You’re not special

Ever notice the way everyone wants to live here?

“Here” could be the throbbing heart of urban Canada in a DT Toronto condo, or the bucolic, grapy Okanagan, or reawakened Halifax, or Victoria, the nation’s most stuck-up market. It’s part of our collective Confirmation Bias – telling ourselves we made a great choice, confirmed by the fact every other living person is envious. Or at least we think so.

And here’s Melinda, to tell us about exactly that.

“Here in Halifax NS, real estate is still hot as heck and everyone on the street is saying that prices will never fall. “Look at all the Ontarian plates; everyone wants to be here!” People are still happy to go well over-asking and to pay peak market prices,” she writes.

“They trust the selling agent implicitly when he/she says that there is another offer or 10 on the table (no proof required, of course). “It’s different here.” “We’re the fastest growing metropolitan area in the country.” “Halifax has always been robust and didn’t fall in 2008; we won’t fall now.” “Things were flat for 10 years prior; this is just catch up.” Will Nova Scotia’s bunnypatch where prices nearly doubled from 2020 to 2022 drop in value like Greater Toronto? I sure think so, but the locals don’t and they keep bidding wildly high.”

Nothing about the East is unique in terms of real estate. Sales are down, supply is up slightly, prices are flat and eroding and mortgages cost the same as they do in Vernon or Oshawa. What’s different is that incomes are generally lower and real estate looked dirt cheap from a Toronto standpoint. But that advantage is now gone along with the Covid crisis and WFH.

Just look at all the price reductions taking place. Huge. “Almost double from this time last year, and this is a trend that I do not expect to stop anytime soon,” says Halifax agent and blogger Jeremiah Wallace. “With less buyers to draw from with each passing day, Sellers expectations also continue to change with the tides, well… mostly. I imagine it’s not easy being on the other side of the market, just missing the golden listing time by weeks really, so considering having to reduce in price is quickly a forgotten selling strategy.. With the recently announced mortgage rate hike further twisting the knife, it’s no wonder the market has cooled so quickly with the amount of uncertainty Buyers face right now.”

The fav realtor technique of holding offers and hoping for a blind auction is gone, Wallace admits. “There’s simply not enough traffic to draw from… something is needed to inject some life back into the market, if not, it will continue to correct. The question is, how far will the correction go, and how long will it take. We climbed quickly in a very short time, so a correction could be swift and significant.”

Meanwhile in Toronto, same same.

There are more delistings currently that sales. That simply means sellers unable to sell for the price they want, or who have received zero offers, are withdrawing from the market. Vainly, they plan to list again when the buyers return and prices rise. It is a failed strategy.

Realtor and statistician Scott Ingram shovels us some evidence of the growing weakness in the wake of the central bank’s blockbuster rate rise last week. “Now that’ I’ve done some deeper analysis on the Toronto real estate numbers for June,” he Tweets, “here are some charts that jumped out at me. First, TRREB has monthly data back to Jan ’96. This is the *lowest June ever* for Freehold sales in those 27 years, 31% below the 10-year avg.”

And it’s dramatic… more proof of the inverse relationship between the cost of money and the housing market:

And what about BC’s burning interior where some of the nation’s greatest housing lust fueled a massive price spike in places like Kelowna?

Yup. Pfft. Not different there, either.

The Kelowna Real Estate Report says K-town is sinking into bear territory for detached homes, while townhomes are already mired in one. The number of detacheds for sales has surged 88%, flipping the market from one favouring sellers to one supporting buyers in a “significant slowdown.”

And what of the prevailing emotion?

“Fear is extreme in all segments. The detached segment is continuing to lead the change in the sentiment shift from extreme greed to extreme fear.”

And here is the prediction (the chart is too graphic to reproduce on a family blog): “Detached prices forecasted to drop -42.72% or -$557,553 over the next 12 months.” In other words, from close to $1.3 million, descending into the eights. And heaven help those YVR refugees who came to the Valley in February to plunk their dollars down.

There is no escape. Only excuses.

About the picture: “Thank you for your blog!” writes Zandra. “My husband and I look forward to it everyday. I sent in our dog Kooper once before and my husband was so excited!! It’s a new season so here is Kooper back in the winter if dogs are allowed twice.”

126 comments ↓

#1 TurnerNation on 07.18.22 at 1:48 pm

Ahh the Snowflake Millennials.
Hayden, Jaden, Greyden, Brayden, Aden.

———
Just another day in Global WW3 — kicked off March 2020.
The next (former) First World Country to fall.

https://www.zerohedge.com/energy/gazprom-declares-force-majeure-will-halt-gas-flows-germany-indefinitely
“Gazprom Declares Force Majeure, Will Halt Gas Flows To Germany Indefinitely”

—- Oh yes the globalist ghouls will starve us out, freeze us out; whatever it takes.
(Not a finger is being lifted to help Ukraine. By design.)

https://news.yahoo.com/panama-protests-continue-despite-fuel-045242182.html
“Thousands of Panamanians took to the street again on Tuesday to protest rising inflation and government corruption, despite the announcement of price cuts for fuel and some food products.”

#2 Kooper on 07.18.22 at 3:28 pm

That dog is a stud!

#3 Steven on 07.18.22 at 3:34 pm

Broker buddy said today “Market completely flipped to a buyer’s market.”

286 on market vs 15 last year same time.

Now when do prospective buyers become extremely sticky waiting for a bargooon?

I’ll say mid late 2023 IF they keep raising rates consistently.

#4 renter in Surrey on 07.18.22 at 3:34 pm

Decent TH in the valley is about $1mil.

https://www.zolo.ca/langley-real-estate/20849-78b-avenue/21

There NO material price reductions.

#5 Dave on 07.18.22 at 3:36 pm

Joe Rogan calls canada a Communist country and Trudeau a dictator

Joe who? – Garth

#6 baloney Sandwitch on 07.18.22 at 3:37 pm

Fun read today, Garth. I am not into RE (just own 1 home mortgage free and no desire to own a second) but I am student of fear and greed (but regularly succumb to both despite promising myself not to, I guess it’s the human condition).
It is interesting that fear seems to be receding in the financial market. According to CNN fear index – extreme fear has given way to just plain fear even though S&P is down 10% yoy and 20% ytd.
https://www.cnn.com/markets/fear-and-greed
https://www.gurufocus.com/idx/%5EGSPC

#7 Omicron anagram on 07.18.22 at 3:41 pm

DELETED (Language)

#8 Søren Angst on 07.18.22 at 3:43 pm

the chart is too graphic to reproduce on a family blog
– Garth

——————

Oh Garth…I said -40% a few days ago and you didn’t delete it. I posted late at night though, so the kids all must have been in bed (Mill and GenZ kids).

TOO funny.

#9 The General on 07.18.22 at 3:44 pm

This correction is happening worldwide. China’s real estate industry, when including construction, sales and related services, accounts for about a fifth of GDP. An estimated 70% of middle-class wealth is also tied up in property. According to Goldman Sachs, the Chinese property market is the largest single asset in the entire world. Millions of disgruntled homebuyers have suddenly refused to pay their mortgages on unfinished projects. Not good.

#10 Søren Angst on 07.18.22 at 3:48 pm

Europa TRAVEL TIPS: “Red Extreme Heat Warning”, Fire & FCO

HEAT FREAK
UK histrionics about “Red Extreme Heat Warning” this week (faccia infarinata pussies).
https://www.bbc.com/news/world-europe-62196045

The English have not lost their sense of humor with the heat:

PIGS to be lathered with sunscreen ahead of UK’s biggest agricultural show
https://twitter.com/BBCNews/status/1548951234408742912

whereupon Jim observes:
They’ll be bacon hot.

35-38 deg C from the 19th to the 27th in Pordenone (add +2 deg for actual, Italia lies). What heat warning do we get?

Sunny.

Italia claimed it was 33 yesterday in Pordenone. Bank sign across the Largo said 36, it never lies. Digital oven thermometer terrazzo verified ✔.
—————-

FIRE
Spain, Portugal wildfires. Portugal, slide 19/31, yeah 🍁 Canadair flown by Italia’s Vigili del Fuoco (slide # may have changed, they keep adding photos).
https://www.cmjornal.pt/portugal/detalhe/centenas-de-bombeiros-combatem-incendios-de-norte-a-sul-do-pais?sid=1168524&utm_medium=Social&utm_source=Twitter&utm_campaign=BotoesSite

not just Spain and Portugal – France, Morocco, Crete, Croatian coast, SW Turkey:
https://www.bbc.com/news/world-europe-62196045

Italia wildfires, not as bad as the above, still 3X the average…nice shot of another 🍁 Canadair water bomber:
https://www.thelocal.it/20220627/heatwave-italian-wildfires-already-three-times-worse-than-average/
—————-

FCO
500 flights scrapped in Italy by 4-hour aviation strikes
https://apnews.com/article/travel-airlines-italy-e998375dd70938ebb63a46728c730a31

The Italian transport ministry said the strikes were called by workers for Ryanair (1/2 the flights), easyJet, Air Malta and Volotea airlines.

Compared to airports in other Western European countries, Italy’s airports have experienced less chaos this summer. Airline and airport workers in Italy received government benefits while not working, instead of losing their jobs as happened in other European countries.

REBOOK other airlines if I were you Canada.

In lieu take FrecciaRossa 1000 high speed trains, 400 kph. Milano Centrale to Paris-Gare-De-Lyon, 6h 35min, 135€, 4 stops in between.

Roma Termini to Milano Centrale, 3h, 86€, non-stop.

Slower vs. flight times but comes with 1st class seating you pre-book, plenty of luggage space and DT to DT service.

#11 The General on 07.18.22 at 3:48 pm

Turkish proverb : ” If a clown moves into a palace, he doesn’t become a king, but the place becomes a circus”.

#12 Adam Smith on 07.18.22 at 3:49 pm

*polishes monocle, looks down nose at plebeians*

But Victoria is different!

#13 SunShowers on 07.18.22 at 3:50 pm

Lol I live in the prairies, where the wind hurts your face 6 months out of the year. I totally understand why nobody wants to live here!

At least housing is cheap (by comparison)!

#14 Catalyst on 07.18.22 at 3:51 pm

Sales might be at the lowest level in 27 years but what was the avg. detached price 1996 vs now. It’s the price we need to see come down and that isn’t happening fast (excluding the mini bubble of Jan-Mar) this year.

#15 Prefer not to Share on 07.18.22 at 3:52 pm

Hey Garth

Despite a higher rate environment (which supposedly helps rate-reset preferred shares), preferred shares on a nosedive. Any comments here? I only have about a 6% allocation but its painful to watch them getting shellacked every day.

Seems like they are down no matter the news (low rates, high rates, good economy, bad economy). Sometimes I wonder if I’m better off investing in the common stock – at least that way I get dividend growth and if there was an Armageddon event, pref shares don’t seem much help anyhow as nobody really expects us to get a slice of the pie.

I shudder to think about what portfolios including 20% of the things look like these days. Fixed income is supposed to be a buffer…

Best

#16 Felix on 07.18.22 at 3:54 pm

You’re not special

Truer words about dogawful canines have never been spoken.

#17 PutinsSonjustin on 07.18.22 at 3:57 pm

Joe who? – Garth
———-

You won’t know. Well above your intelligence level. Keep writing about other stuff you have no clue about like real estate market.

Actually he’s not above any one’s intelligence, I hear. – Garth

#18 Josef on 07.18.22 at 3:57 pm

Hi Garth,

Why are preferred a like CPD taking a huge spanking. I thought that rising interest rates should make them swell not flaccid.

#19 Captain Uppa on 07.18.22 at 3:58 pm

Neighbour a few houses down in March sold his house and said “… time to give a young family a chance”. That old bungalow was $1.25M.

Fast forward to now: for lease for $4K a month.

I am so tired of this crap.

#20 Shawn on 07.18.22 at 3:59 pm

Learn Math

From last blog someone calculated”

$200k down on an $800k house leaves me with a net worth of $400k ($200k equity in house + $800k financial assets – $600k mortgage), so I’m at 50%? ie. Breaking the rule.

**************************
Your net worth in that scenario is $800k house + $800k Financial minus $600k debt = $1000k or 1 million. Same as the day before the house purchase if we ignore closing costs.

Net worth in house is $200k or 20% of net worth but I would focus more on $800k invested in house out of $1.6 million assets = 50% of assets in real estate so in a sense I am back to where you got to but calculated differently.

Risk of a house investment is proportional to the house cost. A lower down payment (lower portion of net worth) invested in a house does not reduce risk.

#21 Linda on 07.18.22 at 4:01 pm

‘Kooper’ looks like a very happy pup:)

I think it will take some time for folks to accept the new reality. Lots of comments make it clear that some are thinking that this RE market correction will be brief. Others are in denial – ‘prices here have not fallen!’ ‘there are still plenty of buyers willing to pay over asking!’ etc. My thought is that if one doesn’t ‘have’ to sell & intended to live in the current digs for the foreseeable future anyway the current dip isn’t anything to write home about. Further, seems to me that if the eventual sale still exceeds what one paid originally for a place that still counts as a gain. Yes, I know, the perception that one lost out on peak price will irk those who were sure they could sell for more. Reminds me of a coworker who won several thousand dollars in the lottery. Most would have been ecstatic to win that much; said coworker bemoaned that their winning ticket was one digit off winning a much larger amount.

#22 Pylot Project on 07.18.22 at 4:02 pm

The correction coming is going to hurt my prov. of BC the hardest, especially with the highest amount of GDP in Canada (19.6%) attached to Real Estate. Nova Scotia comes in second highest with Real Estate taking up 17.2% of GDP.

Prov Gov’t will likely shrug and say, “It’s just a flesh wound”.

https://betterdwelling.com/canadian-provinces-depend-on-real-estate-services-for-up-to-1-in-5-gdp-dollars/

#23 Squire on 07.18.22 at 4:04 pm

Dumb & Dumber is going to pull the election lever once again this fall to avoid giving PP or the next Con leader any advantage.

#24 Zed on 07.18.22 at 4:04 pm

June RE volume is probably only shock reaction to rate rises. Both sides will adapt their price reality and the volume will pick up in a few months, at a resonable valuation.

People will still have to change house/apartment according to their needs, so nothing new this time.

#25 Søren Angst on 07.18.22 at 4:08 pm

I know you said not to, but I love self-flagellation looking at my Google Finance Watch List (not with a “Kink” flogger, metaphysically speaking).

US Mr. Market all RED (Jul 18, 3:43:37 PM UTC-4) save the Vix.

Me, all in the GREEN. From +0.62% to +3.88% today. 2nd trading day in a row. Luck of the ☘.

——————

Almost forgot Garth:

Crude Oil Front Month $102.25 +4.78% +4.66 Today
Jul 18, 7:56:13 PM UTC · USD · NYMEX

yeah _ _ _

#26 Dave on 07.18.22 at 4:09 pm

Question about houses in Kelowna: Do they come with an air filtration system for the annual summer smoke from the increasingly worse forest fires?

#27 Dirtydebtor on 07.18.22 at 4:10 pm

The thing about Kelowna: there is no jobs. I went to engineering school there. Most of my classmates fled the town right after graduation. We’re now mostly P. Eng’s with developing careers.

My classmates who stayed in Kelowna are mostly unemployed. Or if working, it’s down at the Canadian Tire or Dollarama.

#28 Crystal ball futurist on 07.18.22 at 4:12 pm

” -42.72%”

Sounds right. Though when fear grips and banks start asking for more equity, there will be an overshoot. The bottom would be closer to 50% from here.
Will start looking for deals Fall 2023.

#29 Big Bucks on 07.18.22 at 4:20 pm

RE prices are 55% higher than anything comparable in the US so if we drop 30-35% that’s pretty much a given at this stage.If the overnight rate gets into the 5-6% range in 14-16 months we could see a 60% crash.Inflation is going to stay high and probably test the 14% we saw in 1981 so anything can and likely will happen.Sellers should take their hit now and sell if they have to because Spring 2022 prices will be the high as far out as 2035.

#30 TurnerNation on 07.18.22 at 4:23 pm

Control over our Travel/Movement. Permanent. Say, What if…what if they didn’t ‘test’?

https://abc7ny.com/nyc-covid-staten-island-ferry-mask-mandate-new-york/12057208/
Rising tide of COVID cases curbs Staten Island Ferry runs in New York City
NEW YORK CITY (WABC) — The people who run the Staten Island Ferry have been testing positive for COVID, so the vessels have been running a little less frequently lately.

https://www.theverge.com/2022/7/13/23207428/tesla-texas-ev-charging-heatwave-off-peak-grid
Tesla asks Texans to avoid charging their EVs during peak times because of the heatwave
11
Soaring temperatures are pushing the grid to the limits

—– Quebec. Good thing they had ‘curfews’ and fired qualified health care staff over the mandates. Our tax dollars at work.
Remember, next time call a cab and have them take you to the USA. Faster, and you will live on.

.Montreal Children’s Hospital says it’s overcrowded, urges to avoid emergency room
Montreal Children’s Hospital says a surge in patients is putting strain on its emergency services, forcing families to be redirected elsewhere. (nationalpost.com)

#31 Myth Buster on 07.18.22 at 4:29 pm

The myth of Halifax being a means for Torontonians to finally be able to afford the life they wanted has now been busted. Our salaries can’t compete (off 2 fold in many cases), our taxes are higher, our roads have more potholes, we’re less recession proof, and Mushaboom really is in the middle of nowhere with only a seasonal canteen for the epicures. Check the listings. Those uber high 2 million dollar mansions are back up for sale. So many Ontarians couldn’t even last 12 months!

#32 Shawn on 07.18.22 at 4:33 pm

Canadian housing starts in June, 274,000 annualized.

No slow down

U.S. is only at 1.6 million with ten times the population. We been building WAY more per capita than the U.S. every year since at least 2008. No one mentions it in the financial press.

#33 TilJ on 07.18.22 at 4:37 pm

Can I get a link for the “Kelowna Real Estate Report”? My google-fu is weak today.

#34 bipolar on 07.18.22 at 4:38 pm

“You’re not special” Well…. my elementary school teacher told me….. we are all the same but special in our own way.

#35 That Guy on 07.18.22 at 4:44 pm

So sad, two folks I know bought recently: house next door took possession Jan 2022. Ouch!

Next, I have family that bought recently, closed May/June I think. They couldn’t have done it worse. Both cases it’s small towns with lllooooonnngggg commutes.

The first case, they’re not family so it’s out of my area to help them.

The second, how can I help them? Just don’t bring up how much they’ve lost in RE value? Send cookies? Buy tissues?
TG

#36 That Guy on 07.18.22 at 4:49 pm

One more serious thing about all the inflation lately: won’t think mean that the deficit will be more easily covered and the government debts (at, say, federal and provincial levels) be easier to cover?
I want to say yes, but I fear that any gains financially would be quickly spent.

#37 Warren-the-lagging_indicator on 07.18.22 at 4:49 pm

Joe the toe promotes drug use and leads young men astray in many other ways. When I rode my bicycle across the country, the prairie winds in Saskatchewan coupled with snow drifts were far worse than dealing with climbing the arduous mountain passes and avoiding grizzlies out there in BC.

#38 Parksville Prankster on 07.18.22 at 4:49 pm

Meanwhile, listings are stacking up on parts of Vancouver Island. Not a bit of price reduction, but then again, not a lot of apparent sales activity either.

Word on the street in the Parksville area is, “It’s mortgage free, so if I don’t get what I want, I’ll just take it off the market”.

Testing the waters seems to be the present plan.

#39 Dragonfly58 on 07.18.22 at 4:57 pm

Close to 30 years ago I switched to Langley in the Fraser Valley. Then it was a nice mix of town and rural. Biggest mistake is I didn’t bite the bullet then and mortgage myself to the hilt.
Ended up in a very modest place that reasonably easily fit our income. Bank advised to build up our equity and in a few years get what we want, with a larger down payment , perhaps even a bit more borrowed money if necessary.
Long story short, we dutifully paid the place down, but all the while places that were more in line with what we wanted / actually needed, shot steadilly upward . Significantly faster than what our very basic, and more over time maintenence / repair intensive ” starter ” place experienced. Instead of needing 10 – 15 % more money , by the time the 10 year since purchase mark went by it was more like 80 % in addition to what our starter place could be sold for.
We made a pretty decent position { two decent incomes and frugal ways } so much worse by playing it safe. We are now so screwed it would take a 649 win to get us back to where we were in 1992 – 95. Only say $50,000.00 extra needed then, a million or more today. Frustrating beyond words. Screwed for life by being too timid with debt in my 30’s.

#40 Jane24 on 07.18.22 at 5:12 pm

Remind me , how do we send the dog photos in please?

[email protected] – Garth

#41 Observer on 07.18.22 at 5:16 pm

#5 Dave on 07.18.22 at 3:36 pm
Joe Rogan calls canada a Communist country and Trudeau a dictator

Joe who? – Garth

^^^^^^^^^^^^^^^^^
Joe Rogan is a propaganda spreader. Of course his fans lap it up and pass it on, as can often be seen in this comments section.

#42 Andrewski on 07.18.22 at 5:19 pm

Yikes or Yahoo

#43 Shawn on 07.18.22 at 5:19 pm

#34 bipolar on 07.18.22 at 4:38 pm

“You’re not special” Well…. my elementary school teacher told me….. we are all the same but special in our own way.

***********************************
You’re unique…just like everybody else.

#44 NOSTRADAMUS on 07.18.22 at 5:23 pm

HOTEL CALIFORNIA!
Those who listened to Tiff Pinocchio and leveraged themselves up to the hilt, using real estate as an inflation hedge are now learning the hard way just how large a mistake they made. They are trapped and they can’t get out.
Their situation reminds me of the closing lyric’s in the song,
HOTEL CALIFORNIA.
“Last thing I remember,
I was running for the door,
I had to find the passage back
To the place I was before,
“relax” said the night man,
“we are programmed to receive”
You can check out any time you like.
but you can never leave.”

It would appear that the overindebted have been living in a parallel universe. The false assumption is breathtaking in it’s serial fallacies in that Tiff Pinocchio at the Canadian Central Bank will relent on its removal of liquidity in lock step with the increase in the interest rate. Truly delusional. Once again, “you can check out any time you like, but you can never leave. Steady lads, hold the line.

.

#45 Sean on 07.18.22 at 5:24 pm

According to the weekly numbers on Jeremiah’s site, average Halifax single family home prices are falling like a rock. 599k down to 521k in just over a month

July 14
Average Single Family Home Selling Price:  $521,629 ($532k,$572k,$587k,$577k) *$474k

July 7
Average Single Family Home Selling Price:  $531,650 ($572k,$587k,$577k,$599k) *$463k

Previous weeks numbers in brackets
*Previous Year’s Stats

#46 Love_The_Cottage on 07.18.22 at 5:26 pm

#32 Shawn on 07.18.22 at 4:33 pm
Canadian housing starts in June, 274,000 annualized.

No slow down

U.S. is only at 1.6 million with ten times the population. We been building WAY more per capita than the U.S. every year since at least 2008. No one mentions it in the financial press.
______
A couple of points Shawn since you are one of the few to actually think through things here instead of just posting the same crap everyday. (Yes, people, we get that you hate Trudeau and/or Tiff. But it says more about you than him that you see every issue through the same lens. Anyway…)

1) The U.S. population is approximately 8.8x that of Canada (not 10x although the math is easier and this used to be a good number to use) as the growth in the U.S. is lower than Canada. Lower immigration and higher death especially since March 2020.

2) Population growth and demographics play a key role in future housing demand. More so than total population.

3) If your point was that housing starts should be declining I would bet they will. But there is a time lag between the increase in interest rates and a drop in housing starts and I would argue that the increase in rents tells us more about whether we have enough housing than any other factor.

Cheers.

#47 Victor Llearna on 07.18.22 at 5:28 pm

Sheep with houses finally learning that they aren’t worth as much as they think they are. very few people in Canada can afford the monthlies on a $ 1 Million dollar mortgage. probably currently less than 1% of the population.

#48 rknusa on 07.18.22 at 5:32 pm

re: Halifax

Halifax is overpriced now when compared to Ontario property outside the GTA

NS provincial income taxes higher, on a 100K income you will be paying $5,000 more in taxes a year

HST 15% vs 13% Ontario

access to a doctor pitiful

I know where Garth’s permanent address for tax purposes is and it is not Lunenburg for this every reason

#49 crowdedelevatorfartz on 07.18.22 at 5:37 pm

I grew up in Halifax.
Moved out west in the early 1980’s ( just in time for the recession )
I try to get back to Hfx every year or two.
First time back since March of 2020 and the covid lockdown.
80% of my friends are tradesmen.
Busier than sh!t
OR if they were govt peons …they retired in the last few years.
All of them agree that real estate has peaked.

This real estate bubble has been pricked….only a matter of time before the balloon spins off in an unknown direction.

P.S.
Was out walking the boardwalk with my elderly mom and sister in Eastern Passage yesterday at the “eastern” entrance to Halifax Harbour.
Great day.
A mother and daughter walked by speaking Ukrainian.
I asked them if they were from Ukraine.
We all stopped and spoke for a few minutes.
They are very worried about what is coming…..
Great

#50 crowdedelevatorfartz on 07.18.22 at 5:40 pm

@#40 jane24
“Remind me , how do we send the dog photos in please?”
++++

I will be very VERY disappointed if your dog isn’t wearing Prada sunglasses and sitting in a Ferrari.

#51 tbone on 07.18.22 at 5:40 pm

So i was watching this house
bus stop is directly behind it on islington
77 Manorhampton in w9

lists on may 28 for 1788k
lists on june 07 for 1688k
lists on july 06 for 1100k

sold july 16th for 1325k
advertised as sold over ask , lol

#52 JPN on 07.18.22 at 5:43 pm

# 26 Dave & # 27 Dirty

I’ve not had the privilege of correcting 2 bloggers at the same time but here goes .. First “Dave” C’mon man.. do you watch the news ? Fires are virtually everywhere as temperatures rise. Yes.. the Okanagan.. Thompson even the Yukon start up from time to time.. I’ve lived here over 50 years and we have had our share however less than one may think.. 4 major events I recall. Loss of homes however .. is a tragedy “anywhere”

# 27 .. you should do some research outside of your class mates… There are jobs everywhere and not just the in the service industry albeit this is what you see the most of being a tourist destination and culture. I get a kick out of Okanagan “bashers” Life is great here You should visit and see why and not from an armchair.

#53 RichardTO on 07.18.22 at 5:44 pm

Welp, my Conservative Party ballot just showed up in the mail, time to vote for Pierre, because he promised to mess with the federal bureaucracy.

They need to be messed with.

#54 Penny Henny on 07.18.22 at 5:46 pm

#32 Shawn on 07.18.22 at 4:33 pm
Canadian housing starts in June, 274,000 annualized.

No slow down

U.S. is only at 1.6 million with ten times the population. We been building WAY more per capita than the U.S. every year since at least 2008. No one mentions it in the financial press.
///////////

I’m surprised you haven’t figured this one out yourself.
Our housing starts are higher per capita just as our immigration rates are higher per capita.
I would also wager that our population growth is higher the the US’s on a percentage basis.

#55 Penny Henny on 07.18.22 at 5:47 pm

I would also wager that our population growth is higher than the US’s on a percentage basis.

#56 conan on 07.18.22 at 5:48 pm

No one buying and no renters moving, least the ones that are in rent control. Another rate hike a week for weeks to come. It is going to be bad.
Add in Putin doing “whatever” to keep oil/ grain prices high and we are in a tough spot.

We can not sit back and watch things develop. The Russians had this adventure in their play book. It is not a coincidence that this is happening after a one hundred year pandemic.

Canada is lucky that we are ok in the grain/oil department. We need to step up to help Europe.

#57 Penny Henny on 07.18.22 at 5:49 pm

#32 Shawn on 07.18.22 at 4:33 pm
Canadian housing starts in June, 274,000 annualized.

No slow down

U.S. is only at 1.6 million with ten times the population. We been building WAY more per capita than the U.S. every year since at least 2008. No one mentions it in the financial press.
////////////////////

Also just wondering is a mobile home considered a housing start?

#58 Knowledge izz power on 07.18.22 at 5:53 pm

Ahead? But as rates rise and current conditions prevail, the greenback remains the safest go-to-place for wealth (you should have some ).

~~~~~
What form ? Physical Cash or money market funds ?

#59 Shirl Clarts on 07.18.22 at 5:58 pm

#4 renter in Surrey on 07.18.22 at 3:34 pm
Decent TH in the valley is about $1mil.

https://www.zolo.ca/langley-real-estate/20849-78b-avenue/21

There NO material price reductions.

^^^^^^^^^^^

Be patient. All of the recent price hikes (since Jan-Feb 2022) are gone.

The peak price in that development (The Boulevard) was at the end of January 2022.

Unit 2 – 4Bd 3Bth 1,371 SF (they marketed the foyer as a 4th bedroom) sold for $1.075M. This was the peak in this development.

Unit 59 3Bd 3Bth 1,367 SF sold in February for $1.05M

Unit 21 will probably sell for $850K, as evidenced by more recent sales of comparable TH’s. This is a 21% price reduction from peak.

The recently announced sky train expansion line from Surrey to Langley (completion by 2028) might help it sell a bit faster, but in my opinion Langley is totally overrun with too many townhome developments. I sometimes end up there on a weekend driving around the core, and traffic is a nightmare.

I don’t know what draws so many to live in Langley. Perhaps it was cheaper housing? Not much to do there except go to all the big box stores and the chain restaurants. The public schools rank higher there than say Pitt Meadows or Maple Ridge.

What will be interesting is to see if prices drop further. We are only sitting at Dec 2021 prices.

#60 Yukon Elvis on 07.18.22 at 6:01 pm

#27 Dirtydebtor on 07.18.22 at 4:10 pm
The thing about Kelowna: there is no jobs. I went to engineering school there. Most of my classmates fled the town right after graduation. We’re now mostly P. Eng’s with developing careers.

My classmates who stayed in Kelowna are mostly unemployed. Or if working, it’s down at the Canadian Tire or Dollarama.
+++++++++++

Bingo. You are right on the mark. Kelowna is an ok place to live if you have money and don’t have to buy a home or pay rent. If you are just starting in life and need to earn and save it can be a rough go here. Lots of my friends’ kids that grew up here had to move away to find meaningful work.

#61 Sail Away on 07.18.22 at 6:02 pm

All this focus and stress over housing jiggery pokery, geez. Just find a good job or two in a reasonably-priced location, buy a house, don’t stick your head in a borrowing noose, and sock away 75% of take home pay for 15 years.

If houses cost more than 300% of household income and you can’t afford one without borrowing money, be rational and find another place to settle that shortens, rather than lengthens, your path to financial independence.

So many people seem to carry mortgages after 50yo these days. That’s nuts. My parents bought the family farm for $10k cash on the barrelhead in Alaska in 1977. We bought our Nanaimo gem for $350k cash on the barrelhead in 2006. Never ever would we have moved here if house prices were at today’s income multiple.

Gotta be prudent and make the logical decisions. Nobody else will do it for you.

Easy peasy. Just call me ‘Mr. Solution’.

#62 crowdedelevatorfartz on 07.18.22 at 6:06 pm

@#17 PutinsSonjustin

While I find Joe Rogan and his guests amusing.
And his MMA “cred” is his keyway to internet fame.

I dont believe Mr Rogan has the international political experience to opine on anything more than the price of popcorn in Kansas.

#63 Robert James on 07.18.22 at 6:34 pm

#27 Dirtydebtor I certainly agree with you.. Kelowna is without a doubt the most overrated city in Canada .. I have lived 15 miles South of Kelowna since 1967 and Kelowna has really went down hill bigtime… The traffic , the crime,, and of course the smoke just gets worse every year .. Of course some of the phony real estate pumpers tell people that are dumb enough to believe them,,, ” This Napa North ” .. LOL Now that is a howler..

#64 TheDood on 07.18.22 at 6:39 pm

#4 renter in Surrey on 07.18.22 at 3:34 pm
Decent TH in the valley is about $1mil.

https://www.zolo.ca/langley-real-estate/20849-78b-avenue/21

There NO material price reductions.
_______________________________

Patience…….

Let them sit on the market for months and months. Eventually, the people who HAVE to sell will be forced to at whatever price buyers are willing to pay. This is not going to happen over night.

There is entire generation of the population who’ve been brainwashed by the RE pitch line nonsense – prices will never fall, get in now or be priced out forever, the market is sizzling, interest rates aren’t going up, borrow from your parents, etc.

A 1300 sq ft strata property for 900K????? In Langley? If someone thinks that is a good deal, then go for it.

Honestly, if people just stopped buying and waited these greedy dirtballs out, the prices would surely drop fast. There’s just too many dummies willing to part with cash they don’t have. That’s a 300k-350K property at best.

#65 45north on 07.18.22 at 6:40 pm

Realtor and statistician Scott Ingram shovels us some evidence of the growing weakness in the wake of the central bank’s blockbuster rate rise last week. “Now that I’ve done some deeper analysis on the Toronto real estate numbers for June,” he Tweets, “here are some charts that jumped out at me. First, TRREB has monthly data back to Jan ’96. This is the *lowest June ever* for Freehold sales in those 27 years, 31% below the 10-year avg.”

The low number of sales is a sign of weakness but wait until they go up.

#66 Jennifer on 07.18.22 at 6:46 pm

Talked to my sister-law the other day who lives in Germany. She told us, Germans are utterly angry at their politicians for putting the country so depended on Russia.

Last winter her apartment complex was mandated to keep heating temperature below 65 C. Even for her, it was too cold. Constantly sick with flu as a result.

It will be terrible for Europeans, on one hand falling Euro, as a result of not having supportive economy or European Bank reluctance to raise interest rates. Inflation will be ongoing problem for Europe.

#67 the Jaguar on 07.18.22 at 6:48 pm

What a smile on that Kooper dog. Like the Gerber Baby equivalent in canines.

Our resident Albertan ‘wannabe’ Shawn wrote a little piece a while back on the ‘Maritime Provinces’ as we refer to them out west. Not very flattering portrait as I recall, though no doubt there are many beautiful spots to relax and enjoy the view. The current influx from Ontario are largely escaping the GTA. No need to paint a picture on that one. No brainer. Marcia will welcome you with open arms, lol.

You have to live next to BC to understand that beast. In a ‘keep your friends close and your enemies closer’ kind of way, but best to keep your pistolla on the night table if they ever show up as an overnight guest. Don’t keep any large bills on you either.

I don’t know anything about middle earth. I hear Jackfish Lake is a nice spot in Saskatchewan. I adore Montreal and could do a long stay there, but it’s not my country. You can take the Albertan out of Alberta, but only for so long. Best just to vacation at these other spots. Do long stays in places like Mazatlan where cute little wiener dogs named Charlie roam the streets.

It’s too bad that some really nice people are going to get caught short handed in this housing debacle. We can sit back with amusement or schadenfreude, and where speculators or multiple property investors are concerned I feel little sympathy. But good people are going to be hurt. If they got bad advice and overpaid and the valuation for the property isn’t coming in at closing they are going to be in a tough spot. Hundreds of thousands of dollars in some cases. Where are they going to get it? Insured options, yes. But there are limitations in that world.

We didn’t go off the rails in Alberta because we were so busy trying to keep our heads above water since 2015. Thank you Jason Kenney for all your hard work. Like a cat on a hot tin roof we’re going to land on all fours. Perfect spot for a criminal mastermind like The Jaguar…

#68 Old Ron the Realtor on 07.18.22 at 6:53 pm

If you actually read the B of C notes, they spell it out. R.E. prices will decline for 6 Quarters of more. I have predicted that the GTA would give back all of the $432,000 Covid bounce. I figure we are about half way there.

At 5% $1,000 of mortgage debt costs $5.32 a month. It is only catastrophic if you were expecting 2% forever. Otherwise, 5% is pretty good value.

#69 Jumper on 07.18.22 at 6:54 pm

And here is the prediction (the chart is too graphic to reproduce on a family blog)

—-

Chart would be a Jumper!

Third Eye Blind.

https://m.youtube.com/watch?v=gRYZijLZR-Q

#70 Quintilian on 07.18.22 at 7:27 pm

“You’re not special”

Yes, even China is not special.

China home prices fall for 10th month as economic crisis deepens

https://economictimes.indiatimes.com/news/international/business/china-home-prices-fall-for-10th-month-as-economic-crisis-deepens/articleshow/92907745.cms

#71 Dragonfly58 on 07.18.22 at 7:29 pm

Shirl #59. The townhouse jungle is only a very small part of Langley. Much less than 20 %. And concentrated around the City of Langley and the North West in the Township. Most of Langley is quite rural, Hobby Farms / working farms , 5 – 80 or more acres.
Very nice wooded , rolling hills. Still a few pockets of true rainforest splendor . And very little of it is subject to flooding like in near by Abbotsford. Closer to the Ocean , so it does not get as baking hot in the summer as Abbotsford and Chiliwack. And not nearly the smog problem as further up the valley. I lived in Abbotsford for two years back in the late 1980’s, even then the air quality could become quite bad in the summer.
Biggest problem in Langley is property price. About the only people who can and are buying in my area are would be blueberry farmers { very long term property speculators in disquise } . Pockets bulging with cash as capital moves from Northern India to Langley. { Abbotsford as well } All of us who earn our living or draw our retirement income from here in the local area are totally out dollared. Otherwise, as long as you can come up with the $ for a few acres – 5 acres, it’s really a great place to live. Lived in quite a few places, Langley is my overall #1 choice. Just need a property that fits my needs and my budget. An increasingly tall order.

#72 Love_The_Cottage on 07.18.22 at 7:32 pm

#68 Old Ron the Realtor on 07.18.22 at 6:53 pm
If you actually read the B of C notes, they spell it out. R.E. prices will decline for 6 Quarters of more.
__________
I don’t ever laugh out loud at comments but this is an exception. A prediction from the B of C is something we should put belief in right now? Hilarious.

#73 Rent the Podium on 07.18.22 at 7:34 pm

Noticed data on Victoria suspiciously absent. I’m betting it’s the most resilient market in the country.

#74 A Broken Clock on 07.18.22 at 7:35 pm

Does anyone have a link for this “Kelowna Real Estate Report?” I’d like to see that too thanks.

#75 Dragonfly58 on 07.18.22 at 7:41 pm

P.S. plenty to do in Langley if you have a decent size property. Upkeeep never ends I know, but it opens up so many doors when you have a bit of space. My kids were always over at their friends place that had several acres with quads and later dirt bikes. Room for a workshop, projects, a boat if that is your thing. Gardening and so much more.
Wife and I are way beyond the nightlife years. But even on our large for residential / way too small for ag. , ALR property there are always things on the go.
It would be nice if Langley had a movie theatre that played better movies for those rainy winter nights, but you can’t have everything. Teenager oriented movies just don’t do it for us in our 60’s.

#76 Truth Law on 07.18.22 at 8:00 pm

Now this is an idea!

https://www.theguardian.com/books/2022/jul/18/the-big-idea-should-we-have-a-truth-law

I think we should have a truth law, as well as a law about deficits not being allowed. Get these politicians under control.

#77 Shawn at the Clansman on 07.18.22 at 8:04 pm

#46 Love_The_Cottage on 07.18.22 at 5:26 pm

#32 Shawn on 07.18.22 at 4:33 pm
Canadian housing starts in June, 274,000 annualized.

No slow down

U.S. is only at 1.6 million with ten times the population. We been building WAY more per capita than the U.S. every year since at least 2008. No one mentions it in the financial press.
______
A couple of points Shawn since you are one of the few to actually think through things here instead of just posting the same crap everyday. (Yes, people, we get that you hate Trudeau and/or Tiff. But it says more about you than him that you see every issue through the same lens. Anyway…)

1) The U.S. population is approximately 8.8x that of Canada (not 10x although the math is easier and this used to be a good number to use) as the growth in the U.S. is lower than Canada. Lower immigration and higher death especially since March 2020.

2) Population growth and demographics play a key role in future housing demand. More so than total population.

3) If your point was that housing starts should be declining I would bet they will. But there is a time lag between the increase in interest rates and a drop in housing starts and I would argue that the increase in rents tells us more about whether we have enough housing than any other factor.

Cheers.

************************************
First it must ne noticed that love the cottage seems verry intelligent in recognizing the quality of my posts.

And yes more immigration in Canada but we have built at least 50% more homes per capita than the U.S. going back to 2008. Something the financial press could notice, but no.

Hopefully they have a shortage of houses given I own shares in a home builder there.

I’m biased about Canada too as I own shares in a residential property developer in Alberta. I watch the housing starts closely.

Penny Henny, no response since you failed to compliment me first. I am adopting Garth’s MSU policy,

#78 Outrage on 07.18.22 at 8:11 pm

Yes, its horrific situation for real estate in Victoria. Sort of. Its taking 3 to 7 days for a house to sell. I didn’t think I would ever see that. Maybe in a few months when they lower rates again the action will pick up again as usual. Its quite scary to see this happen in Victoria.

#79 Doug t on 07.18.22 at 8:17 pm

AH YES everybody thinks their special and that they live in Thee Most Special of Special Markets LOL – WAKE UP PEOPLE – your not Special and where you live isn’t Special………

Clowns to the left of me
Jokers to the right
Get ready for a reality check

#80 JPN on 07.18.22 at 8:21 pm

#63 Robert James

Let me get this right .. you live in Peachland 15 miles South of Kelowna and your telling folks about our smoke in Kelowna ? I recall Glenrosa and Trepanier Creek burning last year..

#81 Dr V on 07.18.22 at 8:22 pm

38 Pville prankster

stats for you

http://www.vireb.com/index.php?page=20

The PQ selling price is…interesting…. Feb through May held up very steady about $1.05M. June tanked to $938k. One month does not a trend make, so check again for July – usually available just a few days after month end.

#82 Kid Kelowna on 07.18.22 at 8:26 pm

#39 Dragonfly58

You’re looking at lost appreciation but did you ever feel much mortgage stress over the years with your manageable level of debt ? If not, that’s priceless.

#83 We Need a new Rule on 07.18.22 at 8:27 pm

We need a new rule. The “Rule of 90” seems confusing.

How about the “Rule of 10” where your age + 10 = percent of net worth in investable assets?

Both rules blow up after age 90 anyways…..

#84 Shakir on 07.18.22 at 8:35 pm

“And here is the prediction (the chart is too graphic to reproduce on a family blog): “Detached prices forecasted to drop -42.72% or -$557,553 over the next 12 months.” In other words, from close to $1.3 million, descending into the eights. And heaven help those YVR refugees who came to the Valley in February to plunk their dollars down.”

Not a realtor here and so out of curiosity, the avg price of detached at its peak was close to $1.3m in what city?

We know TRREB avg price of all property types were at $1.3m at its peak. So the quote around detached in a hot market forecasted to go down by 40%+ is not unreasonable.

#85 Rosana Victoria on 07.18.22 at 8:48 pm

That’s a very useful prediction, immigration always has an effect in the market but let’s see what can happen.

#86 David on 07.18.22 at 8:51 pm

This real estate bubble was eventually going to correct. One has to feel for families with young children watching their incomes being corroded by inflation and higher housing costs. Since 2002Canadian housing costs have swelled by 375% and in markets like Vancouver and GTA prices have increased by 490% and 450% respectively. Canada had a world class bubble and there is a good possibility of a long bear market.

#87 WTF on 07.18.22 at 8:56 pm

#53 TO”Welp, my Conservative Party ballot just showed up in the mail, time to vote for Pierre, because he promised to mess with the federal bureaucracy.”
—————————————————————– I cancel you. Loathe Trudeau but Not voting for angry dude who throws mud but no solutions, never had a real job. Just another grandstanding dork with simplistic answers to complex issues. No Millhouse isn’t getting my vote.

Charest all ready to address our biggest issue, Health Care. Bring it on.

#88 Shawn at the Clansman on 07.18.22 at 9:03 pm

Wage and Price spiral

A certain motel / restaurant business in Nova Scotia just today gave everyone a $2.00 per hour wage increase.

#89 Alberta Boy on 07.18.22 at 10:21 pm

In a world with disinformation spreaders like Joe Rogan, I am so thankful to have CNN and the CBC to help me know the right way to think. In my home we have a saying, “when the experts on the CBC have spoken, the thinking has been done.”

#90 Overheardyou on 07.18.22 at 10:45 pm

So real estate is local may be more important this time around…

#91 Sail Away on 07.18.22 at 10:57 pm

#79 Doug t on 07.18.22 at 8:17 pm

AH YES everybody thinks their special and that they live in Thee Most Special of Special Markets LOL – WAKE UP PEOPLE – your not Special and where you live isn’t Special………

Clowns to the left of me
Jokers to the right
Get ready for a reality check

——–

Consider starting with spell check.

#92 get help on 07.18.22 at 11:03 pm

crowdedelevatorfartz, ponzius, Sail Away, IHCTD9, Faron, TurnerNation, The Jaguar, Dr V, Penny Henny and the rest of the regulars; watch these episodes.

Then, get help here, here, here or here.

#93 DON on 07.18.22 at 11:31 pm

#78 Outrage on 07.18.22 at 8:11 pm
Yes, its horrific situation for real estate in Victoria. Sort of. Its taking 3 to 7 days for a house to sell. I didn’t think I would ever see that. Maybe in a few months when they lower rates again the action will pick up again as usual. Its quite scary to see this happen in Victoria.
*******
Houses are sitting on the market in Victoria and other parts of the island.

#94 Dr V on 07.18.22 at 11:31 pm

92 Help

crowdedelevatorfartz, ponzius, Sail Away, IHCTD9, Faron, TurnerNation, The Jaguar, Dr V, Penny Henny and the rest of the regulars; watch these episodes.

Then, get help here, here, here or here.
———————————————–

Well thanks for the advice, but I dont smoke, drink little, no facebook, no twitter, no smartphone (they dont make you smart – who knew?), maybe a lottery ticket……oh wait……I do ride a bike and can grouchy if my garmin screws up or I miss a few days…..is that it?

#95 Doing my Part on 07.18.22 at 11:31 pm

I live and own real estate in Victoria, I watch the market carefully, new listings and sales.
Was a flurry of new listings over the last few months but fewer right now, probably due to summer holidays and people holding off to see if the market has a bounce back.
Lot’s of price reductions and listings sitting on the market not selling.
It is not different in Victoria, it followed other markets up, it will follow them down.
People who think otherwise are in for a learning experience.

#96 Doing my Part on 07.18.22 at 11:32 pm

oh yeah, dump the last of your bitcoin while you can, it’s going to zero.

#97 jim on 07.18.22 at 11:36 pm

“Yes, its horrific situation for real estate in Victoria. Sort of. Its taking 3 to 7 days for a house to sell. I didn’t think I would ever see that. Maybe in a few months when they lower rates again the action will pick up again as usual. Its quite scary to see this happen in Victoria.”

Sounds like you’ve been getting your news from the Victoria real estate board briefings. Median price for detached homes and condos are down 10 percent the past four months in Victoria and sales may be at 20 year lows by the end of this month. Enjoy

#98 Philco on 07.18.22 at 11:49 pm

DELETED (Language)

#99 Betsy on 07.18.22 at 11:52 pm

This mystery ‘Kelowna Real Estate Report’ you’re quoting isn’t online. So where did this ‘forecast’ come from? I see a stalling market here for sure. But no 40% drop in prices being had in the Okanagan. Still a low supply here. But lower demand now too. $1.3 down to $800k? Not likely anytime soon. And I watch the trends daily….I’m an appraiser here.

#100 maxx on 07.19.22 at 6:59 am

@#30

“—– Quebec. Good thing they had ‘curfews’ and fired qualified health care staff over the mandates. Our tax dollars at work.
Remember, next time call a cab and have them take you to the USA. Faster, and you will live on.”

One advantage of living close to the border…called a U.S. doctor’s practice s few years ago wanting to see a dermatologist. (needing to see one in “la belle province” can mean waiting years. We had waited 18 months following an unfavorable diagnosis with no end in sight).

Eye-dropper medicine.

Upon calling the doctor’s office in the U.S., we were told “oh, no problem, we can see you on Wednesday.” Our call was placed on a Monday.

As you quite rightly say, “our tax dollars at work.”

Vote accordingly and don’t forget to create a separate medical fund of your own. We’ve been on this project for nearly 2 decades now. If Canadians do this, it will eventually funnel a ton of cash across the border, but as you also say, “you will live on”.

#101 maxx on 07.19.22 at 7:05 am

@ #32

Proving yet again that Canadians are a nation of double-digit I.Q.s when it comes to RE.

Silly wabbit.

#102 Calgary Observer on 07.19.22 at 7:25 am

Meanwhile, back in Cowtown…

Price reductions are coming fast and furious now. Price reductions of $30K last month are now $50K. $100K not unusual, but these are on places that were over priced.

Watching sellers chase the market down now while buyers retreat.

#103 Senator Bluto on 07.19.22 at 7:38 am

#87 WTF on 07.18.22 at 8:56 pm

Charest all ready to address our biggest issue, Health Care. Bring it on.

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

My ballot showed up and I struggled with the Pepe vs Charest issue.

End of the day, I think Charest is Yesterday’s Man, not unlike Jason Kenney. Lots of talk, but too entrenched in the system to shake things up.

Is Pepe a risk? Yes. But he’s campaigning from the right to pull the oxygen from the room and will govern from the center.

(I kind of like the Pepe nickname; it’s actually pretty good branding and positively persuasive)

#104 Doug t on 07.19.22 at 7:48 am

#78 outrage

This made me giggle – “its quite scary” lol are you living in a snow globe world – take your rose coloured glasses off and WAKE UP

#105 Pandemic vs. Automation on 07.19.22 at 8:33 am

We’ve talked about how automation was a threat to labour a number of times over pre-pandemic years on here.

Well, Pandemic made many quit voluntarily.

How convenient? …for automation.

#106 jess on 07.19.22 at 8:34 am

….another man’s waste is another man’s treasure!

Farmers around the world are struggling. Your pee could An organization in Brattleboro, Vermont, has a surprising solution. https://richearthinstitute.org/

#107 The Guardian on 07.19.22 at 8:34 am

‘A bigger paycheck? I’d rather watch the sunset!’: is this the end of ambition?

https://www.theguardian.com/money/2022/jul/19/a-bigger-paycheck-id-rather-watch-the-sunset-is-this-the-end-of-ambition

Dissatisfaction with modern work – rigid hierarchies, bad management, boundaries that flex only one way – had been mounting for decades, says Hobsbawm. The upheaval of 2020 not only revealed our jobs to be more flexible than many of us had been led to believe; we were also reminded of the importance of health, hobbies and relationships – our careers often seeming hollow by comparison. Now, says Hobsbawm, “there’s a widespread sense of ‘carpe diem’”.

“No one can just go back as before, because we are all in some way profoundly changed,” she says. “What people want less of now is pointless presenteeism, stress, toxic workplaces and the commute … People want autonomy and flexibility as much as they want promotion and professional careers, or more.”

#108 Johnny Debt on 07.19.22 at 9:26 am

OK, let’s stop kidding ourselves.

All this debt is unrepayable.

I’m talking Federal, Provincial, US, Europe, etc.

This stuff is going to start turning into a giant seaming pile now that QE is being tapered back and The Shark is no longer so friendly.

So? What will happen?

Can they just write it off as bad debt?

Can they forgive themselves what they owe?

Let me give you an example about a friend.
He was obese. 360lbs. He had a problem with chocolate. He could eat it endlessly. 2kg bar for lunch. I’ve seen it with my own eyes. Around GFC, the stress of loses and financial pressure made him stress eat. He pushed it to what to me visually looked like north of 450lbs. At this point he needed a cane to walk. A short walk from room to room made him sweat vigorously where he would take out a towel from his pocket. Breathing looked laboured with each and every breath.

There simply was no path for him to get back to the 300lb range through discipline and reduced eating. He was too far gone. He went in and got the gastric bypass. Like magic, he shed the weight like you wouldn’t believe. Still heavy, but I think he may have gotten himself to a sliver under 300lb within months. Everyone was relieved because he was on the way to the afterlife for sure if drastic action wasn’t taken, and soon.

Is that the only solution for this debt? A gastric bypass?

No way they can make a dent in it the way things are going.

Answer me this: Does anyone see any path to the debt levels being reduced? Anyone? Any indicators of it being possible or doable on the horizon? Can someone point me to any?

#109 Prince Polo on 07.19.22 at 10:02 am

I think this is what we call an overheating economy—people are spending and have jobs, but they aren’t happy. And even the people who changed jobs now regret it.

This is all because high inflation is really terrible. It is no surprise that it seems like every world leader is resigning. Yes, I know other things are going on in each respective country, but high inflation leaves very little margin for error when it comes to leadership. It means everyone in your country faces a big pay cut, loses wealth, and faces more uncertainty. And in some ways, it is worse than ever before because inflation was dormant for so long and came out of nowhere. The inflation we face today feels like it came from a series of policy errors (which is partially true).

And longer-term, high inflation has a way of exposing all our sins. The longer it sticks around, the more it seeps into expectations (and I am not comforted by consumer sentiment surveys or breakevens—they have a terrible track record), and then interest rates go up. It is not just the Fed’s fault interest rates will rise; on the long end of the curve, inflation expectations and inflation uncertainty are what determine yields. So why is the curve inverting then? I am not sure; perhaps bond traders believe inflation will go back to 2% soon. But bond traders aren’t psychic; they make wrong predictions a lot. And even if inflation moderates soon, which I think it will, I think the 2% stable inflation world is not coming back. Eventually, that reality will show up in interest rates.

And higher rates mean all that debt we took on, especially corporate and sovereigns, gets expensive. And this will cause all sorts of problems, especially in developing countries.

Source: https://allisonschrager.substack.com/p/its-ugly-out-there

#110 OK, Doomer on 07.19.22 at 10:52 am

#103 Senator Bluto on 07.19.22 at 7:38 am

(I kind of like the Pepe nickname; it’s actually pretty good branding and positively persuasive)

=====

Yes, it’s easy to think of it as “Peppy”, which is better, happy and upbeat.

Unlike “Sleepy Joe” or “Low Energy Jeb” or “Crooked Hillary”.

Makes me wonder if someone who tried to push it as a negative actually had it backfire on them.

#111 enthalpy on 07.19.22 at 11:02 am

just had a friend come back to Ontario…from Halifax(after moving during C o v i d).

Struggled to sell their place and took the only offer,which was under under asking. Beautiful house btw.

Great lifestyle out there(if you can find a decent job) but if you need healthcare, watch out.

#112 Jay on 07.19.22 at 11:02 am

And here is the prediction (the chart is too graphic to reproduce on a family blog): “Detached prices forecasted to drop -42.72% or -$557,553 over the next 12 months.” In other words, from close to $1.3 million, descending into the eights. And heaven help those YVR refugees who came to the Valley in February to plunk their dollars down.

Wasn’t the average detached house price at the peak $2M. Where is this $1.3M figure coming from? Or are you referring to all housing types? Because if the chart is reading -42% on detached houses, would that not be prices in the $1.1M range, not 8’s as you have stated?

#113 IHCTD9 on 07.19.22 at 11:03 am

#108 Johnny Debt on 07.19.22 at 9:26 am

Answer me this: Does anyone see any path to the debt levels being reduced? Anyone? Any indicators of it being possible or doable on the horizon? Can someone point me to any?
_____

Nope. Not after Trudeau. It’s just way too much now for any Politician to tackle. We’re going to give everyone a free copy of “the deficit myth” and tell them not to worry.

Best we can hope for is the next PM simply running a balanced budget – but I don’t even see that happening. Trudeaus post-Covid regular run of the mill everyday budget deficits nearly match the previous all time Canadian record deficit set by Harper during the GFC.

It’ll be a few years yet before the pain fully arrives though, so some other PM will have to deal with the 43+ BILLION in *annual* interest we’re headed for by 2026. That’s about 60% more than we’re shelling out right now servicing our debt.

It doesn’t matter who runs the show going forward. Trudeau marks a turning point in Canadian history, from a land of once good prospects and promising futures, to a woke, broke, economic, and social dumpster fire.

#114 Brett in Calgary on 07.19.22 at 11:07 am

I think most folks that rode the RE market up (and therefore have equity because of it) fail to realize the difficulty of getting into a market where houses are ONLY $800K. This is still a massive stretch for most Canadian households, even with substantial down payment. A decent salary of 110k per year for example, gets you no where near a 800K house; 400-500k maybe.

#115 Re-Cowtown on 07.19.22 at 11:21 am

There is a winter scene from the movie “Dr. Zhivago” where said Dr. bemoans the pitiful sight of a man tearing down fence boards for firewood. The police chief remarks (paraphrase) “A single man doing so is indeed a pitiful sight, but a mob of them will destroy a city.”

Looks like the Germans are getting ready for real life to imitate cinema:

https://joannenova.com.au/2022/07/germany-plans-to-be-wood-fired-nation-for-homes-but-has-run-out-already-eu-says-plan-which-industries-to-close-first/

I hope our PM has seen “Dr. Zhivago” and learned something other than how to dress like a Cossack.

#116 Sail Away on 07.19.22 at 11:43 am

#108 Johnny Debt on 07.19.22 at 9:26 am

OK, let’s stop kidding ourselves.

All this debt is unrepayable.

——–

Let’s explore, shall we?

All things on earth have been created from the things of the earth. Certain items are found in certain places and a network has been created to distribute these. This network is fuelled by (well, fuel, yes, but also…) the uniquely human invention of money as an exchange mechanism.

The invention of money is just the human acceptance of the concept that money can be traded for goods.

It’s just a concept. This is important: it’s just a concept.

And because money is just a concept, debt is just a concept.

Imagine all the world’s money and debt disappeared overnight, but nothing else tangible changed. Everything that’s been built remains built. All distribution networks remain in place. All connections and agreements remain.

Money and debt are unimportant except within the game. So… play the game and accumulate as much as possible, but always understand these are just concepts.

#117 Shawn on 07.19.22 at 11:49 am

Can Government debt be repaid?

#108 Johnny Debt on 07.19.22 at 9:26 am
OK, let’s stop kidding ourselves.

All this debt is unrepayable.

I’m talking Federal, Provincial, US, Europe, etc.

*******************************
What makes you think government debt ever needs to be repaid?

For hundreds of years it has increased. It gets rolled over at the end of each term. Basically new borrowing to repay old borrowing. As long as this happens and the interest is paid everyone is happy.

Government debt in general does not need to be paid down or reduced unless it is too high as a percent of GDP.

There is no scenario where Canada’s federal government debt for example ever needs to be paid down to zero. Possibly it needs to be reduced and if so that is doable. But paid down to zero. No.

You have identified a problem that does not exist.

#118 Johnny Debt on 07.19.22 at 12:05 pm

#109 Prince Polo

P.P.

You think Germany is going to keep carrying Europe’s debt? Keep paying for Club Med?

Heck no! Ze Germans won’t let it happen. Look at the 9bn in aid to Ukraine, that is supposed to be new debt, and they said NEIN! And you know what? Rightfully so.

At this moment, you’ve got to be dense to not see that Putin has Europe BY THE BALLS! I see a clear path for Putin to blow up the EU…for desert.

He can blow up Italy, and even Germany quickly just by cutting off the gas. Crush their economies. Eye for an eye sanctions. The house of cards goes down quickly after that.

What happens after that is simple to see. EU dissolves. Euro is relegated to memory. Germans bring back the DM.

…the good? Obviously all that Euro debt will go poof when the Euro goes poof.

What about that USD debt? How will that go poof?

#119 Johnny Debt on 07.19.22 at 12:19 pm

#116 Sail Away

Indeed. I understand it is a concept.

The key is, everyone has to buy into the concept. Believe. What happens when that belief wavers?

#117 Shawn

Indeed Shawn. As per my obese friend example, he didn’t go down to zero either. Just a manageable large amount.

The point is that the amount is not manageable. And I strongly believe there is a whole bunch of debt that will only come out of the woodwork when the wall is hit, making things quite worse as a result.

And so, let’s not go down to zero, but let’s get down by at least 33%. How is that possible/doable?

#120 Steven Rowlandson on 07.19.22 at 12:29 pm

My room mate denies that people buy homes as an investment and insists that they buy property as a place to live while I insist that for most people they are looking for the big pay off and having a place to live is at best secondary, a near nonpriority next to the investment angle. We are both hanging out in the Barrie Traveler Lodge courtesy of the Busby center and interested governments due to being priced out of Canada by the real estate market. I want my own place and the other guy would be content to live under a tree.
The deal in the mean time is double occupancy and being watched over by young people who are like hall monitors or dare I say prison guards but without the big boots and weapons. may be living in a barracks is closer to it. For homelessness to end 95% of home prices must end then with existing wages everyone can go their own way and get a life. The real estate profiteers will just have to find something else to do with their cash..

#121 Dragonfly58 on 07.19.22 at 12:53 pm

Concidering almost everyone , upper middle class and downward is already taxed to near the breaking point it’s hard to see how a 33 % reduction in Gov. debt is even remotely possible.
Above upper middle class tax breaks / strategies limit how much tax can be collected.
The bulk of the Canadian population has already been fleeced. I can’t imagine how this can be solved. The future is starting to look very dark indeed.

#122 jess on 07.19.22 at 12:57 pm

Pair of Uxbridge residents charged in series of alleged real estate frauds
July 16, 2022

Peel police say they have charged two people from Uxbridge after they defrauded at least 18 people out of millions of dollars.

Police say the frauds happened between January 2019 and June 2021 across multiple jurisdictions.

The two would allegedly accept advance payments without delivering on the properties.

Former Stouffville realtor previously jailed for ‘Ponzi scheme’, charged again in alleged mortgage scam
Courtney Wallis Simpson, husband Kenneth Simpson have been hit with more than 100 charges

By Jeremy GrimaldiReporter
Mon., July 18, 2022timer2 min. read
updateArticle was updated 3 hrs ago

#123 Legal Beagle on 07.19.22 at 1:11 pm

#110 OK, Doomer on 07.19.22 at 10:52 am

#103 Senator Bluto on 07.19.22 at 7:38 am

(I kind of like the Pepe nickname; it’s actually pretty good branding and positively persuasive)

=====

Yes, it’s easy to think of it as “Peppy”, which is better, happy and upbeat.

Unlike “Sleepy Joe” or “Low Energy Jeb” or “Crooked Hillary”.

Makes me wonder if someone who tried to push it as a negative actually had it backfire on them.

*****************************************

To further quote former President Donald Trump – “Wrong.”

It was pushed (be me) for ease of typing in various group chats/blog posts/etc.

I also don’t think there is anything inherently disrespectful about ‘Pepe’ unlike the other examples you cite.

#124 Sail Away on 07.19.22 at 2:39 pm

#119 Johnny Debt on 07.19.22 at 12:19 pm
#116 Sail Away

Indeed. I understand it is a concept.

The key is, everyone has to buy into the concept. Believe. What happens when that belief wavers?

——–

Belief in the sanctity of the western monetary system is very ingrained. So… play the game, but don’t actually trust it completely.

Structure your life so the vagaries of the financial and monetary system are interestingly exploitable, but never have the ability to destroy you.

Sort of like our homesteaders Bezengy, IHCTD9 and Wrk.Dover.

#125 Game Warden on 07.19.22 at 3:24 pm

#89 Alberta Boy on 07.18.22 at 10:21 pm:

-In my home we have a saying, “when the experts on the CBC have spoken, the thinking has been done.”

LOL, I love that. Thanks!

#126 IHCTD9 on 07.19.22 at 3:40 pm

#117 Shawn on 07.19.22 at 11:49 am
Can Government debt be repaid?

#108 Johnny Debt on 07.19.22 at 9:26 am
OK, let’s stop kidding ourselves.

All this debt is unrepayable.

I’m talking Federal, Provincial, US, Europe, etc.

*******************************

What makes you think government debt ever needs to be repaid?
——-

How about a 40 billion annual debt servicing bill?

How about 50 billion? 60? At some point, even just the interest alone is a problem.

40% of working Canucks pay zero net income tax. Labour participation rate hangs in the low 60% zone. That doesn’t leave many working folks to pay the ever-increasing tab…