Canadian RE Bears: Just Wrong?
To paraphrase Kermit: its not easy being a RE Bear
Particularly in some big Canadian cities
Prediction is a crap business at the best of times
Economists build careers on being wrong alot or at least not right alot
The RE Bear thesis:
2/
To paraphrase Kermit: its not easy being a RE Bear
Particularly in some big Canadian cities
Prediction is a crap business at the best of times
Economists build careers on being wrong alot or at least not right alot
The RE Bear thesis:
2/
Residential property prices in key cities: Vancouver, Toronto and their surrounding areas are over inflated and will fall dramatically
Its not hard to find general agreement home prices are too high, most folks outside the RE industry and quite a few insiders will say it
3/
Its not hard to find general agreement home prices are too high, most folks outside the RE industry and quite a few insiders will say it
3/
"Prices are crazy!" "Who would pay that?" "Wow, that little dump got that much!"
That's common
People inside the RE industry will say: "World Class!" "No Supply!" "Immigration blah, blah"
And there are elements of truth in those comments
Canada is a great country
4/
That's common
People inside the RE industry will say: "World Class!" "No Supply!" "Immigration blah, blah"
And there are elements of truth in those comments
Canada is a great country
4/
Immigration paused but not stopped, there are some Supply issues
But prices are ridiculous
History is useful: after a hard RE crash in 1990 home prices started going up in 1996 and with a couple of blips have gone up for 24 years
If you were 24 in 1996 you are 48 now
5/
But prices are ridiculous
History is useful: after a hard RE crash in 1990 home prices started going up in 1996 and with a couple of blips have gone up for 24 years
If you were 24 in 1996 you are 48 now
5/
For that 48 year old's entire adult life "real estate only goes up" is factual
The 2008 Crisis did drop RE values but for less than 12 months then back up
In March 2017 RE values peaked after a run up and dropped but 18 months later had largely recovered
6/
The 2008 Crisis did drop RE values but for less than 12 months then back up
In March 2017 RE values peaked after a run up and dropped but 18 months later had largely recovered
6/
If you HAD to sell during the dips it hurt but that was a very limited number of people
Which brings us to a worldwide pandemic and economic disaster
And RE prices in the GTA are up about 20% from 2019
So....... its tough to be an RE Bear
You're wrong almost always
7/
Which brings us to a worldwide pandemic and economic disaster
And RE prices in the GTA are up about 20% from 2019
So....... its tough to be an RE Bear
You're wrong almost always
7/
Ridiculously wrong
And some of us wrong for very LONG, I have been wrong about sustained RE price reversal for 12 years, that's a crap record even for an economist
I got out of the prediction business
Still believe prices are ridiculous
Still worried about RE values
8/
And some of us wrong for very LONG, I have been wrong about sustained RE price reversal for 12 years, that's a crap record even for an economist
I got out of the prediction business
Still believe prices are ridiculous
Still worried about RE values
8/
Because a bunch of people may get hurt
Because the next generation is in a debt trap
Because life in general would be better for so many people if RE prices were lower
And the next 12 months will be very interesting
But no predictions
Because the next generation is in a debt trap
Because life in general would be better for so many people if RE prices were lower
And the next 12 months will be very interesting
But no predictions
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