The process

So the dollar tumbled by almost a percentage point Tuesday. Seventy-three and half Yankee cents now. That slide came after we heard about the economy.

Growth came in at 2.9% in the latest quarter. Less than before – no surprise. Vastly higher than analysts had predicted – big surprise. The interesting part: exports, non-residential and business investment were up strongly. Housing investment and household spending plopped. Wage gains fizzled far below inflation. And as spending dropped, saving increased – the savings rate jumped to 5.7%.

Whazzat mean?

Higher interest rates and swelling mortgages have apparently turned the tide. Real estate sales have crashed by a third or 40% in most markets, prices have fallen as a result and there’s more property pain coming as rates rise again in seven days. Remember that this economy is more than 60% driven by household spending – which is fuelled by debt. So when the cost of money rises, when income gains drop and lettuce costs double, people turtle. The economy changes. And this is exactly what the central bankers have been looking for.

Will rate hikes mollify sooner? Maybe. That’s one reason the dollar sold off (higher interest rates attract capital, bolstering a currency – and vice versa). Of course, the tightening cycle is not over yet and unless we get a stinker of a recession next year (not happening) mortgage and bank rates will stay put throughout 2023. It could make for one of the most interesting spring real estate markets in memory, starting in about 90 days. Never before have we had frustrated demand, a 7.5% stress test hurdle and low levels of inventory. If lots more people decide to sell, prices could cascade.

Meanwhile, what’s government doing? Raising real estate taxes exponentially while spending billions to increase the supply of houses. Classic suck-and-blow. Blog dog Shawn gives us a local glimpse into why this is a failed policy:

I started working part time in new home construction in 1994 (for my father) part time for a couple of years and then full time from 97 to 2002 and again 2006 to 2010. Never would’ve imagined this kind of fever pitched frenzy and prices in real estate. I was talking to my brother in law John yesterday – he still works for some contractors around the area where I was raised. John informed me that he estimated roughly 90% of housing developers had offers and clientele just vanish – “it’s like someday just flipped a switch”, he said. Developers tarping over poured foundations, things coming to a complete stand still; one developer even took the For Sale signs off of 5 or 6 houses and started renting them out (because of the lack of offers). This is in the Belleville, Trenton, Stirling area. I think you’re bang on when you said it’s an affordability issue and not a supply issue.

Yes, we are correct. There are lots of houses for sale. Months-of-inventory numbers in major markets are heading steadily higher. Mortgage origination volumes at the big lenders have plummeted. The country’s largest builder has seen sales fall 65% and closed development sales centres. Real estate boards in Vancouver and Toronto report deals have tumbled by about 45% year/year, and are running drastically below 10-year levels. It’s evident there’s more inventory than there are buyers. The market is wobbling because of demand, not supply.

What’s likely to happen next?

The Re/Max puffsters and LePage harlots swear housing will revive in 2023 because, well, because. But this is an unlikely outcome.

First, rates will inflate a little more, then stick. There’s little reason to believe a pivot is coming, and none to believe we’ll return to 3% home loans. The stress test is staying stuck at a level which materially chops the amount of money people can borrow. Second, the economy will slow. Probably not go into reverse, at least for long. But growth next year will be elusive, having an impact on consumer confidence and household spending. Third, incomes will fall further behind inflation as unemployment ticks higher. Home ownership costs keep escalating. Affordability keeps falling.

So the real estate market hasn’t hit a floor. Prices must fall further in order to compensate for mortgage hikes. The fact it’s started was the big news in today’s economic stats. Lots more to come.

Now let’s check in with Matt, newly moved (with his squeeze) from Nanaimo to Victoria.

We sold our house in Nanaimo and now have $800k in the bank.  We are living in a basement suite, which my wife is not thrilled about.  Housing in Victoria is expensive and I think we should wait to buy, but our Nanaimo realtor told my wife that the market is at the bottom and should rebound in 2023. Although condos are a lot cheaper, my wife is set on a house.  How long should we wait?

Your Nanaimo realtor is high on hopium, Matt. Without a serious rate drop (not coming) the housing market won’t jump, even in delusional, self-worshipping Victoria. Give it a year, at least.

And move out of the damn basement, which is only fuelling your wife’s house lust. Also get the eight hundred grand out of your chequing account. Even dumping it into a brain-dead, one-year GIC at 5% will give you the equivalent of $3,250 a month to help defray the costs of renting a whole house while preserving the principal and your relationship. Then wait. Watch. Shop. Be patient.

Like love, this is a process. Let it evolve.

About the picture: “A smart friend of mine introduced me to your blog 3 years ago,” writes Jeff. “and this is Charlie when I asked her for the first time: “want to hear what Garth has to say today?” She was interested for a moment but likes naps and playing with her banana more than advice from a blog. I don’t blame her. Thank you for for keeping a steady hand on the ship, wave after wave. I look forward to learning from your posts daily.”

118 comments ↓

#1 TurnerNation on 11.29.22 at 2:37 pm

Uppa up. Real simple guys take what our Rulers tell us and flip it 180 degrees to make sense. Need another example?

https://www.theglobeandmail.com/canada/article-sales-of-greenbelt-land-raise-questions-for-ford/
.During the 2018 election campaign, Mr. Ford promised not to touch the Greenbelt – a vast arc of farmland, forests and wetlands across Southern Ontario. … Again, in late 2020, he made a similar promise.

—–

— Life in our crowded, fetid “UN Smart Cities”

.Toronto to prioritize TDSB schools requiring programming, support after violence (cp24.com)

.Staff at Toronto school say they’re receiving death threats amid near-daily fights, violence (toronto.ctvnews.ca)

—– This might explain much. We are a democracy!!!

https://datac.ca/health-canada-switches-mainly-pharmaceutical-funding/
Health Canada switches to mainly pharmaceutical funding
Before user fees were introduced in 1994, Health Canada was entirely funded by tax dollars. Now, with the majority of its funding arising directly from the pharmaceutical industry, questions have been raised about whether or not the goal of drug companies to sell their products in vast quantities poses a conflict of interest with Health Canada’s responsibility to provide safe and effective drugs to Canadians.

#2 Captain Uppa on 11.29.22 at 2:41 pm

I’ll be looking to see how much of a discount will be seen for large waterfront properties out East. I assume a decent amount of those homes have owners who are now stretched thin.

I’m already seeing more and more listings on Realtor.ca

#3 Gerry on 11.29.22 at 2:41 pm

I don’t understand, prices have gone up close to 40 percent in two years in the West Coast and now we have high interest rates and prices have only dropped by about 5 percent in places like Victoria and Vancouver and the thinking now is that things will moderate? Isn’t there much more of a chance price drops will be larger next year when mortgage rates re set?

#4 Leftover on 11.29.22 at 2:50 pm

As the snow flies, listings are lapsing and creating an illusion of shortage. But by spring 5-year fixed rates will approach 6% and buyers simply aren’t in a position to pay current prices. Meanwhile, the Bank of Mom’s Heloc is treacherous ground.

How big a reset? I wouldn’t want to guess, but if we’ve learned anything in the past 3 years it’s to expect the unexpected.

#5 TurnerNation on 11.29.22 at 2:50 pm

@Faron you are forgetting the $cience part. Contracts were signed for the PCR tests, One could not get a cancer screening but they could get a PCR test. Fact.

The most basic thing international flights were not banned or even tested in 2020, 2021. This tells me that the goal was not health but otherwise.

Some hard data:::
—- El Salvador a success story.
The charted outcomes here are staggeringly different to the Former First World Countries’ ineffective and tyrannical hand played.

https://roundingtheearth.substack.com/p/el-salvadors-tale-of-covid-19-medicine
Like many nations, El Salvador responded early to the pandemic by shutting down most international travel. On a more scientific note, El Salvador actively promoted healthy lifestyles, including maintenance of Vitamin D levels that have been highly associated with COVID-19 outcomes.

While El Salvador saw a case surge mid-2020 after lifting restrictions, El Salvador has outperformed the rest of the world ever since.
There are no vaccine mandates or passports in El Salvador, no mask mandates, no testing requirements to enter the country.
Everybody makes their own choice. So far, +70% have been vaccinated. (Dec 2, 2021)

—-
—–Hmm our rulers on the TeeVee never told us this. All these years.

https://www.nature.com/articles/s41598-022-24053-4
Vitamin D deficiency has long been associated with reduced immune function that can lead to viral infection.
… we show that Vitamin D2 and D3 fills were associated with reductions in COVID-19 infection of 28% and 20%, respectively ….Mortality within 30-days of COVID-19 infection was similarly 33% lower with Vitamin D3 and 25% lower with D2

#6 Justin S on 11.29.22 at 2:54 pm

$3,250/month, taxable at your top tax rate.

You’re right. Better to earn nothing. Good thinking. – Garth

#7 Dolce Vita on 11.29.22 at 3:07 pm

Real gross domestic product (GDP) rose 0.7% in the third quarter (quarterly change).
https://www150.statcan.gc.ca/n1/daily-quotidien/221129/dq221129a-eng.htm?HPA=1

Real gross domestic product (GDP) edged up 0.1% in September (monthly change).
https://www150.statcan.gc.ca/n1/daily-quotidien/221129/dq221129b-eng.htm?HPA=1

Up. Better than down.

Oh, and

yeah oil

Largest contributor to GDP growth, via Exports, 3rd Qtr.
Exports
https://www150.statcan.gc.ca/n1/daily-quotidien/221129/cg-a002-eng.htm
Exports, Oil
https://www150.statcan.gc.ca/n1/daily-quotidien/221129/cg-a003-eng.htm
September as well
https://www150.statcan.gc.ca/n1/daily-quotidien/221129/cg-b003-eng.htm

#8 Love_The_Cottage on 11.29.22 at 3:14 pm

The market is wobbling because of demand, not supply.
_______
Without looking at rents or vacancy rates I don’t see how you can reach a conclusion on housing supply. I’ll await your pithy reply telling me I’m wrong.

Read the post. Lots of houses are available. – Garth

#9 Shawn on 11.29.22 at 3:19 pm

HSBC Branches and Staff levels

#167 jess on 11.29.22 at 2:15 pm
RBC buying HSBC Canada for $13.5B
Social Sharing

HSBC has 130 branches and 4,200 full-time equivalent employees in Canada

*******************************
Yeah, I believe I read this morning that RBC thinks it can cut HSBC’s operating costs by half. Bye Bye at least half the staff. And branches too will be closed . Branches are so 2015 in any case. This is called efficiency and productivity and if the deal is allowed then I am not against the job cuts.

But why would even a really brain-dead Competition Bureau allow this merger? They are finally “growing a pair” lately and are attempting to block the Rogers takeover of Shaw. So there is hope.

Oh but wait they may be tied up with the case they put against RBC for calling itself somewhat green in spite of lending to (gasp) oil and gas companies. Yeah gotta go after that.

#10 cuke and tomato picker on 11.29.22 at 3:22 pm

Google THE DAY FREEDUMB DIED if you want to listen to an inspiring song and be thankful for how our PRIME
MINISTER HANDLED IT.

#11 the Jaguar on 11.29.22 at 3:22 pm

‘It could make for one of the most interesting spring real estate markets in memory, starting in about 90 days.’ and ‘…. growth next year will be elusive, having an impact on consumer confidence and household spending.’ -GT +++

Betcha $5 bucks the spring rutting season starts earlier this year. Otherwise how will the entitled book and pay for their annual spring break holiday in the Dominican Republic? The credit cards must be maxed out from Black Friday, Boxing Day, and mortgage payment subsidy. Christmas and New Years in home sweet home, but this guy named Mr. Reality keeps knocking on the door and won’t go away.

The December 7th rate increase will set the table. The one with all the domino’s lined up.

Meanwhile back at the ranch, we’ll just have to content ourselves with the Battle of the Titans. ( Musk versus Apple, various shady characters who might be relations of the POTUS, etc. ). Hope Elon has a personal protection detail.

That little puff ball Charlie is the cutest thing in captivity.

#12 Dolce Vita on 11.29.22 at 3:23 pm

YTD, Seasonally Adjusted GDP up by

2.65%

($ x 1,000,000)

Jan GDP = 2,018,160
Sep GDP = 2,071,640

—————

USA 1 – IRN 0, Half Time

Italian Announcers getting closer and closer to pronouncing Weah (Oui – Ahh, to them) and reveling at that.

Elvis, Lady Liberty and a Cheesehead cheering in crowd.

#13 just a dude on 11.29.22 at 3:31 pm

Matt, do yourself and your squeeze a monumental favour and heed Garth’s prudent advice about moving out of the basement suite. Quickly. Doing so might save you from a world of pain, and on so many levels. Best of luck.

#14 Dolce Vita on 11.29.22 at 3:35 pm

About that 2023 BoC pivot Garth …

I ‘dunno.

Largest contributor to Inflation has been Transportation which of course is fueled by

yeah oil

and that is forecast to catapult up from about USD $85 now to

$110

in 2023 or

+30%.

https://ca.finance.yahoo.com/news/oil-why-goldman-sachs-is-still-bullish-despite-headwinds-164501916.html

ANEMIC US Fed and BoC rate increases have ZILCH effect on quashing Demand …

Record US Black Friday
https://twitter.com/GRDecter/status/1597228141965377536

Record Cdn Black Friday
https://www.bnnbloomberg.ca/shopify-reports-17-per-cent-increase-in-black-friday-sales-1.1851885

——————–

US & Cdn Consumer Rates whining just that, lying thru their teeth and oil about to transcend their worst nightmare at the pump.

There will be no pivot for some time to come in 2023 – if anything MORE RATE INCREASES to come in 2023.

By then, Cdn RE will be in the toilet, sales and price wise.

Last person out, don’t forget to FLUSH.

#15 West New West on 11.29.22 at 3:37 pm

Homes are giant sucking machines that require fortitude. One of the things that I see with the less experienced is lack of foresight on upkeep. Homes break all the time, roofs deteriorate and cause drips that get the insulation drywall wet, light switches wear out, doorknobs fall off, etc etc etc., yards require constant attention if you want them to look anywhere close to nice, hedges need trimming. Patio furniture, lawn stuff, then the partner wants nice lights up, decorations. The challenge is that the prices of all this crap have skyrocketed, along with the tools that are needed to get all of this stuff done and up to date. More importantly, power tools today are sheer ghosts of what they were 15 years ago for quality. I put a kitchen/bath room in 7 years ago in a higher end home with me doing all the gutting, framework, tiling, gas, electrical and disposal and it cost $180K for custom cabinets, higher end appliances and hardware/supplies. I cannot imagine what it would cost now.

Shawn……of course the wife wants to get into a home, but remember that when you get her there it only just starts. What begins with ‘Oh wow I can just live here as it is with all this extra space’ soon turns into ‘the bathroom is mouldy and the green sink is so outdated and we need to get this updated, it looks like crap when company comes’……and then it starts. I dont have the answer, but I strongly recommend when you are looking at homes, get very clear to yourself whats going to come down the pipe in the next 5 years and more importantly get the wife on board, Write it down, sign it together, the ‘plan’ and put it away. You will most likely need it later and the reality check halps a lot.

#16 epic bear on 11.29.22 at 3:46 pm

unless we get a stinker of a recession next year (not happening)
_________________________

since WWII when the 2/10yr and 3mon/10yr curves have inverted for any length of time and together, recession came 100% of the time.

i guess you’re saying it’s different this time?

I said what I said. Short and shallow. – Garth

#17 Faron on 11.29.22 at 3:51 pm

Great post Garth. Nice to see the non-RE economy grow. Long ways to go yet, but the right direction.

About this:

“And move out of the damn basement”

Way easier said than done. The rental market is tight and very expensive here. He’s lucky to not be living in a motel.

Congrats on moving away from Nanaimo Matt. Mt. Benson is a real danger. 5 percent chance of severe injury or death if you set foot on it.

#18 Dr V on 11.29.22 at 3:56 pm

3 Gerry

Figures here for you for Victoria

https://www.vreb.org/historical-statistics#gsc.tab=0

Comparing March 2022 (peak or close to it) to October
2022 for single family homes

Average price -14%
median price -19%
unit sold -44%

#19 chalkie on 11.29.22 at 3:58 pm

We get a minor spark of sales life and real estate goes all giggly into territory of spreading their expectations, but do not buy into this phantom Real Estate dream just yet, here is what the president of REMAX had to say on Global news this morning.

After the “frenzy” of 2021 and a “big peak and valley” in 2022, the president of REMAX Canada tells Global News that next year could see “balance” return to the national housing market.
But Christopher Alexander says how high the Bank of Canada drives interest rates, and when it pauses or returns to more normal steps in its policy rate, will determine when homebuyers and sellers alike feel comfortable getting back into the market. “That’s the big wild card,” he says.

Note how Christopher used the word COULD return, hidden between those lines I see disappointment and fear for the home sale markets, the truth is, no one knows and my money is on– there are deals to be had in 2024, set on your wallet and keep your money short-order invested and enjoy a little interest as you wait for the right moment, it’s out there and 2023 is not going to be the date for the bottom line.
Two percent (2%) inflation is nowhere in the cards and the BOC will hit or break the 5% Northbound barrier when the chicken comes home to roost and even then, Canadians will accept 3 ½ to 4 % inflation and move on as the world turns, there will be crying stories of why we could not get down to 2%, you and I call them excuses and uneducated on how the markets work.

For the politicians, the 2% inflation was a number that was dreamed up like throwing darts, where it lands will determine our target, next to no thought put into how we would get there, lets just pick 2% and keep our CANUCKS happy.
like Christopher, Mark Carney and his team are pretenders and are living in wonderland, hoping in one hand, and wishing in the other.

What would really help sellers and buyers alike, is the cost of real estate commissions, Cost that is in the clouds and if it is not brought back to reality, the information highway will run over the future of high commission’s much quicker than the real estate industry thinks.
The 5% cost to sell items in the hundreds and millions of dollars and then walk away with many 10’s of thousands of seller’s dollars with next to no investment in the property, is something that society has in the spotlight and the light is getting darker as the bulb burns out.

For home buyers, let us not think for one second that there is no cost to you when you buy, that is a bologna belief, your cost to buy is already factored into the seller’s price, just like the realtor commissions.
By decreasing real estate commissions will allow for a much softer landing at the banks when you need to borrow, for both the seller and buyer alike, keep in mind, you are borrowing for many 10’s of thousands of dollars to support just a selling price through real estate.

Elon Musk has stumbled to a net loss of 90 billion so far in 2022 with headaches in Space X, TESLA and the latter, his purchase of Mr. Twitter blowup backfire. Buffett is closing in to run on par against the world’s richest man Mr. Musk.
There are rumors of Musk offering two years’ salary to a few talented people that he fired to return to twitter, must be hard times around the water cooler.
Let us see if the carrots cook up a tasty flavor or just rot in the ground. Biden is not Elon’s best friend and Trump is running off at the lips with no control on the filters.
I think they could get together for a cup of coffee and fix everything in 10 minutes or so, with the help of Dolly Parton singing to them of course.

Quote of the day: I need a raise in my commission,” the Realtor said to her Managing Broker. “There are four other companies after me.” “Oh really?” asked the manager. “What other companies are after you?”
“The electric company, the telephone company, and the gas company.

#20 That Guy on 11.29.22 at 4:02 pm

My gosh what a good looking pup! Cute as a button!
Back to real estate: we are looking to buy and sell some time in the next year. Timing wise, well I am looking for a new job before buying and selling, no thanks to becoming a landlord, the most loathed class of Canadian, even below Trump supporter.

#21 IHCTD9 on 11.29.22 at 4:03 pm

In the sticks, 600K still sells. It’ll take a month, maybe two, but they’re still going. Nice places these ones too.

750K+ are rotting on the MLS. A place down the road has been sitting at ~850K since last year’s snow was on the ground. 300K junkers are also rotting, who wants to reno a 300K heap and try to win in this market?

I estimate near 50% of the local MLS listings are hopeless at this point. Priced where locals won’t buy, the GTA humpers have left town. They were only here to load up on RE, not to move in. Eventually they’ll all tap out and delist. 5-6 pages worth of listings have already disappeared since summer.

If rates hold all thru next year, I expect the average SFD price locally will sneak into the high 400’s, and ’24 might see mid-low 400’s.

#22 jess on 11.29.22 at 4:05 pm

https://www.mcgill.ca › newsroom › channels › news
COVID-19-vitamin D paper retracted by Springer Nature journal
https://retractionwatch.com/2022/04/22/covid-19-vitamin-d-paper-retracted-by-springer-nature-journal/
https://retractionwatch.com/2022/04/23/weekend-reads-should-peer-reviewers-be-paid-kim-kardashian-and-conflicts-of-interest-scandal-costs-millions-in-grants/
vitamin d https://retractionwatch.com/retracted-coronavirus-covid-19-papers/

=====================
‘Exposed to horrendous things’: young people in UK speak out against evangelical church

Ex-followers of Universal Church of the Kingdom of God say they felt pressure to give money and were told demons caused mental health issues

https://www.theguardian.com/world/2022/nov/29/young-uk-people-speak-out-against-evangelical-church-universal-kingdom-god

#23 alexinvestor on 11.29.22 at 4:13 pm

Growth at 2.9% is horrific. Remember, Canada’s population grew almost at 2% YOY ! Growth per capita is less than 1%, and this is coming as increased interest rates continue to hammer the consumer. The economy and the loonie are about to crack. Good thing they changed the rules a few years ago to allow 100% of RRSP money in foreign currencies.

Our population growth in 2021 was 0.5%. Growth near 3% is just ducky. Stop making stuff up. – Garth

#24 Tom from Mississauga on 11.29.22 at 4:24 pm

Was certain you’d comment on RBC HSBC merger. Crickets from Ottawa.

Inevitable. HSBC shopped all the big banks. – Garth

#25 Greg Ellis on 11.29.22 at 4:27 pm

Couple of things here. Canadian who has lived in Florida for 20 years in the big bad US of A. Once you are over 65 medical care is fantastic. Medicare plus a supplement at $330 per month gives you care with any doctor anywhere in the US. Major surgery. Bypass at 400k you maybe pay 5k. MRI? Choose 3 nearby places. Wait between 3and7 days. No charge. Only bad experience was pre 65 Obama Care. $900 per month. Lost all of my doctors. Very limited choices with virtually no North American educated physicians. Is it La Dolce Vita? My goodness soccer is dull. Game today I think Iran had one shot on goal.

#26 IHCTD9 on 11.29.22 at 4:27 pm

Once FOMO and greed/hormones fizzle, all you’ve got left is regular people buying houses for regular reasons.

Mom and Dad can finally relax. The humpers might want to start learning about liquid investments, I think those who failed to unload in the black might be gaining an appreciation for such things.

#27 Greg Ellis on 11.29.22 at 4:34 pm

To continue a bit. The soccer commentators get excited when the ball crosses midfield. That is a major happening. The injuries. These are young men in their prime. We had harder collisions during recess in primary school and these guys are rolling around like death is very near. They should be ashamed. More action in a pro hockey game in 30 seconds than in 90 soccer minutes of guys kicking the ball up and down the field.

#28 Love_The_Cottage on 11.29.22 at 4:35 pm

#8 Love_The_Cottage on 11.29.22 at 3:14 pm
Read the post. Lots of houses are available. – Garth
________
Factually incorrect:

New listings increased by 2.2% m/m in October. However, their level remained below the long-term average… Meanwhile, the months’ supply of inventories ticked 0.1 percentage points (ppts) higher to 3.8 in October, but remained below the long-run average.

https://economics.td.com/ca-existing-home-sales

I said lots of homes are available. And a 3.8 month supply is exactly that. – Garth

#29 Caffeine Monkey on 11.29.22 at 4:38 pm

We haven’t even seen the full effect of interest rates increases yet, and realtors and talking about a rebound in 2023? Let’s check back six months after the last round of tightening by the BoC, which won’t happen until next year. The delayed effect on mortgage rates means that it won’t be until late 2023 that we even begin to see the cumulative effect of all the rate increases. To think that we’ll have a rebound any time soon is pure hopium.

#30 WEX19 on 11.29.22 at 4:38 pm

I live south of Ottawa. New phase of subdivision was selling like hotcakes last 2-3 years. Cost of houses doubled. The foundation contractor came to talk to me about the new foundation going in right behind my place. He said 6 out of 8 foundations on his list were cancelled as well as a block of 5 townhomes. Sales have stopped and the speculators are giving big discounts to sell as interest rates rise. New homes cost approx. $250k more than the 1 year old resale is selling for. I don’t think we are going back to March 2018 prices when I bought, but the people who moved into the new construction homes 2 weeks ago are definitely underwater.

#31 Dolce Vita on 11.29.22 at 4:39 pm

Garth as it stands, rates will have to increase by a lot more. Forget about inflation, Canada is bleeding money because of its US-Cdn exchange rate.

If Canada were a company, then its CURRENT ACCOUNT is its Receipts-Disbursements Cash Flow statement:

https://www150.statcan.gc.ca/n1/daily-quotidien/221128/t002a-eng.htm

3rd Qtr = – $11 Billion

after 2 positive qtrs.

This is because BoC not raising rates enough to match the Americans – losing ground to them esp. since May 2021.

https://www.google.com/finance/quote/USD-CAD?sa=X&ved=2ahUKEwjNy4ruqtT7AhWxi_0HHVhECxsQmY0JegQICBAc&window=5Y

Even with Exports to the US increasing, their value has gone down due to the exchange rate. GOOD NEWS is Cdn $ doing well against the OTHER FOREIGNERS (e.g., useless EU with a prime of 2%).

https://www150.statcan.gc.ca/n1/daily-quotidien/221128/cg-a002-eng.htm

——————–

By far, America is Canada’s largest trading partner. Exports up but $Cdn value down. So much so Current Account cash flow out $11 billion.

BoC is going to fuel import inflation from the Americans and is devaluing Canada’s receipts and putting it into a negative cash flow situation.

BoC has to increase rates by more than the Americans. If not, they will continue to impoverish Canada and Canadians.

#32 JPN on 11.29.22 at 4:40 pm

#21 IHCTD9

Dude where are you ? $ 400 K for a house .. never .. What’s the land price .. Like a hundred grand ? .. You are way too optimistic.. Sure there will be some fire sales but I sell building supplies .. You can’t build a house for $ 400
let alone buy the land.

#33 Nonplused on 11.29.22 at 4:41 pm

Well today’s blog is near perfect, so I’m going to comment on something else:

On Right-Wing and Left-Wing Extremists

Much has been said about whether the Republicans (or Conservatives in Canada) need to do more to disavow themselves of right-wing extremists, and an equal amount of attention has been drawn to the question of whether the Democrats (or Liberals & NDP in Canada) have done enough to disavow the woke crowd and violent organizations like ANTIFA or BLM. Fact is neither side can disavow its own stupid people unless the other side does likewise. It is, in that way, somewhat like nuclear deterrence or any sort of armed standoff. Unilateral disarmament doesn’t work. You need a treaty. But none is forthcoming.

Let’s briefly review what makes people stupid. Let’s say two people, Jim and Susan, are somehow involved with each other. Could be married, or maybe they work together, or maybe they play together on a co-ed team. Could be anything. And let’s say Jim consistently does things that fall on this grid, as to whether his action helps or hurts either him or Susan. I didn’t come up with this but I like it:

Results of Jim’s action on Jim & Susan

Jim takes an action and that action:

Helps Jim and helps Susan: Intelligent
Helps Jim but hurts Susan: Banditry
Hurts Jim but helps Susan: Sacrifice or helplessness
Hurts Jim and also hurts Susan: Stupid.

If a person is stupid, much of what they do makes no sense, because it hurts others but also hurts themselves. Everybody is worse off. At least with bandits, you may not approve of their behavior, but you can see their motive. They are making off with the goods at other people’s expense. But if everybody loses, the action is stupid.

This is why socialism is stupid. It knocks down the successful, but it doesn’t help anybody else. At least not in the long term.

But back to politics. Stupid people are everywhere, making up at least 25% of the population, and they are hard to identify unless you know what to look for. And nobody ever recognizes their own fools as stupid, only the other team’s fools. So what to do? You certainly can’t have the stupid determining the outcome of elections. But that is exactly what would happen if either side disavowed their own stupid. Ideally, what you need is the stupid who vote split evenly down the middle, with half on the right and half on the left. This way their votes cancel out. You want each side to start out with 12.5% of the vote, being exactly half of the 25% of people who are stupid. That way the election can belong to those who are more reasonable. Thus, neither the right nor the left can disavow their stupid. It would be suicide so long as the other party is allowed to keep their own stupid.

But what about the bandits? We’ve got plenty of those too. They help themselves, and if it happens to help anyone else that is a happy coincidence. Or the helpless? Plenty of them around too. Or single-issue voters, either pro or against something? Again, the best you can hope for is that the preponderance of all the different groups is roughly split down the middle. In an ideal election, there would be enough bandits, helpless, and stupid people on each side that the net was even, leaving only the intelligent to decide the election. And since the intelligent make up probably no more than 10% of the population, it is especially important that most races are close.

And that, folks, is how you save democracy. If either the bandits, the helpless, or the stupid are allowed to be the swing vote, someone is going to get hurt.

#34 Scott in Gibsons on 11.29.22 at 4:41 pm

All assets are overpriced due to too much leverage at near zero cost. Real estate seems a safe target for honest discussion here. What about over valued stocks and bonds? Do we really believe they will recover their lofty valuations just to keep advisors from looking incompetent? Like they say, hope is not an investment strategy and definitely not a risk management strategy. Keep praying and talking your book. And get your excuses ready. Might have to nix the comments section due to mean words.

#35 Paul on 11.29.22 at 4:47 pm

The Re/Max puffsters and LePage harlots swear housing will revive in 2023 because, well, because. But this is an unlikely outcome.
————————————————————————————————
That is corporate B.S. go speak with the realtors on the street, lots are feeling the pinch.

#36 Love_The_Cottage on 11.29.22 at 4:52 pm

Doug Ford solution to a health care crisis is to continue paying lawyers instead of nurses:

https://www.cbc.ca/news/canada/toronto/bill-124-ontario-public-sector-wages-1.6668186

#37 Shawn on 11.29.22 at 4:54 pm

Canada’s Population Growth?

#23 alexinvestor on 11.29.22 at 4:13 pm
Growth at 2.9% is horrific. Remember, Canada’s population grew almost at 2% YOY ! Growth per capita is less than 1%, and this is coming as increased interest rates continue to hammer the consumer. The economy and the loonie are about to crack. Good thing they changed the rules a few years ago to allow 100% of RRSP money in foreign currencies.

Our population growth in 2021 was 0.5%. Growth near 3% is just ducky. Stop making stuff up. – Garth

*************************************
2021 is so 2021, we are now near the end of 2022

Google says:

“In 2021/2022, Canada’s population grew by a record 703,404 people (+1.8%) to reach an estimated 38,929,902 on July 1, 2022.”

Population growth in 2022 by the time it is reported will be WAY over 2% due to pent up demand and Ukraine impact.

#38 Irish Stew on 11.29.22 at 4:59 pm

Inherited a family home.
Have had it on the market for 120 days.
One offer for $80k less – we declined.
Delisted for now until January – waiting till after Christmas.

It isn’t getting better out there.

Asked my son if he wanted a house.
He asked who would cook and do laundry.

That experiment ended quick.

#39 Shawn on 11.29.22 at 5:03 pm

Exports? and the dollar?

Dolce Vita at 31 said:

By far, America is Canada’s largest trading partner. Exports up but $Cdn value down. So much so Current Account cash flow out $11 billion.

***************************
Explain that math again. A lower Canadian dollar means exports of a given volume are worth more in Canadian dollars.

As for Current Account, I think I read it was negative because of lower oil prices and higher investments by Canadians outside of this country.

An interesting fact (I believe) about National Accounts like the Current Account is that as far as I understand, they do not exist, there is no such actual account with dollars flowing in or out. It’s a notional account. Any expert economist here that can confirm?

#40 bdwy on 11.29.22 at 5:07 pm

This listing in my neighbourhood, originally listed at $5M, 103yr old house with unfinished basement. What a bargain!

https://faithwilson.com/listings/1056-richelieu-avenue/

——–

now 4.4m

it is same amount of land as 4 standard lots in grungy, dangerous east van.

in the ultra lux hood of the city.

where 4 empty lots will run 5-6 mil over here in dumpyville.

ergo ; it’s a great buy.
one day those will be allowed to subdivide, it’s instantly worth 10m+.

#41 Shirl Clarts on 11.29.22 at 5:07 pm

Regarding Matt… I’ve been through this. What Matt is trying to do is short the housing market – sell high, buy back when it drops. But his partner is skeptical. Matt, she needs to be on board with the “rent and wait” plan, and put a time limit on it.

I don’t agree with moving out of the basement suite. That is part of the strategy! Renting a house indeed will be more comfortable, but it will cost twice as much. And soon after, she will say “We are throwing away rent on someone else’s mortgage”.

Both Matt and spouse need to agree on the same strategy. If she is resentful waiting (an easy) 12 months, it will put strain on the marriage. Worse, if Matt gets the timing wrong and misses the bottom, the shame will linger for years. And that will be the story told to friends, family, over the holidays, at parties, on social media, etc…

If she is not on board, buy her a house TODAY! And if they are cheaper in 12 months, you’ll be the one saying “I told you so”.

#42 wallflower on 11.29.22 at 5:09 pm

#8 Love_The_Cottage on 11.29.22 at 3:14 pm

Loads of inventory.
And DOM for loads of rentals (hitting and staying at all time highs in volume) at highest ever in my southern Ontariowe city. Mom pop specuvestors own these. How long can they remain untenanted?
This class of housing and the assignment condo in building group comprise the tail of the dragon coming along to thwack the already wobbly market.

Sooooooo much inventory yet to hit the listings.
Does it all come at once Feb/Mar 2023?

#43 Sail Away on 11.29.22 at 5:15 pm

Thanks for the post, Garth.

Some of us don’t mind the weaker CAD at all. We do a lot of work with American firms, so our firm’s Canadian rates are ever more attractive, and 70% of personal investments are in US assets/USD that have gained +8% purely on exchange in the last 6mos.

Then our (and Michael Burry’s) US for-profit prison, GEO, jumped 16% today. Roses everywhere.

Win-win-win.

#44 Saint Herb on 11.29.22 at 5:15 pm

“If lots more people decide to sell, prices could cascade.”

Could FOMO happen to the sellers like it did to the buyers previously. Could we get a situation where the seller is rushing to sell, knowing (or believing) the price will be lower tomorrow, so do whatever it takes to sell today!

#45 Mr Canada on 11.29.22 at 5:21 pm

Garth, you should write a blog whether 1/3 of current mortgage holders with variable mortgages should lock in now for the duration of their term or continue to painfully wait and watch. Asking for a friend.

#46 crowdedelevatorfartz on 11.29.22 at 5:36 pm

I was speaking with relative on the East Coast today.
They have been trying to sell their house since August.
Got an offer in early Sept “subject to financing” close to their asking price.
“financing fell through’
Relisted late Sept, a bit lower, 2 offers.
Accepted the higher “subject to financing” offer.
Financing wasnt approved.
Relisted lower in Oct.
Third offer “subject to financing”
Offer fell through due to financing issues.

The realtor spoke with the last potential buyers.
Seems the bank would only finance 70% of the list price…. the buyer had to come up with the rest.
I’m assuming the banks are trying to avoid the 30% haircut that may be coming.

Snowing hard in Burnaby at 2:35pm.
Expecting 6 to 8 hours of this.
Might be snow-mageddon here in the next few hours…..
Stay tuned.

#47 Dominoes Lining Up on 11.29.22 at 5:43 pm

Good description, Garth. People indeed seem to be “turtling” right now, and this is probably just the beginning.

A colleague of mine works as a consultant for charities trying to raise funds. He has shared some illuminating info about the economy from his vantage point. It doesn’t look good.

Today is supposed to be “Giving Tuesday”, a big annual donation day for charities, but has been shaping up to be a big disappointment for weeks. Donations are plunging and people just don’t have the free credit or cash they used to have to donate.

My friend has labelled this “Giving Up Tuesday” for his charity clients looking to balance the 2022 books. The donations just aren’t coming in and he sees this dropping further into 2023.

Also, he has told me how many charities are now struggling after jumping into the whole charity lottery business. In 2020 these all surged with people spending lots of stay-at-home cash to buy lottery tickets online to win cars and houses and stuff. Now there are charity lotteries that may be underwater. The Cancer Society lottery closed last month having sold barely 70% of tickets. The Princess Margaret lottery got greedy in 2021, increasing the ticket float to 1.1 million. This fall they have dropped back to 710K tickets, and have barely sold 70% my friend tells me, with the draw closing in a couple days. Other smaller charity lottery ventures are barely scraping above 50% sales levels and may be incurring big debts shortly. The OLG is also saying internally that sales have really dropped recently and people are just not spending like they used to.

The illusion of loose and free money for gambling and donations and rampant real estate profits has disappeared. Everyone is hiding under their shell now.

This all is setting up some additional personal financial dominoes that will help knock down the real estate bubble with some very loud bangs over the next couple of years.

#48 Observer on 11.29.22 at 5:47 pm

#44 Saint Herb on 11.29.22 at 5:15 pm
“If lots more people decide to sell, prices could cascade.”

Could FOMO happen to the sellers like it did to the buyers previously.

^^^^^^^^^^^^
FONGO! Fear of not getting out.

#49 Gr on 11.29.22 at 5:51 pm

Yes, a happy wife for a happy life, usually/hopefully.
Renting a house is always much less expensive that a divorce!

#50 45north on 11.29.22 at 5:52 pm

I started working part time in new home construction in 1994 (for my father) part time for a couple of years and then full time from 97 to 2002 and again 2006 to 2010. Never would’ve imagined this kind of fever pitched frenzy and prices in real estate. I was talking to my brother in law John yesterday – he still works for some contractors around the area where I was raised. John informed me that he estimated roughly 90% of housing developers had offers and clientele just vanish – “it’s like someday just flipped a switch”, he said. Developers tarping over poured foundations, things coming to a complete stand still; one developer even took the For Sale signs off of 5 or 6 houses and started renting them out (because of the lack of offers). This is in the Belleville, Trenton, Stirling area.

what I thought. People see prices fall and don’t make offers. Tarping over foundations is a poor alternative to finishing and selling a house.

IHCTD9: I estimate near 50% of the local MLS listings are hopeless at this point. Priced where locals won’t buy, the GTA humpers have left town. They were only here to load up on RE, not to move in. Eventually they’ll all tap out and delist. 5-6 pages worth of listings have already disappeared since summer.

The general decline in real estate will not spare Dummer Township.

#51 Sail Away on 11.29.22 at 6:00 pm

#25 Greg Ellis on 11.29.22 at 4:27 pm

Canadian who has lived in Florida for 20 years in the big bad US of A.

Once you are over 65 medical care is fantastic. Medicare plus a supplement at $330 per month gives you care with any doctor anywhere in the US. Major surgery. Bypass at 400k you maybe pay 5k. MRI? Choose 3 nearby places. Wait between 3and7 days. No charge.

——–

Thanks Greg. Yes, medical care in the US after 65 is subsidized and very good. Prior to 65, if in a good job, insurance covers the big bills after deductible of $1,000 or so.

Subsidized medical care mostly benefits the lower strata of society. My handful of ER visits in Canada have all been for trauma/broken bones/puncture wounds, etc, and in every case I’ve been placed in queue behind several first come/first serve tweakers on their 9,657th visit.

That said, when my turn came, the care was quite good. I just feel like real injury is more important.

#52 Lower the Boom....er not on 11.29.22 at 6:01 pm

Yogism 9: “I stopped using nicknames when I got called out”.

#53 DER on 11.29.22 at 6:12 pm

Garth, re your position position that there is no real estate supply problem in Canada vs a number of your follower’s position that we do have a supply problem is interesting. Looking closer at the problem I believe you are both right…there is no “middle class” and upper housing supply shortage but there is a real affordable housing supply issue that needs to be dealt with.
It makes me sick to see Doug Ford open up more greenbelt land for the same old suburban sprawl Ontario approach to the problem. You couldn’t make a bigger mistake. Suburban sprawl is the most costly approach to housing affordability there is . Miles of roads, storm and sanitary sewers , water service, gas hydro cable …then after the osb boxes are built the owners then get to jump in their cars and spend their time driving to schools, business, shops and services that just adds to a larger carbon problem and their cost of living , not to mention their quality of life.
What needs to happen is that all existing Canadian cities keep their hard boundary lines in place and say ” no more sprawl….all new housing has to be within the existing boundaries”. At the same time Provincial and Civic municipalities need to enact lots of new legislation that allow for more density within built up areas. Housing options like free standing garden suites, coach houses , and strata conversions of large older homes and commercial and industrial buildings
that are no longer viable.
I contend that the Cities that take this approach will not only finally have a supply of affordable housing to offer but they will see the quality of life for their residents within these areas improve. Moreover, these cities will be able to spend their tax money on public transportation, parks, schools and hospitals instead of spending so much to fund urban sprawl that ONLY the developers and builders win with.

#54 Faron on 11.29.22 at 6:15 pm

#46 crowdedelevatorfartz on 11.29.22 at 5:36 pm

Snowing hard in Burnaby at 2:35pm.
Expecting 6 to 8 hours of this.
Might be snow-mageddon here in the next few hours…..
Stay tuned

Fun. Lucky you. Get the skis out.

Victoria a bit too warm. Snain. Strong winds with gusts to 55kt in Strait of Georgia. Ferries cancelled.

#55 Tony on 11.29.22 at 6:16 pm

I believe Shawn lives in Edmonton where they build homes and then the builders go bankrupt. It’s been that way since 2007 with one brief respite early in 2014.

#56 Linda on 11.29.22 at 6:23 pm

‘Charlie’ is too adorable!

Yes, affordability is the real issue especially given how high prices have gone. Realistically the pool of people who could ‘afford’ to pay $1 million plus for a place to live was limited in size. I think there are a lot of folks who really could not afford the mortgage they took on. Said folks are now seeing the fiscal apocalypse approaching if it hasn’t already arrived via one of those letters from their lender of choice.

#57 Cash is King on 11.29.22 at 6:29 pm

his is where Greaterfool is completely wrong. No one is spending a dime on Canadian homes or condos when they can buy TWENTY 20 houses in the USA instead of spending their money on a SINGLE Canadian house. ALL INVESTMENT DOLLARS HAVE LEFT CANADA FOR THE CHEAPER USA HOMES AND CONDOS.

#58 Don on 11.29.22 at 7:01 pm

#4 Leftover- “As the snow flies, listings are lapsing and creating an illusion of shortage. But by spring 5-year fixed rates will approach 6% and buyers simply aren’t in a position to pay current prices. Meanwhile, the Bank of Mom’s Heloc is treacherous ground.

How big a reset? I wouldn’t want to guess, but if we’ve learned anything in the past 3 years it’s to expect the unexpected.”

Basically, you have noting to say. Try politics.

#59 Habitt on 11.29.22 at 7:03 pm

#37 Shawn. Yep taps are wide open. Thanks

#60 Shawn on 11.29.22 at 7:08 pm

Shawn?

#55 Tony on 11.29.22 at 6:16 pm
I believe Shawn lives in Edmonton where they build homes and then the builders go bankrupt. It’s been that way since 2007 with one brief respite early in 2014.

*******************************
Well the “Shawn” that Garth mentioned above is an interloper. It does not say where he lives.

I don’t follow builders too closely here in Edmonton but I can’t recall more than about 1 going broke.
Reidbuilt homes went broke in 2017. Tony, what were some other home builders that went broke in Edmonton?

I am two degrees of separation away from Sarasota Homes founders / owners and they appear to be doing fantastically.

I would say things were probably looking dicey for some builders in 2020 or 2021 but things roared ahead in 2022 (until maybe the last month or two).

I can tell you that the main publicly traded land developer her in Edmonton has made only skimpy profits since 2014. Home prices were high enough although stable and not rising. Was no one making bank? (Other than the banks)

#61 Shawn on 11.29.22 at 7:15 pm

Edmonton Home Builder bankruptcies

Okay Tony I see two more Unity in 2012 and MCG Construction 2019. I don’t recall either story. Never heard of them.

Probably happens everywhere. It’s the Circle of life. Strong new players emerge like Sarasota Homes and week entities with weak management go broke. Ask Simba to explain it to you.

#62 Russ on 11.29.22 at 7:21 pm

Dog poll: how do you prefer to pronouce this blog post title?

The Queen’s English version of process (proe cess) or the American common version of process (prah cess).

Having suffered an education in British Columbia we have always used the Queen’s English but I am noticing a remarkable shift to people using American common english these days. Maybe due to all the immagrants arriving to enjoy the good life?

Heavy snowfalls on the Island excepting. :) Sucks today eh.

Cheers, R

P.S. new IP Garth, from a different island, away.

#63 Wrk.dover on 11.29.22 at 7:53 pm

#2 Captain Uppa on 11.29.22 at 2:41 pm
I’ll be looking to see how much of a discount will be seen for large waterfront properties out East. I assume a decent amount of those homes have owners who are now stretched thin.
________________________________

Mostly the recent purchasers, from Dawg knows where.

It has always been a lean way of life here, people don’t overextend. Even the high rollers.

#64 Doing my Part on 11.29.22 at 7:53 pm

The best parts of the Blog,
1. The blog itself, almost always interesting, witty and informative.
2. When Garth punches a commenter in the nose (figuratively speaking of course) for a dumbass comment.
3. The well thought out, witty, funny or informative comments.
I scroll through the rest.
Worst parts…another day!

#65 Observer on 11.29.22 at 8:06 pm

#53 DER on 11.29.22 at 6:12 pm

^^^^^^^^^^^^
I agree.

#66 Dr V on 11.29.22 at 8:17 pm

62 Russ

“Heavy snowfalls on the Island excepting. :) Sucks today eh.”
————————————————–

It really sucks when it’s on my driveway.

#67 Observer on 11.29.22 at 8:33 pm

Won’t all those Albertans who were crying about their rights, freedoms and government overreach be upset?

Alberta Premier Danielle Smith’s signature legislation would grant her cabinet new powers to bypass the legislative assembly and unilaterally amend provincial laws.

The measure is described in Bill 1, the Alberta Sovereignty within a United Canada Act, introduced Tuesday in the provincial legislature.

The bill describes how the Alberta government plans to not enforce federal legislation, policies or programs it decides are “harmful” to Alberta’s interests or infringe on the division of powers in the Constitution.

The legislation would allow cabinet to direct provincial entities, including municipalities, municipal police forces, post-secondary institutions, school districts and regional health authorities not to enforce federal laws. Cabinet could also direct a minister to issue an order or directive.

The bill is silent on what happens if any organization refuses to follow cabinet’s directives and continues to follow federal law.

https://www.cbc.ca/news/canada/edmonton/alberta-premier-danielle-smith-sovereignty-act-1.6668175

#68 IHCTD9 on 11.29.22 at 8:42 pm

#32 JPN on 11.29.22 at 4:40 pm
#21 IHCTD9

Dude where are you ? $ 400 K for a house .. never .. What’s the land price .. Like a hundred grand ? .. You are way too optimistic.. Sure there will be some fire sales but I sell building supplies .. You can’t build a house for $ 400
let alone buy the land.
—————

Southern Ontario, 2 hrs from the GTA. Average sfd price here before Covid hit was 350K. Yes a building lot right now is 100K+, I don’t imagine anyone will be buying these as a really nice 20 year old house on an acre or two is 550-600K right now today. It’ll drop from there yet. So will those lot prices. For now, few will be building new, it’s way too expensive.

I figure 400-450K average is a good bet in a year or two – if rates hold. It’s about 530K right now. The average here is highly affected by the types of houses that sell, less than 50 sell in a year. Sales of 750K+ houses are going to near zero. Locals don’t buy them, locals are pretty much the only buyers left now.

#69 I don't know on 11.29.22 at 9:32 pm

Most of the year/year statistics are being compared to one of the hottest years on record for real estate (2021), so of course they have more of a visual impact.

In the second half of 2021, it was quite obvious to all that rates were going to rise soon. Demand was brought forward far in advance.

What will happen?

Smart people who locked in won’t miss a minute of REM sleep either way.

Home owners with VRM who are being pinched will just eat ramen and kraft dinner for the time being. Or re-amortize. They know they just have to hold on. The market is already sniffing rate hike pauses and then declines (wait until year/year CPI is negative). Canadians don’t default.

Investors will just hold off selling and raise rents.

As always, timing the market is a fool’s game. You buy real estate when you can afford to. The biggest casualty here? Affordability. Shelter is a right. Owning real estate is not.

IDK

#70 Shawn on 11.29.22 at 9:52 pm

The Savings Rate?

Garth mentioned: . “And as spending dropped, saving increased – the savings rate jumped to 5.7%.”

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

Garth never said this was typical but I want to make a point about that in case anyone things it is typical.

I’ve always been suspicious of how that savings rate figure is calculated. Maybe Dolce Vita can explain it.

But it in no way shape or form is applicable to “typical” Canadians. For example it is highly unlikely that let’s say 60% of Canadians are within say 3% of that number.

Averages represent typical when the distribution is of the bell curve shape. Probably two thirds or more of Canadian men are within say 50 pounds of the average male weight. And it’s even more likely that two thirds or more of males are within say 4 inches of the average male height. For these items average is typical.

For anything financial like savings rate and wealth the bell curve is very flat with a massive left tail below zero and a very long and but low tail to the right. Average savings is not typical.

#71 I don't know on 11.29.22 at 9:57 pm

#57 Cash is King on 11.29.22 at 6:29 pm

The Canadian market bears little resemblance to the US market with about 20 reasons why.

They have more variability, with higher highs and lower lows.

Check out Manhattan real estate prices and compare them to Canada. Then try to tell us you can buy 20 homes in cash.

IDK

#72 IHCTD9 on 11.29.22 at 10:04 pm

#46 crowdedelevatorfartz on 11.29.22 at 5:36 pm

Snowing hard in Burnaby at 2:35pm.
Expecting 6 to 8 hours of this.
Might be snow-mageddon here in the next few hours…..
————

Enjoy, we got a foot in 24 hrs a week ago. Broke the winch cable on the Griz. Plowed twice, should have done it three times.

It’s all gone now, and lots of rain coming. I got a nice preview to the mess of stripped sod and thrown gravel that will be waiting for me in the spring.

#73 JPN on 11.29.22 at 10:06 pm

#68 IHCTD9

Delusional.. I can’t find any home or vacant land in MLS even remotely close to your number..There is a tipping point .. news flash..not everyone needs to sell their home.
Believe it or not a lot of folks will just stay put .. and yes .. pay the increased rate.. Good luck with your quest getting a deal of a lifetime like your suggesting..

#74 Doug in London on 11.29.22 at 10:09 pm

I think you’re bang on when you said it’s an affordability issue and not a supply issue.
—————————————————————–
That’s my observation here and around London also. Let’s hope that more rental houses and apartments for rent coming on the market bring rents closer to reality. There’s concern that higher interest rates will slow construction of new houses. There’s still some hope that 10 years from now there still might be something left of the once but no more protected Greenbelt. I’ll bet some Nortel shares on it.

#75 Doug t on 11.29.22 at 10:16 pm

DELETED (Ad hominem)

#76 Ponzius Pilatus on 11.29.22 at 10:19 pm

#66 Dr V on 11.29.22 at 8:17 pm
62 Russ

“Heavy snowfalls on the Island excepting. :) Sucks today eh.”
————————————————–

It really sucks when it’s on my driveway.
————-
I Just like snow.
The more the better.
Went out for a 2 hour walk in the snow driven wonder land.
Cleares your mind, and reminds you that the best things in life are free.
Why are people such woozies?

#77 Reynolds753 on 11.29.22 at 10:30 pm

#25 Greg Ellis

I am a Canadian who has lived in the USA for over thirty three years. I am now at the age were Medicare kicks in. If your premium with a supplement is “only $330 per month” you must not have much income or wherewithal. Perhaps you file jointly. The premium quickly escalates to over $615 at any comfortable income level. Do not forget the co-pays for any sort of procedures or appointments. They can easily range from well over $100 (including an MRI) and they are an “out of pocket” expense. Not all health care providers will accept Medicare rates and coverage. Be prepared to pay more if you really insist on that “special” doctor. Health care costs after sixty five, disregarding Medicare premiums, are often considered a big expense line item in retirement.

My experience with American health care both as a provider and user is that it can be very hit-or-miss and expensive. It also very inconsistent in taking care of people. Those with money and excellent insurance get well looked after. Those who fall out of the net do not. No doubt, Canadian health care has many problems. Equality of care is rarely an issue. Just saying. Do not get ill and that would be in either the USA or Canada.

#78 David Greene on 11.29.22 at 10:31 pm

I think you may have missed a really great teachable moment there.

=—————————————–
#38 Irish Stew on 11.29.22 at 4:59 pm

Inherited a family home.
Have had it on the market for 120 days.
One offer for $80k less – we declined.
.
.
Asked my son if he wanted a house.
He asked who would cook and do laundry.

That experiment ended quick.

#79 General Wow on 11.29.22 at 10:36 pm

DELETED

#80 Slivovice R us on 11.29.22 at 11:04 pm

Difference between US and Canada…..US are through to the last 16. Meanwhile Canada celebrates scoring a solitary goal as a Heritage moment, even though they got severely pummelled by the Croats….when did failure become a heritage moment?

#81 Sail Away on 11.29.22 at 11:27 pm

We save somewhere more than half of take-home. Our salaries and compensation keep increasing while we mostly spend like Wrk.Dover and greatly enjoy living minutes from work with piles of free activities at the doorstep. Contentment comes from being exercised and mentally stimulated, rather than stuff. Like well-adjusted, enthusiastic dogs.

#82 Mad Money on 11.29.22 at 11:32 pm

$3,250 a month in a GIC?

Wait. Watch. Shop. Be patient?

Add 800 of your own money to the 3250 and you can rent a house in Victoria without ever touching your principal.

If house prices crash. Jump in. If they don’t. Rent forever with a huge cash pile that you won’t have to touch. You will save bigly on ownership upkeep costs (around 200k per 30 years).

Laughable how scared people are of not owning.

Also, another stat that mortgage brokers are well aware of: 80+% of borrowers don’t make it 5-years before “switching” things up, meaning people buying forever homes move often and things change fast in life. Renting gives you huge flexibility if you can afford it.

Obviously if you don’t have 800k in the bank to offset rental costs, the rent is going to be steep, but 4,000 per month rents you a nice house and 2,500 rents you a nice condo.

#83 Dr V on 11.29.22 at 11:44 pm

76 Ponz

“Why are people such woozies?”
——————————————–

Woozies? Driveway cleared by me and Lily. That’s double wide, 25m long, plus turnaround, plus windrow from plow, plus spot for elderly neighbours and their windrow. Started to rain about dinnertime. All woulda been 3 inches of slush.

Calling for more overnight Wednesday.

Not exactly fun, but keeps me active.

#84 Ponzius Pilatus on 11.30.22 at 12:29 am

#83 Dr V on 11.29.22 at 11:44 pm
76 Ponz

“Why are people such woozies?”
——————————————–

Woozies? Driveway cleared by me and Lily. That’s double wide, 25m long, plus turnaround, plus windrow from plow, plus spot for elderly neighbours and their windrow. Started to rain about dinnertime. All woulda been 3 inches of slush.

Calling for more overnight Wednesday.

Not exactly fun, but keeps me active.
———————
Well,
I have not racked the leaves yet.
Always wait until all the leaves have fallen.
Most of the time the wind does the job.
Blowing them to the neighbours
It’s kinda neat how the wind piles them up in a corner.
And then, I get into action.
1 hour, and it’s done.
German/Austrian efficiency at work.

#85 Faron on 11.30.22 at 12:30 am

#51 Sail Away on 11.29.22 at 6:00 pm

My handful of ER visits in Canada have all been for trauma/broken bones/puncture wounds

Sounds like a bad day on Mt. Benson. You are lucky to have survived.

Also, It’s called triage. And, your assumptions about your fellow ER users is pure FYIGM.

#86 Faron on 11.30.22 at 12:39 am

#83 Dr V on 11.29.22 at 11:44 pm

Woozies? Driveway cleared by me and Lily. That’s double wide, 25m long

Reason number ten million to live simply and only in as much space as you need. Takes me all of 5 minutes to shovel my sidewalk and another 10 to clear the car. Usually do my neighbours’ sidewalks while I’m out. But, I’m a glaciologist — snow and ice are my jam.

Also, if it’s cold, use a broom and beat the pedestrians to it, so you don’t have packed snow. Broom’s good for about 6 inches of dry stuff.

#87 Nonplused on 11.30.22 at 12:51 am

#80 Slivovice R us on 11.29.22 at 11:04 pm
Difference between US and Canada…..US are through to the last 16. Meanwhile Canada celebrates scoring a solitary goal as a Heritage moment, even though they got severely pummelled by the Croats….when did failure become a heritage moment?

———————————–

Come on man. Canada came into the tournament ranked near the bottom. But making it was better than we’ve done in recent history. Croatia and Belgium are both ranked closer to the top. The fact that we put on a decent show and didn’t stink up the joint is a success, and indicates the trend is in the right direction.

If you thought Canada had a decent chance of making it to the 16, you probably wouldn’t last long as a bookie. There was no reason to believe it would happen. It would have been quite an upset. So the fact that we were only down 1 goal after 135 minutes of soccer against 2 of the best teams in the world isn’t all bad.

So let’s celebrate the fact that things are trending up. If we keep building, maybe next time we do make the 16. But that’s probably as far as we go. But the time after that…. Maybe group of 8 in 2030. Then once we are in the group of 4 in 2034, anything can happen. Most of us might still be alive.

Remember, you can’t just pick 11 guys off the street and win a world cup. The whole of society has to get behind it, even the kids. Especially the kids. It takes years of training and internal competition. Canada still prefers hockey. Can we really win at both? I’m trying to think if there is another top Soccer country that also dominates in another team sport. It’s not coming to me.

I guess on the women’s side Canada and the US are both pretty dominant in both hockey and soccer. But, for various reasons, I’d say they don’t have much international competition, making it easier. Canada and the US are ahead there for cultural reasons.

#88 A Lucas on 11.30.22 at 5:01 am

When Harper was in office the CAD was at par.
When Justinflation is in office the CAD barely past 0.80 USD.

Sunny ways my friend. Sunny ways.

JT will leave Canada in a mess for future generations.

#89 Tony on 11.30.22 at 5:52 am

Re: #60 Shawn on 11.29.22 at 7:08 pm

Infiniti Master Builder Inc. filed for bankruptcy in January this year. I’ll have to check around for others as the small ones don’t make the news.

#90 Wrk.dover on 11.30.22 at 5:54 am

#72 IHCTD9 on 11.29.22 at 10:04 pm
Broke the winch cable on the Griz.
__________________________________________

If that is the winch that lifts the plow, remove the drum, drill a hole in each sideboard, put a pin side to side and use a strap instead of a cable.

#91 crowdedelevatorfartz on 11.30.22 at 8:11 am

@#76 Ponzie’s palindrome problems
“Why are people such woozies?”

+++
They probably drank too much and when they wake up with a hangover, they turn into wussies….

#92 Bezengy on 11.30.22 at 8:11 am

Jason Kenney’s parting remarks, sad.

“From the far left we see efforts to cancel our history, delegitimize our historically grounded institutions and customs, and divide society dangerously along identity lines.

“And from the far right we see a vengeful anger and toxic cynicism which often seeks to tear things down, rather than build up and improve our imperfect institutions.”

#93 IHCTD9 on 11.30.22 at 8:49 am

#73 JPN on 11.29.22 at 10:06 pm
#68 IHCTD9

Delusional.. I can’t find any home or vacant land in MLS even remotely close to your number..There is a tipping point .. news flash..not everyone needs to sell their home.
Believe it or not a lot of folks will just stay put .. and yes .. pay the increased rate.. Good luck with your quest getting a deal of a lifetime like your suggesting..
_____

Is it that hard to believe? Like I said, 350K was the average price only 3 years ago, now it is 530K in my area. It’s on the way down at approximately the same angle as it went up. You seem offended that houses might sell for this low.

Belleville (mentioned in the blog today) average is 508K, right now today.

Stirling (mentioned in the blog today) average is 423K right now today. (sales mix plays a role)

All the towns hours from the GTA which bubbled during Covid, are going back to normalcy. Figure in a couple more hikes, and a year or two of steady rates, and 400-450K is guaranteed – maybe even conservative.

#94 Randy on 11.30.22 at 9:08 am

DELETED (Medical falsehood)

#95 IHCTD9 on 11.30.22 at 9:11 am

#90 Wrk.dover on 11.30.22 at 5:54 am
#72 IHCTD9 on 11.29.22 at 10:04 pm
Broke the winch cable on the Griz.
__________________________________________

If that is the winch that lifts the plow, remove the drum, drill a hole in each sideboard, put a pin side to side and use a strap instead of a cable.
____

In fine Dutch fashion, I just pulled out a couple feet of cable, torched it off, and reattached the hook.

I saw that plow strap idea while cruising Amazon, looks like a viable option as well.

#96 schoolie on 11.30.22 at 9:34 am

Dost mine eyes deceive me? Did I just witness THE Garth Turner recommend a GIC investment? I suppose even a hard nosed GIC hater like you can’t help but acquiesce a modicum of respect for the oft maligned stalwart of Canadian financial products now that they have jumped the 5% mark. Say it ain’t so Garth.

The context was a short period of time following which capital would be deployed for a down payment. Relax. – Garth

#97 Steven Rowlandson on 11.30.22 at 10:01 am

We are not made of money. We don’t get paid like we were prime ministers of Canada or presidents of the USA.
There are limits to what we the people can afford.

#98 Dharma Bum on 11.30.22 at 10:21 am

@Faron

I’m confused. Jordan Peterson, the beacon of right wing thought, told me racism is impossible in Canada. Maybe the all-beef diet clouded his thinking.
——————————————————————————————————

Correction: he eats only beef, water and salt.

I believe that it’s the salt part that is slowly corroding his brain tissue. Like a car’s undercarriage in Toronto in February.

“Stage I: Steak, Water, Salt
The first part of the Jordan Peterson diet, is the elimination phase which calls for at least a 2 months just meat, water, and salt. This approach to carnivore is also called the Lion Diet, or carnivore elimination diet.”

https://www.doctorkiltz.com/jordan-peterson-diet/

#99 Dharma Bum on 11.30.22 at 10:29 am

#33 Nonplused

Stupid people are everywhere, making up at least 25% of the population, and they are hard to identify unless you know what to look for.
———————————————————————————————————

The litigants on the Judge Judy and Judy Justice show.

#100 Observer on 11.30.22 at 10:57 am

So much for freedom Albertans. I hope you are paying attention and not just acting on emotion:

The superpowers that Smith never advertised or forewarned are the ones really worth unpacking. Because for all the advance debate about what it meant in Smith’s head for the province to have sovereign powers, nobody expected that Smith fancied giving herself the powers of a sovereign.

Section 4 of the Alberta Sovereignty within a United Canada Act gives the provincial cabinet the kinglike powers to amend legislation by circumventing the legislature, and all the debates and democratic trappings therein. Once the UCP-dominated legislature approves a resolution that beefs about — say, federal methane regulations for fertilizer — there’s nothing in Smith’s bill that constrains the secret law-rewriting powers of the premier and her lieutenants.

There’s a second extraordinary thing this bill does. It severely limits Albertans’ rights to challenge use of the act’s superpowers in court.

She’s talked about the bill as a “shield” against Ottawa. It also shields her government from its own concerned citizens.

https://www.cbc.ca/news/canada/calgary/danielle-smith-alberta-sovereignty-cabinet-rewrite-laws-1.6668807

#101 Observer on 11.30.22 at 10:59 am

Wow! Alberta’s own “dictator” (to use “freedom convoy” terminology.

“Someone only has 30 days to challenge any decisions or deeds made under the Sovereignty Act. For normal laws, the time limit is six months.

Anybody trying to launch such a challenge also must meet an unusually high legal standard to knock it down. The act also immunizes anybody carrying out this act’s provisions from civil liability — cabinet ministers and MLAs, too.”

See link above.

#102 the Jaguar on 11.30.22 at 11:15 am

What would a snowy Wednesday be without a few Snippets?—

-• The Bank of Canada lost $522 million in the third quarter of this year, marking the first loss in its 87-year history. In the central bank’s latest quarterly financial report, it said revenue from interest on its assets did not keep pace with interest charges on deposits at the bank, which have grown amid rapidly rising interest rates. ++ ( No Christmas bonus for you this year Tiffster…)

-Economic growth in the third quarter was much faster than the Bank of Canada predicted, raising the odds of another outsized interest rate increase before year’s end to quiet inflation. “The economy is still in excess demand — it is overheated,” Macklem told the House finance committee last week. ++ (Expect a lump of coal in your stocking this Christmas…)

“In retrospect, the mortgage stress test introduced in 2018 may not have been so unreasonable after all. Imagine how much higher home prices and debt levels would have risen in the absence of those measures?” Older homeowners who are expecting to downsize to fund their retirement should recognize the headwinds that could slow or stall real estate price growth, or even cause prices to fall further in 2023 and beyond. ++ ( Appears the Chicken Hawk finally ekked out a ‘base hit’).

And finally:

” CRA is clawing back $3.2 billion in COVID-19 financial aid benefit overpayments, a staggering number that’s just the beginning of the agency’s monumental task of recouping billions in excessive or fraudulent payments through hastily designed emergency programs.
But that number will only grow as CRA investigators look over millions of applications for half a dozen COVID-19 programs until at least 2025. They also revealed the agency has already discovered about 25,000 cases of fraudulent payments tied to identity theft, “a scale we haven’t seen in the past.” ++
(Captain Renault: I’m shocked, shocked to find that gambling is going on in here! [a croupier hands Renault a pile of money]. Croupier: Your winnings, sir.)

#103 Shawn on 11.30.22 at 11:18 am

When the Canadian dolalr soared to par and above

#88 A Lucas on 11.30.22 at 5:01 am
When Harper was in office the CAD was at par.

**************************************
Yes, it peaked somewhere over $1.11 as I recall.

BUT it lasted basically “the better part of a Monday morning”.

By the way, remember that “correlation is not necessarily causation”. That high Canadian dollar was caused by $130 oil and massive oil sands investments. And was it also due to the fact that the U.S. was imploding with the sub-prime financial crisis. I recall suggesting that Alberta consider buying Arizona (tongue in cheek just to rile up some Americans). Those were the days…

AND Garth and I and others were here on this blog telling you it was a GOLDEN time to buy a U.S. sun-belt house if you were a snowbird or possibly even for investment. A close family member of mine, age 80 at the time, bought a nice foreclosure house in a Tampa Florida suburb at a great price.

#104 Sail Away on 11.30.22 at 11:28 am

#85 Faron on 11.30.22 at 12:30 am

Sounds like a bad day on Mt. Benson. You are lucky to have survived.

——-

‘Strange Man Yells at Mountain’

#105 Basement on 11.30.22 at 11:30 am

Basement apartments are underrated

#106 Rent the Podium on 11.30.22 at 11:30 am

If you’re looking for a house in Victoria, as opposed to GVA, and something comes up that you like and can afford, buy it man! Real estate is local and Victoria ain’t Brampton. The best you can get in Victoria is a pause in price increases. Even with the national crash were still up 10% yoy.

#107 Steerage on 11.30.22 at 11:34 am

#101 Observer on 11.30.22 at 10:59 am
Wow! Alberta’s own “dictator” (to use “freedom convoy” terminology.

“Someone only has 30 days to challenge any decisions or deeds made under the Sovereignty Act. For normal laws, the time limit is six months.

Anybody trying to launch such a challenge also must meet an unusually high legal standard to knock it down. The act also immunizes anybody carrying out this act’s provisions from civil liability — cabinet ministers and MLAs, too.”

See link above.

The whole thing seems profoundly silly.. cases will just end up in higher courts which will rule no you can’t just overide federal laws… total gong show.. hey like having a referendum on equalization

#108 Dr V on 11.30.22 at 11:39 am

Most towns make the landowner responsible for clearing the sidewalk fronting the property. At my old office, I would clear it at quiting time and immediately salt it even if it was still snowing. This would help in hindering the snow packing and freezing to the concrete. Much easier to clear the next morning.

#109 Gr on 11.30.22 at 11:46 am

Some might be interested.

Waiting for Superbatteries They are still a long way from matching the energy density of liquid fuel
https://spectrum.ieee.org/ev-battery-2658649740

#110 Sail Away on 11.30.22 at 11:47 am

#103 Shawn on 11.30.22 at 11:18 am

Re: 2008-9 US RE

AND Garth and I and others were here on this blog telling you it was a GOLDEN time to buy a U.S. sun-belt house if you were a snowbird or possibly even for investment.

——–

We have several friends who bought in California’s Palm Springs/Palm Desert/La Quinta area around that time. They stay 2-3 months of the year and rent out with a management agency for the balance of the year.

As always- strike when the iron is hot, or… when people are despondent.

#111 Quintilian on 11.30.22 at 1:08 pm

It truly is an enigma.

I have been to Alberta many times, met a lot of great people.

Yet they vote for the likes of Danielle Smith who wants to pick a fight with Justin.

Shawn,
Would you kindly lend her your brains on a temporary basis.
A good political fight is great drama, but there must be some resemblance of a probability that the outcome is not predetermined.

I clown from Alberta on the national scene is enough.

#112 Sail Away on 11.30.22 at 1:09 pm

“I rolled with the Oath Keepers….. I said, let’s storm the place and hang the traitors… If we’d had guns I guarantee we would have killed 100 politicians. They ran off and were spirited away through their underground tunnels like the rats they were.”

— Thomas Caldwell, The Oath Keepers

#113 Quintilian on 11.30.22 at 1:10 pm

*I clown from Alberta on the national scene is enough.

*One clown from Alberta is enough.

#114 Shawn on 11.30.22 at 1:22 pm

Apply the (Danielle) Smith Maneuver

Following Danielle’s lead I hereby declare myself a sovereign free man of the land and will no longer comply with any Alberta law that I feel impinges on my freedom (which is basically all Alberta laws).

Is there an official process to let the Alberta government know about my declaration or does this blog suffice?

#115 Don Guillermo on 11.30.22 at 1:33 pm

#110 Sail Away on 11.30.22 at 11:47 am
#103 Shawn on 11.30.22 at 11:18 am

Re: 2008-9 US RE

AND Garth and I and others were here on this blog telling you it was a GOLDEN time to buy a U.S. sun-belt house if you were a snowbird or possibly even for investment.

——–

We have several friends who bought in California’s Palm Springs/Palm Desert/La Quinta area around that time. They stay 2-3 months of the year and rent out with a management agency for the balance of the year.

As always- strike when the iron is hot, or… when people are despondent.
**********
We have friends that have 2nd homes in Palm Springs/ Palm Desert and in Phoenix. Beautiful homes but maintaining these properties can cost $30,000 USD/year and upwards. Some spend more than 3 months and have to count days in country so as not to overstay. Our Calgary/ Pheonix friends are just about to retire and have decided to sell. They are looking for a property in Mexico. Depending on where they end up a similar property near the ocean could be 1/3 the capital cost and 1/6 operating costs. Couple that with an easy to acquire Permanente residence you can come and go as often as you want. You can also use professional management management to rent but most we know don’t. It’s fun to pop down in summer occasionally especially when the smoke moves in.

#116 jess on 11.30.22 at 2:12 pm

Wednesday, May 26, 2021
DOJ Announces Coordinated Law Enforcement Action to Combat Health Care Fraud Related to COVID-19
Criminal Charges Against Telemedicine Company Executive, Physician, Marketers, and Medical Business Owners For COVID-19 Related Fraud Schemes with Losses Exceeding $143 Million

The Department of Justice today announced criminal charges against 14 defendants, including 11 newly-charged defendants and three who were charged in superseding indictments, in seven federal districts across the United States for their alleged participation in various health care fraud schemes that exploited the COVID-19 pandemic and resulted in over $143 million in false billings.

The defendants in the cases announced today are alleged to have engaged in various health care fraud schemes designed to exploit the COVID-19 pandemic. For example, multiple defendants offered COVID-19 tests to Medicare beneficiaries at senior living facilities, drive-through COVID-19 testing sites, and medical offices to induce the beneficiaries to provide their personal identifying information and a saliva or blood sample. The defendants are alleged to have then misused the information and samples to submit claims to Medicare for unrelated, medically unnecessary, and far more expensive laboratory tests, including cancer genetic testing, allergy testing, and respiratory pathogen panel tests. In some cases, and as alleged, the COVID-19 test results were not provided to the beneficiaries in a timely fashion or were not reliable, risking the further spread of the disease, and the genetic, allergy, and respiratory pathogen testing was medically unnecessary, and, in many cases, the results were not provided to the patients or their actual primary care doctors. The proceeds of the fraudulent schemes were allegedly laundered through shell corporations and used to purchase exotic automobiles and luxury real estate.

https://www.justice.gov/criminal-fraud/facts-statistics

Telemedicine,clinical laboratories,and DME 2022 enforcement action
>1.2b {fraud loss-( intended) }
>8m. Seized
36 defendants charged /13 federal districts involved
52 administrative actions against medical providers
read more @

https://www.justice.gov/criminal-fraud/telemedicine-enforcement-action

#117 jess on 11.30.22 at 3:36 pm

steward Rhodes is a Yale lawyer is he part of that 10%

Nonplused on 11.29.22 at 4:41 pm

Oath Keepers: ‘How I escaped my father’s militia’
30 November 2022|News

The son of militia leader Stewart Rhodes spent years plotting to help his family escape an abusive household. Now that the elder Rhodes faces decades in prison, the rest of the family is rebuilding their lives.
BBC New

https://www.bbc.com/reel/playlist/in-depth?vpid=p0dkqj1g

#118 jess on 11.30.22 at 3:52 pm

“Citizens United created loopholes in campaign disclosure rules that have made so-called dark money — funds from groups that do not disclose their donors — disturbingly common. Powerful groups have poured more than $1 billion into federal elections since 2010, typically concentrating on the most competitive races. Dark money continues to seep into executive, legislative, and even judicial elections, threatening the impartiality of state supreme courts across the country. Without transparency, voters don’t know who is trying to influence them, making it harder for them to reach informed decisions. ”

https://www.brennancenter.org/issues/reform-money-politics/influence-big-money/dark-money