Usually, it takes 6 to 12 month for the housing market to get impacted by a recession (because the last thing home owners would do is to sell their home, they have some savings, EI, govt support etc), the govt pushed that 6 month with their support, Nothing would happen in the real estate market before the govt life support is gone ... 760k Mortgages were deferred, 8M people on $2000 monthly support, business needed help with rent which is covered for few month, courts are closed (no one allowed to default) , evictions are halted, landlords can't list their homes to sell, and 300 billion worth in loans were deffered... With immigration close to 0, 12% unemployment rate, 400k students going online in Toronto, international students are gone, Airbnb going bust (over 25k units still not listed), record condos completion, covid risk (it's not done yet, hopefully we don't but a second wave is possible here too t) .. You can't tell me we won't have an impact when all of this is hitting the market in the fall/winter when deferral cliff ends and EI ends and monthly money ends, evictions starts ..etc
I don't think real estate goes up, with more debt taken out your money is diluted and worth less. So you need more of it to purchase an item. I can't see a crash in canada. Our fake housing inflation contributes to our fake gdp.
@RUclipsr 2 Totally agree with your assessment of the economy. 2021 we will see the REAL picture of the damage economy. David Hunter already predicted a deflation period in 2021.
@@Bigjohn928 Jump 10% comparing to 2019 July or comparing to last month's data. Even if it did jump 10% comparing to last year, it doesn't mean its fake. People are just reacting to the economy situation: lowest interest rate and coming inflation.
Some governments (like Chile) are encouraging people to tap into their pension funds to get thru the recession/depression, thus encouraging indebted people to borrow from their future and ensure poverty in retirement. This is a recipe for future social unrest, and revolution.
It's just a different way to get to the same outcome. If your system pumps money up to the top 10%... eventually you still get social unrest and revolution.
Australia has put in a similar scheme where people can tap into their superannuation this year for up to $10000, and another $10000 next year without a tax penalty....another short term policy that does not solve anything and kicks the can down the road. Also, let's talk about the real estate lobby. In the early 1990s recession they lobbied the feds to let people tap into their RRSP for a down payment. Now they are lobbying to increase immigration. Sadly, the Canadian dream of a detached house, with a nice deck and a BBQ will be just that, a dream for most young people. The big Canadian banks own internal surveys show that 40-45% of first time home buyers got a financial loan or gift from a relative (parents/grandparents, older siblings) Well, not everyone has relatives who are willing to give them a helping hand.
is better to give back that money before it gets wiped out when the martek crashes and we see hyperinflation, do you think retirement funds for Venezuelans worth something today? pension money has gone straight to the richs pockets and you're just holding bags
I was young in 2001, making barely enough money to be income taxed, but yet government was taking some of that money to buy mortgages with less than 20% cash down off the banks' books. Almost 20 years later, that scam is still going on and top 5% income isn't enough to buy pretty much anything other than shoebox condos.
Canada real estate is the most overvalued asset class in the WORLD in terms of value (what you are getting versus what you are paying), household gross income versus price (now over 10X) , highest G7 household debt to income ratio at 180% (and 20% higher versus the USA when their market crashed in 08), highest possible yearly taxes (and watch for these to skyrocket as federal/provincial/municipal governments need to suck it out if you to balance their out of control spending), plus excessive welcome tax when you buy and giving up 5% at sale to agent at sale when you sell, mortgage interest not tax deductible like in the USA, no loan terms longer than 10 years (USA has 30 year fixed) and Canadian banks screw you royally when you ask for a 10 year rate, mortgage deferrals (scam to begin with as interest during window is tacked on to your principal) coming to an end soon, household capacity on paying mortgage dependent on both income earners keeping their high paying jobs, especially with inexistent savings (quite risky position to be in these days both for borrowers and buyers) and banks lending like drunken sailors based on household income only (not even looking at couple’s debts and lousy balance sheet) because the government has their back with the CMHC (which other country has such such a ponzi scheme going?!). Canadian housing is built on quicksand, not rockbed. It’s only a matter of time that the collapse happens and the more the government gets involved to scotchtape the situation, the harder the coming fall. The first 5 years of your 1 million dollar mortgage, you are paying 250,000$ of: mortgage interest, welcome tax, yearly real estate taxes, insurance, excessive electricity, landscaping, snow, pool maintenance, upkeep as it gets older, throwing parties for the Jones’s, etc. Not to mention buying furniture for every room. Worst investment ever...you’re the one paying your mortgage (not your tenant), there is zero cashflow and your price appreciation in 10 years barely covers the money you’re burning in the fireplace to live there. People don’t sit down and do the math properly, especially Canadians who only talk to each other about how much their house is worth and went up in price. And Canada itself is in big trouble economically. No technology, no innovation, no productivity. Oil and gas decimated, automotive decimated, aerospace decimated. The only legs Canada is standing on is the most overvalued real estate in the world, period. And when I say most overvalued real estate in the world, that includes apartment buildings with unlimited upkeep and deadbeat tenants selling for 3-4 CAP and empty commercial real estate with Mickey Mouse non investment grade tenants (and if you’re lucky one anchor tenant) with limited life left in all the leases going for under 5 CAP. Canadians is in for a cold bucket of water over their head and reality will only set in when it slaps them in the face soon! Canada’s central bank chairman is begging (openly begging like a baby!) Canadians to keep borrowing money and that he has our back because he knows the quicksand we’re on or else why would he openly plead Canadians on TV to keep borrowing and that everything will be okay?! You know what that means when a government mule tells you he has your back: that Canadians are on their own, nobody has your backs and you should prepare for the coming catastrophe. The Chinese took over Canada like termites by using its real estate to funnel their cash out of China. This put Canadians dreams of owning a home at an unaffordable price and paying it off in 10-15 years near impossible. CHMC is warning Canadians openly of the coming 20% collapse (which means double 40%). Danger Danger Danger!!!
Then why does Owen Bigland who has been a real estate investor for 30 years always says buy and hold? He's become a multimillionaire in real estate and has over 30 rental properties. He's done something right! I don't get it. How is RE a bad investment then? It seems we are just missing out if we don't invest. Watch this video and tell me your thoughts. ruclips.net/video/LzbDGfY_pfo/видео.html
Gene Reynolds Canadian real estate is astronomically overvalued right now and buyers are only betting on more plus value which is not the way to invest as that is pure gambling. As Steven Harper said, Canada is un-investable right now. So why invest in Canada at the top top top of the market. That’s why our central bank head is begging Canadians to keep borrowing money and he has our back because he knows the quicksand we’re on or else why would he openly beg Canadians on TV to keep borrowing and that everything will be okay?! You know what that means: that Canadians are on their own, nobody has your backs. And banks are handing out mortgages and credit like candy. It’s time for the great Canadian crash of the real estate ponzi scheme. It happened in 89 when the GTA prices went down 40-50% in a matter of 2 years. And it will again soon. Very soon.
@@hymansahak181 I guess you are correct. But, boy, my friend who is a developer just built a rental building with 50 units and commercial at the bottom. I asked him why rentals and not just sell the units. He said he wants monthly recurring income which will last for 30-50 years and will pass it on to his kids. Everyone needs a place to live and this is how he will not have to worry about an income stream. His theory is 50 units at 2500 per month average = $ 125,000 per month ongoing minus operating/maint costs. Not bad. Then continue to build equity and do it again when he finds another hot property deal.
Sounds a bit extreme, what about just buying a reasonable place your family has no problem affording against your own stress tests. Buying can be a lot cheaper than renting, it certainly was some years ago when i bought as a committed renter. Good call too as its nearly tripped in value (mostly over 2.5 years a few years ago). I agree that if you wrote down al the possible bad qualities of an investment vehicle housing has basically them all (expensive to hold, expensive to trade, liquid) but then again ZERO capital gains on primary residence.... What you've not taken into account though is the value in not having to put 100% cash into a home, a lender will loan 5x 20% down (or more via CMHC). Run the numbers on ones return on equity if they only put 35k down paid in whatever tiny amount they put in the first 5 or 10 years but the place appreciated 2.5x. Its a great return at 100% ownership but unbelievable looking only at equity. A smart person would pay as slowly as possibly even, pull out equity if they want. Sure you pay interest but its historically low 2.5% or whatever. meanwhile can buy pretty 'low' risk stocks nice diversified basket that will do well long term and pay you even 2-5% dividend, if you want to get into more risk for some can get 6-9% if you want to bet on some energy or mining or other things. As for someone else paying ones mortgage, its really just a matter of perspective, you can pay the bank 'rent' or you can pay the owner. Have to do the individual math on what is the better deal on a case by case basis.
They steal thousands of dollars for a couple of days of work. Nice gig. Can't believe in this day and age of technology, we're still paying the Realtors upwards of 50000 dollars to sell our homes.
One of the things that cannot be controlled by BofC, CMHC, CREA, etc., is market sentiment. If it looks like a bubble, walks like a bubble, and talks like a bubble - then it's a bubble. Once people start to think that buying a house may not be an investment that goes up 10% a year forever they will be reticent to buy. RE inventories are increasing, and I get emails daily on price reductions. I'm looking to buy a house for my daughter, and I have no intention of even looking at houses until next year. Once the CERB, and mortgage forbearance ends watch out. Many comments are made in the belief that mortgage debt is the only debt households have, and this couldn't be further from the truth. Government policy right now is like rewarding a badly behaved child.
I've also noticed listings on the west side and Shaunnessy are up and prices have dropped a bit. There are many condos in downtown for sale as well. Not sure what to do. I guess take your advice and wait another year. There are so many 2 bedrooms and 3 bedrooms available for rent as well in Vancouver but the rents are still high.
Good points Steve but there's some unknowns. First point is 'don't fight the Fed' applies here. As you've seen the governments will do 'anything' to keep this bubble going. How about central banks depositing $20,000 for every man woman and child? Sounds crazy but the shit thats going on now nothing would surprise me.In Canada they've told us no rate increases for 2 or 3 years this should underpin homes.How about Government insuring all mortgages? At the end of the day buying a property that's good value,lock in a great rate that s the way I'd do it if I were a buyer.
@@genereynolds3482 With the possibility of more air bnb properties coming on to the market as rentals I would sit tight for sure. betterdwelling.com/canadian-real-estate-buyers-pay-steep-premiums-to-own-vs-rent/
If the Canadian real estate market was only accesible to Canadians, then yes I'd agree 100%. The problem is the Canadian real estate market is available to (literally) the entire world; We're competing with the richest people from around the world, many of which don't care if they're paying a few hundred thousand more for a property - As long as they can get their cash out of their country and as long as the Canadian government obliges, they'll keep using our RE market to launder their money (all at the Canadian citizen's expense). Mark my words, the Government of Canada will make it _easier_ for foreigners to buy properties in the near future, they'll tell us it'll "help" the economy, so the majority will just swallow that pill and not ask any questions. I sincerely hope you're right though, but I won't be surprised if the market just keeps going up with no end in sight, as it has in my city (Montreal) over the last year.
@@anthonytenaglia203 As you say, there are a lot of unknowns. I think the only thing that we know for sure is that the population of Canada is one of the most indebted in the world. There are a lot of people out there hanging on by a thread, and I don't think the end of CERB, and mortgage forbearance will be a good thing. For too many years our economy has been driven by debt as opposed to wage increases. At the end of the day, it doesn't matter how low interest rates are if you can't make payments on all your debts. The B of C is also going to be in trouble as inflation starts to creep in which reducing people's ability to pay their debts. I would imagine that many cities will be increasing their property taxes to pay for all the shortfalls created by Covid-19. All in all it's a complete shit show that may end badly for a lot of people.
We totally understand and agree with everything you’ve just said. We have done so much reading on Central Banks etc etc so because of this we do understand what’s going on. It’s incredibly frustrating that we can’t talk to the average person about this as it’s just beyond their comprehension. So thanks to your speaking up about it (no one else will) the Central Bank and the Government are being kept some what accountable.
It's the Canadian way; Why save and plan ahead when you can just leech off the taxpayer? Because in the end, we'll all have exactly the same amount of assets, the Government will make sure of it,
it depends upon circumstances...sometime renting is more viable for some because of different reasons, such as more rights, and convenience if one has to move around in life....
Steve thanks for taking about this people need to know how it works. My question is if BOC buys all the mortgages to take the risk from the bank. What happens if defaults spike. Do they just print their way out of it?
@Norbert Kausen I get that inflation will run rampant with the money printing and assets will bubble but at what point does that longer work? When society revolts due to the wealth gap?
Bank of Canada purchased $550 million in Canadian mortgages by June 2019. As of June 2020, the Bank of Canada has purchases $7.95 BILLION in Canadian mortgages to prevent a collapse in real estate.....an increase of 1450%. Read it and weep! 😢😢😢
I agree from fundamentals perspective but we’ve been seeing Vancouver’s market defying fundamentals for years, so the correction may take many years to happen, during which people will continue benefiting (or suffering) from the over valued RE.
@@billferguson1368 I'm not calling anyone in particular a fool, but predictions are often wrong. To be so sure of one's predictions could be interpreted as arrogant, foolish, or naive. The wise person admits they don't know what will happen in the future, especially the near future.
Thanks for digging into this - unfortunately topics that need more explanation than an infographic tend to get neglected, while it's exactly these technical details that are threatening to our community (nay, at this scale, our society)
There will be lots of blood on the streets. Homes and lives lost. Nobody is coming to save them. Deals of a century will be had for those who have liquidity and credit available, while most have become insolvent. You get what you deserve eventually.
Asmodai2011 Suggesting that unwary everyday folk “deserve” the financial pain that’s perpetrated on them by central banks, the banking system at large, corrupt corporations & their political puppets, is a laugh. There’s a reason that people are kept ignorant about the financial system & how currency is created...
New subscriber here. Appreciating the content. I'm on the east coast of the country here in Halifax NS, turning 30 and going back to work after a 3 month temp-layoff. I'm shocked to see the amount of pent up demand for residential real estate here. I carry no consumer or student debt, have 6 months of an emergency fund which thankfully I didn't need to tap being on CEWS and have some physical silver, along with a self-directed RRSP and the "golden" (more like bronzed-finished/fools-gold) handcuffs of a DCPP. I also am a renter, looking to get into a home eventually after getting married in October. I'd like to think I'm somewhat financially literate, but I can't seem to shake the questions of 1) How are people doing it? Is it a race to get into housing before CMHC and banks tighten up their lending practices? Which to a younger person is akin to kicking the ladder down after others have gotten up. Leading to a melt up of everything. 2) If the house of cards falls to levels which CMHC themselves are saying it could (9-18%), what are these over-levered people going to do? It also seems like hardly anyone in my age group that I know of anyway are even talking about what's going on here. It feels like housing is becoming more like the stock market in that it's a graph reflecting rich peoples' feelings. So younger folks are just resigning themselves not realizing they are going to be footing the bill later on with none of the upside. Plus, looking on ViewPoint, the amount of commercial real estate listings seems to be ever-increasing at an alarming rate. I can't be the only one wondering. It also can't be unique to the Maritimes. I'm just hoping people are realizing how over-levered they are and what it could mean if this goes belly up. I'm not holding out hope though!
You have a very good take on things, personally i am wondering the same thing from where i am in Vancouver. There is a lot of money coming into Vancouver from everywhere which is driving demand ..however i am skeptical and also have been in construction for 30yrs . All i can say to you is it is never upward forever ,it can change quickly... i would wait till November.
Simon Eales I can only imagine the lunacy there! I can’t even process the sums of money flowing into real estate there and hardly anyone is batting an eye. I’m just continuing my best efforts to buy some metals, and keep a finger on the pulse of things. What’s truly fascinating though is the lack of people even talking about this. It reminds me of when 2008 was happening and afterwards people scratching their heads going “wha happened?!”. I’m skeptical too, it’s just how long can people go on being over-levered up as they are?
GDP = Net imports/exports + Foreign Investment + Government Stimulus + Innovation/Production The government prints money that does two things: (1) it allows the BOC buy bonds to aid Government Stimulus, and (2) devalues the currency which helps net exports/imports. Unfortunately, devaluing the currency also erodes cash savings, but increases all hard assets (e.g. real estate) valued in the currency.
So our economy is going to be trash from this. Losses are as important as profits in the market, because otherwise the scarce resources cannot be reallocated to more productive uses. Forget having any kind of robust productivity growth in the economy. Resources (capital, workers) need to be moved out of the RE industry and be employed in more productive areas. The market needs to act. These geniuses in the government are not letting this happen by manipulating mortgage rates. Yeah let's zombify this economy. All hail our central planners.
If I could double like your videos, never mind. Triple like your videos, I would all day. Thanks for everything you do, I've followed your videos and made many great decisions based on what I've learned. You help decipher markets and policies like no-one else.
Do we know how much bank lending has increased or changed since March of this year. If it has not actually increased then new money that is being printed is not making into the system. Government has bought bonds to allow banks to have more capital to lend but it may still be stuck in the banks. There was a great thread on twitter today about this albeit in the US.
Cash flow, cash flow, cash flow. Flip all the RE money you want from this pocket to that. Without revenue and profits from real economic activity, cash flow for households, corporate and governments (for them its taxes from households, corporates) is going to dry up. Scary times.
First house i bought it was 11 1/4 got a little house saved paid it off and bought a piece of property use the equity of that house to build a new house with a small mortgage . number one rule never buy more than you can afford. 0% is not rewarding the savers and low interest rate are giving people a false sense of buying on speculation that house prices will always go up. maybe on water lots.
Everytime I think the conditions in the economy are conducive to deflation... central banks and governments meddle in the market- only bringing prices even further up.
Yes, 100%. Just get in the market. Listen to OWEN BIG LAND. He has 30 investment properties and is living life. Rental Income is KING. Have 2-4 properties and you will never have to work or worry about money again. Good for retirement years.
Eventually the lack of economic growth will lead to a severe drop in the price of housing in most markets in both Canada and my US of A. Our Federal Reserve as well as you Bank of Canada will continue to print and buy bonds as they perceive a lack of no other options in their minds. I guess I'm old school in my belief that if possible try and put the fire out before it becomes so large that only mother nature herself will succeed in that effort. Its my belief that we are strong enough to endure a 2 year downturn and then emerge bigger and stronger than before. My feelings are that the powers that be don't understand the most crucial element that holds us together is TRUST in the system. In the end as usual the piper will be paid.
I agree with your analysis. The question is how long the govt will be able to prop up the housing market. Due to Covid, immigration has stalled until a vaccine becomes widely available and historically immigration was a big driver of increasing house prices. Tourism is gone and Airbnb investments will be defaulting. Commercial real estate is suffering. Cerb will be ending and replaced by unemployment insurance and less generous programs. The real economy continues to suffer and when 15% of all Canadian mortgages are in deferral the question is how long folks will be allowed to postpone payments. Banks cannot forever be denied payment unless the bank of Canada decides to pay these mortgages, which seems unlikely. But ultimately what happens in the real economy should have an impact: people without jobs are unlikely to buy homes. Once starter homes are no longer being purchased, it could have a serious ripple effect in the rest of the housing market. Unlikely to occur before 2021.
Another great update. I am expecting banks to layoff a large percentage of staff permanently which causes a negative feedback loop for house prices. Also other employers, as they are unproductive zombie companies. In 2008 TD Bank laid off 15k+ permanent employees and they offered to hire them back at lower salary, reduced benefits/vacation. Mean while after 2008 many jobs in banks and corporations have been filled with lower wage labor from India. Most teams in Canadian banks are now all from India or other countries. Note immigration is good, but too much of anything can be bad.
and, like many things innovation has completely change how these old businesses operate. I dont want to have to go into my bank and do anything, i had to for the first time in years, for some technicality, they are lovely and friendly but it takes forever to do anything! Some 50 year old guy was in there paying all his bills like it was 1980. I kinda chuckled when he was paying all the cell phone bills. buddy get the app!
TD Bank did not lay off 15K employees on 2008. The Financial Crisis started in October 2008, there were no lay offs until 2009, there was never 15K lay offs at a single Bank in Canada.
Bubbles! Bubbles everywhere! Keep that mania going until it all blows up in our faces via extreme social unrest. I’ll likely see it in my lifetime sometime around when beef is $50/lb and bread is $30/loaf lol. Good times for the asset-heavy oligarchs. Awful times for savers. Buy real assets! Fantastic video as always, Steve. Thanks!
How does what CMHC is doing help affordability? Aren't they just making it harder for people actually trying to buy homes to live in, while increasing buying opportunities for rich investors/speculators looking to put their money into assets? Maybe it all would have worked 10 years ago, but with the amount of wealth inequality there is now, what they are doing just further increases the wealth gap by locking out poorer people. I doubt you'll see significant price drops since the supply will just be picked up by investors trying to rent out properties to cash-poor Canadians who can't afford a home. And, without interest rate increases, it's just going to be a buying spree for people who have more money than they know what to do with and nowhere else to put it. They should have targeted speculation, but instead Siddall is pushing supply side economics as the solution and saying people should be happy to rent for life.
I have to question your numbers. The real estate number lag what is really going on but 2 months. Real estate prices are down over 7% in Vancouver. Supply and demand? Well in Toronto air bnb is selling can can increase the housing availability by 30%.. Yes banks are holding interest rates low, but property taxes may go up 17% in fact that is a pretty solid number for mississauga.. The full extent of the covid-19 hasn't even hit yet.. the housing market is in real danger
Owning a home is probably the riskiest investment to make in Canada at this point. It's probably much safer to invest in residential REITs, Gold, and stocks and just diversify and keep renting until things settle down.
Basically the toilet is long overdue for a flush, and the BoC is bolting rings on to the bowl and is preparing to take out the ceiling so it can keep going higher.
Real Estate in over valued markets will crash and fail. The market lost its perception of value and got greedy. The then newly created stimulus package from 2008 found its way to undervalued markets like Canada. We benefited from the inflation. But it created distortions in the market and a big fat bubble that now will burst. Domestic income alone could never have propped up valuations to absurd amounts. The economic Hurricane is now here and we are about to witness which homes had good financial foundations.
Not sure your analysis is spot on on the CMB program...those are secondary market purchases..I agree it helps spreads stay in but that $8 billion is only about 3% of the entire CMB program that is in existence...the IMPP program would be a much larger influence I believe
@@saretsky fair point however still does not detract from the fact that they have only bought about 3.5% CMBs in the market...IMPP or BoC is the same thing...both BoC and CMHC consolidate up to the Consolidated Revenue FUnd...whether it is CMHC through IMPP or BoC through another program it ends up at the same place
The day the average Joe acts and understands is the day you move to the opposite side of the equation. NEVER FOLLOW THE HERD....it will DESTROY your wealth. Unfortunate but true.
Will this cause wage inflation? I notice prices of certain items and services have increased greatly in the past few years. Now with Gov intervention, i feel that will continue.
that wasn't their only 'prediction', that was just one of the many possible scenarios they were looking at, like a good, worse and terrible model to see what each would mean. Sounds like most have fully backed away from the worst case once we had a bit more idea of things opening up.
@@ytyt3922 oh bullshit, it was Harper and his conservatives that massively expanded the loophole that was the temp foreign workers system to import unskilled labour for this business buddies meanwhile allowing the very wealthy to buy their way in with a temp 1m investment given back after just 4 years. At the same time very slightly slower the positive immigration from our fairly good points system. You see Canada needs to import people as we don't have enough ourselves. Without immigration or massively increases to our birth date our economy will collapse under the strain of our otherwise aging population, but of course we knows the cons want every excuse to destroy our social benefits.
You have to understand how many industries depend on the well-being of real estate market. The fact is property tax is not only a significant income source for the government but also keeping the value of the entire real estate industry at par or better is important for all of the by product industries stemming from the real estate market. Think about mortgage lenders, home inspectors, home improvement stores, lawyers, realtors home renovation contractors, utilities companies and home insurance companies, and income for all these people who are working in these industries that are paying their own income taxes and trying to buy their own property. As a government, you cannot afford to devalue the real estate industry and cause all these sub industries to collapse which ultimately is just hurt the government and the tax revenue.
true, how do we solve the problem of young people being able to buy homes? Everyone should be able to buy a home otherwise we have discrimination on the highest level...no one talks about this
Whats going to happen to my savings? I'm trying to save money so I can buy a house at a reasonable price (I have a friend who just took out a 30 year mortgage, which is not my intention to follow suit). But will my savings be inflated away to protect/save the housing market? Is it better to buy a house now and ride the central bank / government protection train or is that a false idea? If i buy a place for $500,000 now and inflation explodes ill be able to pay it off in one pay check (theoretically).
I'm in the same boat as you. I'm debating just buying since gov't is intent on not letting housing market crash. Seems they'll do everything in their power to stop it. While investment markets are fairly unpredictable, so have liquid cash in your account is a bad idea due to inflation and the safest investment seems to be the housing market. Great..
i mean losing 1-1.5% per year is really nothing to lose sleep on all though why on earth would you be saving into cash, at least a savings account and get a few pennies interest, save mutual funds. or just buy large cap US growth funds.... my main pension account did 24% last year sure it sent down with covid but its back up for the year. If you are saving in cash you are losing out big time. Why would you NOT get a 30 year mortgage, nothing wrong with it. Rates are are historically lows, means borrowing has never been so cheap. While rates stay low it is better financially to pay as little as you can, and just invest the cash you would have put into doubling your payment or whatever into better returns in the markets. Yes some minor risk but really meh. Personally did that with a condo 7 yrs ago. i couldn have pumped all my saving into the place and just been paying it off now. but ive made well over 100k in gains on just the cash i didn't put in. Basically if the lenders are giving me nearly free money im absolutely going to take it as long as possible. When rates go higher 5 or 6 % then i'll think about just paying off my places in cash if i dont think i can make more gain in other investments.
Inflation makes products more expensive, your wage will stay the same. Saving money with get you only so far. You need to make strategic investments in assets that are not overvalued. Gold, silver, crypto otherwise you will be left in the bottom. There will only be two classes in the future... the wealthy and the poor.
How do you reckon all of this “liquidity”, mostly attributable to the central bank, flow into and prop up the real estate market? seems like it’s more relevant to the stock market and general businesses (to stay afloat and not actually prosper). I still think that supply and demand in the RE market have at least some impact on how things will play out
You can’t have it both ways. Encourage borrowing while telling Canadians to not take on more debt. As much as homeowners don’t want to lose equity, at some point that needs to happen or the economy and currency will get destroyed.
right but its short term vs. long term. Equity destroyed now, vs. probably in the future economy and currency destroyed. Politics is rather short term focused. Also currency going down in value isnt always a bad thing, its good for some bad for others (exporters vs. importers).
@@billferguson1368 its not faux equity just because you personally dont believe in it or cry it is not fair. Regardless of the why and how it remains a fact of reality. People seem perfectly happy to part ways with their money in a fair exchange. maybe it shouldn't have but it has. Personally i am glad i bought, rents went from 1100 for my place to 2k but since i bought i made 300k in paper capital gains :)
@@billferguson1368 meh wishful thinking. Heard that since before i was born about Vancouver. Not to say there haven't big big dips and people lose houses but for the majority its just hold. Agree that deciding when to sell is harder than deciding what to buy for stocks and when to buy it. Which is just why most people are better off not thinking too hard, buying good blue chip stocks you can hold for decades. or houses.... I know you think realestate is going to crash big but its just not. buy ya a beer if it does though :)
@@billferguson1368 right but people have been saying that since the 70's. And while there certainly has been big dips its done well. Sure that doesn't mean it will continue to of course no one can predict the future. Personally i think there is way too many people and power tied up with wanting housing not to crash and i'll never ever bet against that. I dont think there is any value in Tesla stock at 1000 let alone 1500 but no way am i crazy enough to short it either! I suspect more realistically housing just will take a long pause 10-15 years where it really doesn't do a whole lot. Millennial and others waiting for some 40+% crash are never going to get in, Babyboomers will continue to fuel the fire giving out big down payments to their kids to allow them to buy. For me its less concerning about the actual sales price far more concerning how the hell anyone is supposed to save enough for a down payment. The payments are not the problem its getting 100-150k to even get those payments... anyone else notice a massive shift in developers suddenly after 40 or 50 years only developing and selling a great many are now developing solid portfolios of 100% rentals to keep they juicy cash flowing should they no longer be building nearly as much. I though this development at 100% capacity would have run out of steam years ago but it seems it still has solid momentum at least for now...
@@billferguson1368 no seriously absolutely from the 70's. My parents moved out from back east lots of people saying oh hey should hold off on buying. Glad they didn't. it wasn't all great though also had the 80's interest rates people losing their houses or nearly, 90's recession, 2000s dot com crash, 2008 and all the rest. I am not suggesting buying a bunch of places now what i am suggesting is the sky isn't falling and if you bought any time before maybe the last year or so everything is probably fine. Only the truely crazy leveraged and maybe Air bnb folk if they cant convert to leases will have issues and good they should, they screwed up the market anyways. The world is not over people...
The pumping of liquidity can only work for so long. Unless the banks plan on giving NINJA loans (pipe dreams) I see big pressure coming from those that already bought houses and can no longer afford it. Those sellers are in the market now (with forbearance), come 3 months after expiration we will see the blood in the streets. Google businesses for sale, you will see job losses to come in a few months
At some point liquidity has to flow to the consumer for this “economic’ policy to continue. At that point we might as well be China as we will be fully in a centrally planned economy.
Aren't we China already? I thought we'd been taken over a long time ago - adding exponentially to the unsustainable rise in real estate prices in B.C. to ludicrous levels.
Great video.... I must admit I am 100% wrong about the housing market... thought it was going to come crashing down... another unusual thing is the banks don't seem to have any fear at all. Even at the bank I'm working at, they don't seem to fear the economy at all. I must be missing something... The MBS market is hot again because rates are so low, alot of institutional clients are hungry for yield and thus are reaching out more on the risk spectrum.
The banks don't fear the economy yet because they have been packaging non-insured mortgages to sell to the government. The insured mortgages mean that they will not lose a penny if a homeowner defaults. Win-win for the banks. However, they might start to feel differently when people start to default on HELOCs, car loans, credit cards, etc.
In other news if anyone was listening to the question ' where do you park your money?' Gold and bitcoin have been doing very well. Dont forget its all taxable. Don't forget to dollar cost average in and dollar cost average out.
no.... They are rather regulated, they cant even run a loss on their budget. They just wont sell the real estate they own much of.... its a non issue just like if my house or stocks go up or down as long as they eventually go up what do i care...
I just heard from a multi millionaire reliable source, so wouldn't surprise me. Maybe Steve doesn't want to comment or rock the boat? It's ok though...
Possibly off topic, but I'm already seeing signs of major devaluation of our currency. Everything from small niche collectibles, to luxury watches, to classic cars has already gone up considerably over the last year, with no real decrease in available supply or increase in demand. I think real estate will keep going up, not because they'll have _real_ appreciation but because our dollar is devaluing at a high rate - Properties will artificially increase in cost because the Canadian "peso" will be worth so little.
Let me put it this way, in Montreal rental properties up 15% per year during the last 5 years, if you want to buy a 2m rental building your minimum down pay is about 450k, in less than 3 years you will make your investment 100% back or more depends on the area. BTW house empty rate in Montreal is 0.015% people literally begging for a place to live, i sold my condo in Beijing China few years ago got 1.5m and I bought 3 rental buildings roughly 2m each, so go figure.
wild times. not sustainable. house prices cant keep going up like they are. There will come a point where no one is a home owner and everyone is renting. I said it before, in the future, if you own a house you will be looked at as wealthy.
You know Steve sometimes I feel I am being play, from outside force that are out of control. Their scared of what if ? I feel it in my gut. Are we all going to be up in that hurricane in the end?
Canada's Financial System.... is in fact now no more than Canada's Real Estate Market. For "if" the Real Estate market were to collapse... or sustain a substantial de-valuation/default occurrence.... so to would the Financial System stresses manifest as liquidity detractions that cripple GDP in the wider economy.
IMO individuals with Families or jobs should have their own property. Financially: a small plot of land should only cost 15 years of your territorial median income (30k x 15 is 450k for a plot) . Singles and elderly can live in Apartments. A little sacrifice here and there and all will be fine. Government and real estate firms and mortgage banks all benefit when prices are kept high, there are lot of people that benefit from these high prices. Oh and Local persons, born in the territory, have first bid on property purchase. Yup simple as that , it's just a call of all people to understand simply the benefits in the long run. Yeah selfless isn't it.
Thanks for my weekly dose of economic education. Very sobering but rings very true in my ears. I enjoy watching Hedgeye and Keith M. has the same opinion of these policies. They favour the wealthy and continue to drive the wealth gap. I'm not a fan of these policies even as a person who is long RE and other financial assets. Thank you sir.
Hi Steve! I’m not sure it’s such a moral dilemma. The wealth gap will be corrected through voting for higher property taxes and wealth taxes which has already started. If it is perceived that the system is unfair people will vote for politicians who redistribute. No one seems to mind the “school tax” in Vancouver except people with 3 million dollar homes, and they will get out voted. Hate the game, not the player! I call this the “Robin Hood effect”, and you can use that in your videos. Ha! Seriously, thanks for the great info!
@@saretsky I actually think there won't be. I have a suspicion the boomers and enough of gen X will be able to hold off taxes on asset owners for another couple of elections and I think the middle class, that is left, is going to see massive income tax increases. As boomers start hitting the healthcare system look the F out as that number is going to be massive and will have incredible costs. Income tax I see going up 15-25% in the next 10 years and I think you'll start to see violent social unrest.
We haven't hit the disruptive stage of this Depression yet. I believe we will disruptions next year and it looks like it might be a something like a credit freeze. If that does happen prices will plummet. Time will tell but the criminal behavior can't go on for ever.
Chart by Stephanie Hues?? I did not find helpful, is it in Billions of Dollar?, what about stocks?, what is chart indicating other than money in real estate going up, would like more context and more information on the chart. Also on other Chart was it 8 Trillion I cannot remember, Also if Feds buy bank mortgages then what does this mean, i think it shows Government just printing money but also owning assets. So in further recessions Canada takes more loses and banks etc stay a float. Thanks, otherwise a reasonably good video.
Bang on Steve. Liquidity drives, not real economics. It’s exactly what has had intelligent people on the sidelines for the last 7 years. All the time arguing about overvaluations, PE ratios blah blah blah blah!! If they don’t see it at this point, maybe they never will.
Bond markets around the world are screwed. CBs have been the only purchaser in many countries. Do not own bonds people. Shift to private equity in blue chip stocks.
Affordable will come, but it will be through densification of Maple Ridge, Mission, Chilliwack and to a degree Langley. West of the sport Mann, if not already out of reach will be very soon.
Thanks for the video Steve, insightful and practical as always. Like other comments have noted there will be a comeuppance; yes, government income supports may have helped keep retail ticking along but exports are depressed and sooner or later will have wider effects.
liquidity drives markets? really? if there is less money floating around then there is less money to eventually bid-up. We can look at other markets to show this. The reality is if there is money to be made in the economy, people will come. If there is no money to be made, people will leave to where the money is which effects the housing market. Throw in debt people are struggling with and you have the inevitable crash that will come.We do not have the wealth and economy to keep these prices inflated for ever. It is too early yet.... gov and the system are holding tooth and nail to keep things as they are.....but it must correct significantly. PoP!
As usual you explained the real truth of the housing market in simple terms. A person like you should get involved with politics. That’s how we could see the changes Thank you .
I'm a fan of your content I really love watching them all, it's something I look forward every time. I hope we can connect and work together! Have you considered hiring a video editor?
So basically, if the RE market is too big to fail, which it seems to be, then people should buy. Seems like a safe investment given that the government and central bank are propping it up.
In my opinion....take care of yourself.....how? Raise your own food, very low debt , if you can work for yourself. Just a thought, old school. Corporate North America sold us out a few decades ago, we are now paying the price. Middle class is disappearing...etc. Invest in yourself.
Usually, it takes 6 to 12 month for the housing market to get impacted by a recession (because the last thing home owners
would do is to sell their home, they have some savings, EI, govt support etc), the govt pushed that 6 month with their support, Nothing would happen in the real estate market before the govt life support is gone ...
760k Mortgages were deferred, 8M people on $2000 monthly support, business needed help with rent which is covered for few month, courts are closed (no one allowed to default) , evictions are halted, landlords can't list their homes to sell, and 300 billion worth in loans were deffered...
With immigration close to 0, 12% unemployment rate, 400k students going online in Toronto, international students are gone, Airbnb going bust (over 25k units still not listed), record condos completion, covid risk (it's not done yet, hopefully we don't but a second wave is possible here too
t) ..
You can't tell me we won't have an impact when all of this is hitting the market in the fall/winter when deferral cliff ends and EI ends and monthly money ends, evictions starts ..etc
I don't think real estate goes up, with more debt taken out your money is diluted and worth less. So you need more of it to purchase an item. I can't see a crash in canada. Our fake housing inflation contributes to our fake gdp.
@RUclipsr 2 Totally agree with your assessment of the economy. 2021 we will see the REAL picture of the damage economy. David Hunter already predicted a deflation period in 2021.
When the news reports said housing market jump more than 10% in July it must be fake.
@@Bigjohn928 Jump 10% comparing to 2019 July or comparing to last month's data. Even if it did jump 10% comparing to last year, it doesn't mean its fake. People are just reacting to the economy situation: lowest interest rate and coming inflation.
@RUclipsr my landlord wants to list our place to sell, what can I do to prevent that?
Some governments (like Chile) are encouraging people to tap into their pension funds to get thru the recession/depression, thus encouraging indebted people to borrow from their future and ensure poverty in retirement. This is a recipe for future social unrest, and revolution.
That'll be the recipe, right there.
It's just a different way to get to the same outcome. If your system pumps money up to the top 10%... eventually you still get social unrest and revolution.
Like wise in Australia
Australia has put in a similar scheme where people can tap into their superannuation this year for up to $10000, and another $10000 next year without a tax penalty....another short term policy that does not solve anything and kicks the can down the road.
Also, let's talk about the real estate lobby. In the early 1990s recession they lobbied the feds to let people tap into their RRSP for a down payment.
Now they are lobbying to increase immigration.
Sadly, the Canadian dream of a detached house, with a nice deck and a BBQ will be just that, a dream for most young people.
The big Canadian banks own internal surveys show that 40-45% of first time home buyers got a financial loan or gift from a relative (parents/grandparents, older siblings)
Well, not everyone has relatives who are willing to give them a helping hand.
is better to give back that money before it gets wiped out when the martek crashes and we see hyperinflation, do you think retirement funds for Venezuelans worth something today? pension money has gone straight to the richs pockets and you're just holding bags
I was young in 2001, making barely enough money to be income taxed, but yet government was taking some of that money to buy mortgages with less than 20% cash down off the banks' books. Almost 20 years later, that scam is still going on and top 5% income isn't enough to buy pretty much anything other than shoebox condos.
Agreed. Ottawa is now becoming Toronto as well.
Just keep kicking the can down the road until it's someone else's problem
ANOTHER INDIVIDUAL WHO KNOWS HOW TO PUT IT IN PLAIN ENGLISH!
The can will get big enough so we'll all live in it as a good Soviet collective.
Pc principle...you are a wise and good comrade no reeducation camp for you.
In canada we do not have any economy anymore. The only sector canada has now is housing. When it drops. And it will. We are all in deep trouble.
Canada real estate is the most overvalued asset class in the WORLD in terms of value (what you are getting versus what you are paying), household gross income versus price (now over 10X) , highest G7 household debt to income ratio at 180% (and 20% higher versus the USA when their market crashed in 08), highest possible yearly taxes (and watch for these to skyrocket as federal/provincial/municipal governments need to suck it out if you to balance their out of control spending), plus excessive welcome tax when you buy and giving up 5% at sale to agent at sale when you sell, mortgage interest not tax deductible like in the USA, no loan terms longer than 10 years (USA has 30 year fixed) and Canadian banks screw you royally when you ask for a 10 year rate, mortgage deferrals (scam to begin with as interest during window is tacked on to your principal) coming to an end soon, household capacity on paying mortgage dependent on both income earners keeping their high paying jobs, especially with inexistent savings (quite risky position to be in these days both for borrowers and buyers) and banks lending like drunken sailors based on household income only (not even looking at couple’s debts and lousy balance sheet) because the government has their back with the CMHC (which other country has such such a ponzi scheme going?!). Canadian housing is built on quicksand, not rockbed. It’s only a matter of time that the collapse happens and the more the government gets involved to scotchtape the situation, the harder the coming fall.
The first 5 years of your 1 million dollar mortgage, you are paying 250,000$ of: mortgage interest, welcome tax, yearly real estate taxes, insurance, excessive electricity, landscaping, snow, pool maintenance, upkeep as it gets older, throwing parties for the Jones’s, etc. Not to mention buying furniture for every room. Worst investment ever...you’re the one paying your mortgage (not your tenant), there is zero cashflow and your price appreciation in 10 years barely covers the money you’re burning in the fireplace to live there. People don’t sit down and do the math properly, especially Canadians who only talk to each other about how much their house is worth and went up in price. And Canada itself is in big trouble economically. No technology, no innovation, no productivity. Oil and gas decimated, automotive decimated, aerospace decimated. The only legs Canada is standing on is the most overvalued real estate in the world, period. And when I say most overvalued real estate in the world, that includes apartment buildings with unlimited upkeep and deadbeat tenants selling for 3-4 CAP and empty commercial real estate with Mickey Mouse non investment grade tenants (and if you’re lucky one anchor tenant) with limited life left in all the leases going for under 5 CAP.
Canadians is in for a cold bucket of water over their head and reality will only set in when it slaps them in the face soon!
Canada’s central bank chairman is begging (openly begging like a baby!) Canadians to keep borrowing money and that he has our back because he knows the quicksand we’re on or else why would he openly plead Canadians on TV to keep borrowing and that everything will be okay?! You know what that means when a government mule tells you he has your back: that Canadians are on their own, nobody has your backs and you should prepare for the coming catastrophe.
The Chinese took over Canada like termites by using its real estate to funnel their cash out of China. This put Canadians dreams of owning a home at an unaffordable price and paying it off in 10-15 years near impossible. CHMC is warning Canadians openly of the coming 20% collapse (which means double 40%). Danger Danger Danger!!!
Great comment.
Then why does Owen Bigland who has been a real estate investor for 30 years always says buy and hold? He's become a multimillionaire in real estate and has over 30 rental properties. He's done something right! I don't get it. How is RE a bad investment then? It seems we are just missing out if we don't invest. Watch this video and tell me your thoughts. ruclips.net/video/LzbDGfY_pfo/видео.html
Gene Reynolds
Canadian real estate is astronomically overvalued right now and buyers are only betting on more plus value which is not the way to invest as that is pure gambling. As Steven Harper said, Canada is un-investable right now. So why invest in Canada at the top top top of the market. That’s why our central bank head is begging Canadians to keep borrowing money and he has our back because he knows the quicksand we’re on or else why would he openly beg Canadians on TV to keep borrowing and that everything will be okay?! You know what that means: that Canadians are on their own, nobody has your backs. And banks are handing out mortgages and credit like candy.
It’s time for the great Canadian crash of the real estate ponzi scheme. It happened in 89 when the GTA prices went down 40-50% in a matter of 2 years. And it will again soon. Very soon.
@@hymansahak181 I guess you are correct. But, boy, my friend who is a developer just built a rental building with 50 units and commercial at the bottom. I asked him why rentals and not just sell the units. He said he wants monthly recurring income which will last for 30-50 years and will pass it on to his kids. Everyone needs a place to live and this is how he will not have to worry about an income stream. His theory is 50 units at 2500 per month average = $ 125,000 per month ongoing minus operating/maint costs. Not bad. Then continue to build equity and do it again when he finds another hot property deal.
Sounds a bit extreme, what about just buying a reasonable place your family has no problem affording against your own stress tests. Buying can be a lot cheaper than renting, it certainly was some years ago when i bought as a committed renter. Good call too as its nearly tripped in value (mostly over 2.5 years a few years ago).
I agree that if you wrote down al the possible bad qualities of an investment vehicle housing has basically them all (expensive to hold, expensive to trade, liquid) but then again ZERO capital gains on primary residence....
What you've not taken into account though is the value in not having to put 100% cash into a home, a lender will loan 5x 20% down (or more via CMHC). Run the numbers on ones return on equity if they only put 35k down paid in whatever tiny amount they put in the first 5 or 10 years but the place appreciated 2.5x. Its a great return at 100% ownership but unbelievable looking only at equity. A smart person would pay as slowly as possibly even, pull out equity if they want. Sure you pay interest but its historically low 2.5% or whatever. meanwhile can buy pretty 'low' risk stocks nice diversified basket that will do well long term and pay you even 2-5% dividend, if you want to get into more risk for some can get 6-9% if you want to bet on some energy or mining or other things.
As for someone else paying ones mortgage, its really just a matter of perspective, you can pay the bank 'rent' or you can pay the owner. Have to do the individual math on what is the better deal on a case by case basis.
5% hike/inflation every time a realtor gets involved in a neighborhood. Should they not be paid an hour too?
They steal thousands of dollars for a couple of days of work. Nice gig.
Can't believe in this day and age of technology, we're still paying the Realtors upwards of 50000 dollars to sell our homes.
This is another reason of prices going up...
"A bull market in social unrest" - Totally agreed about the wealth inequality you just mentioned
feds doing it for the lols
Well it’s not easy to predict future but homes are so expensive in GTA that even 50 year amortization won’t help a new buyer .this is crazy
I always watch at least one commercial to show my support. Thanks for the great content!
One of the things that cannot be controlled by BofC, CMHC, CREA, etc., is market sentiment. If it looks like a bubble, walks like a bubble, and talks like a bubble - then it's a bubble. Once people start to think that buying a house may not be an investment that goes up 10% a year forever they will be reticent to buy. RE inventories are increasing, and I get emails daily on price reductions. I'm looking to buy a house for my daughter, and I have no intention of even looking at houses until next year. Once the CERB, and mortgage forbearance ends watch out. Many comments are made in the belief that mortgage debt is the only debt households have, and this couldn't be further from the truth. Government policy right now is like rewarding a badly behaved child.
I've also noticed listings on the west side and Shaunnessy are up and prices have dropped a bit. There are many condos in downtown for sale as well. Not sure what to do. I guess take your advice and wait another year. There are so many 2 bedrooms and 3 bedrooms available for rent as well in Vancouver but the rents are still high.
Good points Steve but there's some unknowns. First point is 'don't fight the Fed' applies here. As you've seen the governments will do 'anything' to keep this bubble going. How about central banks depositing $20,000 for every man woman and child? Sounds crazy but the shit thats going on now nothing would surprise me.In Canada they've told us no rate increases for 2 or 3 years this should underpin homes.How about Government insuring all mortgages? At the end of the day buying a property that's good value,lock in a great rate that s the way I'd do it if I were a buyer.
@@genereynolds3482 With the possibility of more air bnb properties coming on to the market as rentals I would sit tight for sure.
betterdwelling.com/canadian-real-estate-buyers-pay-steep-premiums-to-own-vs-rent/
If the Canadian real estate market was only accesible to Canadians, then yes I'd agree 100%.
The problem is the Canadian real estate market is available to (literally) the entire world; We're competing with the richest people from around the world, many of which don't care if they're paying a few hundred thousand more for a property - As long as they can get their cash out of their country and as long as the Canadian government obliges, they'll keep using our RE market to launder their money (all at the Canadian citizen's expense).
Mark my words, the Government of Canada will make it _easier_ for foreigners to buy properties in the near future, they'll tell us it'll "help" the economy, so the majority will just swallow that pill and not ask any questions.
I sincerely hope you're right though, but I won't be surprised if the market just keeps going up with no end in sight, as it has in my city (Montreal) over the last year.
@@anthonytenaglia203 As you say, there are a lot of unknowns. I think the only thing that we know for sure is that the population of Canada is one of the most indebted in the world. There are a lot of people out there hanging on by a thread, and I don't think the end of CERB, and mortgage forbearance will be a good thing. For too many years our economy has been driven by debt as opposed to wage increases. At the end of the day, it doesn't matter how low interest rates are if you can't make payments on all your debts. The B of C is also going to be in trouble as inflation starts to creep in which reducing people's ability to pay their debts. I would imagine that many cities will be increasing their property taxes to pay for all the shortfalls created by Covid-19. All in all it's a complete shit show that may end badly for a lot of people.
We totally understand and agree with everything you’ve just said. We have done so much reading on Central Banks etc etc so because of this we do understand what’s going on. It’s incredibly frustrating that we can’t talk to the average person about this as it’s just beyond their comprehension. So thanks to your speaking up about it (no one else will) the Central Bank and the Government are being kept some what accountable.
Let's keep rewarding irresponsible behaviour, what could possibly go wrong.
It's the Canadian way; Why save and plan ahead when you can just leech off the taxpayer?
Because in the end, we'll all have exactly the same amount of assets, the Government will make sure of it,
All money is fiat currency that is created with a push of a button anyway
Yep. Classic example of moral hazard and it’s only going to get worse.
It's irresponsible to work full time and rent from someone else. Buy your primary
it depends upon circumstances...sometime renting is more viable for some because of different reasons, such as more rights, and convenience if one has to move around in life....
The BoC is just delaying the inevitable. When it eventually blows it's going to be an epic show...
Yes I'm buying popcorn buy the barrel. It's a he'll of a show and the climax, I believe, is coming soon.
It's not just Canada it's almost every major economy on earth. Which tells you there is something more to it. There's a big plan in place.
Steve thanks for taking about this people need to know how it works. My question is if BOC buys all the mortgages to take the risk from the bank. What happens if defaults spike. Do they just print their way out of it?
@Norbert Kausen I get that inflation will run rampant with the money printing and assets will bubble but at what point does that longer work? When society revolts due to the wealth gap?
I would never buy Canadian property again, even if I won the lottery.
Useful info for Canadian housing and finance. Simply explained and relevant. Thank you
Bank of Canada purchased $550 million in Canadian mortgages by June 2019. As of June 2020, the Bank of Canada has purchases $7.95 BILLION in Canadian mortgages to prevent a collapse in real estate.....an increase of 1450%. Read it and weep! 😢😢😢
I agree from fundamentals perspective but we’ve been seeing Vancouver’s market defying fundamentals for years, so the correction may take many years to happen, during which people will continue benefiting (or suffering) from the over valued RE.
@@billferguson1368 You should know by now, that predictions, especially with the certainty you've displayed, are a fool's errand.
@@billferguson1368 Oh, you can accurately predict economic cycles, you must be 'living large' ! You've a rare gift.😉
@@billferguson1368 I'm not calling anyone in particular a fool, but predictions are often wrong. To be so sure of one's predictions could be interpreted as arrogant, foolish, or naive. The wise person admits they don't know what will happen in the future, especially the near future.
Bill Ferguson I haven’t seen one of your predictions come yet.
Not one.
Yet you speak like you have a clue about this game. You should be embarrassed.
Thanks for digging into this - unfortunately topics that need more explanation than an infographic tend to get neglected, while it's exactly these technical details that are threatening to our community (nay, at this scale, our society)
There will be lots of blood on the streets. Homes and lives lost. Nobody is coming to save them. Deals of a century will be had for those who have liquidity and credit available, while most have become insolvent. You get what you deserve eventually.
Asmodai2011 Suggesting that unwary everyday folk “deserve” the financial pain that’s perpetrated on them by central banks, the banking system at large, corrupt corporations & their political puppets, is a laugh. There’s a reason that people are kept ignorant about the financial system & how currency is created...
New subscriber here. Appreciating the content. I'm on the east coast of the country here in Halifax NS, turning 30 and going back to work after a 3 month temp-layoff. I'm shocked to see the amount of pent up demand for residential real estate here. I carry no consumer or student debt, have 6 months of an emergency fund which thankfully I didn't need to tap being on CEWS and have some physical silver, along with a self-directed RRSP and the "golden" (more like bronzed-finished/fools-gold) handcuffs of a DCPP. I also am a renter, looking to get into a home eventually after getting married in October. I'd like to think I'm somewhat financially literate, but I can't seem to shake the questions of 1) How are people doing it? Is it a race to get into housing before CMHC and banks tighten up their lending practices? Which to a younger person is akin to kicking the ladder down after others have gotten up. Leading to a melt up of everything. 2) If the house of cards falls to levels which CMHC themselves are saying it could (9-18%), what are these over-levered people going to do? It also seems like hardly anyone in my age group that I know of anyway are even talking about what's going on here. It feels like housing is becoming more like the stock market in that it's a graph reflecting rich peoples' feelings. So younger folks are just resigning themselves not realizing they are going to be footing the bill later on with none of the upside. Plus, looking on ViewPoint, the amount of commercial real estate listings seems to be ever-increasing at an alarming rate.
I can't be the only one wondering. It also can't be unique to the Maritimes. I'm just hoping people are realizing how over-levered they are and what it could mean if this goes belly up. I'm not holding out hope though!
You have a very good take on things,
personally i am wondering the same thing from where i am in Vancouver.
There is a lot of money coming into Vancouver from everywhere which is driving
demand ..however i am skeptical and also have been in construction for 30yrs .
All i can say to you is it is never upward forever ,it can change quickly...
i would wait till November.
Simon Eales I can only imagine the lunacy there! I can’t even process the sums of money flowing into real estate there and hardly anyone is batting an eye. I’m just continuing my best efforts to buy some metals, and keep a finger on the pulse of things. What’s truly fascinating though is the lack of people even talking about this. It reminds me of when 2008 was happening and afterwards people scratching their heads going “wha happened?!”. I’m skeptical too, it’s just how long can people go on being over-levered up as they are?
GDP = Net imports/exports + Foreign Investment + Government Stimulus + Innovation/Production
The government prints money that does two things: (1) it allows the BOC buy bonds to aid Government Stimulus, and (2) devalues the currency which helps net exports/imports. Unfortunately, devaluing the currency also erodes cash savings, but increases all hard assets (e.g. real estate) valued in the currency.
Looking to buy a single family home here in Montreal. Last 2 months have been nuts but slowing down a lot now. Seeing a few price drops recently.
Montreal real estate is booming. Look into Rosemont area.
lol i just gave an offer to a house in Brossard, 2.38M in L section, the houses here are booming i expect sell it in 2 years for 3m.
@@whosurdaddy1975 nice. To infinty and beyond
So what happens to the bonds if the mortgages foreclose? It sounds like a CDO or BTO as they're referred to now, what makes them different?
great explanation
keep it up we need more orator like you in Canada
you can ignore reality but you cannot ignore the consequences of reality
So our economy is going to be trash from this. Losses are as important as profits in the market, because otherwise the scarce resources cannot be reallocated to more productive uses.
Forget having any kind of robust productivity growth in the economy. Resources (capital, workers) need to be moved out of the RE industry and be employed in more productive areas. The market needs to act. These geniuses in the government are not letting this happen by manipulating mortgage rates. Yeah let's zombify this economy. All hail our central planners.
If I could double like your videos, never mind. Triple like your videos, I would all day. Thanks for everything you do, I've followed your videos and made many great decisions based on what I've learned. You help decipher markets and policies like no-one else.
Do we know how much bank lending has increased or changed since March of this year. If it has not actually increased then new money that is being printed is not making into the system. Government has bought bonds to allow banks to have more capital to lend but it may still be stuck in the banks. There was a great thread on twitter today about this albeit in the US.
do you think they will increase the % of taxable capital gains in the next 5-10 years?
Yeah Steve, your finally starting to talk about what you see without censorship.
Cash flow, cash flow, cash flow. Flip all the RE money you want from this pocket to that. Without revenue and profits from real economic activity, cash flow for households, corporate and governments (for them its taxes from households, corporates) is going to dry up.
Scary times.
First house i bought it was 11 1/4 got a little house saved paid it off and bought a piece of property use the equity of that house to build a new house with a small mortgage . number one rule never buy more than you can afford. 0% is not rewarding the savers and low interest rate are giving people a false sense of buying on speculation that house prices will always go up. maybe on water lots.
Great video Steve, thanks.
Everytime I think the conditions in the economy are conducive to deflation... central banks and governments meddle in the market- only bringing prices even further up.
HELP !!! is it a good time to invest in a pre construction condo that would get ready in 3 years from now? ( from toronto) with 10% down
No
Yes, 100%. Just get in the market. Listen to OWEN BIG LAND. He has 30 investment properties and is living life. Rental Income is KING. Have 2-4 properties and you will never have to work or worry about money again. Good for retirement years.
Eventually the lack of economic growth will lead to a severe drop in the price of housing in most markets in both Canada and my US of A. Our Federal Reserve as well as you Bank of Canada will continue to print and buy bonds as they perceive a lack of no other options in their minds. I guess I'm old school in my belief that if possible try and put the fire out before it becomes so large that only mother nature herself will succeed in that effort. Its my belief that we are strong enough to endure a 2 year downturn and then emerge bigger and stronger than before. My feelings are that the powers that be don't understand the most crucial element that holds us together is TRUST in the system. In the end as usual the piper will be paid.
Great points. As we know the powers that be would rather wait until the house is almost burnt to the ground before they try to put the fire out.
Is this a good time to buy bank stocks? Since the government is supporting the banks.
“Hope that brought some value and anxiety to you”
*education
Thank you for the truth, it takes integrity to tell it without varnish.
Postponing a LARGER DEPRESSION LATER.
I agree with your analysis. The question is how long the govt will be able to prop up the housing market. Due to Covid, immigration has stalled until a vaccine becomes widely available and historically immigration was a big driver of increasing house prices. Tourism is gone and Airbnb investments will be defaulting. Commercial real estate is suffering. Cerb will be ending and replaced by unemployment insurance and less generous programs. The real economy continues to suffer and when 15% of all Canadian mortgages are in deferral the question is how long folks will be allowed to postpone payments. Banks cannot forever be denied payment unless the bank of Canada decides to pay these mortgages, which seems unlikely. But ultimately what happens in the real economy should have an impact: people without jobs are unlikely to buy homes. Once starter homes are no longer being purchased, it could have a serious ripple effect in the rest of the housing market. Unlikely to occur before 2021.
Another great update.
I am expecting banks to layoff a large percentage of staff permanently which causes a negative feedback loop for house prices. Also other employers, as they are unproductive zombie companies.
In 2008 TD Bank laid off 15k+ permanent employees and they offered to hire them back at lower salary, reduced benefits/vacation. Mean while after 2008 many jobs in banks and corporations have been filled with lower wage labor from India. Most teams in Canadian banks are now all from India or other countries. Note immigration is good, but too much of anything can be bad.
and, like many things innovation has completely change how these old businesses operate. I dont want to have to go into my bank and do anything, i had to for the first time in years, for some technicality, they are lovely and friendly but it takes forever to do anything! Some 50 year old guy was in there paying all his bills like it was 1980. I kinda chuckled when he was paying all the cell phone bills. buddy get the app!
That labor didn’t go to India. It went to Brampton. 😂😂😂
TD Bank did not lay off 15K employees on 2008.
The Financial Crisis started in October 2008, there were no lay offs until 2009, there was never 15K lay offs at a single Bank in Canada.
Their policies are absolutely vile... If only people understood how these policies impact the working class dream...
Bubbles! Bubbles everywhere! Keep that mania going until it all blows up in our faces via extreme social unrest. I’ll likely see it in my lifetime sometime around when beef is $50/lb and bread is $30/loaf lol. Good times for the asset-heavy oligarchs. Awful times for savers. Buy real assets! Fantastic video as always, Steve. Thanks!
tobacco road
This is what happens when you make a house where people live...into an 'asset'... someone somewhere will show you a way to make 'money' out of it.
How does what CMHC is doing help affordability? Aren't they just making it harder for people actually trying to buy homes to live in, while increasing buying opportunities for rich investors/speculators looking to put their money into assets? Maybe it all would have worked 10 years ago, but with the amount of wealth inequality there is now, what they are doing just further increases the wealth gap by locking out poorer people. I doubt you'll see significant price drops since the supply will just be picked up by investors trying to rent out properties to cash-poor Canadians who can't afford a home. And, without interest rate increases, it's just going to be a buying spree for people who have more money than they know what to do with and nowhere else to put it. They should have targeted speculation, but instead Siddall is pushing supply side economics as the solution and saying people should be happy to rent for life.
Great content. Thank you
I have to question your numbers. The real estate number lag what is really going on but 2 months. Real estate prices are down over 7% in Vancouver. Supply and demand? Well in Toronto air bnb is selling can can increase the housing availability by 30%.. Yes banks are holding interest rates low, but property taxes may go up 17% in fact that is a pretty solid number for mississauga.. The full extent of the covid-19 hasn't even hit yet.. the housing market is in real danger
I hope you prosper like I will during the next economic crash.
Owning a home is probably the riskiest investment to make in Canada at this point. It's probably much safer to invest in residential REITs, Gold, and stocks and just diversify and keep renting until things settle down.
Congrats if you bought and held stocks back when his video came out
Basically the toilet is long overdue for a flush, and the BoC is bolting rings on to the bowl and is preparing to take out the ceiling so it can keep going higher.
So should I sell my rental property and buy gold?
No, but if you want to sell then sell to me, where u at?
Real Estate in over valued markets will crash and fail. The market lost its perception of value and got greedy. The then newly created stimulus package from 2008 found its way to undervalued markets like Canada. We benefited from the inflation. But it created distortions in the market and a big fat bubble that now will burst. Domestic income alone could never have propped up valuations to absurd amounts. The economic Hurricane is now here and we are about to witness which homes had good financial foundations.
Not sure your analysis is spot on on the CMB program...those are secondary market purchases..I agree it helps spreads stay in but that $8 billion is only about 3% of the entire CMB program that is in existence...the IMPP program would be a much larger influence I believe
@@saretsky fair point however still does not detract from the fact that they have only bought about 3.5% CMBs in the market...IMPP or BoC is the same thing...both BoC and CMHC consolidate up to the Consolidated Revenue FUnd...whether it is CMHC through IMPP or BoC through another program it ends up at the same place
Excellent Video! I wished the main stream media would pick this up. The average Joe doesn't know nor understand.
The day the average Joe acts and understands is the day you move to the opposite side of the equation. NEVER FOLLOW THE HERD....it will DESTROY your wealth. Unfortunate but true.
The MSM is a large part of the problem .
Will this cause wage inflation? I notice prices of certain items and services have increased greatly in the past few years. Now with Gov intervention, i feel that will continue.
What's your take on CMHCs 9-18% Vancouver price decline prediction? Will that come to roost by next year?
No
@@baseline6786 wasn't asking you pal
that wasn't their only 'prediction', that was just one of the many possible scenarios they were looking at, like a good, worse and terrible model to see what each would mean. Sounds like most have fully backed away from the worst case once we had a bit more idea of things opening up.
Not as long as the Liberals are in power to swamp Canadian cities with invasive foreigners
@@ytyt3922 oh bullshit, it was Harper and his conservatives that massively expanded the loophole that was the temp foreign workers system to import unskilled labour for this business buddies meanwhile allowing the very wealthy to buy their way in with a temp 1m investment given back after just 4 years. At the same time very slightly slower the positive immigration from our fairly good points system. You see Canada needs to import people as we don't have enough ourselves. Without immigration or massively increases to our birth date our economy will collapse under the strain of our otherwise aging population, but of course we knows the cons want every excuse to destroy our social benefits.
Please have an episode focused on Alberta. Thank you
You have to understand how many industries depend on the well-being of real estate market. The fact is property tax is not only a significant income source for the government but also keeping the value of the entire real estate industry at par or better is important for all of the by product industries stemming from the real estate market. Think about mortgage lenders, home inspectors, home improvement stores, lawyers, realtors home renovation contractors, utilities companies and home insurance companies, and income for all these people who are working in these industries that are paying their own income taxes and trying to buy their own property. As a government, you cannot afford to devalue the real estate industry and cause all these sub industries to collapse which ultimately is just hurt the government and the tax revenue.
true, how do we solve the problem of young people being able to buy homes? Everyone should be able to buy a home otherwise we have discrimination on the highest level...no one talks about this
Whats going to happen to my savings? I'm trying to save money so I can buy a house at a reasonable price (I have a friend who just took out a 30 year mortgage, which is not my intention to follow suit). But will my savings be inflated away to protect/save the housing market? Is it better to buy a house now and ride the central bank / government protection train or is that a false idea? If i buy a place for $500,000 now and inflation explodes ill be able to pay it off in one pay check (theoretically).
Yes theoretically you could.
I'm in the same boat as you. I'm debating just buying since gov't is intent on not letting housing market crash. Seems they'll do everything in their power to stop it. While investment markets are fairly unpredictable, so have liquid cash in your account is a bad idea due to inflation and the safest investment seems to be the housing market. Great..
i mean losing 1-1.5% per year is really nothing to lose sleep on all though why on earth would you be saving into cash, at least a savings account and get a few pennies interest, save mutual funds. or just buy large cap US growth funds.... my main pension account did 24% last year sure it sent down with covid but its back up for the year. If you are saving in cash you are losing out big time.
Why would you NOT get a 30 year mortgage, nothing wrong with it. Rates are are historically lows, means borrowing has never been so cheap. While rates stay low it is better financially to pay as little as you can, and just invest the cash you would have put into doubling your payment or whatever into better returns in the markets. Yes some minor risk but really meh. Personally did that with a condo 7 yrs ago. i couldn have pumped all my saving into the place and just been paying it off now. but ive made well over 100k in gains on just the cash i didn't put in.
Basically if the lenders are giving me nearly free money im absolutely going to take it as long as possible. When rates go higher 5 or 6 % then i'll think about just paying off my places in cash if i dont think i can make more gain in other investments.
Gold
Inflation makes products more expensive, your wage will stay the same. Saving money with get you only so far. You need to make strategic investments in assets that are not overvalued. Gold, silver, crypto otherwise you will be left in the bottom. There will only be two classes in the future... the wealthy and the poor.
How do you reckon all of this “liquidity”, mostly attributable to the central bank, flow into and prop up the real estate market? seems like it’s more relevant to the stock market and general businesses (to stay afloat and not actually prosper). I still think that supply and demand in the RE market have at least some impact on how things will play out
You can’t have it both ways. Encourage borrowing while telling Canadians to not take on more debt. As much as homeowners don’t want to lose equity, at some point that needs to happen or the economy and currency will get destroyed.
right but its short term vs. long term. Equity destroyed now, vs. probably in the future economy and currency destroyed. Politics is rather short term focused. Also currency going down in value isnt always a bad thing, its good for some bad for others (exporters vs. importers).
@@billferguson1368 its not faux equity just because you personally dont believe in it or cry it is not fair. Regardless of the why and how it remains a fact of reality. People seem perfectly happy to part ways with their money in a fair exchange. maybe it shouldn't have but it has. Personally i am glad i bought, rents went from 1100 for my place to 2k but since i bought i made 300k in paper capital gains :)
@@billferguson1368 meh wishful thinking. Heard that since before i was born about Vancouver. Not to say there haven't big big dips and people lose houses but for the majority its just hold. Agree that deciding when to sell is harder than deciding what to buy for stocks and when to buy it. Which is just why most people are better off not thinking too hard, buying good blue chip stocks you can hold for decades. or houses....
I know you think realestate is going to crash big but its just not. buy ya a beer if it does though :)
@@billferguson1368 right but people have been saying that since the 70's. And while there certainly has been big dips its done well. Sure that doesn't mean it will continue to of course no one can predict the future. Personally i think there is way too many people and power tied up with wanting housing not to crash and i'll never ever bet against that. I dont think there is any value in Tesla stock at 1000 let alone 1500 but no way am i crazy enough to short it either! I suspect more realistically housing just will take a long pause 10-15 years where it really doesn't do a whole lot. Millennial and others waiting for some 40+% crash are never going to get in, Babyboomers will continue to fuel the fire giving out big down payments to their kids to allow them to buy. For me its less concerning about the actual sales price far more concerning how the hell anyone is supposed to save enough for a down payment. The payments are not the problem its getting 100-150k to even get those payments...
anyone else notice a massive shift in developers suddenly after 40 or 50 years only developing and selling a great many are now developing solid portfolios of 100% rentals to keep they juicy cash flowing should they no longer be building nearly as much. I though this development at 100% capacity would have run out of steam years ago but it seems it still has solid momentum at least for now...
@@billferguson1368 no seriously absolutely from the 70's. My parents moved out from back east lots of people saying oh hey should hold off on buying. Glad they didn't. it wasn't all great though also had the 80's interest rates people losing their houses or nearly, 90's recession, 2000s dot com crash, 2008 and all the rest. I am not suggesting buying a bunch of places now what i am suggesting is the sky isn't falling and if you bought any time before maybe the last year or so everything is probably fine. Only the truely crazy leveraged and maybe Air bnb folk if they cant convert to leases will have issues and good they should, they screwed up the market anyways. The world is not over people...
The pumping of liquidity can only work for so long. Unless the banks plan on giving NINJA loans (pipe dreams) I see big pressure coming from those that already bought houses and can no longer afford it. Those sellers are in the market now (with forbearance), come 3 months after expiration we will see the blood in the streets.
Google businesses for sale, you will see job losses to come in a few months
Kijiji business for sale
Fb marketplace business for sale
seniors got a ONE TIME $300 mini CERB for the month of July....how's that for equality?
and anyone on federal disability CPP like many on $550/mo got nothing because it was not a municipal disability...
But Trudeau and his friends got how much lately .
Montreal real estate is booming
At some point liquidity has to flow to the consumer for this “economic’ policy to continue. At that point we might as well be China as we will be fully in a centrally planned economy.
Aren't we China already? I thought we'd been taken over a long time ago - adding exponentially to the unsustainable rise in real estate prices in B.C. to ludicrous levels.
Great video.... I must admit I am 100% wrong about the housing market... thought it was going to come crashing down... another unusual thing is the banks don't seem to have any fear at all. Even at the bank I'm working at, they don't seem to fear the economy at all. I must be missing something... The MBS market is hot again because rates are so low, alot of institutional clients are hungry for yield and thus are reaching out more on the risk spectrum.
The banks don't fear the economy yet because they have been packaging non-insured mortgages to sell to the government. The insured mortgages mean that they will not lose a penny if a homeowner defaults. Win-win for the banks. However, they might start to feel differently when people start to default on HELOCs, car loans, credit cards, etc.
I talked to someone quite high up in a Canadian bank. U are correct, They don’t believe there will be a housing correction.
In other news if anyone was listening to the question ' where do you park your money?' Gold and bitcoin have been doing very well. Dont forget its all taxable. Don't forget to dollar cost average in and dollar cost average out.
with university not being open this year , ubc real estate is going to take a hit ... will that spill over into the rest of vancouver
@@saretsky Good! Once upon a time you could rent a whole basement with what it costs to rent A ROOM in a basement now.
Hey steve, is it true that the city of vancouver is bankrupt because of an equity pull back in their real estate investments?
no.... They are rather regulated, they cant even run a loss on their budget. They just wont sell the real estate they own much of.... its a non issue just like if my house or stocks go up or down as long as they eventually go up what do i care...
I just heard from a multi millionaire reliable source, so wouldn't surprise me. Maybe Steve doesn't want to comment or rock the boat? It's ok though...
Buy gold? Even at all time highs?
silver
Possibly off topic, but I'm already seeing signs of major devaluation of our currency.
Everything from small niche collectibles, to luxury watches, to classic cars has already gone up considerably over the last year, with no real decrease in available supply or increase in demand.
I think real estate will keep going up, not because they'll have _real_ appreciation but because our dollar is devaluing at a high rate - Properties will artificially increase in cost because the Canadian "peso" will be worth so little.
historically collectable in general do not do well in times of economical depression...
"Catch 22" I was thinking the same thing
if it isn't apparent yet, it will be - central banks need to be abolished
Many cities have programs to support young entrepreneurs already.
Let me put it this way, in Montreal rental properties up 15% per year during the last 5 years, if you want to buy a 2m rental building your minimum down pay is about 450k, in less than 3 years you will make your investment 100% back or more depends on the area. BTW house empty rate in Montreal is 0.015% people literally begging for a place to live, i sold my condo in Beijing China few years ago got 1.5m and I bought 3 rental buildings roughly 2m each, so go figure.
wild times. not sustainable. house prices cant keep going up like they are. There will come a point where no one is a home owner and everyone is renting. I said it before, in the future, if you own a house you will be looked at as wealthy.
You know Steve sometimes I feel I am being play, from outside force that are out of control.
Their scared of what if ?
I feel it in my gut.
Are we all going to be up in that hurricane in the end?
Canada's Financial System.... is in fact now no more than Canada's Real Estate Market.
For "if" the Real Estate market were to collapse... or sustain a substantial de-valuation/default occurrence.... so to would the Financial System stresses manifest as liquidity detractions that cripple GDP in the wider economy.
Good video. Please work on cutting out the 'aaaamm's
Great analysis, yes please do an explainer video.
Smart cookie Steve is
Some truth bombs. Fully agree on what you have said.
Too many people are better off laid off or not working. That is causing buble economy, which is now a bigger problem than the pandemic itself.
IMO individuals with Families or jobs should have their own property. Financially: a small plot of land should only cost 15 years of your territorial median income (30k x 15 is 450k for a plot) . Singles and elderly can live in Apartments. A little sacrifice here and there and all will be fine. Government and real estate firms and mortgage banks all benefit when prices are kept high, there are lot of people that benefit from these high prices. Oh and Local persons, born in the territory, have first bid on property purchase. Yup simple as that , it's just a call of all people to understand simply the benefits in the long run. Yeah selfless isn't it.
Facts
Thanks for my weekly dose of economic education. Very sobering but rings very true in my ears. I enjoy watching Hedgeye and Keith M. has the same opinion of these policies. They favour the wealthy and continue to drive the wealth gap. I'm not a fan of these policies even as a person who is long RE and other financial assets. Thank you sir.
Hi Steve! I’m not sure it’s such a moral dilemma. The wealth gap will be corrected through voting for higher property taxes and wealth taxes which has already started. If it is perceived that the system is unfair people will vote for politicians who redistribute. No one seems to mind the “school tax” in Vancouver except people with 3 million dollar homes, and they will get out voted. Hate the game, not the player! I call this the “Robin Hood effect”, and you can use that in your videos. Ha! Seriously, thanks for the great info!
@@saretsky I actually think there won't be. I have a suspicion the boomers and enough of gen X will be able to hold off taxes on asset owners for another couple of elections and I think the middle class, that is left, is going to see massive income tax increases. As boomers start hitting the healthcare system look the F out as that number is going to be massive and will have incredible costs. Income tax I see going up 15-25% in the next 10 years and I think you'll start to see violent social unrest.
We haven't hit the disruptive stage of this Depression yet. I believe we will disruptions next year and it looks like it might be a something like a credit freeze. If that does happen prices will plummet. Time will tell but the criminal behavior can't go on for ever.
Chart by Stephanie Hues?? I did not find helpful, is it in Billions of Dollar?, what about stocks?, what is chart indicating other than money in real estate going up, would like more context and more information on the chart. Also on other Chart was it 8 Trillion I cannot remember, Also if Feds buy bank mortgages then what does this mean, i think it shows Government just printing money but also owning assets. So in further recessions Canada takes more loses and banks etc stay a float. Thanks, otherwise a reasonably good video.
Bang on Steve.
Liquidity drives, not real economics. It’s exactly what has had intelligent people on the sidelines for the last 7 years. All the time arguing about overvaluations, PE ratios blah blah blah blah!!
If they don’t see it at this point, maybe they never will.
Bond markets around the world are screwed. CBs have been the only purchaser in many countries.
Do not own bonds people. Shift to private equity in blue chip stocks.
Take that liquidity away from banks and they stop lending, or rates rise dramatically. Both options are not acceptable.
Affordable will come, but it will be through densification of Maple Ridge, Mission, Chilliwack and to a degree Langley. West of the sport Mann, if not already out of reach will be very soon.
Great content, as always, thanks Steve.
Thanks for the video Steve, insightful and practical as always. Like other comments have noted there will be a comeuppance; yes, government income supports may have helped keep retail ticking along but exports are depressed and sooner or later will have wider effects.
Love your videos. Invest in a microphone.
liquidity drives markets?
really? if there is less money floating around then there is less money to eventually bid-up. We can look at other markets to show this. The reality is if there is money to be made in the economy, people will come. If there is no money to be made, people will leave to where the money is which effects the housing market. Throw in debt people are struggling with and you have the inevitable crash that will come.We do not have the wealth and economy to keep these prices inflated for ever. It is too early yet.... gov and the system are holding tooth and nail to keep things as they are.....but it must correct significantly.
PoP!
Wait until the end of benefits
As usual you explained the real truth of the housing market in simple terms. A person like you should get involved with politics. That’s how we could see the changes
Thank you .
We don't need someone with his smarts working for The Club.
I'm a fan of your content I really love watching them all, it's something I look forward every time. I hope we can connect and work together!
Have you considered hiring a video editor?
So basically, if the RE market is too big to fail, which it seems to be, then people should buy. Seems like a safe investment given that the government and central bank are propping it up.
Insightful video as always Steve.
In my opinion....take care of yourself.....how? Raise your own food, very low debt , if you can work for yourself. Just a thought, old school. Corporate North America sold us out a few decades ago, we are now paying the price. Middle class is disappearing...etc. Invest in yourself.