Oz Buzz #32: Outlook Conference – Back to School Sale
Oz Buzz #32: Outlook Conference – Back to School Sale
“In the morning I can’t eat, I’m thinking of you. In the evening I can’t eat, I’m thinking of you. In the night I can’t sleep… I’m so hungry!”
HOT PROPERTY 8 SUITES – $114,000 (US)
THE NUMBERS, THE NUMBERS – EARLY VANCOUVER
COMMENTS ON LARGE NUMBER OF QUESTIONS
NEW HOME BUYER PACKAGE
GREAT HOT PROPERTIES 8 SUITES FOR $114,000 (US)
OUTLOOK CONFERENCE SPECIAL (September 21st)
I received a ton of responses to the items featured in Oz Buzz 31. Here is a rapid response…
My off-hand opinions on euro AND Canadian dollar, resulted in a lot of finger wagging. Remember, its’s my opinion! Details at Outlook 2020 on September 21. I stick by my opinion.
The ‘US creating a 100- or 50-year bond’ rolling all its debt into it generated the most response. To the ‘gentle’ man calling me names: Treasury Secretary Mnuchin said last Friday that ‘ultra-long bonds are being considered’ 50- or 100-year bond! So there!
On US (declining?) prices, we had several people commenting on Phoenix (hot), Austin (hot), Portland (hot). We agree the US will go higher. Listen to Janet Lepage who owns 12,000 condos in he US. Find ou twhere and why.
Several questions on: “Where do we get good United States statistics”.
NEGATIVE INTEREST RATES
OMG! So many questions and so many comments.
Notably: Will we have negative rates in Canada? Answer: Don’t know. Not likely.
Will negative interest rates be the downfall of the financial world? Answer: Oh wow! The fear of the end of the world is back, I could cite you “fear of the world” questions from 1987 (stock crash), 1991 (13.5% 5-year interest rate), 1993 (500% interest rates in Sweden), 1998 (currency crisis), 2008 (economic collapse) and on and on and on.. It will be choppy … I heard yesterday: We are having the “Yield Hunger games”. While we do, remember “cash is not trash”.
The number of submissions for the ‘revenge of the little people’ has grown to where we will do a special issue of “Words I hate’, “How can they?” and “Revenge” … Some of you are funny…
HONG KONG RIOT QUESTIONS
We covered it last issue. Yes, it will help add buyers into our market. 300,000 Canadians live there but how many and by when exactly is anyone’s guess. But it will help stabilize our market.
(NEW) QUESTIONS, QUESTIONS
Q: Ozzie. Sorry, I know you get a million emails. Could you pls just clarify this one sentence: “Don’t buy retail, department stores, shopping centres— hard assets and stocks. Keep some cash…the older the more. Do you mean “buy” hard assets and stocks?? And what do you mean “keep some cash – the older the more” huh? A: Thanks for pointing this out. You are SOOO right! Very confusing. I spelled it out in the ‘Yeah but story’ and at all conferences but did not do it justice in this segment.
What I meant to say was this: We are going digital. Thus, department stores, shopping centres and a lot of chain stores are doomed. A report done by Credit Suisse estimates that 20% to 25% of malls would shutter over the next five years, largely because of store closures. In 2017, 6,400 stores closed – a further 3,600 are closed in 2018. Advice, don’t buy a business/store etc. in a mall, do not buy Dept. store, clothing chains etc. Overnight delivery kills shopping centres…
Opportunity may however be in warehouse storage downtown or near downtown because of the overnight delivery. We also have recommended for 25 years: Buy your own office/industrial/retail store. Buy: Strata office/strata warehouse. Age and Cash…Over 70 – have 50% in cash, 40% over 60, 30% over 50. Below 40? Go for the brass ring…you can make it back if you lose.
Q: Reading the last OzBuzz, it seems that to all questions raised you have the same answer, anything in the world will benefit British Columbia, whether it’s Hong Kong riots (people will come here), the printing of money will increase prices, Europeans will flee to Canada, etc. etc. Really? A: Yes. Why? We are rated as the 3rdsafest country in the world to put your real estate investment dollars. The world’s investor is fleeing to safety accepting lower and lower yields – for safety. We will muddle through ahead of most places in the world – as always.
Q: Royal LePage reports that condo square footage prices are down in Vancouver – the sharpest decline in Canada?
A: “The per-square-foot price of a condo in Greater Vancouver fell 8.3 per cent year-over-year to $764 as a correction in the region’s housing prices continued. That compares with a 9.1 per cent increase to $743 per square foot for a Greater Toronto Area condo”, Royal LePage said.
We are building smaller units, so our price per condo is still high. The condo prices are down as per RE board numbers too. Interesting is the increase in TO. TO came back…so will Vancouver.
We have talked in the past about virtual realty, augmented realty and the like. The latest eyebrow raiser is now that anybody could take any photo of your face and create a video that looks and acts like you, with all of your facial features!
Major Point: If we were concerned about picture identity, virtual realty, think of the endless possibilities of having your face put onto another body and doing and saying things that you didn’t say, but looks just like you!?
THE NUMBERS, THE NUMBERS
A hot August? July was hot. August in Vancouver (early numbers) also shows well.
Major Point: The overall SF market has strengthened since mid June. August sales are up 24%, listings are down by 11%…a good sign for a stronger fall market. Condo sales overall are higher by 9% and listings are still up by 24%, But over 100% higher than in May 2017. We are up again over last year’s sales but still well below the high of 2017.
It is a mad world, negative interest rates,slowing global growth, trade wars and great geopolitical risks. At Real Estate Outlook 2020 – on September 21 we will come up with remarkable predictions. Come get into clarity about 2020.
REAL ESTATE OUTLOOK
We have asked all our speakers to come up with their professional forecasts for US and Canada markets. These forecasts will be focussing on the major markets of Vancouver, Calgary, Edmonton, Houston, Dallas, Phoenix, but also cover the best minor markets throughout BC.
NEW HOME BUYER GOVERNMENT INCENTIVE STARTS SEPTEMBER 1
Eligible Canadians can buy into the CMHC’s new shared equity mortgages for first-time buyers. Government: “… the plan will help reduce the cost and risk of a mortgage for home ownership and will benefit 100,000 families over the next three years by dropping the costs of monthly mortgage payments by nearly $300 and a total of $3400 annually.”
a)Under the plan, families purchasing a home worth less than $500,000 can sell an equity stake in the home to the government worth 10%.’
b) Minimum credit score of 620. Maximum income limits. Home buyer seminar attendance required. Not to exceed maximum debt-to-income ratio of 45%
c) Interest-free, payment-free loan, from a fund run by CMHC, matching the buyer’s down payment. This is up to five per cent of the purchase price on a resale home, or 10 per cent on a new-build or presale home.
d) The government’s portion of the home shares in rising or falling values. The loan, plus any equity uplift on that portion, is repayable to the government upon sale of the home or after 25 years, whichever is sooner.
Effective? Well, it’s a bit ‘like a lottery’. Buyers have prospective monthly savings on mortgage payments – but could lose a lot if prices rise.
Major Point: If you had done it in Vancouver 10 years ago you would have had to pay back an 80% increase in your loan! What’s fair is that while you must share the profit – if it goes down you can pay back less. However, government should benefit based on historic increases. Question you have to ask yourself: Do you want the government as your partner?
A: First, I post all the questions that I receive from OzBuzz on this website. If you are a specific area expert in a given field, please apply with your area of expertise and why you feel you are an expert to firstname.lastname@example.org and we will take your application into consideration.
Q: How can I get my property management company listed on the British Columbia Real Estate Directory (www.BCRED.ca) A: It’s free! You can sign up and join the 11 other property management companies listed there. The BCRED is meant to help everybody and anybody in the real estate industry to be found quickly (i.e. there are 72 builders and contractors).
North Vancouver, a rare Penthouse. Wraparound panoramic views of city, ocean and mountains. Located in the heart of Central Lonsdale near shops, restaurants and loads of other amenities. Price: $2,288,000
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