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September 7, 2018 | Truthiness

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

Is it possible to draw a straight line from the new $14-an-hour minimum wage to 80,100 job losses in Ontario in a single month? Could it be that all those small business dudes warning they’d have to trim hours and workers in order to stay viable were telling the truth? Maybe the laws of economics actually do apply. Wow. Who knew?

In any case, the awful job stats in the GTA, Ontario and beyond are just more bad news for realtors who now have enough extra time to bomb this site. But it’s not merely the fact the employment scene is wonky, wage gains are also on the decline – just as interest rates go up (the next increase is October 24th).

Against this background the mischievous attempt by the housing industry to pretend prices which are falling are actually rising is a grand piece of theatre. They’re helped by a sheeply media reduced by falling ad revenues to rewriting real estate board media releases. It’s pathetic. And dangerous. If financial guys tried to do what real estate hucksters pull off monthly, they’d be in jail. Or driving Kias, for God’s sake.

When this blog pointed out yesterday that average prices have been softening for months, while the industry claims otherwise, there were intestines and blood all over the steerage section floor. But, facts are facts. There was no spring property rush, the summer sucked and the autumn market is so far non-existent. That may change. But potential buyers should know the reality. Having the official industry numbers compiled, organized, presented and spun by salespeople – with zero regulatory oversight – is appalling. Houses now cost a crazy amount. Families spending or borrowing a million or more deserve some truthiness.

Hanny Elsayed tracks all of this at his site (http://TorontoRealEstateCharts.com). He read the fighting words posted here yesterday and sent along this note:

TREB seems quite cheery this month, saying sales and prices are up. They may only be talking about part of the equation. To gauge sentiment, we need to know if sales/listings/prices are up or down. My site covers 13 cities/housing types. Of those, 12 show either a YoY increase in listings, a decrease in sales, or both.

This appears to have been overlooked in the TREB press release. I’m not saying that this means a bearish outlook. I’m just saying that of the 13 subs covered, only Brampton detached has positive direction on all of supply, demand and price. The rest appear to be less clear.

So here is a representative sample of what actually appears to be happening. Markham is a bustling 905ville, packed with new housing developments and has even been a fav destination for years of the much-maligned (on the blog) Asian community. Prices there were nutso in 2017 along with the rest of the region, and they are now retreating – just like everywhere else.

Prices fell sharply and have not recovered.

 

Inventory surged in early 2017 and remains.

 

Supply outstrips demand dramatically.

 

Is this a market you really want to buy into given the certainty of rising interest rates, the uncertainty of the nation’s trade and the shocking employment news in Ontario? Well, if you’re brave, maybe so. But if you’re buying with a ton of leverage, financially stretching to grab a forever house – or you just read the latest TREB report about the market recovering with sales and prices rising – be careful. They made that up. It’s not reporting, it’s marketing.

You should know that.

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September 7th, 2018

Posted In: The Greater Fool

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