Oz Buzz

September 19, 2022

AGENDA
2022 HEADLINE REVIEW
THE (CRASHING) NUMBERS, THE NUMBERS
QUESTIONS, QUESTIONS
LANDRUSHCANADA.COM NOW AVAILABLE ON VIDEO
SNAPSHOT – INVESTORS IN BC
QUESTIONS, QUESTIONS: 
Pre-sales, developers, assignments, China, Foreigners, Canada and US dollar, FED, USA, buying now, many more

Question:
If you did not know your age,
how old would you think you would be?

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AGENDA
2022 HEADLINE REVIEW
THE (CRASHING) NUMBERS, THE NUMBERS
QUESTIONS, QUESTIONS
LANDRUSHCANADA.COM NOW AVAILABLE ON VIDEO
SNAPSHOT – INVESTORS IN BC
QUESTIONS, QUESTIONS: 
Pre-sales, developers, assignments, China, Foreigners, Canada and US dollar, FED, USA, buying now, many more

Question & Answer

Q: I SURE MISS THE Q/A SECTION. PLEASE BRING IT BACK
A: HERE IT IS

COMMENT
I had three responses to the silly very old joke on the last Oz Buzz. One lady determinately shared her annoyance with me. She described it as anti-female with a lot of wordy unhappiness. Entitled to her opinion. Noted. Funnily I also had a finger waving from (I presume) male subscriber who said that painting 70-year-old men as only being able to get a woman if they pay for it is demeaning to old men. The third reply was also negative, but I could not find the writer in our database … so that is that. OK, a new world indeed. Tell a joke at your peril!

Q: YOUR TAKE ON MAKING SURE DEVELOPERS CAN CLOSE. HOW DO I DO THAT?
A: Research a quality developer. In the end in all investments, you make particularly in real estate you buy the owners/managers of a fund, owners/manager of a REIT and owners/manager builders and developers. Buy reputation, experience – carefully read (or have your professional read) the contract! Evaluate the true benefits of the many deals offered now.

Q: SHOULD I STILL BUY A PRE-SALE? THERE ARE SOME GOOD DEALS.
A: If you investigated the area, the builder (see above), note this: You are in an inflationary environment where you fixed your today’s price. Price is fixed, inflation is rampant, adding to costs at about 7% a year. However, if FED and BOC are determined to crash markets …? In this environment there are no guarantees…unchartered waters. Your call.

Q: I BOUGHT A PRESALE last year, CLOSING end of 2023. HOW DO I GET OUT? ASSIGN IT?
A: A truly personal question. FOMO? You bought it for a reason. Home? Why get out? Investment? See above. You bought last year. You bought at a much lower price that now is fixed till the end of 2023. If you can assign it, you likely will lose some of your deposit. Only you can answer that question.

Q: YOU SAY CHINA IS GOING TO BE IN TROUBLE. D0 THEY NOT HOLD US TREASURIES IN THE BILLIONS? COULD THEY NOT CRASH THE US MARKET INSTEAD?
A: Interesting question. Better ask a currency expert/economist. Milton Friedman said years ago that it is ok to send paper money overseas when you get cars, boats commodities – things – in return.

I am only interested in what impact overseas investor face in their own country that makes them want to come here and drive up/or not our markets. Note next question.

Q: OUR GOVERNMENT HAS STOPPED ALL FOREIGN REAL ESTATE INVESTORS FROM BUYING FOR 2 YEARS. THAT WILL A HAVE VERY NEGATIVE IMPACT, I GUESS?
A: Not ALL foreign investment. Foreign investment in residential real estate, yes, and with exceptions. Investment in commercial, retail, industrial is open. Can you say: vacant lot and build?

LOTS OF QUESTIONS ON ECONOMY. I AM NOT AN ECONOMIST BUT HERE GOES: 

QUESTIONS AND ANSWERS BLITZ

GOING INTO A RECESSION? 
Yes, Canada milder. China and Germany severe.

THERE WILL BE NO RECESSION-LOW UNEMPLOYMENT, JOBS OPEN
True you have to increase unemployment to break inflation. And they will. Watch funds rate this week

YOU SAY CANADIAN DOLLAR TRAVELS WITH OIL. STILL? 
Yes, oil to go down further in October.

ARE YOU STILL FIRM ON YOUR TAKE ON THE US DOLLAR?
Yes. It’s thee reserve currency, it pays higher interest, money keeps flooding in. US higher.

I HAVE A FIXED RATE MORTGAGE. IS MY PAYMENT SAFE?
Not if you hit the trigger point (highly likely by end of year for most) – google Trigger Point.

I KNOW YOU WRITE A LOT ABOUT INFLATION – HOW HIGH WILL IT GO?
Read previous Ozbuzz issues. Go to shadowstats.com and see what the real ‘Volker’ rate is.

I HEARD YOU ON MICHAEL CAMPBELL. YOU SAID BUY INDUSTRIAL. STILL?
Yes, for years. Search my Ozbuzz blogs and listen to my Oz casts. I have recommended industrial for years! BC Industrial is now the highest priced in Canada and had the largest number of deals last year. Vacancy rate? .05%! That on 230 million sq ft.

WHAT IS YOUR TAKE ON ELECTRIFICATION?
Michael Campbell has had some brilliant guests. We are not ready to convert. Go to Brian Gitt interview https://podcasts.apple.com/us/podcast/315-brian-gitt/id1453077533?i=1000579434819

DO YOU BUY ALL HARD ASSETS?
I am a real estate guy. Have sold all losers (as I recommended for a year). Thinking of buying commodities (minerals) that you need to make electricity, like lithium etc.? BUT NOT NOW.

YOU SAY CASH IS NOT TRASH. BUT I LOSE PURCHASING POWER. 
Indeed. Market relatedGet into cash short term. But don’t stay there. Age related: Obey!
Go look up previous Ozbuzz or listen to my speech at Landrushcanada.com video.

HAS REAL ESTATE ALWAYS BEEN GOOD?
If you understand and act applying the PRINCIPLES OF inflation/timing/trend/cycles – YES! All urban real estate that has a purpose – and is producing income … will always have value and rise in direct line with inflation.

WHEN CENTRAL BANKS ARE FINISHED RAISING RATES, THEY WILL GET BACK DOWN TO 2% BY END OF 2023?
Absolutely not. They will go to what they think is the highest necessary and stay there for 1-3 years.

HARRY DENT HAS PREDICTED A HUGE REAL ESTATE CRASH AND LOOKS LIKE HE IS RIGHT.
Leave me alone with Mr. Dent. He forecast real estate (and other crashes) for 29 years. Read his book “ The Depression of 2010”. 2010!

YOU RECOMMEND BUYING IN THE STATES. WHICH CITIES?
Buy my video. Haha.

I BELIEVE THAT THE FED WILL KEEP PRINTING MONEY FOREVER. YOU SAID SO.
Thanks for vote of confidence. Difference now: You cannot go back to printing if inflation is at 9 percent. You trigger hyper inflation.

WILL THE FED NOT STAY FIRM. NOT PIVOT AND THEN HAVE TO RAISE RATES AGAIN?
See below…

THAT’S IT – A SMALL TAKE ON (TOO MANY) QUESTIONS

MAJOR, MAJOR  POINT:
The US FED is having a two-day meeting culminating in releasing its interest rate increase (September 21) this Wednesday. Also, a host of Central Banks worldwide are raising interest rates THIS week.

INNER CIRCLE: We will publish our view on September 22/23.

TOILETS OF THE WORLD

Comment: I kill myself on your “toilets of the world.” I thought it was ridiculous but had to look. Then I saw your “business toilet”. I fell off my chair. I have an iPad rest at eye level on my throne!

I cannot believe myself.

Ok today, the argument rages: Inside out or Outside in: Here is the definitive answer:

toilets

Oz buzz themes in 2022 to date (September 20, 2022)

  • JANUARY: CASH IS NOT TRASH. CHINA WILL CRASH WORLD MARKETS
  • FEBRUARY: THE HIGH IS IN PLACE
  • MARCH: MARKETS CONTINUE TO SHIFT DOWN
  • APRIL: US DOLLAR WILL SOAR. SALES PLUMMET
  • MAY: MASSIVE CRYPTO CRASH WILL TAKE OUT OUR BUYERS
  • JUNE: CASH IS NOT TRASH. SALES CONTINUE TO PLUMMET 
  • JULY: 4 UGLY MONTHS AHEAD
  • AUGUST: WORLD ECONOMY SNAPSHOT/FORECAST

THE AUGUST NUMBERS

TORONTO

This comparison says it all. Looking year over year August prices are 1% higher to $1,070,200. Looking August 2022 ($1,079,500) over February 2022 ($1,334,500) you see a decline of $255,000 (on the overall average price) or 20%.

year over year summary

year over year summary

Major Point: Active listings are 62% higher, (versus 20% lower in Feb). Prices sharply lower when you use the high of the market (February – just like Vancouver) versus the August price … and not August 2022 over August 2021! This will continue to adjust – downwards.

BRITISH COLUMBIA

The BCREA numbers speak for themselves. Unit sales are crashing everywhere (as measured against last year). Average decline? 41%. Biggest decline? Chilliwack – 57%. Average prices are – on average 2% higher over last year … but measured against the high in February – down between 15% – 25%

around-the-province stats

SNAPSHOT

LOWER MAINLAND INVESTORS NOTE:

  1. The high in sales was reached almost everywhere in March 2021 (2021!). The high in the average price came almost everywhere in Feb (Mar/Apr) 2022 (2022!).
  2. Prices will be quoted in the media as being UP and that is correct if you measure prices of today against prices of August 2021. But the decline started THIS February as we told you in our February: ‘THE HIGH IS IN PLACE’ headline
  3. Also, the price increases over last August in Vancouver are only 1% in SF, when they were 17% May 2022 over May 2021. But a drop of 14% since April when the average clocked in at $2,311,300!

Major Point: While year over year prices are up (and that is all you see in the media)the price declines THIS year are continuing to accelerate in all sub-areas every month and that for 6 months!

We are showing absolute monthly highs (March 2021) against August 2022. While some may argue that at least on sales it is unfair to compare an August month against a March one. But this is just for a real eye opener. We are trying to rock your (complacency) boat! Down 74%!

For clarity – as usual – we report the August over August results for 4 years.

highs in monthly sales

VANCOUVER (4 years)

Again: 

  1. Here we are looking at a 4-year August over August comparison.
  2. Remember to take the 2020 comparisons with a grain of COVID salt!

Snapshot:

SF: REBGV reported SF sales declined a further 44% over August 2021. The average price achieved in April of $2,312,000 is down by $321,444 – or 14%!

CONDO: REBGV reports condominium sales are down 39% over August 2021 sales. The condominium average price is down by 6% from April.

vancouver-aug-2022 stats

  • Major Point: Study the above at the opening comparison of the ‘high in sales’ (usually March 2021) and the high in Vancouver prices (usually February 2022) and note the sharp declines in all sales and sharp declines in all prices.
  • Then note the 4-year comparisons.

FRASER VALLEY

SF home sales continued their sharp downturn (-57%). Prices are much lower. Active SF listings CONTINUE HIGHER in the last 2 months. As well as being higher than 2019 July. Condominium sales cracked as well, down 49%.

Fraser valley stats

The numbers tell the story. Look at intro to the numbers and the comparison of February 2022 to August 2022, a 24% decline in single family home prices.

MAJOR, MAJOR POINT: Again, as we said on February 9: THE HIGH IS IN PLACE. For the last 5 months we pointed to a changing market…before the interest rate changes really clocked in and the stock market and crypto crashes. Now, the very (too?) fast increase in rates really starts to bite. We expect that to continue and even accelerate into the Fall.

DISCLAIMER
Please note that any response to any email or any invitation to any meeting is accepted on the understanding that “Jurock Real Estate Insider (JREI)”, “Oz Buzz (OB)”, “JCIR (JC)” as the case may be, are not responsible for any result or results of any action or actions taken in reliance upon any information contained in this posting or meeting, nor for any errors contained therein or presented thereat or omissions in relation thereto. 
It is further understood that the said OB or JREI, or JCIR as the case may be, do not, pursuant to this posting, purport to render legal, accounting, tax, financial, planning, or other professional advice. The said OB and JREI and JCIR may or may not own properties discussed at meetings or receive or not receive referral fees at any meeting you may attend as a result of this posting or invitation. The said OB and JREI and JCIR, as the case may be, hereby disclaim all and any, liability to any person, whether a purchaser of any offering, a reader of any offering, or, otherwise, arising in respect of this postings and of the consequences of anything done or purported to be done by any such person in reliance, whether whole or partial, upon the whole or any part of the contents of these postings. If you respond to any posting OB or JREI and JCIR or attend any meeting from and by said companies, we fully expect that you get independent legal/tax/investment/mortgage advice as the case may be.

#OZBUZZ #LANDRUSHCANADA #REALESTATEMARKET #REALESTATEVANCOUVER #REALESTATECANADA #WORLDVIEW #REALESTATEBRITISHCOLUMBIA #HOTPROPERTIES #REALESTATEPODCASTS #QUESTIONS #INTERESTRATES #OIL #FORECASTS  #PRESALESASSIGNMENTS

Song of the week

  • Slightly nasty comment about my choosing Wagner overtures. “Incompetent composer, anti-Jewish – just load noise from another century.” My – always bright wife said – leave it alone – why talk music anyway?
  • As always, she is likely right, but dear B.M. Every time you attend a wedding, and the bride comes in at the arm of her father – you listen to Wagner. In English-speaking countries, it is generally known as “Here Comes the Bride” or “Wedding March“, but “wedding march” refers to any piece in march tempo accompanying the entrance or exit of the bride, notably Felix Mendelssohn’s “Wedding March”. When you see the movie Apocalypse Now and watching the helicopter attack it is Wagner’s “Ride of the Walkure”
  • Loud noise. Please get lost.

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Disclaimer

Please note that any response to any email or any invitation to any meeting is accepted on the understanding that “Jurock Real Estate Insider (JREI)”, “OzBuzz (OB)”, “JCIR (JC)” as the case may be, are not responsible for any result or results of any action or actions taken in reliance upon any information contained in this posting or meeting, nor for any errors contained therein or presented thereat or omissions in relation thereto. It is further understood that the said OB or JREI, or JCIR as the case may be, do not, pursuant to this posting, purport to render legal, accounting, tax, financial, planning, or other professional advice. The said OB and JREI and JCIR may or may not own properties discussed at meetings or receive or not receive referral fees at any meeting you may attend as a result of this posting or invitation. The said OB and JREI and JCIR, as the case may be, hereby disclaim all and any, liability to any person, whether a purchaser of any offering, a reader of any offering, or, otherwise, arising in respect of this postings and of the consequences of anything done or purported to be done by any such person in reliance, whether whole or partial, upon the whole or any part of the contents of these postings. If you respond to any posting OB or JREI and JCIR or attend any meeting from and by said companies, we fully expect that you get independent legal/tax/investment/mortgage advice as the case may be.

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