

#24 MDQ on 05.19.22 at 4:38 pm

How do you think someone like this guy would navigate the next 3 years?
https://www.youtube.com/watch?v=djDUHu4xLiY&ab_channel=MatthewVarga

He is what Garth calls “cowboy”.

Actually I was thinking more like “dink”. – Garth

#25 Big Mac on 05.19.22 at 4:39 pm

«Second, we don’t have a supply problem»

The voice of reason, thank you Garth

#26 erik mtl on 05.19.22 at 4:40 pm

Almost every day we hear inflation is caused, in part, by a wacky supply chain. Other than factories in China being shut down, where else is there obivous explainable supply chain disruptions that could account for noticeable changes in inflation? It almost seems like this is an invisible boogeyman that people use to explain away the current inflation phenomenon…

Small example: chip shortage = new car delays = used car inflation. – Garth

#27 Mr Fox on 05.19.22 at 4:46 pm

Now the question is: will the investors panic and get out when we enter the bear market.. since we’re just 1 step away from it.

That would be foolish. – Garth

#28 Observer on 05.19.22 at 4:47 pm

It’s going to be interesting to watch just how far and how fast Canadian real estate drops.

#29 Wallflower on 05.19.22 at 4:51 pm

I propose that the only metric a prospective homebuyer should follow in this type of market is listing terminations.
Eye popping. I have never seen volumes remotely near what I see now.

#30 Paddy on 05.19.22 at 4:55 pm

Kepler is a handsome boy indeed.His eyes look so kind and gentle.I have the same problem whilst walking my dog, he gets all the compliments, but I ain’t jealous, cause he’s the best boy and he deserves them.

It’s gnna be interesting to see how this plays out. I’m 38 now and have quite a bit of skin in the game. I’m not really too concerned though cause I’m B&D all the way courtesy of Garth and the gang at Turner Investments. And if everything goes south, then it’s out of your hands and you can’t do anything anyway.

#31 Guy in Calgary on 05.19.22 at 4:56 pm

Good. I would like a cabin or vacation spot in BC.

#32 Søren Angst on 05.19.22 at 4:56 pm

Mr. Market ought to recover soon?

Articles saying the US Market has all but priced in a recession. So good news. Hopefully true.

—————

Cdn RE clearly not looking good.

The days of home as ATM, retirement package are coming to an end.

And the worst hasn’t even happened yet with inflation and rising rates.

I think the “worst” will be a lot worse than people expect.

Year 0 was 2020 where the times of

Expect the Unexpected

started.

….

Just like as I type at 10:54 PM here, Pordenone being buzzed by F-16s taking off in full afterburner.

Grazie Uncle Sam for having our back, noise and all.

#33 THE DANDADA on 05.19.22 at 5:04 pm

“The politicians lied about that one.”

SAY WHAAAAATTTT!!

Politicians lie????

#34 Shawn on 05.19.22 at 5:05 pm

Alberta Advantage OIl and Gas versis Wind ans olar

#212 WTF on 05.19.22 at 2:56 pm
Alberta imports many many things. You need exports to pay for the imports. Wind and solar will never replace those export dollars.
—————————————————————
Deflection,

That statement contains nothing related to what you unequivocally asserted regarding alternative energy sources and transmission capacity in Alberta. Completely incorrect in fact.

************************************
What I started out this thread saying was that to prosper an area needs a competitive advantage.

Alberta has a big competitive advantage compared to most (not all) places in that it simply has lots of oil and gas. Having oil is a giant advantage over a place without oil.

When it comes to wind ann solar, I don’t see where Alberta has any big advantage. Yes it’s pretty sunny and often windy especially in parts. But most of North America has pretty ample sun and wind.

I worked in the electrical industry for 26 years and so have some knowledge of transmission lines. Alberta has a small capacity tie line to Saskatchewan and a small connection to Montana. It has a fairly large connection to B.C. But B.C. has cheap hydro. The big population centers that could use Alberta wind and solar electricity are too far way and we don’t have the transmission lines to get there. It would be more economic to put the wind and solar in Toronto than to send the electricity from Alberta even if the lines were there.

Alberta can displace some gas and coal with wind and already has. But that does not bring in money from outside.

Oil and gas are what caused Alberta to grow to over 4 million people.

My main point, Alberta has a big economic advantage in oil and gas and no such huge advantage in wind and solar .

Here is a link to Electricity Supply and Demand. It does indeed show wind generating a good part of the load right now (18%).

Despite wind generating 18% of the total Alberta generation at the minute. Alberta is importing 714 MW mostly from B.C. a the minute. (For whatever reason the imports show as a minus when it is a flow into Alberta. You see at the top left the so called negative from import is added to the Alberta generation to get the total Alberta load).

So that’s my point, zero wind power is being exported to bring in money. Alberta is importing electricity as it does virtually every day. Green wind and solar power is great. But it will never be any kind of major export for Alberta.

#35 CL on 05.19.22 at 5:06 pm

They’ll drop the stress test and eventually bring back 30 or more year amorts. Everyone is brave until the people….voters…become restless. And they will. And to add, just like they said inflation is transitory, there will be no soft landing whatever that is and oil isn’t going down anytime soon rates or not.

I am indifferent to real estate values, just a realist. Wrong or not, people’s entire “retirements” are in their houses, so they like to think.

Summary: it’s gonna be a disaster.

#36 Dotcom Bubble Trouble on 05.19.22 at 5:09 pm

Would like to see similar data on regions of Alberta and British Columbia.

#37 Shawn on 05.19.22 at 5:12 pm

The link to Alberta electricity Supply and Demand

http://ets.aeso.ca/ets_web/ip/Market/Reports/CSDReportServlet

#38 Linda on 05.19.22 at 5:17 pm

‘Kepler’ is indeed one pretty pup. Looks very well groomed.

So what I’m wondering is, if WFH will help in easing the financial hit of tumbling RE valuations. Also whether rents will drop in exurban locales so the priced out locals can afford accommodation again.

#39 mitzerboyakaQueencitykidd on 05.19.22 at 5:22 pm

Dogs r great
beer iz good
people r krazie

#40 TMac on 05.19.22 at 5:23 pm

Locked in a fiver at 1.79 that I have until late 2026. Great advice, Garth!
We will see what the landscape looks like at that time but, man does it ever feel nice to make a right move at the right time.
The B&D portfolio seems like a bonus now.

#41 J on 05.19.22 at 5:33 pm

“Second, we don’t have a supply problem. Never did.”

I’d be really interested in data that backs up this claim. Perhaps a blog post dedicated to this topic?

Supply chain woes are (temporarily) disrupting Canadian homebuilding project timelines in 2021/22 (at least according to a quick google search). But, it would be nice to see data that shows no structural housing supply issues.

#42 Søren Angst on 05.19.22 at 5:43 pm

Can’t win for losing in Canada, EV or ICE.

Tesla Supercharging costs quadruple in Canada.

5 min @CA$0.68 per min = CA$3.40
16 min @CA$1.30 per min = CA$20.80

Mr & Mrs Sauga dude complained to Musk on Twitter.

https://www.teslaoracle.com/2022/03/30/supercharging-costs-almost-quadruple-in-canada-tesla-is-working-on-a-solution-says-musk/

The ever so dutiful Google:

People also ask

How long does it take to supercharge a Tesla to 100%?

It took 63.5 minutes to charge from 0 to 100% on the V3 supercharger, and surprisingly, it only took about 6.5 minutes longer while charging on the V2 station, and finished up the complete charge in 1 hour and 10 minutes.

————–

If so, I can see why the Mr. & Mrs. Sauga dude with a 16 min charge @ CA$20.80 was not a happy EV camper.

yeah oil

(couldn’t resist)

#43 Ponzius Pilatus on 05.19.22 at 5:50 pm

#208 crowdedelevatorfartz on 05.19.22 at 2:35 pm
@#203 IHCTD9
“Don’t blame the TPS – they can’t even put cuffs on someone and stuff them in the back of a cruiser anymore without getting sued, suspended, investigated, inquired, shamed, doxed, protested, and featured on the CBC. I wouldn’t blame them a bit if they decided to just chill at Timmies until quitting time. Why risk losing a good gig by trying to do your job?”

++++

Yep.
Defund the police and release criminals the same day with a “promise to appear”
Doesn’t seem to reduce crime.
Funny that.
—————-
Hey you two Keystone Cops.
In Nazi Germany there was nary any crime on the streets.
But the prisons were full, so they had to build huge Concentration Camps, which we know also had other purposes.
Think about that, before you wish for a brutal police state.

#44 Montgomery Burns on 05.19.22 at 5:53 pm

Ahmed Hussein will never let real estate prices fall. He assured me that the Liberals will find ways to stop that.

#45 Ponzius Pilatus on 05.19.22 at 5:55 pm

#17 crowdedelevatorfartz on 05.19.22 at 4:27 pm
Could a 0.75% rate increase be possible June 1st?
Only if the rate masters at the BoC have the cojones to slay that inflation dragon quickly.

Realtors should return the Leased Audis now while they still can.
——————-
Another fuzzy Crystal Ball prophecy by CEF.
May I remind you of your prediction that gas will hit 3 bucks by summer.
Summer starts in 1 Month.
Are we getting there?

#46 NOSTRADAMUS on 05.19.22 at 5:59 pm

MIND BENDER.
It’s really, really important to break our minds out of the realtor/media “Framing” on the housing issue. Contrary to their self serving narrative, low prices on good-quality houses are GOOD, not bad. They mean lower costs of living, a benefit for the majority of Canadians. They mean homebuilding is more economically efficient and less wasteful. Smaller mortgages (as a share of income) means lower financial leverage, less risk for individuals, and less cost to society since fewer people will be forced to declare bankruptcy in a job loss, injury, illness or other health crisis.
The only people who think houses should be ever-more-expensive are the ones trying to sell them, and the ones hoping to trap you into debt so you can pay them blood sucking interest for the rest of your life.
In addition, high home prices are a tax on the real economy because people don’t have enough money left over to spend on other things. Such as the necessities of life, food, health, transportation, etc.
The winners are: finance and insurance,” REAL ESTATE BROKERS,” provincial and local taxing authorities. The losers are practically every other player hoping to get on the real estate ladder. Steady lads, hold the line.

#47 Søren Angst on 05.19.22 at 6:06 pm

#37 Shawn

Native born Paleo Albertan here that worked in the energy industry for a spell (oil/gas/chemical enrg, procurement, construction).

AB a Province of hewers and drawers and will remain so.

Under Trudeau the 1st they had Gov Apparatchiks reviewing purchase orders for $100’s of millions in imports & you had to prove that there was no viable Cdn. source – amounted to nothing (idea was it would foster new Cdn business to offset imports, didn’t happen).

Under Mulroney you had the Western Diversification Fund – amounted to nothing other than some high production cost Poplar Pulp & Paper Mills in the middle of nowhere, the rest were financial boondoggles for those that could write a convincing story.

Manufacturing, AB does not have the population and cannot compete because of transportation costs to large population centers.

oil. gas. coal. some poplar trees. nobody wants fossil fuel electricity nowadays other than for peak period demand (pm;u 9.5% of electricity in Canada).

—————–

Milk the hewing and drawing has always been the AB way as long as I can remember.

I don’t see that changing any time soon.

#48 willworkforpickles on 05.19.22 at 6:10 pm

“And it was all predictable.”
………………………………………………………………………..

Ditto!

#49 The Regulator on 05.19.22 at 6:19 pm

# 14 – Hurling Albertan : Haaaahahahahaha. In your dreams. It sure is easy to sit back and criticize others. I should know.

#50 canuck on 05.19.22 at 6:21 pm

Hurtin’ Albertan on 05.19.22 at 4:24 pm

No comment on Kenney resigning or the complete gong show in Alberta politics?

The UCP have been a disaster for Alberta. Every portfolio Kenney and his minions have touched they have willingly or unwillingly sabotaged or bungled (COVID-response, healthcare, opioid harm-reduction, education, parks/environmental protection, pipelines… the list of their scandals and blundering is endless)

We need a provincial election ASAP to bring back some political stability, hopefully with a chastened and much wiser and more pragmatic and civil Notley government at the helm.

Or perhaps Alberta is just ungovernable…
____________________________________________

Wrong province. Take your socialist dogma one province to the left. They’re used to that there. Enjoy the 2.20 gas prices and PST.

#51 IHCTD9 on 05.19.22 at 6:29 pm

James must be an astronomy guy with a dog by that name :)

#52 Happy Liberal on 05.19.22 at 6:33 pm

DELETED

#53 DOn't fight that F guy on 05.19.22 at 6:38 pm

Not on intellectual dishonesty, he does that for a living. Just Google.

Only here to troll and wrok his issues.

#54 Robert B on 05.19.22 at 6:39 pm

As Peter Schiff once said ” You have to raise rates so you can lower them.”

By 2023 , we won’t get a chance to raise rates that high this time… No more Volcker moves coming.

Once will kill the economy, then down come rates we go…..

#55 Nonplused on 05.19.22 at 6:44 pm

There are too few houses, or houses and apartments if you will. But not enough to explain the huge run up in prices. Even when houses or anything else is scarce, there is a price where buyers just sit it out. But not in a bubble.

Except in Calgary. They seem to be building a lot of houses here, but we never really had the bubble that seems to have gripped YYZ and YVR. Prices are strong, but I wouldn’t call it a crises. Plenty of units available for 4 times income assuming 2 people working. Not your dream home maybe, but who gets to start out in their dream home?

#56 Nonplused on 05.19.22 at 6:51 pm

Oh and Calgary never really had the move to bunny patch either, since that is a naturally engrained part of the Alberta psyche and people do that as soon as they can anyway, since forever.

#57 Reality is stark on 05.19.22 at 6:57 pm

Down a half mil in 3 months and you think they’re gonna close you are dreaming.
I don’t care if your lawyer is Jesus, you won’t get your money.
The rule of law doesn’t mean anything any more, we live in the social justice era. No accountability, no responsibility. The seller is an oppressor.
At the top of the market you take a quick close and all cash from a doctor or dentist or the pope.
In God we trust all others pay cash.
On the barrelhead.

#58 Love_The_Cottage on 05.19.22 at 7:02 pm

Second, we don’t have a supply problem. Never did. Prices aren’t too high because there are too few houses. The politicians lied about that one. With a couple of dinky rate increases demand has wilted
____________
With respect, you’re confusing home prices with the supply requirements for housing. Rental prices continue to climb, until that changes supply is part of the equation.

#59 Dishonest Realtor Carjacker on 05.19.22 at 7:06 pm

Garth, I’ve decided to follow your protocol and take a Balanced and Diversified approach to making a living.

With 68,000 realtors in the GTA and a dearth of listings it’s tough to make my car lease payments and buy food.

So I am now also in a kind of informal auto resale business. Anyone who can suggest a neighbour with an accessible luxury vehicle, please text me and I can offer them a 5% commission. And if you would like to buy a high quality used vehicle, I can offer excellent pricing and 24 hour delivery.

(Out of respect for my industry, I will not be taking orders for Audis, however)

#60 IHCTD9 on 05.19.22 at 7:12 pm

#43 Ponzius Pilatus on 05.19.22 at 5:50 pm

Think about that, before you wish for a brutal police state.
——-

Wish for a brutal Police State? Uh, more like just understanding that not a lot of crime fighting will be getting done in Toronto.

Just not worth losing your job by trying to do your job right? I don’t blame ‘em a bit. Pay is the same relaxing at Timmies. Plus, they get much better job security drinking coffee than by taking criminals off the street. Fighting crime could get you fired in a second!

#61 Barb on 05.19.22 at 7:12 pm

Kepler is a cool name for both a lovely dog and a telescope!

T2 will be worrying about reelection chances with all the hurt coming down. Bet he’s asking a bureaucrat how to separate Wage and Price (from Wage and Price Controls.)

*grin*

#62 Dr V on 05.19.22 at 7:12 pm

12 Faron

“Nope, these are two different things.”
————————————————-

I was only referring to O’s comment re the SCOTUS and “imtimidation”. There has been much bobbing and
weaving since. Better if O just owned it.

I have no dog in the right to choose or truck convoy discussion. Tamara will have her day in court.

#63 Brian on 05.19.22 at 7:22 pm

Covid is not fading. Justin Trudeau said in the House of Commons recently that more Canadians are dying of Covid 19 in the last month at a higher rate than the previous two years.

#64 Ed on 05.19.22 at 7:24 pm

Its time for Alberta to move further from the East & confederation.

Booting Kenney is just the beginning…now we need a leader with an Albertan vision…Danielle is not it…and of course Nutley isn’t either.

#65 crowdedelevatorfartz on 05.19.22 at 7:26 pm

@#43 Ponzie’s Police
“Think about that, before you wish for a brutal police state.”

+++
Please Ponzie.
Time and time again on the “News” we hear of repeat offenders with criminal history dating back decades being arrested for another violent crime.
Only to be released on bail the same day with a “promise to appear”.
I would hardly call incarcerating criminals before trial….with 100, 200, 300 police interactions……a brutal police state.

https://vancouversun.com/news/crime/bc-experts-repeat-prolific-offenders

And I quote, ” 40 known offenders are responsible for 6300 offenses.”

Time to start locking a few of these incorrigible people up?
Our do we just keep the revolving door spinning…..

#66 MadChild on 05.19.22 at 7:31 pm

The CB has always ran the game and real estate is tightly correlated with markets because these markets all need one thing: money.

The next bull run starts exactly when the CBs eases and starts expanding the money supply, but that can’t happen until inflation is killed off, which will be achieved once consumers pull back, creating a recession and broad based job loss as the domino effect of money velocity flat-lines.

So, even though some will have low borrowing rates locked in until 2026, will rates be as low as 1.9% again, because if not cost of living will be substantially more going into the future for the ones who thought they struck good fortunes over the past few years and just because house prices correct with higher rates does not mean that life will be anymore affordable than it has been as the maximum affordability ceiling adjusts to what people can max out at. If waiting, the only thing lost is time, but if wanting to buy a house you should definitely wait until rate hiking peaks and values adjust, otherwise you are losing several hundred right out the gate.

If rates go up and don’t ever come back down we are going into the dark ages but my bet is rates will go up for a bit and then crater once it breaks the economy. 2008 changed everything.

#67 Quintilian on 05.19.22 at 7:33 pm

https://thebreaker.news/news/day-huawei/

Stockwell Day Tweets praise for China’s Huawei, hours before campaigning for Conservative Wai Young

Just be thankful that the Conservatives have been cast out to the political wilderness federally and provincially.

SD was always a loonie. Lake Okanagan will never forgive him. – Garth

#68 DON on 05.19.22 at 7:34 pm

#2 Ponzius Pilatus on 05.19.22 at 3:57 pm
Reports from the States (which should also be relevant to Canada) suggest that rents in major cities are rising sharply.
Which of course makes sense, as higher mortgage costs drive would be buyers into renting.
This trend will probably continue until rent also becomes too expensive in relation to buying, so that the would be buyers are getting back into the market.
So, in effect, rising rental prices should act as a bottom to house prices.
At least, in theory.
This shows that RE markets are rational and follow Mr. Market.
However, what will happen with the specu investors with empty units?
Will they get rid of their units or rent them out?
My guess is, rent them out, and therefore lower rents overall.
But, of course, that depends on how many empty units there are.
Which nobody seems to know.
In any case, archiving equilibrium is what this is all about.
When steaks gets to expensive, you buy hamburger meat, until the butcher has to grind the steak into hamburger meat, and so on.

******
Or landlords unable to sell could in a position where they need whatever rent they can get. A little of both? If you raise your rents too high to compensate for increased costs renters might go to amore needy landlord asking lower competitive rents. A mixed bag of course…

#69 Sherry on 05.19.22 at 7:48 pm

I keep saying again we are going to late 1990’s to 2000’s GIC, government bond rates, 6% to 7%. Mortgages, lines of credit, HELOC’s etc. are going to 8% to 9%. This is going to happen, the low rate, free money train is over after 20+ years. Deal with it debt junkies.

#70 Dr V on 05.19.22 at 7:55 pm

47 Soren

” nobody wants fossil fuel electricity nowadays other
than for peak period demand (pm;u 9.5% of electricity in Canada).”
——————————————————

Looks like about double that actually. It is also my very basic understanding that coal plants need to operate at a base load, also gas and oil but less so and depends on the technology and type of generator. Nuclear not sure. Hydro is quick to respond to load. just open the tap some more.

https://www.cer-rec.gc.ca/en/data-analysis/energy-markets/provincial-territorial-energy-profiles/provincial-territorial-energy-profiles-canada.html

Interesting site.

#71 Trudeau is a deluded idiot that destroyed Cacada on 05.19.22 at 7:57 pm

DELETED

#72 IHCTD9 on 05.19.22 at 7:59 pm

#217 Dr V on 05.19.22 at 3:45 pm
190 IHCTD9

Re: Observer

It’s no use IHC. You cant hit a moving target! And even if you do it just moves again…..
———-

It’s no problemo Doc! One great thing about the steerage section is that once you hit submit, you can’t edit or delete your comment. Now, Observer said something ultra-stupid (hey, I’m guilty too), but he didn’t own it. That means I will win every exchange on the matter until he stops trying to say he didn’t say what he clearly (and irrevocably) did. Obviously, I’m not the only one who took note of the comment either.

Observer is sunk on this one until he owns it. Until then, I can take pot shots from the sidelines at my leisure until the end of time. : )

#73 Steven Rowlandson on 05.19.22 at 8:14 pm

The problem with playing monopoly especially in the real world is that the few or the one wins and the rest lose.
When the capacity to pay is gone so is the cash flow and when that happens the assets become useless and nonperforming in a closed system like a game or a wage suppressed economy. As it was said at the end of the Patton movie, “all glory is fleeting.”

#74 Observer on 05.19.22 at 8:15 pm

#60 Dr V on 05.19.22 at 7:12 pm
12 Faron

“Nope, these are two different things.”
————————————————-

I was only referring to O’s comment re the SCOTUS and “imtimidation”. There has been much bobbing and
weaving since. Better if O just owned it.

^^^^^^^^^^^^^^^
OK. For the umpteenth time, I screwed up and used a word that did not accurately reflect what I was trying to say. My bad.

Can we now go back to my comment from today that triggered this strange diversion to a dialogue from several weeks ago?

Too lazy to cut and paste, but I believe I was insulting SA’s intelligence for suggesting that Tamara Lich was a freedom fighting hero who is being persecuted for her thoughts rather than her actions. Now that is quite the statement to “own”. Thoughts?

#75 Location on 05.19.22 at 8:16 pm

#1 Dave on 05.19.22 at 3:52 pm

Is it fair to say that the cities with the most aggressive growth in real estate will also be hut the hardest with a decline in prices ie Vancouver Kelowna and Toronto?

——————-

No Dave. It is not fair to say that. Did you not read the article? Bunny patch. Bugtustle, Saskatchewan. None of these places are Bunny Patch. Sure, they will get a bit of a haircut but that will be minimal and possibly relatively short lived. It will help reset prices and hopefully remove silly people who had no business buying in the first place.

Metro Kelowna is the fastest growing area in Canada and has been for several years. Do your own research.

You will always need to pay a premium to live in desirable places. It’s called…. location, location, location.

#76 Grunt on 05.19.22 at 8:18 pm

Dang! I sneezed and missed the platinum royal tour of Canada.

#77 Linda on 05.19.22 at 8:24 pm

#14 ‘Hurtin’ – Regarding Kenney & the UCP, I’d advise the purchase of the large size Cowboy Popcorn & your beverage of choice. Sit back & enjoy the show as the UCP plays ‘replace the leader’. Going to be entertaining to watch, especially since UCP rules do not rule out Kenney making a run for the newly vacated premier position!

#78 DON on 05.19.22 at 8:27 pm

#14 Hurtin’ Albertan on 05.19.22 at 4:24 pm
No comment on Kenney resigning or the complete gong show in Alberta politics?

The UCP have been a disaster for Alberta. Every portfolio Kenney and his minions have touched they have willingly or unwillingly sabotaged or bungled (COVID-response, healthcare, opioid harm-reduction, education, parks/environmental protection, pipelines… the list of their scandals and blundering is endless)

We need a provincial election ASAP to bring back some political stability, hopefully with a chastened and much wiser and more pragmatic and civil Notley government at the helm.

Or perhaps Alberta is just ungovernable…

*******
First thing I saw when I checked the news this morning. What makes someone outright resign even if in the wrong in these times? A friend texted me the dirty laundry listed. What else is the question?

Meanwhile in BC, the former clerk of the legislature under the BC Liberal/Conservative/Social Credit government has been found guilty of breach of public trust and fraud.

What’s next?

#79 Chris L. on 05.19.22 at 8:36 pm

DELETED

#80 KNOW IT ALL on 05.19.22 at 8:40 pm

So WHY would the Bank lend you the funds to purchase a home if they knew it was going to decline in value?

#81 Lamb Brad on 05.19.22 at 8:44 pm

Now is the best time to invest in Toronto real estate.

#82 Observer on 05.19.22 at 8:47 pm

#8 Faron on 05.19.22 at 4:04 pm

Observer stated a hope that intimidation may change a SCOTUS ruling or at least provide some public airing.

^^^^^^^^^^^^^^
What I was trying to express, but failed, was that I hoped negative public reaction(lots of loud protesting for example) to the looming ROE v Wade strike down, would encourage SCOTUS to rethink their position and confront their own right wing biases as opposed to imposing their religious and moral views on women.

Sadly I did not explain myself well and caused all sorts of hand wringing apparently. Methinks the right wingers at this blog just like to find reasons to try to attack my words, as imo, I frequently do a good job of making them look foolish.

#83 Dip on 05.19.22 at 8:47 pm

There will be no rate hikes in June and for the next 3 years. Canadians with mortgages will riot on the streets if they have to renew at higher rates.

#84 WTF on 05.19.22 at 8:50 pm

#64 Ed
Its time for Alberta to move further from the East & confederation.

Booting Kenney is just the beginning…now we need a leader with an Albertan vision…Danielle is not it…and of course Nutley isn’t either.

—————————————————————

And who elected them?

Didn’t you have a PM from Calgary for gods sake? Yes you did, saw him in an Irish bar on Steven Ave post victory for the leadership. Tall Dude, big belly, Blue eyes, condescending dead fish stare. Lots of Reform fart catchers buzzing about.

But Ya, fill your boots. Form yet another “new” party with the same Bible thumpers and libertarian whack jobs. Be sure to Add in the Soon to be incarcerated freedum Convoy Organizers to the toxic mix. Insanity is trying the same thing and expecting a different result. Have at er.

Just brilliant.

#85 Observer on 05.19.22 at 9:02 pm

“Methinks the right wingers at this blog just like to find reasons to try to attack my words, as imo, I frequently do a good job of making them look foolish.”

Actually, let me rephrase, “they”, not “I” frequently do a good job of making themselves look foolish. I just point it out. SA’s remarks regarding poor, persecuted Tamara Lich being the most recent example.

#86 yvr_lurker on 05.19.22 at 9:04 pm

And it was all predictable.
————
I have learned over the past 30 years to try to be under-stated and a bit humble. Although I agree with the essence of your post, I have some questions:

Would anyone have expected 8 months ago that:

1. Inflation would be running at 7% + (actually figure for most people in what they buy is much higher).

2. That to expect a 5 year mortgage renewal in a few months will be just south of 7% (given we were around 2% about a year ago).

3. That gas would now be $2.33 per liter in Vancouver, when it was under 1/2 that figure at the start of Covid.

4. That a B+D portfolio is down by at least 7 or 8% from the start of the year.

5. That Putin has lost his mind driving chaos in Europe and having us revert to back to a mid 80s mentality.

So many extras on this list. It has been rather extreme to say the least in the past 5 months…. Nobody could have anticipated the MAGNITUDE of the change…

As for not a “supply issue”, I beg to differ. It is local I believe. Try finding a suitable rental for students at University in Victoria or at UBC… very expensive and uber-hard to find. More immigration will just push the local supply issue in the next year. Extra supply has been bought and held by investors over the past upteen years in Vancouver. Hopefully they will have to sell with the new trends in the market at a loss, which will free up supply.

Understated and more humble is a better way to go…

Nah, the RE bust was predictable. Only the timing was unknown. BTW humble is overrated. – Garth

#87 Stone on 05.19.22 at 9:34 pm

Simply that the chartered bank prime rate of 3.2% now will be 5.2% by December. Variable-rate mortgages now at 2.6% will be almost 5% and fixed-rate fivers could be pushing 7%, up from the mid-fours at present.

———

Are 5 year fivers currently in the mid-fours at present?

Butler Mortgage is showing them at 3.73% for insured mortgages.

Are you talking about the same mortgage type?

That’s a broker, not a lender. Borrow from a reputable source. Bank loan rates are as stated. – Garth

#88 Outrage on 05.19.22 at 9:44 pm

Gas prices in Victoria is $2.33 a liter . In USA terms ,it is $ 6.88 usd a us gallon. Yes , if they we’re paying that in the U.S.A they would be in riot in the streets. In Canada they just roll over like whipped dogs and pee as Doug Casey would say. Dragflation is alive and well in Canada. The CB will never let the prime rate go above 4.5% guaranteed. Shameful, but its all planned.

#89 When Will They Raise Rates? on 05.19.22 at 9:45 pm

#29 Wallflower on 05.19.22 at 4:51 pm

I propose that the only metric a prospective homebuyer should follow in this type of market is listing terminations.
Eye popping. I have never seen volumes remotely near what I see now

————–

Interesting… Where can one find this data?

#90 IHCTD9 on 05.19.22 at 10:01 pm

#73 Observer on 05.19.22 at 8:15 pm
#60 Dr V on 05.19.22 at 7:12 pm
12 Faron

“Nope, these are two different things.”
————————————————-

I was only referring to O’s comment re the SCOTUS and “imtimidation”. There has been much bobbing and
weaving since. Better if O just owned it.

^^^^^^^^^^^^^^^
OK. For the umpteenth time, I screwed up and used a word that did not accurately reflect what I was trying to say…
———-

Very good, consider yourself off the hook.

#91 TurnerNation on 05.19.22 at 10:09 pm

Almost back to normal in the Former First World Countries! Normal is the plan right?
It’s just taking a bit long…longer…Mid 2022 here we are. Maybe Two More Weeks till normalcy??

Covid Scotland: Bid to give ministers controversial ‘Henry VIII’ powers labelled ‘chilling’ and a ‘power grab’
Opposition MSPs have criticised a “chilling” Scottish Government bill labelled a “power grab” despite ministerial commitments to water down the initial proposals.
https://www.scotsman.com/news/politics/covid-scotland-bid-to-give-ministers-controversial-henry-viii-powers-labelled-chilling-and-a-power-grab-3691980

.Ottawa interim police chief Steve Bell didn’t ask feds to invoke Emergencies Act | Globalnews.ca (globalnews.ca)


— I’ve been hammering this point for months. The reason Kanada still has the QR codes for travel, awaiting the digital ID to drop. We are being strung along until that time.
Control over travel/movement is permanent. March 2020 kicked off this new global system.

https://tnc.news/2022/05/19/feds-consider-digital-identity-and-facial-recognition-for-air-travel/

Feds consider “digital identity” and facial recognition for air travel
The Trudeau government has announced it worked with airlines to consider requiring “digital identity documents” and biometric data like facial recognition for pre-aircraft boarding requirements.

#92 BCWally on 05.19.22 at 10:11 pm

Just wondering if we could do that housing market deathwatch thing with the skulls again…

#93 Father’s Daughter on 05.19.22 at 10:31 pm

I have seen a ton of listings drop their price by $100-200K in the last few weeks and even with that they still seem insanely overpriced. Nothing is moving and as a prospective buyer all I can hope is that we hold the line and wait to “get in” until some sanity returns to these prices

#94 Steve M on 05.19.22 at 10:36 pm

Supply and demand is clearly still the overriding factor.

With the rate hikes, the cost of owning is even more than it was before, factoring in price declines and decent-sized downpayments.

#95 AB on 05.19.22 at 10:37 pm

#64 Ed
Spot on! I was always a loyalist until the ND/Lib’s showed what low life’s they are by bringing down the hammer on some bouncy castle’s. We recently returned from a trip to the USA. Speaking with so many good folks there made us realize that Canada is no longer sane and rational. Enough is enough.

#96 Ponzius Pilatus on 05.19.22 at 10:45 pm

90 IHCTD9 on 05.19.22 at 10:01 pm
#73 Observer on 05.19.22 at 8:15 pm
#60 Dr V on 05.19.22 at 7:12 pm
12 Faron

“Nope, these are two different things.”
————————————————-

I was only referring to O’s comment re the SCOTUS and “imtimidation”. There has been much bobbing and
weaving since. Better if O just owned it.

^^^^^^^^^^^^^^^
OK. For the umpteenth time, I screwed up and used a word that did not accurately reflect what I was trying to say…
———-

Very good, consider yourself off the hook.
———————————-
Haha.
IHTCD9
Godfather of Steering.

#97 Nonplused on 05.19.22 at 10:47 pm

Re: Roe vs. Wade

Lots of confusion about this potential ruling both North and South it seems.

The leaked SCOTUS opinion is simply that there is no authorization in law or the constitution for a federal mandate either in favor or against abortion access. In short Row vs. Wade wrote new law, which it is not in the power of the SCOTUS to do. Overturning it just throws the issue to the states individually or to congress to actually write and pass a federal law (which might be beyond the federal government’s constitutional jurisdiction, but it is not beyond the individual states).

Folks, the courts do not have a mandate to write laws, only interpret them or determine the constitutionality of them.

So once again we see that the whole thing is just the MSM trolling for clicks again. They made another mountain out of a mole hill because it gets views and sells ads, and we all fell for it again.

Remember, folks, if it’s on CNN it isn’t true.

Congress can fix this in no time once they are done borrowing money from China to give to Ukraine.

#98 Shaker on 05.19.22 at 11:09 pm

My mostly Maple portfolio is down 1.3%. I don’t know what you’ve been buying …. ETFs stuffed with garbage? Good news, Trudeau finally capitulated to international standards and banned Huawei, but only after his objectionable recalcitrance had him and us labeled as a security threat and unreliable around the world.

#99 Dr V on 05.19.22 at 11:19 pm

97 Nonplused – it’s also American so not my business.

74 O – All good. I have no comment on Tamara. Also, I am pro choice and lean right more than left.

#100 yvr_lurker on 05.19.22 at 11:26 pm

Nah, the RE bust was predictable. Only the timing was unknown. BTW humble is overrated. – Garth
——-

Good one.

Likewise, I don’t think anyone could have predicted that a basic but decent house in Dunbar area of Vancouver, which was on offer for 630K in Sept. 2002 would now be worth over 3M 20 years later. The numbers I know as this was what I was contemplating in 2002, which would have been over 4 times our income at that stage and was a bit “risky” to take on at the time (so I thought). Needless to say that such a place now is in the stratosphere for almost everyone in the age group that I was in at the time. Who would have guessed that real estate purchased at that time would be such a terrific investment. Not so now, however.

#101 Paul on 05.19.22 at 11:36 pm

#68 DON on 05.19.22 at 7:34 pm
#2 Ponzius Pilatus on 05.19.22 at 3:57 pm
Reports from the States (which should also be relevant to Canada) suggest that rents in major cities are rising sharply.
Which of course makes sense, as higher mortgage costs drive would be buyers into renting.
This trend will probably continue until rent also becomes too expensive in relation to buying, so that the would be buyers are getting back into the market.
So, in effect, rising rental prices should act as a bottom to house prices.
At least, in theory.
This shows that RE markets are rational and follow Mr. Market.
However, what will happen with the specu investors with empty units?
Will they get rid of their units or rent them out?
My guess is, rent them out, and therefore lower rents overall.
But, of course, that depends on how many empty units there are.
Which nobody seems to know.
In any case, archiving equilibrium is what this is all about.
When steaks gets to expensive, you buy hamburger meat, until the butcher has to grind the steak into hamburger meat, and so on.

******
Or landlords unable to sell could in a position where they need whatever rent they can get. A little of both? If you raise your rents too high to compensate for increased costs renters might go to amore needy landlord asking lower competitive rents. A mixed bag of course…

*****

That’s a bingo.

#102 Ponzius Pilatus on 05.20.22 at 12:01 am

98 Shaker on 05.19.22 at 11:09 pm
My mostly Maple portfolio is down 1.3%. I don’t know what you’ve been buying …. ETFs stuffed with garbage? Good news, Trudeau finally capitulated to international standards and banned Huawei, but only after his objectionable recalcitrance had him and us labeled as a security threat and unreliable around the world.
——————-
Please back up your claim.
“Around the World”?
You mean our Anglo Saxon friends?

#103 mj on 05.20.22 at 12:03 am

After reading the report on Target and Walmart. I believe the US is in a recession right now. If this is the case and they announce it in July, watch what happens.

#104 Nora Charles on 05.20.22 at 12:10 am

I remember a Brian Ripley who turned up here from time to time. I enjoyed his Plunge-O-Meter. The website is now empty and he seems to be erased from the internet. Anyone know where he went?

#105 BunnyPatch Watcher on 05.20.22 at 12:12 am

Sorry, but I live in BunnyPatch in the best part of BC and prices continue to reach all time highs – even higher than the Spring.

Sure, offer nights are largely gone but any decent house is still selling within a week or less for full price or over ask. But garbage, of which there is a lot, is sitting for weeks with price reductions – but still selling higher than May 2021. Houses that sold for 700k pre-pandemic are still selling for 1.3.

Some investors bailed at what they thought was the peak – one colleague but for 680k in August 2020, listed for 1.15 in late March, and sold for 1.257k – all there while renting it out. Most investors are listing for a 100% return, and if the sell, most are getting close.

This bunny patch has not cooled down with the rate increases and the market seems to bifurcate even more – the decent, nice houses are selling for 100-150% more than 2 years ago getting at the 1.5 million mark, and average stuff is dropping but still selling higher than last year.

I think it will be a very long time before things cools down with that bifurcation.

#106 Cowtown Cowboy on 05.20.22 at 12:48 am

#14 Hurtin’ Albertan on 05.19.22 at 4:24 pm
No comment on Kenney resigning or the complete gong show in Alberta politics?

The UCP have been a disaster for Alberta. Every portfolio Kenney and his minions have touched they have willingly or unwillingly sabotaged or bungled (COVID-response, healthcare, opioid harm-reduction, education, parks/environmental protection, pipelines… the list of their scandals and blundering is endless)

We need a provincial election ASAP to bring back some political stability, hopefully with a chastened and much wiser and more pragmatic and civil Notley government at the helm.

Or perhaps Alberta is just ungovernable…

————————————————————————————-

You are an idiot

#107 Two-thirds on 05.20.22 at 12:52 am

Garth,

Scotia’s study strongly disagrees with your view on housing supply:

“Canada has the lowest number of housing units per 1,000 residents of any G7 country. The number of housing units per 1,000 Canadians has been falling since 2016 owing to the sharp rise in population growth. An extra 100 thousand dwellings would have been required to keep the ratio of housing units to population stable since 2016—leaving us still well below the G7 average.”

https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.housing.housing-note.housing-note–may-12-2021-.html

This study uses actual Canadian census data and Statscan sources, to estimate trends on housing.

What is remarkable is that the three countries with the lowest housing stock per 1000 people (UK, US, CAN) just happen to be the ones where prices have skyrocketed (see chart in the article).

Meanwhile, Japan, Germany and France, have not gone through this phenomenon, in spite of extremely accommodating monetary policies in Europe and Japan, as low as the ones in Canada!

For sure, low rates add fuel to the fire, but the study shows a clear downward trend in housing supply in our country, beginning circa 2018, relative to the long-term average.

So yes, Canada HAS a housing supply problem, and therefore a massive inflation in prices should not be surprising, and they cannot be explained by interest rates alone.

Mr. Market just disproved it. – Garth

#108 Dr V on 05.20.22 at 12:57 am

98 Shaker

“My mostly Maple portfolio is down 1.3%. I don’t know what you’ve been buying …. ETFs stuffed with garbage?”
————————————

First, you must give a time reference. Better still more than one, so we can compare to various indexes or etfs
over those time periods. Maybe you’re doing good, maybe not.

I purchased an etf earlier this year, after taking a gain from some old MFs I had. ETF shows as down maybe 3% since purchase in January. My other two purchases are very slightly in the green. All were purchased with dividends in mind, so up or down is not such a big deal.

I think the index is down several percent from its peak.
The banks are down more, so what is holding up the index? Probably energy and materials – I havent bothered to check. My etf has lots of banks and energy.

I agree with the Huawei move.

#109 Dr V on 05.20.22 at 1:15 am

98 Shaker – further to the above, I checked the YTD returns for the 5 largest energy stocks on the TSX. Wow.
My etf owns 4 of them. All good.

#110 millmech on 05.20.22 at 2:18 am

#17 CEF
Some countries are taking inflation seriously and have raised rates 200 basis points, I would expect to see 50 basis points per meeting going forward until year end and would not be shocked to see the same for next year.
What ever the US does we will do and I do not think they care about our real estate market when they are making their decisions about controlling inflation.

#111 Alberta Nomad on 05.20.22 at 3:39 am

I am curious about your thoughts on Stephen Punwasi. He focuses a lot on money laundering in Canada and its impact on real estate. Not quite blaming chinese dudes, but definitely not blaming it as much on FOMO.

#112 Diamond Dog on 05.20.22 at 3:57 am

An excellent summary of our current economic state of affairs, Garth. If there’s any one thing I most appreciate from this blog, it’s your take on real estate meticulous subject though it may sometimes be. And it really was all predictable, as you’ve stated. As predictable as the effects of inflation and rate hikes are known to be since time memorial.

Alas, my own energies are tapped out from a busy spring seeding crops. Why, I haven’t even got the energy or time for comments of a non topical ad hominem nature the odd traitor amongst us so richly deserves.

! I don’t even have energy or time for that!

But that’s something a few sleeps can change. Should be up and entertainingly comparing western separatists with misguided Frenchmen in no time, (they are so blindingly alike) should the opportunity of making butter out of nuttery continue to present itself. Something tells me it won’t be long.

#113 under the radar on 05.20.22 at 4:48 am

How is leveraging your home to buy that condo or play the market working out? . Remember?. Not repaying the free money. A lot of folks are now stuck in the mud. Stuff happens, eschew debt.

#114 My Body My Choice on 05.20.22 at 6:35 am

“One year later, there is still no evidence of unmarked graves or missing children at former residential schools.”

Brian Giesbrecht is a retired judge of the Provincial Court of Manitoba, Nina Green is an independent researcher, and Tom Flanagan is professor emeritus of political science at the University of Calgary.

https://tnc.news/2022/05/19/guest-op-ed-one-year-later-there-is-still-no-evidence-of-unmarked-graves-or-missing-children-at-former-residential-schools/

#115 Fortune500 on 05.20.22 at 7:25 am

Won’t impact Boomers one bit. Gen Y and Z on the other hand … Luckily everyone had the option of waiting to purchase a home in the last 3-5 years and live with their parents or rent a suitable family home that they weren’t going to be renovicted from. They only purchased because they were ignorant and spoiled … obviously.

#116 Chris L. on 05.20.22 at 7:56 am

DELETED

– Turner nation provided the exact same link and thoughts.

This blog is a bit clicky – only some thoughts are allowed from some people. I get the NDP now, we need more diversity for sure. Too much cancel culture. Whatever man. Twitter has been a blast lately. Thoughts and ideas fighting each other out on equal footing. Guess who’s ideas are winning?

The door is there. Leave whenever you want. This site is not going to become another social media swamp. – Garth

#117 Whitey on 05.20.22 at 8:24 am

I keep my powder dry and watch for opportunity. I’m not convinced we are anywhere near bottom yet.

#118 TurnerNation on 05.20.22 at 8:37 am

We pay the super high taxes for all the cool stuff we get!
Like severe shortages of Federally employed and regulated workers.
Say…you know what would speed up airport processing…why a global digital biometric ID!
You see how the Long Game is being played Lads?
The A.I. will control your travel rights. Keep your Mark up-to-date y’hear?

https://www.blogto.com/travel/2022/05/baggage-claim-toronto-airport/
https://www.blogto.com/travel/2022/05/people-afraid-fly-toronto-pearson-airport/



Toronto almost is banning cars. Some routes, it’s temporary wink wink. CV did this…oh yes the kick off.

[email protected] #CityOfTO announces #VictoriaDay weekend #ActiveTO road closures
News release: https://toronto.ca/news/city-of-toronto-announces-victoria-day-weekend-activeto-road-closures/
A complete list of road closures and restrictions is available at http://toronto.ca/roadrestrictions

CV is designed to be permament. Your company owns you. Good tax farm slave. But keep paying those high taxes, so worth it.

https://www.canada.ca/en/services/benefits/ei/ei-regular-benefit/eligibility.html
In most cases, if you lose or quit your job because you didn’t comply with your employer’s mandatory COVID-19 vaccination policy, you won’t be eligible for EI regular benefits.

#119 TurnerNation is a nut on 05.20.22 at 9:06 am

#118 TurnerNation on 05.20.22 at 8:37 am
We pay the super high taxes for all the cool stuff we get!
Like severe shortages of Federally employed and regulated workers.
Say…you know what would speed up airport processing…why a global digital biometric ID!
You see how the Long Game is being played Lads?
The A.I. will control your travel rights. Keep your Mark up-to-date y’hear?

https://www.blogto.com/travel/2022/05/baggage-claim-toronto-airport/
https://www.blogto.com/travel/2022/05/people-afraid-fly-toronto-pearson-airport/



Toronto almost is banning cars. Some routes, it’s temporary wink wink. CV did this…oh yes the kick off.

[email protected] #CityOfTO announces #VictoriaDay weekend #ActiveTO road closures
News release: https://toronto.ca/news/city-of-toronto-announces-victoria-day-weekend-activeto-road-closures/
A complete list of road closures and restrictions is available at http://toronto.ca/roadrestrictions

CV is designed to be permament. Your company owns you. Good tax farm slave. But keep paying those high taxes, so worth it.

https://www.canada.ca/en/services/benefits/ei/ei-regular-benefit/eligibility.html
In most cases, if you lose or quit your job because you didn’t comply with your employer’s mandatory COVID-19 vaccination policy, you won’t be eligible for EI regular benefits.

————

So many people have been banned but this nut is allowed to keep on.

#120 IHCTD9 on 05.20.22 at 9:30 am

I wonder why LCBO prices have stayed near the same? The Rum I like comes all the way from Puerto Rico yet the price has barely moved throughout the pandemic.

I guess the LC must be absorbing the hikes. That’s good since taxes on alcohol here in Ontario appear to exceed 100% when you compare to US prices at the duty free shops.

#121 Phylis on 05.20.22 at 10:00 am

#104 Nora Charles on 05.20.22 at 12:10 am
I remember a Brian Ripley who turned up here from time to time. I enjoyed his Plunge-O-Meter. The website is now empty and he seems to be erased from the internet. Anyone know where he went?
Xxxxxxxx
I don’t know where he went, but I think he might have sold the site, if I remember correctly. Anywho… you could try this site to look back at his site, if you remember the site name. https://archive.org/web/ The web never forgets!

#122 Lee on 05.20.22 at 10:19 am

Bitcoin is not kaput. The people who pumped it up the first time will pump it up again.

No rational investor owns an asset with a standard deviation like that of BTC. – Garth

#123 millmech on 05.20.22 at 10:32 am

#105
My friends son bought in bunny patch as WFH was forever, spent money to upgrade the dream home and lots of toys for the lifestyle(boat, quad, jet ski) and now has been called back.
He has listed his place and is now competing with multiple listings for 25%-40% less than his, I looked in that area there are around 200 listings less expensive than his and last year at this time there were only around 80 total listings, now it is over 400, with some one the market for over a year.
The one good thing going for him is that he bought with cash and will walk away poorer financially but not under water like other people are going to be.
Funny is it not, that last year at this time you could ask any price and people just piled the money on you and wrote nice compelling letters as to why they should be the Belle of the Ball and get the house. Now 20% plus price drops and crickets, you would think now that “investors” would be storming the gates to get a deal.

#124 Froggy on 05.20.22 at 10:33 am

I don’t really know what everyone saying on this blog when the fed raised rates .5 and caused a housing pause but really it’s not the fed it’s the bond market and because of inflation l guess you can call it a black swan so rates were 3.5% two or three year’s ago with the fed rate at over 2% so you now there at 4.5% at a fed rate of under 1% and for Toronto housing will crash at this it’s called a huge credit crunch now we will have millions of house holds underwater never happed in over l’m guessing 30-40 years and everyone’s talking like just a slow and minor correction my thoughts 55-70% how could it not interest at 5% average for a few years that means 3 spring markets at best 50% less sales now you tell me not

The Fed is the US central bank. Ours is the Bank of Canada. Similar, but different. – Garth

#125 Froggy on 05.20.22 at 10:58 am

For anyone wondering about the stress test we won’t need it at 6% rates because a 2 million home will go for 7-8 hundred thousand problem solved you do the math and with over a million households underwater man a lot of pain and l feel terrible for all the first time buyers who will learn a hard lesson and the ones that bought 2nd home’s in the last 5 year’s could potentially lose everything because of the out of control leverage on two properties 400 on the first and one million on the second and rates at over 5% with housing losing min 25-30 this year you do the math and easy prediction it’s simple but hard to swallow 55-70% down

#126 Steve French on 05.20.22 at 10:59 am

My comments to GF are not being approved.

I shouldn’t have to say this, but, don’t you know who I am?

I was Smoking Man’s lieutenant!

#127 Shawn on 05.20.22 at 11:01 am

Retail sales Volumes Have to Fall?

I mentioned a few times that if inflation is say 7% and wages are up 3% at best then retail sales volumes have got to fall. Consumers collectively likely can’t borrow or use savings to keep volumes up.

I was looking and found this note in the latest Stats Canada Retail sales report which was for February:

“In volume terms, retail sales were down 0.4% in February.”

The March retail sales report comes out next week. I’d bet on another decrease in volume and even more so when the April and May reports come out. Something has to give when gasoline prices are so high.

#128 DON on 05.20.22 at 11:08 am

#121 Phylis on 05.20.22 at 10:00 am
#104 Nora Charles on 05.20.22 at 12:10 am
I remember a Brian Ripley who turned up here from time to time. I enjoyed his Plunge-O-Meter. The website is now empty and he seems to be erased from the internet. Anyone know where he went?
Xxxxxxxx
I don’t know where he went, but I think he might have sold the site, if I remember correctly. Anywho… you could try this site to look back at his site, if you remember the site name. https://archive.org/web/ The web never forgets!

***********

I thought I saw Brian on here in the last couple of months…still waiting for the return of MF.

#129 Dharma Bum on 05.20.22 at 11:10 am

#83 Dip

There will be no rate hikes in June and for the next 3 years. Canadians with mortgages will riot on the streets if they have to renew at higher rates.
——————————————————————————————————-

Mortgaged Lives Matter

#130 Froggy on 05.20.22 at 11:12 am

A house is only worth what someone is willing to pay coming to a theatre near you soon

#131 Ponzius Pilatus on 05.20.22 at 11:12 am

#114 My Body My Choice on 05.20.22 at 6:35 am
“One year later, there is still no evidence of unmarked graves or missing children at former residential schools.”

Brian Giesbrecht is a retired judge of the Provincial Court of Manitoba, Nina Green is an independent researcher, and Tom Flanagan is professor emeritus of political science at the University of Calgary.

https://tnc.news/2022/05/19/guest-op-ed-one-year-later-there-is-still-no-evidence-of-unmarked-graves-or-missing-children-at-former-residential-schools/
—————————-
So, you’re saying that The Residential Schools were sought after by native parents who wanted a better life for their children?
Everything was ok, nothing to see here.
Move on!

#132 dragonfly58 on 05.20.22 at 11:13 am

I think we keep Turner Nation around , despite being a bit repetitive , because his posts have more than a bit of truth in them. Time has an eerie way moving dystopian speculation to reality over the last 75 years.

#133 Satori on 05.20.22 at 11:14 am

#38 Linda on 05.19.22 at 5:17 pm
So what I’m wondering is, if WFH will help in easing the financial hit of tumbling RE valuations. Also whether rents will drop in exurban locales so the priced out locals can afford accommodation again.
—————————————-
Rent drops when demand for rentals drops, so it’s not happening any time soon. And if by a miracle it does, it will only be down by $100/month bucks or so. Rents prices are not dependant on the housing markets.

#134 DON on 05.20.22 at 11:15 am

Somewhat bored with the lack of good news lately I ventured on to Reddit Canadian Personal Finance’ and looked at the housing market thread. Most commentors are quite behind in their thinking and logic, but reassuring each other that they made the right moves. It was eye opening…it is like they are living in the past.

#135 Shawn on 05.20.22 at 11:20 am

Bank of Canada Money Printing

The Scenario…

The Bank of Canada is accused by Pierre Poilievre of “printing money”, vast quantities of it.

Bank of Canada response: No we just bought some bonds and expanded our balance sheet.

Judge: Answer the question did you print money or not?

Bank of Canada (borrowing a famous answer from Bill Clinton): That depends on the definition of the word “money”. And on the definition of “printing”.

#136 Ponzius Pilatus on 05.20.22 at 11:21 am

120 IHCTD9 on 05.20.22 at 9:30 am
I wonder why LCBO prices have stayed near the same? The Rum I like comes all the way from Puerto Rico yet the price has barely moved throughout the pandemic.

I guess the LC must be absorbing the hikes. That’s good since taxes on alcohol here in Ontario appear to exceed 100% when you compare to US prices at the duty free shops.
————-
I have to say that I was pleasantly surprised when I visited a LCBO store in Ontario on my last trip.
Very similar look and feel as the stores in BC.
Friendly staff and a nice assortment of European beers.
Prices were a little cheaper than in BC.
You are blessed my friend.

#137 Froggy on 05.20.22 at 11:23 am

Garth’s 100% wright home prices are correlated to interest rates and the health of a country’s economy so rates at 1.79 home sells for over two million and the same house house at 5-6 % three times 1.79% then what happens and an economy that sucks for a few years you have a receipt for a dissater you do the math and forget about the those condos coming through the pipeline closings at 6% fiver or 5% variables so don’t hold your breath for a soft landing it will be the hardest for housing in Canada coast to coast and a soft economic landing

#138 pPrasseur on 05.20.22 at 11:31 am

RE is the backbone of this economy, it drives consumption which is by far the largest share of this economy.

The “success” of RE in this country is mostly based on the socializing of the risk associated to loans, that is the CMHC, which provides a steady flow of first time buyers in to the system. The Canadian bank cartel is happy, it can lend massively with little risk. This gravy train makes a whole lot of people happy, including politicians of all jurisdictions.

Feeding on that fiscally is a massive, expensive (and pathetically unproductive) public sector, the other main economic branch, as well as the first beneficiary of this economic scam.

Economically this country lives or die with RE, so don’t be surprised at the first hints of economic slowdown to see measures and stimulus to ease credit again.

This whole thing is corrupt, it is a farce and a scam, it cannot lead to anything other than a disaster, but your guess is as good as mine as to when or how!

Real estate does not constitute the largest segment of Canada’s GDP. It is a complete myth that rates will retreat if house prices fall. Garth

#139 Satori on 05.20.22 at 11:33 am

#80 KNOW IT ALL on 05.19.22 at 8:40 pm
So WHY would the Bank lend you the funds to purchase a home if they knew it was going to decline in value?
—————————
Cause banks want to make money, and if you buy a house with a high mortgage they make more money, because the mortgage broker gets a kick back for all the mortgages he does, and #1 – because they don’t care about you.

And here is another surprise, that might shock you, your realtor doesn’t care about you either. They make what is called ‘commission’ and the bigger you buy the more commission they make.

Start the habit of look into what into ‘what’ the interest of the other person doing business with you is. 99% of the time, everyone you do business with doesn’t care about you, unless your mother is a mortgage broker/realtor, you are 100% on your own and everyone working with you, has self-interest, whether it is a company, government, corporation or sales person. Even your wife, just think about it.

#140 Ponzius Pilatus on 05.20.22 at 11:41 am

Is Musks getting too big for his britches?
People are coming out of the woodwork.
He better be careful.
And Tesla share holders, too.

#141 Froggy on 05.20.22 at 11:48 am

The question is will the investors bail out when housing crashes in 6 month’s my guess most will

#142 Ponzius Pilatus on 05.20.22 at 11:51 am

#122 Lee on 05.20.22 at 10:19 am
Bitcoin is not kaput. The people who pumped it up the first time will pump it up again.

No rational investor owns an asset with a standard deviation like that of BTC. – Garth
—————
Yep,
Long tail risk is huge.
Black Swanish.

#143 The Regulator on 05.20.22 at 12:03 pm

# 84 – wtf : FYI the robot with nice hair is from Ontariowe, not Alberta. Where does he hang his hat nowadays? Brilliant you are not. You’d probably give up your free-dumb in a second if your masters told you too. The convoy wasn’t exclusively Albertans either, Einstein.

#144 Sail Away on 05.20.22 at 12:30 pm

It’s looking like a fantastic long weekend. At least those emotionally distressed from buying a vastly-inflated house in the last year can take comfort in nice weather.

Once again the climate has changed to summer. Colder and wetter than usual it seems, but still summer. Morels and big hungry interior trout next weekend.

Markets continue indecisive. Some decent values out there but I’ve bought the ride down and will need to let dividends re-accumulate. Financially, we approach the SA household’s only real nondiscretionary bill of the year: property tax. Such hardship.

#145 Philco on 05.20.22 at 12:42 pm

Yup i think a bigger corection than I thought. The perfect storm.

This is what happens when the managment sucks.
https://www.investmentwatchblog.com/crisis-in-sri-lanka-no-gas-no-food-country-is-bankrupt-politicians-being-beat-murdered-gov-buildings-on-fire-over-3000-killed-in-last-24-hours/

#146 Philco on 05.20.22 at 12:50 pm

God help us if things really cave in. Its been a hellofa party.

And wow biden now VERY unpopular. Gave 15bmil to the polititans in Sri Lanka so could escape!! Their all the same in my book now the rubber is meeting the road!

#147 bdwy on 05.20.22 at 12:53 pm

So, you’re saying that The Residential Schools were sought after by native parents who wanted a better life for their children?

——————
yes, for most anyone alive today. after 1948 attendance was by choice of the parents. so again , yes.

#148 Ponzius Pilatus on 05.20.22 at 12:53 pm

#144 Sail Away on 05.20.22 at 12:30 pm
It’s looking like a fantastic long weekend. At least those emotionally distressed from buying a vastly-inflated house in the last year can take comfort in nice weather.

Once again the climate has changed to summer. Colder and wetter than usual it seems, but still summer. Morels and big hungry interior trout next weekend.

Markets continue indecisive. Some decent values out there but I’ve bought the ride down and will need to let dividends re-accumulate. Financially, we approach the SA household’s only real nondiscretionary bill of the year: property tax. Such hardship.
——————-
Agree.
The hard work getting my veggie garden planted is starting to pay off.
Lettuce and peas are getting ready for harvest.
Tomatoes are humming along nicely.
Not a care in the world.
Live in the Lower Rainland is good.

#149 pPrasseur on 05.20.22 at 1:12 pm

Real estate does not constitute the largest segment of Canada’s GDP. It is a complete myth that rates will retreat if house prices fall. Garth

RE dopes consumption which is by far the largest sector of the economy.

RE boosts consumption in at least three way:

1) Tremendous wealth effect.
2) Using houses as ATMs, for example with HELOCs.
3) By funneling all that new debt money into the economy, those newly printed million dollars mortgages have to end up somewhere and I doubt it’s into productive activities.

As for rates, this country is clearly dependent and addicted to massive debt and stimulus, IMO it won’t take much of a downturn of the economy to incite the BoC to ease monetary policy.

This economy is corrupt, corruption brings poverty, that has never been denied.

#150 Faron on 05.20.22 at 1:13 pm

#144 Sail Away on 05.20.22 at 12:30 pm

Wow, you write a lot of pompous, dumb sht here, but this is way up there. Maybe not quite as bad as comparing a woman seeking abortion with shooting armadillos, but very high.

#151 Josie on 05.20.22 at 1:25 pm

GTA price have NOT fell by 50%. Spreading false news is a crime. Look it up under the Criminal Code & seek legal advice.

Funny. All stats posted here are supplied by industry sources. – Garth

#152 bdwy on 05.20.22 at 1:51 pm

all stock tickers taking even more pounding.

52wk tops for oilers this morn but red now too.
u.g.l.y.

what is most concerning to me is the absence of dip buyers around here .
by -20 doug in london should be shouting from the rooftops. did i miss it?

a fast rebound in the age of a friendly fed, sure we know that works.
what about now?

#153 Atheist Jew on 05.20.22 at 1:55 pm

DELETED

#154 Observer on 05.20.22 at 2:14 pm

#111 Alberta Nomad on 05.20.22 at 3:39 am
I am curious about your thoughts on Stephen Punwasi. He focuses a lot on money laundering in Canada and its impact on real estate. Not quite blaming chinese dudes, but definitely not blaming it as much on FOMO.

^^^^^^^^^^^^^^^^
Stephen Punwasi is a PiedPiper supporter who promotes ageism through his never ending Boomer bashing.

#155 Chris L. on 05.20.22 at 2:45 pm

a fast rebound in the age of a friendly fed, sure we know that works.
what about now?
_____________________

No rebound until rates normalize or maybe a few weeks before that happens and can be ‘fully priced in’. I figured it out — I usually do. So hang tight there cowboy. This, as does the market lately has more to do with psychology than anything else. Buy oil now though…it’s still stupid cheap and it’ll scorch up first and fast. Oil is all I have. I dumped out everything as the rate announcements materialized. Enjoy.

#156 Sail Away on 05.20.22 at 2:49 pm

#150 Faron on 05.20.22 at 1:13 pm
#144 Sail Away on 05.20.22 at 12:30 pm

Wow, you write a lot of pompous, dumb sht here, but this is way up there. Maybe not quite as bad as comparing a woman seeking abortion with shooting armadillos, but very high.

——–

Hmmm. I find life beautiful. It always baffles to me when others choose a path of resentment. Sad.

Fun fact: Armadillos always give birth to quadruplets of the same sex!

#157 Ustabe on 05.20.22 at 2:55 pm

Hey, Sail Away…has Elon sent you your horse yet?

#158 X on 05.20.22 at 3:10 pm

Interest rates are not going higher than 1.25%. Real estate is too big to fail in Canada.

Even Adam Vaughan admitted that he would rather protect the values of Canadian real estate than protect the integrity of Canadian society and stability.

He said no such thing. And you are mistaken about rates. – Garth

#159 Sail Away on 05.20.22 at 3:37 pm

#157 Ustabe on 05.20.22 at 2:55 pm

Hey, Sail Away…has Elon sent you your horse yet?

——-

He did. I thought you’d remember: during the walkaround inspection, I lifted the tail and said hi to you.

#160 Shaker on 05.21.22 at 7:06 am

Re: 102 – PP

Time frame? Sure. Like to be more specific but our host don’t like us “Stock Picking Cowboys” and our money making antics, so no ‘stock picks’. But seriously, it’s pretty easy to look back and wish overweighting certain sectors had been even more agressive.

The Mostly Maple I mentioned as being down an adjusted 1.3% over my equity and covered calls in recent weeks. Some are up more, some down more, but the up outweighs the down. Ergo , averages skewed to the upside taken in that context. Annualized and averaged it’s not even a pimple on a chart. If I dial back 6 months we’re way up. 2 years , two baggers, three, quads aplenty.

Hope that helps. The moral here is to buy great stocks.