Canada's 'housing bubble' deemed close to bursting

[WarrenC12]

Originally Posted by Truenorth00

Hope to see even more.....

Why? Just to crush housing?

Originally Posted by swimmer_spe

If a recession is a deflation, not inflation, and the BoC is raising interest rates, does that mean the fear of a recession is misguided?

It means the inflation that was slowing has stopped and they want to keep it going down. They literally do not care about anything else.

[swimmer_spe]

Originally Posted by WarrenC12

Medical offices usually cluster in zones around hospitals. They won't just go anywhere.

Which means when St. Paul's moves, there will be a massive movement of associated private offices out of that area and into the area surrounding the new hospital.

Definitely not true all over.. Here in Sudbury, they are all over and actually not near the hospital. I can think of a few buildings that are just medical and they are in different parts of the city. Then there are the random offices in various strip malls and other buildings.

[swimmer_spe]

Originally Posted by WarrenC12

Why? Just to crush housing?



It means the inflation that was slowing has stopped and they want to keep it going down. They literally do not care about anything else.

They want it at 2% a year. That is not a recession. That is normal inflation.

[WarrenC12]

Originally Posted by swimmer_spe

They want it at 2% a year. That is not a recession. That is normal inflation.

Well traditionally they overcorrect and push us into recession to restore inflation to whatever their target level is (2% for the last few decades at least).

My point is that they don't care if they cause a recession, unemployment, housing crash, etc. It's all about one thing: 2%

They do forecast being down to 3% in the summer, which is right around the corner. I guess we'll see.

[swimmer_spe]

Originally Posted by WarrenC12

Well traditionally they overcorrect and push us into recession to restore inflation to whatever their target level is (2% for the last few decades at least).

My point is that they don't care if they cause a recession, unemployment, housing crash, etc. It's all about one thing: 2%

They do forecast being down to 3% in the summer, which is right around the corner. I guess we'll see.

Currently, there is no risk of high unemployment happening. Everywhere is still hiring.

Housing market needs to crash to fix many problems, and it is still going strong.

So, yes, they will keep going with their increases.

[Truenorth00]

Originally Posted by WarrenC12

Why? Just to crush housing?

There's no other way to get inflation down than to accept some damage to asset prices. Eventually, people will understand this. The BoC is finally getting it.

Originally Posted by WarrenC12

They do forecast being down to 3% in the summer, which is right around the corner. I guess we'll see.

3% CPI is no accomplishment. It's 50% over target. And they aren't even close to meeting that yet. Moreover, the longer this goes on, the stickier inflation gets and the more we risk a wage-price spiral. There's only one real way out here.

They might get lucky and see inflation ease a bit if Russia gets crushed and the war ends. But we weren't out of the woods yet. And stuff like dam blowing up (wish feeds a whole canal system in a major grain producing area of Ukraine) isn't going to help the inflation situation.

[WarrenC12]

Originally Posted by Truenorth00

There's no other way to get inflation down than to accept some damage to asset prices. Eventually, people will understand this. The BoC is finally getting it.

I'm pretty sure they have been "getting it" the whole time. They've never been shy about admitting they need to tame inflation at all costs.

Originally Posted by Truenorth00

3% CPI is no accomplishment. It's 50% over target. And they aren't even close to meeting that yet. Moreover, the longer this goes on, the stickier inflation gets and the more we risk a wage-price spiral. There's only one real way out here.

It's ~4% today. 3% would have seemed like a miracle in 6 months ago, especially considering the economy today. This stuff doesn't change overnight... that's why I'm surprised they are still saying 3% by summer. We shall see.

[WhipperSnapper]

Shocking. the commercial office market has a bleak long term future.

Medical office buildings tend to be lower quality. You go there for x-ray or blood test. You're more likely to go a First Canadian Place in Toronto for a plastic surgery consultation. I guess my point is that a bleak commercial office market for the forseeable future may present opportunity for service based medical businesses to seek better quality locations and spaces in commercial office buildings for the same costs as a medical office building in the future,

[Changing City]

Originally Posted by swimmer_spe

Definitely not true all over.. Here in Sudbury, they are all over and actually not near the hospital. I can think of a few buildings that are just medical and they are in different parts of the city. Then there are the random offices in various strip malls and other buildings.

Warren is discussing a new $2.2bn hospital serving a population at least three times bigger than the entire population of Greater Sudbury, and for some specialties, for the whole of BC. So the scale of demand for specialists and their accompanying office demand is significant, and there are already office projects being developed near the new hospital. Older office buildings near the old hospital are also looking to be repurposed, or redeveloped.

There are still plenty of other medical offices across the city that serve more general day-to-day use. There's no evidence that there's any less demand for those as a result of the pandemic, and an increase use of tele-medicine. The doctors are still in their offices, just sometimes on the phone, or computer, for some consultations, but anything needing a physical examination, or direct intervention still happens at the office. So far there isn't a robotic physiotherapist, or virtual dentistry either.

[whatnext]

Originally Posted by WarrenC12

Well traditionally they overcorrect and push us into recession to restore inflation to whatever their target level is (2% for the last few decades at least).

My point is that they don't care if they cause a recession, unemployment, housing crash, etc. It's all about one thing: 2%

They do forecast being down to 3% in the summer, which is right around the corner. I guess we'll see.

That 2% isn't just a number, it means not eroding workers purchasing power through inflation.

We need a housing correction but the best we can hope for is a stagnation in prices to bring us back in line with other western countries. Unfortunately Trudeau and Minister Fraser are hellbent on destroying the necessary work of the BoC by amping up demand by driving immigration to unsustainable levels.

[Truenorth00]

Originally Posted by WarrenC12

It's ~4% today. 3% would have seemed like a miracle in 6 months ago, especially considering the economy today. This stuff doesn't change overnight... that's why I'm surprised they are still saying 3% by summer. We shall see.

They were foolish to promise 3% by summer. That was done so that they could then pledge a "pause" in rate increase. That caused housing to run, partly driving this increase. They have to accept that they need to stop making monetary policy with one eye on the housing market.

While it's good that we're down to 4%, being a third higher than their own interim target and double the official target is not a huge success. The longer inflation is elevated, the greater the risk. And the clock is ticking here.

[ssiguy]

StatsCan just reported today that, once again, Canada's productivity fell in the last quarter and it's the 3rd consecutive quarterly decline. Our economy is growing but strictly due to population growth and an increase in the hours worked..............that a fancy way of saying that Canada continues to get poorer.

[LightingGuy]

Originally Posted by ssiguy

StatsCan just reported today that, once again, Canada's productivity fell in the last quarter and it's the 3rd consecutive quarterly decline. Our economy is growing but strictly due to population growth and an increase in the hours worked..............that a fancy way of saying that Canada continues to get poorer.

Yet some people continue to be in denial that we are entering a recession....

[swimmer_spe]

Originally Posted by Changing City

Warren is discussing a new $2.2bn hospital serving a population at least three times bigger than the entire population of Greater Sudbury, and for some specialties, for the whole of BC. So the scale of demand for specialists and their accompanying office demand is significant, and there are already office projects being developed near the new hospital. Older office buildings near the old hospital are also looking to be repurposed, or redeveloped.

There are still plenty of other medical offices across the city that serve more general day-to-day use. There's no evidence that there's any less demand for those as a result of the pandemic, and an increase use of tele-medicine. The doctors are still in their offices, just sometimes on the phone, or computer, for some consultations, but anything needing a physical examination, or direct intervention still happens at the office. So far there isn't a robotic physiotherapist, or virtual dentistry either.

Right now, you are correct. However, give it 5 years. Will your family doctor that is in an office of their own, now be in an office with others? Will those specialists combine with others in 1 office? Will they still have the same in person hours as they used to? These are the things to watch for.

Originally Posted by ssiguy

StatsCan just reported today that, once again, Canada's productivity fell in the last quarter and it's the 3rd consecutive quarterly decline. Our economy is growing but strictly due to population growth and an increase in the hours worked..............that a fancy way of saying that Canada continues to get poorer.

That is also a way to say that the markets are going strong while they fill vacancies. What if productivity and unemployment rates grew? That would be something to be scared of.

[swimmer_spe]

Originally Posted by LightingGuy

Yet some people continue to be in denial that we are entering a recession....

List all the requirements of a recession. It is not just a shrinking economy. That is a big one, but there are other metrics too. What are they?

[whatnext]

Originally Posted by ssiguy

StatsCan just reported today that, once again, Canada's productivity fell in the last quarter and it's the 3rd consecutive quarterly decline. Our economy is growing but strictly due to population growth and an increase in the hours worked..............that a fancy way of saying that Canada continues to get poorer.

Canadians continue to get poorer.

[suburbanite]

Originally Posted by LightingGuy

Yet some people continue to be in denial that we are entering a recession....

Depends if you want to stick to the black and white technical definition of recession or not.

A fraudulent money manager can still grow his AUM while achieving negative returns if he's good at selling a fake bill of goods. That's more and more what Canada is looking like these days.

[kwoldtimer]

Originally Posted by Truenorth00

They were foolish to promise 3% by summer. That was done so that they could then pledge a "pause" in rate increase. That caused housing to run, partly driving this increase. They have to accept that they need to stop making monetary policy with one eye on the housing market.

While it's good that we're down to 4%, being a third higher than their own interim target and double the official target is not a huge success. The longer inflation is elevated, the greater the risk. And the clock is ticking here.

Who did that?

[LightingGuy]

Originally Posted by swimmer_spe

List all the requirements of a recession. It is not just a shrinking economy. That is a big one, but there are other metrics too. What are they?

How about you answer your own questions for once.

[swimmer_spe]

Originally Posted by LightingGuy

How about you answer your own questions for once.

Fine....

What happens during recession?
During a recession, the economy shrinks because of pullbacks in economic activity, especially consumer spending and business investment. Companies lay off workers and slow hiring, unemployment rises and wage growth stalls.

Lets look at each one and ask simply whether it is happening. Yes/No

the economy shrinks because of pullbacks in economic activity Yes

Companies lay off workers Yes

slow hiring No

unemployment rises No

wage growth stalls No

So, that is 2 yeses and 3 nos. So, still not a recession.