Oz Buzz #97: All New Multiplex Changes Are Now Law

July 14, 2024

“The past is a great place, and I don’t want to erase it or regret it, but I don’t want to be its prisoner either.” – Mick Jagger

NEW VIDEOS

1. Update! Bill Laidler and Ozzie revisit new Multiplex after June 30! Free Study?

NOTE IMPORTANT:

1. Get a FREE feasibility study
2. Get MUST HAVE DEFINITIONS + FEASABILITY CHECKLIST

See the NEW multiplex video here:

3. Michael Campbell and Ozzie talks Home Residential Tax on Moneytalks!

June 29 episode: https://mikesmoneytalks.ca/june-29th-episode/

4. Michael Campbell and Ozzie talk: The new Landlord and Tenant act

July 6 episode: https://mikesmoneytalks.ca/july-6-episode/

The above videos are also available as podcasts here:
Listen to Ozzie’s Podcast on OZCAST at www.ozbuzz.ca
Also on Apple cast, Amazon video, Spotify.

AGENDA 

• ALL NEW MULTIPLEX CHANGES ARE NOW LAW
• STILL LOOKING AT WEALTH TAX. YES. PROOF
• CANADA/US INTEREST RATES UP OR DOWN FROM HERE
• WHICH CITY HAS REMOVAL OF FLOOR SPACE RATIO?
• NEW LANDLORD AND TENANT ACT IS REALLY A NEW TENANT ACT!
• CANADA NUMBERS ARE DOWN, DOWN
• THESE ANNUAL NUMBERS WILL BLOW YOU AWAY!
  CRAZY CRASH FROM 15,734 TO 7, 330!
• INFLATION CONTINUES WITH A RECESSION IN BETWEEN
• THAILAND TRIP – STILL OPEN
• ECONOMY – OUTLOOK
• QUESTIONS, QUESTIONS

WEALTH TAX DISCUSSION IS BACK

We did talk June 29 at length (Campbell podcast listen above) on possibly ending the capital gain exemption.

Financial Post reports week of July 8:

1. There were a number of reports about the prime minister and finance minister meeting with a government-funded think tank to discuss a variety of issues involving “generational fairness,” one of which was the introduction of a home equity tax.
2. Michael Campbell and I talked about “Generation Squeeze” often (last on June 29-listen above) as pending – here is proof again.
3. This particular think tank, Generation Squeeze, seems to think that one of the ways to enable the youth to afford a new home is to go after older people who have worked hard historically to save enough to buy a home and pay off their mortgages. In their view such older people’s homes have often benefited from decades of undeserved capital appreciation. (!!!)
   “The first step is putting a price on housing inequity by adding a modest surtax on homes valued at more than $1 million. Surtax will apply only to the top 12 per cent of high-value homes; the vast majority of Canadians won’t pay a penny more.“

That’s hogwash! In Vancouver and Toronto it will affect 100% of homeowners. Not a single home is under $1 million.

Their answers always are print more, create huge debt, blame working people that saved, repaired roofs, paid taxes etc., etc. all their lives and want to leave something to their kids (the Backbone of our society).

Why do they do this … or can even propose it? BECAUSE WE LET THEM!

QUESTIONS, QUESTIONS

Q: I WANT TO JOIN MARC ON HIS THAILAND JOURNEY. How to get hold of him?
A: He is back in Thailand. You can reach him here: Marc Jurock marcjurock@gmail.com

Q: You say the government will force municipalities to allow the new zoning bylaws? Where does it say that?
A: I did not say “will,” but “can.” It is part of the new legislation. NOW LAW!

Q: I HEARD YOU SAY THAT 30% of a new build is government taxes fees, etc.? Where do I find that?
A: The CEO of Tridel, Jim Ritchie said it on national TV this month. Over 30% is tied up in those costs.

Q: We hear about our economy crashing. Will that also impact real estate prices?
A: Well, 50 percent of condos are selling now below the 5-year average in most markets. Presale markets show waning confidence with continued government intrusions by raising new taxes. Prices? Review the ‘rolling numbers’ below…with the enormous downturn in sales prices will follow – as in town. But prices down, isn’t that what buyers should want?

ECONOMY (Interest rates and outlook below)
​
Q: Why did the liberals create new capital gains tax charges at this time? 
A: The idea was, if enough people are scared of new tax increases and sell, governments look better (short term) with all that new revenue. Collectively new tax income makes liberals look better there.

Q: McDonald offers value meals for 5 dollars. Isn’t that deflationary?
A: All fast foods stores are at it. Why? They became so expensive, business crashed. Massive shutdown of fast-food restaurants.

REAL ESTATE COSTS
Q: Insurance is going crazy in Canada. We need to invite companies from the US and Europe to give our ‘fat cats’ competition.
A: Well, the ‘fat cats’ have seen huge losses worldwide…floods, quakes , fires. The US insurance is rising faster. Ozbuzz called it 2 years ago in Florida. Now, insurance that was $4,000 to $10,000 what was $5,000 soared to $15,000.

Q: Strata fees are soaring in the US. Will Vancouver follow?
A: Higher insurance (see above), higher wages, higher materials, stricter government rules on mandated upkeeps, etc…,etc. Staying with Florida: Assessments on 10-year old buildings are rising so hard and fast (quadrupling!) that homeowners literally can’t pay. (Google: HOA fees soaring in the US.) In Canada, clearly when buying an older condo you must study their Depreciation Reports … don’t buy and cry.

GENERAL TOPICS
Q. You talked about tolerance. We have a card group. Recently, we stopped playing and got into a heated argument on immigration, religions, pronouns that must be used by law, etc.
One of our ‘left leaning guys’ who I always tolerated, got my goat. Definitely he knew how to argue better. How can I learn to argue better? Who is your “Right of center guy?”
A: Dr. Jordan Peterson (BOOK: Ozbuzz recommended his book ‘12 Rules of Life’ 2 years ago). He can make an argument and hold his own. Want to have more ‘right of center’? Google: Charlie Kirk, Ben Shapiro, Matt Walsh, Michael Knowles. Be warned, all have a ‘bend’ of their own, but come from a good place. Europe is in a vast turmoil on immigration and similar issues – and it is ahead of us. We can expect the same. Not everybody’s cup of tea Mr. Douglas Murray (Ozbuzz recommended his book “The Death of Europe “ also several years ago) and yes, he can debate.

Q: Looks like Ozbuzz has the power. Disney is now offered for free everywhere. Nike’s stock is crashing. DEI is in outright collapse and companies that are ESG centered do not benefit from their stance. 
A: Haha. If you are referring to my ROTLM (Revenge of the little man). Nope, no power, but part of a shift of more and more middle-class people asking questions: Why are we being trained into so many different directions to suit who?
However: Do question: DEI, ESG, Digital dollars (big, big problem ahead)

Q: I tried to take out $6,000 out of my bank account which has $32,000 in it, They said I can only take out $3,000…but it’s my money?
A: Banks have limits to “protect” you. Talk to manager get your limit increased. Change banks. But digital dollars, will actually make it worse. PLUS every transaction over $10,000 will be reported to CRA/IRS.

Q: Have a problem with AI. I think it’s the biggest change ahead in our lives and we seem helpless. Chats are shit.
A: Yes, the proverbial AI HELL. No more humans, everything is a bot (my email hammers me daily). All ‘chats’ are shit? OK, agreed! …but the moment it says “we are to help, log your complaints here”…you are sunk. Because the AI lists all the problems it can think off (except yours) and then redirects and redirects. No more humans.

REAL ESTATE

Q: I have a presale coming up for possession end of 2024. I think the value of my unit is down by 20%, because a recent assignment sale was down at that price. How will I get my mortgage now at the lower value?
A: Assignments are usually not recorded by appraisers or boards. But that’s why we advise to get pre-approved. Most banks will go with the original appraisal when it granted builder loans. In other words it will not necessarily re-appraise the unit.

Q: There is a guy on YouTube, name is Ron Butler. He says that Government is trying to screw the buyer.
A: Well, Mr. Butler says a lot of things with ‘juicy’ language. But governments say: “We need affordable housing” and then create tax after tax, adding to negative affordability. So yes, the result is that the buyer is worse of…if not screwed.

Q: I’m a realtor. Looks like investors are bailing big time. Prices are coming down. But should I share this with owners?
A: Huh? You are not god, nor are you a bigger expert than all the talking heads. Your job is to reflect to the owner the “actual” market conditions, that he/she find themselves in their submarket (condo/house/suburbs/trend/timing). So, sales are down 25%, your job is to get your owners listing into the 75% that sell. Period. Your job!

ECONOMY

INTEREST RATES WHEN IN CANADA AND WHEN IN USA?
Who knows, right? Jamie Dimon thinks 6% is possible, others believe we are  going to go back to 1%. Everybody talks it, not one has the answer.

USA
As a country the US is financing larger short term fiscal deficits than others (2–4-year debt). The US private sector has a higher proportion of long-term fixed rate debt (mortgage debt fixed over 30 years) than most other countries. To the extent that rates need to be renewed and that in a higher rate cycle, that debt renews sooner and higher. To that extent we have almost 2 debt economies (long term – consumer – and short term –government) each with its own rates.

The CPI (consumer price index) numbers July 9 came out 1% better than forecast and lowest in 2 years (the decline).

Next day the PPI (Producer price index) reported to be 1% higher!

Stock markets gyrated up and down and forecasters on all sides had a field day – or two. I reported to you my belief that Powell is loathe to do anything on rates before the election…

Major Point: So, here goes. Ozzie’s stab in the dark: The earliest in the US is .25% in September. More than 1% next year.

CANADA 
Why may rates come down sooner? All costs are soaring. 50 percent of restaurants lose money. 25 percent increases in food cost. Can you say: “Insurance”? Even commercial insurance is soaring. Then utilities, wages etc. So, we have sharp declines in consumer confidence, huge bankruptcies, stores closing everywhere. But only, if and when unemployment numbers go up, rates will come down. Not before.

Major Point: So, our economic numbers are really poor. Mortgage defaults are pending, real estate market sales are crashing (see below). We talked about the different forecasters last month. I think Canada may go .25% earlier (than US) again. 75% possibility in September, even 25% possibility in July. Will it make a difference? NO. Psychology is increasingly negative.

ECONOMY
Not popular, but we need a recession. Rosenberg still predicts it (4 years), but he is right in ‘the need for’, if wrong as to timing. We cannot lower rates quickly, in that we have felt no real pain yet (we are starting to), no real sharp mortgage crash, no big unemployment increases (starting). No pain of visibly falling house prices (at least 20%) the psychological pain of lower expectations.

But right now, a quick lowering of rates would get us back into the inflationary expectation race.

Major Point: Downturn is starting. Some investors are stampeding out pre-sales, all STRs, Airbnb, all rentals. New rental laws favour tenants and outright punish owners and there is totally negative cash flow in all rental markets.

COMMENTS
Lots of comments on the “Black Swan” piece and debts. Actually surprisingly people are simply not aware of the debts, how big it is, the likely outcome or have seen the actual running debt clock .

Comment Ozzie likes the best: “Your “black Swan piece was excellent. Read it twice. Thanks”

COMMENTS

Got two fine EV reports. Supporting views. Both liked costs saving on gas Thanks for taking the time. I’ll feature details next time.

REAL ESTATE MARKETS CHANGING

LISTINGS UP EVERYWHERE – SALES LOWER

USA

Kolbassi report:

The number of NEW single-family houses for sale has surged to 480,000 in April, the highest since the 2008 Financial Crisis. This came after new home sales were down 7.7% year-over-year last month, the largest drop in 13 months.

Excluding the 2008-2009 housing crisis this is by far the largest supply of new homes in US history. Notably, the number of new homes on the market has more than TRIPLED in 12 years. Meanwhile, the median price of a new home is at $433,500 and remains near record highs. New homes are becoming the only option for buyers.

CANADA

LISTINGS UP EVERYWHERE. YES, EVEN IN CALGARY!

DEFINITELY OPPORTUNITIES FOR BUYERS…

TORONTO
6,213 homes sold, a 17% decline from 7,429 sales in June 2023. Condo sales in the 416 area were down 29%!

Active listings (ALL PROPERTIES FOR SALE at June 30) were up by 64% to 23,613!

The benchmark price was down by 5 per cent on a year-over-year basis in June 2024. Anecdotally, we hear of increasing listings and lower sales to continue. As well the pre-sale market seems to have stalled (difficult to get hard numbers)… Lower rates have NOT HAD a psychological impact. Active listings are up a whopping 64%.

(You’ll get Oz Buzz 2 weeks before it’s posted online)