“The best argument against democracy is a five-minute conversation with the average voter.”
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Today’s issue: Several comments: Do more on the world view/Do more details on real estate/ Love Behzat/Do it weekly. Lots of responses on all things real estate.
A thinkers book. Ozzie on air. Bitcoin. Tesla. Inflation. Turkish Delight. Investment tip. Real Estate tidbits. US slowing. NZ may do it. Because we let them. False news. Yesterday’s dreams are today’s reality.
TURKISH DELIGHT?Ok, not funny. Already at an ALL TIME low, Turkey’s currency collapsed by a further 30% in the last two weeks. The world’s news was full of ‘contagion’, banks to worry about, etc. As I did many times before, I repeat, don’t worry about Turkey, worry about Italy and France (France has not balanced its budget since 1973). Why? It is the lenders that will lose. Spanish banks have invested $400 million in Turkey. They will NEVER see it back. German banks and the ECB have lent untold billions to Italy and France. When they rumble…
It is these Club Med nations(everything IS included for free) that will sink the euro – but German and Northern countries banks that will bear the financial brunt in the end.
Major Point: Do not run for the hills, but as we recommended at Landrush … the older you are the more you should have a cash portion. Where there is turmoil, there will be opportunities.
MAJOR POINT NEXT WEEK: With July y/y inflation at 3% … let’s review our philosophy on inflation, runaway inflation (hard assets) and / or deflation.
REAL ESTATE TIDBITS
1.In OzBuzz No.5we reported the MLA reportof sharply falling pre-sales in June (by 50% ). Wouldn’t you know it, in the July report sent by the MLA Advisory, July, a normally quieter summer month, saw a very high number of homes released bringing on over 1,900 units. The report also announced that there are 8 pre-sale projects and over 1,000 new homesfor August coming on stream. Read the August 2018 Pre-sale Real Estate Insights at http://mlacanada.com/aug-2018-report
Major Point:I also see an unusually high number of full page ads for condos. (MLA also reported that 65% of units sold in July.)
1a. The Avani, Surrey Centre is reporting that its 181-unit Hotel/Condo combo (118 hotel rooms) is selling at an average of $836 a foot! (13540 98 Ave – Surrey Centre)
2. US is slowing
Redfin, the residential real estate brokerage firm, fell 22%. Redfin’s CEO: “For the first time in years, we are getting reports from managers of some markets that homebuyer demand is waning, especially in some of Redfin’s largest markets.” He specifically cited Seattle, Portlandand San Josebut also said: “The trend is continuing in July and reports are now coming in from Washington, DC, Boston, Virginia and parts of Chicago as well that the homes there are getting harder to sell.”
3. The Economistcalls Vancouver 65% overvalued! The U.K.-based magazine found that our home prices have risen by more than 60 per cent over the past five years. In terms of real estate value versus median household incomes, The Economistreported that Metro Vancouver was the fifth most overvalued of 22 major global cities studied, after Hong Kong, Auckland in New Zealand, Paris, and Brussels in Belgium.
Major Point: That index has been in existence since the early 2000s. I have quoted this index in my newsletter and for several years at EVERY conference – Landrush and Outlook – plus dozens of speeches. My conclusions each time (1999 – 2017) have been: Measuring real estate values against affordability is a total waste of time! Values grow where people WANT to be, or MUST be – affordable or not. Based on an index like that Vancouver has NEVER been affordable as prices inflate based on a dozen other factors and have no relationship to median income. Not for 45 years. Thus, this index is a nice pastime looking at the rest of the world. It is useless in trying to predict a inflation or calamity in the future.
4. UPDATE: We talked about New Zealand before (the news is that it has banned foreign investors – fact was – no such thing yet). However, day before yesterday the New Zealand government confirmed that it will re-introduce a previously proposed ban on foreign buyers purchasing New Zealand resale real estate. Overseas purchasers will still be able to buy new presale homes, and Australian and Singaporean buyers are exempt from the ban. Time to buy New Zealand?
REAL ESTATE INVESTOR TIP OF THE WEEK?
If you are marketing joint-ventures and you are operating under the Northwest Exemption of the BC Securities Commission, please note that the commission has revoked and replaced the Northwestern Exemption effective August 15th. These changes to the exemption will result in it expiring on April 30th, 2019. If you are in the money raising business, stay informed! Please go to the BC Securities Commission website at www.bcsc.bc.caand read the details.
BECAUSE WE LET THEM
There were several suggestions on “because we let them”. Some could be featured here. This one I agree with: “Why do we let park houses and parking lots make the parking expire at 6 am. You either buy that ticket or add another day. They do that because they know you won’t get up to renew parking at 6 am.” How can they do that? Because we let them!
WORDS/SAYINGS THAT ARE ANNOYING – WORDS I CAN’T STAND
One of the worst discussion openers is: “You must agree, that…” Really? I must agree? What is the point if I am not even entitled to respond … but MUST agree first. In our new evermore polarized world the news media, politicians and their fans all want to put you in a box. If you are not agreeing with me, you must be opposed. Utter nonsense and very dangerous.
BITCOIN / TESLA
I am getting a lot (too many) of inquiries/comments on Bitcoin. Yes, I quoted Mr. Dimon, Chair of Goldman Sachs (called it a fraud) last September and urged you to stay away from it. Yes, it went up after I mused about that. However, since it hit the lofty heights of $19,000 USD in January, it has dropped by 65%. Last week most of the cryptocurrencies dropped between 3%-10%.
Maybe they will be the future. New way of running countries and central banks, but ask yourself – when the Turkish lira collapsed last week by 30%, where did the Turkish people change their money into? Did they change it into bitcoin or other cryptocurrencies, or the USD?
You want to watch what regular people actually do rather than talk. Or listen to the promoters.
Major Point: I am not giving advice, just musing. Also, last September I mused that TESLA that produced 80,000 cars a year (with great difficulty) was valued by investors higher that GM which produces 2.5 million cars, was going to crash, I mused that only government subsidies stimulated the few sales there were. This week, TESLA sued the Ontario Government for stopping subsidies.
YOU MUST READ THE FINE PRINT – OR FAKE NEWS
Michael Campbellreported on his great show “MoneyTalks” that the quote of 500 billion straws per day worldwide in use did not come from any reputable institution but rather from a 9-year old’s ambitious science project. Haha! Watch what you hear and watch who says it! There is always this or that organization (that you never heard of) making this or that claim or quoting a “study” (particularly on the environment) with no particular back up. Ask, what study, what date, where to read it?
QUESTIONS I ASK?
I did receive response as to why I razzed ‘LOL’. Wow, you all are using it! It is likely so much used to indicate a non-threatening message rather than meaning “laughing out loud.” However, I find in today’s world, everybody wants to be different and then they’re a copy of everybody else. If you use LOL, you are a copy. Next week: Why we wear jeans with holes in them (it will blow you away!).
As you know, I have highly recommended Nassim Taleb’s book: “The Black Swan” several times in the past. One of his lesser known but equally as fascinating books is a book of aphorisms called “The Bed of Procrusters” – available from Random House New York. In it, he groups his aphorisms into dozens of relevant headings. All of which are remarkable, astounding and thought provoking. They are definitely not something you can read elsewhere. I promise you will love his attack on our most cherished secret cows.
THIS WEEK: OZZIE ON VIDEO/AUDIO
On Michael Campbell’s radio show. Why Government rules, regulation and new taxes are killing sales. MoneyTalks: https://www.youtube.com/watch?v=p8T8cyQWUnQ
Ozzie is on air with Michael Campbell every Saturday sometime between 8:30AM – 10 AM. The Hot Property that we discuss there, is available by subscribing to the Ozzie Dispatch at Jurock.com
LIVE LIFE LARGE
Yesterday’s dreams form today’s realities.
Tomorrow’s reality will come from today’s dreams
Big dreams, big goals
Big challenges, big rewards
I will dream big
I will dream in technicolour
I will dream in surround sound
I will dream big
I will grow into my future best!
Look up (BUY, while they last!) all of the “Grow into your future best” cards at: www.commitperformmeasure.com
Have a great week and grow into your future best self!
!!!Ozzie Jurock’s Real Estate Outlook conference is just 3 months away!!!
PS: Ozzie Jurock’s Real Estate Outlook conference is just 3 months away. Buy tickets now at www.jurock.com
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