August 8, 2021
“Life is like a dogsled team. If you ain’t the lead dog, the scenery never changes.” –Lewis Grizzard
OZZIE HAS A ZOOM MARKET UPDATE ON AUGUST 11.
THE NUMBERS, THE NUMBERS – JULY 2021, 2020, 2019, 2018
IMMIGRATION WILL HIT 400,000 THIS YEAR?
US/CANADIAN DOLLAR FORECAST
HIGHER INTEREST RATE THIS FALL?
WHAT? ‘WELLS FARGO’ CANCELS ALL PERSONAL LINES OF CREDIT ON THOUSANDS OF CUSTOMERS?
WORLDWIDE REAL ESTATE CONTINUES HOT?
Q AND A: REAL ESTATE, ECONOMY, BLACK SWAN
AMAZON, NETFLIX NOW DISNEY
SUBSCRIBER BLACK SWANS CIRCLING?
SF DEALS SHIFTING INTO CONDOS?
INFLATION OR DEFLATION? CONTINUED!
Q: YOU MENTION THAT YOU HAVE ZOOM MEETINGS FROM TIME TO TIME. I DON’T THINK I HAVE EVER SEEN AN INVITATION ON OZBUZZ. DO YOU ACTUALLY HAVE THEM?
A: I am the co-owner of a real estate company called Jurock Case Investment Realty (JCIR). Please sign in there: WWW.JCIR.CA. Next zoom meeting is “Real Estate Markets” on August 11, 2021, 7 PM PST. As an Oz Buzz SUBSCRIBER, you can attend free, but must sign up at the www.JCIR.ca website to get an invitation.
OZZIE MAJOR, MAJOR POINT:
Major media hardly reported it…This is a ‘Black Swan precursor event’.
Wells Fargo – from one day to the next – shut down all its existing personal lines! The revolving credit lines, which typically let users borrow $3,000 to $100,000 were instantly cancelled. Customers have 3 months to pay off or change to regular credit (mortgage, credit card). Wells Fargo warned customers that the account closures “may have an impact on your credit score”. You guess?
In 2008 I sent an urgent warning to my “Jurock Real Estate Insider” subscribers, warning them of the impending cancellation of CANADIAN bank and their unused credit lines. I advised businesses and individuals to use the ‘unused’ portion of credit (call it an insurance policy) if they expect to have to use it and do it quickly. In fact, all banks canceled all ‘unused’ credit lines within weeks of my warning. Customers with 20 or more years tenure with their bank, faced cancellation of credit lines. It was of course a liquidity crisis… part of the general financial crisis. Why did they do it? Unused lines of credits must be set aside as possible outstanding liabilities. So, they cleaned up their balance sheets. Bugger their long-term customers. But, please, this is far worse!
Dear subscriber, you may think that is just a minor adjustment of one of the US banks balance sheets. It is decidedly NOT! Tens of thousands of people are affected….not ‘unused credit lines’…but ALL existing personal credit lines.
Not just any old bank but Wells Fargo & Company – a leading financial services company that has approximately $1.9 trillion in assets and claims to serve one in three U.S. households and more than 10% of all middle market companiesand small businesses in the U.S!
This major institution cancels all its customers personal lines of credit – just like that. That is after selling them into the credit lines hard in the first place! Rings a bell in your head? Ask yourself: What about MY personal lines and MY HELOC). Imagine all of your personal lines of credit you possess– and you get three months to clear it out… ! Get the idea?!
They could not do this to my HELOC or line of credit, you say? Read your docs, be astounded as to what you signed and cry!
Why did Wells Fargo do it now? Whatever the reason that was given…That is NOT it!
Ask: What is the bank expecting to happen (Unsubstantiated…rumor is that AM Express has also canceled a third as well). This is not idle speculation. For them to incur the wrath of their customers, the eyebrow raising question in their financial strength etc.…must be that they saw/see a REAL DANGER ahead. Liquidity crisis? Much higher rates? (Banks need to match funds!)
Major Point: No warning about what MAY happened…it HAS happened.
Q: DOZENS OF QUESTIONS ON: WHEN, WHERE HOW HIGH WILL INTEREST RATES GO?
A: I said last month that the ‘surprise will be on upside’ In the last two weeks many forecasting stalwarts forecast early rises:
Canada: I.e. Benjamin Tal, CIBC allowed one week ago “… that the Bank of Canada is widely expected to start tightening rates in the second half of 2022 – notably earlier than what was assumed not too long ago.”
US: Dallas Fed President Richard Kaplan suggested that “tapering” could come soon: “ As we make substantial further progress, which I think will happen sooner than people expect, I think we’d be far better off, from a risk-management point of view, beginning to adjust these purchases of Treasuries and mortgage-backed securities.”
My take: Higher rates are ahead…as early as .25% in October.
Q: WHAT IS YOUR CURRENT TAKE ON US DOLLAR AND CANADIAN DOLLAR?
A: If market expects that the US Fed raises rates sooner… will benefit US dollar and combined with falling oil prices will make Cdn much lower again.
Q: I LIKED YOUR MIGRATION PIECE. IF TRUE- IT’S VITAL.CAN’T FIND THIS ON ‘STATS CAN’ SITE. PLEASE SHOW URL.
A: If true? Everything we publish is supported by fact. We got most numbers from RBC and from IRCC. Note:
–Goal of Federal Government remains 1.2 million immigrants between 2021 – 2023.
—RBC Senior Economist Andrew Agopsowicz (quoting Stats Can) said fastest quarterly increase since the beginning of the pandemic at 82,000 first quarter. (First quarter is generally the LOWEST quarter. Even if all quarters were the same: 328,000…plus 90,000?)
—IRCC holds Express Entry draws. This is the primary way Canada welcomes economic class immigrants. (60 per cent of the new immigrants).
–In addition, IRCC launched six new permanent residence streams aiming at some 90,000 essential workers and international graduates to permanent residence.
Major Point: The 400,000-immigrant number for 2021 is possible. Whoever comes they go mainly to the big cities: Vancouver and Toronto. It will have an impact! Plus: New study permits issued for international students posted a healthy 44 percent annual increase while visas issued after graduation were up by 160 percent over the same quarter last year.
Q: YOU ALWAYS MENTION THAT AMAZON IS COMING TO VANCOUVER. BUT IF THEY ARE THE ONLY COMPANY COMING, WHATS THE BIG DEAL?
A: Amazon IS A BIG DEAL (look at previous ozbuzz.ca for details.) But there are many other companies looking to come here. Netflix will shoot 52 movies in BC during the next year. Now, strengthening our “Hollywood North” label Walt Disney Animation Studios is planning to open a new studio in Vancouver. Slated to open in January 2022, will focus on long-form series work and special projects for Disney+, including a musical series, Moana. This will help our already strong digital animation sector. These kinds of companies put us “on the map” and are vital for our continued future. Not just mountains and oceans and commodities…real work for real people at the forefront of innovation! Amazon, Netflix, Disney (28 others!) Keep em coming!
Q: JUST JOINED OZBUZZ. FASCINATED BY YOUR TAKE ON INFLATION. IN WHICH OF YOUR BOOKS DO I FIND YOUR BASIC POSITION?
A: All of them…but you can also see our stance in almost every issue…go to Oz Buzz 39 – 42. (Inflation/Deflation-Timing-Trend-Cycles).
Q: EARLIER THIS YEAR YOU SAID THERE WILL NOT BE A JUNE ELECTION, THEN YOU CHANGED YOUR MIND AND PREDICTED AN ELECTION. NOW?
A: As I said last month, the Federal Government has booked a number of venues in Vancouver and Richmond. They are just watching their internal polls – mostly they care about Ontario numbers – once they line up…an election will be called. Likely? October.
COMMENT: LOTS OF GENERAL ECONOMY QUESTIONS. MANY OUTSIDE MY SCOPE OF INTEREST OR TOO SPECIFIC A QUESTION. I HAVE ANSWERED SOME OF THEM DIRECTLY…OTHERS…NOT.
- How to strata title an apartment building. (Varies by city)
- How to get on pre-sale lists (Go to jcir.ca and other local pre-sale marketing lists)
- Luxury tax details? Google it!
- Bill C-10… Curtails free speech? I have said all I want to on the subject…Interestingly item on the FREE SPEECH CURTAILMENT ISSUE: Michael Campbell’s Facebook page was suspended by Facebook. If Facebook can do that now to a regular commentator with his own radio show… what if the government adds this to its power?
REAL ESTATE QUESTION BLITZ
Q: I LIKE TO SEE SOME US NUMBERS (PHOENIX, PORTLAND, SEATTLE).
Best to go to drill down to area-by-area statistics – including school =ratings and number of people in a household by sub area?
Q.: I LIKE TO SEE THE DETAILS OF THESE NUMBERS FOR TORONTO AND PREDICTIONS.
In Canada it is best to go to Canadian Real Estate association at CREA.ca and then go to individual city board websites. Also Realtor.ca etc. ( In the US go to website below or realtor.com)
Q.: HERE IN MONTREAL, QUEBEC…INFORMED ME…THAT CMHC IS ALLOWING REFINANCING STRICTLY FOR THE PURCHASE OF PROPERTY, AND ANY RENOVATIONS THAT HAVE TO BE DONE…CANNOT BE USED TO PAY DOWN ANY OTHER DEBTS…QUESTION: BASICALLY, IF I PURCHASE A NEW INVESTMENT PROPERTY WHICH IS MY INTENTION, DO RENOVATIONS WHICH AGAIN ARE MY INTENTIONS, AND THERE’S LEFTOVER MONEY, WHAT HAPPENS TO THIS LEFTOVER MONEY? CAN I DO WHAT I PLEASE WITH IT?
A: Go to CMHC website here: https://www.cmhc-schl.gc.ca/en/professionals/project-funding-and-mortgage-financing/mortgage-loan-insurance/mortgage-loan-insurance-homeownership-programs/cmhc-improvement. If you follow the guidelines, there won’t be any money “left over”.
Q.: I LIKE YOU TO EXPLAIN PRE-SALES IN DETAIL. I THINK I UNDERSTAND THE BASIC PREMISE, BUT HAVE NO CLUE AS TO DOWNPAYMENTS AND MORTGAGES, ETC.
A.: I just did a detailed discussion on the radio (Money talks with Michael Campbell CKNW 980) Saturday the 7th. If you join our zoom next Wednesday, we will make it part of the presentation.
Q: IS NORTH AMERICA THE ONLY PLACE WHERE PRICES ARE SOARING?
A: Further to last months Knight Frank Research report there are now a number of organizations that report hot, hot real estate markets. Actually, from South Korea to Australia to Hungary, nearly every major economy’s housing market is rising Some of these reports blame “the effects of the pandemic”. We believe it is monetary inflation…largely unreported monetary inflation creating the biggest price boom in two decades. According to OECD data, out of the 40 countries analyzed, only three countries experienced real-terms house price falls — the smallest share since 2000, per a Financial Times analysis. Economists credit the price increase to low-interest rates, larger banks of savings collected over lockdowns, and yearning for more space as work from home options grow more common. It’s hard to remember another time with such high demand from both investors and homeowners for UK property.
Australia reports a soaring market….
Q: WHAT ABOUT COMMERCIAL, OFFICE AND INDUSTRUIAL REAL ESTATE?
A.: The WORLD PROPERTY JOURNAL reports a ‘surprising worldwide recovery in commercial real estate’.
Their key global investment takeaways :
- Global commercial real estate investment volume in Q2 grew by 98% year-over-year to $260.4 billion, bringing the H1 2021 total to $459 billion–up by 15% from H1 2020.
- Americas and APAC volumes returned to pre-COVID levels in Q2, while European volume is expected to return in H2 on the back of economic recovery and widespread COVID-19 vaccinations.
- Capital continued to flow primarily to industrial and multifamily assets, while office investors remained focused on core assets.
- Investors favored markets with strong population growth, including those in the U.S. Sun Belt, German and Nordic urban centers and Tier I cities in Asia-Pacific.
H1 2021 global investment grew by 15% from a year ago to $459 billion. The office sector had the largest share with 26% of total investment in H1 2021, followed by industrial at 22% and multifamily at 20%, reflecting accelerated consumer and demographic trends.
Major Point: Companies, funds, individuals all are GUSHING CASH. That cash is now findings its way into ALL hard assets and assets that show a return are leading the way. There is an enormous drive into multi family assets by Pension and other funds worldwide.
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. Canada’s average price has risen by over 25% nationally…look up the map here (Ghost your cursor over every province to drill into the numbers) https://www.crea.ca/housing-market-stats/national-price-map/
Again: Dramatic changes:
Sales of SF homes were up 46% June/June, but now July over July they are down by 7%!
Sales of Condos were up June over June by 61%, now July over July still up but only 20%
SF home prices still up by 19% (down from 23%) but price increase percentages are slowing, and condo prices are only up by 4% (as last month).
SF Listings are down 9%.
Condo listings down by 25%.
Major Point: Summer heat and psychological confusion (maybe I should wait to sell) has reeled in the listings…Sales are off, but still much higher than the previous 3 years. Realtors tell me that they see a marked slowdown. Vital to get a good professional realtor in this market peak.
THE FRASER VALLEY
Fraser Valley – all SF in July (new and used sales)
Sales of SF homes in FV down 14%, but listings also down (vendors will wait for better price?) Prices remain much higher
SURREY MAJOR POINT:
July SF sales down over 2020 but up 2019,2018. Active listings down 27%!! Prices UP
City of Surrey Condos July prices UP all years.
City of Surrey Condos Active Listings down 35% all years. Sales UP 25%. June condo Active listings down 26%.
COULD BE A BLACK SWAN
Subscribers have taken a number of stabs at the “Black Swan”.
- Virus 4th wave, or Virus blood clots, new strains, new shutdowns, economic collapses
- Crypto sucks out all investment capital as millennials look for quick fast ways to get rich
- Millennials refuse to work, having got used to the free government handouts
- The “great reset” predicted and laid at the feet of German professor is not just a possibility, but will be reality
- Wildfires, floods, and storms are precursors to the end of the world.
Lots of submissions…some waaayyy out there. So, again, as last month: If it is expected and predicted…it is not a Black Swan!
Look under Major Point above: ‘Black Swan precursor event’ actually is underway!
During the last few months, we spent a lot of time on crypto questions…with the result …we have 43 new ones… no more…crypto in this issue
- I sent your piece on community and network to everyone in our investment circle. Brilliant!
- Not value but momentum only! That’s what millennials want: fast money!
- Your community effect item was great. That’s what is happening in our country where groups become powerful (WOKE. BLM) because of their like-minded philosophy. (Ed. Note. I was more referring to economic structures…where a large following of interactive participants create “togetherness” as in buying same things or selling etc.
- If your “Negative outcome Money-losing companies” turns out to be true, I want to create a community with you as the leader.
- Like your ‘term’ explanations. You should put all real estate terms on Oz buzz as a reference area.
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.
4. Who the heck is Ozzie? go to www.ozziejurock.com.
5. Ozzie on YouTube? www.youtube.com/jurockvideo
- Ozzie’s zoom speech to your company or organization?
Go to www.ozbuzz.ca to inquire rates and availability
LIVE LIFE LARGE
I grow into my future best!
Every small business has a plan
Every company has a budget
Every bank has a plan
To be the best one can be, one
Has to create a personal plan
I create a personal plan
I review my plan daily
I hold myself accountable
I focus on my top 20% of customers
I plan my free time – I guard it zealously
I plan my work time – I work with commitment
I plan my get ready time – where preparation
Meets opportunity with confidence
I will grow into my future best!
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.
HAVE A QUESTION OR COMMENT?
You can reach me at firstname.lastname@example.org with all of your questions, comments and concerns regarding the Oz Buzz publication.