July 7, 2021
“At the bottom of all the tributes paid to democracy is the little man, walking into the little booth, with a little pencil, making a little cross on a little bit of paper—no amount of rhetoric or voluminous discussion can possibly diminish the overwhelming importance of that point.” —Winston Churchill, House of Commons, 31 October 1944
(Good quote with an election in Canada imminent!)
THE NUMBERS, THE NUMBERS – JUNE 2021, 2020, 2019, 2018
Q AND A: REAL ESTATE
Q AND A: ECONOMY
Q AND A: OZZIE TAKES A SHOT
WILL CRYPTO COLLAPSE AFFECT REAL ESTATE ?
NETWORK AND COMMUNITY NEW BUZZWORDS AND YOUR FUTURE!
CURRENT BLACK SWANS CIRCLING
SF DEALS SHIFTING INTO CONDOS?
INWARD MIGRATION – COMING NOW!
COMMERCIAL REAL ESTATE
NEW LAW ON OWNERSHIP REGISTRATION
NEW LUXURY TAX WILL BACKFIRE
NEW RENTAL RATE INCREASE ALLOWED
INFLATION OR DEFLATION? CONTINUED!
CMHC RELAXES LENDING GUIDELINES. WHY?
ECONOMY QUESTION BLITZ:
Q: YOU TALK A LOT OF INWARD MIGRATION. WHEN WILL IT START AGAIN?
A: Interesting and timely question. Canadian population growth beat expectations in the early months of 2021, with strengthening international migration driving the rebound. “First quarter data from Statistics Canada showed that the country’s population grew by 82,000, a rate that RBC Senior Economist Andrew Agopsowicz said was the fastest quarterly increase since the beginning of the pandemic.” If continued it would go to 368,000 – fairly close to the Federal Govt target of 400,000 and much faster!
Q: OZZIE, YOU TOLD US THAT YOU PREDICTED INFLATION. I DID CHECK YOUR YOUTUBE CHANNEL AND WATCH BCTV PIECES. NOW, I AM A FAN. BUT WHAT NOW? COLLAPSE? CRASH? OR MORE INFLATION?
A: Yes, yes, and yes. In fact, through all gyrations for 50 years – inflation in hard assets has been the outcome of printing money. The difference now? More printing than ever by everybody! Inflation is now worldwide, it is massive, it is relentless, it is again vastly underreported or ‘misreported’ as temporary. During the increases, we have had deep dips (2008, 2000 etc.) see below.
Q: Interest rate piece was great, but are rates up or down this year?
A: Yes, the surprise will be on upside…after the Federal election. And then as early as the month after.
Q: When will the election be?
A: Looks like the Federal Government has booked a number of venues (i.e., the Alpen Club and others) for August, September, October. It will happen.
WHEN WILL THE ECONOMY GET BACK TO NORMAL?
The new normal. We will never be the same. But first step? Not until the subsidies are stopped. As long as people get paid not to work – $2,000 a month – they will stay home.
UPON A RETURN TO NORMAL, WHICH GOODS WILL WE BUY AND WHO WILL BENEFIT THE MOST?
We are flush with cash. We have bought all the goods online…the money we have now saved will go into services. Restaurants are packed, travel…
WILL WE HAVE A BOOMING ECONOMY IN JOBS?
There are many industries needing workers at lower end of scale, but – see above.
Getting a job explosion? Not in all sectors – BC saw 70% of people not lose their job. Nationally many sectors (public sector for instance) did not lose any job. More important will be, that some businesses will close right after subsidies…there will be the possible ‘solvency crisis’ we discussed. But the longer we take to return, adjustments (people closing shop, reinventing their work, etc.) will not be as visible.
DID YOU GET YOUR SHOT OZZIE?
Yes, both. You need it to travel. Particularly if there is a passport required and a 4th wave happens. So, if you have 2 shots…go travel. If you are an anti-shot guy or gal, go travel now – last chance. Countries will close soon. If you are a denier and conspiracy is your game…go travel immediately or you must forever stay where you are. We will NOT get back to normal as far as travel goes.
YOU TALKED ABOUT A LUXURY TAX WHERE CAN I FIND DETAILS?
Starting January 1, 2022, a new tax will affect high-end products including automobiles, pleasure boats and private aircraft. The government said the tax will be a 10-percent fee on the total cost of the vehicle or a 20-percent fee on the amount exceeding $100,000, whichever amount is smaller. To me that is just the beginning. Actually, luxury taxes backfire, since people that can afford luxuries postpone purchases, people that work in the luxury sector get laid off and manufacturers sell fewer things.
Q: AGREED ON “GOING CABIN ONE”. WHERE ARE YOU CRUISING NEXT AND IN WHICH CABIN?
A: Tongue in cheek? Cabin one referred to living life large. If you mean an actual cruise, likely Greece from Venice August 22, or September.
YOU ARE A LITTLE TOO CRAZY WORRYING ABOUT BILL C -10. THERE IS NO BOOK BURNING HERE – GOVERNMENTS WILL BE SENSIBLE.
Do not guess, read the bill! Legislation is pushed thru with Liberals, NDP and Quebec support. Again: Why? No other country is doing it. This is about curtailing free speech. Censorship is the real aim. Bureaucrats banning speeches and now even writing? Luckily, the bill is stuck in the Senate. And the senate went away for the summer. Good. Still hope. If Trudeau does not get in…the bill is dead. If he does, prepare to have to defend every word you say and – according to Trudeau – every ‘appropriate word’ you do not say.
REAL ESTATE QUESTION BLITZ
Lots of fine comments on selling house before you buy another and getting a good tenant. I wish I could publish all your (some horror) stories. Thanks for sharing.
Q: ARE MARKETS SLOWING?
A: Too general a question (asked often.) Which markets?
- Not in the numbers yet. But then numbers may have been mostly of early June.
- Anecdotally yes. Realtors talk about a market that is tired. Buyer fatigue.
- CMHC relaxed lending guidelines. Why? Market (and their Share of it) is slowing fast!
- Markets in SF slowing. Shift into condos (look at numbers).
Q: HOW BEST TO HANDLE MULTIPLE OFFERS?
A: Those days are over for now. Multiple offers are now only those that are staged (listed well below market value) by realtors. Rest of markets more normal. Buyers smell a slowdown, (smart) vendors do not play games and get it while they can.
Q: WITH THE ONGOING CONDO INSURANCE DEBACLE, HOW DO YOU SEE IT PLAY OUT?
A: Get insurance for your condo separately. Get a tenant package and one for you. Make sure to read your policy. What validates it and what does not? I.e., if you leave a property vacant for 5 days and it burns, are you still insured? What is your duty?
Speaking of someone who has gone thru a fire…1. Get a great local agent…2. Get a great local agent. 3…you get the idea…then 4. Listen to him.
Q: IS NORTH AMERICA THE ONLY PLACE WHERE PRICES ARE SOARING?
A: No, according to Knight Frank Research transactions in the UK this June were 24% higher making it the highest on record. Records in prime central London, the London suburbs, and the rest of the UK, including the country house market. The number of Knight Frank reported transactions in the UK in June was 26% higher than in March 2021. Actually, around the world, major cities, seeing price increases and sales gains. Inflation is now (still unreported) a worldwide phenomenon. I mean it will stay!
Q: WHY DO YOU USE 4 YEARS?
A: Comparing month over month makes all the headlines: ‘June sales are lower than May sales’ ‘April is higher than March’. Normal is when sales rise from February into May/June, flatten in the summer, rise into September, October and then fall sharply into January. Every year. We use the same month because it is more relevant to compare our current status to previous years rather then only a current month to month snapshot. Study the numbers there are eye openers here.
Q: WHAT IS THE DIFFERENCE BETWEEN NEW LISTINGS AND ACTIVE LISTINGS?
A: New listings are only those listings that were taken throughout the current month. Active listings or inventory are all listings that are left for sale at the end of a month (can be both new and previous months listings). Both are good indicators of possible market direction.
Q: WHAT IS THE NEW LANDOWNER TRANSPARENCY DISCLOSURE LAW?
A: Last year BC introduced a new statute. This statute requires mandatory disclosure regarding beneficial ownership of land in British Columbia. LOTA will require reporting bodies that are registered owners of land in British Columbia as of November 30, 2020, to file a transparency report to disclose beneficial ownership by no later than November 30, 2021. This is aimed at finding out who owns what in a trust or other entity. NOTE…you MUST disclose all you own by the above date.
Q: NEW ALLOWABLE RENTAL INCREASES FOR RENOVATIONS ETC.
A: Sweeping new laws for you as landlords and tenants to study. The legislation intends to help landlords to recover extraordinary and necessary expenditures through rent increases (capped at 3% per year over 10 years) and dispute resolutions. A quick glance raises SOME question in my mind…a more detailed study of the doc is needed.
For instance, on “Ineligible expenditures” it states: “ A) Repairs needed as a result of inadequate repair or maintenance by the landlord. B) Expenditures where the landlord has recouped the cost from another source.” I mean who decides?
You can find it here: https://news.gov.bc.ca/releases/2021AG0101-001278
Your thoughts – AS ALWAYS – are most welcome. WRITE QUESTIONS HERE: INFO@JUROCK.COM and put OzBuzz in the subject line. I try to answer ALL questions, but not all will be featured here.
THE NUMBERS, THE NUMBERS
The sales and price numbers are still strong right across North America, but there are cracks.
There are widely different markets (SF vs condo, different suburbs vs averages).
- Calgary Sales Up 65%, Prices up 13%, Active listings for condos UP 26%
- Victoria hot Sales Up 28%, Prices up 20%, Active listings down 40%
- Surrey SF Active Listings that were up in May by 11% are now in June down 10%
Condo listings that were down by 16% are down further this June by 26%
- Vancouver Strong measured against last 4 years. Shift into condos?
BUT THERE ARE CRACKS
- Richmond, Sales up 74%, Prices up 27%, SF listings UP 13%, CONDO listings UP 5%
- Vancouver East: SF listings up 48%
- Vancouver West: SF active listings up 58% – new listings up 38%
Again: SF listings up a tad, but STILL well down from the 6,976 number in 2018. Condo listings are above the 3,968 achieved in 2018. (But well down by 12% over last year). Sales are much higher – of course Covid – but look at the previous 3 years. MUCH higher ALL YEARS!
THE FRASER VALLEY
Fraser Valley’s extraordinary pandemic real estate market continued to break sales records – 2,180 sales showed an increase of 36 per cent compared to June 2020 (1,603) and a much steeper increase over 2019 (1,241) and 2018 (1,371).
Last Month the board received the second‐highest volume of new listings ever, 3,926 new listings in May. HOWEVER, this month new listings are down by 9% over June 2020 (3,172).
Active listings across the board are down a substantial 23%.
The average price at $979,300 is 26% higher than last year and substantially higher than 2019 ($740,100) and 2018 ($751,000).
Major Point: Sales were up much higher than 3 years previous. Prices also ALL years. Surprisingly, active listings are the lowest in June of last 4 years also…-23%!
SURREY MAJOR POINT:
June SF sales up still dramatically last 4 years. June condo sales ditto
June SF prices up dramatically all 4 years. June condo prices up all years
June SF Active Listings down 10% all years. June condo Actives down 26%
OZZIE TAKES A SHOT ON NON-REAL ESTATE (Opinion):
Here I have received a question and I take a shot: Not a prediction, heck no! No advice…just a wild guess! In order of questions received.
WHY DON’T YOU PUBLISH YOUR BLOG ONLINE LIKE ALL BLOGS DO? WHY MUST I SIGN IN ?
We publish the blog – all blogs – online. But if you give us your email you get it sooner. We also answer your questions to your email. Finally, if we make an invitation to an Ozzie ZOOM night, you get invited.
CRYPTO QUESTIONS ABOUND:
SORRY, BUT WHAT IS BITCOIN ALL ABOUT?
Do not be sorry. It is confusing. The idea was and is…to create a global non-government financial interactive operating system. (Which Bitcoin is not yet, Ethereum and Cardano want to create.) For that to work you need global protocols. However, my question: How do you do that without anyone in charge? (No CEO at Bitcoin)
CRYPTO LOSSES YOU TALK ABOUT WILL BE ABSORBED AND THE WAY UP IS CLEAR!
Huh? $1.5 trillion was lost by someone. Absorbed by the wrong (small) people! The way may be up, but it sure is not clear, which of the 8,000 – 10,000 coins will survive.
WHY WOULD GOVERNMENT WANT CRYPTO OR ANY DIGITAL CURRENCY?
Having a digital currency means having total control. No tax evasion. No cutting corners. Heaven to bureaucrats. Easy to hide printing (creating).
IS CRYPTO COMING TO CANADA. REALLY?
If you mean as a currency? Banks are more than thinking about it. They study it. England, Sweden and the US have massive studies underway…as does the IMF (a euro coin). China has kicked out its crypto miners. Since 65% of all Bitcoin was mined in China…why did they do that? To create their own! Probably a good thing.
WHY THE NEED TO STUDY CRYPTO? IS IT NOT FINISHED YET?
A storage of value is one thing. To create a global financial interactive operating system is another. Crypto has problems: Sustainability… Scalability … Interoperability … Governance.
Who runs it?
WHAT IS THE NETWORK AND COMMUNITY EFFECT? NOTE: THIS IS YOUR FUTURE!
A: I attended a UDI meeting a few years back. At the meeting one of the developers talked about why he likes “whale” type realtors. Realtors that had a proven following and whose clients could be depended on to close. Of course, since then with Facebook, LinkedIn etc. many realtors and others created a “following”. Today “whales” are sought after by developers.
However, when these followers – thru YouTube became interactive (they respond, ask questions, offer opinions, etc.) they turn from a whale leader with followers into a network of likeminded people.
Well, now Youtubers have a network of tens of thousands of followers and are literally paid by the amount of subscribers. They formed their own network and community.
Look at Reddit with millions of small subscribers that drove up the price of AMC and GameStop hundredfold – a likeminded community – acting in unison.
Here is the key, (there is a deep understanding necessary) it is not the value of the coin, the value of the technology or even ANY value. Today it is creating first a following, then growing it into a network that turns into a community. It is the network and the community than runs together creates massive power. Your future? Whatever you want to do: Find a large network or become a network and create a community. Start by joining my community of real estate investors. Ha-ha.
WHY IS THERE A FINITE NUMBER OF COINS?
And then…people lose the passwords, and the coins are lost forever. A famous Vancouver crypto operator dies and a 100 million plus (purportedly lost). Worse, last week a young billionaire died swimming and likely – if no one finds passwords and ‘crypto keys’ – some 1.5 billion worth of coins are lost. Every year Bitcoin loses between 4% and 5% of passwords and keys!
Passwords? I cannot even remember my Apple password — now I am trusting my money to my memory? Hahahaha!
Enough crypto. If you play with it do not leverage. It will kill you in a downturn. You are not a value player you are a momentum player, successful in a community that creates up or down momentum regardless of value. Leave start-ups – choose your community well and watch it. Is it growing?
MY COMMENT ON ELON MUSK RAISED SOME EYEBROWS.
Several people were surprised that a) Tesla gets renewable credits to the tune of $1.5 billion and then can SELL the credits to gas guzzlers. Well, that makes him a fine CEO (creating a bottom line when selling cars did not get him one)…but it smells – a little – when he throws Bitcoin owners under the bus because of ‘sudden energy concerns?’ (Ed. Note: No more Musk please…I realize that he has a lot of fans. I agree he is a genius.)
THE PROVERBIAL BLACK SWANS – SIMILAR BIG COMMENTS
I thought your “Black Swan” comments were right on. Whatever will happen it will be massive, misunderstood and come largely from unexpected quarters. The question of enormous leverage, neophytes talking about 3fers or 10fers (margin ability) openly on Reddit and other sites, the fact that here are 8000 coins likely10 precent or more outright frauds), criminals hiding their payments in bitcoin… all that smells indeed like a “building black swan). We see it, we feel it, but we cannot imagine what it will mean.
But Ozzie come on…take a shot.
I‘ve had a dozen similar questions – answered them one by one…But the question is always…come on – why not take a shot?
I am an incessant reader all my life…now an incessant YouTube watcher…and I am always looking for that swan…Both up or down.
While I mainly look only for real estate swans (what could affect values, sales) at these times I also look for stock and crypto crashes as forerunners for something worse to happen in housing.
For example, I looked always at shadowstats.com to see the true rate of the “Volker basket” inflation 35 years ago. It served me well in the support of my inflation stance.
Well, here is a predictable (?) Black Swan for you:
Negative outcome Money-losing companies have flooded the secondary (stock) market (Bloomberg): During the past 12 months, almost 750 money–losing firms have sold shares in the secondary market, exceeding those that make profits by the biggest margin since 1982. Look at the graph below. In 2000 and 2008… the nonprofitable companies also outsold the profitable ones, with the result that ‘an ebullient market lured unprofitable cos into the market’. Once supply overwhelmed demand…it turned into a rout…twice. (graph) Says Barron’s: … “the profitable firms—usually larger and more established in business—were able to raise more money than their unprofitable counterparts. That gap, though, has been narrowing, and the unprofitable ones have taken over in the past year. The money losers raised $27 billion more than the money makers since last June—something that has not been seen in at least 40 years, surpassing even the gap during the dot-com bubble”. Look it up:
Hold that thought…The inflection point came when the graph crossed ‘0’ negative.
That happened in 2000 and 2008. Followed by massive crashes. The next one? Look at the graph below … happened was 2 weeks ago…
Predictable, possible or? Black Swan? Swan circling? You asked for it…
ECONOMIC OUTLOOK AND REAL ESTATE FORECAST ON ZOOM
Ozzie and Ralph Case company Jurock Case Investment Realty (JCIR) is holding an information seminar… Real Estate Markets in June.
As an Oz buzz reader, you can attend free, but must sign up at the www.JCIR.cawebsite.
Ozzie’s other websites for you to play in: free
1. if you are in the industry, in building, selling, marketing, developing, lawyering, etc…,etc. list yourself in the free BC real estate directory: www.bcred.ca
2. Questions to Ozzie and experts: www.askanexpert.ca
3. Set up your own “talk” at www.realestatetalks.com
(Ozzie’s 22-year-old bulletin board for you to play in)
4. want to see all Ozzie blogs and all Ozzie podcasts? go here: www.ozbuzz.ca.
5. Who the heck is Ozzie? go to www.ozziejurock.com.
6. Ozzie on YouTube? www.youtube.com/jurockvideo
- Ozzie’s zoom speech to your company or organization?
Now fully booked till September 4. thanks.
LIVE LIFE LARGE
I grow into my future best!
There is me here today
Thee is a better me somewhere
Today I take the first step
Towards growing into my
Future best self.
Look em’ up (and buy) all the “Grow into your future best” cards at: www.commitperformmeasure.com
WANT TO PARTICIPATE?
Go to www.realestatetalks.com – Some 2,500 members (47,009 posts) talk real estate. Ozzie created this bulletin board in 1998!
If you are in a real estate related industry of any sort (realtor, appraiser, lawyer, home inspector, etc.) list yourself in Ozzie’s free British Columbia real estate directory at www.bcred.ca.
OZZIE’S YOUTUBE CHANNEL
You can watch all videos and podcasts on my YouTube channel at https://www.youtube.com/jurockvideo. It is a great way to check on what I said 10 years ago.
Ozzie is on air with Michael Campbell on the fabulous MONEYTALKS every Saturday sometime between 8:30AM – 10 AM. The radio station is CKNW and the best way to listen to it is WHEREEVER YOU ARE IN THE WORLD, just visit www.cknw.com at 8:30 am every Saturday (PST), click on live and you’re good to go. The Hot Property that we discuss there, is available by subscribing to the Oz Buzz Dispatch at Jurock.com
Why subscribe if I can just go to the website at Ozbuzz.ca? Hot properties and the latest podcasts are DISTRIBUTED TO SUBSCRIBERS FIRST– posted 2 weeks later on website.
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