Asking a real estate agent whether you should buy a home right now is like to asking an alcoholic whether they think you should have a drink lol. Homes in my neighborhood that cost around $450k in sales in 2019 are now going for $800 to $950k. Every seller in my neighborhood is currently making a $350k profit. Simply unreal. In all honesty, deflation is what we require. The only other option is for many people to go bankrupt, which would also be bad for the economy. That is the only way to return to normal.
Home prices will come down eventually, but for now; its best to offset some of your real estate investments and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes. If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to around $750k.
this is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? i'm in dire need of proper portfolio allocation
'Carol Vivian Constable, a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
John's outburst towards the end calling out the builders is applaudable!👏 Builders are the ones who're responsible for turning the condo market into a speculative bubble, and now they're scapegoating the development charges. Let's keep calling spade a spade.. greedy doesn't take anyone too far & we can all see it now! Great work guys, more of you are needed out there! Btw, I'm a Realtor myself and proud of your informative podcasts 👌
Shoutout to you John for calling out the Developers/investors and financialization of our housing market. It’s clear that relying on investment or incremental policy changes will not save us. A whole rejigging of our politics, and paradigm shift in culture is the only thing that can make housing affordable again and make the economy work for people. Our politicians have fully been captured by capital markets and people have been forced and encouraged to participate in the investment trap at the risk of homelessness, insecurity and poverty. Greed has captured our society and has put us in a worse place despite so much wealth creation.
Much respect for John who said that developpers and the economists they have in their pocket are deceitful saying that the issue is the fees on building house. When the market was in their favor, they did not complain, now that they are loosing money oh it's the cities' fault.
New mortgage rules in Dec will motivate some pent up buyers to act - but otherwise I see some downward pressure We are house hunting but remain hesitant: Mortgage rates are still Higher than what got us to this level (John) as a buyer on side line this factors big. + Prices still at levels fueled by 2% rates -in past year Unemployment rose to 8% in GTA, most Metro areas across Canada are over 6% and rising month over month - as mentioned construction industry is slowing down - US tarrifs pending. What will Canada's auto industry look like in 3 years - rents down 10% and might we'll keep dropping (rents still 30% above 2021 levels) -one big variable will be listings - clearly some of those buyers on the sidelines have lost their jobs Still looking for a detached home where the math works ❤
I laugh that people find condo fees high. Methinks either 1) these folks haven’t owned a house, or 2) they haven’t priced out replacing roofs, (and removing squirrels and racoons), new windows, doors, eavestrough cleaning, chimney repair, driveway repair, shovelling snow, window cleaning, lawnmowers and other garden tools, landscaping costs, replacing crushed sewer pipes, having trees removed and cut up, pool chemicals, opening, closing, etc etc. Tell me again how high condo fees are? It’s not that condo fees are high. It’s that the price of the condo is too high for what you get. The condo fees don’t actually represent the real cost of owning (hence special assessments) it’s just that people who pay $500k for a box can’t comprehend that they are also being asked to pay for the upkeep.
As someone who owns a detached house and condo rentals concurrently, I can confirm that, if you actually maintain your non strata property to even a moderately decent level, the condo maintenance fee is less than non condo property upkeep. Consider too that the condo fee typically includes HVAC and water.
Really agree with John that people likes to pin the issue on a single trending topic, creating a "boogey man" for all their problems. There isn't a simple catch all fix for something as big as housing affordability, its an issue with a lot of heads that requires more nuance.
Would be very interesting to hear what your thoughts are on how the future policies of the 2nd Trump term would impact the Canadian real estate market. I know these things are highly unpredictable, but can you offer any cursory insights?
Not unpredictable. The bond market has already responded, and fixed rate mortgages are rising. With tariffs, Canadians will have more inflation, businesses less profits and more layoffs. It will be hard times for Canadian real estate, however rents could begin to increase again should we see an influx of Anericans or illegal immigrants seeking shelter up north.
tariffs will increase US inflation, while Canadian inflation is negative.... so rates will be higher in the US than Canada in the long term.... which means less cost of borrowing here and more cashflow here.
@@TimBer-y3y It's true no one has a crystal ball, but with many people using 20x leverage to literally gamble on Canada's housing market, the upside potential should be taking a backseat to the very real possibility of prolonged price weakness. At a time like this people would be wise to be buying housing because they can afford it and they want to live there, not as a money-making scheme.
@@ElectronicWasteland-p2x Interest rate drop in Dec and Jan 2025, ppl are easier to affords, plus federal allows 30 years amortization and CMHC to 1.5 million. The market will be much better for sure in spring . Plus it is likely cabs dollar is much softer compare to US dollar, attract more foreigners to invest in Canada .
Ah yes 2 realtors that think a 2014 Lambo should cost the same as a 2024 Lambo..... guess what, it doesn't... there is always a price delta between new and used.... especially when new comes with warrantees....and these guys want people to buy things that are just coming off warrantee lol! If actual precons went from 1700 to 1300, that means the resale went from 1300 to 1000.... but the resale they pump to their clients they still think is 1300. (because if someone has 1300 bucks and can pick between the brand new and the used, they would always pick the brand new unit, new will always have more demand at comparable prices so there is always a price gap)
I watch I guy who put it like this: "In every very dark tunnel, you can look out and see a tiny light of hope at the end of the tunnel. Not so in the GTA condo market. That light is a train coming to hit you!"
zombie condo investments.... psychologically, investors don't want to stomach the loss... so there will be a slow but steady negative cash flow bleed for years as they hold on to these non performing assets... This will keep these investors on the sidelines for future purchases as they lick their wounds and wait for a recovery - which could be years away... particularly with a soon to be goosed US economy, leading to higher bond yields... Visa overstayers will have little impact on rents and RE sales... I am assuming landlords will now be asking for proof of status before they rent to anyone... Landlords don;'t want to sign a lease with a tenant who decides in 3 months in to leave the country or is arrested on an immigration hold.
Problem is, everyone is looking at these investors as cashed up pro property investors and corps. The vast majority are not. Most are people who drew equity out of their homes, and used their home as collateral. If they're lucky, they no longer had a mortgage except for this new purchase, but a lot have a mortgage, can't carry 2 mortgages, can't bleed cash, and will lose their home, or put it on the market. This threatens the entire housing market in Canada when all these condos and homes hit the market at once, adding in the people refinancing at higher rates. The potential is housing market Armageddon. You could go from, "I might finally be able to buy a home", to "I might buy 3 homes", if you could find that liquidity. Not saying this is the base case, but The possibility exists.
negative cashflow does not mean they are losing money. Paying your credit card is negative cashflow. Next thing you are gonna say is you are losing money paying off your debt. you are 100% delusional as always. the vast majority of condos are making money (even if you are kicking in for the principal payment), so by default they are not non-performing. actually everything you said was 100% wrong.
It’s always hard to understand John’s point. Steve brings up a concrete point about the ‘dog crate condos’ market potentially struggling with 3.8% rates because the math doesn’t add up. But John? ‘I think there are some investors buying’-what kind of comment is that? If you have a stance, state it clearly like Steve does, and back it up with some logic. This vague commentary just feels weak and unconvincing.
the math actually does work for 3.8% rates... Steve is 100% wrong on this one.... as is everyone that cries about it.... best part about math is that it doesn't matter if 10 or 10000 of you say the same thing, you are all still wrong. If you can get a 3.8% mortgage today you are 100% making money..... you might still be negative cashflow, but that is not losing money. Paying a credit card debt off is negative cashflow.... but your debt is going down and asset value going up as your cash pile is dropping. Next thing Steve gonna say is don't pay off your credit cards because it is negative cashflow.
@@GreenBeanGreenBean😂lol, I see that you are not that good at math. Come back when you finish Economics 101 and college math so we can have an educated debate.
Asking a real estate agent whether you should buy a home right now is like to asking an alcoholic whether they think you should have a drink lol. Homes in my neighborhood that cost around $450k in sales in 2019 are now going for $800 to $950k. Every seller in my neighborhood is currently making a $350k profit. Simply unreal. In all honesty, deflation is what we require. The only other option is for many people to go bankrupt, which would also be bad for the economy. That is the only way to return to normal.
Home prices will come down eventually, but for now; its best to offset some of your real estate investments and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes. If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to around $750k.
this is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? i'm in dire need of proper portfolio allocation
'Carol Vivian Constable, a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
John's outburst towards the end calling out the builders is applaudable!👏 Builders are the ones who're responsible for turning the condo market into a speculative bubble, and now they're scapegoating the development charges. Let's keep calling spade a spade.. greedy doesn't take anyone too far & we can all see it now! Great work guys, more of you are needed out there! Btw, I'm a Realtor myself and proud of your informative podcasts 👌
Shoutout to you John for calling out the Developers/investors and financialization of our housing market. It’s clear that relying on investment or incremental policy changes will not save us. A whole rejigging of our politics, and paradigm shift in culture is the only thing that can make housing affordable again and make the economy work for people.
Our politicians have fully been captured by capital markets and people have been forced and encouraged to participate in the investment trap at the risk of homelessness, insecurity and poverty. Greed has captured our society and has put us in a worse place despite so much wealth creation.
Great breakdown of the Toronto and Vancouver markets!
Much respect for John who said that developpers and the economists they have in their pocket are deceitful saying that the issue is the fees on building house. When the market was in their favor, they did not complain, now that they are loosing money oh it's the cities' fault.
No houses will be built if developers don't make money.
@@rge9857 Land prices will drop to a level where development will be come profitable again. Land owner takes the loss.
Would be great if we could have these episodes on Podcast the same day….On CastBox….🙏
Great show lots of unpacking!!
Not sure development charges are purely a boogeyman. Charges on projects selling in 2020 were SIGNIFICANTLY lower than now.
New mortgage rules in Dec will motivate some pent up buyers to act - but otherwise I see some downward pressure
We are house hunting but remain hesitant:
Mortgage rates are still Higher than what got us to this level (John) as a buyer on side line this factors big. + Prices still at levels fueled by 2% rates
-in past year Unemployment rose to 8% in GTA, most Metro areas across Canada are over 6% and rising month over month
- as mentioned construction industry is slowing down
- US tarrifs pending. What will Canada's auto industry look like in 3 years
- rents down 10% and might we'll keep dropping (rents still 30% above 2021 levels)
-one big variable will be listings
- clearly some of those buyers on the sidelines have lost their jobs
Still looking for a detached home where the math works ❤
We want much lower maintenance fees on condo units before we ever consider buying a condos
I sold my condos. Will never buy another stratified property again
I laugh that people find condo fees high. Methinks either 1) these folks haven’t owned a house, or 2) they haven’t priced out replacing roofs, (and removing squirrels and racoons), new windows, doors, eavestrough cleaning, chimney repair, driveway repair, shovelling snow, window cleaning, lawnmowers and other garden tools, landscaping costs, replacing crushed sewer pipes, having trees removed and cut up, pool chemicals, opening, closing, etc etc. Tell me again how high condo fees are? It’s not that condo fees are high. It’s that the price of the condo is too high for what you get. The condo fees don’t actually represent the real cost of owning (hence special assessments) it’s just that people who pay $500k for a box can’t comprehend that they are also being asked to pay for the upkeep.
@@davidhughes6048totally agree with you. Seems like people don’t have a clue what the upkeep is for a house.
@davidhughes6048 also property tax on a house will be as much of Condo fees
As someone who owns a detached house and condo rentals concurrently, I can confirm that, if you actually maintain your non strata property to even a moderately decent level, the condo maintenance fee is less than non condo property upkeep. Consider too that the condo fee typically includes HVAC and water.
It is too early to say the market is going back to normal
Really agree with John that people likes to pin the issue on a single trending topic, creating a "boogey man" for all their problems. There isn't a simple catch all fix for something as big as housing affordability, its an issue with a lot of heads that requires more nuance.
Would be very interesting to hear what your thoughts are on how the future policies of the 2nd Trump term would impact the Canadian real estate market. I know these things are highly unpredictable, but can you offer any cursory insights?
Not unpredictable. The bond market has already responded, and fixed rate mortgages are rising. With tariffs, Canadians will have more inflation, businesses less profits and more layoffs. It will be hard times for Canadian real estate, however rents could begin to increase again should we see an influx of Anericans or illegal immigrants seeking shelter up north.
tariffs will increase US inflation, while Canadian inflation is negative.... so rates will be higher in the US than Canada in the long term.... which means less cost of borrowing here and more cashflow here.
Thank you for another very informative episode!
dead cat bounce in Canadian real estate
Or market recovery. No one really knows
@@TimBer-y3y It's true no one has a crystal ball, but with many people using 20x leverage to literally gamble on Canada's housing market, the upside potential should be taking a backseat to the very real possibility of prolonged price weakness. At a time like this people would be wise to be buying housing because they can afford it and they want to live there, not as a money-making scheme.
@@ElectronicWasteland-p2x
Interest rate drop in Dec and Jan 2025, ppl are easier to affords, plus federal allows 30 years amortization and CMHC to 1.5 million. The market will be much better for sure in spring . Plus it is likely cabs dollar is much softer compare to US dollar, attract more foreigners to invest in Canada .
Ah yes 2 realtors that think a 2014 Lambo should cost the same as a 2024 Lambo..... guess what, it doesn't... there is always a price delta between new and used.... especially when new comes with warrantees....and these guys want people to buy things that are just coming off warrantee lol!
If actual precons went from 1700 to 1300, that means the resale went from 1300 to 1000.... but the resale they pump to their clients they still think is 1300. (because if someone has 1300 bucks and can pick between the brand new and the used, they would always pick the brand new unit, new will always have more demand at comparable prices so there is always a price gap)
Municipal Councils need to get back to only providing funding for mandated Municipal functions.
I watch I guy who put it like this:
"In every very dark tunnel, you can look out and see a tiny light of hope at the end of the tunnel.
Not so in the GTA condo market. That light is a train coming to hit you!"
Hey, FOMO Pumpers! ⛽🙄
zombie condo investments.... psychologically, investors don't want to stomach the loss... so there will be a slow but steady negative cash flow bleed for years as they hold on to these non performing assets... This will keep these investors on the sidelines for future purchases as they lick their wounds and wait for a recovery - which could be years away... particularly with a soon to be goosed US economy, leading to higher bond yields...
Visa overstayers will have little impact on rents and RE sales... I am assuming landlords will now be asking for proof of status before they rent to anyone... Landlords don;'t want to sign a lease with a tenant who decides in 3 months in to leave the country or is arrested on an immigration hold.
Problem is, everyone is looking at these investors as cashed up pro property investors and corps. The vast majority are not. Most are people who drew equity out of their homes, and used their home as collateral.
If they're lucky, they no longer had a mortgage except for this new purchase, but a lot have a mortgage, can't carry 2 mortgages, can't bleed cash, and will lose their home, or put it on the market.
This threatens the entire housing market in Canada when all these condos and homes hit the market at once, adding in the people refinancing at higher rates.
The potential is housing market Armageddon. You could go from, "I might finally be able to buy a home", to "I might buy 3 homes", if you could find that liquidity.
Not saying this is the base case, but The possibility exists.
negative cashflow does not mean they are losing money. Paying your credit card is negative cashflow. Next thing you are gonna say is you are losing money paying off your debt.
you are 100% delusional as always.
the vast majority of condos are making money (even if you are kicking in for the principal payment), so by default they are not non-performing.
actually everything you said was 100% wrong.
We need to get temporary workers to build homes at minimum wage.
It’s always hard to understand John’s point. Steve brings up a concrete point about the ‘dog crate condos’ market potentially struggling with 3.8% rates because the math doesn’t add up. But John? ‘I think there are some investors buying’-what kind of comment is that? If you have a stance, state it clearly like Steve does, and back it up with some logic. This vague commentary just feels weak and unconvincing.
the math actually does work for 3.8% rates... Steve is 100% wrong on this one.... as is everyone that cries about it.... best part about math is that it doesn't matter if 10 or 10000 of you say the same thing, you are all still wrong.
If you can get a 3.8% mortgage today you are 100% making money..... you might still be negative cashflow, but that is not losing money. Paying a credit card debt off is negative cashflow.... but your debt is going down and asset value going up as your cash pile is dropping. Next thing Steve gonna say is don't pay off your credit cards because it is negative cashflow.
@@GreenBeanGreenBean😂lol, I see that you are not that good at math. Come back when you finish Economics 101 and college math so we can have an educated debate.
@@DanMaxe24 you are very bad at math that is 100% correct.... please pass elementary school. Most of you can't even count to 10.
@@GreenBeanGreenBean you are delusional
@@GreenBeanGreenBeanrelax. No smart investor is buying for negative cash flow right now. They either increase DP or buy a cheaper unit.
bull trap
am bearish on Steve's hairline