For newbies, be aware that this is a grossly oversimplified scenario. For one thing, you can't get a mortgage on an investment property without at least 25% down payment. Two, it's easy to see comps for house purchase prices, but it takes a lot of research to understand the comps on rent prices. The trick is to find a place where renting is more expensive than buying, but those places are less common because of this very type of scenario. Three, you have to remember that rent number he's using is supposed to be net income, not gross. So you have to think about costs for taxes, insurance, maintenance and vacancy when you're researching investments. All that said, real estate investing is a good tool for wealth accumulation. But it isn't foolproof.
Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
Due to my demanding job, I lack the time to thoroughly assess my investments and analyze individual stocks. Consequently, for the past seven years, I have enlisted the services of a fiduciary who actively manages my portfolio to adapt to the current market conditions. This strategy has allowed me to navigate the financial landscape successfully, making informed decisions on when to buy and sell. Perhaps you should consider a similar approach.
Recently, I have been exploring the possibility of consulting with advisors. As a mature individual, I am in need of guidance, but I am curious to know how truly impactful their services can be?
There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’ Melissa Terri Swayne” for about five aiyears now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
Here in Ottawa, every long time resident owns on average 3 properties (lots of them purchased during Covid). Majority of them are running variable rate 6% + mortgages. All are in negative cash flow.. Now we hear about big job cuts in IT and government sector. Definitely we have not reached the bottom of this RE crisis yet..
I fail to see how I should care about other people's bad financial decisions. There might be some collateral damage to me but one man's loss is another's opportunity. You said it yourself ... 1.)bought during silly and unprecedented Covid era. 2.)might own 3 properties, possibly in same geographic location, so less diversity 3,)6% carry, which isn't outrageous by historical standards but was the number used to calculate ROI which is now producing negative cash flow 4.) As for job losses .. reality of life in Ottawa if history is any indication. Were these investments made by one or two job families? Unlikely both would lose their job. All of these were risks that should have been taken into consideration. Those that can take advantage of the situation and weather the storm will end up on the "right" side. One final point. SFH are one of most volatile RE choices. In tough times, fewer people are willing to take on renting a SFH compared to condos or purpose built rental units. People who made money with SFH usually made it thru capital gains, and a good portion attributable to the tax break afforded such transactions.
Canadian household debt just reached $ 3 trillion. Lumber is down $1300 from its peak and the next 2.5 years have 90% of mortgages up for renewal. Buyers need to put their hands in their pockets and watch the fireworks. If you don't sit tight you're going to be part of the most over leveraged real estate bubble in the world.
how on earth have you worked out the next 2.5 years we have 90% of all mortgages up for renewal? the vast majority of people have 5 year fixed or variable, thus it would stand to reason close to 20% are up any given time less however sells or refinances mid term. More likely the last 30-35% or so who have been at their 5 year fixed and 5 year variable on fixed payments at the historical low payments are coming up for renewal.
@@RainCity3rd30-35% of the 2.5% mortgages coming for renewal is massive. As an example I have a work friend who’s mortgage payment has gone from $1500 per month to $2800 per month. At 30-35% of mortgage renewals coming due with the risk of rates staying high we will see many foreclosures, many bankruptcies. The media lies about a strong economy so all the normies won’t see the rug pull coming. This economic collapse will be epic, biggest in the history of mankind. My advice, get out of debt…..pay off your mortgage….brace for impact.
Speculators leaving the market? It's about f@ck!ng time! Since there's been no government leadership to de-commoditize residential real estate, lots of folks are going to go bust. Thinking that you build GDP per capita through investment in this "commodity" is nonsense. You partly proved it in the video. If you'd gone back to 2015, it'd reveal this metric has stagnated in Canada as compared to the US - $55,000 USD vs.$80,000 USD. Bubble finally going "bang".
Once the Chinese money left the real estate market this will blow up the entire market , its the money laundered that keeps this housing prices go up and afloat
When I said that would happen, over a year ago, the RE bumpers considered it gloom and doom to their taste 😂 Sorry to inform, but this is just the beginning 👌
This has all the hallmarks of 1973-87 all over again. The only things that went to the moon were inflation, interest rates and unemployment. But life went on. People still bought homes, lost money in the stock market and found jobs. It was tough, and a real eye-opener for those of us who were just starting out and never experienced such a lifestyle before. There will be much opportunity in the future.
@@segasys1339 they will if they want future growth. Even they know high house prices will cannibalize and stagnate the economy leading to lower productivity. Also at some point it will become politically profitable to allow a correction as gen z + millenials are now the biggest segment of the population and are going to be the life of the economy. Good luck to you though.
And sentiment can change on a dime. As soon as all the sheep realize that lower rates won't save em, you will see a rush to the exit. People will start front running each other and they will sell before prices go lower and lower. Pack mentality, most people all think the same. House prices will have to adjust to the higher rates, and sellers will actually have to compete in a saturated market with a lack of qualified buyers. Most people haven't realized this yet.
if BoC (Lord Trudy) cut rates, say good bye to the Canadian buck being a sh#tty 0.73 to the USD. It will be a 0.50 to 0.65 to the USD. Your standard of living will be precipitously lower and your inflation (need to buy those US priced fruits and vegetables) will be much worse than it is now.
Welcome to the great Canadian dumpster fire. If you have ever flown planes which I do you learn about what happens during a stall. Everything is great speed starts to slow no biggie. You don’t even feel it. Once the plane gets to slow horns start going off and the plane violently shakes and falls out of the sky. The most terrifying experience you will ever have the privilege of not going through. Canada is now approaching stall speed. Who knew that 10-15x income levels wasn’t sustainable. The reason that 3-5x income to price levels is the standard is because it’s sustainable!! People in the past started to freak out at 5x. So they should. We are so far absurd it’s comical. All things that go up must come down.
eh i mean sure but people have been saying Vancouver [rices were not sustainable for 30 or 40 years. Prices were crazy when my parents moved to Vancouver in '79. Sold a house in ottawa for 55k bought a real fixer upper in Vancouver for 110k. I thought it was crazy prices in 2012. Glad i bought the place i was renting off the landlord. Price not going back to those price unless the world as we knows it ends. That said, i certainly wouldn't be buying rental units now! Lot of head winds against real estate these days and only going to be more added. Odds are the gains we've seen over the last decade are not going to the same over the next decade. My bet's on equities. But id not be rushing out to sell ones primary residence if you already own though.
To me, the funniest shit I’ve heard the last couple years is cutting rates is bullish. You do realize when rates get cut it means the economy is doing horribly. They’ll cut when it’s too late. You really think stocks and real estate is going to be bull markets ? You’d be dumb thinking that. lol. “I wanna wait cause rates cut means my house will skyrocket in value” I’m here now telling you dream on. No ones going to be able to qualify for loans when they don’t have a job. Also, businesses will be doing poorly during a recession so how would cutting rates be bullish for stocks? Use common sense people I been saying this for 18 months now. Rate cuts is a bad sign lol. Also, rate cuts will Only happen end of 2025 that’s another thing I been saying for mad long now. This shit all takes forever to play out. You’re better off ignoring all the head lines and just living your life cause they get you all wild up for nothing. That entire talk about rate cuts from the BOC is just to keep Canadians hanging in there for longer cause they know they CANT lower the rates but imagine coming out saying “we can’t lower rates cause inflation is still bad”. That would really add steriods to the recession fears and the feds are always trying to keep the fear at bay. It’s all a scam. I’ll say it again we all live in a clown town. Imagine spending your life reading the news and all the bullshit investing daily trying to time markets day trading etc. no wonder those people poll themselves. It’s complete garbage lmao . Pure waste of time .
RE will often go up when there are people working, economy is good, migration moving in to have good jobs and are able to buy. If the economy sucks and rates get cut, people move away (early 90s in VanCity). People move , less demand for homes, prices fall.
I agree with the clown town but unlike Canadian real estate, Canadian stocks have been in the toilet for a couple years now at least. Export driven Canadian sectors such as energy and mining should do well once our rates drop and subsequently our dollar crashes. It makes more sense to look at international real estate, possibly having a usd asset hedge against a falling CAD
In a typical cycle the bottom of the housing market isn't until a full year, if not two years AFTER the first rate cut. I'm old, I've seen a few cycles. Lol Lots of people are going to get their recession cherry popped in the next 3 to 5 years.
Also why government is messing with capital gains, taxes etc.. because guess who is loosing a massive amount of tax revenue from these rate hikes? You got it, investors now write off so much on interest expenses and rising property tax, inflated repairs, maintenance fees. Government is essentially loosing all that tax revenue from rental incomes. Most of the payment is going to interest now especially with these variable rate fixed payment mortgages.
my hope in all of this shake out is that hard working people can afford home of their own, whatever form that takes, and that there is an end to all of the speculation and greed that comes from gobbling up everything on the market for profit. Shelter....a basic human need. This meltdown has been a long time coming
The comment at the end about those 'people who spend $3MM for a house in Vancouver' seems off to me as the cost of the money, the interest rate, matters a lot to me. Not all rich people have enough cash to go that route. Last house I did was 2.75% 30year fixed and I got a 25 basis point reduction by giving the bank $1MM to hold for a bit. The difference between 3% and 2.75% can actually matter. At 4.125% I'm not pushing ahead as I want to. At 5% or 6% I'm not a buyer. Thanks for the video. First time I saw you anywhere.
During COVID, the Alcohol and Gaming Commission of Ontario had a lot less restaurant work to do and started looking a bit closed at casinos. The end effect was 90% of the top 300 players getting banned because the would not show income source. Not sure if that happened yet in Van, but its part of the story too.
I agree the rental market it’s at the absolute peak ..no one has 3800 for a small two bedroom.. There isn’t enough people to afford that ..except the rich students..and now they can’t come for fake university degrees! You comments about it are spot on !!
I thank the real estate investors for their service. Currently I am renting a brand new townhouse in Vancouver. It would cost 40% more to own. The landlord is giving me a good subsidy. My rent is less than even the interest portion of the mortgage 😂
I wonder if we’ll finally see pressure on prices to the downside then. Thus far here in southern Ontario single family detached or rural small lot like 0.5 - 1 acre (what I’ve been looking to move to) is basically where it was at the peak just with massively higher interest rates. I would think Toronto condos (haven’t watched your other pod in a few weeks with the housing market updates for the GTA) are under a ton of pressure to the downside. As you’ve noted, it’s a massive ship thus it takes a long time for these things to finally turn around in the other direction.
Best comments at the end. Condo market full of investors has little overlap with single family houses. That said, people buying 2 or more million dollar single family houses with a million or more equity tied up even if they dont go down in price but just sit stagnant for say 8-10 years thats a huge loss in time value.
Very good point. My comments elsewhere in this post were very similar. The loss of earning power of that money that is tied up is very similar as just realizing your loss and moving on....with your tail between your legs.
Uh, condos are a ladder into SFH, when people can't sell their condo, they can't buy a SFH. If condos drop 300k in value, that's 300k less for a person to spend on a house. Little overlap, lol. No one buys a 2 million dollar house without selling a condo first, generally.
@@jadejackson1509 there is still little overlap. Sfh prices can and do move quite independently from condos. Even the price difference between 1 and 2 bedrooms can and has grown and shrunk significantly. Similarly the price difference between old and new condo units. There are times in the recent past sfh have been going up while condos flat or down.
@@RainCity3rd I think condos move first. If you think sfh are going up over the next 2 years you are in for some trouble. Price adjusted with the MLS Home Price index composite (a thing that basically accounts for a house having different value due to size and location) sfh are down 1% yoy in April. Add 4% inflation to that. SFH is down, and inventory is way up. And it's April.
@@jadejackson1509 new homes are still selling in greater vancouver...one just sold for 3.550 in Coquitlam. Prices are still higher than they were 2-6 years ago
Thanks for sharing. It can be confusing to understand all the market dynamics. As a renter, I find this comforting that the market might moderate over the next year or two. And gives some hope to us if we think about buying a condo in the next few years.
we're at low interest rates NOW. historic is 7 percent. folks hoping for rescue of yet lower rates - dream on. If they do drop, they'll have to be jacked up again as our productivity is terrible and currency will fall, like the yoyo rates and inflation of the 70s and 80s.
Now is a great opportunity to buy. I think you're wrong about the Capital Gains. Anecdotally, I know about 6 investors that are listing their properties and trying to undercut other sellers in their condo towers to get their placed sold before the Capital Gains tax kicks in. These people are looking at profits north of $250K as they bought over 5 yrs ago. Once the tax kicks in, there won't be this level of competition to sell.
I've seen this before... The 1st to go is the boat.. yes that $100,000 boat and trailer. Holidays disappear. and that 2nd home (part of the mini real estate baron) has to sell.
Cultus lake cabins aren’t all rented out and usually they are at this time a year. Airbnbs are $500 plus a night for ‘cozy rustic’ two bedroom cottages. (Not a chalet 😂😂) they even ask you to wash the towels and linens before you leave or they will dock your deposit
Maybe a slight dip coming on condos when they are 2.5 to 3x over-priced in VanCity. Numbers need to change MASSIVE to make any sense for a person who makes 100k per year (ie top 10% income earner)
It's interesting that consumers are willing to pay $30-40k more for a staged home vs an unstaged rental occupied home. Buyers dont have the forsight to what a staged home would actually look following purchasing and occupying. IMO, it's a self-inflicted wound for buyers.
It's a bubble. Condo investors will be smoked at higher for longer rates (4%+) and that upward pressure on inventory/downward on price will drag down the rest of the RE market as people start to realise the longer they wait the cheaper RE will be become. It's always been about the cycle.
Sellers counting on interest rate cuts saving them .. is a reflection of what the federal gov is also doing: demanding changes to mortgage terms (from the banks) so that sellers can wait it out until interest rates are cut. Sellers might be forgiven - the fed gov should not! It should be voted out!
I was just looking at how many vacant land listings there are in Ontario lol. Looks like quite a few other propertiea in rural/ waterfront areas have as well
Would you do a video on your opinion on Calgary ? Prices here just keep going up while other parts of the country is flat or going down. For me an investor since 2009 living in Calgary I don’t want to pay 400-500k for your basic detached landed home. If prices don’t come down here I might have to buy rentals in red deer or even out of province. But yeah would love to see a video on your opinion on Calgary or even Alberta.
More inventory is a good sign we are going in the right direction. Rates need to stay flat so we don't loose the momentum. Bottom line is that some will suffer but its the majority to go forward. The banks are ripping us fn off and we need some type of bank reform.
Steve.....retired in 2012, licensed in 1988. Your narrative is brutally honest, I commend you for that honesty. Interesting times, great channel mate, all the best. Stay safe❤
The oceans and mountains are nice, plus it sits right beside one of the top food producing regions in the world which makes for fantastic meals, a freezer full of blueberries and all the rain provides fresh potable water. I live just outside the city and it’s paradise on Earth - endless forest, mountains and ocean to enjoy. It’s seldom too hot or too cold but yes, it does rain.
The real estate market is not going to crash. In Japan in the 90s the market crashed when the bank and the government decided it. With the miserable Canadian pension system the country can not afford market going to crash. The only way to adjust the real estate market to the real economy and cancel part of the Canadian debt is create inflation and make more difficult to qualified for mortgage. This process is going to get many years.
Don’t agree with your guess that the new short term rental rules are not a factor in the increased supply of listings. Also dont agree with the new capital gains rules not affecting the supply of listings. These changes in rules affect investors instantaneously and in a negative way.
Renewals will get affected by increasing rates on stress tests. I see no rate cut this year, a false flag as the rate cut sentiment died a few months ago imo. Steve, you are not only a real estate agent, but a psychologist, you should be charging extra commission for offering that service to problem clients! 20% percent mortgage renewals each year means the pain will continue.
Imagine how many people refinanced in 2020 on five year terms at close to zero? 2025 is just around the corner. To the extent that we are seeing investors struggle with new rates, that’s just the tip of the iceberg.
IMO.... rates aren't headed 'significantly' up or down. And suggestive to me anyways.... that the 'elephant in the room' continues to be the hit coming to consumer spending implied by still ~700,000 Residential Real Estate Mortgages renewing(~40% ? Negams) here through 2026 all at higher rates than when initiated which could foretell a pretty painful recession/demand destruction/deleveraging cycle ? Just say'ing here... there is elevated potential for a very unfortunate progression into softer SFD Residential Real Estate price discovery as numbers of Listings surge vrs buyer/consumer sentiments reluctant to engage playing 'wait and see' into recession ? Let's hope a combination of adequately funded, timed and initiated BoC monetary/Gov't fiscal policy actions can insulate away from extreme swings in sentiment..... and navigate into more balanced market conditions over time.
Wait a sec… so the government has been making the right moves to improve housing all along? So many UA-camrs and analysts preaching doom and gloom, how sales slowed, building new construction speed, prices still high to build… blah blah. These are all expected steps to start seeing any changes for lower house prices, lower rents and lower construction costs
@@RainCity3rd you delusional? Typical Vancouverite stuck in their own bubble and not realizing what’s actually happening around them. Go get your soy latte , easy foam, 150 degrees ….
what kind of camera are you shooting with? I feel like you need to stop down or an ND filter if you have that kind of ability... probably nobody else cares though haha
"You can't kick a person out of their home in order to make money on the housing you priced them out of by commodifying a human necessity, so I recommend keeping that human necessity unused so that you can make more money" Steve, you're kind of a sociopath.
For newbies, be aware that this is a grossly oversimplified scenario. For one thing, you can't get a mortgage on an investment property without at least 25% down payment. Two, it's easy to see comps for house purchase prices, but it takes a lot of research to understand the comps on rent prices. The trick is to find a place where renting is more expensive than buying, but those places are less common because of this very type of scenario. Three, you have to remember that rent number he's using is supposed to be net income, not gross. So you have to think about costs for taxes, insurance, maintenance and vacancy when you're researching investments. All that said, real estate investing is a good tool for wealth accumulation. But it isn't foolproof.
Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
Due to my demanding job, I lack the time to thoroughly assess my investments and analyze individual stocks. Consequently, for the past seven years, I have enlisted the services of a fiduciary who actively manages my portfolio to adapt to the current market conditions. This strategy has allowed me to navigate the financial landscape successfully, making informed decisions on when to buy and sell. Perhaps you should consider a similar approach.
Recently, I have been exploring the possibility of consulting with advisors. As a mature individual, I am in need of guidance, but I am curious to know how truly impactful their services can be?
There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’ Melissa Terri Swayne” for about five aiyears now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
Here in Ottawa, every long time resident owns on average 3 properties (lots of them purchased during Covid). Majority of them are running variable rate 6% + mortgages. All are in negative cash flow..
Now we hear about big job cuts in IT and government sector.
Definitely we have not reached the bottom of this RE crisis yet..
IT job cuts have been happening for more than a year by now.
I fail to see how I should care about other people's bad financial decisions. There might be some collateral damage to me but one man's loss is another's opportunity. You said it yourself ...
1.)bought during silly and unprecedented Covid era.
2.)might own 3 properties, possibly in same geographic location, so less diversity
3,)6% carry, which isn't outrageous by historical standards but was the number used to calculate ROI which is now producing negative cash flow
4.) As for job losses .. reality of life in Ottawa if history is any indication. Were these investments made by one or two job families? Unlikely both would lose their job.
All of these were risks that should have been taken into consideration.
Those that can take advantage of the situation and weather the storm will end up on the "right" side.
One final point. SFH are one of most volatile RE choices. In tough times, fewer people are willing to take on renting a SFH compared to condos or purpose built rental units. People who made money with SFH usually made it thru capital gains, and a good portion attributable to the tax break afforded such transactions.
@@delinquense
Most home owners won't lose their jobs, their tenants lose their jobs and don't pay.
They’re toast
Canadian household debt just reached $ 3 trillion. Lumber is down $1300 from its peak and the next 2.5 years have 90% of mortgages up for renewal. Buyers need to put their hands in their pockets and watch the fireworks. If you don't sit tight you're going to be part of the most over leveraged real estate bubble in the world.
how on earth have you worked out the next 2.5 years we have 90% of all mortgages up for renewal? the vast majority of people have 5 year fixed or variable, thus it would stand to reason close to 20% are up any given time less however sells or refinances mid term. More likely the last 30-35% or so who have been at their 5 year fixed and 5 year variable on fixed payments at the historical low payments are coming up for renewal.
@@RainCity3rd30-35% of the 2.5% mortgages coming for renewal is massive. As an example I have a work friend who’s mortgage payment has gone from $1500 per month to $2800 per month. At 30-35% of mortgage renewals coming due with the risk of rates staying high we will see many foreclosures, many bankruptcies. The media lies about a strong economy so all the normies won’t see the rug pull coming. This economic collapse will be epic, biggest in the history of mankind. My advice, get out of debt…..pay off your mortgage….brace for impact.
I couldn't agree more this can't last it's impossible in these current conditions
Speculators leaving the market? It's about f@ck!ng time! Since there's been no government leadership to de-commoditize residential real estate, lots of folks are going to go bust. Thinking that you build GDP per capita through investment in this "commodity" is nonsense. You partly proved it in the video. If you'd gone back to 2015, it'd reveal this metric has stagnated in Canada as compared to the US - $55,000 USD vs.$80,000 USD. Bubble finally going "bang".
The 2025 and 2026 renewals do represent well over 50% of all existing mortgages.
Once the Chinese money left the real estate market this will blow up the entire market , its the money laundered that keeps this housing prices go up and afloat
When I said that would happen, over a year ago, the RE bumpers considered it gloom and doom to their taste 😂 Sorry to inform, but this is just the beginning 👌
This has all the hallmarks of 1973-87 all over again. The only things that went to the moon were inflation, interest rates and unemployment. But life went on. People still bought homes, lost money in the stock market and found jobs. It was tough, and a real eye-opener for those of us who were just starting out and never experienced such a lifestyle before. There will be much opportunity in the future.
Condo market and cottage markets are the canaries in the coal mine. Thanks for updates Steve
source?
@@segasys1339 my own research and my own thinking. I don't blindly accept mainstream narratives like most people do. You have to do your own research.
@@Casey-qm1nd the government will never allow a correction. QE plus inifinity immigration means number go up. I’m loading up on condos.
@@segasys1339 they will if they want future growth. Even they know high house prices will cannibalize and stagnate the economy leading to lower productivity. Also at some point it will become politically profitable to allow a correction as gen z + millenials are now the biggest segment of the population and are going to be the life of the economy. Good luck to you though.
@@segasys1339they are already QE by quietly bailing out the banks. Inflation will soar if they cut and our dollar is already bottom barrel.
from the denial phase to the panic phase
Nicole Foss said a long time ago that real estate is all about greed and fear.
People STILL think rate cuts are right around the corner and the market is going back to all time highs. 🤣
It's not?
And sentiment can change on a dime. As soon as all the sheep realize that lower rates won't save em, you will see a rush to the exit. People will start front running each other and they will sell before prices go lower and lower. Pack mentality, most people all think the same. House prices will have to adjust to the higher rates, and sellers will actually have to compete in a saturated market with a lack of qualified buyers. Most people haven't realized this yet.
@@Casey-qm1nd 💯
if BoC (Lord Trudy) cut rates, say good bye to the Canadian buck being a sh#tty 0.73 to the USD. It will be a 0.50 to 0.65 to the USD. Your standard of living will be precipitously lower and your inflation (need to buy those US priced fruits and vegetables) will be much worse than it is now.
@@Casey-qm1ndthey need to start that income verification with cra asap
Welcome to the great Canadian dumpster fire.
If you have ever flown planes which I do you learn about what happens during a stall. Everything is great speed starts to slow no biggie. You don’t even feel it. Once the plane gets to slow horns start going off and the plane violently shakes and falls out of the sky. The most terrifying experience you will ever have the privilege of not going through. Canada is now approaching stall speed.
Who knew that 10-15x income levels wasn’t sustainable. The reason that 3-5x income to price levels is the standard is because it’s sustainable!! People in the past started to freak out at 5x. So they should. We are so far absurd it’s comical. All things that go up must come down.
Times have changed. And the new world order is in.
Greed.
eh i mean sure but people have been saying Vancouver [rices were not sustainable for 30 or 40 years. Prices were crazy when my parents moved to Vancouver in '79. Sold a house in ottawa for 55k bought a real fixer upper in Vancouver for 110k. I thought it was crazy prices in 2012. Glad i bought the place i was renting off the landlord. Price not going back to those price unless the world as we knows it ends. That said, i certainly wouldn't be buying rental units now! Lot of head winds against real estate these days and only going to be more added. Odds are the gains we've seen over the last decade are not going to the same over the next decade. My bet's on equities. But id not be rushing out to sell ones primary residence if you already own though.
Nosedive into the mountainside
To me, the funniest shit I’ve heard the last couple years is cutting rates is bullish. You do realize when rates get cut it means the economy is doing horribly. They’ll cut when it’s too late. You really think stocks and real estate is going to be bull markets ? You’d be dumb thinking that. lol. “I wanna wait cause rates cut means my house will skyrocket in value” I’m here now telling you dream on. No ones going to be able to qualify for loans when they don’t have a job. Also, businesses will be doing poorly during a recession so how would cutting rates be bullish for stocks? Use common sense people I been saying this for 18 months now. Rate cuts is a bad sign lol. Also, rate cuts will
Only happen end of 2025 that’s another thing I been saying for mad long now. This shit all takes forever to play out. You’re better off ignoring all the head lines and just living your life cause they get you all wild up for nothing. That entire talk about rate cuts from the BOC is just to keep Canadians hanging in there for longer cause they know they CANT lower the rates but imagine coming out saying “we can’t lower rates cause inflation is still bad”. That would really add steriods to the recession fears and the feds are always trying to keep the fear at bay. It’s all a scam. I’ll say it again we all live in a clown town. Imagine spending your life reading the news and all the bullshit investing daily trying to time markets day trading etc. no wonder those people poll themselves. It’s complete garbage lmao . Pure waste of time .
The tiktok generation haven't seen an economic crash yet
RE will often go up when there are people working, economy is good, migration moving in to have good jobs and are able to buy. If the economy sucks and rates get cut, people move away (early 90s in VanCity). People move , less demand for homes, prices fall.
I agree with the clown town but unlike Canadian real estate, Canadian stocks have been in the toilet for a couple years now at least. Export driven Canadian sectors such as energy and mining should do well once our rates drop and subsequently our dollar crashes. It makes more sense to look at international real estate, possibly having a usd asset hedge against a falling CAD
@@Johnnynomadic I’ve converted some money into usd a few months ago
In a typical cycle the bottom of the housing market isn't until a full year, if not two years AFTER the first rate cut.
I'm old, I've seen a few cycles. Lol
Lots of people are going to get their recession cherry popped in the next 3 to 5 years.
Also why government is messing with capital gains, taxes etc.. because guess who is loosing a massive amount of tax revenue from these rate hikes? You got it, investors now write off so much on interest expenses and rising property tax, inflated repairs, maintenance fees. Government is essentially loosing all that tax revenue from rental incomes. Most of the payment is going to interest now especially with these variable rate fixed payment mortgages.
They are going after the boomers.
my hope in all of this shake out is that hard working people can afford home of their own, whatever form that takes, and that there is an end to all of the speculation and greed that comes from gobbling up everything on the market for profit. Shelter....a basic human need.
This meltdown has been a long time coming
Only when the tide goes out do you discover who's been swimming naked. - Warren Buffett
The comment at the end about those 'people who spend $3MM for a house in Vancouver' seems off to me as the cost of the money, the interest rate, matters a lot to me. Not all rich people have enough cash to go that route. Last house I did was 2.75% 30year fixed and I got a 25 basis point reduction by giving the bank $1MM to hold for a bit. The difference between 3% and 2.75% can actually matter. At 4.125% I'm not pushing ahead as I want to. At 5% or 6% I'm not a buyer. Thanks for the video. First time I saw you anywhere.
During COVID, the Alcohol and Gaming Commission of Ontario had a lot less restaurant work to do and started looking a bit closed at casinos. The end effect was 90% of the top 300 players getting banned because the would not show income source. Not sure if that happened yet in Van, but its part of the story too.
I agree the rental market it’s at the absolute peak ..no one has 3800 for a small two bedroom..
There isn’t enough people to afford that ..except the rich students..and now they can’t come for fake university degrees! You comments about it are spot on !!
I like the comment about the fake degrees.
Great show Steve!!
I thank the real estate investors for their service. Currently I am renting a brand new townhouse in Vancouver. It would cost 40% more to own. The landlord is giving me a good subsidy. My rent is less than even the interest portion of the mortgage 😂
At one point your landlord is going to sell. Good luck with that.
@@Joe-mz6dcwon't make a difference since tenants have the right to stay even if the property is sold
@@zachem66 tenants will have to move if the buyers occupy the property as primary residence.
@@zachem66 only if the new owner wants to rent ... if not, the seller will evict the tenant .. it's part of the sales contract
@@rosewildbill6368you will have to pay lumpsump to the tenants to leave.
I wonder if we’ll finally see pressure on prices to the downside then. Thus far here in southern Ontario single family detached or rural small lot like 0.5 - 1 acre (what I’ve been looking to move to) is basically where it was at the peak just with massively higher interest rates. I would think Toronto condos (haven’t watched your other pod in a few weeks with the housing market updates for the GTA) are under a ton of pressure to the downside.
As you’ve noted, it’s a massive ship thus it takes a long time for these things to finally turn around in the other direction.
Best comments at the end. Condo market full of investors has little overlap with single family houses. That said, people buying 2 or more million dollar single family houses with a million or more equity tied up even if they dont go down in price but just sit stagnant for say 8-10 years thats a huge loss in time value.
Very good point. My comments elsewhere in this post were very similar. The loss of earning power of that money that is tied up is very similar as just realizing your loss and moving on....with your tail between your legs.
Uh, condos are a ladder into SFH, when people can't sell their condo, they can't buy a SFH. If condos drop 300k in value, that's 300k less for a person to spend on a house.
Little overlap, lol. No one buys a 2 million dollar house without selling a condo first, generally.
@@jadejackson1509 there is still little overlap. Sfh prices can and do move quite independently from condos. Even the price difference between 1 and 2 bedrooms can and has grown and shrunk significantly. Similarly the price difference between old and new condo units. There are times in the recent past sfh have been going up while condos flat or down.
@@RainCity3rd I think condos move first. If you think sfh are going up over the next 2 years you are in for some trouble. Price adjusted with the MLS Home Price index composite (a thing that basically accounts for a house having different value due to size and location) sfh are down 1% yoy in April. Add 4% inflation to that.
SFH is down, and inventory is way up. And it's April.
@@jadejackson1509 new homes are still selling in greater vancouver...one just sold for 3.550 in Coquitlam. Prices are still higher than they were 2-6 years ago
Good call Stevey!
Thanks Steve.
Thanks for sharing. It can be confusing to understand all the market dynamics. As a renter, I find this comforting that the market might moderate over the next year or two. And gives some hope to us if we think about buying a condo in the next few years.
we're at low interest rates NOW. historic is 7 percent. folks hoping for rescue of yet lower rates - dream on. If they do drop, they'll have to be jacked up again as our productivity is terrible and currency will fall, like the yoyo rates and inflation of the 70s and 80s.
Now is a great opportunity to buy. I think you're wrong about the Capital Gains. Anecdotally, I know about 6 investors that are listing their properties and trying to undercut other sellers in their condo towers to get their placed sold before the Capital Gains tax kicks in. These people are looking at profits north of $250K as they bought over 5 yrs ago. Once the tax kicks in, there won't be this level of competition to sell.
I've seen this before... The 1st to go is the boat.. yes that $100,000 boat and trailer.
Holidays disappear. and that 2nd home (part of the mini real estate baron) has to sell.
My buddy just bought a motorhome off a distressed guy yesterday.
Cultus lake cabins aren’t all rented out and usually they are at this time a year. Airbnbs are $500 plus a night for ‘cozy rustic’ two bedroom cottages. (Not a chalet 😂😂) they even ask you to wash the towels and linens before you leave or they will dock your deposit
Maybe a slight dip coming on condos when they are 2.5 to 3x over-priced in VanCity.
Numbers need to change MASSIVE to make any sense for a person who makes 100k per year (ie top 10% income earner)
It's interesting that consumers are willing to pay $30-40k more for a staged home vs an unstaged rental occupied home. Buyers dont have the forsight to what a staged home would actually look following purchasing and occupying. IMO, it's a self-inflicted wound for buyers.
Mortgage rates are rising. Inflation is rising. Blood in the streets.
Plus rising unemployment = blood bath
@@michellerousseau4277 100% and rising unemployment is another fact the propaganda media will continue to hide.
Hope so
Court ordered sale on Davie. Large property. I have never seen a sign like that on the property. Something has seriously changed for the worse.
I noticed that the other day big ol sign .
You mean for the better 😂
Are they restricted from selling?
The audio sounds a lot better!
I have some investment in the property but we need this price drop to finish the cycle. The rates are going down with this. Something gonna give
It's a bubble. Condo investors will be smoked at higher for longer rates (4%+) and that upward pressure on inventory/downward on price will drag down the rest of the RE market as people start to realise the longer they wait the cheaper RE will be become. It's always been about the cycle.
Sellers counting on interest rate cuts saving them .. is a reflection of what the federal gov is also doing: demanding changes to mortgage terms (from the banks) so that sellers can wait it out until interest rates are cut. Sellers might be forgiven - the fed gov should not! It should be voted out!
Why would the new short term rental rules not be the reason, if not part of the reason?
My uneducated view based on what I'm seeing and hearing is nobody can afford anything.
😂
I was just looking at how many vacant land listings there are in Ontario lol. Looks like quite a few other propertiea in rural/ waterfront areas have as well
Would you do a video on your opinion on Calgary ? Prices here just keep going up while other parts of the country is flat or going down. For me an investor since 2009 living in Calgary I don’t want to pay 400-500k for your basic detached landed home. If prices don’t come down here I might have to buy rentals in red deer or even out of province.
But yeah would love to see a video on your opinion on Calgary or even Alberta.
Why not an etf for a couple of years?
There’s a few pockets that will go up as people sell more expensive homes elsewhere and buy for cash where they can afford.
More inventory is a good sign we are going in the right direction. Rates need to stay flat so we don't loose the momentum. Bottom line is that some will suffer but its the majority to go forward. The banks are ripping us fn off and we need some type of bank reform.
Steve.....retired in 2012, licensed in 1988. Your narrative is brutally honest, I commend you for that honesty.
Interesting times, great channel mate, all the best.
Stay safe❤
Thank you
Reality is finally starting to set in. Good video
Vancouver housing prices should be less than 50% what is now.Nothing special about that area but rain ,more rain and more rain?
lol
Well we also have the Canucks!
The oceans and mountains are nice, plus it sits right beside one of the top food producing regions in the world which makes for fantastic meals, a freezer full of blueberries and all the rain provides fresh potable water. I live just outside the city and it’s paradise on Earth - endless forest, mountains and ocean to enjoy. It’s seldom too hot or too cold but yes, it does rain.
@@thebigpicture2032 and forced jabs brought to you by your "friendly"NDP government, take jab or lose a job?
@@user-fe5lr9zt3y I’m not afraid of a needle, never hurt me.
The real estate market is not going to crash. In Japan in the 90s the market crashed when the bank and the government decided it. With the miserable Canadian pension system the country can not afford market going to crash. The only way to adjust the real estate market to the real economy and cancel part of the Canadian debt is create inflation and make more difficult to qualified for mortgage. This process is going to get many years.
Steve, great video, what are you doing with your own property investments?
He has all rented out. He's doing great.
My Calgary stuff is long term rentals
Don’t agree with your guess that the new short term rental rules are not a factor in the increased supply of listings. Also dont agree with the new capital gains rules not affecting the supply of listings.
These changes in rules affect investors instantaneously and in a negative way.
Love the content Steve. Do my a favour and stare in the lens, not the screen. I keep thinking "Is he being interviewed?"
Renewals will get affected by increasing rates on stress tests. I see no rate cut this year, a false flag as the rate cut sentiment died a few months ago imo. Steve, you are not only a real estate agent, but a psychologist, you should be charging extra commission for offering that service to problem clients! 20% percent mortgage renewals each year means the pain will continue.
Public debt to GDP keeps going higher in Canada... 120%
The rubber finally meets the pavement.. yes the pool boy no longer drives a BMW
Steve what do you think about the Kelowna market. ?
Vulnerable
It’s terrible
Imagine how many people refinanced in 2020 on five year terms at close to zero? 2025 is just around the corner. To the extent that we are seeing investors struggle with new rates, that’s just the tip of the iceberg.
Imagine waking up and your country’s currency is only worth 30% of what is was before 🧐 I hope you have some Silver coins brother 😉
"Nobody wants to drop their pants before they have to"
'there maybe some opportunities this summer' when a realtor can't help himself 😂
At least he went with a season and not 30 days from now.😅
Canadian companies are far more leveraged than housing.
Small businesses always use bank debt to finance operations
Good point
And a lot of those small business owner used heloc as part or that debt
Chatter that a $25,000 departure tax is being considered as the exodus expands.
IMO.... rates aren't headed 'significantly' up or down.
And suggestive to me anyways.... that the 'elephant in the room' continues to be the hit coming to consumer spending implied by still ~700,000 Residential Real Estate Mortgages renewing(~40% ? Negams) here through 2026 all at higher rates than when initiated which could foretell a pretty painful recession/demand destruction/deleveraging cycle ?
Just say'ing here... there is elevated potential for a very unfortunate progression into softer SFD Residential Real Estate price discovery as numbers of Listings surge vrs buyer/consumer sentiments reluctant to engage playing 'wait and see' into recession ?
Let's hope a combination of adequately funded, timed and initiated BoC monetary/Gov't fiscal policy actions can insulate away from extreme swings in sentiment..... and navigate into more balanced market conditions over time.
We know what's coming steve...
Condo owners - Make the 1 bedroom $450k and 2 bedroom $550k
Do you realize that every time you say "condo market" UA-cam captions are showing "condom market" 😅
We have been told just 2 weeks ago that there were not enough housing due to the influx of excessive immigrants.
Why does Steve wave his arms around so much?
Where is this 14% of rental construction? Seems way over exaggerated
Stagflation coming?
Deflation
Wait a sec… so the government has been making the right moves to improve housing all along? So many UA-camrs and analysts preaching doom and gloom, how sales slowed, building new construction speed, prices still high to build… blah blah. These are all expected steps to start seeing any changes for lower house prices, lower rents and lower construction costs
Too many people in debt
Bull Market in some provinces though 😂
I am looking for investor friendly countries. Canada in the dumpster.
It sure is. Go to Eastern Europe my friend.
Thanks to investors
Invest in some skills or an education so you can actually contribute something to society
jesus you people are so dramatic. Canada is fine. Even if we had a recession, they happen every decade or so.
@@RainCity3rd you delusional? Typical Vancouverite stuck in their own bubble and not realizing what’s actually happening around them. Go get your soy latte , easy foam, 150 degrees ….
Weimar Germany pending… lol hopefully not
what kind of camera are you shooting with? I feel like you need to stop down or an ND filter if you have that kind of ability... probably nobody else cares though haha
"investors" 😂
"You can't kick a person out of their home in order to make money on the housing you priced them out of by commodifying a human necessity, so I recommend keeping that human necessity unused so that you can make more money"
Steve, you're kind of a sociopath.
This video is about everything and about nothing at the same time. That guy has a unique skill of speaking a lot and saying nothing:)