Canadian Real Estate Downturn - In the Trenches with Canada's Top Agents
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- Опубліковано 23 жов 2022
- Canadian Real Estate prices are currently enduring their sharpest downturn in two decades, with national prices off 14% since the peak. The slump has been led by Toronto and Vancouver, two of the most expensive property markets in the country. Mortgage rates are nearing 6%, so what happens next? I've brought on some of the top agents in the country to discuss what they're seeing on the ground and how they're building their business in these challenging times.
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On the bright side there should be good deals on real estate agent owned BMWs and Audis soon.
And less assholes on the roads
What a Toronto mindset, Real estate is our biggest resource? Albertans clearly feel a little different. I would argue Real estate has wrongfully become a massive part of our economy and I don’t know if we can ever undo that.
She said the government won't let the real estate market collapse its "our one Canadian resource"
Kindof a warped perspective.
It’s why Canada has a failed economy and will get hammered in this recession. You can’t build an economy on trading houses among each other.
You expect too much from Toronto barby
The idea that Canada won't let the real estate market collapse is based on nothing. "Bad thing can't happen because it's bad" is not an argument. If that were true nothing would ever collapse. If it's between home owners who by and large have paid off their home losing value or our currency going so low that import create a feedback loop of inflation and inflation expectations until we hyper inflate.... yeah. I'm sorry they will let anything collapse to fend that off.
Not saying real estate is going to crash and burn, but the idea that it can't is just a lack of imagination.
but none of these people seem to have any real experience , would be interesting to see how many of them have LIVED through an economic downturn... selling courses on what? how to survive with leads that can't close?
Plus the BoC is going to raise rates along with the FED. The Federal reserve doesn’t care about the Canadian housing market
When people ask how it got this bad, 4:36
Pretty wild to listen to people describing the bursting of a bubble. It almost sounds textbook in some ways.
Examples include a decent percentage of a profession looking to change careers and talk of no cash flow available in a market, only appreciation.
Talk of panicked sellers at the fringes also a tell...
When more experts start to concur is the time I start to worry.
Hang in there, all. I agree about the long-term bull case for real estate as dollars continue to get devalued.
All fiat currency is inevitably headed the same direction within a few decades, just at different rates of speed. Owning tangible things should do well in that environment.
Due to today's high debt levels though, pain is finally being felt as the regime shifts and rates begin to trend higher. Central bank "tightening" is now realizing its intended effect as prices fall and excesses are brought into check.
Others agree that policy typically lags reality by 12-18 months, so they are almost certain to over-tighten and bring down over-levered assets and their industries.
Steve, what are you hearing from longer term investors on a fixed rate? Are most holding on?
Curious what you're doing right now to prep yourself for the bigger picture and continued financial repression.
It seems like gold, energy, commodities, carbon credits all on the rise over the next decade? Especially when China finally reopens and a friggin' war(!) eats away at limited commodity supplies and worsens debt levels?
Bitcoin likely to catch another bid as people look to keep up with purchasing power?
Feels very 4th Turny. Frankly I'm a bit terrified. Looking at my views today, the me from three years ago would've called me a conspiracy theorist... and yet this continues to play out in front of us.
Don't worry Justin and Tiff would never put us in a bad spot 😏
📌Do what everybody else is doing if you are okay with only having what everybody else has.Information that will pay you everyday, you've got to stop saving all your money.
Venture into investing some, if you really want financial stability.
Choose to grow and elevate your mind by studying audios, videos, attending conferences that will give you the edge!
Lately I’ve been thinking of buying cryptocurrency for retirement, I’ve set asides $350k to invest but along the line,I usually get cold feet, maybe because I have no idea what I’m doing, please I could really use some guidelines.
@@lorenzodias8738 In situations like this,I always recommend to people on getting guidance at least from someone that understands price action and all that while you strive on improving yourself by watching videos and learning fundamental analysis.
Investment guidance sounds like a great idea,thought about it before but never knew how to go about it.
@@ernestradner156 I used to invest on my own because of making your money work for you mentality but never made any progress until I sought the guidance of Daniel Christopher Downes and he has made me understand that strategy is everything.
Wow…..Daniel Christopher Downes?
Good assortment of agents alright, Nasma Ali's commentary 4:36 around the GoC won't allow the real estate market to collapse because it's Canada's one resource highlights the idea that literally ANYONE can be an agent. Scary indeed.
This is the general sentiment. Not necessarily what I believe is right.
Obviously they are biased. This is their bread, they hope for the best. Btw I don't think she will ever have any money problems, any sector would accept and welcome her, she is too positive, kind and beautiful.
@@zoltanb1221 probably not many western Canadian sectors after the ignorant comment about Real Estate being the only Canadian resource. Your welcome for all the oil and gas transfer payments from AB Nasma
Optimist Bias, its when people push possible adverse outcomes under the rug to create an illusion that everything is completely under control in thier mind. Its Naïve to think the government cares and looks out for everyones best interests, It would also be foolish to think that polliticians never fuck up and make mistakes too lol.
@@nasmadotali Its the sentiment amongst financially illiterate, emotionally destitute and biased property owners im sure..
So your all feeling a drop in income so your launching something to try to milk some cash out of your fellow realtors. classic!
but they are top producing realtors lol
This is the equivalent to asking bitcoiners on the future of bitcoin get a panel of a non biased group
Lol so true
Love it, thanks for that common sense comment.
This is a bunch of crooks creating a narrative to influence or save their bacon from the clients they serve or recently drove into negative equity.
Why won’t you drink the Kool-Aid sir
@@saretsky none of them look like they even own properties to be discussing the real estate market tbh except you steve?
Folks who own properties don't have time to yapp around. The realors are desperate in this market, so you get a new video every day. But thanks for making sense.
I remember the last severe downturn in Toronto in 1989 which took 6 yrs to bottom and close to 15 yrs to recover and at that time interest rates were higher than inflation. I fear this time could be worse.
Yeah who the fuck is going to take on a huge loan at 12%. Problem is that would mean the past 40 years of inflation would get swallowed up in less than a year. The economy can’t stop.
The drop hasn’t even started
@@EricAlHarb a townhouse still cost more than 1.2 mil . It hasn't gone down at all
@@tommywong3147 yeah you’re right. Not yet
@@EricAlHarb but they are selling R/E agents packages on how to become better agents LMAO
The only reason RE is such an obsession is because real rates have been negative for so long. It's a completely unproductive asset class which doesn't help future generations of Canadians. It's been a serious misallocation of people's time and resources and has occurred at the expense of actually productive investments in infrastructure, health care, energy, technology. Truly a sign of economic stagnation in the late stages of capitalism.
Thanks everyone ! Love the insight
An investment should never be cash flow negative!!!! That is now called a speculation. Fuelled by greed and FOMO. I don't want to see my fellow man suffer but this speculation needs to stop we are only hurting ourselves!
I am sure she is a very nice person, and a great Realtor, but... lol, how can anyone ever say they trust gov't to do the "right thing".
Her fake lips 💋 and bobble head says it all. Gravy train 🚆 is over and clearly she needs a reality check
Renting is actually still dirt cheap compare to buying.... U can rent a house for 4k . If u buy just the mortgage alone is 7k plus $500 property tax and also regular maintenance. It's almost half price renting. Not to mention u have to somehow come up with 300k down payment
also if you bought a townhouse or home at the top in gta/van last winter the amount you're down now just after a year could be equivalent to 10 years of rent.
Interesting that nobody mentioned the job market in Canada when things slow down layoff start when people don’t have jobs they can’t make mortgage payments!
Because all the experience and success of these agents carreers is built on bull markets only. There never has a hardtime in sight to even get creative enough to think about the other people where thier money comes from.
a few take aways:
"nobody is desperate" and "everyone is just waiting" are the sales pitches for todays current sentiment for a real estate agent that depends on commissions. The actual reality is that when the average household income is 100k before taxes in toronto but a starter home is still roughly 1.3 million in the city, that is just a massive mortgage to take on and gets that much more massive every month as the BOC raises the interest rates another 0.75 basis points. So you already had pressure pushing the market down off interest rates alone. We haven't taken into account that earnings calls are coming through into the stock market and we are starting the beginning of the next phase of companies begining to lay off employees. So do you think everyone will just "continue to wait" and "nobody will be desperate" when they have no income to pay thier mortgage anymore? lol
secondly, "the government is not gonna let the real estate market collapse" That is also just proves this agent is trying to sell a much more positive narrative, because she is framing the situation as if Canada is isolated in thier own independent bubble from the rest of the world and is raising the interest rates independently. Ask yourself why the whole world is raising rates in Tandem? Is this a coincidence no? just like when they kept rates criminally low during the pandemic to herd all the sheep into the market, they are now raising the rates at record speed to herd the sheep into the slaughter. I think its almost obvious that the government wants to collapse the real estate market and other financial markets, Because in the bust cycles assets change hands from poor people to rich people to widen the wealth inequality gap.
Great comment, you’re bang on. (I’m an ex realtor). “You’ll own nothing and be happy” is what the WEF “predicted”, yet everyone thinks the government (owned by WEF, Klaus brags about that) will save them and never let the bubble burst, talk about naive
because she doesn't know what she is talking about. They can't sell anything.. that's why they are pitching a course during a time when most "leads" are dead leads... NOBODY is qualifying , not even High value clients at the bank right now, capital hard to come by.... this course should have rolled out years ago, not when people are soaking in debt
@@TheWoodfordreserve I personally think its only a matter of time that some sort of tech company will create a RE sales platform that will be a disruptor that doesnt require agents anymore. 5% comission is a steep price to pay when the fundemental reason why homes are selling in a bull market is when rates are extremely low, debt is cheap, government creating an environment for demand to thrive vs supply. Now that things are shifting to a bear market in RE is when we could see whos actually good at selling now
it's so good to see that higher interest rates have now fixed our housing shortage. If developers can't sell units unless we have free money policies then this proves all our increases were strictly speculation. Hopefully real homeowners don't lose their homes due to almost 25 years of bad policies.
I would’ve more so enjoyed critical analysis from both sides of the coin (RE Bear/Bull).
31:02 Tom I was almost left homeless after a realtor tried to torpedo my deal. I was able to negotiate a lower price Feb 2020 prior to the mortgage deferrals, and the selling and my realtor both lied to me to try and fvck the deal. They would have made maybe 500$ extra each, both realtors 5+ years experience. Literally would have left a family with a newborn completely fvcked for 500$, disgusting.
Terrible to hear that. I hope everything worked out.
@@TomStorey It did, we caught it before it became a real issue. We had to find the seller on FB and cobble the deal together ourselves. He told us the realtor was saying we were trying to back out, and on our side we were being told we couldn't close early to save the deal before I got a COVID lay off.
That's just that deal, working with realtors in both Ontario in BC has been nothing short of disgusting narcissistic behavior.
I would like to see way more professionalism in the whole industry, from trades to realtors.
Due to the way how Realtors compensation is decided they are motivated to exploit the buyer from both sides (pun intended). That's why most of the realtor (not all but majority) act like scums, low grade life on the Earth due to money they get..
Somewhere in the same category as used car salesmen
@@albundy9706 or pharma salesmen
Canadians are trained to expect central bank/government intervention to stimulate house prices
Pavlov would be proud.
This really just seems to be the case in two markets. I'm not seeing or hearing of any pain on the ground in Manitoba, Saskatchewan, or Alberta. Interestingly these are places where real estate is mostly just a place to live...
Such gross human behaviour from “investors” wanting to capitalize on other peoples misfortunes.
I’ve listened to interviews with guys that are worth more than everyone in this video combined say they sold their real estate 18 months ago at the prime time. Anyone who thinks real estate isn’t going to tank lacks critical thinking skills. Even our idiot prime minister said they’re combating the housing bubble by decreasing speculation.
Thanks very much!
Great to see top real estate agents hashing it out on what's happening on the ground and "In the Trenches" preparing for what's next!
This woman who says that the government will not let the market crash or that investors in Toronto have strong mentality and will wait it out clearly has no clue what she is talking about. Scared to think there are thousands of those on the market.
Wonder how many of her clients who bought recently are in for a surprise
she also said in an interview if Bank of Canada raises rates she did not think it was going to impact the housing market... she does not know what she is talking about at all
awesome show!! great to hear candid opinions from a group of realtors, i wouldnt watch this every week or month but its really nice to touch base a few times a year,, for me a non realty person
steve @ should i lock my rate now?
If someone planning to buy a home in Canada or US they must be crazy, just wait prices will hit 2015 level just be patient.
crashing down to 2015 levels is a stretch. I know you would love to buy a home at those levels and so would I
LOL😂😂😂😂😂😂😂
Wishful thinkers
And i can buy a 67 Vette for 3000
Safe assumption is 12-36 months. I sold 18 months ago and people thought I was crazy. The market seemed unsustainable. I might have been early but I am happy with my discussion now that the dust is setting and the smoke is rising..
You were crazy because you were way too early. With that said being early is better than being too late. We’re still up year over year so technically you still lost out on some gains.
@@sharinglungs3226 You are correct. I did miss out on some profits as of today but every day, every week and every month that goes by that changes back in my favour. I figure after Wednesday 75bps hike I will be even and super glad I got out when I did.
Still a good choice. Timing the tippy top and the very bottom is unrealistic. I just sold a property and the buyers are annoying and flakey and had lots of over the top rude low ball offers.
@@dirtyburger7528 I hear ya. It’s becomes very difficult to find middle ground when the market shifts quickly. This type of volatility does not bring out the best in people. That goes for both ends of the cycle.
i live in BC and one thing i notice when people buying house is that some realtors are actually pumping the price more than you can afford.
yay.. sign me up... I want to buy into your course so I can secure a million leads that wont qualify for ANYTHING starting tomorrow!! yes please.
They have lost all those juicy commissions they were getting for doing basically nothing
@@Cutlerypotato they were not top producing anything in my opinion.. bunch of kids trying to make a quick buck
60 percent pre-sales may be a requirement in a Metro area but as soon as you head out to anything in the suburbs or smaller populations you end up with 80 to 100 percent when it's a soft or down market .... the smaller areas are always hit first and the hardest ....
"Your house is supposed make you money, that's the whole point of it" Wow....what ever happened to the point of housing being a place to live ? Who is this chick, totally delusional.
Thank you all for your insight into the Real Estate field. I like the analogy to a tourist. We bought our condo in 2020 without having seen it personally (video, family visited) while abroad. One comment: “owners” are people who own their property outright. Until you pay off your mortgage, the bank owns (at least part of) the property. My question: how much stress do people have who buy homes that are over $1 million with a 20% downpayment while interest rates are increasing? Do people today accept the fact that they will be in debt most of their lives?
Incorrect. You are the owner and the lender has an interest in the property. The lender is only legally entitled to take ownership if you do not fulfill the promises as outlined in your mortgage agreement.
Regarding life-long debtors, the max allowable amortization period on a mortgage is 30 years, so if you're under age 40 and stick to your amortization schedule you'll get out of debt. If the real estate market does turn around at some point some people might buy an investment property or 2 and use the capital gains to help pay off property #1. And some people may pay down their mortgage ahead of schedule if/as they receive pay increases at work over time.
IDK but when you think about it, wouldn't it make sense to wait a bit like the sellers were waiting in the past 2 years??? Hmmm. I bet you at some point there will be some kind of panic once the clever investors and agents realize that the more "they wait it out" the worse off they're gonna be. And yes, I understand that people can take properties off the market and rent it out, but this applies only if someone wants to keep it for long term, because otherwise there is a risk that the place gets damaged and the reno can be very very expensive.
At this point, I'd rather ride this until it collapses, than sell it at a loss, honestly. If the price of everything is going up, except housing, it seems insane to lose this money as there is no other alternative to save equity. I will rather not go on a vacation for 2-3 years, stop spending money on nonsense, sell of car, and not renew my clothing this year unless I really have to, than lose something I work so hard on. I'd rather let businesses suffer for not having my money than me losing the asset.
@@jupitereye4322 it's very different thinking for baby boomers and retirees. Who own most of the properties . They don't have all the time to wait for another real estate cycle. When u own 2 houses worth 3 million. Now downtown to 2.5 mil u just cannot risk for it to go back to 3 mil. When u are like 70 years old. U die in 10 to 15 years. What's the point.
@@tommywong3147 The point is that if this is the case, I will transfer that house/apartment to my children if it's too late, and not sell it at a loss/discount. I don't expect everything to turn out well for me, I look at this at a generational level, unlike this younger generation that never knew about sacrifice and always wants everything now, as if life and nature owe them something from birth. Who says we are entitled to comfort and safety? We pay the price for our choices, and especially for the choice of the government that did absolutely nothing for affordability, nothing to help anyone but themselves. National debt skyrocketing, inflation... all because we were sold this idea of utopia, without any real value being added. While other nations were investing in the development of AI, the energy sector, we were investing in wind turbines, the worst-performing source of energy. No good incentives for solar panels, and no real help for schools and education so children can learn more. Instead, our children learn nonsense, flat-out nonsense. My children just changed schools, we moved to Langley from South Surrey, both of these schools are way behind in everything. You can blame it on covid, but they didn't do any better before either. My son was told last week not to do his math tasks so fast in class because other children may feel bad. My point is, we've invested in the wrong things, and have been at least since I came to Canada almost 8 years ago. Practically since this Trudeau came to the position of PM. Corruption has skyrocketed. Just take a look at one example in Central Surrey, the building named "Ultra", a building that didn't pass inspection for seismic code, but still was granted permission to build. All because of corruption by certain people, from certain regions of the world, who are making huge money on real estate in Lower Mainland by building garbage. Some of these companies make houses, wait for the inspection to approve them, then start removing insulation from the walls in order to inflate their profits. All I am saying is that I will not be the one to lose my investment, I will hold it, and if it's too late for me, fine. I will transfer it to my children and at one point they will make something with it.
After the municipal election, significant property tax increases might be coming.
@@jupitereye4322 Are you from Eastern Europe by any chance? Because I do share the same philosophy and attitude to passing down my home/assets on to my kids. That’s what runs in our culture.
Even if mortgage interest rates stop rising and stay above 5% for two years then Vancouver and Toronto markets are going to crash. 5% is way too much when the average mortgage is close to a million dollar.
Most likely they wont stay at 5% for 2 yrs
@@baseline6786 We are in such an interesting time. Central banks are trying to get inflation lower. To do so they are needing a shallow recession. To get this they are increasing interest rates. If we get lower rates the economy will likely also be in a recession. How does real estate do in a recession? It looks like check mate to me - real estate is likely in for a very tough year or two.
@@vikingvancouver9832 they said that with covid and look how it took off.
Hard to say how it will react. Ppl want to buy. Buyers are still there waiting. Longer the wait the more rush at once to buy when the bottom is clear
@@baseline6786 I agree on the rush to buy when people think the bottom is in, but don't agree with the part about covid. They flooded the system with money and easy credit, which created this terrible inflation we see, so now they need to do the opposite. They screwed up bit time 2 years ago, now we will all suffer ecause of their incompetence
@@thanks4that261 it will be similar during covid.. the K shaped recovery going forward when the market turns.
Also.. See how winter and covid if another wave comes around will help inflation drop.
your clients can't close and you are bullish on the market? have any of you been through an economic downturn?
It's not a lie if you beleive it
@@Cutlerypotato none of them appear to fully grasp what is going on.. multiply contradicting statements...
@@oscarfernandez8969 it's cute that some of them think real estate is the only industry in Canada.
That's the problem were trying to correct. We need money to flow into productive parts of the economy not helping people buy there 10th rental property.
@@Cutlerypotato Ok Costanza
@@Cutlerypotato but these guys have little to no experience they all look like young millenials that have never weathered a REAL storm
We know these vulture real estate agents will only look out for themselves.
*why can't the government of Canada link Canada Revenue Agency and mortgage approvals to verify information and prevent fraud*
Why not link to these realtors socials?
Theres way too many delusional sellers, you missed the boat, you bought that property for 50% less than your asking, figure it out damn.
Actually brilliant, when things get slow create a course to generate cash flow. I'd do the same I can't hate.
Coast Capital pre-approved me for a 925k investment property in March 2022, I did not buy anything so I renewed my pre-approval this month in October 2022, now they can only approve 525k.
The sentiments expressed at 20:50 if accurate are extremely disturbing.... as much for simple naivety/financial illiteracy as blatant "normalcy bias" paralysis of presenting fundamentals ?
WHO are these people.... and just WHAT are they predicating such grossly ignorant sentiments upon ?
It's absolutely ridiculous ?
Can anyone here frame a brief set of circumstances.... or prevailing Canadian Financial System fundamentals RESPECTIVE of context globally, that would/could support the sentiments espoused at 20:50 occurring within the next 60 months ?
Unreal in my mind
Homeowners should be more concerned about losing the equity and not that everyone will lose the house I don't think that will happen I think equity will disappear drastically inventory will come back to the market thanks to investors offloading and most importantly I think that HELOC debt will be the biggest issue especially if that equity they borrowed from is gone ....
Biggest issue is private lenders. They don’t want the risk leaving many stretched owners into distressed sellers.
Private lenders will not extend debt. Watch out below!
Helocs are a callable loan
@@donm2067 most are what is your point? The lender can demand payment? On money you do not have....and on equity that no longer exists.....thats why it's the biggest danger to homowners....Canadians have abused HELOCS for decades that's why osfi introduced new rules to take effect in 2023 I know people that bought homes based solely on the fact ghey would make the minimum 3 months mortgage payments and apply for one to live off indefinitely....and they have been
@@jaymar1615 Ok so we're agree, the masses are idiots that abused HELOCs that can be called in if the bank gets distressed. It's also noteworthy that we have bail in laws and frame work legally in place since 2011.
Looking forward to ken and Stacey having to sell everything in order to make the last payments before they go broke.
In my opinion, there won't be a market bottom until the interest rate hikes stop. I'm actually surprised we haven't corrected more considering current rates. Great Video !
If we follow the past when this happened, the bottom is two years away from when the rate hikes stop. I don’t think speculators realize people won’t jump back into the market when they lose their job or they fear they may get laid off.
@@sharinglungs3226 do you actually think they will let central banking fail? No. They will turn the moment a few buddies lose real money. People fucking know this and are just standing strong, playing chicken with the banks. We win the more real estate you own the more wealth you create. This will never change. Maybe for some markets, but for the most part a 100k home will 100% appreciate in the near future no matter what. I can’t believe a home from 1984 cost 20k and a home built in same area 2006 for 115k now sold for 825k. We are retarded lol.
keep in mind there is still alot of companies that are likely going to gear up for layoffs early next year. with an impact on job markets, it forces people to list thier property especially as mortgage rates are rising
Wait till people's mortgage terms are up and their monthly payments are double when they renew. I don't think that's happened yet.
@@billbong2014 I dont even think you have to wait that long for this to play out, Its likely the market will go through some serious pain for many, the damage will be done and at that point they will have no choice but to pivot and adjust the rates downwards again. Probably wont be 1% though
What's the commission for leasing?
1 months rent usually + HST
Let it all collapse. It’s healthy for everyone.
Owen Bigland should get a guest appearances a debate of the upcoming bull/bear market
Keep until your Home Properties - Foreclosures. Yes - you are paying all to Interest.
I hate real estate industry. Such a rip off for the amount they do (no offence to you guys). It will start to go by the wayside
In a hot market real estate agents are just paper pushers. Utterly useless and should be replaced by technology at a fraction of the cost. It’s such a con they get a % of the sale.
@@sharinglungs3226 Exactly, ends up costing $10k+ to each realtor to show you some houses and fill out paperwork. Such a scam.
@@elephantmoney Cartel behavior from an industry comprised of 87% tourists. Embarrassment.
"...I've been so wrong about rates this year ..." Yup, you have as have I. WTF?! This is painful
Mortgage rates shouldn’t matter the broker just needs to put a little salt and pepper on there income documents. Why has the government not said anything about mortgage fraud in Canada spoiler alert they will not not do anything its how they keep the country afloat.
It's not possible to carry on that salt and pepper now cause they can't put salt and pepper on interest rates and now their payment will sky rocket due to high interest rates. This ship is going to sink unless prices comes down.
Considering death rate exceeds immigration, that explains how the salt and pepper has driven demand.
@@CANADUKIAN your right on the money I could not have said it better.
@@CANADUKIAN I looked into that through stats Cananada, if it's 400k immigrants +100k international students which turn into PR, that half a million people a year, if death rate is 300k per year, were up 200k people, which is about the same as house building.
@@donm2067 I think this is the the first year where 400k is target, not sure it will be reached, apparently a lot do not want to live in airbnbs.
Combined 40 iq on this podcast.
39*
Guess its still beating the loonie hour...
I just don’t see the bull case for any real estate. The more rates stay high, which they will, the more mortgages will have to renew at these new rates. All it takes is one over extended owner to set new price discovery in any neighborhood 🤷♂️🤔
"our only resource"
The standalone monthly SAAR of total housing starts for all areas in Canada in September was 299,589 units, an increase of 11% from August. This was definitely unexpected. However, as you know it's hard to stop a rolling train.
The SAAR of total urban starts increased by 12% in September to 276,142 units.
Multi-unit urban starts increased by 16% to 216,549 units in September. Single-detached urban starts were flat at 59,593 units.
Rural starts were estimated at a seasonally adjusted annual rate of 23,447 units.
The market has hit the brakes, and we still have record builds every month.
We all know how this ends.
Feedback loops create the bubble, but the same feedback looop creates the crash.
We may see Jingle mail for the first time here in Canada
Well after all this talk they just want your commission period!
It's only when the tide goes out that you learn who has been swimming naked. Warren Buffett
Owen Bigland is missing from this.He must be in the top 2 or 3% of realtors in Vancouver.
BoC will definitely take a break raising rates and might even try to take them down before realizing they are back where they started and inflation persist again and that's when they jack it up again. Best is to raise it above 6% and hold it there to play they ripple effect out.
Great perspective from some of the biggest names in the industry. Thanks for the insight! UA-cam comments can often be an endless trail of negative comments, you can please everyone...
Death rate is higher than immigration. What does that mean for the “immigration” demand rationale? Or does that just sound like a good reason to entice investment by implying high demand?
Canada has no gold reserves.
this is true. same with the bail-in regime implemented in 2013 that is still in place. nothing to worry about though
The only thing realtors can (and must) do to mend their negative image would be to lobby for and establish a sister agency in each provice (or federally) that is incentivized and fights for action based on the BUYERS needs not the sellers. One can argue a few bad apples don't mean all realtors are bad, but I would suggest thinking about this as a moral situation similar to the US medical system:
The US medical system puts profits infront of care, it has some great benefits to those who have the money and leaves behind those who do not.
Candian Real estate is the same thing if you treat a shelter/home as a human right.
I understand that banks are starting to lay off mortgage clerks.
The word investment or investor is now used so loosely that it has lost its meaning.
Most people don't know the difference between an investment, a speculation and gambling. Even the media and many university professors. They just parrot what some other textbook had erroneously written.
The consensus opinion is that the latter (gambling) is riskier than the former which is totally false. You could have gambling bets that are less risky than some investments.
For example, say you turn-over all but one card in a 52 card deck and the ace of spades was not one of them. The next card has to be the ace of spades. It's a 100% sure bet.
On to the definitions:
An investment is a capital outlay to produce a cash-flow.
A speculation is a capital outlay to produce a gain, based on recognizing geo/social-political anomalies.
Gambling is a capital outlay to also produces a gain, based on probabilities.
Consequently, if a capital expenditure does not produce a cash-flow, it's not an investment.
On that note, we often hear that a house is a good investment. It's not.
A house cannot be an investment unless you rent it out to produce a cash-flow. It can however, be a speculation.
A home is a commodity. It's a component of the Holly Commodity Trinity: Food, Shelter and Energy.
sounds to me that owners/landlords choosing the type of tenant can and most likely does lead to racism or discrimination... I sold my property in Canada in 2021. The experience was an absolute nightmare the agent was only interested in selling to her clients to increase her commission. I don't usually dislike people.. I despised my agent. She messed up two offers that were higher thn what I sold for.. worse experience of my life... bought a fabulous villa in Portugal... loved my agent, was impressed with agent acting for the sellers, the process was smooth... what a difference ... in Portugal the downpayment goes directly to the seller, not the agency... much more civilized in Portugal.. I do get it why real estate agents in Canada may be on the hate list
Great video. Thank you all for the open discussion. If anyone wondered if we are in a big real estate bubble all you have to do is listen to 15:90-22:30 and 31:40-32.30 for some clues. “Investors are used to cash flow negative”. Investors feel downturn “is temporary; will come roaring back.” Investors “are not buying for cash flow… are buying for appreciation”. “…when are we going to see fire sales? Already are in the assignment market.” What i heard from listening is it sounds like lots of people who own real estate today are bleeding cash (cash flow negative). And with rising interest rates it is getting worse for them. They think the situation is temporary - Bank of Canada will see their pain and bail them out (they are too important to the Canadian economy). Yikes. As we peel back the onion this actually looks really frightening.
You didn't just get interest rates wrong. Some of the worst advice comes off this show on many topics.
agree.
Honest citizens come last
I hope young people don’t take these young agents advice. These kids are so optimistic because they have never seen a down market. Many of you guys especially this young girl and her clients will get crushed in the near future.
Almost got to 5 minutes. Sorry Steve just can’t listen to real estate agents.
how can the guy who said he was bullish on pre-con think anyone is going to close on units in the years to come when entire world is facing a recession?
He just said cost of building increased, high interest rates for developers increase costs further along with Canada having high immigration rates and low vacancy. Low supply high demand.
@@YMu-xe4fi low vacancy does not equate into sales. Low supply, high demand, ZERO LIQUIDITY .. NOBODY can afford housing.. that's why he is selling everyone on cheap courses
Is that dua lipa?
This really only appears to be an issue in two markets.
Of course lead Gen is always a bottle neck. You have more agents available than houses to sell ALL the time. the irony is that if real estate agents made flat fees for transactions, would this video even exist. Like would these ppl still be agents and as faithful to the profession if the incentives were different
For successful and smart investor, HOPE cannot be a strategy. if it is. that person cannot be called as an investor.
Going back to the comment about developers having to raise costs to factor in cost of affordable homes.
I’m wondering would that put downward pressure on prices since some buyers in the market will shift to the affordable supply?
Great Q - The affordable housing is affordable rental supply - typically priced at 80% CMHC avg market rent (1150 for a 1 bed and 1350 for a 2bed in Toronto). Have to have specific income etc requirements to qualify for affordable rental units - not the same people buying condos.
Historically the rental market is cash flow negative and strictly long term appreciation which is why the wealthy controlled our rental market in the past as they could depreciate the asset over 100 years or more.
They started transferring the risk to civilians in the 1970s on as they renovated and sold off those rental units to Baby Boomers. If inflation continues with sustained interest rates the Government could break housing, stock, jobs market, pension plans, and mass exodus of immigrants due to lack of opportunities as they will also have no equity in the home. There will then be an opportunity for the 1% to buy back all that product with the help of our Government of course.
I never understand why we believe Government is here for us. If they cared social problems would be better not worst and our Country wouldn't be bankrupt.
Investing in real estate has one very important difference than investing in stocks - and that is big leverage. In a rising market, big leverage magnifies returns to the upside. However, as Warren Buffet warns, leverage will wipe you out financially in a declining market. What kind of real estate market are we in today? A declining market. It sounds to me like things could get very tough for lots of real estate owners/investors if interest rates stay high well into 2023.
If you looking for work look south of the border. At the end of this year rates in US will be well above 8%. There will be opportunities like it was 2008. Canadians will take advantage as usual and they are at the right age to make a move down south. Last boomer turn off the light.
These guys seem to really be ignoring what a true recession looks like in terms of both rentals and sales.
because they have no experience
Educate us
Canadian Real Estate = One Canadian Resource.....lol
That's why you don't use Instagram famous realtors
She is hotter than Canadian Real Estate
Nasma 💩 need Abe to set her straight again
Prices may drop drastically but what I'm noticing in my mid sized city 2 hours from Toronto is that new listings are coming on HIGHER priced than last month, the month before, etc even though the only things selling are homes under 500K. It's insane. I suppose they think that if they come on the market at over 1million then even if they take a 30% lower deal they'll end up ahead. Buyers are not this stupid.
In Orangeville circa 2014, the new "rich" subdivision in behind the car dealers on highway 9, I watched the billboard go from 500k$, 600k$, to 750k$, all price changes were between Christmas to Easter.
Their "starting from" went up a quarter million in 4 months. All from buyers coming in and saying "wow this is so cheap compared to Toronto", like you fvcking Muppets. Those houses were built like shit too, I would be there fixing the electrical, and noticing zero straps, cheap plastic boxes were the main foyer chandelier would hang and give way.
All built as fast as cheap as possible.
Due to the way how Realtors compensation is decided they are motivated to exploit the buyer from both sides (pun intended). That's why most of the realtor (not all but majority) act like scums, low grade life on the Earth due to money they get..
If you’re a millennial like me, you’ve never seen a major housing bear market in any way. We can’t even comprehend it.
Millennials lived through 08-09 housing crash in the US
@@Cutlerypotato That had no effect in Canada. The market barely took a hit at all. Millennials in the US saw it but they were arguably too young to understand.
@@Beastofcookies they have this thing called the news where you can get updates on events around the world. Plenty of millennials were in there 20s in 08
@@Cutlerypotato I dont think you know what a millennial is. Millennials are born between 1981 to 1996. The oldest millienial wouldve been 16.
@@Beastofcookies hahaha you can't count bud
Just buy the property with cash .
Wow! Reading the comments I am disappointed how much people hate realtors!! I guess people hate used car salesman and any other hustler who makes more money. I find it more in Canada than the US. Making money 💰 is not a crime but it seems like all those who are unsuccessful like to take it out on UA-cam on anyone who seems to be doing well..Resentment is partially behind all this negativity. Great show and very intelligent questions by Steve. Answers to these questions give great insights into what is going on in the market! Also, if all these people hate realtors, why do they watch their channels and listen to them for 40 minutes plus, L.O.L.
Everyone is wrongly concerned about falling house prices.
Sure it look bad, but if you don't lose your income* you'll keep your home.
Moreover, In a dystopian deflationary scenario, inevitably, central banks will flood the market with cheap credit to protect the value of bank collateral. Central banks exist to add liquidity to the banking system. Any other narrative such as price stability is balderdash and serve as cover.
However, Let's look at this from a dystopian case scenario: Hyperinflation
When hyperinflation sets-in, all credit ceases immediately.
This means your mortgage will not be renewed at the end of your term.
Banks will take possession of your home as your new landlord.
Inflation will always be preferred for banks over deflation in a fractional reserve banking system.
What would you rather have?
Realtors are the only ones who win, whether markets go up or down
How do they won if the market goes down
@@kqh123 Instead of house purchase transactions they will do more rental transactions
@@michaela.5363 I don't think Realtors do a lot of rentals tbh.
@@kqh123 How do you think people rent their properties out?
@@michaela.5363 Craigslist and facebook marketplace is the most common
Yeah you don't have a 30 year fixed you definitely will crash harder than the usa
😂
Yo Steve man you're too smart to be talking to a few of these Realtors lol.
Some of the comments from the 'experts' lollllll For real????
Our only resource???? Yo man common that's sad this girl made more money than me last year hahahahah
She made more than $15k last year?
Every bullish person on housing should go to jail and if they're realtors should get a life sentence, fear is a much stronger feeling than greed, tho near future will tell !! lol
"In the trenches"- such brave soldiers. I love when Steve refers to the panel as a "star studded lineup". If the point was to reshape the image of the pompous realtor, it did the opposite
There's literally nobody happier than me rn
did he just say craigslist
The right thing to do is pause on rate hikes after doing so many. People are doing fine with inflation where it is as it trickles down.
Lmao pain train is coming in hottt
@@davidkania3720 the pain train is knowing you are priced out or have to pay the big bucks. That rent is the only option
Inflation is like 6-7 and the target is 2.
We're just warming up
@@Cutlerypotato the wont keep raising rates. When u think they just getting started actually they r almost done
@@baseline6786 wait until Wednesday
CAN ANYONE GET ME APPROVED?????!! LOL................ I got 300k for down-payment no income !!!!! Looking for 1.5 M detached surrey area!!!!
You need salt and pepper on your application
Just wait it out don't worry rent for now
@@Cutlerypotato but I'm a Gora =( maybe some bullz eye bbq sauce 😋