December 20 Market Update

Lots of crypto bashing on here! I have about 0.5% in crypto. Lots of arguments out there not to buy it but one that doesn’t hold water is that it isn’t backed by anything. It is: a user experience that is generally better than fiat. No forex, no inflation, etc. There are over 6,000 coins now though so it is tough to suss out the best ones but if you could get paid in a stable currency immune to inflation that you could spend anywhere in the world would you?

For those that don’t understand the concept of the value of something being backed by a user experience, look at blockbuster versus netflix. Same content. Different…user experience which one do you use?

There is a time lag between mortgage rate increases and price declines.

Oh great. That means the people on HH here that are waiting for rates to go up before buying. will pay higher mortgage interest, but still pay the same or higher prices for the house.
Unless they are prepared to also wait out this “time lag” you’ve discovered. How many years is it?

So we cannot assume that rising mortgage interest rates will lead to lower house prices

There is a time lag between mortgage rate increases and price declines. Likewise there is a time lag between falling rates and a market bottom, because the falling prices scare people from buying. As well, falling prices often accompany recessions and high unemployment. Like in Ontario circa 1991.

Toronto prices doubled from 1985-1989,

… yes despite posted mortgage rates rising from 10 to 15% during that period. https://www.ratehub.ca/5-year-fixed-mortgage-rate-history

then lost half their value over the next 5 years or so. It took 13 years to recover the lost ground.

Yes, despite posted mortgage rates falling from 14 to 8% during that period.

So we cannot assume that rising mortgage interest rates will lead to lower house prices. As always, supply and demand are the biggest factors.

So… if you set aside $126k for 31 years, let a further 7000 after-tax dollars evaporate for every one of those 31 years for property tax, insurance, and maintenance the gamble MIGHT pay out a 2% return before inflation.

Tempting, tempting.

Toronto prices doubled from 1985-1989, then lost half their value over the next 5 years or so. It took 13 years to recover the lost ground.

The relevance of all this to Victoria house prices, is that some people here are expecting interest to rise in response to this inflation that we are seeing, in the hope that this will lower house prices. Of course they may be right, but I don’t think so.

You have the Bank of Canada and the Fed both saying they’re going to raise rates 3 times next year specifically for inflation reasons and that inflation can not be seen as transitory any longer. That’s the reason I believe that interest rates will rise.

Call me crazy, but I think there’s a huge difference between leaving rates at 4% (during ww2), and leaving them at 0.5%.

Wages outpacing inflation and shift from one to two income households. Are we going to see that going forward?

I can’t find any data that indicates wage outpaced inflation throughout the 70s. In fact the opposite occurred.

Canadian family average income in 1971 = $43,437, and 1980 = $55,061. Total growth of $11,624 or 26.76% in 9 years.

Canada average inflation from 1971 to 1980 is 116.98% in 9 years.

Canadian Council on Social Development Fact Sheets — http://www.ccsd.ca/factsheets/fs_avgin.html

BoC Inflation Calculator — https://www.bankofcanada.ca/rates/related/inflation-calculator/

How much is some though?
Many of the war time bonds were marketed directly to your average person.
Looks like they issued about $2.9 trillion in bonds in today’s dollars.
The Fed has bought over double that in the last 2 years no?

Monetary expansion was similar in size during ww2 to the 20-21 pandemic.

Money is created by all banks (ie commercial banks like JPMorgan) , not just the fed. The central bank buying securities is one way of creating money, but that’s only part of it. The commercial banks create most of it, and the fed attempts to control this by lowering rates, direct lending to the banks, changing reserve requirements and repurchasing securities from them.

The important point is is to look at the money supply, (m0,M1,m2) as that tells you the sum total of how how much money actually got created. The M2 money supply expansion seen in WW2 was the same as what we’ve seen with the Covid pandemic.

M2 in USA increased 52% in the 5 years of the war 1941-45
The last 5 years of our economy (2017-2021) have seen M2 increase 51%
https://www.longtermtrends.net/m2-money-supply-vs-inflation/

The point here is that in ww2, a similar expansion of money supply did result in inflation from 1946-50, total 32%. But then it was back to normal (prices stayed high, but inflation fell to 2-3% so was transitory). But interest rates didn’t rise, because the fed wanted to keep them low. And they stayed low until the 1960s https://advisor.visualcapitalist.com/us-interest-rates/

The relevance of all this to Victoria house prices, is that some people here are expecting interest to rise in response to this inflation that we are seeing, in the hope that this will lower house prices. Of course they may be right, but I don’t think so. I think governments and central banks will look back at these postwar periods (ww1, ww2) as a template of how to recover from the huge new debts, by inflating and expanding the economy. Instead of introducing austerity and higher rates. That’s why I expect years ahead of inflation, low rates and higher Victoria house prices.

“ the System made some open-market purchases to influence the yields on short-term government bond”

How much is some though?
Many of the war time bonds were marketed directly to your average person.
Looks like they issued about $2.9 trillion in bonds in today’s dollars.
The Fed has bought over double that in the last 2 years no?

Here you can see m2 growing including huge peaks during the wars, causing inflation peaks for a few years…. https://www.longtermtrends.net/m2-money-supply-vs-inflation/ But they didn’t raise rates much and it went away after a few years.

The actually tapered the growth in the money supply though.

14 charts that show what inflation and monetary policy will look like in the next year

But keep in mind, predictions are hard – especially about the future.

What can go wrong?
Low interest rates, high resale price, and now assessment up several folds over an average family yearly income.

I can see that young inexperienced buyers are going to trip over themselves to buy as much house/s they can afford in the coming months. And, renters will continue to blame boomers and foreign buyers, while call for more taxes as the only cure for the cancer that the governments created.

Leo was there a contest this year? 2021

Happy new year! Really got to know the new house over the last couple months especially the attic. Leaks are just a part of my life now until it’s dry enough for someone to get up there and do a better assessment of the flashing around anything sticking out of the roof which seems to be the problem. I move an industrial fan around to dry up the leaks. One roofer sounds promising but won’t get up on the slippery metal shingles until it’s drier or they come back with ropes and harness so hopefully once the weather turns. In the meantime we’ve been having a blast in the snow.

Metal roofs… Kind of cool, if installed correctly, which ours apparently wasn’t. Still hoping for a moderate fix, doesn’t appear we need to re-do the whole roof.

I see my daughter’s home in Vancouver (in the city), “only” went up 20%

they will lower that 3.494% rate to 3.494/(1+.3)= 2.69%

Okay. I think I understand. So, is that an example of the “mill rate” in action then, or is that something else?

Patriotz,

Can you elaborate on that a bit more? So for instance, the municipal deduction could theoretically drop percentage wise given the larger total revenue?

Like I said I must be missing something because the resulting tax increase that this entails would seem pretty disproportionate to any increases of their actual operational costs.

but seeing your taxes go up $500 to $1,000/year, permanently, plus annual increases isn’t fun.

You know, I do wonder about this. Different people say different things – ie as valuation goes up, property taxes go up. Others say your property taxes only change if the value of your home changes differently relative to the others around it (ignoring tax rate changes from the municipality).

I’m in North Saanich. When I look at their website, they identify the total tax rate for 2021 as being 3.494% of every $1000 of taxable valuation.

So to me, that seems more like taxation changes YOY is directly tied to valuation, not changes in value compared to nearby homes.

So in this case, say last year’s assessed value was $900k . That would mean an annual PT bill derived from 900,000/1000*3.494= $3144.60 per year.

But if next year (assuming tax rate is unchanged) the valuation is, for example, $1,305,000, that means 1,305,000/1000*3.494= $4559.67

Or am I missing something? In the end we’ll just have to find out, but either way it’s safe to say my house made more than I did last year….

Our up island place went up 48%. Here in town it was 27%.

Right. But when you switch to a new house as you did last year, you first payoff all previous deferments in full. So you’re starting deferments again.
‘
‘
yes, that’s the way it works.

2021 Assessments are out: https://www.bcassessment.ca/

+44.5% here. Same throughout the neighborhood. Just astounding, and I don’t mean that in a good way. This doesn’t take into account any price inflation since July.

Print, print, print, you zealous central banks. They aren’t even trying to hide it anymore. Despite what they say about tapering QE, they won’t (and now can’t) do anything of the sort. They may get a hike or two in there, but sovereign, corporate, and consumer debt is far too high to let them get anywhere meaningful. I will not be surprised if this price escalation continues, because a market flooding with misallocated and non-stop printed money is not about fundamentals and genuine price discovery. I do not believe it’s a coincidence that prices exploded as Covid hit and the printing presses turned on in earnest.

The Canadian Central Bank is now apparently involved in fiscal policy, as they have started to directly fund our government’s operations. Then we see inflation destabilizing, inequality continuing to rise, and our currency (and our debts held in that currency, by implication) becoming absolutely worthless – all the while we get told it’s all good for us. Flooding society with liquidity as a last ditch attempt to smooth over a debt soaked, broken financial system is not a new concept, and it generally ends up the same way. Until that day…

Happy New Year everyone…your hard-earned cash is going to be trash. 🙂

22% here on the Marigold/Strawberry Vale Border. Looks like less than most other posters but I seem to recall this area being on the high side the previous year.
Happy New Year.

I’m guessing my old neighbor won’t be happy when he sees that his assessment went up 42% this year most likely due to us selling our home last year.

I’m happy to see my assessment up only 18.5%, we may actually see a drop in our tax bill, although we actually defer our taxes.

Up 3.5%…..guess my tax bill be dropping!

+32% property taxes are not looking good in comparative

+19% for me and my neighbours in the COV

+26%

The current situation is most similar to the inflation after wwii
< The fed printed billions of dollars daily after ww2?

Absolutely. Of course it was done during WWII, which is when the bonds were issued and the highest deficits occurred.

https://www.federalreservehistory.org/essays/wwii-and-its-aftermath

“ Perhaps the most important actions performed by the System during the war were to control government bond prices to promote stable financial markets and (even more critical) to help reduce the interest rates on financing the extraordinarily large fiscal deficits associated with active participation in the war. In 1939, shortly before the beginning of the conflict in Europe, the System made some open-market purchases to influence the yields on short-term government bonds. The goal was to promote stability in short-term funding markets and prevent market disorder in the face of uncertainty at the outset of the war. Once the United States formally entered the conflict, the system made a firm commitment to support government bond prices. In April 1942, the Federal Open Market Committee announced that it would maintain the annual rate on Treasury bills at three-eighths of 1 percent by buying or selling any amount of Treasury bills offered or demanded at that rate. For longer-maturity government securities, the System also established a maximum yield (or a minimum price) by standing ready to buy whatever amount of these securities was necessary to prevent their yields from rising above the maximum yield. Such a commitment to maintain low yields (high prices) of government bills and bonds necessarily resulted in the purchase of a significant volume of government securities, producing a substantial expansion of the System’s balance sheet and, in particular, of the monetary base. Indeed, the monetary base increased by 149 percent from August 1939 to August 1948.”

Up 27% here

+35%

You’re assuming that inflation isn’t temporary

It’s never temporary, the price inflation always stays. There’s been little to no deflation in the past 100 years.

The current situation is most similar to the inflation after wwii

The fed printed billions of dollars daily after ww2?

Here is the official take of the WhiteHouse economists, who believe inflation will be temporary, like it was after wwii.

Even Powell is saying that it isn’t transitory any more.

The huge government debt is a reason that they won’t want to raise rates as fast as they should

Well, either way, it’s a nice pickle. No one will buy bonds to back debt at such a a low return on risk (so the need to bump interest rates). The use of Central Banks to buy bonds through massive paper issuance to back debt leads to currency devaluation and pumps up inflation. As well, the latter erodes confidence in the financial system and the solvency of those conducting the policy. I’m sure in the 80s and the early 90s the government would have loved just to of said “hey, let’s take our debt servicing payment down from 40 billion to 20 billion by cutting these high interest rates”. Still comes down to debt being a market and someone needs to want to buy yours and the only way to make that happen is to pay a return. If Central Banks keep purchasing debt through new paper, people will be even more shocked by inflation or by the interest rates that will be needed to start getting it under control or to have markets wanting to buy sovereign debt. That also goes for the renewals on all those mortgages from the last year. Thwt mortgage debt is supported by bond buying through BoC and CMHC to get those low rates. On renewal, lenders are going to need to sell those mortgage bonds on a market that might not like the heavy indebted risks of the people holding those loans. The only mechanism the market has to alleviate that risk to get someone to buy those bonds, is to increase the return and require a much higher interest rate to be paid. This will be at a point where the central bank and government won’t have the ability to intervene because they have used the fiscal capacity up and any further central bank style bond buying programs to support private lending to artificially keep rates low will be detrimental to the system.

Hopefully a better year ahead for all of us.

Let’s not put too much pressure on 2022; we saw what happened when we had big hopes for 2021.

2789 Arbutus Rd. looks like a steal in comparison to 1559 Ash. The lot is almost three time the size in a much fancier hood on a much more quiet street (section).

https://www.realtor.ca/real-estate/23807973/2789-arbutus-rd-saanich-arbutus

Vacant building lot at 1559 Ash Road in Gordon Head, 8,676 sq/ft for $1,425,000.

Cryptomanie is a modern version of tulip mania, hence have 0 cryptocurrency in my portfolios.

@Umm…really

I don’t disagree but the problem is governments can remain irrational longer than you can stay solvent…

More than three-fourths (79 per cent) of the 5,000 Canadians polled by the Angus Reid Institute say their earnings have not risen in tandem with the increase in their grocery bills and wider cost of living.

From: https://financialpost.com/executive/posthaste-majority-of-canadians-fear-a-negative-impact-on-their-finances-if-mortgage-rates-rise-poll

Come on mortgage rate escalation! Let’s get this done. Mostly to quell the fantasy of vast salary escalation people are expecting. It’s even more of a fantasy for government workers that don’t realize when their employer has just went on a borrowing binge, that hiring and wage freezes are just around the corner for anyone tied to the public sector. You know, like many of the people in Victoria that just took on massive mortgages with duel family incomes both from the government. Yes, the private sector is agile enough to quickly adjust to compete for talent (the immediate need to hire someone to get a job done and bill more to cover the the cost escalation), however, this does eventually balance out. For governments, there is no longer room to borrow, and people that are being pinched by inflation with costs escalating through everything that they do; these people are not going to be overly receptive to anyone proposing increased taxes. Thus begins open season on government wages. It always starts with the consultants and contractors and followed by denying backfills for folks on extended leave… Then the attrition battle (do we really need to fill this position now that it’s vacant?). Then the morale goes (well, I know that’s a great opportunity, but since I can’t backfill your position, I will not approve your secondment or temp assignment, even though it’s valuable experience for you or comes with a pay raise). Then a zero % mandate in all contract renewals and the elimination of those one time program funds that just kept reoccurring, suddenly disappear. This all should be a fun watch!

Instead of bit coins…..One might want to look at investing in lithium. (The USA only produces 2% of it’s own lithium I believe.)
The “Thacker Pass” Lithium project in Nevada looks exciting. (Currently 41 cents a share). It’s set to be the biggest lithium project in the US. and a judge recently made a ruling in the companies favor)
Production starts this spring.
(In my opinion, one might want to consider Investing in the mining company as well as the parent company.)

But take a look at the trend in economic losses (Table 1).

If you’re comparing the 1970s with today, you need to adjust for inflation or better still to GDP. (Nominal GDP is up 10X since the 1970s.). If you do that, you’ll see that economic losses from weather disasters are also down.

The huge drop (down 66%) in loss of life from weather disasters is 2X more impressive when we realize that population has doubled during this time. Because that means we now only see 1/6 of the loss of human life (per capita) from weather disasters compared to the last 50 years, which is remarkable, and unexpected.

Please note that I am not suggesting that weather disasters are reducing over time. But they don’t appear to be worsening. And at least it’s good news to hear that, despite 50 years of population growth and climate change, that the impact of weather problems (impact measured by human lives lost) has actually fallen to 1/3 of previous levels. Remember, we are told by many that climate change is leading to weather disasters that could ultimately lead to human extinction. So far, that doesn’t appear to be happening. Some good news data points like that might cheer some people up.

Why bitcoin is worse than a Madoff-style Ponzi scheme

https://www.ft.com/content/83a14261-598d-4601-87fc-5dde528b33d0

https://docdro.id/aMCLDdu

Who on this blog has money invested in bitcoin or other cryptocurrencies?

I don’t yet.

The good news…There are far fewer deaths from extreme weather events than there used to be. We are only seeing 1/3 of the deaths that we used to see in the 1970s or 1980s.

Yes it’s good news, but looking at the details those large death tolls in the 1970s and 1980s can be attributed to conflict and misrule in 3rd world countries. For example, #1 death toll in Ethiopia in 1983 was largely the result of the wrongheaded agricultural policies of the Communist government of the day – blamed by them on drought. #2 death toll in Bangladesh in 1970 was when it was still East Pakistan and was misruled by the government in former West Pakistan, leading to civil war a year later. And so on.

Improved administration and food aid have reduced those 3rd world death tolls in recent decades. But take a look at the trend in economic losses (Table 1).

Is it natural gas or propane?

no heat to the interior its just a matter of time before the resistance of the insulation allows the interior temps to drop low enough when the exterior temps are -10c.

It is possible that the exterior wall temperature drop down below freezing if the interior side is not heated, however the slab in the house shouldn’t be anywhere near freezing temperature as our ground temperature is a steady +3.5 to +10 C or more at around 3.3′ deep pending soil type/conditions/season (average around +7 C), hence the incoming water shouldn’t be anywhere near freezing. The only thing that I can think of is that the waterline is not covered by insulation in your wall and perhaps the pipping is on the exterior side of the insulation, or there is a pocket of no insulation in that portion of the wall.

I did read that a pex line in an exterior wall takes to -6.6c to freeze. Or am I wrong on this?

I haven’t heard of that claim. Copper is a better conductor than pex so it will freeze before pex, and given enough time stagnant water inside pex pipe will freeze at 0 C air temperature.

NRC Canada Ground Temperatures – https://tinyurl.com/2p9d5knd

I like climate scientist Katharine Hayhoe’s characterization of global warming as global weirding. Weather will get increasingly weird and less predictable as the climate changes.

Yes, “weird” is a good term to describe the recent climate change and weather extremes. Because in terms of causing disasters with loss of human life , it isn’t worse, more extreme or more catastrophic than in the past.

The good news…There are far fewer deaths from extreme weather events than there used to be. We are only seeing 1/3 of the deaths that we used to see in the 1970s or 1980s. This is from global drought, heat, storm, landslide, flood and wildfires. For example, 168K deaths in the 2010-2019 decade, and 667K deaths in the 1980s.

This Data is from the World Meteorological Organization “WMO ATLAS OF MORTALITY LOSSES FROM WEATHER, CLIMATE AND WATER EXTREMES (1970–2019)”
https://unfccc.int/sites/default/files/resource/2021.09.20%20-%20WMO%20Atlas%201970-2019.pdf
Note the source here is the official UN weather organization “ WMO is the specialised agency of the United Nations for meteorology (weather and climate)”

@QT

I have photos of everything and the main is under the ground and enters an insulated wall. It does enter up an exterior wall into the suite as based on the layout there is no other way. I guess we could have furred the wall out.

Though if even with code insulation and no heat to the interior its just a matter of time before the resistance of the insulation allows the interior temps to drop low enough when the exterior temps are -10c. I did read that a pex line in an exterior wall takes to -6.6c to freeze. Or am I wrong on this?

Thanks Mt. Tolmie. I will look into that for sure. I remember my parents wrapped insulated oven mitts around the outside taps. Don’t know if it helped but I can’t remember any problems with burst pipes during winter.

One of my customers was without water to there suite when the tenant left for a few days and turned off the thermostat.

I find this quite odd, unless the main water service that enter the house is not bury underground or lack of insulation where it penetrate the house. Ground temperature should keep the waterline warm enough through our short and mild cold weather.

I should probably be renewing the sawdust in the water meter manhole.

Good idea, and cover the meter with sawdust as well.

pump spinning its wheels and overflowed onto the basement floor. all fixed.
pump is required as our old house does not have a floor drain

Might want to check the float switch to make sure that it is not sticking or waterlogged float.

Our house doesn’t seem to have individual shut off valves for outdoor taps. Just have the main water shut off. No crawl space as well. Are there many houses built this way?

Yes many older homes were built with no internal shutoff for hose bibb. You can retrofit all sillcock connections with ball valves inside the house, or install frost free ones. However, I finds that by disconnect all hoses from the hose bibbs will prevent freezing/cold from travelling into the house piping in our environment (my parents old home pipping didn’t freeze back in the 80s cold spell when we experienced -14 C and -30 C with wind chill for 2 weeks).

Our house doesn’t seem to have individual shut off valves for outdoor taps. Just have the main water shut off. No crawl space as well. Are there many houses built this way? My last home had shut off valves for every outside tap. They were all located in the basement or crawl space areas. House was built in late 90’s.

Re frozen water pipes.

Our house was built in 1905 so probably before indoor plumbing. It has been modified extensively over the years by several owners (by extensive I mean gutted to the outside walls, shimmed to 2X6 construction, insulated, re plumbed, re-wired etc.). We have been here 40 years. When we moved in it froze most winters but over time, we added insulation, moved pipes etc. and have not had any issues for the last 20 years or so. Somewhere in the 90’s it froze under the sidewalk and required a visit from the COV (they warmed the sidewalk with a tiger torch until if unfroze) Given that it froze in an area outside my control, I am still concerned when it drops to -10 for a week or so but that doesn’t seem to be happening as often anymore. Speaking of such, I should probably be renewing the sawdust in the water meter manhole. Thanks for the reminder.

I am guessing that the regulator may be flawed.

Regulator/control valve rarely fail. Most of the time pilot light doesnt stay lit or have a hard time starting up because of dirty/failed thermocouple or dirty burner port. And, try youtube to replace the $20 thermocouple if you don’t have a multimeter to test the voltage.

Handyman skill level 1/5 required to replace thermocouple.

Happy New Year Deryk: Hope all is well with you since it has been a while since you have been online here. Difficult time these days with Covid haunting all of us.

Part of Frank’s response was offensive too. Gonna suggest emotional, which I believe was newishomeowners original dis too. DCs have a purpose sure. So do MDs. So do DMDs, psychiatrists, naturopaths, physiotherapists, RMTs, psychologists and so forth. That said the DCs I know in my cohort of friends from my school days didn’t qualify for canadian med schools, dental schools or schools of naturopathic medicine and went stateside for a relatively easier academic qualifying path. Some have also failed miserably in a market saturated with competition and only work as chiropractors part time.

get the roof repaired

Get up into the attic to find the source of the leak, and use roof repair wet/dry patch such as Black Knight, etc…
Most leaks are around vent penetrations that need a coat of wet/dry patch or replace with a new roof vent with over size flange.

Can anyone recommend a good company to assess a gas fireplace?

While not important or urgent for me I did call my heating guy for an appointment to look at my gas fireplace. Really surprised that the company is closed for the week. I would not have thought that the dead of winter was the best time for a holiday? That seems to be so typical Victoria.

Physiotherapists are the best doctors in the world. They were the only ones who ever fixed me up. PTs always helped no matter the injury. Generally understated and overdelivering. All hail the God-King Physio-Nitus.

.

The great debate. I think people have been snowed in on holidays too long. Lol…

These fake doctors cause alot of harm to people. Say whatever you want, cyberbullying or whatever B.S. I will not stay silent on this issue.

@mus im uninformed because you hqve respect for a scam? Lmao go read any study on the dangers of these scam artists. At least I know from the comments who the ignorant are.

Cyberullying is alive and well on some blogs. There is one for young lawyers that comes to mind that is very extreme.

Chirpractors are as much “doctors” as any other doctor clearly. Respect for all healthcare professionals. Having said that, why do we have the construct of “doctors” at all?” I guess to make sure people follow recommendations for their health rather than going all over hell’s half acre. Sometimes it gets taken too far. Someone should write an essay on the history of doctorhood and what it is for.

Not sure what the purpose is in posting false, offensive and derogatory comments, but it adds nothing to the conversation. Sorry this happened to you Frank, and perhaps Leo can exercise some moderator magic on the comment and the poster can refrain from this conduct.

Number one employer in Victoria is the government or one of their subsidiaries.

Marko- I totally agree, I was a Chiropractor for 16 years and opted to go a similar route. I haven’t done the math but I estimate at least 75% of my net worth today is the result of asset appreciation. I did however, had to work hard to acquire these assets. Nothing was handed to me.
I believe the federal government is the largest employer at 500,000.

What I find fascinating is the fact that our government has the resources to process 400,000 immigrants efficiently each year but cannot provide adequate health care (long wait times), senior care homes, etc… I’m glad they have their priorities straight.

I have tangible frontline health care skills (respiratory therapist) and I also have master in health care admin from UBC, but why would I work in health care when thnx to our brilliant government my networth increased more than 7 figures in the last 18 months just based on my real estate asset and stock market appreciation.

I am going to go work nightshifts in a stressful hospital environment for 100k pretax when I can do **** all just by simply positioning myself (taking on cheap debt) for the government printing money and make many multiples of 100k not including my business income.

As I’ve said before ICU nursing/etc needs to be 150k+ without overtime, but as a society we don’t put value on that. We value an ICU nurse the same as a COV tree preservation officer.

why the **** would I clean or do manual labor when I can play the system (i.e., interview well, etc.) land a government job and go from there.

Come on off it. There just aren’t that many government jobs in Canada, and many are biased toward locals (e.g. bilingualism requirements). Victoria is highly unrepresentative in public sector employment (high) and immigration (low).

I live in Ottawa and I can tell you that the lion’s share of immigrants either wind up in taxis, restaurants, Walmart, etc. for the lower skilled ones or in high tech for the higher skilled ones. Many high tech firms were founded by immigrants, most recently Shopify. That was also my observation from my years in Vancouver.

We could still prioritize bringing in people with the skills we need (healthcare and construction etc.)

Problem with construction is on average you can’t get enough points and meet other criteria. For example, a lot of construction workers abroad would not have proof of funds -> https://www.canada.ca/en/immigration-refugees-citizenship/services/immigrate-canada/express-entry/documents/proof-funds.html

and QT is right about healthcare. When I worked at the hospital other than some niches (i.e. South African doctors) there weren’t a lot of foreign trained employees. There were immigrants, but more like came to Canada, went to BCIT for training, and then obtained a job.

When my parents came to Canada in the 1990s my father worked in construction as a stone mason and my mother at the Vic General as a housekeeper and most of her colleagues were hard working eastern europeans (until housing keeping was privatized) . Unless coming in as a refugee or something, that wouldn’t fly anymore.

My overall impression of current immigration, unless going to Moose Jaw on a Saskatchewan immigrant nominee program, is you have to speak solid english, be savvy enough to make it through the bureaucracy/paperwork, and have some financial backing (proof of funds). When you poses these qualities you are also savvy enough to land in Canada and be like….hmmm, why the **** would I clean or do manual labor when I can play the system (i.e., interview well, etc.) land a government job and go from there.

I’ve helped multiple landed immigrants buy property in greater Victoria on 2x BC provincial jobs in the last few years. I am happy for these fellow Croats in them securing great stable lives, but big picture they contribute nothing and increase demand on housing.

Of course, my friend who is a drywaller and worked 60 hrs a week gets shipped back as he can’t make it through the paperwork/points/etc. while every other construction project in Victoria is delayed a year or two due to labor shortages. Makes sense.

On the economic front I was thinking less about poverty however defined (which varies a lot ) and more about how the majority (i.e. what is called working or middle class) is doing. And I don’t think they’re doing better.

I don’t think there’s any case to be made that the Canadian middle class have done poorly, and even less that their poor results would rise to the level of a “societal issue”.

Why? The Canadian middle class is the wealthiest of any country in the world, according to California based investopedia based on median income and wealth. Remember, the Canadian middle class owns homes, which are a bigger asset than they had in previous generations, and more middle class own homes than previous generations. Lots of middle class “average Joe’s” in many places in Canada are millionaires due to their home asset.

https://www.investopedia.com/ask/answers/040615/what-country-has-richest-middle-class.asp )

Which Country Has the Richest Middle Class?
“For decades, the United States boasted the honor of having the richest middle-class. However, since 2019 Canada has the wealthiest middle class of any country in the world ”

As for the post-1990 decades,…unfortunately the social metrics have gone pretty much nowhere in Western Europe and North America

No.

There have also been huge improvements in the time frame (1990s to present) and countries you’ve mentioned (Canada USA and Europe) on major social issues: (all of this accomplished just in the last 30 years in North America and Western Europe)

• education (10 years to 12 years)
• Child mortality halved (1% to 0.5%)
• Life expectancy +4 years (77 to 81)
• Poverty halved

As you can see on this single chart

” There have been dramatic, sustained global improvements in the important social metrics, over the last 200 years and since the 90s. ”

You would never know that from the mainstream media.

Funny, I ‘m sure I’ve heard about slavery, child labour, smallpox and other mass killers, maternal/infant mortality, warfare, famine and stuff like that in the 19th and early 20th centuries in the mainstream media. Why I’ve even seen movies about those things.

As for the post-1990 decades, almost all the the improvement in living conditions has taken place in East Asia and India, with a smidgen in Eastern Europe. That’s a lot of people and it pulls up the global average. But unfortunately the social metrics have gone pretty much nowhere in Western Europe and North America, and have gone down for many people in the US in particular.

The immigration discussion doesn’t need to be either/or. The question isn’t is immigration good or bad but what level is best. The level of immigration could be reduced to .7% rather than current levels to allow for housing and services to catch up. We could still prioritize bringing in people with the skills we need (healthcare and construction etc.) and could make up for any lost tax revenue by increasing taxes on real estate profits as well as possibly increasing the GST by 1%.

Merry Christmas and the joy of the day to everyone. It is even a white Christmas with a bit more to come.

(now they are looking to change their immigration policy to add more population)

They are mulling at making 70 as permanent retirement age from 65 after asking employers to employ people over the age of 70 a few years ago, and currently their academics are suggesting that retirement age at 75 is more appropriate for their populous.

Marko, I don’t have a conclusion to laneway houses as I have not tested the market with sales as few properties with laneway homes have sold.

Tentatively my assumption is that the contributory value of the laneway home is much the same as a basement suite. It’s a mortgage helper.

The trade off is between the additional income generated and the loss of privacy/ enjoyment for a home owner in occupation of the property. As per the article, high income neighborhoods are less likely to have any additional value added to their property for a laneway home as privacy/enjoyment is a priority over that of the additional income it generates. While other neighborhoods where it is difficult to qualify on income can get a boost to the property’s value.

Gordon Head for example has lots of homes with basement suites. If you own a rancher / one storey in that neighborhood putting in a laneway would make sense. My guess is that any boost in value would be similar to comparing the difference in the sale prices of a one story home to a home with a basement suite with similar main floor areas. That would capture the loss in privacy/enjoyment (ie Bundle if Rights of Real Estate). Then you could relate that boost in property value to the income it generates. And I’m GUESSING that boost would be somewhere between 36 to 48 times the monthly gross income of the laneway house. Not much of a boost in value relative to the cost to construct at say $250,000. In accounting terminology this factor is called the pay back period.

A neighborhood where the home owners are concerned with privacy may have a lower factor or non at all. So each neighborhood will have a different factor which has to be derived from the marketplace.

This still has to be tested. But for example in Oaklands if you are thinking about putting in a laneway house that would rent for $2,000 per month the guestimate factor of say 48 would be a contributory value to the property of nearly $100,000. But it will likely cost $250,000 to build or more.

What I am NOT,NOT,NOT saying is that you shouldn’t build a laneway house. Every person is different and every circumstance is different. In fact I will repeat that ” What I am NOT,NOT,NOT saying is that you shouldn’t build a laneway house.” What I’m saying is if you intend to sell the property immediately afterward it isn’t going to be the smartest thing to do as you will likely net less on the sale than if you had not built the laneway house. If you are intending to hold the property for the long term, like a decade and more, it might be worthwhile.

If you own a property and have lots of equity and intend to keep the property for the long term, building a laneway may be an option. It’s good for the kids when they get older or for the grandparents or for when you may want to down size and rent out the main house or just for the cash flow. Everyone is different and every circumstance is different.

All of the above is guess work at this time. It has to be proven through sales in the neighborhoods. There just isn’t enough data, at this time, to make a conclusion. I wonder how much these Sauder School studies cost to produce? Likely tens of thousands of dollars. You got mine for free, and that’s exactly what it’s worth.

So its like a Ponzi scheme. That will blow up if we don’t keep feeding new tax dollars through growth in GDP. Demand for products that are taxed and income tax can only grow if immigration grows.

Nope, we can always cut services and expectations of the population. As well, with a Ponzi you shuffle the same assets around to look like some is there when it isn’t (so no actual growth). Where with immigration and GDP growth we simply make a bigger pie for everyone. You know, from that productivity thing…

Japan seems to manage ok without population growth.

That has led to stagnant growth since the 1990s and if you do follow Japan, that has correlated to many societal issues they are dealing with today (now they are looking to change their immigration policy to add more population).

@umm..really

So its like a Ponzi scheme. That will blow up if we don’t keep feeding new tax dollars through growth in GDP. Demand for products that are taxed and income tax can only grow if immigration grows.

Then you have a municipality like Sooke that is looking at limiting further development and growth to meet climate objectives. Yet the majority of the population moved out there for an opportunity to afford a home.

@ Patrick
Agreed we are all immigrants on this land. Pay it forward.

Not enough schools, hospitals, housing, etc.. to meet our current needs.

Things are never built before they are needed, almost all policy is reactionary because government and politicians live in an election cycle of the moment. Your hospitals, schools and housing are not being built without immigration and the economic growth that comes from it. Not to mention the money to fill the tax coffers, pension plans and all those cheques that people now believe be the government must send to them. If you want to limit immigration you will need to start with a massive roll back government services that you consider are essential from piles of public servants to medical provisions and programs. Not to mention tax hikes and the need to push pension eligibility back by years. The GDP growth needs to come from somewhere to maintain services, Canadians are great at borrowing and spending money, but not great at creating it (we have a super low productivity rate). There is the fantasy of taking from the rich, but it can only be taken once and then it doesn’t come back and the majority of the wealth is actually held in the middle by scale of population. So, taking from the rich, very quickly becomes the taking from the you and me. I guess there’s the MMT folks figure you can just print money and give it out that’s not tied to any productivity, that hasn’t had any consequences?…lol.. Neither does borrowing it I guess…lol. So, to reconcile debt and money supply to our GDP, GDP needs to grow and since Canadians really don’t do that, it is necessary to pump immigration as much as we can.

That’s 150 years of nation building, now people come to Club Canada and enjoy all the benefits and infrastructure that took 150 years to build. There should be a steep membership fee. If their abilities are so valuable, why are they allowed to leave their countries? Instead, they are holding the door open for them to leave.

I’m holding the door for you Frank.

Actual net international migration and total population growth have been below pre-pandemic norms, as previously discussed.

Yes immigration and population “have been” below previous levels, but now they are “above” previous levels. It’s just from processing slowing down and now catching up. It is expected that clearing this huge 1.8 million backlog of immigrants is going to add lots of PR/citizens to “pour fuel on the red-hot housing market”

The fall in population numbers was just processing delays and closed borders. Things are getting back to normal, and we are now (using statscan real-time population clock) at the highest population growth levels (1.2%) seen since 2009 (1.23%). For example, this is above 2019 pop. growth of 0.9%. https://www.macrotrends.net/countries/CAN/canada/population-growth-rate

Using the real time model from statscan. https://www150.statcan.gc.ca/n1/pub/71-607-x/71-607-x2018005-eng.htm …Canada’s current population growth rate is 455,000 people per year. Which is a growth rate of 1.2% per year.

None of the immigration numbers are falling. There are a record 1.8 million existing immigration applicants waiting to be processed. These are all types, non-residents and temp/permanent. About half of them are already here. Victoria’s share of that backlog number would be 18,000 people.

Any apparent drops are just because they stopped processing applications and closed offices in 2020. In 2021, they are still slowly processing this huge backlog.

BC share of the 1.8 million immigration backlog is 240,000 people. A significant point for Victoria and BC real estate is that only citizens and PR are able to buy RE without paying foreign buyer tax. It’s not just the foreign buyer tax, as typical mortgages are only available to PR/citizens. That means that some of the backlog represents a backlog of people waiting to buy homes and get mortgages when they become PR. About 10% of immigrants buy homes right away, and that is discussed in this np article “new migrants could pour gasoline on the red-hot housing market” https://financialpost.com/real-estate/canada-opens-door-to-immigrants-adding-fuel-to-hot-housing-market and immigrants are predicted to buy about 6,800 homes in Victoria over the next five years https://www.livabl.com/2019/10/new-immigrants-canada-buy-homes.html

“ if their abilities are so valuable, why are they allowed to leave their countries? ”

why 8 out 15 total Canadian Nobel Prize winners were allowed to leave Canada?

There are also 2.8 millions Canadian living aboard. Are their abilities not valuable so they are allowed to leave Canada?

Sources: https://www.science.ca/scientists/nobellaureates.php

https://policyoptions.irpp.org/magazines/may-2021/canadians-living-abroad-should-be-embraced-as-hidden-assets/

Canada has plenty of liabilities.

And growing because the baby boomers are retired/retiring, thus come the working age immigrants asset to support the ageing liabilities.

Demographic dividend — https://en.wikipedia.org/wiki/Demographic_dividend

Trading Economics: Canada – Age Dependency Ratio (% Of Working-age Population) — https://tinyurl.com/2n2d38sj

Just saw on CTV news that Canada has broken the all time immigration record with 401,000 new immigrants in 2021.

Most of these people were already living in Canada. Actual net international migration and total population growth have been below pre-pandemic norms, as previously discussed.

IRCC has been able to meet its Immigration Levels Plan target this year through a technicality. A landing can occur either by a temporary resident of Canada seeing their legal status change to permanent residence, or by them arriving to Canada from abroad and officially gaining permanent resident status. Prior to the pandemic, most new immigrants came from overseas. This year, however, IRCC has focused on transitioning those within the country to achieve its newcomer goal.

https://www.cicnews.com/2021/12/canada-breaks-all-time-immigration-record-by-landing-401000-immigrants-in-2021-1220461.html#gs.k9qen0

My 3300 sqft 2018 code built home is approx. $150 a month in bc hydro costs

Okay so $1,800/year which is my experience with newer homes as well.

I estimate a typical home would cost 10 to 15% more to hit step code 5. I can give a breakdown but its long winded so a on 600k build for your average home that is a significant cost. Townhomes would be closer to the 8 to 10% as they have party walls and less exposed walls.

Let’s go with your lower range, 10% or $60k.

Let’s assume with code 5 we can get the bc hydro costs down to $800/year.

That is a 60 year payback (we are making some assumptions here like the triple pane low e windows are still performing well after 30-40 yrs).

So in a housing crisis government is implementing something with a 60 year pay back, being generous.

Just saw on CTV news that Canada has broken the all time immigration record with 401,000 new immigrants in 2021. Still wondering why house prices are so high?

If you think macroeconomics has no piece on housing prices. It appears you are wrong.
Macroeconomics and currency exchange is so…so much more powerful than any microeconomic or statistics that you all keep. Non of the housing stats matter … do you get this? Your housing statistics are useless unless everything is related to M2 money supply. None of the statistics that you have provided in the last 15 years even matter a bit,,, sorry, do not shoot the messenger, if you shoot me ..do let me die in an old growth forest.
Re Crypto… and yes this about housing.. prices anyway. Crypto needs to stabilize before it gets any traction. I get it you made a lot of $ . That is not the same as having a safe and positive means to transact business. Crypto is nothing but a gamble until they can stabilize. You can also make millions playing Black Jack.
The block chain is a good technology but totally unrelated. Its great for most supply chains, yes!
Macroeconomics matters!

but why lose 60% office staff?

They were all invested in bitcoin.
Why work?

@stroller this is the problem with freedom of speech. Stupid people usually scream louder.

I know Sidekick will chime in with passive isn’t very complicated and I agree when doing a custom home where you aren’t trying to make a profit and have all the time in the world, sure. If you are trying to do 4 to 6 townhomes on a corner lot step code 5 is difference between a feasible project and not.

I haven’t talked in depth with Mark Bernhardt about this (https://www.passivehousecanada.com/projects/north-park-passive-house/) or this (https://bernhardtcontracting.com/pf/wilson-street/) but I suspect he would disagree with you. I do know the current environment is not development-friendly, and anything ‘extra’ like Step 5 just adds friction. But that’s just scape-goating step 5 (in my opinion) instead of pointing both fingers at bureaucracy.

It’s incredibly expensive to build.

In pure $, yes, it’s more expensive. I believe we’re running about ~10% premium (locally). The Europeans have it dialed in, but we’re a number of years behind them. Keep in mind the cost-of-ownership is usually cheaper when a mortgage is involved.

drywallers not paying attention can ruin your entire Step Code 5 house

You’re doing something wrong if you have this problem.

Other than cost trades these days are a nightmare. Even simple, but newer methods of things like ICF foundation you have to do yourself or get completely gouged which is fine if doing one house, but as a builder/developer on a multi unit project you don’t have time to do things yourself.

Doesn’t this speak to the general state of Construction these days?

Marko is spot on about mass timber. It’s more complex, creates scheduling issues due to the concrete cores, and local GCs have zero experience on estimating or constructing it.

In other construction gossip, Farmer lost a few PM’s in recent months and Campbell lost over 60% of their office staff. Tough times ahead with even less experienced staff.

Yes, I should clarify what I mean is that the way Patrick is quoting it is bunk. My mistake for wording that incorrectly.

I’m happy to accept that clarification, and leave it there.

As usual, I’ve enjoyed the discussion.

Haha hadn’t heard that. They really hyped up the mass timber too. If I’d have bought in I’d be pissed.

Dear Tresah West homebuyers,

I’d like to thank you for your purchase and your ongoing enthusiasm for Tresah. This is a project that has attracted homebuyers and investors because of its beautiful design, value and the opportunity to be part of the first major residential development in Victoria’s growing Midtown neighbourhood.

As we’ve been planning for the upcoming construction of Tresah West, we’ve come to a decision that mass timber is no longer the best structural material for this building. There are challenges related to the mass timber supply chain, market demand, lack of local mass timber expertise and materials pricing that have led us to the decision to build with another structural material. This change will ensure we can deliver this building effectively and in a timely manner.

I’m very excited to announce that Tresah West will be built with recycled, lightweight steel and concrete. We’ve chosen this innovative approach because it’s sustainable, durable and has many benefits when it comes to the speed and simplicity of construction, home design and building maintenance and operations.

I’ve seen some complaints about Step Code 5. What’s the issue there?

It’s incredibly expensive to build. For example (one of many), with Step Code 5 windows need to be triple pane with low e. That alone is a huge increase in cost, for a limited benefit over NEW double pane windows. Over and over on HHV people have posted their annual utility bills and even if you got a step code 5 home down to zero for utilities (unrealistic) it would be decades paypack.

The other thing everyone including government is overlooking is expertise/availability of tradespeople. There is already a huge shortage of tradespeople. A lot of tradespeople have not idea how to do their job, but not to worry with a more complicated process of construction where something as simple as drywallers not paying attention can ruin your entire Step Code 5 house.

Look at what just happener at the Teresha development next to Mayfair Mall…..”we are building mass timber” a year later…..”ohhh wait there isn’t available expertise on mass timber…we are switching to concrete.” I am sure if they delayed their project a year or two expertise would be available but tough to do when you’ve presold the units.

I know Sidekick will chime in with passive isn’t very complicated and I agree when doing a custom home where you aren’t trying to make a profit and have all the time in the world, sure. If you are trying to do 4 to 6 townhomes on a corner lot step code 5 is difference between a feasible project and not.

Other than cost trades these days are a nightmare. Even simple, but newer methods of things like ICF foundation you have to do yourself or get completely gouged which is fine if doing one house, but as a builder/developer on a multi unit project you don’t have time to do things yourself.

Maybe smalltimedeveleoper can chime in with his step code 5 thoughts?

Actually on the local Vibrant Victoria forum someone posted that Leo was going to run for Saanich council.

If it is true, you have our two votes Leo!

I’ve seen some complaints about Step Code 5. What’s the issue there?

Now that’s funny. The “series that Leo posted” was the same trading economics graph that I originally posted that started this whole discussion. https://househuntvictoria.ca/2021/06/20/a-brief-history-of-credit-measures/#comment-80706

Shit, should have correlated that one right away, sorry. I guess I didn’t see that post from June.

“And now we know the 68.55% data point does come from statscan, and we’ve progressed to the point where Leo himself uses the graph, and people like you are praising it as an “accurate source””

This is an interesting interpretation, but I don’t think that’s what just happened.

Based on the series that Leo posted, I don’t think it could possibly be that accurate.

Now that’s funny. The “series that Leo posted” was the same trading economics graph that I originally posted that started this whole discussion. https://househuntvictoria.ca/2021/06/20/a-brief-history-of-credit-measures/#comment-80706

The only thing that’s changed is that Leo first called that chart “bs” and didn’t believe it was possible that the 68.55% number data was coming from statscan.
And now we know the 68.55% data point does come from statscan, and we’ve progressed to the point where Leo himself uses the graph, and people like you are praising it as an “accurate source” .

The error band is very small (accurate 99% of the time +/- 0.4 %.). That would put the 68.55% number in the range (68.15..68.95)

Based on the series that Leo posted, I don’t think it could possibly be that accurate.

I don’t think it’s bunk. But it is a different data source than the Census, and I would be cautious about trying to stitch the two together.

“Here is the methodology info for the Canada Housing Survey”

Are the numbers adjusted to account for excluding members of the Canadian Forces living in military camps and people living on Indian reserves from the survey, which are included in Census household data?

And here is it again, if you missed it twice already in HH posts https://www150.statcan.gc.ca/n1/pub/12-581-x/2020001/h-l-eng.htm Total= 14,790k owned=10,138k rented=4,653k. And 10138/14790=68.55% (Source: Statistics Canada, table 34-10-0066-01)

Just curious, what’s the error band on this one look like?

Yup, they know best -> https://www.youtube.com/watch?v=BwmqGLDdlGc

Another video from you featuring Pierre Poilievre. It’s all starting to make sense now.

Utter nonsense. The technical capabilities of the internet and its applications have nothing to do with whether it’s a good idea to pay for “ownership” of a number.

If you want a better analogy, look at the huge sums of money people were paying 20 years ago for companies that never made profits.

It’s not clear to me what your criticism is. Are you suggesting that paying for “ownership of a number” in today’s climate is similar to buying into the dot com hype of the late 90’s and early 2000’s? You believe the current bitcoin pricing and NFT mania are a bubble of sorts?

If yes, I don’t agree.

Sure, there are traders profiting on BTC price volatility. But there are also people who are buying BTC/ETH and participating in decentralized finance because a de-fi makes more sense to them than the status quo. There is a parallel system of finance developing. It’s not just speculation as you appear to suggest.

As we shift more of our lives online, paying for “ownership of a number” does make sense to some people, particularly if you believe online will be a place where people spend most of their time. This isn’t a stretch to believe, given remote work and social distancing. In that case, perhaps digital ownership is real and potentially very profitable.

And that, my friend, is the rub. Someone asking “What is the metaverse/BTC/De-Fi?” is today’s version of Brian Gumble asking “What is the internet anyway?” in 1994.

It’s new, abstract, and hard to understand. But there is a growing number of people participating, and as applications grow it will make more sense. Just like the internet in the early 90’s.

Or at least, I think it will. I could be wrong, as I and many others have been throughout time.

do you have any solution?

Google “Paul Volcker”. “Milton Friedman” will do too.

What I have a problem with is average folk thinking they know more about setting interest rates, etc., than the Governing Council at the BoC.

I agree. Best to leave all decisions to experts, not question monetary policy (or any policy) decisions and carry on with life. Benevolent institutions have our best interests in mind.

Vancouver approves six-storey rental towers on major arteries

Now, because of a new rental policy that Vancouver council approved almost unanimously last week (only Councillor Colleen Hardwick was opposed), projects like this one won’t have to go through a rezoning. Instead, there will be a more simplified process, vetted by city staff.

Will the central banks quiet down the party now, or wait until it gets completely out of hand?

Good question. I think the central banks will let Inflation run, like they did after WWI and WWII.

The extreme case….In Germany, after WWI, the inflation brought prosperity, big stock market gains, generous social programs and full employment. People and the government (weimar republic) were happy and living with the inflation (1919-22), until the “wheelbarrows of money” stage (1923) where everything collapsed. Civil servants had their wages indexed to the crazy inflation throughout, but still got economically hammered. There’s a good book “the downfall of money” that documents it.

I’ll take Leos average folk analysis any day over whatever CMHC/central bankers have to say.

Leo’s local RE analysis is peerless. CMHC is often clueless, as we’ve learned over the years.

What I have a problem with is average folk thinking they know more about setting interest rates, etc., than the Governing Council at the BoC.

I’ll take Leos average folk analysis any day over whatever CMHC/central bankers have to say.

That’s why I’m here, and not on Evan Siddall’s twitter account.