Oz Buzz #92: BC Proposes To Govern All Land In BC With Natives’ Bands

RealEstateTalks Video: EXCLUSIVE: Kyle Green – Ace Broker Reveals: ‘Reverse Mortgage Secret Weapon’ – Right Under Your Nose: https://www.youtube.com/watch?v=5WcPEAy3eU0&t=5s

Listen to all videos on Podcast on Apple cast, Amazon video, Spotify and Ozcast:
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New Ozcasts

Ozzie and Ralph: Ultimate Presale Condo Assignment Hack! A Whisper Mortgage Revolution. WIN BIG in the Property Game
Ozzie and Kyle: Reverse Mortgage tricks
Ozzie and Rob: Unlock the professional Secret SPECIAL in Brokerages!
Ozzie: Answers Ozbuzz questions 
(NOTE: all of these above available as videos on Youtube.com/jurockvideo)

AGENDA

• MUST READ! BC PROPOSES TO GOVERN ALL LAND IN BC WITH NATIVES’ BANDS.
• BUYERS REJOICE WITH LOW DOWN PAYMENTS! 
• CHINA IN DEPRESSION?
• SOME WORRIES FOR THE WORRIED
• INFLATION IS UP AGAIN. WILL RATES FOLLOW?
• INTEREST RATES. IS IT WHEN? OR IF THEY COME DOWN?
• THE NUMBERS, THE NUMBERS  RECESSION? INFLATION? 
• CHINESE NEW YEAR IS BUYING TIME

POLAR BEAR WITH MICHAEL CAMPBELL OZZIE AND MYSTERY PLUNGER?
PLUS! A GRAND PAST BC PREMIER? WHEN? March 2nd

Can’t make it? Donate here at mikesmoneytalks.ca

Michael Campbell’s Special Olympics Polar Bear Lederhosen Extravaganza
See it in 2023 … join in 2024. Where? English Bay. When March 2, 1PM
https://www.youtube.com/watch?v=UPdfi6yxr2s&list=PLv7hugbJLT-aEEMwKpia_vdkZScWSZmVp&index=3

COMMENTS

C: Lots of comments on CMHC predictions and lack of Government response
A: Yes, everybody talks affordability. We get none of that. What we do get is more taxes. 

C: Ozzie, I have seen you  for years. Man, at the Outlook conference you were on fire. Everybody talks about Ozzie’s Jokes; I liked the meat! Your position on inflation, positive outlook without being stupid has served me and my family well. You were worth the ticket.
A: Blush. Thanks. I thought the whole conference was great. All – even opposing – viewpoints were represented. What I found disconcerting was that so many troubled people at my booth were literally in trouble. Short term rental owners now underwater, buyers of presales in Kelowna and elsewhere, fearful mortgage renewal questions, etc. 

BUYERS REJOICE – THEY ARE FIGHTING FOR YOU!

Developers are coming out big time this spring. I talked about it last Ozbuzz. RYZNAR MEDIA tells us: “We have over 45 campaigns booked for February with developers. 11 of those are rental campaigns with 50% of those in Calgary and Edmonton.  2 Surrey high-rise projects that were expected to launch last year are coming to market in 2024.

Core by Westland, at Surrey Central Skytrain is also expected to come to market this year. There are many new Townhome projects in the pipeline as well as high rises in Coquitlam. 

Why do they do it? CHINESE NEW YEAR in the year of the WOOD DRAGON is buying time. Seems that – like last year – developers are expecting an early bounce of buyers (yep, they are out there) and they want to catch what they can. It is ‘gloves off’ time!

NOTE: You, the buyer benefits. Minimal down…

However, one noted senior developer believes that banks want more down than that… Be that as it may…read last month issue on guarding yourself.

NOTE also: We also hear through the grapevine that some are holding back their launch or will watch it carefully. If they do not get the right response they will pull back.

HUSH HUSH!

The BC government wants the MOST MASSIVE change to our Canadian Property rights through a devastating  change in the Land Act.

The Fraser Institute has a MUST-READ REPORT…”We are closing BC for business”:

READ IT HERE AND weep!

Then, if you agree ACT and WRITE your politicians. Don’t wait or it will be implementation without representation!

Here at Ozbuzz I promised myself never to be political, but this is so dramatic, so life-as-we-know-it changes and so underhanded in the introduction of it that we must abandon the promise. We quote mostly the Fraser Institute research on this. According to Michael Campbell BC drafted the legislation before it even announced that it was bringing it into the legislature this spring.

Here it is in a nutshell: 

Our government is quickly and quietly moving towards co-management (alongside more than 200 First Nations) of all Crown land (i.e. public land), roughly 94 per cent of the province. 

Our government wants to “share decision-making” on all Crown land. In other words, within the next four months or so, the government hopes to introduce an entirely new regime where the government and First Nations jointly make decisions about land-use on public lands. 

Make no mistake, this change will have massive consequences for B.C. The uncertainty and sheer magnitude of it may mean:

• Vastly increased housing costs (as every new housing sub-division on the outskirts of any town now would need indigenous “consultation” and every felled tree needs to be approved.
• Food getting far more expensive as much ALR is on native land and
• Vastly falling investments and job losses as major projects such as mines, roads, Site C dam equivalents, pipelines or transmission lines get held up, delayed, or get even more expensive !

The worst is that it is  brought in under the table. A last week ANGUS REID poll said that only 13% of BCers are even aware of it and when asked 94% would not like it if it was brought in.

Before the crowd descends on me – this is not ‘anti’ anything … it is pro-property rights. Native bands already have enormous power, to make them co-managers is not remotely appropriate. By nature the Land Act is to govern for all British Columbians. The government has that right now. The Natives have a duty to do what is best for natives and the bands. Which is their right!

To change that is in no way of benefit for all British Columbians,

More than that … according to the Fraser Institute that would be a death knell for investment in the province. BC has long struggled to attract investment, and keep and grow successful entrepreneurs and businesses, a critical lifeblood for any economy.

Read its projections! DO IT NOW! 

QUESTIONS, QUESTIONS

INFLATION (lots of  questions)

Q: Ozzie, I see deflation, big layoffs. What are your signs that inflation is staying high?
A: David Rosenberg and others would agree with you. Again, remember, what kind of inflation are we talking about? The monetary driven hard asset inflation? Or the headline, core (8 kinds of) or CPI/PPI? There is a difference. I look at hard asset inflation. Look at stocks below as well – soaring, real estate rearing quietly? Well, even the Government reported inflation rates are showing increases month over month both in US and in Canada. The actual rates are still soaring (did you go shopping lately, eat in a restaurant, look for a rental, pay gas, buy  a car?). The stock markets are soaring– say inflating. 

Note: Victor Adair (https://victoradair.ca/subscribe/) writes in its incredibly accurate newsletter (still free) that the Euro Stoxx 50 (a European version of the DJIA) has rallied ~20% to 23-year highs. The Japanese Nikkei is up ~27%, just a few points away from touching the All-Time Highs made in 1989. The Toronto Composite Index closed this week at a 22-month high, up ~17% from the October lows, and in the US the DJIA, S&P and the NAZ made new All-Time Highs this week but closed lower on the weekly charts. 

NOTE: I grant you; it is confusing. Large TECH cos layoffs muddy the waters indeed. We stick with our multi year predictions. All the money creation will result in higher asset prices. But we must ‘muddle through’ first.

INTEREST RATES

Overnight rates coming down when?

Well, CIBC Capital Markets predicts a 1.25% rate cut in 2024, even though it also says: “… economic growth will be unlikely in the first half of 2024!”

Ok, Ozbuzz said on its video and on the MC podcast that we thought we would have to wait to June for rates to come down a quarter. Maybe a second cut by August and a third cut? Maybe even not till after the election. But forecasting rates is a mugs game.

Why we think only .75% this year? Unmeasured inflation is rising, employment is strong, unemployment stays low. Central Banks don’t want to give up their fight just yet. Why? In the 70s, Fed Chair Arthur Burns pivoted too early … that brought in Volker who went with 21% rates.

Mortgages (NOTE!):

We talked the last few months about ‘whisper rates’ and the competition among banks for your ‘good credit’ business. Mainly: long-term rates are tied to the long-term bonds not the overnight rate. That rate soared to 5% (driving US mortgages over 8%) then crashed to 3.8%  – which created the 4.89% low insured ‘whisper rate’ in Canada. This week the 10-year bond rate rose .6% in 3 days. OK … fixed rates will likely follow!

If you need a mortgage, get preapproved NOW. We may see mortgage rates rise again.

Questions, Questions

Q: You said a recession is likely and also you said at the WOFC that rates could stay where they are and or not come down until the 2^nd  half, but there are many job losses throughout the US and Canada. Are we not in the middle of a major downturn already?

•  True and stock markets are soaring. Confusing. The major layoffs in major tech companies tells a story in the US and Europe. In Canada we just had Bell lay off 4,300 people.  At the same time we can’t get enough construction workers, health workers all service sectors.

Q: You seem to be positive on the real estate debacle of mortgage renewals coming due in Canada and the Commercial Real Estate market in the US. You say we will muddle through. Should I buy an apartment building now then in the US ?

•  There is indeed some 135 billion of mortgages in 2024 and some 350 billion in 2025 coming due in Canada. The US commercial market is in serious trouble. I DO believe we will muddle through, but for now I would be much more comfortable on the sidelines. See below.

Q: To measure your current month against a past high month is not relevant. Measuring a January against a past March is useless.

• I make it clear that I put it in only to highlight any false euphoria. The high SF price in January’s FV SF home price was indeed higher than January 2023 by 14% ($1,500,000) but it achieved a high of $1,900,000 in February 2022.

Q: You nailed it in 2022, when you foretold of the Chinese real estate developer Evergrande collapse. Tell us more.

1. Actually we ‘nailed it’ in 2021 when we told you about this and other collapsing Chinese companies building in London and LA. Revisit issue No 64! An excerpt:  

1. Chinese developer woes are crushing Chinese and emerging market high yield debt. Typical China problem. Companies do not report losses…that is why it waits until a big crash forces the report. Surprise! 
2.  Evergrande, which has more than $300 billion in liabilities and 1,300 real estate projects in over 280 cities – means that cities like London will see their  real estate markets (likely) get under pressure as it cannot finish projects.

Nothing more to tell, Empty cities, crashing economy, a 40% decline in its stock market… China is in depression. However, money will continue to try and flee and some of it will find its way here!

Q: The debacle on the STR and Airbnb deserves more play in Ozbuzz. Why doesn’t it?
A: We did a video on it: Killed in BC! 

Q: What happened to the revenge of the little man? There is so much to be revenged! (Actually there are a few also that miss ‘toilets of the world’, “positive thinking cards”, ‘music of the month’, etc.).
Q: The letter seems to get later and later in the month?
Q: Just get back to the weekly charge. I happily pay if I get it every week.
Q: You said a video every Friday. Where?
Q: I see on Facebook; you are speaking everywhere. How do we know whether you are in our area (Alberta)?
A: All true. Alas, I am in great demand. Blush. I do appreciate these notes. Shows that you are reading! I am currently re-assessing all that I do… Will update …after the Polar Plunge next week. In the meantime:

• Event schedule open to public at ozziejurock.com
• Videos at Youtube.com/jurockvideo

THOSE OF US THAT LIKE TO WORRY – HERE ARE SOME WORRIES FOR THE WORRIED

• Kolbassi (on X) says: In the States:
  • 14% of all commercial real estate (CRE) loans and 44% of office building loans are now in “negative equity.”
  • In other words, the debt is now greater than the property value on all of these properties.
  • Currently, US banks hold over $2.9 trillion of CRE debt, the majority of which is held by regional banks.
  • Office building prices are down 40% from their highs and CRE as a whole is down over 20%.
  • All as rates rise and many of these loans are due to be refinanced.
  • CRE is beyond bear market territory.

Wars: If Middle East conflicts escalate – we could have another supply shock and troubled shipping lanes. Can you spell $150 dollar oil?

Recession: Bloomberg predicts a recession starts in 2^nd half. Says, we are worse off now than we were 12 months ago.

THE NUMBERS, THE NUMBERS

BRITISH COLUMBIA

BCREA reports 3,979 residential unit sales in (MLS^®) systems in January 2024, an increase of 29.4 per cent from January 2023. The average MLS^® residential price in BC in January 2024 was up 10.5 per cent at $957,909 compared to an average price of $866,922, the low point for average prices over the last two years!

Source: BCREA 

SNAPSHOT JANUARY  2024 VANCOUVER AND FRASER VALLEY

We told you last year that, as we compare ourselves in 2024 to the same months in 2023, we will look great! The market collapsed in 2022/2023 – now it has recovered? Well against 2023, yes! BUT NOT AGAINST 2022, 2021 AND 2020.

Vancouver and Fraser Valley

VANCOUVER 

While SF sales are a tad better, they are still 31% below the 10-year average for JANUARY. In fact, in JANUARY 2024 we sold 388 SF homes. In 2022 we sold 626, in 2021 we sold 750 and 2020 we sold 442.

Vancouver SF and condominium new listings are up 10% and 15%, respectively.

Here is a 5-year JANUARY  2024 over JANUARY  2022/2021/2020/2019 comparison. 

VANCOUVER – Single Family

Major Point:

• Vancouver condo price best JANUARY in last 5 years!
• But still behind highest monthly prices achieved in last 5 years (see summary above)

FRASER VALLEY – Single Family

Major Point: Fraser Valley – SF Sales are up a whopping 62% over 2023. Still we are 40% of sales of 2022 AND still 50% lower than 2021. New listings are up 32% in condos; also up 25% in SF homes.

MAJOR, MAJOR POINT:

NOTE: Anecdotally buyers are feeling better psychologically. We hear of full open house and the odd multiple offers. The thought of possibly lower rates is a motivator. February will tell the story, more than any other February in the past. Please note that in our view interest rates will not be lower until June – if then. US inflation rates (also Canada) are much higher. Employment reports are soaring, and Powell went on ’60 minutes’ and practically accused predecessors of letting congress get away with unconscionable high money printing. He also took some of the blame … but he indicated: “no more!”

We said last month – still on:

CONTINUED FROM ABOVE: FRASER INSTITUTE REPORT ON PENDING Land Act changes:

Between 2010 and 2019, the decade preceding COVID, B.C. attracted less private investment per worker than the national average and well behin Alberta, Saskatchewan and even Manitoba. As expected, the lack of business investment has produced lower incomes. 

In B.C., poor government policy drives a poor investment climate. Consider our business tax system, which includes the highest total tax rate on businesses in Canada. A study published by the University of Calgary found that in 2020, B.C.’s total business tax rate, including federal business taxes, was 25.6 per cent, dwarfing the national average (15.6 per cent) and the rate in neighbouring Alberta (12.1 per cent).

Currently, British Columbians, through their elected provincial government, are the final decision-makers about what happens on public lands. Land that is used for communications and electricity transmission towers, to mining, tourism, agriculture, and transportation infrastructure. The Act also covers lakes, rivers, and the coastline, which impacts anything on water including future hydro projects.

In essence, if the government changes the Land Act according to its co-management plan, First Nations will become joint landlords of more than 90 per cent of B.C. and own veto power over any decision British Columbianswant to make for our province.

Fraser Institute: It’s hard to overstate the chill these proposed changes would have on B.C.’s investment climate, particularly given existing concerns about land claims and regulations. The province will become essentially un-investable in many industries that do business on Crown lands or water.

Clearly, the uncertainty and sheer magnitude of this proposal deserves closer scrutiny by British Columbians who should have a greater voice in these proposed changes. To say that the government is rushing and not being fully transparent with such a monumental change in legislation would be a generous understatement. The economic and fiscal implications of these changes will be profound, and the provincial government has failed to disclose any economic impacts.

At a minimum, the government should delay the implementation of these changes and allow a robust debate to occur.”

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