According to fresh data, the Canadian real estate market is booming again.
In a world where interest on your savings account is in the two-per-cent range and secure investments such as locked-in guaranteed investment certificates aren’t paying a whole lot more, houses are once again feeling like the best place for ordinary Canadians to keep their money.
The question being asked by many young Canadians, who are considering buying their first home and many boomers at the other end wondering when to sell, is whether those house price increases will continue in 2020, or will it all come crashing down.
Most commentators from the real estate industry have been upbeat in their outlooks for the coming year.
While not the 30 per cent increments Vancouver saw at the peak of the boom, new figures from the Canadian Real Estate Association (CREA) out on Monday suggest that if you bought a house in November a year ago, that house was worth 8.4 per cent more in November this year.
As a return on a safe investment in the current market, that’s astounding. And the tax advantage makes it even better.
Covering your assets
For most Canadians who only own one home, Canadian tax law means that the entire eight-odd per cent increase — about $40,000 on CREA’s average priced home and $80,000 on the average million-dollar homes of Toronto and Vancouver — is entirely income-tax free.
Not only that, but the CREA prediction for next year shows prices will rise another, tax free, 6.2 per cent. What is not to like about such staggering returns?
Well, as usual, if making-money were easy, we’d all be multimillionaires. Details matter. And for another thing, if you want to cover your assets, you can’t just look at the bright side.Is now the time to rent or buy? One expert Hilliard MacBeth is still advising young people to avoid the condo market where he thinks prices have become detached from the land value they represent (Don Pittis/CBC)
Over the longer term, Canadian property prices are in all likelihood a safe bet. While prices dip periodically, they almost always recover again. But that can take a decade or more.
In fact, a closer look at that 8.4 per cent rise in prices, according to CREA economist Gregory Klump, tells us that until just the last few months prices have not been doing so well. Effectively, the big percentage increase is based on comparing a high point in November this year with a low point in November a year ago.
Overall, comparing all of 2018 to all of 2019 shows prices are only expected to rise 2.3 per cent by the time this year is over. So that is a detail to remind you that it depends on exactly when you buy and when you sell. And not only when, but where.
“There was an almost even split between the number of local markets where activity rose and those where it declined,” said the CREA report. “Higher sales across much of British Columbia and in the Greater Toronto Area offset a decline in activity in Calgary.”
Too much euphoria?
If you are ever worried that you are feeling a bit too euphoric about the state of the property market and your enthusiasm needs damping down, one useful option is to talk to Hilliard MacBeth, or better yet read his book When the Bubble Bursts.
There aren’t a lot of people who say the Canadian housing market remains overvalued and is heading for an inevitable fall, but MacBeth is not the only one. Swiss bankers at UBS recently put out their latest Global Real Estate Bubble Index, and Toronto had the honour of second place between Munich and Hong Kong. Vancouver came in at No. 6.
“The people who are really suffering in the residential side are the new home builders who have built too much product on the outskirts of Edmonton and Calgary,” said MacBeth, on the phone from Edmonton at the end of last week. “I think the term is ‘immediate availability’ — code for ‘we’re desperate.'”
Canadian Real Estate Association figures are based on resale homes, but in Calgary and Edmonton new home builders who have too much product in the pipeline are really suffering, MacBeth said. (CBC)
He says there are bargains to be had, so long as you don’t think prices are going to go down further yet.
As MacBeth points out, under priced new-builds are not included in the CREA numbers, nor are mortgage defaults, which are often sold quietly by the foreclosing banks. He said that houses withdrawn from the market because the seller is dissatisfied by offer prices also don’t make it into the data.
In some ways, MacBeth says the property market in Alberta and Saskatchewan — currently suffering from a continued downturn in the oil and gas sector — represents a foretaste of what could happen if the wider Canadian economy were to go into recession.
It is something Stephen Poloz in his Bank of Canada year-end speech and news conference last week said he had taken into account. While the central bank sees the large pile of mortgage debt accumulated by Canadians as sustainable, it remains the principal vulnerability for Canada and its financial system.
‘A nasty shock’
“If a nasty shock came along and unemployment in Canada rose significantly … the effect of that shock would be magnified,” Poloz told business reporters. “So we would have a bigger and more prolonged recession than if that debt was not there.”
Poloz was in no way predicting a global or Canadian economy shock this coming year, but he said Bank of Canada modelling shows that even in the worst case, the country’s banking system would remain sound.
Having studied the central bank’s predictive scenarios, MacBeth is not so sure. But of course gloom, especially in the property market, is one of his specialities.
He is still advising young people to avoid the condo market where he thinks prices have become detached from the land value they represent. He is advising people to rent, and notes that construction companies working on purpose-built rental properties will continue to do well, selling them to pension funds for the reliable stream of future income they represent.
“So will 2020 be the year of recession in Canada? I suspect it will, and if that’s the case, then it will be a particularly challenging time for Canadians because we’ve never gone into recession with private-sector debt levels — both corporate and household — at such high levels,” said MacBeth.
That may be the minority view, but now you’ve been inoculated. It’s safe to go back and read some real estate optimism about how property has nowhere to go but up in 2020.
Olympic champion Maggie Mac Neil announced her retirement from swimming Thursday.
The gold medallist in the women’s 100-metre butterfly at Tokyo’s Summer Games in 2021 made the announcement in an Instagram post alongside a photo of her swimming as a child.
“The little girl above would have never dreamed this is where her love of swimming would take her,” Mac Neil wrote. “I am so grateful for all the memories, people, and places I have gotten to experience just through swimming.
“I’m excited to begin the next chapter of my life journey, as I embark on discovering who I am outside of swimming.”
The 24-year-old from London, Ont., earned a complete set of medals in Tokyo after helping relay teams to silver and bronze medals.
Mac Neil’s five gold medals at the 2023 Pan American Games in Santiago, Chile, were the most by a Canadian athlete at a single Pan Am Games.
She was fifth in butterfly and was a member of two women’s relay teams that finished fourth at the recent Olympic Games in Paris.
“Anyone who I crossed paths with never, ever told me I couldn’t achieve my goal of going to the Olympics,” Mac Neil wrote. “It’s still surreal to be able to say I’m a two-time Olympian.”
She completed her master’s degree in sport management at Louisiana State University this year.
Born in China and adopted by Dr. Susan McNair and Dr. Edward MacNeil, Mac Neil’s mother wanted her to take swimming lessons for safety reasons because of the family’s backyard pool.
Mac Neil’s 2017 diagnosis of sport-induced asthma — which can be triggered by the swimming staples of heat and chlorine — forced a switch from longer distances to sprints.
Mac Neil became Canada’s first world champion in the women’s 100-metre butterfly two years later.
The nearsighted Mac Neil, who doesn’t wear contacts or prescription goggles, has seen multiple times a meme of her squinting hard at the scoreboard in Tokyo as she tried to decipher her result.
“I like to think it helps because I can’t see where other people are and I’m able to focus on my own race,” Mac Neil said before the Olympic Games in Paris. “That was definitely the case in Tokyo.
“I got that meme sent to me at least three times in January even though it’s been three years since.”
This report by The Canadian Press was first published Sept. 26, 2024.
Fairness for every generation: more than an empty slogan, not yet a reality
New Report Card shows more progress required to achieve federal budget promise
This week, the United Nations enacted the Declaration on Future Generations.
The Declaration obliges all nations to govern as Good Ancestors, stewarding what we hold sacred now and forever. It delivers a vital antidote to the cynical, short-term thinking that plagues the politics of too many countries.
Canada endorsed the Declaration, as our Prime Minister just affirmed to the General Assembly. To support its implementation here at home, Generation Squeeze prepared Canada’s first ever
Report Cardon our federal government’s commitment to generational fairness.
There is good news and bad news.
It is good news that Ottawa re-organized the national budget around the promise of “fairness for every generation.” This is a big reason why our report card does not assign any failing grades. We would have done so in past when generational fairness was not on the political radar.
The bad news is that much work remains before Ottawa will earn excellent marks.
Our lowest grade – a D – signals that spending plans in budget 2024 do not invest fairly in young and old alike. Investments in Old Age Security (OAS) and medical care for the aging population dwarf investments in the Canada Child Benefit, child care, housing and postsecondary.
This indefensible gap will only widen if the Bloc Quebecois gets its way. The Bloc is threatening to hold the Trudeau government hostage to its demand to accelerate OAS at pace that will leave investments in younger people even further behind.
Ottawa earns C for its efforts to avoid leaving unpaid bills to younger and future generations. Canada currently has the lowest net debt/GDP ratio of any G7 country, which is a strength. But Canada also faces a structural mismatch between revenue and spending as a result of poor planning for population aging. This mismatch is driving the $40 billion federal deficit.
Despite enacting the most comprehensive federal housing policy we’ve witnessed in decades, the government still only earns a C+ for reducing intergenerational tensions in Canada’s housing system. Since the National Housing Plan never mentions the word “wealth”, it ignores that many older Canadians have benefitted from the rising prices that now inflict unaffordability on their kids and grandchildren.
We award the Government of Canada a B for its efforts to steward the planet for younger and future generations. Mr. Trudeau now leads the only government in Canada that defends the principle “If you make a mess, clean it up.” Consumers should pay for our carbon pollution so we pollute less, and pay to clean up our mess. Otherwise we betray our kids.
Canada earns its top grade – a B+ – for organizing its budget around the promise of fairness for every generation. But we are not yet among the world’s leaders in implementing the UN Declaration. Wales has a Commissioner for Future Generations. The EU has a Commissioner for Intergenerational Fairness. Canada needs one too.
Canada needs an Act to safeguard the wellbeing of present and future generations, because a single budget isn’t enough to disrupt the short-term thinking that seduces the present to colonize the future. Only by enshrining intergenerational fairness into machinery of government will we safeguard what is sacred – a healthy childhood, home and planet.
VANCOUVER – Quarterback Nathan Rourke says the B.C. Lions “have to have a sense of urgency” as they prepare for their final four games of the CFL season.
“There’s a lot of importance in these last four games,” Rourke said after practice this week. “We’ve got to get it going.”
The Lions (7-7) want to get back on track when they face the Hamilton Tiger-Cats (5-9) at B.C. Place Friday night. B.C. is coming off an embarrassing 33-17 loss at home to the Toronto Argonauts two weeks ago that left them in second place in the CFL West.
Across the country, a three-game winning streak has put the Tiger-Cats back in playoff contention in the East.
Defensive back Jamal Peters said the Ticats never stopped believing in themselves, even when they started the season with five losses.
“We kept the faith,” said Peters, who leads the team with four interceptions. “We kept believing in one another and kept working. We knew we wouldn’t ever be out of it.”
The Lions started the campaign 5-1 but are 2-6 in their last eight games. They head into the weekend two points behind the first-place Winnipeg Blue Bombers and one ahead of the Saskatchewan Roughriders.
After looking strong in beating Ottawa and Montreal by a combined score of 75-35, the Lions managed just 222 total yards against Toronto. Rourke was pulled after completing six of 12 passes for 110 yards and no touchdowns.
“We’re trying to piece it together ourselves,” Rourke said in trying to explain why the Lions can be ferocious one game, then kittens the next. “At the end of the day it comes down to being able to play a complete game.
“That’s what all the good teams around the league do. They are able to play four quarters and have their offence help their defence.”
Rourke is 2-3 in the five games he has played since returning to the CFL after failing to land a job in the NFL. The Canadian-born quarterback has completed 79 of 126 passes for 1,099 yards, four touchdowns and seven interceptions. In the last two games Rourke has no touchdown passes and has thrown three interceptions.
Coming out of a bye week, Rick Campbell, B.C.’s head coach and co-general manager wanted to stop any talk of a quarterback controversy in Vancouver by saying Rourke remains the Lions starter.
“I don’t want to create any confusion,” said Campbell. “Right now this is what we’re doing. I want there to be clarity and not a debate going on.”
Veteran Vernon Adams Jr. was an early candidate as the league’s outstanding player before sustaining an injury and the return of Rourke. Adams was four of seven for 75 yards, no touchdowns and threw an interception when replacing Rourke against the Argos.
For the season Adams has completed 171 of 266 passes for 2,544 yards, 14 touchdowns and seven interceptions.
“We can win with either one of these guys,” said Campbell. “We’re going to go with the continuity Nathan has been playing with the last several weeks. We think we have room to improve and grow.”
One reason for the Hamilton turnaround has been Chris Jones joining the team as a senior defensive assistant after being fired as Edmonton’s head coach and general manager.
In the 10 games before Jones arrived, Hamilton allowed an average 33.4 points a game and gave up 3.5 touchdowns. In the four he has been a coach, the Ticats have given up 26.5 points a game and allowed 2.25 touchdowns.
Quarterback Bo Levi Mitchell also leads the CFL with 4,044 passing yards (322 completions on 473 attempts) and 24 touchdowns.
Campbell knows Hamilton comes to the West Coast riding a wave of confidence.
“We always know we’re going to get their best shot,” he said. “Our job it to focus on us and make sure that they get our best shot.
“When they get our best shot, we’re pretty good. We need to direct all our energy and focus on ourselves.”
HAMILTON TIGER CATS (5-9) at B.C. Lions (7-7)
Friday, B.C. Place
ORANGE SHIRT DAY: The Lions celebrate their fourth consecutive Orange Shirt Day Game to pay respect to Canada’s National Day for Truth and Reconciliation. Players will wear special Orange Shirt Day warmup jerseys, which will be raffled off in support of the Orange Shirt Society and Indian Residential Schools Survivors’ Society (IRSSS).
HOMESTREACH: The Lions play three of their final games at home. After Friday they host Calgary Oct. 4 and Montreal Oct. 19 before finishing the season with a bye. B.C.’s lone road game is an Oct. 12 visit to Saskatchewan.
BYE BYE: The Lions are 4-2 in their last six games after a week’s rest.
DOING THE STREAK: Hamilton is looking for it’s first four-game win streak since 2022.
THREE-PEAT: Lions running back William Stanback needs just 41 yards to reach 1,000 for the third time in his career.
CLOSE ENCOUNTERS: The two teams have split their last six games at B.C. Place, with five of them decided in the final three minutes.
This report by The Canadian Press was first published Sept. 26, 2024.
