Canada Housing/Debt: Trust me, I'm a landlord.

The Something Awful Forums > Discussion > Debate & Discussion > Canada Housing/Debt: Trust me, I'm a landlord.

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

ocrumsprug posted:

I think it is unsecured in that if the debt > assets of the estate CC companies get to eat the loss. Though they will try and make your heirs believe that they owe. The mortgage holder can foreclose the house to recoup their money.

Yeah, ok, that makes sense.

# ? Dec 10, 2013 21:36

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# ? May 11, 2024 12:29

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Whether you like Garth Turner or not, I think it would be hard to credibly argue that he's not on fine form this evening:

Garth Turner posted:

Another day, another factory. On Tuesday came the turn of 500 employees at a cereal plant in Ontario to learn they�re toast. Exactly 90 years after it started pumping out corn flakes in London, Kellogg�s is moving to Thailand, where the minimum wage was raised this year to $10. Per day.

One hundred and seventy clicks away, the town of Leamington is still trying to digest the loss of 740 jobs at a century-old factory turning out red sauce, which also kept 500 seasonal workers busy. In Saskatchewan, as you know, Potash is punting 1,000 workers, and in Toronto mighty Bank of Montreal quietly trashed as many positions. Sears is exiting key locations and idling hundreds, just like Sun Media, now in the process of closing 11 papers. Alberta�s Encana is losing a fifth of its workers, while Blackberry relentlessly disintegrates.

All companies have their own issues and the list above doesn�t mean the economy�s unravelling. But it sure makes you wonder. What�s next?

The Bank of Canada now says it�s disappointed at our export levels, recently dropped its growth forecast and worries about �downside risks� to inflation. Ditto in Europe, Japan and even Australia. For the first time in the lives of most people living, credible economists are talking about the D word. Deflation. So should we.

When economies crap out and growth fizzles, companies have a hard time getting by, especially in high-cost countries like Canada where everybody wants a $375,000 sidesplit in a regional city. So they try to cut wages (that never goes well) or simply leave. A drop in employed people means less consumer spending, which brings fewer deals at the Chrysler store. More folks compete for the available positions which are left, so bosses can offer less. After a while, goods and services are cheaper, but business doesn�t improve because less money is circulating. Real estate sales drop, as do asking prices � it�s a process which can take a year or two to ripple through a city, or a region. This is where deflation�s born.

It can be mild, last a while and go away. It can be like Japan, still in a 20-year recession. Or it can be like the 1930s. In any case, deflation has one overriding characteristic � it makes debt harder to pay. As thousands of employees at BeeMo, Kellogg�s or Blackberry are mulling over this holiday, how do you keep up years of mortgage payments when you�ve got just months of severance? It�s not like the economy is throwing off masses of new jobs.

Last month 21,400 jobs were created in all of Canada, but 28,000 were lost. Of the new ones, the vast majority were part-time positions. So far in 2013, the pace of job creation has dropped 50% from last year. We need at least twenty thousand net new jobs a month to keep up with the new kids, but have been running at only 60% of that level. Unemployment among those 24 or younger is 14%. In Ontario, 17%.

During that same period, personal and mortgage debt has risen to new heights, while average house prices have gained 8% (11% in Toronto). Wages, on average, are growing at 1.5%, and half of that was trashed by your grocery bill. Makes you wonder.

If this is indeed a precursor to years of scant growth, job stress, falling prices and a cash drought, most Canadians got it wrong. On what possible basis would house values continue to bloat, even if mortgage rates stay in the ditch? Wouldn�t it be a mistake to lock up the bulk of your net worth in an asset yielding nothing, or facing declines? In fact, do people know that residential real estate is almost always a casualty when inflation dies?

Actually, deflation seems to be stalking much of the globe. Inflation�s falling steadily in Europe. The US has the lowest rate since the crisis of 2009. Greece, Spain, Portugal, Sweden and Switzerland already have negative values. In all these places lower prices bring falling corporate profits, declining stocks and consumers who stop buying stuff because they know it�ll be cheaper in two months. Some American states and cities are rolling back pension benefits, while the labour force participation rate is dropping.

Central banks may be printing money as never before, but the velocity of it is stalling, In other words, all that stimulus spending ain�t turning into growth, jobs and inflation. Not cool. Five years of cheap money and billions in new debt have obliterated history.

As a boy I once asked my mother why she never threw out string, but added it to a ball. �You never know,� she said. Later I found my parents met in 1930 but couldn�t afford to marry for eight years. Imagine.

http://www.greaterfool.ca/2013/12/10/down/?utm_source=twitterfeed&utm_medium=twitter

# ? Dec 11, 2013 06:18

tagesschau: Sep 1, 2006; Guten Abend, meine Damen und Herren.

Add another 8,000 lost at Canada Post.

edit: And probably disproportionately in urban areas, too.

# ? Dec 11, 2013 18:11

namaste friends: Sep 18, 2004; by Smythe

https://twitter.com/taraperkins/status/410839656393998336

Helmut Pastrick thinks that Toronto's RE prices will double in 25 years.

# ? Dec 11, 2013 20:03

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Cultural Imperial posted:

https://twitter.com/taraperkins/status/410839656393998336

Helmut Pastrick thinks that Toronto's RE prices will double in 25 years.

Not even worth mentioning, by either you or 'Tara Perkins'. His job is, ultimately, to peddle demand for real estate, and assuage concerns that purchasing is a bad idea. That's the upside of a 'public prediction' like this. The downside of such a 'public prediction' is... zero. Even if he is stupendously incorrect - he has zero skin in the game to lose in that outcome.

Ford dealers are known for predicting the purchase of a Ford to be a wise and gratifying purchase. We tend not to report on it though.

# ? Dec 11, 2013 20:14

Paper Mac: Mar 2, 2007; lives in a paper shack

Where can I get one of those magic 8 ball jobs?

# ? Dec 11, 2013 20:15

namaste friends: Sep 18, 2004; by Smythe

Lexicon posted:

Not even worth mentioning, by either you or 'Tara Perkins'. His job is, ultimately, to peddle demand for real estate, and assuage concerns that purchasing is a bad idea. That's the upside of a 'public prediction' like this. The downside of such a 'public prediction' is... zero. Even if he is stupendously incorrect - he has zero skin in the game to lose in that outcome.

Ford dealers are known for predicting the purchase of a Ford to be a wise and gratifying purchase. We tend not to report on it though.

Agreed that pastrick is worthless. I think Tara Perkins is a good journalist and she does a yeoman job of reporting in real estate because she doesn't take a market position. I consider this to be a great data point for future discussion. Like when the truth and reconciliation commissions or the Nuremberg trials.

# ? Dec 11, 2013 20:46

namaste friends: Sep 18, 2004; by Smythe

To wit regarding Perkins' impartiality :

https://twitter.com/taraperkins/status/410848206608547840

Deutsch bank thinks Canada is in deep poo poo.

# ? Dec 11, 2013 20:52

Rime: Nov 2, 2011; by Games Forum

Cultural Imperial posted:

To wit regarding Perkins' impartiality :

https://twitter.com/taraperkins/status/410848206608547840

Deutsch bank thinks Canada is in deep poo poo.

Anyone who looks at that graph and doesn't feel themselves pucker up should have their head examined.

# ? Dec 11, 2013 21:27

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Rime, can you provide a source for that [terrifying] image?

# ? Dec 11, 2013 21:31

Rime: Nov 2, 2011; by Games Forum

Page 45 of this thread, Etalian posted it. It's got a little watermark for "BCA Research 2013", but that's about as far as my context goes.

Edit: Source seems to be Business Insider, generated by BCA:
http://www.businessinsider.com/3-charts-that-make-us-scared-for-canada-2013-10

Rime fucked around with this message at 21:54 on Dec 11, 2013

# ? Dec 11, 2013 21:45

Rime: Nov 2, 2011; by Games Forum

Full text of the Deutsch Bank article:

http://www.theglobeandmail.com/repo...rticle15878166/

They're calling 60% overvalued, goddamn. :stonk:

# ? Dec 12, 2013 18:34

namaste friends: Sep 18, 2004; by Smythe

Mentally I'm keeping a list of influential housing bears. So far I have:

GS
IMF
DB
Robert Shiller
Nouriel Roubini
Paul Krugman (he called the market 'vulnerable' to deleveraging)

Who else?

# ? Dec 12, 2013 19:30

namaste friends: Sep 18, 2004; by Smythe

http://www.theprovince.com/business/Vancouver+area+real+estate+market+looks+healthy+2014+experts/9270980/story.html

quote:

In late 2012 after home sales in B.C. fell to the lowest level since the late 1990s, doomsayers were calling for a severe real estate correction. That didn�t happen. In 2013 sales steadily improved and prices stayed relatively flat. Could 2014 be a shakeup year? To find out, The Province interviewed real estate experts to learn the key trends that will influence next year�s market.

1. Looking back to see ahead � what happened in 2013?

The key word to describe real estate in B.C. this year, experts say, is balance.

According to Sotheby�s International Realty Canada�s CEO and president, Ross McCredie, it was predictable that sales would start slowly in 2013. Buyers were on the sidelines, expecting interest rates to rise.

And there was uncertainty ahead of B.C.�s spring election. The surprise victory of the B.C. Liberals was welcomed by real estate investors, McCredie said, and sales pushed higher through the summer and early fall.

Pent-up demand has been brought into balance now, said Cameron Muir, chief economist for the B.C. Real Estate Association, and sales dropped back below long-term averages in November. Muir said B.C.�s market could soften over the next six months before picking up in the latter half of 2014.

�This is the second year of slow economic growth,� Muir said. �And there was really no employment growth this year, so that has to have some impact.�

2. What�s hot now?

West Vancouver is the hottest market in the Lower Mainland with a nine-per-cent jump in the single-family home benchmark this year, to $1.9-million. And while Vancouver�s west side was down three per cent in the spring, by November the tony market had rocketed back to gain three per cent year-over-year, at nearly $2.1 million for a single-family property.

Areas of Burnaby are also heating up, and Whistler has bounced back by 2.2 per cent year-over-year, as the American economy recovers and foreign buyers re-enter the market, McCredie said.

Among the priciest Lower Mainland markets, Richmond was coolest this year with a 2.7-per-cent drop to $930,000 at the single-family benchmark.

3. Where will it be hot in 2014?

McCredie pointed to immigration from Asia as a bullish factor that will press single-family home prices higher across Vancouver and into Burnaby.

While official data on rates of foreign investment is difficult to track, McCredie believes that in Greater Vancouver foreigners account for about 50 per cent of purchases above the $2-million price range.

McCredie said Vancouver�s market is driven by almost twice the rate of foreign investment as Toronto, the next most popular Canadian market for offshore buyers.

�The reality is that even wealthy Canadians are priced out of Vancouver markets now,� McCredie said. �We see a lot of foreign demand in very specific neighbourhoods like Point Grey. And we think in 2014 you will see continued demand east of Main in Vancouver, and even out to Burnaby.�

4. Why will it be hot?

Some international economists and journalists in the United States recently warned that Canada tops the list of nations with housing markets most likely in dangerous bubble territory.

But McCredie and Muir said the doomsayers are wrong. According to McCredie, Vancouver�s condo market has already corrected and will stabilize at current levels.

And as the city rapidly rezones and densifies, pressure will increase on the remaining single-family home lots, with demand outpacing supply, he said.

As factors that will support Vancouver�s market, McCredie pointed to a relatively strong economy in Canada, ultra-cheap borrowing costs, wealthy baby boomers who are relocating to cities and supporting their children�s� property purchases, and growing foreign investment.

5. Interest rates � sizzle or fizzle?

B.C.�s real estate market is supported by historically cheap interest rates that are largely tied to economic factors outside the province.

In efforts to stem a financial collapse in 2008, officials in the United States dropped lending rates as low as possible. Because Canada�s economy is linked so intricately with the U.S.�s, the Bank of Canada must follow suit.

There are signs that U.S. officials finally are attempting to curtail extraordinary stimulus efforts, but with cautious steps. That means Canada�s central bank likely won�t raise interest rates until 2015, giving borrowers more fuel to buy real estate.

Muir sees banks raising five-year mortgage rates by 0.5 per cent in 2014. But uncertainty around the U.S.�s unprecedented banking policy could still rile financial markets and impact Canada, he said.

�The big risk I see right now is longer-term interest rates being driven much higher than expected,� Muir said.

McCredie predicted borrowing costs won�t rise meaningfully before 2015 in B.C., and even then, �it would take a three- or four-per-cent� rise to trip up Vancouver�s housing market.

Well, at least they're not predicting prices will double in 25 years.

# ? Dec 12, 2013 19:45

namaste friends: Sep 18, 2004; by Smythe

This is mandatory reading if you want to see someone justify an 'investment' in an asset with negative cash flow and zero capital appreciation.

http://issuu.com/wall2wall/docs/tnh_2313/70

# ? Dec 12, 2013 20:03

LemonDrizzle: Mar 28, 2012; neoliberal shithead

Cultural Imperial posted:

This is what housing bulls think:
http://thethirtiesgrind.com/2013/12/10/my-vancouver-real-estate-story/

Well melissa carr, I think you and your husband are incapable of assessing financial risk. You've forsaken your financial health for a housegasm. Enjoy living without savings!

Unless I'm misreading that article, she could sell up today and walk away with a profit of at least several hundred thousand dollars, and will retain the option of doing so until the bubble eventually bursts. Right now she's in pretty good financial health since there's no shortage of greater fools.

# ? Dec 12, 2013 20:07

namaste friends: Sep 18, 2004; by Smythe

LemonDrizzle posted:

Unless I'm misreading that article, she could sell up today and walk away with a profit of at least several hundred thousand dollars, and will retain the option of doing so until the bubble eventually bursts. Right now she's in pretty good financial health since there's no shortage of greater fools.

Absolutely. The problem is, how many of these homeowners would subject themselves to the shame and humiliation of becoming renters again?

# ? Dec 12, 2013 20:09

Baronjutter: Dec 31, 2007; "Tiny Trains"

My parents want to downsize. It's the 2 of them in a massive 3,000 sqft house with a huge yard they can barely take care of anymore and the house stresses them way out. I've told them they could sell the house for 800k or so and rent for the rest of their lives and come out way ahead. Or just rent for a few years then buy when the time is right. Some rich idiots from Ontario just bought the house next door last year for 900k and it's smaller than theirs. Now is the time to get out! The housing market is so weird where people buy houses as "investments" but people buy high and often sell low. How many loving people buy as the bubble is going up and then are forced to sell when the bubble bursts and suddenly they are under water and freak out and want out?

But nope, they'll probably sell the house and buy a slightly smaller one at the worst timing possible because renting is out of the question for their generation.

They are still upset I'm renting and look at it as personal failings as parents that their poor son has to RENT.

Baronjutter fucked around with this message at 20:19 on Dec 12, 2013

# ? Dec 12, 2013 20:15

namaste friends: Sep 18, 2004; by Smythe

Hmm...well luckily my parents are still waffling about that 1.3 million dollar 1700 sqft house in loving Steveston.

# ? Dec 12, 2013 20:28

Shifty Pony: Dec 28, 2004; Up ta somethin'

Cultural Imperial posted:

This is mandatory reading if you want to see someone justify an 'investment' in an asset with negative cash flow and zero capital appreciation.

http://issuu.com/wall2wall/docs/tnh_2313/70

Holy poo poo that "logic". Cash out refinance the house you live in for $100k, use $90k of that as a down payment on a "rental" property with its own $310k mortgage, and (perhaps my favorite bit) assume that the property will be worth the same after 20 years of renting with zero budgeted for upkeep. All that to be in the red $300 per month in the best of times and $2300 per month if you don't have a renter.

# ? Dec 12, 2013 21:49

Kafka Esq.: Jan 1, 2005; "If you ever even think about calling me anything but 'The Crab' I will go so fucking crab on your ass you won't even see what crab'd your crab" -The Crab(TM)

So what's the best thing to do as a renter before, during, and after a bubble bursting?

# ? Dec 12, 2013 22:37

Mrs. Wynand: Nov 23, 2002; DLT 4EVA

Renting, followed by not-renting (depending on how big the drop was).

You could probably save for a down payment but you should be building up savings anyway. Worst case scenario is you just keep investing in not-houses and retire early :c00l:

# ? Dec 12, 2013 22:45

LemonDrizzle: Mar 28, 2012; neoliberal shithead

Well, strictly speaking the best thing to do is to get in on the bubble early, ride it until just before the burst, sell up and take your profits, rent and ride out the crash, and use the fat stacks you made on the upward swing to buy your dream home with no mortgage when the market bottoms out.

Just gotta get one of them fancy future-seeing machines to find out when exactly the peak and trough are going to occur. :colbert:

# ? Dec 12, 2013 22:49

Mrs. Wynand: Nov 23, 2002; DLT 4EVA

That's the sort of reasoning that gets people to buy bitcoins - i.e. the bad kind.

# ? Dec 12, 2013 22:53

Baronjutter: Dec 31, 2007; "Tiny Trains"

Yeah the problem is people have a really bad sense of what stage things are in. By the time everyone is talking about it it's already too late. But like I said, when it comes to realestate, people only really go buying crazy near the middle-end of a bubble, which is often the last dying bit of support the bubble has: the idiot amateur investor. We knew a lot of people who sold their houses in the 80's during the middle of a major slump, but bought during a small boom previously. Why? Well everyone is buying! Buying is so hot right now!! Oh gently caress the market has crashed! Interest rates are double digit!! Everyone says realestate is BAD now so I should sell!! Many of these people were not even forced to sell and if they had waited they'd have ridden it out.

I've seen the same thing with stocks and other investments. People hear about some hot company that's suddenly super successful and they want to buy stock. Then news comes that the company isn't doing so well so they sell. Buy high, sell low!

Exact same thing with bitcoins. They are ridiculously inflated right now and very hard to actually cash out despite imaginary reported values, so tons of people are suddenly buying into bitcoins BECAUSE they are expensive right now. And I can guarantee that in the next bitcoin crash they will all be cashing out as fast as they can.

Baronjutter fucked around with this message at 23:19 on Dec 12, 2013

# ? Dec 12, 2013 23:07

OhYeah: Jan 20, 2007; 1. Currently the most prevalent form of decision-making in the western world

2. While you are correct in saying that the society owns

3. You have not for a second demonstrated here why

4. I love the way that you equate "state" with "bureaucracy". Is that how you really feel about the state

Baronjutter posted:

Yeah the problem is people have a really bad sense of what stage things are in. By the time everyone is talking about it it's already too late. But like I said, when it comes to realestate, people only really go buying crazy near the middle-end of a bubble, which is often the last dying bit of support the bubble has: the idiot amateur investor. We knew a lot of people who sold their houses in the 80's during the middle of a major slump, but bought during a small boom previously. Why? Well everyone is buying! Buying is so hot right now!! Oh gently caress the market has crashed! Interest rates are double digit!! Everyone says realestate is BAD now so I should sell!! Many of these people were not even forced to sell and if they had waited they'd have ridden it out.

I've seen the same thing with stocks and other investments. People hear about some hot company that's suddenly super successful and they want to buy stock. Then news comes that the company isn't doing so well so they sell. Buy high, sell low!

Exact same thing with bitcoins. They are ridiculously inflated right now and very hard to actually cash out despite imaginary reported values, so tons of people are suddenly buying into bitcoins BECAUSE they are expensive right now. And I can guarantee that in the next bitcoin crash they will all be cashing out as fast as they can.

Buy when everyone is selling and sell when everyone is buying and you should be golden.

And start panicking when people begin to talk about "soft landing".

# ? Dec 13, 2013 00:13

Mrs. Wynand: Nov 23, 2002; DLT 4EVA

OhYeah posted:

Buy when everyone is selling and sell when everyone is buying and you should be golden.

And start panicking when people begin to talk about "soft landing".

No. Don't. Everyone is still buying now. You should not buy now. Nor should you buy tulips when everyone was selling them post-crash. They are still just loving tulips.

Buy when the thing you want to buy is worth the price you are going to buy it for to you personally regardless of what other people are doing and/or telling you will happen. If you are buying investments, buy a regular diversified portfolio like everyone else that is reasonable.

If you want huge-risk, huge-potential, just send me your money, I happen to know of this totally sure thing, it's gonna be 800% your money back in like 3 weeks, seriously I've done it so many times before, I just need a little bit more capital from smart good looking investors such as yourself.

# ? Dec 13, 2013 00:20

MiddleOne: Feb 17, 2011

Mr. Wynand posted:

No. Don't. Everyone is still buying now. You should not buy now. Nor should you buy tulips when everyone was selling them post-crash. They are still just loving tulips.

I'm amazed that almost 400 years have passed since that incident and some economists still argue that there's no such thing as financial bubbles. :psyduck:

# ? Dec 13, 2013 00:28

OhYeah: Jan 20, 2007; 1. Currently the most prevalent form of decision-making in the western world

2. While you are correct in saying that the society owns

3. You have not for a second demonstrated here why

4. I love the way that you equate "state" with "bureaucracy". Is that how you really feel about the state

Mr. Wynand posted:

No. Don't. Everyone is still buying now. You should not buy now. Nor should you buy tulips when everyone was selling them post-crash. They are still just loving tulips.

Buy when the thing you want to buy is worth the price you are going to buy it for to you personally regardless of what other people are doing and/or telling you will happen. If you are buying investments, buy a regular diversified portfolio like everyone else that is reasonable.

If you want huge-risk, huge-potential, just send me your money, I happen to know of this totally sure thing, it's gonna be 800% your money back in like 3 weeks, seriously I've done it so many times before, I just need a little bit more capital from smart good looking investors such as yourself.

I'm sorry, I should've been more clear. What I was trying to say is this: use your loving brain and don't overpay. The sad thing is, I don't see any way out of this bubble, it has to burst sooner or later. Exactly the same thing happened in my home country. By the time everyone realized that poo poo is serious, there was nothing left to do but watch in horror as the catasrophe unfolded before everyone's eyes while bankers and politicians kept expecting a "soft landing". Don't know if they were being dishonest or just stupid. Probably both.

And now my sister is caught up in the same mess because she is living in Canada.

# ? Dec 13, 2013 00:46

cowofwar: Jul 30, 2002; by Athanatos

If the BoC or government states on record that there is a bubble everyone will rush to sell and it will encourage a crash. Denial always precedes bubbles.

# ? Dec 13, 2013 01:24

namaste friends: Sep 18, 2004; by Smythe

https://twitter.com/BenRabidoux/status/411322384285593600

quote:

Yes...home equity withdrawal from primary residences currently represents a greater dollar amount than all capex in the oil sands

So if you don't buy a house, you must hate canada or something.

# ? Dec 13, 2013 04:55

namaste friends: Sep 18, 2004; by Smythe

cowofwar posted:

If the BoC or government states on record that there is a bubble everyone will rush to sell and it will encourage a crash. Denial always precedes bubbles.

That's something Jim "Bear Stearns is fine" Cramer would say. The BoC's job is to set expectations, but more specifically, maximize employment and achieve price stability.

I don't think Dodge or Carney *ever* made comments with respect to the housing market. That has always been the domain of the idiots in parliament. The question now is, why the gently caress is Poloz talking poo poo about it?

# ? Dec 13, 2013 04:59

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

Cultural Imperial posted:

That's something Jim "Bear Stearns is fine" Cramer would say. The BoC's job is to set expectations, but more specifically, maximize employment and achieve price stability.

I don't think Dodge or Carney *ever* made comments with respect to the housing market. That has always been the domain of the idiots in parliament. The question now is, why the gently caress is Poloz talking poo poo about it?

Pretty sure employment isn't in their mandate. However, making sure the banking/financial system doesn't fall over dead is.

Carney did speak, frequently and at length about Canadian debt levels. I assumed that this was code for people over extending themselves on mortgages and then over extending themselves again on HELOCs. Housing has hit the point (awhile ago unfortunately) of being a systemic risk to the financial health of the country, so Poloz really doesn't have much choice but to talk about it. However since he is a central banker he needs to be very cautious about what he says and how he says it.

# ? Dec 13, 2013 08:47

LemonDrizzle: Mar 28, 2012; neoliberal shithead

Cultural Imperial posted:

I don't think Dodge or Carney *ever* made comments with respect to the housing market. That has always been the domain of the idiots in parliament. The question now is, why the gently caress is Poloz talking poo poo about it?

FWIW, I don't know what Carney did or did not do about Canada's housing bubble, but as governor of the Bank of England, he's made a number of pointed comments (and direct interventions) in the British housing market with the stated aim of preventing the market from overheating. I'm not sure that any central bank these days really holds to the position that it needs only concern itself with setting interest rates and managing inflation.

LemonDrizzle fucked around with this message at 09:35 on Dec 13, 2013

# ? Dec 13, 2013 09:22

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

Ross Kay takes issue with November reported real estate statistics

quote:

On Monday Dec. 16th., Canada's press reported that, on an actual (not seasonally adjusted) basis, a total of 32,379 homes had traded hands across the country for the month of November, when in fact that total included 2191 home sales that had been reported more than one time in that count.

Ross Kay Realty Consultants, after completing it's November audit of ReSale Homes SOLD data revealed that on a single counting standard (eliminating multiple counts of the same home) of homes that have traded hands, showed November barely broke the 30,000 barrier with only 30,188 homes trading hands. This means the total reported elsewhere represented a 7.3% over reporting of the actual sales that had taken place, making November the most over reported month in history, on a percentage basis.

"Anyone who fluffs this off, is simply showing their lack of expertise in the housing sector. There are a series of market influences and measurements that should have been setting off fireworks or curiosity on the data that has been reported for all of 2013." says Ross Kay, founder and CEO, Ross Kay Realty Consultants. "I will be quite blunt and direct. Every single piece of information supplied to Canadians this year about the National ReSale Housing Sector, has been a wrong. Totals, Averages and any historical comparison that exceeds a 27 day window has been inaccurate."

When looking at the current stage of the Realty Cycle, we see the expected rising sale prices on decreasing inventory levels, that is common at the early stages of the Corrective Phase of the Cycle being reached. What is particularly concerning in Canada for 2013 was the �pumped up numbers� that were released to the public, that have allowed the early stages of the Correction to be prolonged, while more and more risk is added as prices continued to rise, disproportionate to actual sales that have taken place.

�What you see happening is the creation of the �Perfect Storm� towards a housing correction, with no one warning Canadians of what could be coming their way.� comments Kay. �Look, with under 415,000 sales actually going to be taking place in 2013, had Canadians known that real count, they would have already altered their housing plans. Our biggest concern right now, as Consultants, are our boomers entering retirement. The pending next phase of the Correction could literally, wipe out the retirement plans of people for a decade or more.�

It is really too bad that the death of journalism has allowed real estate numbers to get published without comment. :smith:

# ? Dec 18, 2013 08:06

namaste friends: Sep 18, 2004; by Smythe

That's ok! If you gave out accurate information it might spook prospective buyers and trigger a market contraction. And who wants that when upwards of 30% of Canada's GDP comes from FIRE?

# ? Dec 18, 2013 15:12

namaste friends: Sep 18, 2004; by Smythe

https://businessincanada.com/2013/12/18/td-ceo-ed-clark-lofty-home-prices-are-a-canadian-competitiveness-issue/

quote:

�I don�t think people think of housing as a competitive issue. But you sit there and you say, if a Canadian has to pay twice as much for his home as an American, he or she is going to want to be paid more than an American,� he said. This issue is compounded by the fact that Canadian workers are less productive than their American counterparts to begin with. �So you�re less productive, and you have to be paid more just to have the same standard of living in terms of buying houses. That�s a competitive problem, � he concluded.

Economists at TD believe Canadian homes are overvalued by roughly 7 percent at present.

In April, Mr. Clark announced that he would be leaving TD on November 1, 2014, after 12 years of leading the bank.

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# ? Dec 19, 2013 01:18