Rent Inflation is Squeezing the Bank of Canada - The Loonie Hour Episode 142
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- Опубліковано 28 вер 2024
- Rent inflation surged pushing the CPI basket higher. The Liberals lose an important by-election in Toronto. Will JT resign? Toronto new home sales fall off a cliff. The labour market weakens for new immigrants. The Japanese yen continues to roll lower, a key signpost for the global sovereign debt bubble.
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The issue is that either the renter or the owner must in some way pay insurance and property taxes if they want a "permanent roof" with utilities like electricity, gas and water. Because of this, many people-at least in California, where I currently reside-are living in tents. No taxes, rent, mortgages, or insurance. The number of people who tell me they live in their car that I meet amazes me. Its crazy out here!
It’s getting wild by the day. The prices of homes are quite ridiculous and Mortgage prices has been skyrocketing on a roll(currently over 7%). Sometimes i wonder if to just invest my spare cash into the stock market and wait for a housing crash or just go ahead to buy a home anyways.
I get such worries too. I'm 50 and retiring early. Already worried of the future and where its headed, especially in terms of financies and how to get by. I'm also considering making my first investment in the stock market, but how can I do so given that the market has been in a mess for the majority of the year?
Due to my demanding job, I lack the time to thoroughly assess my investments and analyze individual stocks. Consequently, for the past seven years, I have enlisted the services of a fiduciary who actively manages my portfolio to adapt to the current market conditions. This strategy has allowed me to navigate the financial landscape successfully, making informed decisions on when to buy and sell. Perhaps you should consider a similar approach.
this is great! think your advisor would get on the phone with an unknown? i'm in dire need of proper portfolio allocation
There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’ Melissa Terri Swayne” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
Inflation is far more harmful to individuals than a collapsing stock or property market because it directly affects people's cost of living, which they immediately feel. It is not surprising that the current market sentiment is extremely pessimistic. In today's economy, assistance is critical if we are to survive.
It has never been simpler to grasp how to expand your wealth than it is right now, thanks to the availability of competent portfolio advisors that can help you experience and learn about a market with a wide range of assets. I think it's impossible to predict how changing dollar values will affect assets.
If you lack market knowledge, your best bet is to seek advice or support from a consultant or investing coach. Contacting a consultant may sound simple, but it's how I've managed to stay afloat in the market and increase my portfolio to roughly 65% since January. It is, in my opinion, the best way to get started in the industry right now.
Where may one locate an experienced FA? I like the notion of employing their services, but it's terrible that recent stock market tragedies have started to happen more frequently.
Her name is Sharon Ann Meny can't divulge much. Most likely, the internet should have her basic info, you can research if you like
Insightful... I was curious after reading what you shared, so I Googled her name. I came across her webpage.
Can’t wait for people to realize this is as good as it gets.
Canadian's? They're out to lunch - on credit.
Steve, the rents that are down are market rents; CPI measures average rent. That means that if someone leaves the rent-controlled apartment they've been renting for 15 years at $1000 and gets a new place at $2000, even though last year the market asking rent was $2200, the average rent has gone up while the market rent went down. Average rent lags market rent by far, because it includes a mix of people paying current market rents and past market rents (with small increases). But the population of old renters is always gradually being replaced with new renters at the market.
Would love to hear your take on how to invest to mitigate for stagflation!
@32:04 "oversupply" anything but address the demand side of the equation I guess
What you are all tlaking about is Sovereign Default. Debt holders are boiling frogs. They simply don;t know they are broke.
There are good types of debt.
@@roseoverdose6451 That's what they tell you and you believe it. You own nothing. There is no good type of debt. When your currency goes to 20 cents due to sovereign bond default maybe then you will understand. Until then, carry on
@@roseoverdose6451 Tell that to Japan today
@@roseoverdose6451It is only applicable when asset prices have collapsed, and a new cycle has begun or in a high inflationary environment. We have neither. Asset prices are falling, your debt is getting more expensive as your asset drops in value
Leadership contest takes about a year, more than likely they wait till fall, JT steps down, they blame the Leadership contest on them drawing out their stay and collecting their pensions.
This summer is going to be unique in Toronto, GTA Ontario and surroundings. Bigger inventory, better choices. That 3.7 million homes in 7 years it's totally in the cards if we are going to maintain this pace. Brand new and resale in total. So, the plan is working for affordable housing. Are prices coming down a little bit? 100%. I am representing clients in over 30 cities. I can see these things every single day. Posting daily real estate news.
Starts @ 6:42
Thanks for fluffing us man
Great Job!!! Thank You... :-)
Bidding wars in Cambridge/Kitchener for Real Estate and increase gas price will cause CPI for June to go up
They exclude home prices CPI and inflation numbers are a lie inflation is at 10 percent right now.
Sorry boys Richard is my favorite
Rich could start an onlyfans and sell his bath water and bottled farts to fund his space trip. Big brain!
I can’t believe that the big brain economists at BoC don’t realize that pouring gasoline on fire aka rapid increase of rates cause rent inflation. Asset owners are simply passing down their costs on the end users. Increasing the rates was a good step but I’m positive if they would stop at 3.5% the inflation would be back to 2% late last year.
That’s not how things work. Once cost of goods are realized the owners have two choices, up the price or reduce the cost.
@@justinjones5281 How can they reduce the cost of an asset that they already purchased?
@@tomasbillik841 fire employees
🥇
Rich has the best microphone discipline and he is the easiest to hear. The other two should take his lead.. especially Steve... geez man, why not at least get a stand!? I spend all my brainpower being distracted by the mic I can't focus on what you're saying.
@Steve Sales are low in GTA for a specific reason. And it makes sense, right? Is this the end of the world? The opposite. why complaining about sales? We need to be happy for more inventory and no more need it expensive housing. Welcome to the reality in Canada. We should ban multiple offers. We should put mandatory for resale 10 days cool off. MANDATORY. Now, in buyers market, it's the right time to do it.
Liberals lose Toronto: "ok guys its time to start working for the people"
No they just go underground, rebrand, infiltrate another society and pop back again with another attempt to make communism work somewhere else. For some reason communism can never just be a successful economic model on its own, it always needs a wealthy capitalist society to be the host while they take over all the wealth and productive capacity that capitalism created.
25:15....my local Tim Horton's has turned it's staff over by 80% in the last year or so.
1. Where did all the people go that were working there before Trudeau-gration?
2. We have a minimum wage here in Ontario...why would a business owner lay off experienced staff to pay new staff the same minimum wage when those new employees can't even make change?
3. I am left to assume there a hidden wage subsidy for immigrants
Not hidden, just not talked about.
Half the wage of new immigrants is subsidized back to the employer
@@Stormshfter quote source
This is NOT 'normal" cpi inflation central Banks are dealing with in Monetary Policy given the concurrent massively underfunded DEBT liabilities built up 'papering over' Real Estate asset based GDP for well over a decade.
This is a "store'" of not just banked 'inflation'.... but increasingly a massive currency debasement based deficit now unsustainable by contracting GDP/servicing GDI's that was being maintained by no more than the aforementioned Debt expansion.
CRASH !
@35:43 "Hard times ahead" what a change of tune
I’ve said this for 2-3 years now. At a certain point inflation will just be too high and when it hits that magical number either wages jump 30% or people stop paying rent, mortgages, car payments and everything comes crashing down.
You can pull the financial levers all you want but everyone needs food, shelter and transportation. There’s plenty of food, shelter and transportation available but speculation and the need to keep quarterly profits up have pushed the numbers too high for people to afford them anymore. The consumer has been priced out in exchange for short term profits. There’s no juice left to squeeze so everything is about to come tumbling down.
Go to 3rd world countries. For example a 2 litre bottle of cola in Dominican Republic is 150$ in there currency. Trust me the levers will just be pulled on over and over again. Humans are used to being enslaved and Canadians will slowly but surely be deprived of their wants.
Some realtor told me housing was a luxury, and I should stfu and be his renter
@@justinjones5281Being a third world country doesn't work for Canada because of our harsh winters. If Canada has an economy like the Dominican Republic everyone would leave and we would have massive deflation, including for real estate.
Agree
@@Jo-mf2vu takes a long time for that to happen. Crime and other things will ensue first. We have tons of goods to circulate first. The facade is thick.
Skilled workers in tech (my industry) still move to the states as the salaries are the same nominally, but you get paid in USD and aren’t taxed 50%+. Canadian companies need significant wage increases to stop this bleeding.
Always been that way.
Nah....they just LMIA Indians into the country
A poor country cannot increase skilled wages except for the barista via forced socialist redistribution
The bleeding would reduce if house prices matched income.
@@shelterskelter That why you work for a company with a white manager and ceo.
The CPI came in hot, and I got a picture in my mind of Freeland with a "Mission Accomplished" banner.(Head bobbling and all)
What Canada really needs is a Party that deals in Reality
PPC
we already have one, and they will never be allowed in by the puppetmasters
@@rp1891 NOT
PPC, but people can't handle cuts they'd do, so they'll just kick the can down and the kids will have clean the mess up
Lol for a moment I read “realty.” Was thinking, “we have that already.” 100%. These parties are all awful. PPC and Bernier was the Ron Paul of Canada and people or Dr. Paul who is grounded in reality, they painted him as a crazy.
Just a gentle update:
"The Toronto Condo Update
Condo inventory in Toronto has reached a record 10,688 units. Meanwhile, sales fell by 28% in June while this inventory rose by 16% and active listings shot up by 70%.
The people who are willing and able to look for a home right now can't live in a 1 bedroom condo with a max 600 square feet. This is the classification of the vast majority of the units available for sale right now. These units were solely built for investors to rent out because at the time it made economic sense for the developers, the investors and the city to collect their precious taxes. A money grab for all involved. No one ever thought about the end user that is currently in the market shopping for a livable condo right now.
Now that end users are calling the shots, hopefully developers will put all future efforts into building larger, more livable condos. "
It was as Japanese corporations holding UST who sold. They are panicking due to their commodity costs going nuclear and they are stockpiling. Rich is wrong focusing on the Govt or Japan Central Bank. Put the US 10 to the Yen. Same chart. Their multinationals are the sellers
I look forward to this podcast every week. It’s coffee and the three amigos every Saturday morning.
Unlike some listeners I do enjoy the banter. As far as I am concerned your show just keeps getting better. The last 2 weeks have been terrific and the quality of the guests you are attracting is both interesting and informative.
Always start with the good news first, right Keith?!
Every once in a while the conversation includes some frat boy expletives and it just clangs. As I sometimes say to my husband … you’re not at the bar with the boys 😎
This is a quibble I know.
Having said that I will certainly continue to look forward to my Saturday morning Financial /
Real Estate / and Data tutorials.
800 people for Tims...is exactly the problem until we have 800 people looking to operate equipment or ANY trade job, then you can slow down immigration
I still don't understand what the point was in trying to stimulate the economy during lockdowns, when the economy was shutting down.
Did he eat the twinkie from the last bet? I saw Rich chow down... Steve won... so he didn't have to...
We forget why japan went to QE in the beginning. If they let the bond market float and stop QE, it would quash inflation in an instant and become massive deflation.
Japan is an aging society that despite all of their QE efforts have very little demand. They HAVE to have a massive internal bond market because of two reasons:
1. mis allocation of capital especially as they directed funds into certain industries previously.
2. more importantly, they have demographics that don't exactly scream internal demand but rather massive savings which means it has to be recycled somehow through either exports of goods, or capital, or alternatively, through massive internal debt structure, there is literally no other way.
Rich is 100% correct (except the part where external debt isn't who it is owed to but what currency it is owed in) in that this is largely internal debt issue. Sacrificing the currency would definitely be my move in Japan because otherwise you might see a deflationary spiral that they wanted to avoid for the last thirty years. One more advantage of weaker currency is this:
If I am running a system whereby I rely on outsourcing my capital to other countries and grabbing a share of the profit from the growth on that capital to support my aging society, a weaker currency isn't the worst thing in the world as the value of my profits are higher in domestic currency. I know this is cyanical but this is likely how they would also view it.
I know foreign investment in Canada has slowed dramatically.
But if Canada doesn't even invest in Canada what new employment streams will ultimately feed the masses?
Unless I'm misunderstanding your model.
@@Stormshfter I wasnt talking about canada,, I was only talking about the Japanese model.
For Canada its a different story. The popular opinion is that Canada is screwed and isn't doing well. I do agree that we have terrible investment in machinery and productivity inducing assets. But if you took the OECD chart of gdp per capita in USD over the last few years it's fairly similar between quite a few advanced countries, ie, UK, Germany, Australia, Japan, even maybe france are not doing well versus the americans, not just us. The US is leaving everyone in the dust due largely to capital flows. If you changed the currency to PPP (which in my opinion is better than using real GDP per capita) you will realize we aren't doing too badly versus the other countries as crazy as this sounds. We do see dip in the data last two years because of our recent immigration boom.
Immigration is a different can of worms, I will just leave it here that the conservatives may drastically reduce it but they will realize that long term economic planning for Canada actually requires far more people because of the way our geography is and the lack of integration between our markets. It's simply hard between Vancouver and Calgary to do business when we are separated by the mountains. So either we need a large enough market by itself or we do integration with the US, we are doing the later but with Trump all bets are off.
FJT
100%. My concern is they get enough votes in the election to maintain the coalition and they carry on full speed with their ideological demolitioning of our economy.
Rich and Keith seem to pussy foot around the fact they believe the price of real estate market is going to tumble fairly hard. With all the rest of their opinions on the economy they are forecasting very tough times and in fact shorting the economy so why is it other then for Steves benefit to they act like they dont understand whether house prices will hold up or not but instead they soft ball questions Steves way when dealing with housing as if they dont understand or have an informed opinion.
What drives the world? Housing and jobs. Without those two things there would be no population. Housing will never go down in dollars. Wages will always be behind the cost of housing. Minimum wage was the first tipping point. Once you guarantee the amount of money paid to an employee is where we as Canadians went wrong. So now minimum wage will be increased again and again and the cost of goods will increase ahead of that in order for business owners to make more money than their employees. Makes total sense to me.
@@justinjones5281Minimum wage hardly effect home prices. With minimum wage you can sleep in a nice tent all winter long, you can't buy a home.
@@Jo-mf2vu with less skilled workers and higher wages globally causes a negative effect on all costs of living. The golden age of many buyers is dwindling
@54:20 Steve it's called the long-term debt cycle 😉
Funny when they took the Moon pictures there was no stars.....😅😅😅
Inflation higher and u re surprised....
Maybe dey lying....😅😅😅
Petition for Keith to watch Interstellar
Re releases in imax at theatre's September 7
Just curious if Rich can speak or read Hebrew? NASA ?? CANA DA? (2 words) Do you know that if one does side-by-sides of some Claire Bronfman pics( before she got real skinny), she looks just like Manitoba's Ukrainian girl Freeland. Small world or what ?
Just a few things that make one go hmmmm.
You guys should try to get Maxime Bernier on your show.
Thatd be interesting
I love these guys! 🖖🖖🖖
Those rent stats are incorrect
You have a Swiss mechanical instead oh tic toc right Kieth maybe a Phillip pateck
Starts at 7:11
Hey Keith, which is your favorite Star Trek series? Mine is a toss up between DS9 and TNG
@icecapassetmanagementlimit849 I recently started watching some of the original series and it's a lot better than I thought it would be. It's surprisingly easy to get into. Great acting and lighting, great for the storyline too.
Just a thought.2 percent is per month times 12 months so that’s is that not 2.4 yoy
Wish they'd just jump right into the topic and cut the small talk
New title, 'Unnecessarily high interest rates squeeze renters'
How about 1.5 million more Sanjays and Gagdeeps?
That oughta help. Tim Hortons on every block.
The Hyundai Elantra Gang be everywhere....
Celebrate diversity ....👏
Podcast starts at 6:37
Thanks the banter is always so cringe.
T-shirt idea "we're all just trying to get to space" text in the shape of a peace symbol.
@icecapassetmanagementlimit849 thanks. Happy Canada Day! 🇨🇦 ❤
Informative and entertaining as usual.
The prosperity we’ve enjoyed will create the pain we suffer. Blame JT, but most Canadians voted him in, and left him there too long.
Who do we blame for voting in stupidity?
As much as JT is a total fool, he is only a piece of the problem.
The right wing conservatives have such an opposite vision as the left wing liberals, that when the govt changes it's a total start over every 5 to 10 years.
In the end nothing gets built to fund our future.
marijuana smokers....letting pot heads vote.....who would have thought?****
So if CPI was just theoretically where it needs to be ex- shelter, but too high with shelter, does that mean we should cut or hold? Because just in terms of how rates mechanically impact shelter costs there's really no benefit from holding rates high, it'll actually only hurt and cause higher long-term inflation. What's the counterpoint to this, Is it the credibility/inflation expectations angle? I don't know, I see those as important but as long as inflation expectations don't take off out of control I don't see sentiment type considerations as outweighing mechanical considerations.
You're completely accurate with your analysis.
But household debt is off the charts and it needs to come down to support any future recovery.
I have been through 3 good recessions and the only way to fix it is to hold rates high until the high leveraged fall.
At this point debt payers become spending consumers.
I have never seen the banks so reluctant to let the process of high rates take its course. They don't seem to want to let it take its course. One side is fighting against the other.
Result is going to be stagflation for a decade. RE will stay flat, but inflation adjusted it will actually decrease by 3 to 4% annually.
@@Stormshfter I don't agree with this at all. First of all, household debt levels are way outside the central banks purview, that is explicitly not part of their decision making process and shouldn't be, inflation and employment is already plenty to consider and balance. That's literally the point of a central bank being independent is that they have a mandate and they have to follow it without considering other things like that.
Secondly, forcing a painful deleveraging is not the only way to solve things It's not even the best way. Implementing more pro-growth policies and shrinking the size of the debt in real terms is the goal not forced deleveraging.
People want Trudeau to go he is not problem Christa Freeland needs to go she has not got a clue on finance
She has no clue
hello mcfly who hired freeland? get rid of trudeau and you get rid of her too.....win win
Passengers starred Chris Pratt. Very unusual plot for a Hollywood movie too, being trapped on a cryogenic spaceship, defrosted and without anyone else was very interesting to see how the character handled it. It got kinda bad reviews, partly because of how the main character handles the situation, but I think it's pretty believable in that regard.
Hey guys keep the useless banter to a minimum
web is already full of that useless shit
thanks
Fluff ends at 6:38
The under supply in housing is due to zoning regulations, and the unrealistic expectations of many people living in Canada.
@16:57 "1.2 million people" yeah in 2024
What was causing the problem 2018 - 2022?
Rents have gone up more from 2022 to 2024 than they did from 2016 to 2022. So a bigger increase in 2 years than in the previous 6. Mass immigration is the number 1 reason for rental price increases, but yes, not the only one.
@@heathmckenzie6875 house prices doubled between 2018 and 2022 when immigration levels were average.
Anyone can look this up.
Who's going to solve the problem you think we have? Pp?
@@Picklemedia Newcomers rent, that's why rental prices didn't rip until population growth ripped. House prices follow liquidity, which ripped 2020-2022. I have no faith in PP, but do you think PP will be worse than the Liberals? My guess is PP will be a marginal improvement.
@@heathmckenzie6875
2018 $1270
2022 $2140
2024 $2196
So $56 increase from 1.2 million people?
And you think that is the "number one problem"?
just not that interested in ur boooering personal life antics