You can’t dismiss the latest jobs stat coming from the balloon-blasting nation to the south. Friday’s numbers were almost unbelievable after ten months of grinding interest rate hikes. Wow. Over five hundred thousand new hires in a month. And recall that the new positions created here in the land of maple-loving beavers were just as incredible. A hundred thou in December.
There are two implications to all of this as more people hear the news. Stability and confidence.
Over the next month it will become obvious no recession looms. The American unemployment rate, after all, is 3.4%. Economists call that ‘full employment.’ Everybody who wants to work can work. Ditto in Canada. The lowest number idle in half a century. Oodles of empty positions, despite recent layoffs in the bloviated tech sector.
Economies do not fall into job-killing trenches of negative growth with stats like these. In fact both Canada and the US have positive GDP numbers at present. There is no recession. There will not be any ugly reversal in 2023.
This will result in swelling consumer, business and investor confidence.
As for stability, just listen again to what our central bank poohbah said: “If economic developments evolve broadly in line with [our] outlook, Governing Council expects to hold the policy rate at its current level while it assesses the impact of the cumulative interest rate increases.”
That’s a pause. And after eight interest rate increases, also a pivot. Yes, strong jobs numbers in the US could bump the cost of money a little more, but essentially this cycle is done. To goose rates more would court recession. To wind the tightening down now enhances the odds of a soft landing. Nobody – other than burn-it-all opposition politicians – wants a crash.
This is where the stability comes in. Five-year mortgages are 5%, no longer on their way to 7%. Meanwhile national real estate values are 23% lower (on average – more in markets like the GTA), adjusting prices to higher borrowing costs. Some people expect a further price collapse. Others are not waiting, given the above.
Two weeks ago this pathetic blog told you a soft landing was the likely destination. Now it seems more certain. In this period of time, coincidentally, a lot has changed in the real estate market. Further examples…
- Two hundred people showed up at an open house for a ‘starter’ home in east-end Toronto, resulting in a dozen offers.
- In one day a Leaside home was shown over 30 times, and sold.
- Not far away an owner received six bully offers after it became known the property would be listed soon.
- In northern Bunnypatch a $2 million home had 60 showings and six offers.
- A city semi received 33 offers and sold for 70% over asking.
- A two-bedroom home sold for 30% over asking with 33 offers.
- A $4 million listing in a not-the-best hood sold last week in three days for more than the vendors wanted.
- And agents are at it again. Offer nights. Blind bidding. Certified cheques of $100,000 stapled to offers. And don’t bother writing in a condition.
This is a huge change in the course of just days. It’s dramatically at odds with the perception most people have of the market, based on flaming headlines of a sales plunge in Toronto (44%), Vancouver (55%) and Montreal (data yet to be published, but I hear 90%). As central banks popped rates aggressively, winter weather set in, stock markets finished 2022 in a funk and recession headlines were ubiquitous, consumer confidence went over the edge. The negativity in this pathetic blog’s comment section stands witness, as do bogus polls claiming four in ten mortgaged families will be selling in shame within ten months, flooding the market.
All wrong. And no matter how much people without houses want prices to crash, it’s not happening. A correction, yes. Already there. A 50%-off sale? Nope. For that to happen we’d need a long, dark downturn. But in an age of jobs-for-all, rate stability and plunging balloons, 2023 is a different breed.
To be crystal, this blog is not saying the price drop now witnessed is the bottom. All real estate is local, for starters. Some markets will wallow and some rebound. Secondary and tertiary cities, which the pandemic fuelled, are at more risk. Places where the inventory of decent listings is thin will see a strong rutting season. In short, nobody knows a bottom until it’s in the rear view.
Canadians have done a number on themselves and their personal finances with an uncontrollable real estate fixation. Family debt is epic. We owe over a trillion in mortgages. Almost 60% of personal net worth sits in a singe asset. Retirement savings are down. Home ownership costs have exploded, not just because of financing, but also from a bevy of taxes. The average family can no longer afford the average property. And we’re about to witness once again that people have lost their way.
In an ideal world, all those rate hikes would have returned us to, oh, 2015. But now the CB is scared.
Logic dictates there will be a reset. It won’t be fun. But it’s not now.
About the picture: “This is Penelope, my 3-year old, tripod, Formosan mountain dog (aka rescue mutt from Taiwan),” writes Cole, in Vancouver. “She lost a leg as a puppy in Taiwan, but that hasn’t slowed her down in the least. Here she is at the top of the Chief in Squamish, BC. (No, she wasn’t carried up. Did it all herself). As we made our way to the top, a chorus of ‘wow, if she can do it I have no excuses’ seemed to follow us through the woods.”
177 comments ↓
WHY?
WHY are Canada’s politicians so set on safeguarding the interests of the old and the equity in their houses?
What has this got to do with age? Weird. By the way, politicians do not set interest rates. – Garth
“Family debt is epic. We owe over a trillion in mortgages. Almost 60% of personal net worth sits in a singe asset. Retirement savings are down. Home ownership costs have exploded, not just because of financing, but also from a bevy of taxes. The average family can no longer afford the average property. And we’re about to witness once again that people have lost their way.”
++++
The Spring FOMO rutting season will be interesting to watch.
#108 Humble on 02.05.23 at 3:08 am
“Leapfrogging western economy in 21 years”. In reality since 1985 China has largely been given it’s bounty by the western powers. Even the slightest global lull causes China to wilt. It is not self sustaining.
——————————————
Yep; 3 US Destroyers (or a single submarine) in the Indian Ocean could bring China to its knees in just a matter of weeks. One Map kind if sums it up: https://www.vox.com/2014/9/3/6101885/middle-east-now-sells-more-oil-to-china-than-to-the-us
It is why the “Belt & Road is so strategically import and why China has that base in Djibouti. (if you say Djibouti in a French or British accent it sounds old school imperial)
The Chinese Navy is not “blue water” and they likely never will surpass the USA on this, regardless they will always be vulnerable. Command of the Seas matters…consult the British and Japanese on that.
China is in a horrible strategic situation, dependent on trade, hemmed in by the Island’s surrounding it, requiring external sources for most everything essential. I suspect this situation is why the West has allowed it to integrate as a “system player”, knowing that it will always be in China’s interests to ultimately support “the system”. Russian on the other hand is resource independent and much less vulnerable, maybe why it has been the ‘system’s pariah for the last 20 odd years.
North America is gloriously rich in resources and gifted with internal lines of communication, hence “never bet against America”.
Great news…what does this mean investing wise?
XSP?
ZPR?
ZDV?
VAB?
TD?
BMO?
RY?
T?
Got all that new TFSA money still to spend!
So I guess I can resume with “uppa, Uppa, UPPA” ?
Great, more RE “investors” and specu-flippers. Sigh.
The critical question here is why!
Are we seeing real sound economic progress based on productivity gains or just more unsustainable debt/stimulus spending from households and governments?
Without such information this post is useless.
One thing that would crater the housing prices in Toronto / GHTA area is when/if the banks either get disrupted or decentralize and no longer require their worker sheep to be near Canada’s worst / overpriced / crime ridden city.
Its definitely possible, at one point in history Detroit was a booming city until the big automakers left. Same can easily happen in toronto if Big Banks leave.
On Bank holidays (ie Remembrance day) the GO trains were empty. probably 90% of the non govt jobs in Toronto are either directly for the banks, or a company that supports them (legal / back offices / suppliers etc).
Future of Toronto could easily parallel the fate of Detroit.
Two-thirds of Canadians contacted for a Leger poll agreed with the statement that “It feels like everything is broken in this country right now.”
https://apple.news/A4AMQ4MvaSWS_5zq2jOWJYQ
Thank you for these honest and reasonable words, Garth.
Here in the GTA the evidence is very strong that home ownership will be the bedrock of financial gains and stability for the next generations.
This is a time to get off the sidelines and call your favourite realtor. We are getting very busy, so don’t put it off. Don’t miss out.
Hasn’t the premise of this blog since 2008 been that buying a house in Canada would eventually be like catching a falling knife? Is it not why it’s called ‘Greater Fool’? Seems to me that anyone who bought a house anywhere in this country in the last 15 years, save for a pandemic blip that came out of the blue, has made a completely sound investment. Would that not mean the entire point and message of this blog has been wrong for more than a decade, and its title no longer aligns with the original premise? Or do I have it wrong?
I’ve been reading since 2015, and correct me if I misspeak, but hasn’t the tone and underlying theme of this blog been that buying Canadian real estate is unwise?
There has been a laughable correction from stratospheric prices to merely unreachable prices, and that’s it? The market is heading back to packed open houses and Canadian real estate again becomes a win win win investment?
Maybe the blog needs a rebrand now? Buying real estate in Canada between 2008-2020 has proven to be a very wise financial move for virtually everyone who has done so. Those who did not have missed the bus. Who is the greater fool in that scenario?
Thanks for the free advice though, I realize I read and enjoy of my own volition.
Blog message has been the same for ages: buy if you can afford a house, really need a house and doing so does not imperil your family’s finances. Otherwise, concentrate on a more balanced approach. Time to hone your reading skills. – Garth
#3 Dogman01 on 02.05.23 at 11:45 am
Yep; 3 US Destroyers (or a single submarine) in the Indian Ocean could bring China to its knees in just a matter of weeks…
The Chinese Navy is not “blue water” and they likely never will surpass the USA on this…
____________________________
Hey Dogman,
For Dog’s sake, can you please share your confidence with your almighty USA navy brothers?
And more, Mr. Dogman, do you even have any slightest idea about where Solomon Island is located on earth?
Please kindly read the news below:
https://www.reuters.com/world/us-opens-embassy-solomon-islands-blinken-says-2023-02-01/
I think you’re off base here. Real estate recovery and strong job growth are inflationary. It points to further rate increases.
today’s post tells me more inflation
#1 Theory of Everything on 02.05.23 at 11:35 am
WHY?
WHY are Canada’s politicians so set on safeguarding the interests of the old and the equity in their houses?
What has this got to do with age? Weird. By the way, politicians do not set interest rates. – Garth
^^^^^^^^^^^^^^
So young people who bought homes 5 -10 years ago or so, have no equity? If you think about it you will realize that newer home buyers (> 5 years or so) have gained more home equity per year than older people who bought 30 years ago. Your comment and attitude promote ageism.
Garth, long time reader. I have a few objective questions to ask:
-Given the nature of how rent is high within this country (Lethbridge being the lowest according to one poll), what solutions do you see as being viable for that market to lower?
-With regards to the behaviors delineated above, do you see them as healthy, particularly with bully offers/FOMO/non-conditions?
-With respect to the US Feds, do you believe that the US Feds will continue to raise rates? If so, do you think Canada will follow suit like they’ve done historically?
Markets across Canada have already crashed and are only getting worse by the week, not any better.
Buy 20-50 houses in the USA for a million. Rent in Canada.
Don’t be fooled by spring realtor propoganda.
Get your money out while you can and live it upo for the rest of your lives. Tell your boss to go shove it.
Canada is severely overpriced and corrections are well underway across the country.
https://coastalcondos4u.com/2-bed-2-bath-condo-20-minutes-to-gulf-circa-1970-ms-48k/
To be clear on my part:
We are facing inflation tsunami that will wipe out the middle class/95 % of the populace, including house owners. One have to eat after all.
To have ‘soft landing’ after the credit excesses from the past, rates should be in double digits, high teens.
The hot job market proves that. In US it will trigger inflation avalanche that will force much, much higher rates.
I don’t know how to call the incompetents at BoC any more, but to put any trust and hope in their words is a risk not worth taking.
The guy said the the ‘Canadians should rest assured that interest rates will stay low for a very long time’ just 18 months ago.
Now the same guy says that at 4.5 % the CPI of 6 %+, (real inflation at least double that) that ‘Canadians should rest assured that the inflation is defeated and rates won’t rise any further’.
And this is where you run for the hills.
No amount of wishful thinking will stop the thingy from hitting the fan.
If things were fine, people won’t be stealing food from the stores and we won’t be having over 1 million Ontarians on strike for pathetic wage increases.
1.5 million dollars SFH in GTA show only one thing: The total and utter destruction of currency and any trust in it.
Thank you central bankers.
You anti-BoC bleatings are getting old. And remain wrong. It did not create inflation that now exists globally. – Garth
WHY are Canada’s politicians so set on safeguarding the interests of the old and the equity in their houses?
What has this got to do with age? Weird. By the way, politicians do not set interest rates. – Garth
If our elected politicians do not set interest rates then who does control rates? I find it rather frightening for a democracy if some sort of elite group are in control of this very important aspect of our society.
I suppose one could argue that the market sets prices. Is this the invisible hand at work? Can an invisible (invincible?) hand even function in a world of central banks? When it gets right down to it, do not the actions of politicians ultimately dictate what the rate of interest will be? With CMHC, Quantitative Easing, restrictive banking laws, etc how can one ever say that rates are set by the market?
The Bank of Canada was established as a federally-owned and independent agency in 1938. Its Governing Council sets rate policy with mandates including currency support, economic growth and price stabilization. Politicians do not determine interest rates. – Garth
#15 Adc on 02.05.23 at 12:41 pm
Which part of ‘suck it up and move on and get ready to pay for the CB follies’ is not clear to you?
I am sorry, but it was made crystal clear:
High prices in housing are fine, all is rosy and rents are not high according to market conditions.
This is the new normal, get used to it and stop complaining.
BC is ‘done’ with the rates hike, as the financial system can not handle higher rates, expect cuts soon.
Maybe you need 3,4, 5th job?
Titanic is sinking and there and no lifeboats left. So join and face the music.
Yogism #41: “The best strategy to observe on how to end a downward trend is just to look it up”.
#8 Yukon Elvis on 02.05.23 at 12:03 pm
Not surprisingly people complain of the ultra high cost of living, skyrocketing inflation and the state of the health care.
Why if we are a G7 rich nation, inflation is just 6 % and receding fast and we have the best health care system in the world?
It seems lies like these will be much harder to sell in the future.
The cry of the stomach is lauder than the voice of logic.
You go Penelope !!!!
Thanks Garth. There is no real estate crash on the horizon.
* A 5% mortgage seems to have scared investors away, but there are millions of “real” buyers who want a home.
* Prices in the GTA have been flat since last July. The total decline has been 3.5%, that is not a crash, and in fact could only be reflecting the fact that the cheaper houses are now the lions share of homes being sold. The BIG price drop occurred from March-June last year.
*The economy is still growing, and the growth is pivoting away from Real Estate which is one of the B of C objectives.
*Buyers are taking advantage of some decent savings rates and saving for a larger downpayment, just like the old days. What a concept, you actually save for a house.
*Thanks for the objectivity Garth, I just wish real estate reporters in the media, would look at the data and stop with the “crash” narrative.
“bogus polls claiming four in ten mortgaged families will be selling in shame within ten months, flooding the market.”
– Your welcome.
and
The most talked about recession that [has YET to] * happen.
* WON’T
—————————-
FFS Garth make some notes when I post StatCan Wealth calcs.
RE = 53.5% of Net Worth, 45% of Total Assets
Cash, stocks, bonds, etc. = 40.9% of Net Worth, 34.4% of Total Assets
Mortgages = about $2.1 Trillion
—-
Q3 2022, the latest, All Households, Dollars (x 1,000,000), % of Net Worth, Wealth:
Total assets 17,940,140
…Financial assets 8,933,837
……..Life insurance and pensions 2,763,778 (18.3%)
……..Other financial assets* 6,170,059 (40.9%)
…Non-financial assets 9,006,303
……..Real estate 8,076,319 (53.5%)
……..Other non-financial assets 929,984 (6.2%)
Total liabilities 2,841,3190
…Mortgage liabilities 2,079,185 (13.8%)
…Other liabilities 762,134 (5.0%)
Net worth (wealth) 15,098,821
Q1 2022 Net Worth = 16,362,963
————
The above represents about -$1.26 Trillion less than in Q1 2022, -7.7%.
Biggest Losses since Q1 2022:
Real Estate -$697,835
Other financial assets -$297,472
Life insurance and pensions -$199,059
————
Notes:
Life Insurance etc. = Life insurance and pensions include the value of all life insurance and employer pension plans, termination basis, excludes Gov Pensions.
*her financial assets include total currency and deposits, Canadian short-term paper, Canadian bonds and debentures, foreign investments in paper and bonds, mortgages, equity and investment funds, and other receivables.
Other non-financial assets include consumer durables, machinery and equipment, and intellectual property products. Excludes accumulation of value of collectibles including coins, stamps and art work.
Other liabilities include major credit cards and retail store cards, gasoline station cards, etc., vehicle loans, lines of credit, student loans, other loans from financial institutions and other money owed.
https://www150.statcan.gc.ca/t1/tbl1/en/cv.action?pid=3610066001
#3 Dogman01 on 02.05.23 at 11:45 am
a single (U.S.) submarine in the Indian Ocean could bring China to its knees in just a matter of weeks….
________________________________
So sorry to prick your cocksure balloon (sorry again for the lame pun), Please see the below for the fate of your invincible U.S. submarine rooming in the South China Sea:
https://www.theguardian.com/us-news/2021/oct/08/us-navy-nuclear-submarine-strikes-submerged-object-in-south-china-sea-uss-connecticut
“67% agree Canada is broken — and here’s why”
https://nationalpost.com/opinion/67-agree-canada-is-broken-and-heres-why
I suspect the number is closer to 100% for young people.
The centre left parties in this country seem to have jumped off the deep end on wokeness, and completely ignored the issues that matter the most to Canadians (bubble housing prices, health care system, general high cost of living, etc.). Few centre left voters want to vote for someone like Polievre, but if the Liberals and NDP they keep their heads in the sand, what choice will voters have? As a country, we can’t continue down this road. A society where the median young person has little chance of economic stability – let alone advancement – is not a healthy society.
I think many people would gladly let go of the house alas the house would not let go of them. No jingle mail possible in Canada (like it was and still is in the USA) thus(this was saying of one and only smoking man) “People will rather eat gyp rock then admit the defeat and sell the house”.
In the nutshell average house in GTA went from
20 average family incomes to 15 average family incomes and this represents buying opportunity? Maybe…..
As it was many times told on this blog if one can afford the house and if one really needs it please go ahead and buy one.
It seems there is plenty of people prepared to do just that despite the interest rates at decade high.
At this moment buying house is quite the patriotic move that will save Canadian financial system and the economy.
I would hate to think what would transpire if real estate market grinds to halt….If you are wealthy buy the house if you are renter pay the rent on time and in full. This country needs it…
Garth… You can’t dismiss the latest jobs stat coming from the balloon-blasting nation to the south. Friday’s numbers were almost unbelievable after ten months of grinding interest rate hikes. Wow. Over five hundred thousand new hires in a month.
***********
There is another opinion about this :
….On an unadjusted basis, the number of employed people actually fell by 2.5 million last month.
here —>
https://www.bloomberg.com/news/articles/2023-02-03/-too-good-to-be-true-jobs-report-draws-skeptics-on-data-quirks?leadSource=uverify%20wall
and
https://theeconomiccollapseblog.com/dont-be-stupid-the-u-s-economy-actually-lost-2-5-million-jobs-last-month/
About the picture: “This is Penelope, my 3-year old, tripod, Formosan mountain dog (aka rescue mutt from Taiwan),” writes Cole, in Vancouver. “She lost a leg as a puppy in Taiwan, but that hasn’t slowed her down in the least.
=========================
I’ve seen “tripod”… aka 3 legged dogs…. before…and very mobile…and with a zest for life.
Very inspirational…moreso kudos to their owners who decided to make the effort for them to live on.
We bought our home in PTBO abou 7 years ago and it has almost tripled in price since then. Yes prices have dropped a bit, but it’s still a lot more than what we originally paid for it. The Greater Fool is the person that sits on the sidelines hoping that house prices crash to 2008 levels, not happening and if it does we got bigger things to worry about.
Are EV chargers too expensive?
#92 kommykim on 02.04.23 at 8:28 pm
#19 Shawn on 02.04.23 at 11:35 am
Home chargers are quick and easy to install. But costly. Mine was over $4000.
=======================================
The chargers are ridiculously overpriced considering that the conversion of AC to DC, charger regulation, etc, is all done by the EV. The box does virtually nothing and the most expensive thing about it is the heavy wire that goes from the box to the car.
https://youtu.be/RMxB7zA-e4Y
***************************************
Great. so there’s an opportunity for some electricians to start a business installing EV chargers and cut the price. A nice clean business and by repetition the job gets easier.
But keep in mind a cable has to be run from a panel to the garage probably through a finished ceiling. And for many homes you need to add the energy management system that turns off the charger when the power is needed elsewhere in the house.
But in general be like Jeff Bezos who sees excessive margins in business as his opportunity to undercut and be more efficient and still make a good profit.
#112 Dharma Bum on 02.05.23 at 10:26 am
#19 Shawn
EV’s can be charged at home overnight.
————————————————————————————————
1) I don’t go home overnight when I am on a two week road trip.
2) Call me when that overnight time frame for charging is reduced to about 1-3 minutes.
3) Let me know when fast charging (1-3 minutes) facilities are available to the same extent that gas stations are today.
_______________________________________
I was employed as an order selector, operating a double pallet truck up and down warehouse aisles piling on boxes of dry goods for a grocery chain, 51 years ago. When the machine got weak, it was a matter of driving to the battery station, where Buddy slid the battery out one side and a fresh charged one onboard from the other side.
Too bad Musk never had a job, so he could re-invent this wheel too.
With or without all of this automated driving/won’t own the car talk, why is a Tesla owner forced to purchase the battery, when it could be a deposit item like a beer bottle?
Drop the battery from underneath, and a fresh one rises up. I don’t need royalties, just world peace.
Rates are going up!
Trends aren’t set because of one month!
Garth, we need to create a safe word for you.
Is everything ok?
#5 Captain Uppa on 02.05.23 at 11:51 am
So I guess I can resume with “uppa, Uppa, UPPA” ?
Great, more RE “investors” and specu-flippers. Sigh.
——————————————————————-
Seems you’ve been right all along Cap.
This blog stated in 2009-2010 that we have a giant housing bubble in Canada (20-25 % overvaluation?)
This implies that house prices rose faster than inflation by that time, were much higher than should be based on income and economic conditions, and in an inevitable housing correction would decline or rise slower than inflation.
At that time a nice house in Toronto/York region was worth 450 – 500 k.
Since then we have had cumulative inflation of 30-35 % (‘stubbornly low’ for decade according to central bankers + some ‘moderate’ inflation as of now that is now receding)
So based on any logic a nice SFH should be now worth 550-600 k in Toronto/York Region.
A nice SFH is actually worth 2.5 – 3 times that, and we are told now that this is the ‘new normal’ and people should accept it. Somehow 500-600 k is now 1.5-1.8 millions.
So which one it is – we had some sudden economic boom that can not be seen reflected anywhere else in people’s standard of living or inflation was much higher, practically destroying the real purchasing power of currencies?
I am looking for some logical answers here, please.
https://www.google.com/url?sa=t&source=web&rct=j&url=https://finance.yahoo.com/amphtml/news/january-jobs-report-breakdown-industries-190049406.html&ved=2ahUKEwii9dzVgv_8AhVTHjQIHRPHB_oQ0PADKAB6BAgJEAE&usg=AOvVaw3xPo5Ay7mYBk3azT9KlbhX
A decent high level breakdown of the recent jobs numbers in the US.
Off to go look at the data.
@#26 Concerned Citizen
“The centre left parties in this country seem to have jumped off the deep end on wokeness, and completely ignored the issues that matter the most to Canadians (bubble housing prices, health care system, general high cost of living, etc.). ”
++++
Let the lecturing Liberals wear the rising anger and widespread frustration boiling over in this country….after 7 years of Trudeau in power….
They own 100% of it.
You anti-BoC bleatings are getting old. And remain wrong. It did not create inflation that now exists globally. – Garth
Ok, the central bankers are fine economists that know what they are doing. Fantastic professionals who saved us all.
My sincere apologies to them and let’s hope that they continue with their wise management of PUBLIC money and fine job of managing inflation.
Inflation of 9% is now 6% on its way by the end of the year to 3%. Seems okay. – Garth
The Bank of Canada was established as a federally-owned and independent agency in 1938. Its Governing Council sets rate policy with mandates including currency support, economic growth and price stabilization. Politicians do not determine interest rates. – Garth
So who chooses the Governing Council and who chooses them? Presumably there is a measure of judgment in each case otherwise a list of rules, which anyone could apply, is all that would be needed so a Governing Council wouldn’t be required.
Politicians may not set interest rates, directly or day to day, but democracy demands that, ultimately, elected politicians must be held responsible and have the power to decide practically every decision to be made.
I don’t think that anyone would want our elected politicians to be helpless before the dictates of an ” independent” group of individuals no matter how apparently wise they may be .
In a functioning democracy, monetary authorities act independently. And go ahead – apply. – Garth
Statistics Canada found investors made up almost one third of homeowners in some provinces in 2020.
The data agency says investors made up 31.5 per cent of Nova Scotia’s homeowners that year and 29 per cent of New Brunswick’s property holders.
Investors in British Columbia came in at 23.3 per cent followed by 20.4 per cent in Manitoba and 20.2 per cent in Ontario.
When grouped together, the data agency’s calculations show under one in five homes in British Columbia, Manitoba, Ontario, New Brunswick and Nova Scotia was considered an investment property in 2020.
https://www.bnnbloomberg.ca/investors-made-up-20-to-30-of-homeowners-in-some-provinces-statistics-canada-1.1879113
If today’s post holds true, the real estate correction stopped at the worst affordability in history…yikes.
The war in Ukraine is not just about Ukraine and Russia with the U.S. and NATO acting as seemingly benevolent supporters of Ukraine, as the Western media portray.
The United States and its NATO allies are deeply involved in the conflict. The military withdrawal from Afghanistan in 2021 – after 20 years of futile occupation – was a calculated “reorganization of firepower” against Russia, says Pepe Escobar.
Ukraine is merely a proxy and ultimately cannon fodder for American imperial planners.
This war is part of a bigger geopolitical confrontation between the U.S. and Russia, China and other nations that are pushing for the emergence of a multipolar world. That is a multipolar world no longer under the hegemony of U.S.-dominated Western capitalism.
The American unemployment rate, after all, is 3.4%.
______________________________
Fair enough, … yet, YET the latest World Economic Outlook Update projects American growth at 1.2% for the year 2023 and 1.4% for the year 2024. See table on page 6 at:
https://www.imf.org/-/media/Files/Publications/WEO/2023/Update/January/English/text.ashx
Anyway, … according to my quick pencil-scribble on a piece of scrap paper calculates that the employment of ~96.6% should result in economic growth of something in the range of 6 to 8%. Just perhaps, …
… but what do I know?
Best,
F.S. – Calgary, Alberta.
How much does all this North American job growth have to do with the new investment attitude of “anywhere but China”?
(and Russia too I guess)
Seems possible people are finally getting sick of authoritarians and are moving their cash back home.
This whole thing on EVs, chargers etc. still consume electricity from the grid and as of 2018 the grid could not handle if ALL motor vehicles that year were EV.
It’s a simple calc. Rationing/Blackouts in the future because of EVs.
————-
The only hope as I see it is that TSLA succeeds in rolling out its Solar Powered Charger stations.
https://www.torquenews.com/14335/teslas-gigantic-solar-powered-super-charger-station
Only 2 now, 1 in Arizona and another in China but Elon says:
https://twitter.com/elonmusk/status/873131202663690240
The above is not the only way to save the electricity grid and pave the way for more EVs on the road.
————-
DIY solar charging at home has a steep breakeven, 8-11 years vs. the grid (did not check their Math & for the US):
https://www.solar.com/learn/cost-to-charge-a-tesla-model-3-with-solar-vs-socal-edison/
Still, DIY solar better than grid electricity rationing/blackouts in the future.
————-
One way for TSLA in the future to steer EV purchases their way since they will have off-grid power to charge at their charger stations (solar).
The rest of the EV manufacturers rely on public EV charging stations and home grid charging.
If I were TSLA, I would sell a DIY Solar Powered product to homeowners for charging their Teslas.
That central banks all over the world all follow the same policies means that none of them are responsible for the inflation that logically and predictably followed is an interesting take.
You can add in Covid and Putin, if you get bored. – Garth
#14 Observer on 02.05.23 at 12:39 pm
#1 Theory of Everything on 02.05.23 at 11:35 am
WHY?
WHY are Canada’s politicians so set on safeguarding the interests of the old and the equity in their houses?
What has this got to do with age? Weird. By the way, politicians do not set interest rates. – Garth
^^^^^^^^^^^^^^
So young people who bought homes 5 -10 years ago or so, have no equity? If you think about it you will realize that newer home buyers (> 5 years or so) have gained more home equity per year than older people who bought 30 years ago. Your comment and attitude promote ageism.
And fine, let’s say that politicians don’t
^^^^^^^^^^^^^^
I find it bizarre how both of you ignore facts, as if you’re both new on this lovely free blog.
Garth, you first, as the 6-pack ab host.
What has it got to do with age? First, they own the majority of housing stock. Second, how many blogs would you say you have written for us about Bank of Mom? Why would the kiddos need BoM to buy homes for oh so many years…if not over a decade already? We all know it is not a new phenomenon, but has been required to underpin the housing market with new entrants for a very long time, and the amounts involved continue to grow and set records.
And yes, never has Justin or Stephen or Jean come out and told us the interest rate policy. That PR gig is Tiff’s now after Poloz quit because he was tired of being told what to do by the politicians…apparently. Point being, politicians aren’t the ones coming out here and telling us about interest rates, but anyone who thinks politicians don’t give input to the Governor is in my personal view, being naive.
Observer, we know there is a serious affordability problem with housing in Canada. Please don’t take the unusual and unlikely to happen insanity of free money for over a decade and in this pandemic and unfounded greed fuelled by terrible policies to “grow equity” overshadow the fact that average income cannot afford you an average house in most places in this country. Price to income multiples are out of whack bigly.
HELOCs, often used by older house owners to help their spawn finance homes are at record levels. I believe Garth highlights this on the regular too.
Back to Garth for a second – did your parents take out a HELOC on their home to help you buy your first home…out of necessity due to lack of affordability? I believe you’ve told us on here a number of times, that BoM was not a necessity.
Now Observer, back to some facts.
The proportion of Canadian households who own their home—or the homeownership rate (66.5% in 2021)—is on the decline in Canada after peaking in 2011 (69.0%).
The growth in renter households (+21.5%) is more than double the growth in owner households (+8.4%).
Adults under the age of 75 were less likely to own their home in 2021 than adults in that age range a decade earlier—especially young millennials aged 25 to 29 years (36.5% in 2021 vs. 44.1% in 2011).
…more on those young…
From 2011 to 2021, homeownership rates declined among adults under the age of 75.
Homeownership rates among those aged 25 to 29 years fell from 44.1% in 2011 to 36.5% in 2021.
While for those aged 30 to 34 years, homeownership rates fell from 59.2% in 2011 to 52.3% in 2021.
In older age groups, the drops in homeownership were less pronounced; among those aged 70 to 74 years, for example, the homeownership rate fell from 75.5% to 74.8%.
Observer, defensive much? Ageism or factism?
Do both of you wish to retort with any objections to the FACT that home ownership in Canada statistically favours older individuals, or that older individuals have benefited from incredible growth in equity supported by policy decisions and that nearly every policy decision made has SAFEGUARDED?
When so many policies are set with the clear intent to continue to goose prices of houses, mainly owned by older demographic – how can you say that policies don’t safeguard equity in houses for older Canadians, at the cost of affordability for the young?
Back to Garth. How many times have you highlighted the moral hazards of the policy decisions, programs and plans announced by Canadian government? Policies which our politicians devise for political reason to placate the young, while clearly illustrating for us how the policy will have the opposite of the claimed impact to lower prices?
I’m certain I can recall 3 in just the recent months. Forgive if my estimate is low, after you say it 3 times, I don’t need further re-enforcement.
Canada is not broken.
And this from an ex-pat living in Europa, Italy to be specific. Get to see Canada from afar.
Ya, ya, healthcare, wealth going down, too cold or wet, this and that.
A lot of bellyaching for nothing.
———
Inflation is not the fault of Canada, it’s a global phenomenon in developed nations.
Canadian debt is not worse than the debt of other nations when you correct for Regional and Municipal debt. Federal Debt is low compared to most developed nations.
Healthcare is the purvey of the Provinces and it varies. It could be better true (my experience in Italy where they are excellent) but at least Canada has the cash for fix any problems. There just has to be the will at the Provincial levels. Pretty sure they are trying. It’s not like your Province is trying to kill you. MSM like clickbait stories.
Because you don’t like Trudeau does not mean you should not like Canada. It was there long before he came along and it will take a lot longer for him to break Canada if that’s what your thinking.
If the Global Conspiracy was that and it was fantastically successful, we would all be living in a 1 World Gov. We are not.
Cdn Wealth is very high, CAD $530,678 per Adult or USD $398,000 per Adult using StatCan data (Credit Suisse reported USD $409K per yesterday’s Blog) compared to most nations on Earth. Adult in Canada is 18 yrs or older.
Rates are high, well, they have been for most of my adult life. A historical anomaly when rates were near 0. If anything, higher rates signal a return to normal.
RE is losing value, Mr. Market is not going crazy as of present, all true. Why I suspect most of you are so crabby, time heals, bumps in the road, this too shall come to pass as it always has.
FWIW
The smarter folks in Canada realize the housing insanity described in the media really only exists in two regions, the GTA and GVRD. Yes Covid spread the pain outwards, but said areas will eventually revert back as the price run up was 100% due to the Covid/WFH Metro exodus. That’s done like dinner now.
Really, it’s on the folks who live in these Metros and can barely afford rent, to start making a game plan and stop complaining. Ms IH and I manage to earn near double the median hhi of Toronto way out here in the boonies. There are many smaller centres (at least in Ontario) that offer equal or greater earning potential as the GTA with housing at 1/3rd (even less) the cost. No, not in IT or CS – choose your path wisely.
Seriously, there is a ton of opportunity outside the urban hell-holes of Canada for those willing to avail themselves of same. Step one is to stop making excuses why you can’t leave, step two is making a plan, step three is to execute. Half the population of the GTA left their friends and family thousands of miles behind and came here for a better life. Moving 5-10 hours away from the GTA for a better life is child’s play in comparison.
https://breachmedia.ca/the-global-money-pool-that-soaked-canadas-hope-of-affordable-housing/
Forgive me if this was already shared. (I scroll past much of the steerage.) ;) Seems(???)…like a logical explanation. Sad though. More advocates please. I don’t want to be a renter when I am a senior. Moving sucks when you’re young…now imagine it in the golden years.
Things will probably gradually go back to normal. Used car prices have gone down on the wholesale level but retail prices are sticky. Food inflation seems to be the most stubborn. That is partly a result of poor crop yields and partly because of Putin’s invasion of Ukraine. Crop yields will probably go back to normal and what happens with Putin is anyone’s guess.
China’s real estate and demographic problems could hurt the global economy and commodities.
On the other hand not enough is being done to find new oil and gas. Energy companies are understandably cautious given recent events, all the talk about the energy transition, and regulatory obstructionism. Frankly, I don’t see electric cars, wind turbines and solar panels substantially reducing global fossil fuel demand growth anytime soon but a China crash could.
EV Charging lack of knowledge
Dolce Vita at 45 said
If I were TSLA, I would sell a DIY Solar Powered product to homeowners for charging their Teslas.
**************************************
Dolce, a full charge for a Model y Tesla is 75kWh. I’m locked in at 10 cents per kWh on the variable parts of my bill. $7.50 for a full “tank”. The cost of electricity for home charging is a non-issue. In many cases virtually all charging will be at home except for vacation type trips.
AND many utilities offer off-peak rates.
By the way there is massive electrical generation capacity sitting idle every night.
Solar panels would be just for the fun of it. A hobby.
EV owners can suffer rom Range anxiety?
Maybe sometimes. But I CAN tell you that Tesla owners never suffer from Performance Anxiety. Just sayin’. I’m sure Sail Away can confirm.
#46 AnonyMusk
He is correct that it was predictable.
——————-
When countries like Canada, USA, EU etc. put a lot of cash in peoples hands during Covid and they for the most part stayed at home, well they spent it.
Meanwhile people around the globe staying at home aren’t manufacturing much, thus lower production rates.
The above is high Demand chasing low Supply.
It does not get anymore complicated than that.
Now should the CBs have reacted earlier?
I believe so. I recall Commenting on Garth’s Blog that the Covid money being given out, hand over fist as long as you can fog a mirror, would fuel INFLATION and they should start to increase rates – home prices began to skyrocket as people fleeing people thanks to Covid.
On the rates, it was Pandemic and people had enough to deal with. Also, here on the Blog many creatively bellyaching that without that money they would be penniless.
Of course that did not happen, BUT, high demand chasing low supply DID happen. And people fleeing high density living.
It’s not some global conspiracy. It’s Govs trying to make sure their people had money while staying at home if laid off or whatever. At home, the factories were not buzzing. Many fled the DT.
No conspiracy. Supply. Demand. Few working. Lots of cash given to people.
Blame Human Nature instead.
Canadians’ average Wealth??
Who cares.? Canadians’ average or collective wealth is irrelevant. Worry about individual Canadian’s wealth. Specifically your own.
One would think that in the aftermath of blind auction/bully offers/over ask madness that those in the market to purchase would not repeat actions that led to epic RE prices. Obviously not the case given the litany of folks doing all of the above. Pent up demand idiocy or RE madness redux? Maybe a short lived bounce? Time will tell.
Good to see Penelope is able to enjoy her doggie life despite missing a limb. You go, girl!
Recession watch? People running low on cash?
Costco did not get the memo. Just back from my local Costco. BUSY. Some of the longest lineups to pay ever and not because any tills were closed. What a powerhouse company!
EV fans…
You also believe in Santa…Easter Bunny and Tooth Fairy…
…right?
To have statement “the average family can no longer afford the average property” hmmm…is now very old, and arguably irrelevant in this day in age. This has been the case in some markets for what, a decade or more? Its now one of those things that just IS. Its unfortunate, but we all need to move on from this reality.
All real estate is local, some say.
All real estate is loco, others opine.
Let’s see what’s happening in the hectic hamlet of Vancouver Eastside, which includes the bucolic hood of Flopville.
Some people want prices to jump in the way-back machine, let’s just focus on pre-pandemic for now, so that means the last 3 years.
Detached sales in East Vancouver for January since 2020.
2020 54 sales
2021 110 sales
2022 65 sales
2023 33 sales.
Detached median price for East Vancouver in January since 2020
2020 1.5 million
2021 1.73 million
2022 2.1 million
2023 1.6 million
So the last time the median was down to 1.6 million was summer 2020.
I put a post up the other day that stated city-wide the happy place to get a sale is in between 1.25-1.75.
Buyers are currently buying move in ready, lack of inventory plays into the sellers hands.
Several of the cheapest detached options have been on the market for over 100 days, this suggests developers are currently sitting on their hands.
There’s only one reason developers sit on their hands, and that’s because they don’t want the headmaster to give them a whack with the cane…
M48BC
#47 Theory of Everything on 02.05.23 at 2:48 pm
I was a homeowner for 23 years (1989 – 2012). Purchase price was 170K and sold price was 320K. Because I did not own a home for the last 11 years, I did not acrue any wealth from real estate as the last 11 years have seen crazy increases.
Younger people who bought into the market within the last ten years or so made out like bandits. Older people had to wait decades to do the same.
It’s not about age, it’s about timing.
#42 The DAVOS ORCS ARE DESPERATE on 02.05.23 at 2:25 pm
«» This war is part of a bigger geopolitical confrontation between the U.S. and Russia, China and other nations that are pushing for the emergence of a multipolar world. That is a multipolar world no longer under the hegemony of U.S.-dominated Western capitalism.
==============
I am sure nobody would dispute your premise here ,it is absolutely correct as such is the history of the world ,empires rise and fall.
I would argue that China and Russia are the reborn empires of old that had an oppportunity to rise and screwed it up within decades by overplaying their hand in search of past glory.
Ultimately , though as a person ,where would you preffer to live and for which team would you cheer ?
Of course very recent first time buyers (pandemic time period) could very well be screwed even more so than I was when I bought in 1989. To repeat, timing is everything.
#13 mj More inflation
Exactly!! It is under control only on paper.
More rate hikes, like it or not.
There will be a reset and ugly one, until then enjoy the dead cat bounce.
“Logic dictates there will be a reset. It won’t be fun. But it’s not now.”
What’s this RESET supposed to look like?
#3 Dogman01 on 02.05.23 at 11:45 am
#108 Humble on 02.05.23 at 3:08 am
“Leapfrogging western economy in 21 years”. In reality since 1985 China has largely been given it’s bounty by the western powers. Even the slightest global lull causes China to wilt. It is not self sustaining.
——————————————
Yep; 3 US Destroyers (or a single submarine) in the Indian Ocean could bring China to its knees in just a matter of weeks. One Map kind if sums it up: https://www.vox.com/2014/9/3/6101885/middle-east-now-sells-more-oil-to-china-than-to-the-us
It is why the “Belt & Road is so strategically import and why China has that base in Djibouti. (if you say Djibouti in a French or British accent it sounds old school imperial)
The Chinese Navy is not “blue water” and they likely never will surpass the USA on this, regardless they will always be vulnerable. Command of the Seas matters…consult the British and Japanese on that.
China is in a horrible strategic situation, dependent on trade, hemmed in by the Island’s surrounding it, requiring external sources for most everything essential. I suspect this situation is why the West has allowed it to integrate as a “system player”, knowing that it will always be in China’s interests to ultimately support “the system”. Russian on the other hand is resource independent and much less vulnerable, maybe why it has been the ‘system’s pariah for the last 20 odd years.
North America is gloriously rich in resources and gifted with internal lines of communication, hence “never bet against America”.
———-
The US has more naval power than the rest of the world *combined*. The vast majority of all other naval power that exists is allied with the US. China can’t project it’s power other than via nuclear ICBM’s, and of course, these are undeployable.
China’s goal is regional power. It remains to be seen how much of that ambition the Western powers will allow.
For all those people expecting interest rates to return to the levels of the good old days – where mortgages could be had for 2%.
Good luck – we are currently just brushing up against long term normal rates. And CBs around the world will not be in a rush to lower rates for 2 reasons.
1) inflation ain’t tamed yet – it will likely take 1-2 years for inflation to get back to target levels of 2ish percent.
2) CBs will want to keep their most potent and fast acting weapon in their arsenal – namely, their ability to lower short term rates instantly and substantively when any hint of recession appears. And it’s hard to do that if the CB bank rate is 1/4 percent.
So we will all slowlybto adjust the idea of 7% mortgages and HELOCs.
#28 VladTor
I hate to tell you this but I will:
TOEFL.
Bloomberg in effect ends up supporting the numbers, esp. the 2.5 million number that it was historically low. It’s more like a bunch of butt hurt Economists whining about how they got it so wrong with not much to offer as to why. Bloomberg needs to fire a few of them if you were to ask me.
The Conspiracy Nut you cited forgets, or conveniently forgets, that all his high tech layoffs that he repeatedly offers as evidence of flawed US jobs numbers amounted to:
70,000
[and that is in the last YEAR]
https://www.cnbc.com/2023/01/18/tech-layoffs-microsoft-amazon-meta-others-have-cut-more-than-60000.html
ODDLY, no one including the Conspiracy Nut provides alternative calculations with supporting EVIDENCE.
Thus, I defer to the US Labor Department estimate.
BTW, they use Seasonal Adjusting which seeks to smooth out the hills and valleys which means their number is conservative.
Seek to verify the claims.
There is a lot of clickbait out there sensationalizing data for advertising revenue purposes. And they are relentless like Garth wrote about today (Zen: VRM mortgage holders will snuff it out soon).
Caveat Emptor.
So if the war and Covid are to blame for the inflation:
1. I thought that oil prices are back to pre-war levels
2. For a wealthy nation – with wealth over 18 trillions: why would government go to the independent central bank for meager 400 billions in new money at zero rates and not borrow it on the real market at 6-8 %?
3. Dolce Vita: on inflation: Why if the inflation is a worldwide phenomenon I am eating currently organic tomatoes from Italy at 3 Euro per kilo/4.2 CAD
while in Toronto organic tomatoes are 12-15 CAD a kilo? And why are you living in Italy?
Federico Bernardeschi and Lorenzo Insigne play for Toronto FC, my friend.
Central bank ineptitude caused this mess and now they can’t clean it up. Every point mentioned today will put upward pressure on inflation and now we have a CB with no spine to deal with it. 6.2% is the new 2%.
I am I the only one amazed that younger posters here feel its unfair older people generally have more money?
Wtf they doin over there in university?
RE: #1 Theory of Everything on 02.05.23 at 11:35 am
WHY?
WHY are Canada’s politicians so set on safeguarding the interests of the old and the equity in their houses?
=======================================
WHY?
WHY are Canada’s politicians so set on safeguarding the interests of irresponsible debtors over savers?
Low interest rates hurt retirees on fixed incomes. It hurts pension plans too. Low interest rates only help until house prices rise to match the carrying costs. Low rates are inflationary which only helps those people in debt. I think that’s the reason for it: it’s a braindead way of stoking growth without doing anything innovative.
#53 Shawn on 02.05.23 at 3:24 pm
EV owners can suffer rom Range anxiety?
Maybe sometimes. But I CAN tell you that Tesla owners never suffer from Performance Anxiety. Just sayin’. I’m sure Sail Away can confirm.
—————
Confirmed.
If anything, an overwhelming sense of confident well-being and goodwill towards others.
#71 Ed on 02.05.23 at 4:15 pm
I am I the only one amazed that younger posters here feel its unfair older people generally have more money?
Wtf they doin over there in university? ++
For Pete’s sake, Ed…. Don’t you realize that avocado toast, Starbuck’s lattes, frappuccino’s, Skip the Dishes, and Uber rides add up? And Budweiser just isn’t ‘stylish’ enough, it has to craft beer, etc.
The hipster image must be groomed and maintained…
As for the iPhone and plan that goes with it, well, don’t even go there…
#32 Wrk.dover on 02.05.23 at 1:46 pm
#112 Dharma Bum on 02.05.23 at 10:26 am
#19 Shawn
EV’s can be charged at home overnight.
————————————————————————————————
1) I don’t go home overnight when I am on a two week road trip.
2) Call me when that overnight time frame for charging is reduced to about 1-3 minutes.
3) Let me know when fast charging (1-3 minutes) facilities are available to the same extent that gas stations are today.
_______________________________________
I was employed as an order selector, operating a double pallet truck up and down warehouse aisles piling on boxes of dry goods for a grocery chain, 51 years ago. When the machine got weak, it was a matter of driving to the battery station, where Buddy slid the battery out one side and a fresh charged one onboard from the other side.
Too bad Musk never had a job, so he could re-invent this wheel too.
With or without all of this automated driving/won’t own the car talk, why is a Tesla owner forced to purchase the battery, when it could be a deposit item like a beer bottle?
Drop the battery from underneath, and a fresh one rises up. I don’t need royalties, just world peace.
—————-
You’re talking about taking back the empty propane container for your BBQ in exchange for a new one?
Well that idea is quite old.
But, You got any idea how expensive and heavy these suckers are?
Probably need to buy a forklift (made by Musk) to move them around.
I think Garth is wrong.
The canadian housing market as valued back in Feb 2022 OR even now does not work for a variety of reasons. Mortgage costs vs income, demogaphics, and the loss of the promise that ‘housing always goes up’ I think will lead to what some would call a crash. 50% decline from FOMO peak I think still makes a lot of sense.
Nope. Unless we have a depression. Google it. – Garth
“Nope. Unless we have a depression. Google it. – Garth”
Sure… but math.
“The average national home price in December was $626,318, down from over $816,000 when the market peaked in early 2022, said CREA in a new report.”
That’s a 25% decline so far.
If interest rates hold where they are or uptick a bit more (which these job reports suggest) for a couple years I can see it.
Thanks for the google tip ;)
Real estate is not losing half its value unless the economy tanks. The people rooting for higher interest rates do not grasp the consequences, now that Canadians have walked voluntarily into a debt trap.- Garth
Looking deeper into the jobs report you’ll find that it’s the part-time and not full time stats doing the boosting. Why? Because people have blown through their Covid money, ran up their cc and are now having to get a second job. Also, look deeper and you’ll see they have moved the goal posts just like with CPI. They are telling us everything is fine and keep spending. You can’t kill an economy, print fiat currency, start wars then expect to ‘get back to normal’ with a broken supply chain.
“Logic dictates there will be a reset. It won’t be fun. But it’s not now”.
Logic dictates there has never been logic with human being. Covid did nothing. Rate tightening did nothing. May be something much more serious is needed.
Higher rates have caused a 23% decline in the average national price. That’s something. – Garth
#66 Ihtcd9
The US has more naval power than the rest of the world *combined*. The vast majority of all other naval power that exists is allied with the US. China can’t project it’s power other than via nuclear ICBM’s, and of course, these are undeployable.
China’s goal is regional power. It remains to be seen how much of that ambition the Western powers will allow.
——————-
Sure.
All China has to do is release a bunch of “weather” balloons.
And while the Amis are trying to figure out what to do.
XI is already making his moves.
Whatever they are.
When I look up best 5 year fixed rates I see about 4.5%.
5 year Canada bond yield is 3.1% down from a peak a few months ago of 3.9%.
Yes, FOMO is upon us once again and perhaps with good reason.
Worry about the Banks?
A huge mount of deposits used to earn 0% or pretty close to it.
Now it seems very easy to find 4% or even 5%.
There is likely some two or three year loan money that was loaned when deposits cost 0% and now the banks are paying a LOT more.
Problem? The U.S. banks are known even more so the lend long based on short-term deposits. Could get interesting?
What about cash management programs (What is that anyhow?) Don’t the banks automatically sweep some corporate deposits into higher rate accounts for you? Business owners, do tell.
“Real estate is not losing half its value unless the economy tanks. The people rooting for higher interest rates do not grasp the consequences, now that Canadians have walked voluntarily into a debt trap.- Garth”
What does consequences have to do with it? How is that even relevant? If the US can’t stop its housing market from collapsing how can little-Canada? It can’t. If the US keep increasing and holding interest rates Canadian housing break and there’s nothing Trudeau or Poilievre can do about it.
Of course, I’m basing my belief that there has to be some link between incomes and house prices – rather, it’s incomes and mortgage payments. Evan at current depressed prices houses are less affordable than they were at FOMO peak.
Time will tell. I think you get unfairly blames about your housing price collapse predictions – namely, b/c I don’t think you’ve ever actually done that. You’ve simply said that Residential RE was ‘high risk’ in the context of peoples means and diversification. I don’t see how any of that has changed in the current environment. Housing is still extremely high risk.
I think you are estimating the consequences of house prices staying high. Although a 50% collapse (or more) would cause a lot of problems it would also solve a lot as well.
Anyway, TL;DR: 1) Canada can’t stop a housing collapse even if it wanted to. 2) We follow the Fed so if they keep rates high or raise then further, we will have to as well; 3) Current incomes can afford 5% + mortgages; 4) FOMO is still not crushed; 5) A housing collapse solves a lot of problems and would benefit the long term health of our economy.
Let’s compared outcomes in 2 years.
#78 TRON on 02.05.23 at 5:27 pm
Looking deeper into the jobs report you’ll find that it’s the part-time and not full time stats doing the boosting. Why? Because people have blown through their Covid money, ran up their cc and are now having to get a second job.
————-
I think you’ve got something here.
I always had a beef with the way that PT jobs are lumped in with FT.
The correct way is to count PT as an FTE (Full Time Equivalent) of a FT job.
I.e. A half time job would count as a .5 FTE.
Also, I notice the majority of the new jobs are low paying service jobs.
There should also be a way to weigh the jobs in relation to wages earned.
Thanks for the blog Garth
I was not going to comment, but you opened the door on the first post.
Couldn’t agree with you more. Politicians do not set interest rates!
Here’s the kicker. Pierre P is on Facebook with his eight years of Trudeau daily posts. And a post a few days ago, as I am sure you are aware, claims liberals are responsible for setting higher mortgage rates. Has a chart and everything. Thousands of comments unbelievable.
This is the same guys that wants to fire Tiff and Bitcoin as the new currency?
Did you say a few days ago something about the Rhino party? maybe it’s time.
Have a great weekend, thanks for posting.
The crazy buying seems like a dead cat bounce, if inflation will continue to be tamed at current rates so will house prices.
“Logic dictates there will be a reset. It won’t be fun. But it’s not now”.
Logic dictates there has never been logic with human being. Covid did nothing. Rate tightening did nothing. May be something much more serious is needed.
Higher rates have caused a 23% decline in the average national price. That’s something. – Garth
——————————————————–
20 years of climbing prices and only 23% decline, laughable. More to come.
We have been to this movie before. The first unwind is overindebted Canadians barely hanging onto collapsing condo values about to lose all their equity. The second unwind is the 20 plus year old houses and stratas all due for new roofs, flooring, special assemments, levies, ever increasing strata fees always wipes out the young and dumb, now also wipe out 3 – all the co-signers in the family who lent little johny and jane moolah to get into the market are also seeing their lent money crash and disappear as prices rocket downwards. This is an all in the family real estate crash affecting people from every generation who were foolish enough to cosign the mortgage apps oftheir kids and grandkids. See ya later sucks. Golf starts at 7am lunch at noon then a nice long nap. Early retirement in the sun sure bites the big one. Zzzzzzz
for every ‘house sold 70% over asking’ are ten properties that did nothing, and half had a price decrease… no one us paying 70% over a ‘reasonable’ asking price… if they did, no bank would finance it.
Inflation of 9% is now 6% on its way by the end of the year to 3%. Seems okay. – Garth
so why don’t food prices affect the inflation rate?.. volatile item or not.. people still have to eat
‘And recall that the new positions created here in the land of maple-loving beavers were just as incredible. A hundred thou in December.’..federal jobs no doubt
The big surprise by Tesla in 2023 I think will be the profit margins they are able to obtain on the utility sea container size batteries. They now have a new automated factory that will scale to 10,000 per year. At over $2 mil each ,(and mandatory $8,000/yr for 15 yrs maintenance fee / unit), the profit margins could approach 50%-80%. Recession proof demand, over a two years in wait times. Need binoculars to see closest competitors.
Such a crock; GTA and GVRD housing sales are in the ditch; any upward momentum is clearly gone. There will be no upward price pressures; all the money that has flowed out of both markets since peak pricing would have to flow back in again (and then some) for that to happen.
All we have seen to date is COVID-era froth being blown off; the 2019 correction we saw here in the GVRD will continue where it left off.
So, time to pick a lane and stay in it, Garth. Nothing has “changed” except a bunch of loudmouth realtors trying to float hokey memes.
Let’s wait for March stats. – Garth
#75 Ponzius Pilatus on 02.05.23 at 5:11 pm
#32 Wrk.dover on 02.05.23 at 1:46 pm
#112 Dharma Bum on 02.05.23 at 10:26 am
#19 Shawn
Drop the battery from underneath, and a fresh one rises up. I don’t need royalties, just world peace.
—————-
You’re talking about taking back the empty propane container for your BBQ in exchange for a new one?
Well that idea is quite old.
But, You got any idea how expensive and heavy these suckers are?
Probably need to buy a forklift (made by Musk) to move them around.
======================================
Not to mention how integrated into the vehicle these batteries are:
https://youtu.be/N3G8JGsEjPA
#68 Dolce Vita
I hate to tell you this but I will:
TOEFL.
***************
Thank you!
If would I had a Canadian friend like you, I would improve my English without any TOEFL.
Second. If Bloomberg “Conspiracy Nut” … then I give up!
Third. As for the second web link, he also mention about companies such as … Lyft, Walmart, McDonald’s, FedEx. This is not IT companies. Moreover he writing
…. and countless other large corporations have decided to conduct mass layoffs.
He forgot to provide full list for people like you. Big mistake!
Finally . I absolutely do not trust the official American statistics about unemployment and, accordingly, employment after reading an article about 3 years ago how they do it. I don’t remember everything, but… If a person has lost his job and has not registered or does not receive benefits, then he is not considered unemployed because he is considered to be looking for a job and, accordingly, is not taken into account in unemployment statistics. The article contained many interesting facts. I don’t remember everything, but the conclusion about the reliability of American statistics has been made. As in Canada, I don’t know, but also suspicious numbers. Compare with the US economy and think for yourself why I’m so skeptical.
#82 Shawn on 02.05.23 at 5:41 pm
Worry about the Banks?
A huge mount of deposits used to earn 0% or pretty close to it.
Now it seems very easy to find 4% or even 5%.
There is likely some two or three year loan money that was loaned when deposits cost 0% and now the banks are paying a LOT more.
Problem? The U.S. banks are known even more so the lend long based on short-term deposits. Could get interesting?
What about cash management programs (What is that anyhow?) Don’t the banks automatically sweep some corporate deposits into higher rate accounts for you? Business owners, do tell.
——————–
Well, the answer is quite complicated.
Depending on the bank’sbalance sheet.
In short, Banks have a very sophisticated Gap management system.
Gap is the difference between the duration and interest of the deposits and the loans in aggregate.
The maximum Gap allowed is proscribed by OSFI and internally by the Board.
If the GAP is too high, the Bank is vulnerable to interest shocks. To minimize that risk, Banks enter into SWAPS with other financial institution.
The whole process is part of the Asset/Liability Managemet that is centered in the Treasury function.
ALCO (Asset Liability Committee) is made up of senior officers.
And reports directly to the Board.
As you can imagine, the whole thing is done on a Corporate level.
No individual accounts are affected.
As, for American banks.
As 08 has shown that American Banks were (and probably still are) much looser regulated than our Maple ones.
One report I read stated The employment numbers surged because many have taken a second full time job to help fight inflation and debt.
The summer will show the true numbers as mortgages renew in June July and August.
Then we can declare a soft landing.
David Pylyp
Etobicoke, ON
Mortgage renewals will have no impact on the kind of landing we see. – Garth
No offense, Garth, but predictions are a fools errand and there are a few paths here that may still discount your thesis. I don’t think your advice is bad, per se, but I think the markets are just now catching a wiff of the difficulties that CBs will be facing through the remainder of the year and some bulls may be caught offside.
We’ll see if the January rally in RE has any legs soon enough.
I gave zero advice other the usual. Buy if you can afford it and truly need it. If not, don’t. Seems simple. – Garth
The jobs reports are not good news, they signal that we don’t have inflation anywhere near under control, which is fairly obvious to anyone paying attention.
So either money continues to get more expensive, or we learn to live with 5%+ inflation, and that’s the inflation frankenumber. I think most folks feel the calculation is a little silly, most of our disposable goes to food, gas and housing, all of which are running hotter then the 6% claimed.
And the question that should cause the most concern -if 8 rate increases still have us at full employment, and 3x the 2% target, what will it take to actually get to 2%? We are just kicking the can down the road. I believe recessions are healthy but not sure the centrals do.
I didn’t live through the 70s but wasn’t there a similar cycle? Maybe it isn’t different this time?
Should add, I guess the RE goes up forever crowd will proven right again. A 15% or 20% correction over 12 months, after a100- 200% increase, is no correction at all.
So if the market is indeed on fire, and set to close that 15-20% (in my market closer to 5% down) then it sure feels like the RE pumpers have the market pegged.
#66 IHCTD9 on 02.05.23 at 3:58 pm
The US has more naval power than the rest of the world *combined*…
China’s goal is regional power. It remains to be seen how much of that ambition the Western powers will allow…
____________________________
Dear IHCTD9,
Firstly, before you spew out the above empty bravado, can’t you just do some basic research? Just google “US/China navy ships”, you can come up with the following newest report from U.S navy. Don’t be another shallow key board warrior, it does not reflect good on you.
https://www.cnn.com/2023/01/16/asia/china-navy-fleet-size-history-victory-intl-hnk-ml/index.html
Secondly, China will have its own development trajectory, be it economic or military. And to this day and age, you still possess the arrogance to say that China’s ambition needs to have your (the Western powers) mercy/blessing? Do you fancy yourself still live in the opium war age? SMH…
#93 kommykim on 02.05.23 at 6:25 pm
Not to mention how integrated into the vehicle these batteries are:
https://youtu.be/N3G8JGsEjPA
______________________________________
The coolant just needs schrader valves.
Quick release would be easy under a pick up or van.
The compactness of the Volt makes it more ‘fun’ to do a swap! The Volt is gone. Maybe a next gen will be swap ready.
The pallet truck batteries were a meter side to side, .6ish tall and .3 fore and aft. Same weight as lithium in lead and electrolite, I suppose. Easily rolled in line on conventional roller ways.
So Garth, it’s different this time?
“Logic dictates there will be a reset. It won’t be fun. But it’s not now”.
Logic dictates there has never been logic with human being. Covid did nothing. Rate tightening did nothing. May be something much more serious is needed.
Higher rates have caused a 23% decline in the average national price. That’s something. – Garth
——————————————————–
20 years of climbing prices and only 23% decline, laughable. More to come.
======================
PreCovid prices were already high 2019
PostCovid prices are plain crazy like driving under influence
decline from crazy peak is meaningless
how much decline from preCovid prices? – Nothing! and up it goes again
History shows again and again, as long as there is no strong long fear people do not change. And they will return to their old greed as soon as fear is lifted.
It looks like I am wrong of consensus again. I thought debt would cause pain. Maybe it still will but for now I have to retreat. People like to spend. It will cost but then I could be wrong again.
Life treats me savagely when I go against the tide. Then I pull out the few wins – feels good and I am still alive and will try to succeed. I will not let my 2 redhead daughters down. I got a lot of teasing over that one.
Must say, your ability to foresee the impending flippers looking for pity or even legitimate buyers now looking for relief.
Like this gentleman standing in front of his home with it’s Mercedes and Maserati behind and a probably expensive suit complaining how mean Mattamy Homes is being.
I have a hunch that if the market was still strong and profits being made by buyers you’d not see them offering to share their profits. Life is tough, make smart choices and suck it up.
They paid the highest dollar for pre-construction homes at the height of the market. Now their builders are selling the same models for far less.
EV pumpers are dangerous….
They feed into the Communist agenda…
They have failed basic Math and Science….go away…
I don’t think inflation is licked yet. It will still be 4% or so by the end of this year. This means you are getting a 5 year mortgage for 1% real. That would explain the current RE action.
A 23% drop in the average house price in a year is nothing if the overall affordability of a house has gotten much worse over the same period. Or am I missing something? Of course it is something for the people who bought at that price a year ago.
Interest rates have pasued, but not pivoted, yet. Unless pivot does not mean interest rates drop, then I stand corrected.
EV battery swaps?
Completely silly talk from people who just don’t get that EV’s are charged mostly at home and some while at work. Even on road trips you don’t run these things down to nearly empty like you do a gas tank.
A 20 or 30 minute stop every 5 hours is not going to be a big problem. There will no battery swaps in place of charging up.
Maybe for long road trips there will be a different solution like EV trucks with 1000km range.
Really don’t see how inflation can be wholly tamed with interest rate hikes. How much of the inflation is caused on the supply side not the demand side? More companies looking to ‘reshore’ business as the demographics of China shows less and less young cheap labour to produce goods for the west. The Ukrainian/Russian war still has huge implications for continued interruptions with regards to agriculture/fertilizer/oil which drive up costs. Canadian government will bring in 400 to 500K people into the country per year for the next 3 years. They will all compete for goods and services, including rentals and housing. Continued high employment numbers, lots of people working. Why do we think interest rates would drop in this environment?
Elon solved that swapping thingy a long time ago. https://www.tesla.com/videos/battery-swap-event
Kinda.
Again, although it’s not good financial planning to have all your net worth in one address in one city, still looks like anyone who bought between 2008 and 2020 made a good move. Their homes are still worth quite a bit more then when they bought, and if the bottoms in then it’s only up from here. Maybe this is finally the supposed ‘bubble’ that is different this time?
Interested in what this year has to bring us. Sit back, eat popcorn!
I suppose you’re right, but unlike the 2020 rebound I can’t get behind this one.
“Logic dictates there will be a reset. It won’t be fun. But it’s not now.”
No kidding. Bitcoin and Tesla to the moon, just like in 2021.
#100 Proud Truck Driver on 02.05.23 at 7:38 pm
It is indeed most unfortunate that the Great Admiral Zheng He had his ships destroyed at the behest of a corrupt, myopic, centralized and backward tyrannical government, thereby assuring the triumph of the West in the discovery and settling of America!
It is indeed more unfortunate that the same type of corrupt centralized, backward, tyrannical government rules today and results will for all eternity will a second rate nation.
If only they would embrace individual freedom, Western Democracy , capitalism and throw off the shackles of the CCP, they could take their true and glorious place in the sun, until then they must hurl balloons into the sky as a sign of shameful weakness and hope for the best!
Two Canadian pop superstars are early winners at this year’s Grammy Awards.
Toronto rapper Drake picked up best melodic rap performance for his appearance on Future’s “Wait for U” while Vancouver crooner Michael Bublé won best traditional pop vocal album for “Higher.”
Both awards were among the trophies handed out at a pre-broadcast ceremony that streams on the Grammys website.
https://www.castanet.net/news/Entertainment/409942/Drake-Michael-Bubl-among-early-Grammy-winners
#61 Observer
Observer, you come across as a very nice individual. And you’ve provided some information that perhaps colours your view.
I on the other hand, based my comment on factual information, statistics, and many analysis done on this very blog.
Fact is, the older own houses, have seen nearly non-existent erosion in ownership in their age group, and have benefited the most from the politics boosting the equity they hold in their houses.
Further, there has been no policy, certainly no meaningful policy to make any impact since this was clearly identified by politicians as a policy goal. As per my top comment, to the contrary – EVERY POLICY WE HAVE SEEN HAS BEEN TO SAFEGUARD EQUITY IN HOUSED FOR MAINLY OLD OWNERS.
Even when politicians claim otherwise, we’ve analyzed and looked at it from many angels on this blog and concluded these policies (under the claim of being set to make houses more affordable) ALWAYS make them more expensive. PUFF THAT EQUITY BABY!
#72 kommykim
Seniors had savings. Low interest rate hurt them. Hence, why Garth argued – invest ASAP or get steamrolled.
Low interest rates did not hurt pension plans. Low interest rate were accompanied by accommodative policies that blew up asset values and thus pensions benefited big time in my view.
Fully agreed that low interest rates were a giant bowl of free debt drugs left in the middle of a party. The outcome was predictable and is highlighted on this blog periodically with debt levels data. And I also feel that the dream of dropping interest rates ain’t happening.
What good is full employment when an average bag of groceries is $70-$80 and shelter poised for further inflation if the real estate bull market here revs back up again?
The landing was always going to be soft for rich folks. The equities I bought on sale in 2022 are already up and to the right! Hurray! I’m more concerned than ever about the cost of living crisis. We all should be.
Chat with cops, firefighters, doctors, and nurses if you want a picture of how thing are at the moment. We do not live in a healthy real economy in this country. Blog readers should be grateful we are on the upper half of the “K” shaped recovery and mindful of the folks sliding down then bottom half.
#10 FULLY AGREE WITH YOU!!
#100 Proud Truck Driver on 02.05.23 at 7:38 pm
Dear IHCTD9,
Firstly, before you spew out the above empty bravado, can’t you just do some basic research? Just google “US/China navy ships”, you can come up with the following newest report from U.S navy. Don’t be another shallow key board warrior, it does not reflect good on you.
https://www.cnn.com/2023/01/16/asia/china-navy-fleet-size-history-victory-intl-hnk-ml/index.html
Secondly, China will have its own development trajectory, be it economic or military. And to this day and age, you still possess the arrogance to say that China’s ambition needs to have your (the Western powers) mercy/blessing? Do you fancy yourself still live in the opium war age? SMH…
—— – —
No problem, I went and googled it. I found that the USA has the largest Navy in the world. The US has the most advanced Navy in the world. The US has twin nuke carriers equipped with rail guns and lasers, while China has diesel powered WW2 era ramp carriers, and only like – *one* of them. China has no ability to project power due to lack of a carrier fleet. A US nuclear sub has more destructive power than many entire countries. The USA has over 50 of these.
I’m afraid China does indeed need the blessing of the West for any offensive manoeuvres because the West has 10X the offensive power of China. If China made one wrong move, the West would easily crush them both militarily and via economic sanctions. China is likely smarter than you, and will place their bets very carefully to avoid being physically and economically destroyed.
Sorry bro, just the facts – you can research it.
The Reset
Logic dictates there will be a reset. It won’t be fun. But it’s not now.
Keith Dicker, Loonie Hour: He said the housing market may not crash but it is flashing red. Which is more or less what Ron Butler says “the fundamentals are bat shit crazy”. The Royal Bank published its affordability report which says the same thing.
The major players don’t know when it’s going to happen but they’re ready.
Pity Rate Reset Shares
Now they have to compete with deposit saving accounts paying 4 to 5%! rate resets have not been able to catch a break since they were introduced about 15 years ago.
Well, there is the dividend tax credit and one of these rate resets is paying 6% that’s pretty good. But you never know what the reset rate will be. I still like the discounted ones that have a chance to rise.
#115 Dogman01 on 02.05.23 at 8:56 pm
#100 Proud Truck Driver on 02.05.23 at 7:38 pm
It is indeed most unfortunate that the Great Admiral Zheng He had his ships destroyed at the behest of a corrupt, myopic, centralized and backward tyrannical government, thereby assuring the triumph of the West in the discovery and settling of America!
It is indeed more unfortunate that the same type of corrupt centralized, backward, tyrannical government rules today and results will for all eternity will a second rate nation.
If only they would embrace individual freedom, Western Democracy , capitalism and throw off the shackles of the CCP, they could take their true and glorious place in the sun, until then they must hurl balloons into the sky as a sign of shameful weakness and hope for the best!
—— —- –
That’s about it. All the West really needs to do is sit back and wait for China to self-destruct. Same thing we did with the USSR. It’s only a matter of time when you’ve got a totalitarian commie shit-show at the helm.
There’s a good reason why every Chinese dude who has the ability escapes to the West.
#80 Ponzius Pilatus on 02.05.23 at 5:35 pm
#66 Ihtcd9
The US has more naval power than the rest of the world *combined*. The vast majority of all other naval power that exists is allied with the US. China can’t project it’s power other than via nuclear ICBM’s, and of course, these are undeployable.
China’s goal is regional power. It remains to be seen how much of that ambition the Western powers will allow.
——————-
Sure.
All China has to do is release a bunch of “weather” balloons.
And while the Amis are trying to figure out what to do.
XI is already making his moves.
Whatever they are.
——-
Xi ain’t making any moves beyond a few hundred miles off shore. Because he can’t. Unless he wants to start WW3 via ICBM’s which would result in a global nuclear winter. I’ll let you decide if he’s really that stupid/insane. In my opinion, he’s not. He knows when he’s beat.
Saying the BoC is entirely independent in its rate decisions ignores its entire structure. All members of the board are appointed by government. And the mandates they pursur are dictated by government. They are hired and fired by cabinet. This makes them as independent as the CEO of a public company: independent until they step outside the will of the Board, either in performance, policy, or strategy. Which makes them beholden to that Board, ultimately. So not as independent as it’s often made out to be. And, in theory, since we vote in government, the BoC is beholden to citizens. As it should be, with any government body, in a democracy. Think Tiff effed up on inflation and isn’t up to the task of consistently achieving the mandate given him? Then vote for a party that will hold him accountable to that mandate. I don’t personally agree he screwed up, at least not more so than anyone else in his position globally. I think he got it terribly, terribly wrong, but that doesn’t mean he’s not the best man for the job still. I’d be more concerned with the hundreds of billions spent by the libs during the pandemic, and the shutdown of society that went too far, for too long, and gave too much unnacounted for money out to everyone. I never received a dime, but I k owe lots of corps that pocketed hundreds of thousands in unneeded wage subsidies, and people who bought vehicles with small business pandemic relief, and are never paying any of it back. For those like me that didn’t defraud the public purse, congrats, you paid for it all in debt, taxes, and the current cost of groceries.
Anyhow, not here to argue BoC. I actually just wanted to say that everyone’s current optimism that we’ve “pivoted” may age as well as Tiff’s “low for a long time” and “transitory” statements. The beast has not been slated. 6% is not 2%. And until we see it with a 3 in front, I think it’s all just wishful thinking. It could hang in longer than expected, and take another rate cycle the same as the eight hikes we just finished, before it’s finished with us. But go ahead, borrow borrow borrow. Just don’t complain when rates go up another 2-3%: you’ve seen the movie before, and this time of you believe it it’s on you.
I have a decent job in my humble opinion but I don’t have any chance of ever buying a house in Ontario. I’m not complaining, that’s my choice to stay in the province I was born for now and will hope to move near some relatives on the east coast in the next 3 or 4 years.
It just feels like a bit of a shame that many of us here have given up hope and will take our talents elsewhere, I imagine many are like me and also planning to get out of here in the next while. Ontario was a great place to live growing up ..now it’s the opposite of that , just my opinion.
#120 IHCTD9 on 02.05.23 at 9:24 pm
#100 Proud Truck Driver on 02.05.23 at 7:38 pm
Dear IHCTD9,
Firstly, before you spew out the above empty bravado, can’t you just do some basic research? Just google “US/China navy ships”, you can come up with the following newest report from U.S navy. Don’t be another shallow key board warrior, it does not reflect good on you.
https://www.cnn.com/2023/01/16/asia/china-navy-fleet-size-history-victory-intl-hnk-ml/index.html
Secondly, China will have its own development trajectory, be it economic or military. And to this day and age, you still possess the arrogance to say that China’s ambition needs to have your (the Western powers) mercy/blessing? Do you fancy yourself still live in the opium war age? SMH…
—— – —
No problem, I went and googled it. I found that the USA has the largest Navy in the world. The US has the most advanced Navy in the world. The US has twin nuke carriers equipped with rail guns and lasers, while China has diesel powered WW2 era ramp carriers, and only like – *one* of them. China has no ability to project power due to lack of a carrier fleet. A US nuclear sub has more destructive power than many entire countries. The USA has over 50 of these.
I’m afraid China does indeed need the blessing of the West for any offensive manoeuvres because the West has 10X the offensive power of China. If China made one wrong move, the West would easily crush them both militarily and via economic sanctions. China is likely smarter than you, and will place their bets very carefully to avoid being physically and economically destroyed.
Sorry bro, just the facts – you can research it.
+++++++++++
You could mention:
The U.S. Navy is the Second-Largest Air Force in the World. With approximately 3,700 aircraft, the Navy is the second-largest air force in the world – second only to the U.S. Air Force itself.
#120 IHCTD9 on 02.05.23 at 9:24 pm
__________________________________
Your whole rant shows the extent of damage that Trudeau’s cannabis liberalization inflicted on Canadian population. Very unfortunate…
#110 Shawn
YOu will fall down and worship when the gas powered tow truck arrives.
Just reading in a usual reliable publication.
That the Democratic Republic of Kongo is sitting on probably the largest heap of Lithium.
And China has a big foothold in Africa.
Should be interesting.
#128 Proud Truck Driver on 02.05.23 at 10:07 pm
#120 IHCTD9 on 02.05.23 at 9:24 pm
—————
Your whole rant shows the extent of damage that Trudeau’s cannabis liberalization inflicted on Canadian population. Very unfortunate…
—————
????
Hey there, Proud: you flew in insultingly with ‘empty bravado’, ‘basic research’ and ‘arrogance’, without actually providing evidence whatsoever refuting IH’s statements, and he respectfully completely owned you in response.
Should’ve just taken the L and walked away, but you had to double down…
#120 IHCTD9 on 02.05.23 at 9:24 pm
__________________________________
Your whole rant shows the extent of damage that Trudeau’s cannabis liberalization inflicted on Canadian population. Very unfortunate…
———————————————————–
As a rare poster on this blog let me say that IHCTD9 is one one of the more enlightened contributors. I do scroll past a number of the “usual suspects” (no names needed) and IHCTD9 is definitely not one of them. Mr. Proud Trucker: may I ask as to what cannabis liberalization or Trudeau has do do with anything that IHCTD9 commented on? IHCTD9 presents facts. What do you present? Some weird right wing spew?
The Americans have a long runway to continue to raise rates as their economic expansion continues. Eastern hemisphere manufacturing will migrate to US-Mexico.
Fascinating debate on naval power, I suggest reading up on the Ford class carrier. What Peter Zeihan calls “a country smasher”
https://en.wikipedia.org/wiki/Gerald_R._Ford-class_aircraft_carrier
#127 Yukon Elvis
How many hypersonic missiles will it take to sink or disable an aircraft carrier?
Well, a number of topics to comment on here. In no particular order…
Hearing that real estate enquiries in the YVR burbs are really picking up. One broker mentioned that 90% are from permanent residents, with hefty downpayments, not interest rate sensitive…
For those who can’t afford to live where they grew up, this is nothing new, learn to deal with reality. It’s a big country and you can move. It’s been a reality in YVR for 40 years.
The China hard landing being discussed is going to happen, just a question of when. They are in a demographic death spiral unknown in human history.
Their baby-boomers are going to be looking for places to go, and there aren’t any, and they don’t have enough children to take them in.
The immigration consultants in HK are doing a brisk business. Many people in China with money want out, or at least their money out and them with quick options when the time comes. This never bodes well for the future.
They may want regional power, but they can’t have it. The locals in Vietnam, Philippines, Indonesia, let alone the advanced ones in Taiwan, Korea, Japan, will die before being conquered. Much like Russia right now, they don’t have enough young men who would be willing to fight in wars of conquest and occupation.
The bluster over Taiwan is all about distraction for the CCP, like the Falklands, only much bigger, and would have the same result.
There is nothing “independent” about what Tiff and BoC did for T2 and covid spending. Unnecessary 3rd world move and everyone pays for it at the grocery store and elsewhere.
Embarrassing watching Canada try to find a single working Leopard tank to send to Ukraine. It would probably be more useful to send spare parts taken from the 60+ they have sitting in the shop that will probably never run again anyway….
132 Reynolds753 on 02.05.23 at 11:13 pm
#120 IHCTD9 on 02.05.23 at 9:24 pm
__________________________________
Your whole rant shows the extent of damage that Trudeau’s cannabis liberalization inflicted on Canadian population. Very unfortunate…
———————————————————–
As a rare poster on this blog let me say that IHCTD9 is one one of the more enlightened contributors. I do scroll past a number of the “usual suspects” (no names needed) and IHCTD9 is definitely not one of them. Mr. Proud Trucker: may I ask as to what cannabis liberalization or Trudeau has do do with anything that IHCTD9 commented on? IHCTD9 presents facts. What do you present? Some weird right wing spew
————————-
Ihtcd9
Is very knowledgeable when it comes to heavy machinery.
But when he talks about China.
He’s got no clue.
Kinda stuck in the sixties.
Would make a good Republican.
A little racist, to boot.
@ #132 Reynolds753 on 02.05.23 at 11:13 pm
Just wondering if you’re a steel hardtail guy? If memory serves, Reynolds 753 was used on a number of legendary north american bikes, including a few Surlys and Canadian make Rocky Mountain Hammers. Still have a Reynolds 853 RM Blizzard in the seacan on the farm from my xc racing days which are a couple decades in the rearview. My go-to bike for Old Man stuff is a late 90’s RM Cardiac steel hardtail. Getting older though, do a lot more throttle twisting than I do cranking on pedals nowadays when it comes to two-wheels.
#117 Theory of Everything on 02.05.23 at 9:09 pm
Low interest rates did not hurt pension plans.
=======================================
The OECD disagrees with you:
https://www.oecd.org/newsroom/low-interest-rates-threaten-solvency-of-pension-funds-and-insurers.htm
As do others:
https://financialpost.com/personal-finance/retirement/pension-plans-surplus-higher-interest-rates-inflation-risks-abound-mercer
Central Banks have failed to cool the economy, empty seats just mean an equilibrium has not been reached. The punch bowl is still out, for government spending, housing and job seekers.
#132 Reynolds753 on 02.05.23 at 11:13 pm
#131 Sail Away on 02.05.23 at 10:57 pm
#128 Proud Truck Driver on 02.05.23 at 10:07 pm
#127 Yukon Elvis on 02.05.23 at 10:01 pm
#120 IHCTD9 on 02.05.23 at 9:24 pm
Holy triggered batman! One commenter dares to opine that, maybe just maybe, IHCTD9’s cereal-box n Clive Cussler sino-American military strategizing is nigh worthless lunacy and the pile on is fierce. Hilare! Who knew we had such bright and well informed naval strategists commenting here. #SoLucky #BestLyfe
“It’s possible we’re living in a fraudulent system” – M. Bury
That, to me, is the only way to explain what is occurring. The notion that housing will plateau now or soon is so devoid of any economic principles, there is simply no way to account for this phenomenon other than to realize their is a fraud in the system.
Canada relies heavily on immigration to feed the machine. Immigrants don’t show up with suitcases full of money. Some do, but in most cases, Canada relies on immigration to feed the service level jobs, etc.
In the past, immigrants came to Canada knowing that they could eek out a life for themselves, buy a home, and build a better life for their children.
No more. Million dollar homes perpetually price out new immigrants, and often, their children too.
Without a waves of ‘1st time homebuyers’, the housing waterfall is broken, and the mid/upper tier homes are not worth what they’re worth because there will be fewer buyers from the lower tiers to “move up in the market”.
I’m a 1st generation immigrant. Came here when I was 4. My parents built a life through hard work in less than glamorous jobs. But it was at least possible to see the light at the end of the tunnel. They chose to come here because the hell-hole of Eastern European communism essentially meant they’d never own anything. People want to own their little slice of life.
All (green) fun and (green) games until someone loses an eye. Anyone still think the Green Obsession is anything more than a hobby born of small-minded liberal boredom??
***
“Germany is currently mulling reducing its focus on the long hyped ‘green’ initiatives as it scrambles to ramp up lagging defense manufacturing after recently approving a 100 billion euro military revamp in response to the Russian invasion of Ukraine.”
https://www.zerohedge.com/markets/germany-considers-diverting-anti-coal-green-subsidies-weapons-production
@#134 Don
“How many hypersonic missiles will it take to sink or disable an aircraft carrier?”
++++
One or two max.
https://en.wikipedia.org/wiki/DF-21
Or silent diesel electric subs……
https://www.businessinsider.com/how-swedish-sub-ran-rings-around-us-aircraft-carrier-escorts-2021-7
Aircraft carriers were the “game changer” ….
80 years ago.
Weapons systems and strategies update
With todays observation satellites watching…. , GPS guided missile targeting….
We watch them.
They watch us.
24/7
Day and night.
Everywhere on the planet.
Kinda hard to hide a carrier task force.
Carriers are great…. when sending in the jets for a 3rd world country air strike.
Park them 50 miles off shore ( Iraq, Libya, Syria, etc) and send in the jets….back in an hour to refuel, rearm and have a coffee.
(That being said, The US quickly pulled a Carrier group out of the Arabian Sea when the Iranians perfected their missile targeting systems a few years ago).
But against any state of the art military….
They are big,….. fat,….. slow……. targets.
And judging from the US Republicans’ outrage over a balloon….
And one can only imagine the shock, horror and outrage if one, two or three carriers are sunk in one day of fighting…
6000+ sailors and aviators on each carrier.
And they take 7 YEARS to build.
If things keep going the way they are…
We’ll find out soon enough.
“The average family can no longer afford the average property. And we’re about to witness once again that people have lost their way.”
Houses are truly unaffordable. My friends mtg recently renewed and now he is spending a lot more per month to service his mortgage. They have cut down all expenses. No restaurants. No vacations, etc. etc. Only weekly groceries.
It leads us to a bigger question. Why? Is the goal of life to slave to pay the Mtg?
Every one has their own goals in life. For me, though it does not make sense. Apparently I present the minority in Canada.
#138 kommykim
Indeed, perhaps that is the case for some funds, and perhaps government pension funds are short for one reason or another.
To me it would appear that many of these pension funds went seeking returns elsewhere, and found it. The OECD piece is from 2015 and highlights risk, not actual fact or performance, which we know was above posted inflation if invested in markets over that period of past 7 years.
Of course again, to your point, not all pension funds are created equal and some maybe mismanaged and have issues. I think the GM pension with GM pulling out of Oshawa/Canada was something that looked to me from articles I read like it was at risk with significant liability and being offloaded to the taxpayer, but this is all from memory and my facts maybe off. Certainly any pension that was underfunded would need magical returns to cover liabilities.
As for inflation being an issue, we know how that will be addressed and how it will play out. I hardly see a pension fund come out and give 6.5% boosts to pensioners. Increase will be well below inflation levels for some excuse. Inflation will be declared lower than it was. Standard playbook another words. One of the reasons Garth points out that taking control of your pension is perhaps a wise move.
Garth what do you mean by ‘reset’ – this has become a buzz word in the conspiracy crowd circles.
Armstrong and Alex Jones Info Wars.
EUREKA!
By Jove, I’ve GOT it!
Forget about superchargers or battery exchange depots.
The solution to practical EVs for everyone is:
really really really really really really really really really really really really really really really really really really really really really really really really really really really
long cords.
Plug in and drive away!
Saving the planet. LOL.
Balloon Escapades — (including an ‘escape artist’ Canadian balloon, lol! ). Seriously, do we really need to ratchet up more tension with other BRIC nations? ———
” Xie repeated China’s insistence that the balloon was a Chinese civil unmanned airship that blew into U.S. airspace by mistake, calling it “an accidental incident caused by force majeure.” China will “resolutely safeguard the legitimate rights and interests of Chinese companies, resolutely safeguard China’s interests and dignity and reserve the right to make further necessary responses,” he said. +++
China isn’t the only country to face questions about a curious balloon. Back in 1998, a 25-storey high runaway weather balloon proved to be an international headache for Canada.
The helium-filled balloon — about five football fields long when deflated— was launched out of Vanscoy, Sask. on Aug. 24 with an innocent-enough task: measure ozone levels.
Canadian CF-18 fighter jet pilots caught up with the balloon off the coast of Newfoundland and took aim, firing more than 1,000 rounds of ammunition at it.
Undeterred, the balloon meandered into British airspace, forcing air traffic controllers to divert transatlantic flights and catching the attention of the British press. The Royal Air Force also tried to bring the balloon down and were also unsuccessful.”
But the balloon survived the assault, soldiering on over the North Atlantic. Even the muscle of the U.S. Air Force couldn’t bring the balloon to Earth. The rogue balloon was spotted in Norweigian and Russian airspace before eventually crashing in Finland, more than a week after its chaotic journey began. +++
So in summary: The insanity of the bubble picks up and continues… Funny that the “good news” is also the bad news – no major corrections ahead. *cries in millennial*
“This is a huge change in the course of just days.”
—
Just underscores the fact that little of the RE market is driven by fundamentals.
#147 Dharma Bum on 02.06.23 at 9:43 am
EUREKA!
By Jove, I’ve GOT it!
Forget about superchargers or battery exchange depots.
The solution to practical EVs for everyone is:
really really really really really really really really really really really really really really really really really really really really really really really really really really really
long cords.
Plug in and drive away!
Saving the planet. LOL.
—
It is 2023. Wireless charging is a thing.
They’ll put giant wireless charges in parking spots.
Or like in video games, you’ll be able to drive over a long wireless charging lane on the highway – BUT as with Electrify America already costing as much as gasoline, the wireless charging lane for EVs will cost twice the price of gasoline. I mean, it’s not cheap to build so many miles of wireless charging.
Then children will get cancer playing near those parking spots or roads, like from power lines. Worse, men will loose their hair!
Interest rates will rise to 8%. Position yourself accordingly! Don’t listen to the greater fools..
Short term bonds are going to be the best place to shelter from the storm. Currently paying 4.5%
Patrice
#143 crowdedelevatorfartz- Hypersonic
Exactly!!! Aircraft carries are sitting ducks, unable to move and get out of the way. Their heydays are long past. When you can remote control a missle around the world who needs carriers! Within the next few decades they will only be anchored around the USA, to rust away.
RE: #147 Dharma Bum on 02.06.23 at 9:43 am
EUREKA!
By Jove, I’ve GOT it!
Forget about superchargers or battery exchange depots.
The solution to practical EVs for everyone is:
really really really really really really really really really really really really really really really really really really really really really really really really really really really
long cords.
=======================================
I know you’re making a joke, but you are absolutely right. Plus, the technology has existed since the late 1800s. They are called electric trains, trolleys, & busses and work really well.
#134 Don on 02.05.23 at 11:41 pm
#127 Yukon Elvis
How many hypersonic missiles will it take to sink or disable an aircraft carrier?
+++++++++++++
Japan did that 80+ years ago at Pearl Harbour. Did not work out well for them.
New build Condo Price Index out this morning
Here’s the price index from StatsCan. You can see the price is up in Q4 2022 versus Q4 2021 in Toronto and the West but down slightly East of Toronto. You can choose data to see longer term. Too bad it’s not a graph.
Some of you will agree this data makes sense. Others will disagree. Many of those who disagree will cry “It’s manipulated!” or at least wrong, because that’s the way people are these days.
https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1810027301
#155 Yukon Elvis
The world has not stood still for the last 80 years.
Welcome to the brave New World and the multipolar NWO !
Does this mean the “roarin’ ‘20s” thesis is back on?
On the other hand – from the “not so fast” prognosticators. Source: https://allisonschrager.substack.com/p/banking-on-the-best-case-scenario
Re: future wars…
Time to move from comic book logic…
Ukraine war is simply an excuse to get rid of olde obsolete military inventory.
If the war goes truly “hot”…it will be via AI , long range hypersonic missiles and other exotic weaponry.
#153 Don on 02.06.23 at 11:22 am
#143 crowdedelevatorfartz- Hypersonic
Exactly!!! Aircraft carries are sitting ducks, unable to move and get out of the way. Their heydays are long past. When you can remote control a missle around the world who needs carriers! Within the next few decades they will only be anchored around the USA, to rust away.
————
If you are correct on this, then that means all high-value targets of all global super powers will sit and rust since all global super powers have hypersonic missiles.
In the next few decades, I more suspect a defence against HSM’s will emerge. The US already has rail guns and laser prototypes designed and built. China is working on same. If these answer the HSM question, they answer all the missile questions both present day, and forever more.
Until that day though, no country will present high value targets to any nation equipped with functional HSM’s. So really, it’s an international stalemate till a defence is developed (and I’d bet this eventually is assured).
If a solution isn’t found, the stalemate will be permanent. That might not be a bad thing.
As easy as 123 cash for me.
https://www.fool.com/investing/2023/01/03/23-top-dividend-stocks-to-buy-and-hold-in-2023/
#154 kommykim on 02.06.23 at 11:22 am
RE: #147 Dharma Bum on 02.06.23 at 9:43 am
I know you’re making a joke, but you are absolutely right. Plus, the technology has existed since the late 1800s. They are called electric trains, trolleys, & busses and work really well.
—
I had the same thought. Imagine the summer air quality in the Vanciuver Metro without electric busses. All on San Francisco’s transit is electrified. Untold preservation of health for not having to breathe as much diesel exhaust. Intercity electric commuter rail is widely used in more-sane Europe.
Hey Garth, comments are taking forever to post between “Submit” and “your comment is awaiting moderation”.
Gonna guess your back-end database is full or somehow struggling.
Or you are rate-limiting to cut down on spam :-).
We’ve installed a new back-end feature. Called a ‘Faron Filter’. – Garth
#136 Ponzius Pilatus on 02.05.23 at 11:47 pm
Ihtcd9
Is very knowledgeable when it comes to heavy machinery.
But when he talks about China.
He’s got no clue.
Kinda stuck in the sixties.
Would make a good Republican.
A little racist, to boot.
————
I got no issues with Chinese folks Ponz, by and large, they are indefatigably hard working, conservative, family oriented, humble folks. Hard not to like.
The topic at hand was US vs Chinese Naval Power, not US vs Chinese people. Do a little googling to see if I’ve got a clue on that particular topic or not.
Oh, and I wasn’t around in the 60’s (but it would’ve been so cool to have been there).
#161 Forget About Condos Buy Income on 02.06.23 at 12:11 pm
As easy as 123 cash for me.
https://www.fool.com/investing/2023/01/03/23-top-dividend-stocks-to-buy-and-hold-in-2023/
+++++++
Good link. Here is another one:
https://www.dividendyields.org/tsx60-best-dividend-stocks/
#163 Faron on 02.06.23 at 12:22 pm
We’ve installed a new back-end feature. Called a ‘Faron Filter’. – Garth
—
LOL. If contains(userName,’Faron’) then sleep 30
Slightly disappointed you didn’t capitalize on any potential “backend” jokes…
#121 45north on 02.05.23 at 9:25 pm
The Reset
Logic dictates there will be a reset. It won’t be fun. But it’s not now.
Keith Dicker, Loonie Hour: He said the housing market may not crash but it is flashing red. Which is more or less what Ron Butler says “the fundamentals are bat shit crazy”. The Royal Bank published its affordability report which says the same thing.
The major players don’t know when it’s going to happen but they’re ready.
_______________________________________
Nobody knows anything for sure. RE industry would like to think everything’s going back to what it was. Economists say otherwise.
https://financialpost.com/executive/executive-summary/canada-home-prices-will-still-fall-economists
Woops. I think Mr. Turner has missed the elephant in the room. It doesn’t matter what the reserve banks guidance suggests. Nor does it matter gow many jobs are created (or lost).
Inflation hasn’t magically dropped off a cliff. Nor will it.
Ergo I fully expect those 7% mortgages will be required in 2023 in order to squash inflation.
Watch this space.
If you think Elon Musk owns twitter to improve it as a business in a broad sense, you are woefully mistaken. Twitter is a device for him to control narratives and give himself ever more power. Here’s a great thread highlighting that as well as the numerous overtly antisemitic comments he makes or amplifies. The guy is a abhorrent and one has to question his supporters as either vacuous, blind or quietly in support of his beliefs.
Read this thread. Ironically on Twitter despite repeated content blocks and soft bans
162 Faron on 02.06.23 at 12:18 pm
#154 kommykim on 02.06.23 at 11:22 am
RE: #147 Dharma Bum on 02.06.23 at 9:43 am
I know you’re making a joke, but you are absolutely right. Plus, the technology has existed since the late 1800s. They are called electric trains, trolleys, & busses and work really well.
—
I had the same thought. Imagine the summer air quality in the Vanciuver Metro without electric busses. All on San Francisco’s transit is electrified. Untold preservation of health for not having to breathe as much diesel exhaust. Intercity electric commuter rail is widely used in more-sane Europe.
———————
Yep.
But the problem now is.
That all the Teslas.
Are gobbling up the electricity.
That could be used.
To electrify the buses and the street cars.
Love SAN Fran.
Interesting is.
That way back, some idiots wanted to get rid of the cable cars.
The were slowing the cars down, they said.
Can you imagine, Frisco without cable cars
5 year and 10 year Canada and US bond yields went up again. Is this a long term trend, or just profit taking?
Realtors wanted 2 % 5-year yields but it’s already over 3% again after a low of 2.72% in Canada.
164 IHCTD9 on 02.06.23 at 12:29 pm
#136 Ponzius Pilatus on 02.05.23 at 11:47 pm
Ihtcd9
Is very knowledgeable when it comes to heavy machinery.
But when he talks about China.
He’s got no clue.
Kinda stuck in the sixties.
Would make a good Republican.
A little racist, to boot.
————
I got no issues with Chinese folks Ponz, by and large, they are indefatigably hard working, conservative, family oriented, humble folks. Hard not to like.
The topic at hand was US vs Chinese Naval Power, not US vs Chinese people. Do a little googling to see if I’ve got a clue on that particular topic or not.
—————————-
The issue I’m having is some posters are playing war games.
Google cannot predict the outcome.
The US vs. Japan was touch and go for a long while.
The only thing that I can say is, that if there ever is a naval conflict between the China and the States, it would truly be a world war.
The West vs. the States.
And it does not take a genius to figure out who will lose.
#164 IHCTD9 on 02.06.23 at 12:29 pm
#136 Ponzius Pilatus on 02.05.23 at 11:47 pm
A little racist, to boot.
————
Chinese folks… are indefatigably hard working, conservative, family oriented, humble folks.
—
Can’t make this stuff up.
Let’s make this simple: they are humans with identical aptitude for intelligence, stupidity, ambition, laziness, compassion, hatred, liberal thought, conservatism, creativity, dullardotry, self-aggrandizement and humility that you or I or any other homo sapiens has.
Any sentence starting with Chinese people are _______ is racist even if you hedge with the wimpy “by and large”. Does this make you, IHCTD9, racist? No. It shows your deep lack of worldly understanding befitting a bunker dweller in the sticks who surrounds himself with ignorami. FFS.
#163 Faron on 02.06.23 at 12:22 pm
Hey Garth, comments are taking forever to post between “Submit” and “your comment is awaiting moderation”.
Gonna guess your back-end database is full or somehow struggling.
Or you are rate-limiting to cut down on spam :-).
We’ve installed a new back-end feature. Called a ‘Faron Filter’. – Garth
————————-
I noticed that, too.
Put it down to an aging IPad.
Makes me feel special.
How about you, FURZ?
You special, too?
The issue I’m having is some posters are playing war games.
Google cannot predict the outcome.
The US vs. Japan was touch and go for a long while.
The only thing that I can say is, that if there ever is a naval conflict between the China and the States, it would truly be a world war.
The West vs. the States.
And it does not take a genius to figure out who will lose.
———————-
To quote Albert Einstein:
“WWIV will be fought with sticks and stones”
Do you have a previous blog post that has your thoughts on how a reset would play out?
Thanks.
Whew. Good job today Garth. Go have a drink and pat the dog.