The plot

Too hot!

We told you to watch out for the job stats Friday morning. If they sucked, the market would cheer (because bad news is good news). If they were steamy, stocks would fade and yields swell. And, lo, it happened. Too damn hot.

So the US created another 263,000 paycheques last month, more than expected. The jobless rate fell again, to 3.5%. This is considered full employment. More than a million jobs are vacant. Anyone who seriously wants to toil, can. Hourly wages increased an average of 5%.

Ditto Canada. We added 21,000 after three months of staggering. The unemployment rate dipped here, too. At 5.2% (we count things a tad differently) Canada is also considered in a full-employment state. This is why your local Starbucks has a barista crisis and you can’t find a clerk at The Bay.

Here’s the conclusion: interest rates may be kicking the slats out of the housing market, but they’ve yet to tame the economy as a whole. Inflation’s running way above the plan, with a torrid labour market as the primary evidence. So Wall Street – which had a party on Monday and Tuesday – got it wrong, at least for now. Central bankers are not done yet. There will be no pause in this tightening cycle in the next few months. The hawks ate the doves.

And while equities were shedding hundreds of points on Friday, bond yields were plumping. US debt had the best yield-popping week in 38 years. And look what’s happened to Government of Canada five-year bonds, which influence where fixed-rate mortgages are headed.

Canada bond yields surge as economy churns on

The sentiment is universal. Another hike for the Bank of Canada on October 26th and the Fed a week later. The current betting is 75 pbs in Washington and another 50 in Ottawa. Then more from our CB on December 7th.

Says TD Economics:

The Bank of Canada is looking for a further softening in economic data before it can consider taking a breather on rate hikes. Given that the labour market has led the recovery over the last two years, this is one area where a greater recalibration is needed. With the economy yet to find a balance that would allow inflation to return to normal levels, we expect the BoC will continue to lift the policy rate, getting it to 4% by year-end. To echo Governor Macklem’s comments yesterday, “simply put, there is more to be done.”

The bank rate is now 3.25%. If TD’s right (and it is), a 4% BoC benchmark will mean a prime at the chartered banks within a few weeks of 6.2%. As mentioned here yesterday, that will push all mortgage rates higher and put home equity lines of credit close to 7%. As we also proved this week, a real estate price plop of 25% does not make houses any more affordable when mortgages are 5.3%. So when the five-year home loan gets to 6% (it’s coming), we need a house valuation collapse of at least 30% to just stay in the same place.

To put that in perspective, US real estate values declined an average of 32% in the great housing crash of 2005-7, which led to the credit crisis and the collapse of venerable Wall Street banks. (Not happening again thanks to regulatory and lending reforms.) In Canada the most significant market correction since the Depression of the 1930s shaved an identical amount – 32% – from the price of properties, and it was 14 years before they restored. (1989 to 2003. Ask your grandma.)

Says crusty veteran mortgage broker guy Ron Butler: “What’s Happening in Real Estate? Nothing Good… I will go out on a limb here but my best guess is the worst 3 months in RE Sales in the last 25 years are coming up. The quietest fall in a generation.”

Exactly. There is no fall market in 2022. Traditionally it’s the second-strongest period of the year, but sales have collapsed more than 40% in both the GTA and Vancouver. Sellers have been foolishly pulling listings off the market believing things will be better in 2023. They won’t. Prices will be lower. Every offer will come with hair on it. People who have to sell – job changes, relocation, divorce, kids, death or crackhead neighbours – will discount until they get a deal. The floor will keep falling, just as the ceiling kept rising in the heady days of early 2022.

Said a Fed official this week: “Until I see some evidence that underlying inflation has solidly peaked and is hopefully headed back down, I’m not ready to declare a pause. I think we’re quite a ways away from a pause.”

Said Bank of Canada boss Tiff Macklem: “By raising interest rates, we are making it more expensive for households and businesses to borrow and therefore to spend. The housing market had overheated to unsustainable levels early in the pandemic due to low supply, increased demand for larger homes and low mortgage rates. With higher rates now constraining borrowing, the sector has cooled. Labour markets remain tight, the economy is in excess demand, and we have yet to see clear evidence that underlying inflation has come down. When combined with still-elevated near-term inflation expectations, the clear implication is that further interest rate increases are warranted.”

There ya go. Clear as can be. It’s a plot. Monetary policy is currently designed to make houses worth less and to stop you from buying one.

As mortgageman Butler said, this is a generational story.

About the picture: “Greetings Garth,” writes Justin. “Long time reader. I got a picture you might like to use in a blog. We live on a farm and out big bull mastiff, Zoe, scares all new comers. However, her buddy, Pepper, our barn cat rules the place and she knows it. :)”

87 comments ↓

#1 mitzerboyakaQueencitykidd on 10.07.22 at 4:01 pm

Dogs are Great
beer is good
it’s friday im in luv

You can never stop the pendulum of life from completing its tasks

#2 Captain Uppa on 10.07.22 at 4:01 pm

While I don’t disagree with any of what is written here today, I do question whether we should put 100% stock into what Tiff Macklem says.

Lest we forget what he said in 2020:

“Bank of Canada Governor Tiff Macklem assured Canadian households and businesses that borrowing rates will remain at historic lows for the foreseeable future.

‘Our message to Canadians is that interest rates are very low and they’re going to be there for a long time,’ Macklem said at a press conference Wednesday.”

Things change. Get over it. – Garth

#3 chalkie on 10.07.22 at 4:02 pm

The markets are do depressing again today, but we know, for the long term, rebound and higher is somewhere in the making, so let’s sleep well. For those that have invested on borrowed LOC’s, the story maybe somewhat different.

So, Canada gained 21,100 jobs for September and you are feeling better, as nice as this looks on the surface, its pretty much a direction guarantee that BOC will be on target in tomorrow’s direction (OCT 26th) to insure we get a hefty rate interest increase again, most likely ¾ point, that would bring the bank prime over 6%. If you like bonds, well then perhaps you favor of the move. Sock it to the mortgage applicants and the LOC folks, seems to be the game.

When borrowing and debt is at a record low, people tend to spend more, and inflation increases in response to increased demand. When we see interest rates go up, people tend to prefer saving their money and limiting debt, whether it be in the form of fixed mortgage rates or variable mortgage rates, which reduces demand and encourages companies to keep prices low.

If the interest rate goes higher than expected, this may push companies to take aggressive action to combat the rate hike such as in reducing their spending with job cuts, which could push us into recession territory. When things get tight, the very first thing most companies will do is look at their manpower, the team gets reduced to save cost. Isn’t it funny how a CEO can make $2,000,000.00 a year, but its much easier to lay off 50 people making $40,000.00 a year, rather than lay himself off, to save that same two million dollars, that’s life. I guess that’s what they get paid for, to make smart decisions in the board room, smart right?

There is no way that the bank of Canada will pivot away from interests moves bullish stance, even with so much criticism coming from the business sector, Government know best, right?

OPEC cutting production target for a couple million barrels of oil per day. United States were screaming to the top of their lungs begging the OPEC not to go that direction.
On the bright side, Alberta should gain a lot from the oil price increase, but the poor public gets hosed in the wallet every time on any power struggle.

Don’t put those masks away just yet, yesterday the Ministry of Health announced that there were 1,465 people in hospital with COVID. The number is up from 1,141 in September 2022. When shopping at the big box stores where its most noticeable, it’s like COVID is gone away, the percentage is so small for people who continue to wear mask, but the proof is on record today, showing its not going away anytime soon. Average cases with COVID for Canada current today 8,558. This number would be much, much higher with people using the self-test kits, there is no record of these positives in the stats. Since March 2020, there has been at total of 45,606 Canadians including 14,427 Ontarians die from COVID.

With the Russian War, high Oil prices, consumer confidence at a 10 year low, Economists at Goldman Sachs Group estimate up to a 35% chance that the economy will go into recession, which would impact the housing market. Once housing starts to go into default, it will not end well.

Deposit Interest Rate in Canada averaged 5.65 percent from 1975 until 2022, reaching an all-time high of 22.06 percent in August of 1981 and a record low of -0.10 percent in October of 2020. Where is your rate at today? Its like the Lyrics, “The Water Is Rising”.

Planning on purchasing a home, an important consideration in this market is how long you plan on staying in the home. People who are buying their “forever home” have less to fear if the market reverses as they can ride the wave of ups and downs.
Buyers who plan on moving in a few years are in a riskier position if the market plummets. That’s why it’s so important to shop at the outset for a realtor and lender who are experienced housing experts in your market of interest and who you trust to give sound advice. Interview four or five realtors, before you make a choice of who you will give the contract to.
Why, I would never give an exclusive listing. Often the biggest winner in an exclusive listing is the real estate agent. Exclusive listings reduce the chances of cooperation (where one agent represents the Buyer, and another represents the Seller). If the Buyer and Seller are represented by the same person, the agent stands to make a big fat commission, not sure why one would do this, but these signs keep popping up at times in the neighborhoods. Did the exclusive listing really bring in the highest price for the Seller, you will never know and that agent “makes double the dough”?

My advice is to, barter hard and hold firm, there are many MLS starving for business agents right now, that will bend on their rates, start around 3% on your commission negotiations. Of course, there is always do it yourself for sale, 1% commission realtors and private guys and others, all of these options work well in a reasonable priced home.

Quote of the Day: “A rich man is one who isn’t afraid to ask the salesperson to show him something cheaper.”

#4 Sardonic Lizard on 10.07.22 at 4:06 pm

If you don’t have a stick, you have to speak hawkishly. The BoC will pivot as soon as they need to, they just need you to believe it’s not going to happen right now.

#5 Flop… on 10.07.22 at 4:06 pm

Who wrote this post?

Garth?

No, the Butler did it…

M48BC

#6 baloney Sandwitch on 10.07.22 at 4:10 pm

Great picture. The stock investors are Zoe and the Fed is Pepper. Zoe should just play dead till Pepper goes back to the Barn. Don’t fight the Pepper.

The Fed just shoved the real economy out of the window. Now let us wait for the thud.

#7 1255 on 10.07.22 at 4:11 pm

It only took the CBs a generation to figure it out.

#8 Calgary Observer on 10.07.22 at 4:13 pm

Strange things starting to happen in the Calgary market over the past week. Some bigger price cuts kicking in, ranging from $50K up to $200K in some higher priced (but still sub $1million) houses.

Price reductions and back-on markets are out-pacing solds by at least 2:1. Not sure what all that means. I’ll dig into the stats more but it looks like the market is starting to get the high interest rate message.

#9 Triplenet on 10.07.22 at 4:16 pm

21,000 jobs – created in the public sector, primarily in education…..as happens every year in September.
Further, your comment the other day regarding the CMHC having minimal impact with mortgage delinquencies ….i think not. In the mid to late 90’s CMHC held 25% of residential listings most markets in BC.
This certainly impacted the overall market.

#10 Flop… on 10.07.22 at 4:16 pm

Broadway, put down the Coffee Crisp, and take a look at this new listing.

Have you walked by this one?

Only half block, some have been going for 1.2, but maybe they get 1.3?

I forgot, when making predictions you’re supposed to put more nuanced numbers so people take you seriously.

O.k, I go with 1,325,000…

M48BC

https://www.zealty.ca/mls-R2729399/2622-CLARK-DRIVE-Vancouver-BC/

#11 Søren Angst on 10.07.22 at 4:18 pm

US RE Meme that as of late I have noticed Cdn Realtors have adopted:

https://twitter.com/biancoresearch/status/1577769507833221120

Not much to say Garth as you said all there is to say today.

Gave Butler a great big red heart today when I read his Tweet. Smart guy. Candor. A favorite of mine.

——————-

Czechia is determined in trolling Russia. That is one crazy country is all I’ll say:

https://twitter.com/visegrad24/status/1578277908786782208

‘Atta go Czechia.

——————-

“The hawks ate the doves.”
– Garth

Just when I thought my DOVE Cdn ETF was on the mend, this:

https://www.google.com/finance/quote/BNS:TSE?comparison=TSE%3ATD%2CTSE%3ACM%2CTSE%3ARY%2CTSE%3ABMO&window=YTD

Though its 21% monthly dividend yield has cushioned the price decline nicely.

NOT ALL HAWK

My 2 oil ETF/ETNs up in share price, as I type, +7.35% and 8% in the last 5 days. And their 10% qrtrly/41% monthly div yields make it all that much juicier.

Yin. Yang. Yeah _ _ _

#12 Sunny South on 10.07.22 at 4:19 pm

Well, looks like another big rate increase coming at the next meeting based on the job numbers. A year end rally looks less and less likely. Happy Thanksgiving to Mr. & Mrs. Turner and to all blog dogs.

#13 Squire on 10.07.22 at 4:19 pm

Watching the home prices escalate during the past couple of years kept reminding me of the following quote;

We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.
Warren Buffett

So it came to pass that those words carry wisdom. We can clearly see now why.
Oh, and one more thing. Never try to catch a falling knife.

#14 TurnerNation on 10.07.22 at 4:19 pm

Yawn every other storefront has on display a Help Wanted sign.

————
This Thanksgiving I will be taking time to remember the less fortunate among us. Namely, those which will not be eating turkey (because they are vegetarian/vegan). Poor waifs. Now, let’s dig in lads!! *burp*

—————————————
O boy here come the calls/emails.

“Dear Advisor/Adviser. We no longer can tolerate this level of losses and would like to sit it out in cash until we feel it is prudent to invest again.

Signed, G.I. CER.”

REPLY: “What you are pyschic? Not only are you calling a top (now) but will be calling a bottom later on?
I should be investing with YOU! Where do I send the cheque Bucko”?

#15 Dave on 10.07.22 at 4:24 pm

Problem is that even the short sighted millennials that bought with very small down payments near the market peak will do anything to avoid having to sell, even if that means getting money from mom and dad.

#16 Pete Venkman on 10.07.22 at 4:26 pm

Stocks with favourably taxed dividends on fire sale!!!
Cats and dogs living together…mass hysteria!

BNS; PB=1.19; YLD=6.29%
MFC; PB=0.86; YLD=5.97%
POW; PB=0.94; YLD=6.29%
Average PB=1.00; Average YLD=6.18%
(tsx closing prices 2022-10-07)

#17 Victor V on 10.07.22 at 4:26 pm

*U.S. INTEREST RATE FUTURES PRICE IN 92% CHANCE OF A 75-BPS FED RATE HIKE IN NOVEMBER, UP FROM 85.5% BEFORE SEPT. JOBS REPORT

https://twitter.com/Investingcom/status/1578444588141793283

#18 epic bear on 10.07.22 at 4:26 pm

timber……

2023 earnings will now collapse as people figure out there’s going to be a recession with job losses.

stocks are still massively overvalued.
bonds less so. but not a refuge.

covid lows here we come.

Q3 earnings will be fine. Keep your furry little pants on. – Garth

#19 crowdedelevatorfartz on 10.07.22 at 4:32 pm

Crank up the rates.
Higher and higher until the Real Estate markets squeal in terror.
Realtors can feel our pain.
Long…. over… due.

#20 The Original Jake on 10.07.22 at 4:33 pm

“best guess is the worst 3 months in RE Sales in the last 25 years are coming up. The quietest fall in a generation”

The agent that sold my house earlier this year said the listings he has this Fall are getting “no action” and this is in the GTA. It’s absolutely D-E-A-D out there.

Earlier in the year when prepping my property, I told the agent we have to sell before the summer. I do not want to come back in the Fall because there will be no Fall market.

Glad to be out as we are still above pre-pandemic prices…. so lots of air still to come out of this balloon. Just takes years for housing to finally bottom unlike equity markets which bottom in months.

Good luck to the specuvestors and flippers. The party is over.

#21 MC on 10.07.22 at 4:38 pm

so.. i guess it turns out, it IS different this time.

#22 Søren Angst on 10.07.22 at 4:39 pm

Off Topic.

My favorite football team (not your fake sport by the same name Canada) AC Milan has a new guy on the team.

https://twitter.com/acmilan/status/1578387952882925569

We will now win Il Scudetto this season with him on the team.

Tried to get tickets for this Saturday but all this is left are the nosebleed seats at €150 or the extortion seats at €400. And that’s for a regular Serie A league game (vs. Juventus).

And it will probably be sold out by Saturday.

#23 crowdedelevatorfartz on 10.07.22 at 4:42 pm

Our “Woke” politicians in Lotus Land…

https://vancouver.citynews.ca/2022/10/05/bc-crime-violence-question-period/

“Arresting more criminals is futile”…..

Coming to a Federal Liberal near you.

#24 Shawn on 10.07.22 at 4:43 pm

#9 Triplenet on 10.07.22 at 4:16 pm

21,000 jobs – created in the public sector, primarily in education…..as happens every year in September.

************************************
A logical thought indeed but the jobs reports are seasonally adjusted. If there is always say a 25,000 average bump in September than an actual 50,000 bump is shown as 25,000.

Also of course teachers who are asked in July and August if they are employed, say yes.

#25 SW on 10.07.22 at 4:47 pm

Inflation peaked? Maybe not yet. Or at least sticky for years in central bank lingo.

Oil is breaking out of its downtrend, heading into winter, SPR release ending soon, oil embargo ending Dec 5th and China starting to reopen? Winter is going to be interesting. Giddy up energy investors.

#26 Shawn on 10.07.22 at 4:48 pm

Jobs and Immigration

Something to ponder in the jobs reports between Canada and the U.S.

Canada brought in what was it 264,000 net new people (immigrants, net increase in students etc) in Q2 alone. The U.S. is limiting immigration while Canada ramps up. That’s got to push up the job numbers in Canada.

Canadian population is just a hair under 39 million and rising I would guess at a far faster rate than the U.S.

Gonna take some doing to push the job increase numbers down in Canada when there are labour shortages and a lot of people coming in. Bring more to cool wage inflation?

#27 Søren Angst on 10.07.22 at 4:55 pm

#16 Pete Venkman

That’s a Winners Circle Cauldron you’ve assembled there, YTD Stock Price appreciations:

BNS -28.61%
MFC -12.17%
POW -25.16%

Well, on that I’m going to sell my ETFs/ETNs yielding 10% to 40% (incl. NXF +22.73% YTD price gain) just so I can be a part of living La Vida Loca Single Stock Picks where the “dividends” don’t cover inflation let alone their stock price “gains”.

NOT.

#28 Faron on 10.07.22 at 4:55 pm

#118 Sail Away on 10.07.22 at 9:52 am

The Great Pacific Garbage Patch does not exist.

Incorrect.

But, by your logic, the fact that I’ve never witnessed or interacted with anyone of intelligence who lives on Nanaimo’s Stephenson Point Road must mean intelligent humans must not exist there.

Also, the Heartland institute is not centrist.

#29 X on 10.07.22 at 4:57 pm

I think there are lots of home buyers out there, unfortunately sellers just can’t come to selling for so much less than what the guy down the street got in February. Tough pill to swallow, but the quicker you do it, the less painful it is going to be.

Santa Claus rally anyone? I don’t get how stocks are so depressed when we have so many people working and spending money. This market dip is going to look like a small blip in a couple of years.

#30 froggy on 10.07.22 at 5:04 pm

captain uppa in case you don’t interest rates at 6% is considered low and balanced the problem is that and i mean it is that even with interest rats at 3% you don’t pay 1000000 dollars for a shack only a shumck does

#31 Linda on 10.07.22 at 5:10 pm

So is Zoe thinking about picking a peck of pickled Pepper? She sure looks mournful…..

So I’m wondering. Is the 30% reduction mentioned in today’s blog in addition to the 25% reduction that has already taken place, or does the prognostication of a 30% reduction include the drop that has already occurred? The other thing I’m wondering is how many of those folks who got letters from their lender of choice regarding increased payments if rates keep increasing are going to be told the time has come to fork over more $? Talk about the Grinch factor.

#32 crowdedelevatorfartz on 10.07.22 at 5:14 pm

The Canadian Military procurement process takes 11 YEARS to choose a new sidearm.

https://vancouversun.com/news/canada-inks-deal-to-replace-armys-wwii-era-sidearms

As one person involved with the nauseating govt bureaucracy opined…

“Defence analyst and senior Macdonald-Laurier Institute Fellow Richard Shimooka said Canada’s defence procurement process has become choked with layer upon layer of bureaucracy without any single point of oversight.

“There’s been an over-reliance on bureaucratization and process instead of good management techniques in order to undertake defence procurement,” he told the National Post.

The problem, he said, is magnified by the involvement of as many as six separate agencies and groups, all with a say in procurement.

“There’s no real single leader that can go and crack heads, no single point of accountability,” he explained.”

Essentially
Too many bureaucrats, too many processes.
No one accountable.

Yep.
Sounds like govt to me…..

Lets give them all gold plated , inflation indexed pensions and tell them , “Good Job!”

#33 Søren Angst on 10.07.22 at 5:17 pm

Off topic.

Been following the Ukraine Army pretty since the beginning on Instagram.

If I recall they’ve captured or destroyed something like 400 Russian tanks in their counter offensives as of late.

They’re proud of capturing a Russian main battle tank T-90M.
https://www.instagram.com/p/CiqB9dkMUF3/?utm_source=ig_web_copy_link

Blasé about capturing oldie, run of the mill T-62 tanks, but they’ll take them anyway.
https://www.instagram.com/reel/Ci9myLRgAQ9/?utm_source=ig_web_copy_link
https://www.instagram.com/p/CjVpqVSsrH0/?utm_source=ig_web_copy_link
[lots of pics in the last one]

Some of those images remind me of the old paper version of Autotrader.

Slava Ukraini.

#34 Faron on 10.07.22 at 5:19 pm

#23 Søren Angst on 10.07.22 at 4:55 pm
#16 Pete Venkman

BNS -28.61%
MFC -12.17%
POW -25.16%

Well, on that I’m going to sell my ETFs/ETNs yielding 10% to 40% (incl. NXF +22.73% YTD price gain) just so I can be a part of living La Vida Loca Single Stock Picks where the “dividends” don’t cover inflation let alone their stock price “gains”.

NOT

Hey, at least you didn’t invest in Elon Musk’s other scam, Tesla, which is down almost 30% since late September and more than 40% YTD. 16% since it showed off some red hot, widely ridiculed, robot tech that was cutting edge 30 years ago.

#35 PBrasseur on 10.07.22 at 5:25 pm

As Buffett said, as the tide goes out you see who was swimming naked!

Canada is a giant nude beach!!!

No commodities, oil or real estate bull run is going to save you this time.

#36 Sail Away on 10.07.22 at 5:25 pm

#24 Faron on 10.07.22 at 4:55 pm

….by your logic, the fact that I’ve never witnessed or interacted with anyone of intelligence who lives on Nanaimo’s Stephenson Point Road must mean intelligent humans must not exist there.

——-

I’m with you. Bunch of maroons. And it’s dangerous, to boot.

The stunningly intelligent people live well off the road.

#37 TurnerNation on 10.07.22 at 5:34 pm

#3 chalkie on 10.07.22 at 4:02 pm

You forgot to mention the 5-6 shots? How do you factor this into your ad hoc calculations.
Nope it is not over at all. It is permanent (in some peoples’ minds). The Rules are life.
——————

I sure nailed it 280 days ago. I know Life in Kanada and Kanadians.

https://www.greaterfool.ca/2022/01/01/the-year-ahead/#comment-820029

#8 TurnerNation on 01.01.22 at 11:17 am
2022 schedule (Thanks to our sponsor, Fizer):
January: TFSA contribution; 3rd booster
March: RRSP contribution; 4th booster
June: 5th booster
September: 6th booster
December: 7th booster. Annual winter lockdown

#38 Parksville Prankster on 10.07.22 at 5:36 pm

Meanwhile, here in sleepy little Parksville, Sellers still expect close to 400K including transfer taxes, for around 400 square feet of a glorified 5th wheel on a rented pad.

When people are paying 1K per square ft. for holiday trailers on a rental pad, the world truly has lost its mind.

https://www.realtor.ca/real-estate/24891901/a16-200-corfield-st-n-parksville-parksville

#39 Quintilian on 10.07.22 at 5:39 pm

Seems that Central Bankers in North America have finally grown a backbone and rid us of the Greenspan Put.

Maybe, just maybe, some day valuations may reflect real intrinsic value, and an investment rather than a bet at the casinos.

#40 Triplenet on 10.07.22 at 5:43 pm

#20 Shawn
…..go away, you make thing up.

#41 Mike Buri on 10.07.22 at 5:44 pm

Takes several years for a housing bear market to reach capitulation. After 1989 it took about 6 years. We are 6 months in. And, life will go on regardless.

#42 Josh Feldman on 10.07.22 at 5:49 pm

DELETED (Anti-immigrant)

#43 Faron on 10.07.22 at 5:59 pm

interest payments at 3% of GDP. Most since 1980s. 2.3% headwind compared to 2020.

#44 Ponnaps on 10.07.22 at 6:06 pm

“…4% by year-end”

this was the projection a couple of weeks back for mid 2023 with a scale back to 3.5 by year end..

safe to assume 2023 mortgage season is gutted as well..

#45 Wrk.dover on 10.07.22 at 6:15 pm

How about those Toronto Maple Leaf style FANG’s?

The Ontariowe folk are gentrifying my humble shore!

The few houses left for sale are all going for yet more.

And the fixer uppers are already flipping @ double, fixed up.

#46 Wrk.dover on 10.07.22 at 6:28 pm

#38 Parksville Prankster on 10.07.22 at 5:36 pm
Meanwhile, here in sleepy little Parksville, Sellers still expect close to 400K including transfer taxes, for around 400 square feet of a glorified 5th wheel on a rented pad.

When people are paying 1K per square ft. for holiday trailers on a rental pad, the world truly has lost its mind.

https://www.realtor.ca/real-estate/24891901/a16-200-corfield-st-n-parksville-parksville
___________________________________

Those dimensions folks!

And $3700/year property tax….

Walmart parking lot is an upgrade to this.

#47 Investx on 10.07.22 at 6:31 pm

#23 Søren Angst:

“Well, on that I’m going to sell my ETFs/ETNs yielding 10% to 40% (incl. NXF +22.73% YTD price gain) just so I can be a part of living La Vida Loca Single Stock Picks where the “dividends” don’t cover inflation let alone their stock price “gains”.

NOT.”

You’re going to use a covered call ETF as an example of superior returns? Covered call ETF’s are notorious for lower total returns over the long term. Speaking of NXF price, it’s been steadily depreciating since inception.

#48 Why Didn't I Think of That? Invest WHERE IT IS CHEAPER!!!! on 10.07.22 at 6:41 pm

Be a lateral thinker to use your money everyday to make more money the easiest way with the least resistance.
Do that day after day, month after month and year after year and your nest egg will grow a lot larger faster. Speculators always get killed by a crashing house of cards markets. Real investors just keep bringing in the returns.

#49 BCWally on 10.07.22 at 6:43 pm

Wow this must be brutal for residential landlords. BC limited the 2023 rent increase to 2%.
I suppose though, a lot more houses on the market soon for young couples to buy and live in as multiple home owners/landlords are forced to sell, or burn cash forever. Don’t rent a house down there, stick with institutional rental properties. Better yet buy a nice tow trailer and find a good RV lot with gas and power hookups.
Well, the lower mainland is currently repopulating Calgary due to affordability so that should open things up there even more. Enjoy the winter guys, and the natural gas/hydro bill.
Just drove through the LM to get to Abbotsford airport. $2.42/gallon. Singed my fingers with the bank tap card at the gas station. Left for the relative safety of the interior. I don’t think the LM is going to be such a nice place really soon.

#50 Paul on 10.07.22 at 6:44 pm

Things change. Get over it. – Garth
——————————————————————–
There’s an understatement!
Can I use it?

#51 Faron on 10.07.22 at 6:51 pm

#36 Sail Away on 10.07.22 at 5:25 pm

The stunningly intelligent people live well off the road.

Oh, so if my logic is wrong then your logic regarding the garbage patch is also wrong.

To reiterate, a sailor who mysteriously transits a windless gyre with a broken engine and doesn’t see any obvious garbage tells us nothing about the patch’s existence nor importance.

#52 Flop… on 10.07.22 at 6:57 pm

#38 Parksville Prankster on 10.07.22 at 5:36 pm
Meanwhile, here in sleepy little Parksville, Sellers still expect close to 400K including transfer taxes, for around 400 square feet of a glorified 5th wheel on a rented pad.
When people are paying 1K per square ft. for holiday trailers on a rental pad, the world truly has lost its mind.
https://www.realtor.ca/real-estate/24891901/a16-200-corfield-st-n-parksville-parksville

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

Hey Prankie, dunno if you’ve heard of this guy, Chris Barron, but when I was trying to narrow down the lag in Nanaimo information, I noticed he had one that sold last week in Parksville, might as well pass it on, in case it matters to someone in that neck of the woods.

I don’t think I stopped in Parksville on the way up to Courtnay, Comox, that’s as far up island as I went in the cold November rain.

Next time I go to the island I want to check out Duncan too, seems like it’s a possibility to be my back up, back up, back up, to my back up for a place to retire…

M48BC

https://www.chrisbarron.ca/listings/view/485626/parksville-qualicum/pq-parksville/132-635-blenkin-ave

#53 Steven Rowlandson on 10.07.22 at 7:07 pm

“Inflation’s running way above the plan, with a torrid labor market as the primary evidence. ”

Given my observations from personal experience of hours and rates of pay from 1978 to the present the word torrid to describe the labor market is a gross exaggeration. Anemic and Scrooge approved would be more like it. The only thing that is torrid is government deficits and debt and real estate prices, rents and the magnitude of mortgages.
All this is where the real source of inflation is and all other debt contracting is secondary and more or less short term. Too much government spending and playing monopoly in the real world is to blame for it all.

#54 Pete Venkman on 10.07.22 at 7:11 pm

Dear #47 Investx:

Snore Gnats didn’t even pick up on the name!

Who ya gonna call…Ghostbusters!

#55 Steven Rowlandson on 10.07.22 at 7:12 pm

https://www.realtor.ca/real-estate/24891901/a16-200-corfield-st-n-parksville-parksville

Two words to describe the price advertised. Abominable and shameless!

Mobile homes in trailer parks were for those of limited means and far from ideal. Now it seems you need to be rich to live there.

#56 Asian Lives Matter on 10.07.22 at 7:19 pm

Looks like a controlled demolition of the global financial system to me. Don’t accept their solution (CBDCs) to the problem they created.

Gold and bitcoin for the win.

#57 Flop… on 10.07.22 at 7:26 pm

People gonna flip properties in this town until David Eby takes the bowl away.

Let’s see what these guys got up to.

2710 e 2710 1st Avenue.

Someone bought it for 1.25 in late June 2022, after the previous owners were trying to get February pricing for it at 1.58

By late August they tried to get 1.5 for it.

250k, less fees and taxes.

It just sold again 1.38, probably not that much meat on the bone after handing out the brown envelopes, but it’s probably better than holding on to a stop sign for 20 bucks an hour.

People in this town would flip their Mums if they could profit from it…

M48BC

https://www.zealty.ca/mls-R2722189/2710-E-1ST-AVENUE-Vancouver-BC/

#58 Flop… on 10.07.22 at 7:34 pm

Hey Quint, I’ve got a sale that went today up in your parents neighborhood.

On the market for 3 months, but they got good coin just not as much as they wanted.

I feel like the Clint Eastwood of Covid shots.

How many posts have I put up today?

4, 5, do I feel lucky punk?

Something they put in the 4th Covid Vaccine microchip is making me a faster typer…

M48BC

https://www.zealty.ca/mls-R2707165/7463-PANDORA-DRIVE-Burnaby-BC/

#59 XEQT and chill on 10.07.22 at 7:37 pm

My wife and I are house shopping right now in Saskatoon.

I don’t know why Garth complains so much about realtors, I’ve never seen someone work so hard for a sale ;)

#60 Broader Mind on 10.07.22 at 7:43 pm

Inflation must be really bad when our government pays 56 million dollars for a million dollar app. Garth if we could go back a little in historical 5 year bond rate one would see that it is ridiculously low and given our bank rate it is just wrong.

#61 Terry on 10.07.22 at 7:46 pm

What a farce. Rising interest rates the result of central bankers lowering rates to zero or almost zero in 2020. What a mistake that was as I’ve repeatedly said in the past. Now people will be paying for that mistake in the years to come. No problem for me but I do see DOUBLE DIGIT interest rates on the way by mid 2023. They lied to you when they lowered rates in 2020 and told you to get out and borrow and spend insisting that rates won’t go up. Now look at the mess alot of people are in! Bankers, Government and Corporations ARE the problem today! Keep up the “Quiet Quitting” everybody “They” don’t give a dam about you! Look after yourselves and do just enough not to get fired. “They” are not worth it! Also, don’t forget to tell them where they can put their lying team building, leadership raw raw sessions too!

#62 Damifino on 10.07.22 at 8:17 pm

#59 XEQT and chill

I don’t know why Garth complains so much about realtors, I’ve never seen someone work so hard for a sale ;)
————————————-

Are you new around here?

Garth is not anti-realtor.

He’s always urged folks who are buying or selling to use a realtor. He merely cautions us that all realtors are not created equal and it behooves one to learn the difference.

Also, he’s no fan of “Frankenumbers”, highly misleading realtor math, and other sleight-of-hand so common in the industry.

#63 Quintilian on 10.07.22 at 8:25 pm

#58 Flop… on 10.07.22 at 7:34 pm
Hey Quint, I’ve got a sale that went today up in your parents neighborhood.

Hey Flop,
Do you know how much it went for?

Just a little info for you… only the locals would know; the neighbourhood is one massive Airbnb resort.

Most of the new buyers would never be able to pay the mortgage without the “mortgage helper”.
Lots of private financing as well.

#64 Adam on 10.07.22 at 8:32 pm

Who wants some anecdotal evidence? Okay, here you go… I just got home from Costco and it was the busiest I’ve ever seen it. I am talking busier than christmas, busier than black friday. I took an Uber home… usually takes 7 minutes, it took 52 minutes. We were stuck in the parking lot for 45 minutes. I could have walked quicker. Loaded carts full to the brim. Yes, it’s the Friday before thanksgiving. It sure didn’t look like inflation was really bothering anyone. Of course, this is just my little world view from my one little stupid data point. But, I’ve heard other people say the same thing – restaurants are packed, businesses are doing well, everyone is spending money, everyone who wants work is employed. The only way this can stop is with higher inflation. The people hoping for a “fed pivot” earlier this week are probably a little bummed out right now.

#65 DON on 10.07.22 at 8:54 pm

#49 BCWally on 10.07.22 at 6:43 pm

…Just drove through the LM to get to Abbotsford airport. $2.42/gallon. Singed my fingers with the bank tap card at the gas station. Left for the relative safety of the interior. I don’t think the LM is going to be such a nice place really soon.

***************
I took up smoking cigars while pumping gas to lessen the stress of the wallet ding. As stress kills!

#66 Ed on 10.07.22 at 8:55 pm

I sailed thru the alleged Pacific gyre 18 months ago…nothing there…even the water maker pre filter was clean as a whistle.

On another note…Starlink is incredible…whoever at SpaceX that invented this system is a genius.

#67 The Gold Standard on 10.07.22 at 9:14 pm

Translink in Vancouver is hiring 500 new employees and the jobs all pay around $50/hr with some up to $58/hr. All training is provided. Get in now.

https://www.burnabynow.com/local-news/going-to-need-a-lot-more-staff-translink-to-hire-500-workers-by-2028-5908734

Elevator escalator technician ($58.41 per hour)
Vehicle technician ($54.29 per hour)
Power technician ($50.11 per hour)
Electronic technician ($50.11 per hour)
Guideway technician ($49.47 per hour)
Maintenance scheduler ($48.83 per hour)
Guideway support equipment technician (heavy duty mechanic) ($50.11 per hour)

#68 young & foolish on 10.07.22 at 9:16 pm

What’s the point of investing anyway?

#69 Too bad on 10.07.22 at 9:20 pm

Feeling sorry for today’s kids. More clear than ever that they’ll never experience home ownership as their parents did. Might feel nice to some to be “subsidized” by their landlord but that’s not quite the same as the satisfaction of looking after one’s own property and family.

#70 the Jaguar on 10.07.22 at 9:22 pm

Wow. My email is ringing off the hook on the selection of Danielle Smith! Kind of surprising that people actually pay attention to what’s going on in Alberta as most of these emails are from out of province. Then again, people love a train wreck, lol!

Can I just say again ” Thank you for your service and hard work on behalf of the people of Alberta. ” Amen.

#71 the Jaguar on 10.07.22 at 9:23 pm

Oh Yikes! I meant to insert ‘Jason Kenney’ in that last line! Thank you Jason!

#72 crowdedelevatorfartz on 10.07.22 at 9:39 pm

Talking to a former co -worker today.
Seems his sister in Law ( a rock star Realtor) is in a bit of a pickle.

Huge sales income over the past 2-3 years.
Uppa Uppa Uppa.
Blowing the money on Audi’s, Boats, vacations, yada yada yada.
A year ago hubby announces , “He wants a divorce.”

She makes more than him.
Spousal support, he gets the kids….
Did I mention.
She Hasn’t paid tax.
Owes CRA HUGE.
Oh and hasn’t had a sale since….June.
Crickets.
Deadsville.

#73 Balmuto on 10.07.22 at 9:55 pm

This fall market will see a collapse in sales but not necessarily a collapse in prices. The demand is still there and the sellers know it. They will sit on their hands as buyers sit on the sidelines hoping for a bargain. The real test will come in the spring market of next year. By that point if the buyers aren’t back sellers will start to panic. On the other hand if they do come back there could be a bump in prices due to pent-up demand. We’ll know what the true direction of the market is in the Spring.

#74 Felix on 10.07.22 at 9:55 pm

Happy Feline Friday!

Cats always rule the place. Great photo of the truth of animal hierarchy!

#75 Unpinned on 10.07.22 at 10:02 pm

Naples, Fla got hit bad with Ian and Ft. Myers got hit last week. Back in 2008 with the evolving housing crash I got extremely fortunate renting a fabulous villa in Naples for $1,300.00 per month all in for the season. This would not have happened without the housing crisis. The following year in Phoenix, Arizona and Vegas in some hoods half the homes were vacant and the rentals sat vacant for months.

#76 Ronaldo on 10.07.22 at 10:34 pm

#55 Steven Rowlandson on 10.07.22 at 7:12 pm
https://www.realtor.ca/real-estate/24891901/a16-200-corfield-st-n-parksville-parksville

Two words to describe the price advertised. Abominable and shameless!

Mobile homes in trailer parks were for those of limited means and far from ideal. Now it seems you need to be rich to live there.
——————————————————————
Yep, shameless is right. A pretty high premium to park your $50.000 dollar park model of a trailer pad. Never could figure that one out.

Or you could go south and get one like this for a similar monthly fee and put the balance in a nice b & d portfolio.

https://www.azrvresorts.net/homes-for-sale/superstition-lookout-114/

#77 Sail Away on 10.07.22 at 11:34 pm

#66 Ed on 10.07.22 at 8:55 pm

I sailed thru the alleged Pacific gyre 18 months ago…nothing there…even the water maker pre filter was clean as a whistle.

On another note…Starlink is incredible…whoever at SpaceX that invented this system is a genius.

———

Careful… someone who’s never been within 1,000 miles of it is going to start chirping that you’re wrong.

#78 Doug t on 10.07.22 at 11:48 pm

#72 fartz

I spit my beer out reading that – yeah can’t fix stupid

#79 Ohm on 10.07.22 at 11:57 pm

#74 Felix

Perhaps you are a responsible owner. Those who are not and allow their felines to cruise the neighborhood in Coyote country please do not waste our time and post missing cats posters on streetlamps, coyotes need to feed there pups; seen it hundreds of time; will not get into graphics but coyotes always leave a certain a body part that is easily recognized by all.

Feline owners are no better the canine owners; some good ones but most are clueless or lazy. Sorta like adopting a bunny at Easter for a few months.

#80 maxx on 10.08.22 at 5:36 am

@ # 15

Mom and dad are just about tapped out…..will they now borrow at increasingly higher rates to help fund either their spendy Mill kids and their lifestyle?

Mom and pop have had visions of travel dancing in their heads.

Many now have a tough decision to come.

#81 under the radar on 10.08.22 at 5:50 am

“There ya go. Clear as can be. It’s a plot. Monetary policy is currently designed to make houses worth less and to stop you from buying one”

I think the plot also involves disabusing Wall Street of the view that the Fed has their back. They don’t and they keep saying it, but alas, nobody believes them.

#82 the Jaguar on 10.08.22 at 6:57 am

@#81 under the radar on 10.08.22 at 5:50 am
“There ya go. Clear as can be. It’s a plot. Monetary policy is currently designed to make houses worth less and to stop you from buying one”
I think the plot also involves disabusing Wall Street of the view that the Fed has their back. They don’t and they keep saying it, but alas, nobody believes them. +++

Because some gamblers can’t walk away from the table.

Or as Jack Weil put it:

” Because sometimes in poker it’s smarter to lose with a winning hand so you can win later with a losing hand. And politicians can never quite believe that – because they want the power now.”

#83 Tonyw on 10.08.22 at 8:52 am

Which base month and year should we use for the expected total average price decline of 33%?

TRREB average GTA price was $775K in September 2017, $960K in Sep ‘20, $1.135M in Sep 2021 and $1.086M in Sep ‘22.

Or are you saying that the 33% decline should be based on the Feb ‘22 peak of $1.334M which would equate to $440K? This would only take us back to prices in Spring 2020.

Is that enough?

#84 crowdedelevatorfartz on 10.08.22 at 9:48 am

@#67 The Gold Standard.

Most of those “tech” jobs will be night work.
But it is a sad state of affairs when they are “willing to train” people for $50/hr jobs.

However 50/hr isnt considered a lot of money at Translink.
About 15 years ago a local newspaper announced that over 1000 Transit bureaucrats at the Translink head office were making over 100k per year.

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwiOlLmA4tD6AhXLBDQIHWDOCKMQFnoECCUQAQ&url=https%3A%2F%2Ftheorca.ca%2Fvisiting-pod%2Ftranslink-reneges-on-executive-salary-cuts%2F&usg=AOvVaw2lmS4OSpibawxW9yVCcWAz

The Translink Ceo make more than the Prime Minister, Double what the Premier of BC makes and double what the Translink CEO of New York City makes….

Snuffle up to the Govt trough grunting, squealing and EAT!
The dubbed the Head office Tower “The Golden Tower”

#85 crowdedelevatorfartz on 10.08.22 at 9:51 am

@#82 the Jaguar
” And politicians can never quite believe that – because they want the power now.”

+++
Politicians gamble with money that isn’t theirs.
It makes the losing so much easier…
:)

#86 Dharma Bum on 10.08.22 at 10:08 am

#32 Crowdflatulenceonahoist

Too many bureaucrats, too many processes.
No one accountable.
——————————————————————————————————–

Many years ago we were working on a contract bid to supply seating on some sort of government boats. (I don’t remember if they were military or ferries, or what, but they were federally owned and run.)

The bid process was daunting. The specifications made no sense whatsoever. The inconsistencies were mind boggling.

When we met with the purchasing agent directly involved (a federal employee) he said: “You have to understand that the government wastes 5 dollars for every dollar it tries to save”.

And there you have it.

Government efficiency.

#87 Neo on 10.08.22 at 1:27 pm

DELETED (Anti-immigrant)