Canadian Housing Market Crash Of 2024: Let's Talk About It
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- Опубликовано: 26 июн 2024
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Always be crashin'
Agreed. I've heard it's been crashing for the past 20+ years.
@@micrasystemsdon’t forget about the next 20 years!
Always be Karraschin 😊
From a landlords perspective. I think vancouver housing will crash and if it doesn’t. Trust me it will. Just keep renting and let stupid people like me keep buying
@@TomStoreysorry Tom but being a leafs fan is just a set up for a lifetime of disappointments 😅
Remember it doesn't matter how much housing cost, but what matters is having a job to pay your mortgage. When a recession happens, you won't have a job and can't pay your mortgage, ultimately leading to bankruptcy.
Yup just lost mine. Extremely easy to get this one a few years ago and was able to get what I want, now its back to minimum wage I guess? Which means I can pay rent, but I will have to forgo feeding my children. This is absurd. I have about 5 months of savings, crossing my fingers.
Immigrants will build bunk beds in condos. AI will boost Toronto productivity so I calculate Toronto Real estate will moon until 2045.
If housing prices don't come down to a level that's not only affordable but *easily* affordable by Canadians, then it looks pretty bleak for the country. Canada doesn't really offer much in terms of sweetening the deal when it comes to living here - our healthcare is not what it used to be, our education system is not what it used to be at all levels including post-secondary, wages are low, weather is abysmal in most of the country... Why would anyone save up for a downpayment here when a golden visa somewhere else is probably a better investment over the course of your life? Not only that, but why would any qualified individual stay in Canada when they can just hop down south of the border and enjoy a much much MUCH better quality of life (I say this because I did it for 6 years before returning to Canada for the time being). Sure, maybe prices drop a little, or maybe they continue to rise, but it's irrelevant if maintaining a lifestyle in this country is an uphill battle for very little in terms of reward.
I agree, and I'm in this very situation. When you have a reasonable down-payment, but see little value for your dollars, you start to question why you're here. I'm honestly giving it until end of 2025 to see something compelling, otherwise I'm very likely packing up.
That's why I'm looking to buy somewhere in the US
Possibly Florida, where I can hire family to take care of the place while I'm home
In London no one complains about renting.
@@Lifeisapartydresslikeit what do you mean by that?
Everyone wants the market to crash so they can buy. Every single person wants to own a home. Everyone cannot own a home. People in London accept renting and no one complains about housing prices vs renting in London, New York, LA, etc. tired of everyone saying market will crash. Like stop this please!!
What happens when all disposable income goes into services housing either through ownership costs or rent? How does that impact birth rates? What's the sentiment of where the country is going regarding quality of life? Where is the business creation to support these prices? What about the social unrest when we lock young people out of housing? Productivity? What productivity! In my opinion, investing in Canada in the long term is not looking good. Enough of the madness!
All valid questions.
@@TomStoreybut none mentioned in your analysis because 80% of the time house prices go up.
I guess you provoked your audience to engage at least with your video. Good on ya 👍🏼
Agreed. The rest of the world won't be interested in an economy that centers around the appreciation of real estate in its own territory. It doesn't bring them any value.
Furthermore, people won't have children because they can't afford to and we're setting up incoming immigrants to fail. Appreciate the price of homes enough and the only immigrants interested in coming in will be those fleeing a war zone. Nobody wants to move somewhere we're they'll have to declare bankruptcy within a couple of years.
And for those living in ridiculously expensive cities, I hope you enjoy pouring your own coffee at the coffee stores and picking up your own garbage, because soon, nobody who is not in a very lucrative white collar position will want to live anywhere near you unless you are paying them what you are earning so they can make rent.
As long as that's the direction we're going toward, Canada will become a dead end country. Honestly, I hope not, but if it becomes too much of a dump, I might move. I'm lucky enough to have marketable skills and I'm not interested in pissing my money away in a drowning economy. Like the poster of the video alluded to, nobody wants to be watching the whole thing crash from the inside.
Did you hear what Calgary's mayor just said? She noted home ownership is an antiquated 1950's notion and young people want to rent instead as it provides them with a superior lifestyle and will be pushing for more rental unit development... 😐
"You will own nothing and you will be happy."
yikes
If rental is affordable and close to the operating costs that a non-profit would charge, it's not so bad actually.
It becomes ridiculous once it becomes about paying for your landlord's mortgage and his mortgage is ridiculously expensive.
Interesting. I wonder how that mentality trickles down to local politics. Like how? Are mayors bought? The Fed can't force them to say those things. So who?
Fewer investors in the existing home market might be a blessing. I’m all for investment into new builds but first time home buyers are being outbid by people leveraging their other properties.
People can’t afford to buy. Builder can’t afford to build. Where did the money go? Land and government. How about increase the vacant land tax and get some pre approval progress for builder?
I agree with most of it, from Feb 2022 to Feb 2024 I see around 19% reduction. Hard to see a 50% crash from here or even 30% to get to 2019 prices. Even if prices reduce 20-25%, It will still be more expensive than 2019, It’ll have to be a big crash to go below that.
The Canadian housing market can remain irrational a lot longer than anyone betting against it can remain solvent
Nothing can stay irrational forever.
You are correct
I don't understand why people would invest in Canadian real estate if they believe our politicians have ruined Canada. In my opinion buying real estate in Canada means you believe the underpinnings of the country are strong. I don't, and I don't plan on having anything here that ties me down.
Just so we are all on the same page, since Feb 2022 prices are down on average 20 percent. Another 20 percent coming.
And how far do you think the market would have crashed from forced selling if the government/banks didn’t make allowances to extend mortgage amortizations as far out as 90+ years???
The 40-50% number quoted.
Lots of good points. But I might have missed the word “recession “. Wait till the layoffs start. No matter how the government or banks work it out. When you’re out of work you can’t pay for anything. Not matter long the amortization, rates and crazy tricks if you not working your not a mortgage. I know what you’ll say, we’re never going to have a Recession”. Now I’m not a real estate agent but I’m a physicist and I love math and its graphs and trends. First house prices are an inverse to rates. So rates were at zero. Even if rates go to zero again that’s the peak price. And from then on prices will increase only to an increase in wages. Just extrapolate Toronto house price graph 40 yrs in the future. To keep the trend average houses that went from 50 K in 1980 will be worth over 1M. I know that’s me. So if you extrapolate till 2044 that 1M$ house today should be worth 20M$. I’ll bet anyone a billion $ that the average house price in Toronto will be $20M. Investors didn’t care about renting all they did was invest $100K down payment for a million dollar house and paid 5% mortgage and just waited and watched returns of 10,20,30,40,50,60,70,80,90 100% over the years. The world has changed we hit our debt limits during the pandemic and if rates do drop zero we really can’t borrow anymore. The economy is going to rely on hardworking people against n instead of dropping rates from 20% to zero in 40 yrs. That trend n has left the station. Governments, businesses and people can’t borrow more year to year and actually watch their monthly payments drop. So ya I’m really worried but I’m 70 and I own my home and just going to watch the country fall apart because rates can’t go lower than zero well they can go negative but that just make things that much better. The best thing that can happen now is a depression so debt levels and home prices can go to a level that one can afford if he’s only working. It was china and globalization that allowed those rates to drop from 20% to zero with out inflation. That’s all unwinding. Ever ask why employment is so high? It’s onshoring and nearshorng dummy. Imagine the price of a washer and dryer set when it’s made back in Guelph. I can assure you it won’t be $1K that’s for sure. Enough said. The future is not going to look like it was from 1980 to 2020. It’s going back to wars and strikes.
Do what I did. Sell and move to Thailand.
@@kwbw3392 Do you work there? What do you do for fun?
1) Interest rates are not coming down, they may even go up. a) fiscal dominance b) wars are inflationary, we have 2 that could spiral out of control any week c) energy and commodity super cycle + war premium if it escalates.
2) If interest rates do come down, every previous pivot after a rate hiking cycle was followed by a market tank and recession. The cut because they broke something.
3) taxes, a) not coming down. only going up, probably a lot -> less disposable income -> bad for economy, employment b) carbon tax increase is a tax on tax on tax and its effects are going to be the biggest wet blanket ever.
Could prices eventually go up? Yes, in nominal terms but I bet (as I sold near the top) that in real terms the prices will be down at least that and possibly down in both.
What could wreck my thesis? The biggest government intervention ever in the history of Canada.
Do I want this to happen? I don't. I'll be thrilled if I'm wrong and this got fixed. However, not bullish on the powers that be to fix this.
Until the greenbelt gets removed, housing prices in Ontario will remain sky high.
Townhouse in Mississauga just sold for 400k. Less than it's purchase price during the pandemic. Some sellers want out but buyers on the sidelines waiting for further interest rate cuts.
Its called fundamentals...the fundamentals are not there for prices to continue to go up.
you're confusing dollar amount with real world value. Prices can go up just by sheer hyperinflation. Everyone in Venezuela is a billionaire.
It depends on area though. Vancouver Island keeps going up even thought there are barely any good jobs. Coastline and natural beauty never seem to crash. I lived in Los Angeles in 2008 and anything 4 miles from the water held value. Places 45 min inland plummeted. It's a crazy world and people value things oddly.
Its much worse than extending amortizations. They are assessing condis at sale value not market value. So basically to avoid a collapse the bansk are financing a condo that is worth less than it was sold in preconstruction for the preconstruction cost. This is the scary part. This is only kicking the can down the road. In this none of us know what will happen. If things get better, and value picks back up its as if it never happened, but if things continue to trend downward it will be even worse. The only upside is cost is trending down. New starts are generally not breaking ground, the inly bonus is that each month the tenders for trades are dropping, which improves unit cost..
if I was selling a property in Canada I would wait....there is a class action lawsuit in the works against a sellers having to pay the buyers agent fee ......a similar class action lawsuit was won by plaintiffs in USA recently so changes will be comingand you could save a lot of your money paid out in commissions.....in UK an many other countries agents make between 1 and 2%
So; thats what we make already . Your statement is incorrect .
it will not crash but only people with existing real estate can sell and buy Real Estate. So all our 30 and under No hope unless you receive an Inheritance . Make over 500K/yr
I came to Canada 9 years ago as an international student, and I've had thousands of dollars of debt to pay. I used to work every weekend for almost 3 years while in school full time. I never went for vacations until i was 23 years old. I work in trades. Had a broken car, which would take me to work. My goal was to save money and invest. I bought my 1st house at 24yo, 2nd 26, 3rd at 27.
And people here always complain about everything. People are used to living a lazy, noncompettive life. Blaming investors and landlords for the problem.
Everyone has gotten the same opportunities in this country, and anyone who puts in efforts can rise up. Stop buying media propaganda that " you can't "
international student! oh fk
15 people in one room $500 rent eating noodles will get you there, when we do something for $30 an hour u guys do it for $16 cash. ruining this fkin country. prove me wrong!
I came to this country 6 years ago, working in tech still worked doing Uber on evenings and weekends. Tried to buy anything during/after the pandemic, but bidding wars were crazy, I tried new construction, but even that was competitive and I wasn't selected to be accepted for the unit. I'm sure those who tried to buy after the pandemic didn't have the same opportunity you had, you probably got a lot of equity, so it's not the same opportunity as you claim. I know people who still bought in 2022 and can't sell because they are underwater. Even now after some correction, interest rates are prohibitive. Only now I'm in a position to buy something outside GTA, but it doesn't seem the best time to get in. Maybe next year? Imagine who doesn't make a lot, even condos are unattainable for a lot of first-time home buyers
You are a champ! Best wishes and continued success
@@STEVEN-GULLA He forgot to mention he got the money for the down payment/s for free .
WHO couldn't do that with those resources. THAT IS NO ACCOMPLISHMENT.
Interesting video, I'm curious why no one is really talking about the '08 crash. I realize we are in a different boat than we were pre-2008 but there are signs in the economy that we are headed for a fairly serious downturn and with the economy slowing and job losses come housing prices dropping. There is so much discussion around interest rates but no one is talking about the economy slowing down. Here in Kelowna, BC we saw it in the construction industry at the consultants level months ago and it's starting to trickle down to the contractors now and layoffs are starting to happen. It's not 2008 with the whole financial crisis aspect but it's got the same vibe. "Crash" may be an overly dramatic term but we're in for an ongoing serious correction for the next year or two at least in in opinion...
This^. If you remove real estate out of the equation and look at our economic performance and house debt load, this recession is going to have a huge impact on us vs. 2008. We don't have an energy/natural resource or manufacturing industry like we once did. We have post-secondary, services, public sector and real estate.
My bet is unemployment is taking off in the 4-6 mos and the word 'recession' will become more and more prevalent in the media
Real estate people only ever talk about interest rates, it's how you can identify them
I was in Thailand 4 yrs just before the pandemic. Would love to move there. How do I do it.
Supply and demand.
Bringing in a million people to a country that is not prepared to sustain and house the drives up the market by scarcity.
Very balanced and informative video,
I am not worried about a 50 percent drop. I have multiple rental properties🤗, and i want them to fall- because the fundamentals are not there. Dont worry i will still be solvent :-), and 66.7 percent inclusion rate would still apply to me. Fraud is rampant. Negative Amortizations are defaults. Auditors need banks to book this as a bad debt.
I agree with you. Many people want housing pricing to go down or crash, but I have been waiting since 2013; it does not crash and is in correction.
Capital is just being expensive and it does not make sense for investors. Once interest rate go down, investors will come back to the market.
It's nice to see a positive spin, but the reality is that Canadians are growing debt right now. That means that the debt death spiral is happening. The USA will be holding rates or, even worse, raising rates. If that happens so with BoC.
Rates are going to increase, not drop. Canadians are extending their debt, this is a recipe for collapse.
It's not doom and gloom. it's just reality. And I am putting my $$ where my mouth is.
Im selling my TO home and moving out to a smaller city with no mortgage.
Good luck Canada its gunna to be a rough next few yrs.
Fantastically done! Thank you for real content
Appreciate honesty
You’re right, prices will only go down while interest rates decrease if we have a deep recession, still in the realm of possibilities, but we’d indeed have to worry about bigger problems
Some platforms out there say that In 2023 for the first time in Canadian history there was over 1 million immigrants coming to Canada. Online info suggest it’s half that however be it a million or 550K not to mention the domestic population added to the overall demand for housing, I see very little decline in housing demand meaning how could a housing price drop occur given the demand??
Demand means nothing if the price doesn't match purchasing power. Everyone may want to buy a car but if it's too expensive they will take the bus. There are alternatives to buying a house in Canada, you may rent, live with relatives, room with friends, or leave Canada.
Let's let it happen, before we start talking about it.
if the RE prices don't crash, Canadians will only continue become poorer. Anyway, there is a capital flight happening from Canada. I wouldn't invest a cent in Canadian RE. Go down south if you can!
When did Real estate agents become influencers on the housing bubble.... is this new?
It became official last week
When everyone asking when will the bubble burst but what if, the bubble is already bursted.
Let’s data speak. In the 08 and 17 housing market drop, it’s not exceeding 15% drop, but we have a 18% drop in 2022 to 2023, which is a breaking record for 1 decades. In Toronto, it is nearly average 15% drop, some investors who bought at the peak, lost 20% selling in this year 2024. Losing 20% in 2 year in huge!
But mainstream media still not recognising we are already bursted
Interesting theory, sir
Will more investors try to sell before the new capital gains rules come to fruition in June? I suspect after that fewer investors want to sell
In the 1950s, 1 Man's salary could purchase a home easier than 2 salaries today, both a Man and Woman's salaries combined can do today. Historically speaking, the ratio of Housing mean purchase price to a Canadian mean income is in recent years, *the highest its ever been*. It is also among the highest in the entire world. Do you really think that Canada, a country with 20-50 % taxes, a failing healthcare and education system, and one of the worst climates in the world offers more than other countries such as the USA, UK, Caribbean, Parts of Latin America and elsewhere in the world? Canada has used a steady supply of migration to prop up the housing market and economic sectors, but this is only sustainable to a point. Eventually it will become literally impossible for an average working class Canadian to own a house. These characteristics are unsustainable long term and it is a bubble, like the Dot-Com in the late 1990's. Eventually the bubble will absolutely burst, and that may come about through the elected Government, changes in migration #s, and public sentiment.
It is a 100% guarantee that Canadas housing market will crash and correct itself. At its current trajectory soon 75%+ of Canadians won't be able to buy. "When" depends on various factors but I think within 30 years.
you forgot to account for the new capital gain tax....
So you want houses to come down to alot where its affordable.
So you want lower prices in
Vancouver Toronto
Is like saying i want a place in LA lower and New York lower which you know wont happen.
When her you like it or not
These are the 2 places that people want to live .
There e really isn’t alot of choice like the US
Good luck
When houses prices are 11x average income, higher than in places like San francisco, London (England), NYC you still believe that there is room for growth? Immigration is keeping the boat a float that is it.
Investment vs gamble? .. Prices were forced up and they will be forced down. Then forced up and down again and again and again.
Mic drop!
Prices have to drop its unsustainable its simple once they "actually" build more housing and more low income housing for real youll have no choice then to see the market drop by 50% its coming not this year i see it in a 10 year thing in 10 years when housing catches up your million dollar house is gonna be 300k lol lol but we are all spectating but im sitting back and watching to see who is right
Housing should not be an investment it leads to people taking advantage to those that are less fortunate. The Bank of Canada should crank up the interest rates back to 1980's levels and make the housing market bleed. It is the only way to fix this problem. Also if interest goes up we will all make more money of places where you should park your money like GIC's or mutual funds etc. Biggest problem is most politicians are "landlord investors".
66% of Canadian's own their homes. I don't disagree with what you said, but imagine the government telling two thirds of the voters that they are going to decrease the value of their homes. There is no easy fix.
@@TomStorey Yup the rich get richer and the who cares about the rest right. Interest rates need to go up. The Bank of Canada dug a hole for us all with years of super low rates. There is no easy fix but making the top hurt a bit will not kill them, but making the bottom hurt just might. The Bank of Canada and the provincial governments have failed Canadians.
Housing prices not make sense same street all houses on market with crazy difference prices do not realtors are smart enough or sellers are fool
or if all your money is going into housing you will not be spending elsewhere in the economy
So many doom goblins out there 😂
Shots fired!
Hello Tom , you say the prices you believe won't go back to 2019 prices?
Where I am prices are still almost double the 2019 price... so do you think prices might go down to half between 2019 and now price? I think it is very likely where I am, where you are in toronto is different definitely though.
Alot of the gta suburbs and other areas of ontario 3x during covid.. i know alot of prices in these out of toronto towns have dropping 35-50 percent.. where i am i think they need to come down more.
but i think toronto is definitely different as it is a big city..
alot of places in ontario wull go down alot though! as they already have
Where are you located?
Billions of $ were pumped into the economy, deflating the dollar.
So, same house = costs more than before.
All that stimulous $ will not just disappear,
Prices of everything increased and will remain elevated.
The stock market, housing market, and crypto are all going to to come back into reality. People are still stuck in eurphoria and complacency. The disconnect of realizing there will be no interest rate cuts in 2024 is playing out finally. We have still yet to see the tailwind from raising rates so quickly and printing so much. Its all going to come down and come down quickly. 2024-2025 will be a blood bath across all markets.
Says Jonny who is waiting patiently on the sideline to buy a home then once he does jump the fence to other side and want the value to skyrocket
@@baseline6786 Nice assumption. I believe housing should be affordable for everyone and not an investment vehicle which it has become. I make my money in the stock market, not housing as it should be. Ive seen my entire generation (31 Years old) destroyed due to unaffordable housing, where as my parents generations made millions in housing.
@@JonnyZuccs that's with everything. A sought after stock goes up in value. Not everyone gets the opportunity to get in at 6.00 a share.
@@baseline6786 Im sorry, markets dont go up double within a couple years without a correction. I dont want to hear about the 15% housing prices off the peak being a correction. All markets have yet to suffer the inevitable correction from the unnecessary financial shenanigans during covid. This euphoria has gotten to people heads im here to observe and learn from you normies.
I'd give your prediction an 80% chance
Baited.... Made me look...
What a wonderfully refreshing video. Thank you for being a realist!
Great video Tom!! Thank you 🙌🏾
Thanks for watching!
I totally agree. Doom and Gloom sells and unfortunately that has always been the case. The difference of today and say back in the 1980's is now it's always in your face. I'm sure we all heard the saying "misery loves company" and that aligned with "doom and gloom sells" and you got a boiling soup of negativity. That's the generation we live in now. Sorry but people have to quit all the whining and work hard to get ahead. That's what was done back in the 80's when interest rates were sitting at 22%... yes that's correct 22%. And did people still buy a house... YES. Did they complain... YES. Did they work multiple jobs... YES. Stop eating out so much and spending money on things you don't need. Be smart with your money. A double income family with one child even at minimum wage is making $63,000/year. That's $5350/ month. Come on. People can't make a go out of life making over $5000 /month.
Get away from the internet BS and get down to it. It's not as bad as the face time is trying to sell it to you.
This was a very good video Tom.
Thank you!
Tbh, I don’t understand where to start. You have nailed it and summed up everything based on the facts. Yes, there may be people who won’t agree and may call you names but that’s what happens when u r giving a reality check to people. I literally watch this video 3 times and I am not sure if you even realize what masterpiece you have created. Trust me, listen to again in 5 years, 10 years from now and you will praise your own content shared in this video. I am sure I will watch it again.
Folks waiting for a crash are stuck in their wishful thinking as they are losing time. Yes the housing is expensive but one has to start somewhere instead of waiting on sidelines waiting for a 50% correction to fall in their lap. Even then the investors will benefit from that situation as they are risk takers and not the folks who are only in planning stage waiting for the perfect moment to implement/execute their game plan. Consider the long term goal of buying and holding for 20 years and then one will realize the gains. Yes there may be ups and downs but at the end it will balance out itself.
I will love to meet you if possible as I am in GTA and eagerly wait for the weekend to come for the Tom Storey show.
We're going the way of China
I wonder what our Evergrande moment will be 🤷
Who's the ever Grand of Canada? Genius, not, comment
We don't have any evergrandes. Just a bazillion small developers addicted to ZIRP and now going BK.
Market mania lol
i met this guy in person once
I met him in the comments a few times