When strident people hear something they don’t like, they call it fake. Trump taught us how powerful a tactic that can be. He used it against the entire media establishment – suggesting only his thoughts, tweets and posts were genuine. Authentic. Trustable.
Yesterday this blog said things a lot of people did not wish to know or accept. The comment section was a swamp, hip-deep in vitriol and angst. Many rightist snowflakes want nothing good said about maple while you-know-who is PM. And a slew of houseless kiddos waiting for a half-off real estate sale are happy to call fake when the news disappoints.
Well, tough. This blog sells nothing. Has no advertisers to placate. And the wizard is too wizened and crusty to really care what you think. If you don’t want to come here and hear reality, then blow off to Reddit. Moaning is welcome there. They have empathy.
If you care to know the truth, read on.
The CB’s action yesterday changed everything. The bank said its weensy quarter-point pimple was the last hike before a pause to give monetary authorities “time to reflect”. This means we have hit the terminal rate. The end. It will take an inflationary disaster – like a vicious wage-price spiral – to unpause the tightening. Politically, that’s a non-starter. Economically it would increase the odds of a recession. And if the CPI can drift down on its own over the next few months, the Bank of Canada will be delighted to sit on its digits and wait.
Now, whazzit mean for housing? As mentioned, everything.
Consider the facts.
First, prices have declined by 23% nationally, about the same in Toronto and Victoria, 30% in the Fraser Valley and K-W, 40% in King and elsewhere in Outer Bunnypatch. This fully reflects the increase in mortgage carrying costs, which suggests the market has been efficient. Do houses still cost an absurdly exaggerated and unjustified, punishing amount? Yup, of course. But this decline may be all that you can expect, given FOMO and widespread public insanity.
Second, sales have crashed by the greatest amount in recorded history in the land of beavers. Down by 40-50% in Vancouver and the GTA, mirrored in the 905, 519, Okanagan, HRM and Vancouver Island. Buyers melted away as interest rates plumped and the recession talk started. They did not stop wanting houses, just shopping for them.
In other words, there’s a huge amount of pent-up desire. Just as 2% mortgages sucked demand from the future and increased debt, now 5% mortgages have dammed up the demand that normally would have exists in the autumn of 2022. That dam could be about to break.
Third, the yield on a five-year GoC bond is way lower than last fall, and this has been reflected in declining fixed-rate mortgages. HSBC this week is the first big guy to break the 5% barrier, now offering a five-year rate of 4.89%, rolling it back to last September. Yeah, five is a lot more than two or three, but it’s far lower than the historic norm of 8%. With rutting season around the corner and financial earnings a little under pressure, figure on a lot of bank competition coming.
Fourth, it’s already happening. Open your eyes. January mortgage originations, inquiries and applications are hugely higher than in the preceding two months. Says our loan broker buddy Rob Butler: “This feels like a “We waited a year and we’re pissed off so we’re going to buy now”.
Prices can moderate or even drop as buyers face a 7% stress test with prices still ridiculous. But it’s a safe bet sales volumes will pop. There were 30 offers on a east-end GTA bung a few days ago, for example. Until inventory levels climb higher (which should happen soon, now that Tiff has blinked), there will be multiple bids. That’s a given.
In a week we’ll have January stats from real estate boards. Compare those numbers with what will be published in the first week of March. Then talk to me about fake.
Hacked: Some dipstick hacked my Insta account and is sending out messages under my name. If you get one, ignore it. I do not message via Instagram. Sheesh, social media brings out the worst. – Garth
About the picture: “When I’m not feeling great,” writes Robert, “this is my go-to picture. It’s the screen saver on my phone . Moses and Bella, brother and sister, both passed a few years ago. Let’s hope 2023 is a lot better .”
173 comments ↓
Crazy that people are pushing money in now. I’m not doom and gloom but have a hard time believing that we’ve tackled inflation, so expect rates at minimum stay at the level, or increase. Or, the BOC accepts 3-4% longer term inflation. I just don’t see a path to 2% that doesn’t involve a recession.
On a separate note, glad I held on to some of my 2022 tech dogs. Still a ways to go to get to book value, but 20-30% to start the year should pump 2023 returns. And the safe stuff is doing as well. Looking like a good year for an all equity NA balanced, and if rates do decline EOY look out, could be as huge year.
Price will be paid at some point but feel like we will kick the can down the road yet again.
I respectfully disagree. A year ago buyers were getting 1.5% mortgages, now its 5% plus. Sure there might be some rich pent up demand folks that buy. But in GVRD and GTA there are so few now that can afford to buy at these new rates. I wont be surprised if there a flood of listings come spring due to increased monthly costs and unable or struggling to renew. There might not be many buyers willing or able to purchase them.
Obviously. Denying reality is always an option – that will have no effect upon reality.
Yes, there might be a short lived reignition, but it will quickly fizzle out.
However, if FOMO and insanity can overcome the inertia created by the real barriers that are concrete and made visible by a calculator, then perhaps the realtors and Garth might just be right.
But I doubt it.
Tick Tock, Tick Tock
Good afternoon Garth.
Hope you have an awesome day !
I’m so dumb, I thought the Elon haters were saying TSLA was worth $10, now I get it, they meant $10 A DAY.
Housing about to bounce up big time.
Too early to tell if it will last or be the dead cat variety.
Risk on ‘homies.’
First and been reading since 2008!
Prices have declined about 6 percent in Victoria–nowhere near 23 percent.
Don’t forget the proposed OSFI lending restrictions. Plus it will take a few quarters for past rate hike to flush out marginal corporate/private borrowers and the economic/employment consequences. Early calls, short memory and flip flopping are not sound financial advice.
In barely 24 hours, this blog goes from an exhilarating picture of awesome cat Felix to yet another of the endless photos of deceased mutts.
Is this some kind of dogawful market signal?
“Yesterday this blog said things a lot of people did not wish to know or accept. The comment section was a swamp, hip-deep in vitriol and angst.”
——–
Wow, I must say, I didn’t really notice steerage angst or vitriol except for that one usual guy, but then my normal state of mind is optimism which pretty much ignores grinchy-ness.
Why be angry? Days are lengthening, daffodils are blooming (sorry Ontario!), Mt. Benson is beckoning, markets are a-bubbling and investors can be in a state of eager anticipation.
Of course, we opportunists do love overall general morose capitulation, so maybe subconsciously that partially explains my joy. More please! Thanks Garth!
Simple arithmetic. 142 million homes of all types, sizes, age, condition on the other side of the border. Easy pickings for Canadians who can buy them for 20 – 50K in many of the US States. Rents with exchange are 20% higher.
USA has ten times Canada’s population. Buy in USA. Rent in Canada and watch your money go a lot further.
“given FOMO and widespread public insanity”
Very true. But what if, sanity is restored.
Looking at gas, utilities, car maintenance, grocery and insurance bills, I definitely have $750-1000 less every month. Salary not keeping up.
#1 Mattl on 01.26.23 at 12:34 pm
On a separate note, glad I held on to some of my 2022 tech dogs. Still a ways to go to get to book value, but 20-30% to start the year should pump 2023 returns.
——–
Of course. Buy good companies and keep them. Every sector fluctuates and it’s easier to channel Buffett’s ‘hold forever’ than chasing crests or peaks. Buy value and add at lows.
For the Sail Away dynasty, last year was very profitable for business and we did add significantly to our portfolios, but overall, our net worth is +14% from last year at this time. Arbitrages really helped and the Home Capital +53% merger was completely unexpected. Must be living right.
Not denying reality, but just commenting that it’s bleak and (I hate to sound like a millennial) “unfair.”
I just want somewhere reasonable to live AND to save for retirement. I resent being forced to choose between the two.
garth,
your analysis makes little sense.
1. during the entire U.S. housing meltdown from 2008-2012, rates were effectively DROPPING.
2. But WHY would the 5-year GIC rate be lower–despite the BOC’s historic raising? Currently, a 1 year GIC is paying MORE than a 2-year and 3-year…and so forth. This inversion means that the market believes there is a MASSIVE incoming recession–the exact opposite of your “soft-landing” nonsense narrative.
3. “When strident people hear something they don’t like, they call it fake.” Shocking to hear: since this is exactly what you do every day ;)
What happened to Who is qualifying for mortgages?
Should we cash out funds and buy real estate. It never fails to go higher. Just a 6 month pause with a some price decrease
We certainly live in a strange time where pointing out the good things in this country – still one of the best places to live in the world – is met with such ferocious disdain. Just shows the lack of perspective a lot of people have these days. Especially those drawn to the comments section of our favourite blog.
I would love to hear from people where their life sucks because of government. Truly. Most people that I know (purely anecdotal) that are struggling are struggling because of bad luck (chronic illness, being born into an abusive family etc.) and / or bad life choices.
I’ve never met anybody in Canada, or even know of anybody, where government policy is the primary reason their life sucks. My very simple stance is this: as long as my choices are the primary driver of my quality of life, I have very little to complain about. Not to say I won’t critique certain policies here and there, as we all do. But to say the whole system is corrupt and controlled by the WEF and we’re all just pawns in some grand game of the elites? Well that just doesn’t ring true as I continue to be free to make choices and improve my quality of life.
many Canadian experts on US health care in the comments, fancy that. I fully agree that the USA’s highest earners have turbo-charged wages compared to ours. But don’t pretend their system is universal like ours. There’s a HELL OF A LOT of costs that aren’t covered. Insurance? oh you still pay
https://www.forbes.com/sites/debgordon/2021/10/13/50-of-americans-now-carry-medical-debt-a-new-chronic-condition-for-millions
So if Rates are not decreasing in 2023…shouldnt prices continue to fall?
People can close on deals because they are not qualifying for mortgages
A friend of mine who is a realtor (good guy who wants to do right by clients) says January has been a quick reveral in activity. That is to say he has become incredibly busy as if by the flicking of a switch.
So I believe you, Garth. I believe you.
Hmmm….maybe the first time I’ve ever disagreed with you. I agree that Maple is a good performer, but I very much doubt real estate prices have bottomed. They are only down to the levels just before the last year’ run up but still very high historically speaking. The low rates were with us a long while to get us there. If rates aren’t near 3% I still see this market falling. Maybe a little dead cat bounce this spring but the reality is very few people can afford what is out there.
Garth,
Elastic process is going rigid(crusty).
Even Tiff M. cited this one being a mere “pause”. That’s it, a pause. He defended the rationale in 2% target for inflation. He also answered that same question “is your next move a pivot” from different folks at different times throughout the event; specifying how inflation has gone down from 8+% to 6ish% but there is a bigger gap from 6 to 3 and to achieve that they see it necessary to target 2%.
It all remains to be seen for sure. This is a trap or a fake bounce. Not the trend. For the trend to change the entire impact of this tightening cycle would have come to pass. Not before prices plunging that is…
I like optimists. I love realists.
Even in disagreement there is an attraction to your musings.
#7 Antonio on 01.26.23 at 12:42 pm
First and been reading since 2008!
_________
First what, Antonio? First born in your family? First to think they accomplished something spectacular, like being the first to comment on this pathetic blog? First to learn to read in elementary school?
Do tell.
P.S. I’ve been reading since the 1960s.
What if the War in Ukraine drives up inflation – will the data be there to increase rate?
#13 Crystal ball futurist on 01.26.23 at 1:21 pm
“given FOMO and widespread public insanity”
Very true. But what if, sanity is restored.
Looking at gas, utilities, car maintenance, grocery and insurance bills, I definitely have $750-1000 less every month. Salary not keeping up.
—————————————-
Hey,
Big Spender.
That would be about 10 k a year extra.
After tax.
Time to start a budget.
To track where the money is going.
Saying there is no bias or slant in the mainstream media is simply delusional and ridiculous. It has nothing to do with Trump and everything to do with reality. Our media today is there to push a specific narrative, hence why, for example, weather events which are completely normal every year are drummed up with drama and spin to make everyone think they never happen. It rains non-stop for days on the west coast, but no, these are unheard of ‘atmospheric rivers’ that are caused by climate change. A tropical storm or hurricane striking the Atlantic coast as they have always done? Climate change. -30 weather on the prairies for a week in the winter? Russian Polar Vortex and we’re all going to die. It’s actually really sad, Garth, that you don’t get it… or perhaps you somehow benefit from it behind the scenes, who knows. You’re definitely replicating Charles Adler in your flip-flopping, I’ve followed you for 15 years now. You change your positions when it suits you, absolutely.
The Reddit economists are currently convinced that a pause in rates actually means that rate cuts are coming soon. They were also convinced that any drop in domestic demand for real estate would be swallowed up by an unlimited demand from foreigners, causing price growth forever. We can all see how that prediction is going.
So it’s finally safe to buy now in 2023? Unlike the last 10 years where the story was house prices are inflated and the bubble will burst at any moment?
Imperial Oil greenlights $720 million to build largest renewable diesel plant in Canada.
In ALBERTA.
Must be fake news.
https://ca.yahoo.com/finance/news/imperial-oil-greenlights-720-million-155759392.html
You really have to ask the question,”will the overnight rate of 4.5% be higher or lower in 2025?” It’s so easy to say lower because we had near 0% for 15 years but it’s also the reason imo rates will be higher in 2025 than they are today. Bubbles have to deflate period…and they will deflate.
But Garth, does that mean the Fed is also done with rate hikes this year?
#4 Quint:
The tick tock thing, what is the deal there? I agree there headwinds and RE and financial markets are sketchy. But you seem excited about some coming doom event. You realize you could be ticking down to your job being eliminated right? Actually, you must be in government, because if / when you tick tock hits, no one who has a market based job will be safe.
And if you are in Gov’t, and a big economic events hits + all this debt your guy has loaded on, some future government WILL cut the public service. Careful what you cheerlead for, you might get it.
When it was unaffordable at 2% and is now at 5% for a fiver, it’s hard to see how there would be too much of an uptick? Maybe in some areas? I think certain locations may drop a little more before a flatline at best? Will be interesting to see how it unfolds
Fake eh?
Well, truth hurts sometimes. But, happens to important to move on and stop dwelling things that people think are going to make their lives happier…like houses…or teslas…or, Og forbid, 1.50$ hotdogs from Costco.
We may have set the bar of entitlement here in Canada. We have it so good, easy really…no going back now, right?
let Og take care of your entitlement issues!
Have you ever felt that you’re better than everyone? Or that you deserve what everyone else has or more? That you too should lease a Lexus? Or, perhaps you just don’t frown deep enough?
Well . . . . . . .
Og’s Enlightenment Gene Therapy and Spinal Tap may be just the thing YOU need to make you feel human again. Let Og Industries do the work for you. Come in a loser, leave thinking you’re a winner! Guaranteed!
As always, every service that Og Industries provides comes with Og’s personal guarantee that you will NOT leave unsatisfied.
Og
Zen Garth today:
Tough noogies. Go copulate with a duck.
And make like the birds and flock off.
—————
I am not a robot, CAPTCHA.
https://twitter.com/HowThingsWork_/status/1618634993617752068
Some people have a lot of time on their hands is all I will say.
#199 Sail Away on 01.26.23 at 10:14 am
#11 Sail Away on 01.26.23 at 1:10 pm
#14 Sail Away on 01.26.23 at 1:22 pm
—
Gettin’ chirpy. A stronger and stronger gaseous blow is loading leeward slopes with SAG. A SAGalanche is coming. It’s not time yet. But it is coming. I shall continue to harness the blowhard loading and the burial that is to come when sailo goes quiet and pretends/hopes that we forget his inverse signaling and top-ticking buys.
I have gratitude that this life has given the ideal two-way stonk indicator.
Garth or anyone else: how often and under what conditions do banks change the spread between risk-free and their lending rates? Curious if the rates consumers will pay can continue to increase even as bond yields flatten. I would assume that a deteriorating consumer credit picture would increase that spread.
I wish the FED would raise by 75 and give the Canadian Dollar a good beating, or at least require that Tiff grew some nads and kept raising to punish the house speculators.
Alas it won’t happen, and the decade of people calling for lower prices will likely continue as prices rise and the value of the loonie gets smoked.
I suspect a lot of wealthy Chinese are coming for the upper end of the YVR market. I know Garth doesn’t think this matters, but no one in Vancouver thinks that.
Bloomberg had a piece yesterday on the numbers pouring into the consultants now that Covid lockdowns are over.
We’ll know by summer if it made a difference, but my guess is that it will.
There is a national ban on foreign buyers. – Garth
US reports GDP, 2022 4th Qtr annualized:
2.9%
I’m telling you people 2023 will have a lot of turmoil but I believe Mr. Market earnings will not be as suppressed vis-à-vis GDP forecasts.
Market reflecting that, so far. I can’t believe my ETF YTD’s just plowing ahead. Today at 3.2% to 10%.
Jan 2023 div yield down for my ETFs, 19.3%. Last one in today, then calc’d the overall number.
Crazy good so far in 2023.
———–
#14 Sail Away
Net worth is +14% from last year
– Amateur effort.
#re #33
These is for Sailo.
The article is in German.
But worthwhile to translate, if Tesla is your Cuppa tea.
“TESLA reports record numbers, but the problems are just beginning”
https://www.stern.de/auto/tesla-meldet-rekordzahlen—doch-die-probleme-fangen-jetzt-erst-an-33137506.html
When rates dropped by .25%……houses in Surrey went up $125,000 in one month.
Why work for a T4 slip
Cash out your portfolio with Garth and make some real money. BUY REAL ESTATE
#30 Ponzius Pilatus on 01.26.23 at 2:17 pm
Imperial Oil greenlights $720 million to build largest renewable diesel plant in Canada.
In ALBERTA.
Must be fake news.
https://ca.yahoo.com/finance/news/imperial-oil-greenlights-720-million-155759392.html
——–
Renewable diesel factory using vegetable and soy oil. What a dumb idea.
Considerations:
-Diesel is used for machinery to plant, grow and process vegetable oils
-Crops require fertilizer, first mined using diesel, then produced using natural gas
-Vegetable oils, as vegetable oils, retail for significantly more than diesel
As Charlie Munger says, and I paraphrase: ‘There’s no need to be brilliant, just try not to be stupid’
The comment section was a swamp. Easy Pesy. Don’t have one. Its great you provide this blog . Everybody has an opinion. You like to stir the pot just like the next guy. But like you said “you don’t really care what we think”. You speak of reality and so do a lot of other people.
Canada’s economy is housing, it can’t fail.
A dead cat bounce could be in order, at best.
US rates could reach 5.5. Cananda cannot keept it at 4.5 for long ,unless US drops later, which is unlikely untill 2024.
But I am sure BOC already consluted big brother on that.
Rates will go up again this year.
Inflation is not over.
Dave the real estate pumper has moved from no decline in Victoria prices a month or so ago to 6% today. Moving in the right direction Dave, try to keep up.
Garth your first mistake is assuming people want honest advice, when in reality they’re looking for validation for their own opinions. Obviously everyone knows everything well except me because I’m stupid and of course you since your experience pales in comparison to the opinions of BIL’s everywhere.
For all you ChatGPT Mr. Market aficionados:
https://twitter.com/alifarhat79/status/1618691804488146944
Mr. Market: “Me likey”
and the detailed why:
https://www.wsj.com/articles/buzzfeed-to-use-chatgpt-creator-openai-to-help-create-some-of-its-content-11674752660?siteid=yhoof2&yptr=yahoo
I hope they create a ChatGPT ETF I can buy. Have it generate the stock prospectus and then have it analyze its own stock prospectus. That would be cool.
Truth??? I can’t handle the truth. I still think we have another 10% to go on the housing melt, there will be no recession and figure we never went to the moon.
My theory is that Garth has PTSD from past postulations of an impending house market crash that didn’t happen (not his fault, the facts changed) so will avoid a repeat at all costs. Just kidding Garth. Sort of.
I’ll watch the corner lot properties in Richmond Hill and Markham as well as the detached homes closest to the elementary schools in those two cities. These two cities have a knack for all the buyers coming off the sidelines at the same time. Quantitative tightening has not kept pace with the interest rate increases thus the longer end of the yield curve is falling.
Re: #31 Bill zufelt on 01.26.23 at 2:19 pm
Interest rates will probably put in a bottom late in 2025 and begin to increase in 2026.
How do you think BoC is going to resolve the systemic problem with the lack of people willing to work in the lower end jobs. You do not seem to take this into consideration as we will need a lot higher unemployment rate to address this systemic problem.
Yogism #34: “As a fan of the expert, I keep cool”.
Peak oil eat your heart out. How about Natural Gas.
Look it’s almost free.
This chart is…normal?
https://finviz.com/futures_charts.ashx?t=NG&p=w1
With rutting season around the corner and financial earnings a little under pressure, figure on a lot of bank competition coming.
————————————————————–
Yep. Back to the prime minus rates as the banks scramble to get market share as they did in the past. Lower mortgage rates to come. The oldies will be paying for this again as banks reduce the amount they pay in interest. Buy the banks.
And the wizard is too wizened and crusty to really care what you think. If you don’t want to come here and hear reality, then blow off to Reddit. Moaning is welcome there. They have empathy.
Hmmm… you might try having a little empathy yourself sometime. I hear it works wonders. For people just hoping to enjoy the same quality of life their parents had, the present state of this country is a bitter pill to swallow.
Do you think maybe I should create a free blog of financial and real estate advice and publish original content 365 days a year? Or do you want a hug and a hanky? – Garth
#153 Kootenay Dave on 01.25.23 at 9:34 pm
So with the average household after tax income at say 90k per year,«…»so how again are middle class Canadians getting by?
==========
Hate to break the news but 90k per family is nowhere near middle class. 45K per person that works our to roughly $22 per hr (divide by 2080 for exact calculations) .
I would say that the bottom entry of middle class is somewhere around 60K per adult .
Adjust expectations accordingly ,this is where most people fail ,they make entry level wages and think they are middle class so they go and spend as per expectations ,not as per reality.
Your back of the paper napkin math , accurate enough , shows exactly that ,at 90K per year family income you can’t afford much.
We’ve been sold a lie and the greater fools bought it.
Average income clearly shows that the average Canadian cannot afford a middle class lifestyle as understood ( house in the suburbs or condo downtown ,one car per adult , latest toys, vacations abroad ,retirement savings) .
Just because is has the name middle on the expense side , it doesn’t mean it equates to average on the income side.
Ben Tal doesn’t foresee rate cuts until 1 year from now.
https://cibcvirtual.com/witwaw2023
Neither do I. – Garth
“When strident people hear something they don’t like, they call it fake. Trump taught us how powerful a tactic that can be. He used it…” – Garth
_______________________________________
Garth, our PM uses the same tactic. He constantly runs around saying everything is “mis-information or dis-information”. If people opposed him he tries to attack and marginalize – “they are racist/mysongynist/etc.
Why not put the spotlight on Trudeau and call HIM out?
Why only hate the right and not the left????
Not sure I’ve ever heard him use the phrase, ‘fake news.’ That’s why. Nothing to do with left/right. Take the blinkers off. – Garth
If you are an earner, saver or renter in this country, please return to your allotted spot, under the bus.
“Sheesh, social media brings out the worst.” – Garth
Social media is a toxic cesspool of lies, hatred, racism and misogyny. I’m more than happy to have avoided it all but a 15 year old FB account, that I might glance at once a week.
RE: #21 Captain Uppa on 01.26.23 at 1:32 pm
A friend of mine who is a realtor (good guy who wants to do right by clients) says January has been a quick reveral in activity. That is to say he has become incredibly busy as if by the flicking of a switch
=======================================
Well, spring always has an uptick in RE sales. It’s just a little early this year. My tulips are poking their heads up even though there’s freezing weather and snow in the forecast.
Like the tulips, market movements don’t predict the future with 100% certainty any more than my tulips do…
#42 Ponzius Pilatus on 01.26.23 at 2:45 pm
These is for Sailo.
The article is in German.
But worthwhile to translate, if Tesla is your Cuppa tea.
“TESLA reports record numbers, but the problems are just beginning”
———
Um…
“In 2022, Tesla Model Y showed strength as production at Giga Berlin increased. As expected, the car became the best-selling electric vehicle in Germany, the home of Volkswagen.”
https://www.tesmanian.com/blogs/tesmanian-blog/tesla-model-y-3-became-the-best-selling-evs-in-germany-in-2022
Do you think maybe I should create a free blog of financial and real estate advice and publish original content 365 days a year? Or do you want a hug and a hanky? – Garth
Is it too much to ask for both?
#44 Sail Away on 01.26.23 at 2:50 pm
#30 Ponzius Pilatus on 01.26.23 at 2:17 pm
——–
Renewable diesel factory using vegetable and soy oil. What a dumb idea.
As Charlie Munger says, and I paraphrase: ‘There’s no need to be brilliant, just try not to be stupid’
??????????????????????????????????????????
All people in BC stupid ?
Strathcona project will leverage hydrogen produced with carbon capture and storage technology to help Canada meet low-carbon fuel standards.
Facility could produce about 20,000 barrels, or 3 million litres of renewable diesel, per day in 2024.
RE: #60 Bob on 01.26.23 at 3:43 pm
And the wizard is too wizened and crusty to really care what you think. If you don’t want to come here and hear reality, then blow off to Reddit. Moaning is welcome there. They have empathy.
Hmmm… you might try having a little empathy yourself sometime. I hear it works wonders. For people just hoping to enjoy the same quality of life their parents had, the present state of this country is a bitter pill to swallow.
=======================================
We don’t come here to be lied to. I for one am glad I didn’t get to “enjoy the same quality of life their parents had”. Both my parents lived through WW2, mom was buried under rubble when her school was bombed, they worked hard for what they got and made their own way without complaint. Even then, others had it far worse, and they consider themselves lucky. I’ve had it easy in comparison, but even I roll my eyes when I hear people say silly things like, “present state of this country is a bitter pill to swallow”… Grow a pair. Present day Canadians have no idea what real hardship is.
#35 ogdoad
What are you saying? You talk about hugs all the time. I don’t even know why I read this tripe. Do you have anything to add other than complete non-sense?
Before we begin relying on ChatGDP to create wills and ETF’s for us its essential to know that it is as smart as the collective data it claims to absorb.
here’s my recent chat:
…………………………………………………………………
Mike’s mom has 4 children. The first 3 are named George, Harry ans Sally. What is the name of the fouth child?
I’m sorry, I am not able to determine the name of the fourth child as it is not provided in the information you have given me.
……………………………………………………………….
This is a pretty standard IQ test question.
If the inflation calculation they use is a y/y comparison, then the June 2023 numbers should look reasonable since it’s a comparison to June 2022, which peaked at 8.1%, which itself was a comparison to June 2021.
I can see folks starting to buy, but the cost of doing so isn’t something most can afford especially since mortgage rates are higher now. Plus if folks start bidding wars & begin to fork over higher $ again that means those who can’t buy due to $ concerns still can’t.
Well, prices still high in th OK, check out this empty nester home is Osoyoos. Yes, asking and getting are two different things, but prices remain high.
https://www.zealty.ca/mls-196803/4010-PEBBLE-BEACH-DRIVE-Osoyoos-BC/
And yes, Trudeau is a habitual liar.
@#70 kommykim on 01.26.23 at 4:24 pm
RE: #60 Bob on 01.26.23 at 3:43 pm
And the wizard is too wizened and crusty to really care what you think. If you don’t want to come here and hear reality, then blow off to Reddit. Moaning is welcome there. They have empathy.
Hmmm… you might try having a little empathy yourself sometime. I hear it works wonders. For people just hoping to enjoy the same quality of life their parents had, the present state of this country is a bitter pill to swallow.
=======================================
We don’t come here to be lied to. I for one am glad I didn’t get to “enjoy the same quality of life their parents had”. Both my parents lived through WW2, mom was buried under rubble when her school was bombed, they worked hard for what they got and made their own way without complaint. Even then, others had it far worse, and they consider themselves lucky. I’ve had it easy in comparison, but even I roll my eyes when I hear people say silly things like, “present state of this country is a bitter pill to swallow”… Grow a pair. Present day Canadians have no idea what real hardship is.
++++++++++++++++++
exactly.
so many in here crying about their first world problems.
@#65 earthboundmisfit on 01.26.23 at 4:06 pm
“Sheesh, social media brings out the worst.” – Garth
Social media is a toxic cesspool of lies, hatred, racism and misogyny. I’m more than happy to have avoided it all but a 15 year old FB account, that I might glance at once a week.
+++++++++++++++++++++++++++
certainly is if thats what you’re looking for.
None of us can predict the future, but don’t deny that our gorgeous, pouting host is whip smart, experienced, knows a lot more than the average pundit, and is prepared to help people who are prepared to help themselves.
So, settle down out there. Mr. Turner is a good guy. Listen.
#37 Faron on 01.26.23 at 2:32 pm
#199 Sail Away on 01.26.23 at 10:14 am
#11 Sail Away on 01.26.23 at 1:10 pm
#14 Sail Away on 01.26.23 at 1:22 pm
———
Gettin’ chirpy. A stronger and stronger gaseous blow is loading leeward slopes with SAG. A SAGalanche is coming. It’s not time yet. But it is coming. I shall continue to harness the blowhard loading and the burial that is to come when sailo goes quiet and pretends/hopes that we forget his inverse signaling and top-ticking buys.
I have gratitude that this life has given the ideal two-way stonk indicator.
———
Amusant.
Surely you must realize I have never lost a penny on all the stocks I purchased (announced here, transparently) and you panned, right?
From top of mind:
Alacer Gold
Icahn Enterprises
GEO
Tesla (again and again and again)
4 miners in Aug 21
Costco
Blackberry
Blackstone
AQN
And further… these are all companies I’ve chosen to enter with my own money on my own terms.
You hoping against hope that I fail and experience pain is positively ghoulish. Disturbing to see that level of ill will (hatred?) toward another person. Sad.
#71 Quintilian on 01.26.23 at 4:27 pm
Tick Tock, Tick Tock
Simply means the end of the free ride for some.
***
The “free ride” is the mean we’re reverting to, unfortunately.
#60 Bob on 01.26.23 at 3:43 pm
And the wizard is too wizened and crusty to really care what you think. If you don’t want to come here and hear reality, then blow off to Reddit. Moaning is welcome there. They have empathy.
Hmmm… you might try having a little empathy yourself sometime. I hear it works wonders. For people just hoping to enjoy the same quality of life their parents had, the present state of this country is a bitter pill to swallow.
_____________
Oh, stop the moaning, Bob. Sounds like you’ve thrown in the proverbial towel….
throw in the ˈtowel/ˈsponge (informal) stop doing something because you know that you cannot succeed; admit defeat: It’s a bit early to throw in the towel — you’ve only just started the job. This idiom comes from boxing: throwing in the towel or sponge is a sign that a fighter accepts defeat
My father was born a couple years after the first pandemic, lived through the market crash of 1929 a few years later, then the Great Depression, then fought in World War 2 as an underage. I’ll spare the details of my mother but I can assure you they were no less pleasant. Neither made a great salary but they didn’t quit and found ways to make things work. And my first year out of university, jobs were nowhere to be found and interest rates hit 20%….
So get off your high horse and save your hardship story for your grandchildren.
“For people just hoping to enjoy the same quality of life their parents had”
Personally, my quality of life is WAAAAY higher than my parents ever had it. And I say that as someone who (shock!) rents!
Well, I sure hope you’re correct Gartho and we’re entering an age of price and rate stability. After the last three years, we all need a breather, and confidence that the world will look the same tomorrow as it does today, more or less.
#10 Felix
In barely 24 hours, this blog goes from an exhilarating picture of awesome cat Felix to yet another of the endless photos of deceased mutts.
Is this some kind of dogawful market signal?
—-
I honestly feel dead pets should NOT be allowed.
Such downers!
Whenever I see these proud dog owners flash us with the creatures who’s warm steaming crap they hold in their hands on the daily, it makes me smile and isn’t that a good thing? …to make others smile?
Of course these daily crap picking-up owners are also exemplary proper dog owners and people, holding their end of the deal of dog ownership and society. Not like these deadbeat dog owners who give all dog owners a bad image. Those who leave their dog’s crap on the sidewalks of our cities, unscooped. I hope The Devil has a special place reserved for them.
That was uplifting. – Garth
#24 Joker’s wild! on 01.26.23 at 1:52 pm
#7 Antonio on 01.26.23 at 12:42 pm
First and been reading since 2008!
_________
First what, Antonio? First born in your family? First to think they accomplished something spectacular, like being the first to comment on this pathetic blog? First to learn to read in elementary school?
Do tell.
P.S. I’ve been reading since the 1960s.
First to tell you that you didn’t eat your wheaties this morning you miserable bugger.
Garth we really really really have to question what our Central bank govenor is saying….He has been tremendously wrong.
Take his words with a grain of salt……
His exact quote on interest rates was as follows.
Bank of Canada Governor Tiff Macklem on July 15, 2020
“We are being unusually clear that interest rates are going to be low for a long time.”
They are low. You (and many others) have totally lost perspective. No rational person understood him to mean 0.25% would last. – Garth
#73
Mike
Ooops, hit send too quickly. Meant to add…thanks for the distraction from all the rifraf comments here recently. Cheer up people!!! Talk about first world problems. I know personal experience is all relative but jeesh!
#69 Ed on 01.26.23 at 4:21 pm
#44 Sail Away on 01.26.23 at 2:50 pm
#30 Ponzius Pilatus on 01.26.23 at 2:17 pm
——–
Renewable diesel factory using vegetable and soy oil. What a dumb idea.
As Charlie Munger says, and I paraphrase: ‘There’s no need to be brilliant, just try not to be stupid’
??????????????????????????????????????????
All people in BC stupid ?
Strathcona project will leverage hydrogen produced with carbon capture and storage technology to help Canada meet low-carbon fuel standards.
Facility could produce about 20,000 barrels, or 3 million litres of renewable diesel, per day in 2024.
————–
And, furthermore.
Vegetables are a very perishable product.
I don’t know how much grocery stores throw out every day.
But I recon it’s substantial.
Now who is the dumb one?
” Whatdoad? on 01.26.23 at 4:30 pm
#35 ogdoad
What are you saying? You talk about hugs all the time. I don’t even know why I read this tripe. Do you have anything to add other than complete non-sense?”
Wow, you sound like you really need a hug. Take it away, Ogdoad!
#67 Sail Away on 01.26.23 at 4:17 pm
#42 Ponzius Pilatus on 01.26.23 at 2:45 pm
These is for Sailo.
The article is in German.
But worthwhile to translate, if Tesla is your Cuppa tea.
“TESLA reports record numbers, but the problems are just beginning”
———
Um…
“In 2022, Tesla Model Y showed strength as production at Giga Berlin increased. As expected, the car became the best-selling electric vehicle in Germany, the home of Volkswagen.”
https://www.tesmanian.com/blogs/tesmanian-blog/tesla-model-y-3-became-the-best-selling-evs-in-germany-in-2022
————0
Obviously, you can’t read German.
Or know how to use the “translate” function.
The article is about “Die Zukunft”.
@ #29 Rishu on 01.26.23 at 2:12 pm
So it’s finally safe to buy now in 2023? Unlike the last 10 years where the story was house prices are inflated and the bubble will burst at any moment?
——————————————————————–
Garth’s advice has never changed over the years- avoid debt, live within your means, obey the rule of 90, stay liquid, buy a house if you need one and can afford it. That hasn’t changed in the 14 years I’ve been reading. However, I thinks it’s obvious (and sensible) that his confidence in the direction the market is heading has lessened with time. For much of the last two decades, the message has been to warn of a crash. Over the last half decade, that’s changed to a melt, with crashes in certain area codes. He never said when, just that there was elevated risk. And the crash happened, if you happen to buy in Bunnypatch in Feb 2022. There’s people underwater for life, or at least 20 years, at this point. But I think he’s simply recognizing the reality of the situation: Demand for RE in this country is not going to decline in the next decade. Prices will only be constrained by the level of financing people can access, and that access has stabilized in Garth’s opinion, thus so to will prices. In places like Vancouver and Toronto, minimum prices will match maximum financing. In the rest of the country, pricing will be influenced by a combination desirability of location, how monopolized the land/building lot supply is locally, available land supply, and employment factors. Short of big policy changes or a financial shock, neither of which the Wizard sees coming, he rightly predicts the most likely future state is the current one. The best estimate of where prices where be tomorrow for any good/service/asset is where prices are today, adjusted for inflation. Guesses to the contrary are just guesses. Advice to stick within your means and not over-leverage yourself for one asset at one address on one street remains. Just because he doesn’t see further declines coming doesn’t mean it’s safe to buy.
FWIW, it’s my opinion that the Wizard and all the folks thinking that this is it, we’ve all reached terminal rates, no more needed, inflation has been tamed and we just need to “let it ride” are betting too big that they’re right. They may be correct, but markets would suggest that people are convinced that this is correct. I’m not convinced.
I truly feel for those that are renting. Ya ya I know a mortgage and all the extras (strata fees, insurance, taxes) add up to a lot more.
Colour me reactionary, but how did we get to where a household income of $100K/year is required to be able to afford the 30% of income threshold for renting?
In the GVRD, the Vacancy Rate is an obscenely low 0.9%. Average condo is $2500/mo or $30K/yr. The median household income is only $79,500 (after tax). That’s a $1,708/mo shortfall.
No wonder so many people live in their parent’s basement.
#73 Ed on 01.26.23 at 4:31 pm
Before we begin relying on ChatGDP to create wills and ETF’s for us its essential to know that it is as smart as the collective data it claims to absorb.
here’s my recent chat:
…………………………………………………………………
Mike’s mom has 4 children. The first 3 are named George, Harry ans Sally. What is the name of the fouth child?
I’m sorry, I am not able to determine the name of the fourth child as it is not provided in the information you have given me.
……………………………………………………………….
This is a pretty standard IQ test question.
—————
Haha.
Good one.
I almost flunked that one.
shortage of nurses ?
check out all the fake diplomas -25 arrested so far
3 schools shut down 5 states involved….~7600 diplomas over several years! (wonder if any were antivaxxers? )
HHS-OIG, the FBI and Justice Department worked jointly on the operation, dubbed “Operation Nightingale,”
Investigating agents spent weeks combing through upwards of 10,000 records from nursing schools to move the investigation forward. “As we started to poke through them we noticed there were no real courses the individuals took — it was simply a cash mill,” Aybar said.
Nursing candidates who allegedly participated in the scheme would pay as much as $15,000 for the fraudulent diplomas, officials said.
The defendants include “owners, operators and employees” of the schools who “prepared and sold fake nursing school diplomas and transcripts to nursing candidates, knowing that the candidates would use those false documents to one, sit for nursing board examinations, secure nursing licenses, and three ultimately obtain nursing jobs in medical facilities — not only in Florida, but elsewhere across the country,”
… Additional defendants charged include “recruiters” to bring in would-be buyers.
https://abc11.com/fake-nursing-degree-diploma-scheme-degrees-sold/12738739/
-peddling more than $100 million worth of bogus nursing diplomas and transcripts over the course of several years — fake credentials that were sold to help “thousands of people” take “shortcuts” toward becoming licensed, practicing nurses.
7,600 fraudulent degrees, feds say
The schools involved — Siena College, Palm Beach School of Nursing and Sacred Heart International Institute — are now closed.
https://www.wbng.com/2023/01/26/25-arrested-fake-nursing-diploma-scheme-florida/
“Says our loan broker buddy Ron Butler: “This feels like a “We waited a year and we’re pissed off so we’re going to buy now”. – RB +++
That’s called ‘poor impulse control’, Ron. But peeps in glass houses shouldn’t throw stones, so maybe I better not comment on that trait. What the heck. Not banned (yet), so …..
Re – HSBC being the first out of the shute with pricing breaks…just spring rutting season when the Banks chum the waters with rate offers, cash backs, free donuts and massages, etc. Just as Tiff is taking a ‘wait and see’ approach, seems some might want to do the same. I hate to quote the devil, but as Rumsfeld once said…”…because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know.” (Mercy).
I am going to keep a close watch on the oil markets. Energy is GDP, and it seems a likely candidate for any impact on inflationary matters. I know we can rely on DON to keep a close eye on the price of gas at the pumps. Even Ponzi posted a link about DIESEL today, the most precious of the oil products. Abracadabra! DIESEL is the precious one, the Smeagol. Can’t dig all those precious metals out of the ground for the EV’s without it. Big Oil is finally peeking out from behind the tall grass.
Tiff, you are hereby granted a temporary leave for some R&R. Return promptly on March 8th. See if you can find a beach and tan all that pastiness derived from so many late nights crunching employment numbers, etc.
Garth,
Don’t let these clowns bring you down. I enjoy your blog. You’ve been right way more than you’ve been wrong.
Relying on the “fake news” argument is lazy, almost always wrong or misinformed and shows how easily people can get brainwashed and can’t think for themselves. Its a problem. Its how we wind up with Danielle Smith. Rebel News, Donald Trump, Alex Jones and …. hopefully short lived flirtation with Crypto-Pierre.
Well looks like it’s time to get my Real Estate license then.
#46 Brett in Calgary on 01.26.23 at 2:54 pm
Canada’s economy is housing, it can’t fail.
++++++++++++++++
Two hundred and fifty thousand new immigrants per year plus organic population growth all need a place to sleep. If they cannot buy they rent. Someone is gonna make a buck.
#94
Co worker renting out one bdrm suite to help control mortgage costs, everything included(cable, internet, lights, laundry) charging $800, we renters are doing just fine lol.
#72 Whatdoad? on 01.26.23 at 4:30 pm
:):):):):):)
Yes, yes I do!
Og
so, I was at the gym today….and its no surprise that I find people attractive( to the extent that I am at the mercy of my own biology – really…I start to smile uncontrollably)…point is, a smile stuck with me today….from across the room….aimed at me (full. dis. could have been looking at a dust particle – it WAS at me!)….
Leute, leute, leute…I LOVE biology
Og
#82 ‘Devil’s’ – that is if grandchildren actually occur. Did a quick check of birth rates across the world. The handy chart that popped up on the search showed even the traditionally high child producing countries in Africa were on a downward trend. Weirdly enough the Seychelles looked like they were possibly having slightly more children than previously – or at least were holding steady.
The Real Fact Check:
1. Nobody can afford a house, that is the most important fact, which remains unchanged regardless of what the top guy in the big bank huffs and puffs.
2. The only thing that has changed is sentiment.
3. Sentiment doesn’t matter when nobody can afford a house (see point 1)
4. Sure houses declined 23%, but before that they went up 70-100%. In 2 years. Half of that was due to a huge withdrawal of liquidity thanks to too few sellers and too many buyers.
5. For this reason, all of these “xx% from the peak” numbers are meaningless. Completely irrelevant.
6. More fodder and I think we all expect better from this pathetic blog. :p
Apparently lots of people can afford houses. And they are about to do so. Facts are facts. Dissing me won’t make it any easier for you to get what you obviously cannot afford. – Garth
Clearest sign yet that inflation in Canada is fading fast.
https://www.theglobeandmail.com/business/article-inflation-mortgages-interest-bank-of-canada/
For this Ponzi scheme of a RE market not to get vaporized two things would happen:
First, Canadians need to continue entering the market and the epic Canadian debt binge worsens beyond anything thought possible. (Since Canada has socialized credit risk with the CMHC this is in fact possible). Feel free to see this as a signal to invest in maple, I don’t, in fact I think this is pretty stupid at this point.
Second (happening no matter what), higher rates necessitate lower prices and falling prices will ensure thousands end up in negative equity, lose the wealth effect, the HELOCs and having to renew will be a major pain.
Yeah things are looking up no doubt!
@#103 ogdoad
“point is, a smile stuck with me today….from across the room….aimed at me’
++++
Those are called …mirrors.
Hang in there Garth. I agree with a previous comment – many do not know what hard times are like. Whining seems to be the new in thing … for a lot of people. Take control over your life, stop complaining. Plan, monitor, adjust … repeat.
What about the changes to mortgage credit OSFI is planning (or may be planning) — Garth, do you think that will have an negative impact on housing markets despite the BoC backing off?
Wait and see. Implementation would be summer, at earliest. – Garth
#16 saskatoon
You nailed it, congrats!
Nice to see there are still independent thinkers.
Garth, do you think we’re heading into a repeat of the 1970s where inflation slows with rate hikes, CBs ease off, inflation then ramps again, CBs increase, rinse and repeat? It was a full decade of this until the CB went “macho” and jacked rates into the teens to get things under control in the early 80s. Obviously no one can predict the future, but it does seem plausible we might end up in a similar scenario through the 2020s.
The EU has the “legal authority” to use at least 33.8 billion euros of frozen assets of Russia’s central bank for the reconstruction of Ukraine, Bloomberg reported, citing unnamed sources.
https://news.yahoo.com/bloomberg-eu-legal-authority-frozen-213930262.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAKrv6ahNkEVzLVm_4eO99RailQwO4CfKM6TiqGu_W2OXufH1Gq33n0eHwoQDY7Q1gIrK4Z7nARJo6BDL2MJ7tTmUW6c1vY8ii0T8KawHdxjd8eFEfwbf86ICLprhncGUT8ONrSWqUpsXXcqVNxUxTTUzZiAZtbKa6EiGyKui9bU0
@#106 Reg
“Clearest sign yet that inflation in Canada is fading fast.”
++++
Pfft.
The Globe and Mail.
Drinks the bathwater of the Liberal Party.
Go to any grocery store and buy food.
Go fill up with gas at any station.
Go out for dinner and pick up the tab.
Inflation isn’t fading fast.
Facts are facts but I think you need to stop giving realestate advice. Not buying in the peak of 2022, a good call. All else, you were wrong.
What advice am I giving? Right, none. – Garth
#114 crowdedelevatorfartz on 01.26.23 at 7:30 pm
Absolutely correct, and as Jerome Powell pointed out; the biggest drivers of inflation are asset bubbles through the wealth effect, and the tight labour market.
And that won’t go away until monetary policy crushes both with higher rates, and or sustained higher rates for a long period of time.
Canada is in a worse spot.
Rates aren’t going down. They’re not even back to normal at this point. People who can afford to borrow large and pay it back will do so. Those who don’t qualify, too bad.
There are less people in a position to borrow large. Whoop de doo! Yawn!
Fourth, it’s already happening. Open your eyes. January mortgage originations, inquiries and applications are hugely higher than in the preceding two months. Says our loan broker buddy Rob Butler: “This feels like a “We waited a year and we’re pissed off so we’re going to buy now”.
this seems to be at odds with RBC’s affordability report
But wait. This is just foreplay to the consummation knockout from the adults at RBC. It is truly rare to read something like this from a financial institution, especially the largest bank in the land. Its latest affordability report (released yesterday) paints a picture of a country which has committed real estate suicide, for which there is only one cure – a price plunge.
On the one hand the Bank of Canada announces a pause. On the other hand the biggest bank says people cannot afford homes. On the face of it there is no contradiction. The Bank of Canada needs time to reflect which has scant relevance to people buying homes. And I’m speculating but Ron Butler would fit very well into the Royal Bank. Peas in a pod.
Houses can be driven higher by those with the means or the bravado to buy. Obviously. – Garth
Well that correction did not last very long. Are you telling me the $#&@ing realestate agents were right!
Any chance this is a dead cat bounce?
Come on….don’t tell me it’s over that quick.
Who knows? My facts suggest demand is about to increase. – Garth
Anyone who thinks that the mainstream media during the Trump presidency was fair or accurate and that negative stories were not fabricated by the likes of CNN, is simply not wanting to face the truth. The lack of reporting Biden’s inconsistencies (lies) and failing to report negative left actions is disgraceful and totally biased. No wonder the public trust in media reporting is at an all time low.
#112 – do you think we’re heading into a repeat of the 1970s
I can’t say the path will be equivalent, but I’ve been feeling these next few years will be like the 70s, especially with the decline of civil society.
we are starting to burst from economic despair.
the number one solution to a despondent populace is economic opportunity and until people feel it, it’s going to be a rough ride
I don’t share the optimistic view of our moderator. Interest rate hikes take time to work through the system. Inflation will remain rather high, finances will be stretched, and consumer spending will decrease, triggering a recession in the next year. Can’t see how housing won’t come down some more. Now with the escalation in Ukraine, there may be some unpleasant surprises on that front. The blog is simply Garth’s viewpoint, take it or leave it…..He was right in 2022, but was sorely incorrect from 2008–2019 in predicting the collapse of house prices. For those who sat on the side lines in 2008 focusing only on a B+D portfolio, rather than stretching to buy a good house in a decent neighbourhood, you missed out.
The best strategy is to listen to Garth’s advice, read the news, read other blogs of reputable people, and make your own decisions… and then own whatever decision you made. Garth does not have all the answers…
I have not continuously predicted a housing collapse, but a correction (we’ve just had one) and stated repeatedly that real estate ownership was peachy so long as one had the financial resources and did not put family at risk. – Garth
Wow so many nasty posts today. Thanks MrTurner for your daily blog. You call it the way you see it. Things change but my thank you won’t. Bless you and Dorothy.
@#123 Habitt:
+1 Agreed 100%
Duplicate comment detected; it looks as though you’ve already said that!
— That all sounds like the classic Bull Trap on this chart.
https://i0.wp.com/transportgeography.org/wp-content/uploads/stages_bubble.png?w=900&ssl=1
— Just another day in a Former First World Country. An Ontariowe hospital is begging for the funds for…wait for it…”HELP US RAISE ESSENTIAL FUNDS FOR IMPROVED BED LIFTS”
Bed lifts! The state of Science in Kanada in 2023. Maybe somewhere like Haiti can help us out, send some bed lifts.
—
— Face it our Rulers are under orders to gut the system. The whole point of the March 2020 soft coup/reset if you haven’t been paying attention.
https://www.chrisglovermpp.ca/health_care_privatization
TO THE LEGISLATIVE ASSEMBLY OF ONTARIO:
WHEREAS Ontarians should get health care based on need — not the size of your wallet;
WHEREAS Premier Doug Ford and Health Minister Sylvia Jones say they’re planning to privatize parts of health care;
The lack of a housing price collapse is shear sadism.
Better an end in horror for the greedy than a horror without end.
Did it take….40 Ottawa politicians discussing options with 400 Ottawa bureaucrats in 4000 emails……?
https://www.reuters.com/world/americas/canada-send-four-leopard-2-tanks-ukraine-2023-01-26/
The Canadian appeasement metric system.
I have to believe just about anywhere price will be what the credit limit is. So what is the credit limit?
If you use that itools calculator from the federal gov’t site then nobody should qualify for anything out there.
https://itools-ioutils.fcac-acfc.gc.ca/MQ-HQ/MQ-EAPH-eng.aspx
Like average family income of $77K with a car loan and average utility/credit bills could only borrow $230K 5% down with the stress test at 7%.
Since the lowest prices out there are nowhere near that, then one can safely conclude the lenders are completely ignoring federal guidelines.
Conclusion would be the credit limit is unknown, as the lenders clearly do what they want.
Garth is likely right here of a bottom, unless the OFSI steps in and actually forces the banks to follow that guideline, or better yet CMHC steps in and says they will only cover 60% of any default.
@#126 Steven Rowlandson
Majority of people own property. A collapse would be the end of whichever government is currently in power. So it aint gonna happen.
People will ALWAYS without fail, blame government – if something like that happened, not themselves.
Don’t get it Garth. You’ve been talking about these factors for years. I’m seeing multiple stresses building on both supply and demand sides:
Supply
– home buyers who borrowed from private lenders at the top of the market. Private lenders hesitating to renew because of increased housing market risk and better rates on risk-free assets. Now we are about to hit the 12-month mark.
– Stress to the 20% of 5-year fixed mortgage holders who have to renew this year. Rates have not been this high since 2008. All variable rate holders are already feeling this.
– Lots of investors entered the market over the last few years. Those properties were barely cash flow positive before raising rates.
– Investors buying multiple pre-construction projects hoping for price appreciation. These people can not get a mortgage without a massive cash down payment. Who knows how big the false income fraud situation got at top FOMO.
Demand
– Rates moving from 2% to 4.5% means that my max borrowing amount will only get me ~65% of my previous budget.
– HELOC rates are now 9-10%. So parents borrowing from their home equity to get their adult children a $400,000 down payment are less likely.
– Foreign buyer ban. Not serious but still a factor.
– Stricter lending rules from regulators as well as increased hesitation from banks to lend.
– Job losses. Not a lot here yet, but I feel it coming. High tech getting hit. As Tiff said, spending is slowing which means more layoffs coming. Households need dual incomes to afford/qualify to borrow the amount needed to support todays prices.
Lots of little things adding up…
‘And the wizard is too wizened and crusty to really care what you think.’
Yes, but do you still have washboard abs?
#30 Ponzius Pilatus on 01.26.23 at 2:17 pm
Imperial Oil greenlights $720 million to build largest renewable diesel plant in Canada.
In ALBERTA.
Must be fake news.
**************
Real news, just fake emissions savings.
If they are using conventionally grown crops then for each unit of energy they squeeze out of the canola or soya beans, it will require about ten units of fossil fuel energy to produce it in the form of natural gas for synthesizing fertilizer, pesticides, the farm equipment, trucking, and processing plus the carbon loss from the topsoil through tillage, which adds oxygen and speeds up microbe activity, along with damage to long term soil fertility. Oh, and the food crops used for biodiesel takes potential food out of the mouths of people and will contribute to rising food prices.
https://news.yahoo.com/russia-claims-leopard-2-tanks-145217687.html
Things are escalating fast. This blog needs to include more geopolitical analysis rather than assuming everything takes place in some vanilla vacuum.
These interest rates have not had time to bite anyone yet. People just stopped buying and sellers stopped selling. Speculators are out trying their luck. No regular person is.
Something Japan got right after their fiasco. Homes go to zero in 30 years like cars. Land has value of course but everything gets torn down and rebuilt within 30 years or so to meet new demands. Tokyo adds supply and prices go down even when city population grows. So guess what. You can rent cheaper, larger and modern apartments. Housing became a commodity.
RE: #120 Greg Ellis on 01.26.23 at 8:59 pm
Anyone who thinks that the mainstream media during the Trump presidency was fair or accurate and that negative stories were not fabricated by the likes of CNN, is simply not wanting to face the truth.
=======================================
The thing about Trump is that those who oppose him don’t have to make stuff up to make him look stupid. All they have to do is report exactly what he says and does.
@#126 Steve-O
“The lack of a housing price collapse is shear sadism.”
++++
Don’t worry Steve.
Trailer Parks will be the first to crash.
You still have hope at homeownership.
And most trailers are made of really thick tinfoil……
DELETED
#116 Quintilian
consumer spending and labor market conditions have nothing to do with inflation.
additionally, jpow cannot control inflation simply by raising (or lowering) interest rates–as the vast majority of u.s. “currency” in the world exists outside of american institutional control.
The monthly payment on a $1 million mortgage at 2% is $4230 and that this same monthly payment now will cover a $725k mortgage at 5%, or a drop of 28%. Thus it makes sense that prices dropped by a corresponding amount.
As long as people desire houses and people aren’t forced to foreclose, then house prices won’t crater.
#133 SClauswitz
===
They’ve been crying wolf since Feb 2022. And they will keep crying. No impact on the investment management.
2023 could be a surprising year for both housing and the stock market. Sentiment is so bearish right now and everyone ‘knows’ there’s going to be a recession and that now is a ‘bad time’ to invest.
Contrarian indicators perhaps?
https://substack.com/inbox/post/98987531
Everyone arguing about whether rate cuts might happen this year. So funny.
Doesn’t anyone realize they have already happened?
Bond yields are down 75 bps from the peak already. And heading lower.
Mortgage rates are falling.
The central banks’ target rates are overnight rates, nothing more.
Doesn’t matter if the BoC cuts or not, the bond market has done it for them already.
Unless the BoC gets serious and sells some medium and long bonds the rally is about to go into overdrive.
But the BoC will never sell any bonds, they just let them mature at par as selling would mean an actual realized loss on the bonds they bought at the highest prices ever.
The loss of face is too much for their fragile egos.
The bond vigilantes have turned into the bond boosters.
Party on Garth.
And BoC are so transparent in their lies.
1. Inflation won’t be defeated and is here to stay.
For a very long time.
2. The fast rate hikes were accompanied with the propaganda on how they are the ‘bad guys’ to crash inflation despite the cost that somebody else has to pay with the sole purpose of creating a hype in preparation for the inevitable rate cuts.
3. BoC’s intend as manifested in their actions and ‘policies’ is to create inflation, not to fight it.
If house market is ‘turned back on’ we would soon witness 2 and then 3 million dollar homes and another cycle that based on past experience will bring houses soon to 5 millions, maybe 10.
And that of course is ‘organic growth’, not inflation.
It is time to close this mental institutuon.
the same guy at CB used to tell us there would be no rate hike until the end 2023 and the inflation is temporary…
4.89 is still 2.5% more than what was 18 months ago, but the house price of GTA core is only about 10% less, can’t believe people are rushing back to RE market now.
this would be a short bear market rebound, more down with RE price are coming after.
I honestly think rates will HAVE to rise more this year.
The US Feds will be raising rates a few more times – and we will HAVE to follow.
I dont see how else it’ll work.
I’m quite prepared to be told im wrong if people/Garth can explain why though? I’m no expert, but that’s how I understand it has to work?
Why wouldnt that happen? Please someone explain to me why I’m wrong?
#116 Quintilian on 01.26.23 at 8:10 pm
#114 crowdedelevatorfartz on 01.26.23 at 7:30 pm
Inflation isn’t fading fast.
Absolutely correct, and as Jerome Powell pointed out; the biggest drivers of inflation are asset bubbles through the wealth effect, and the tight labour market.
And that won’t go away until monetary policy crushes both with higher rates, and or sustained higher rates for a long period of time.
Canada is in a worse spot.
*************
The CPI items that are all decreasing are not necessities but all the necessities are still increasing. Less money for the non necessities.
Look for the bare necessities, the simple bare necessities
Forget about your worries and your strife
I mean the bare necessities, old mother nature’s recipes
That bring the bare necessities of life.
The tanks won’t really do anything except escalate the war because of their radioactive payload.
Technically dirty bombs.
Putin and his military advisers have repeated that they will not lose a conventional war and there’s no reason they would when they have almost un defendable nuclear weapons, Hypersonic and the under water Poseidon systems.
If people in the West or any where else on the plant think
that they won’t be gravely impacted by these weapons then they need to read up on the devastating abilities of them.
This is not a Reality TV show or Video game.
Russia’s not going to back down.
The definition of correction versus collapse is not clear cut. The only key factor causing the current “correction” is the meteoric rise of interest rates back to some 2008 level in the past one year. Sharp gradient.
For those who bought around 2008-2011 and who ignored the warning below from garth’s website at that time, are way ahead of the financial game. Is he predicting a collapse or correction? Hard to tell, but when one compares it to the U.S. situation at that time the former term might be a reasonable one to use.
Unfortunately, if Garth is correct in his assessment that we have hit the bottom of the market, then essentially we are back to 2019 prices but with a 5% 5-year rate. With inflation raging, and wages not keeping pace, it would seem that the market is more unaffordable than it was in 2019 (except for those who can pony up at 2/3 downpayment).
Here is the excerpt from 2010. Correction or collapse is predicted?
From greaterfool August 2010
——
This brings us to the second question: What happens then?
This is more important. It ‘s where most mainstream economists – those guys who insisted there was no housing bubble to talk about – are completely misguided. Projections from the bank towers that 2011 will bring a peak-to-trough price decline of 10% are worthy of chiselling into the sidewalk at King & Bay. In 2013 we can go there and smirk.
For some time I’ve warned that the American real estate experience could be repeated here – not as extreme; not a carbon copy; and not with exactly the same economic implications. But scary, nonetheless. After all, we’ve committed pretty much the same crimes. We overvalued houses through greed and speculation. We relaxed lending standards. We encouraged people without money to buy homes. We brought in teaser mortgage rates destined to reset much higher. We pigged out on household and consumer debt. We had bidding wars and HGTV. And we all bought into a culture of conspicuous consumption in which a honking big house equated social standing. Now, how is Chicago so different from Toronto, San Francisco from Vancouver, Calgary from Houston, Kelowna from Phoenix or Miami from Victoria?
What does this mean?
Things get more serious in 2011.
#133 Clauswitz “ Things are escalating fast.”
Yes. I have a really bad feeling about this.
Tanks now, F16’s next? Then what?
I just can’t see how this ends with a Russia defeat, at least while Putin is still calling the shots. Defeat would be unthinkable to him.
If Putin comes to the conclusion he can’t beat Ukraine with traditional war tactics (thanks to unlimited western hardware support), then that presumably only leaves him one option to ‘win’.
#133 SClauswitz, Yanks use depleted uranium for their anti tank & anti bunker shells . Thats because its heavy & hard & cheap. Lead is heavy but soft, steel is hard but light, Tungsten is hard & heavy, but expensive. Saddam’s Sunni’s barricaded themselves in Fallujah behind 4 & 5 ft. of reinforced concrete. The Marines stood back & fired depleted uranium encasing magnesium shells at the bunkers. “Shake & Bake”. The super hard depleted uranium creates tremendous kinetic energy breaking through the bunkers thus heating & vaporizing the magnesium to 10k F. Spraying it into every nook & cranny. For anti tank shells its depleted uranium driven at tremendous velocities blasting through the 4″&5″ heavy armour.
An American tank commander made a new record confirmed kills in Iraq. A hero but a very sick one soon after from cancer. Way too much exposure to radiation. A fellow here in town owned Canadian Tungsten, a tungsten mine up in NWT. He went down to the big armament shows in Miami & all that just after the war. Made sense to me when he said the Yanks were going to change over to tungsten. Bought some stock, but the Yanks never changed over. i think I still got some shares somewhere. The Russians got their antitank & “Shake & Bake’ shells too but use tungsten. So they are kinda right. The Russians won’t be as easy as the Iraqi’s. So probably less exposure for the tank crews. If I was fighting tank battles on the Eastern Front against the Ruskies the last thing on my mind would be getting cancer.
Could not agree with Garth. Garth is promoting fairy tale.
Recession just started to speed up. Nothing to do with
stopping more interest rates higher. The damage has
been done. No soft landing. When you have high household debts, recession will be that much more difficult.
By 2024-2025 home prices will fall by at least 50%. More in other areas. Stock market will fall by 70% in 2024. Unemployment will have to be at least 10 %, to
get 2% inflation.
Garth is wrong on his predictions, way too soon to get over a debt fiasco so fast.
#67 Sail Away on 01.26.23 at 4:17 pm
#42 Ponzius Pilatus on 01.26.23 at 2:45 pm
These is for Sailo.
The article is in German.
But worthwhile to translate, if Tesla is your Cuppa tea.
“TESLA reports record numbers, but the problems are just beginning”
—
Wow, Sail Away counters journalism with an article from a shill blog. Hey, at least he didn’t threaten you with violence. Can’t make this stuff up.
In the words of @keubiko: Easy money. #FadeTheStupe
George Santos disclosed that he is an M1 Abrams battle tank.
Not expecting an avalanche of activity this spring. Mostly crickets for the past few months- hence sun and fun in Miami- but there is pent up demand. Time horizon matters in real estate and buyers who step up now are playing the long game. By the way, terrific weather down here. Kampong in Coconut Grove is worth a visit, then a short ride to Joe’s for dinner .
#108 crowdedelevatorfartz on 01.26.23 at 6:56 pm
:):):):):):)
Those are called …mirrors.
):):):):):):
Impossible. They break instantaneously.
Og
Can appreciate your facts, but how then do you solve the housing affordability problem? Coupled with the real wage growth problem. More debt was the out for many previously, what now?
In other words, there’s a huge amount of pent-up desire.
_________
Yes, another fact is that the apartment vacancy rate has fallen to a 20 year low. Less than 1% in Vancouver.
https://vancouver.citynews.ca/2023/01/26/vancouvers-vacancy-rate-drops/
There is a link between rental prices and housing demand. As rents go up high housing costs look better in comparison. People have to live somewhere.
@ #23
Great post.
I´m feeling a similar type of situation: it´s a bit like losing weight. The first few pounds disappear quickly, with the rest increasingly more difficult and the final ones nearly impossible.
Hikes in rates have done a huge amount of good, but have only blown off the easy foam.
Pausing is a great idea. At very minimum, sustaining rates at these levels will revert the economy back to health, albeit slowly as wildly spendy mindsets need to change to more sensible parameters that include saving.
Low rates have conditioned people to think that it´s just not worth saving for the future, and they couldn´t be more mistaken.
People without cash are in no position to take advantage of higher rates. People without cash lose even more money through debt repayment. People without cash are compromising their health through stress. People without cash also compromise their family relationships.
The increased cost of money is the price of better living and societal conditions, including right-sizing the entire real estate sector and its bloated housing prices.
A total bargain. It just takes a little time.
@#147 Down
“Putin and his military advisers have repeated that they will not lose a conventional war …”
++++
Tut tut.
It’s not a “war”.
It’s a “special military operation”.
Calling it a war could land you in prison in your Mother Russia.
Be careful comrade.
There will be no more warnings.
On with the political theater again are we??
New Zealand PM(Former) Jacinda Ardern-, ‘Unless You Hear It from Us, It Is Not the Truth’?
Trump is disinfo??? Give your head a shake.
CPP payment deposited in the bank account with the big raise .
Life is good. lol
So Biden’s words are more genuine, authentic and trustable than Trump’s?
Why are you zealots always looking for a fight? No wonder things turn out as they do. – Garth
@Fishman
Re: antitank
Yes, the antitank weapons in my day 20+ years ago blasted a rod through the tank armour. All explosive was to drive the rod, which superheated and incinerated the tank innards.
I haven’t kept up with armour weaponry since, so don’t know if that’s still the goto – the army is always innovating.
@#147 Down
Thank you for that update from RT.
Now, perhaps trying reading some actual news and not a Russia state sponsored propaganda machine.
For example, here is what Canada’s nuclear regulator has to say about depleted uranium.
https://nuclearsafety.gc.ca/eng/resources/fact-sheets/depleted-uranium-perspective.cfm#:~:text=Depleted%20uranium%20or%20DU%20is,is%20responsible%20for%20nuclear%20fission.
“What health risks are associated with DU?
The main risk linked to DU is not its radioactivity, but its chemical toxicity. Ingestion or inhalation of large quantities of DU can affect the kidney.
If small particles of DU were inhaled in large quantities for a long period of time, the primary health concern would be an increased risk of lung cancer.”
Lastly, how many DU shells have been used in Ukraine or sent to Ukraine? NONE!
Canada is only sending 4 Leopard2’s – shameful, especially if the reason is our inventory of these tanks has been allowed to deteriorate so that they are no longer operable.
Maybe a 50 million contract to McKinsey will tell our government what to do?
BTW Fartz @#127 you left out the consultants – our civil service apparently cannot make a decision without consulting McKinsey first.
Soft landing snippet, including video…
“Canada’s Tiff Macklem was the first Group of Seven central banker to adopt outsize rate hikes to tame runaway inflation, saying that big increases would boost the odds of a soft landing later on. Now his argument is being put to the test.
We know it takes time for higher interest rates to work through the economy to slow demand and reduce inflation,” Macklem said. In doing so, Macklem, 61, has clearly put his reputation on the line.
“The path for the mythical soft landing is pretty narrow,” said Sebastien Page, head of global multi-asset investing at T. Rowe Price Associates Inc.
“We do have to be humble,” Macklem told reporters. “There are a number of risks out there.”
https://www.youtube.com/watch?v=VvSc2Ei-Bgc
Our son split his TFSA xmas gift between NVidia and Tesla. +40% and +54% respectively, in less than a month. NVDA his choice, TSLA my recommendation. This gives me great joy. The kid’s gonna be ok.
#150 Fishy Man
If I was fighting tank battles on the Eastern Front against the Ruskies the last thing on my mind would be getting cancer.
—————————
I think thats what they said about Napalm and Agent Orange.
#163 Quintilian on 01.27.23 at 10:08 am
#157 Love_The_Cottage on 01.27.23 at 7:55 am
There is a link between rental prices and housing demand. As rents go up high housing costs look better in comparison. People have to live somewhere.
Rents have a ceiling because they cannot be amortized, however, rates can deviate out of the affordability range for some time. But eventually supply, demographic, political and economic forces bring the rates down to reflect incomes.
Don’t load up on debt and hope a “poor” renter will pay for it.
————————
It’s happening in BC.
Rent Controls.
2% increase max.
The Metro Kelowna region is one of the most expensive in the country in terms of how much you’ll pay each month in rent.
According to the yearly report from the Canadian Mortgage Housing Corporation released Thursday, rent for the average two bedroom apartment in a purpose-built rental in the Central Okanagan in October 2022 increased by 15 per cent in a year from $1,475 to $1,690.
The average two bedroom condo rented out by an independent landlord will run you $2,234 a month.
Only Victoria, Vancouver and Toronto are higher among Canada’s Census Metropolitan areas.
https://www.castanet.net/news/Kelowna/408374/Metro-Kelowna-rents-increase-15-to-fourth-highest-in-Canada#408374
Re: Ponzie’s Article
No need for the translation app.
I learnt how to read and speak fluent German by watching endless reruns of Hogan’s Heroes.
In fact, everything I know about history and WWII, I learnt from watching Hogan’s Heroes.
Similarly, everything I know about astro physics, I learnt from watching the original Star Trek series.
Everything I know about relationships, I learnt from watching Jersey Shore.
However, when it comes to financial matters, Garth is my Guru.
Ok so let me dumb it down for folks who don’t get it. Yes it’s true the average home is unaffordable for the average person / family to purchase.
But, there are homes that are priced below the price of the average home. Some of them even significantly below.
And there are folks who make above the average income. Some folks make significantly more.
Those two facts alone make it possible for home prices to stop dropping, and even go up as long as inventory remains low.
American Express stock up 11%. Sees profit growth in 2023. Sees basically no indication of recession in card spending.
And remember, many or most AMEX cards are charge cards that are paid off monthly as opposed to credit cards.
#120 GE “Anyone who thinks that the mainstream media during the Trump presidency was fair or accurate and that negative stories were not fabricated by the likes of CNN, is simply not wanting to face the truth. The lack of reporting Biden’s inconsistencies (lies) and failing to report negative left actions is disgraceful and totally biased. No wonder the public trust in media reporting is at an all time low.”
—————————————————————-
Perhaps, your “LEFT” media rant is correct. However the other side of the equation which you conveniently failed to mention. The “RIGHT” Fox rage machine feedback loop starring professional serial arsonists and Trump fart catchers Tucker and Hannity who provide excellent examples of “disgraceful and biased “.
Get a grip. Maybe start watching PBS
DELETED (Anti-vaccine coward)