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The short-sighted immigration policies of the US administration is driving top talent north of the border.
Canada’s immigration policy is hardly warm and fuzzy. On the contrary, it’s icily calculating. The government loves educated, elite newcomers, because they help propel the economy, says immigration lawyer Peter Rekai, but it wants them young, so they won’t drain the public health care system. Their parents are much less welcome.
But Toronto’s rise shows that culture also matters. The US is losing this competition not just because of bad policy; it now seems to be a dangerously racist place. One self-taught Nigerian coder I spoke to, Joseph Cobhams, dreamed of “building a product that a billion people use.” But when he visited New York City, he was stopped by police three times in two weeks.
The brutal reality of slowdown is becoming clearer. Surveys predict 1/3 of UK companies are going to announce layoffs and zero wage rises. Unemployment remains stubbornly high in Europe. Despite the US adding jobs it’s still well below the long-term trend. Recovery is not going to be driven by consumption. New Bank NPL provisions in the US and Europe exceed $140 bln – almost as high as losses from 2008! Even China’s much vaunted virus recovery seems stuck at 80% return to normality.
As the crisis deepens, the greed stories are beginning to leak out. If you haven’t read about the naked graft and corruption of Kodak reinventing itself as Big Pharma overnight with the help of US Govt loan, or companies paying bosses massive bonuses shortly before they go bust – then catch up. For every scam that’s been uncovered, hundreds are probably occurring – slipping under the radar because of the incessant deluge of bad news.. These stories are inflaming already frustrated voters. Full Story
Two of the questions I get most often these days are, “What kind of cycle are we in?” and “Where do we stand in it?” My main response is that the developments of the last five months are non-cyclical in nature, and thus not subject to the usual cycle analysis.
The normal cycle starts off from an economic and market low; overcomes psychological and capital market headwinds; benefits from gathering strength in the economy; witnesses corporate results that exceed expectations; is amplified by optimistic corporate decisions; is reinforced by increasingly positive investor sentiment; and thus fosters rising prices for stocks and other risk assets until they become excessive at the top (and vice versa on the downside). But in the current case, a moderate recovery – marked by reasonable growth, realistic expectations, an absence of corporate overexpansion and a lack of investor euphoria – was struck down by an unexpected meteor strike.
People also ask what’s different about this episode from those I’ve lived through in the past.
Another frequent question is, “What shape will the economic recovery take?” Everyone has his or her favorite candidate: a W, an L, a U or maybe a Nike Swoosh. Of course, the one we hear the most about is a V. While the terminology used isn’t crucial, and may basically be just a matter of semantics, I find the label “V-shaped” misleading.
Of all the people who use the label “V-shaped” to describe this recovery, I don’t think I’ve ever seen anyone define it. To me, a “V” has to satisfy two important requirements: Full Article
THIS MONTH, ADVERTISING giant WPP will send unusual corporate training videos to tens of thousands of employees worldwide. A presenter will speak in the recipient’s language and address them by name, while explaining some basic concepts in artificial intelligence. The videos themselves will be powerful demonstrations of what AI can do: The face, and the words it speaks, will be synthesized by software.
WPP doesn’t bill them as such, but its synthetic training videos might be called deepfakes, a loose term applied to images or videos generated using AI that look real. Although best known as tools of harassment, porn, or duplicity, image-generating AI is now being used by major corporations for such anodyne purposes as corporate training. Read More
June sales increased along with the average price, major win for the bulls? Not even close, the headlines can be deceiving. Once you take deeper dive the recent data is very bleak. The accepted offers in June 2020 are the lowest June in the past 15 years. Homes sold for a higher price than the month before but, for the first time in a quarter, and only up 2% from May.
Even during a downtrend the prices will create higher low data points while still trending lower to find the bottom. Some have stated that the Corona Virus shut down will create a pent up demand, I hope this isn’t the demand they were anticipating because it’s a blip on the charts.
The average sales price for June came in at 1.619Million, signalling the first positive data point since February. July will be hugely important in setting the next short term trend for the Greater Vancouver price chart. If the July is lower than 1.619Million there is a strong likelihood that a new aggressive downtrend will be established. The possible downtrend is indicated with the yellow downtrend marker. We have purposely used yellow as we need confirmation before the downtrend is established.
One anticipated trend that we have spoken on before is now coming to fruition, that being, the high end market is selling more readily than the lot value properties. Buyers are wanting the most bang for their buck and as a result they want the 17Million dollar mansion for 12Million and one such sale took place in June. Not too many buyers are purchasing spec land, this has an effect on the average price. Which means once those foreclosures roll in, and investors begin to dip their toes in the water. That will shift the focus from trying to buy the high end on the cheap to buying homes near lot value.
This also indicates that even while mansions are selling for very high numbers, the average price is still in the middle of the market threshold. Once the foreclosures hit and inventory is high, investors will begin buying deeply discounted lots which will force the average price to further decline. Then the market will panic, but in reality, the investors buying lower valued properties will indeed force the prices to drop but simultaneously be creating the market bottom. The pricing bottom will likely occur at 1.40 million if this threshold breaks we look to 1.225Million as the next threshold.
Detached Sales could be interpreted as “six of one and a half dozen of the other”. Simply meaning you will hear likely hear that the June 2020 sales were the highest over the preceding two year. Technically true, but the June 2020 sales was the lowest excluding the previous two year over the previous 15 years. Don’t let the language fool you when you hear best June in the previous two years. The past three years of June sales data are the lowest in the past 15 years. Not a great trend to be a part of yet Realtors and the Real Estate Boards will likely tout this as a win.
Another truth even though it may hurt some, the pricing peak for the market occurred in 2017, However sales numbers began to tank substantially since the frenzied mentality of 2015 & 2016. Sales numbers have not exceeded 1000 since June 2017, while the average over the previous 15 years is 1050. The reality is the Greater Vancouver detached market has been trending lower for many years already, while most analysts and definitely the GVRD real estate board have been saying we were nearing the end of the tunnel by being able to see light in 2019… Eitel Insights warned that the light was a train, not the end of the tunnel.
Last truth, we know sales are from previous months accepted offers. The accepted offers in June 2020 were only 561 and the absolute lowest June in the past 15 years. For context June 2019 accepted offers were 804, June 2018 were 755, June 2017 were 1,216, June 2016 were 1,446, June 2015 were 1,816. So much for best in the past 3 years, Eh? (Happy Canada Day)
Sales are not good nor are they average in fact they are paltry, inventory is on the rise and will continue into 2021. None of this bodes well for prices in the short term.
Inventory finally surpassed 4200 active listings which hadn’t occurred since December 2019. The inventory currently sits at 4471. Once the mortgage deferral system comes to an end the inventory will rise rapidly.
Over the upcoming year an odd phenomenon will occur to the buyer’s mindset. Far from the chaos of 2015-2016 when frenzied buyers lined up and fought over who would pay the most in history for a home. Into 2021 a whole new kind of methodology will prevail, the fear of overpaying for a depreciating asset. When inventory is at the highs prices will be at the lows but purchasers will be fearful when they should be strong.
With all that said, purchasing when a market is actually at the lows of the cycle is a great idea .Eitel Insights will be releasing a full market analysis for Greater Vancouver in the upcoming week. We proudly announce that Eitel Insights will be promoted by Michael Campbell’s Money Talks. In this report we analyze all 20 markets inside of Greater Vancouver and update the data monthly so you can know exactly when and where the opportunities reside, which are currently rare but do exist right now.
With our newest product release you will know exactly where each market inside of Greater Vancouver is with respect to the individual market cycles, for prices, inventory, sales, moving averages, strength index, and our unique supply demand chart. Use our analytical interpretation for your actionable intelligence.
Not all markets in Greater Vancouver are created equal, some areas are closer to the bottom. While others still have significant percentage losses upcoming. Become an Eitel Insights client to find out which are which.
Dane Eitel
Founder & Lead Analyst, Eitel Insights
604 813-1418
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