Toronto Area Real Estate Faces Economic Conditions Not Seen Since 90s
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- Опубліковано 19 лип 2022
- John Pasalis, President and Broker of Realosophy Realty, lead contributor at Move Smartly, explains why we are at a very critical point in the market right now and what key trends all home buyers and sellers need to take into account to make the right real estate decisions.
Consult with John: www.movesmartly.com/meetjohn
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I agree with you John. The excess leverage will destroy many home buyer. The low interest rates gave a false "illusion of wealth".
Soon many homeless. I am from China, all my family and friends purchased houses at the peak. All underwater and going to lose their homes. Going to be homeless everywhere.
Just earlier this year you said you did not see any drop in housing prices and at that time inflation was still high and Canadians were heavily debt. You like all Realtors never thought rates would ever rise.
John, great lesson in economics! I was a banker a life time ago, and when rates go up, prices go down, and the forecasts are for more rate increases. It wasn't a surprise having rate increases here and in the U.S. It was forecasted last year that rates were going up in 2022. I had a couple investment properties owned over 10 years in Florida that I sold early this year because of the economic forecast. (super happy I'm out) I don't think the majority of the buying public understand the rate/price relationship. Too many individuals believe that these historically low rates are the norm. I lived in the 13% days of the early 90's, and will never forget.
They believe their bankers and real estate agents. We have cold feet as potential buyers. You should have heard what my realtor told me today to try and soothe my doubts. But I'm not your typical "believe everything " type person. And will be holding off as long as I possibly can
Passing through. You, Sir look like John McEnroe. epic
Your hair is amazing.
Thank you, those first few comments were rough 🤣
Very clear explanation. Thank you John!
Thanks, glad you enjoyed it
This was a very good explanation on on all 3 factors. 👍
Thanks! Glad you found it helpful
The Bank of Canada needs to raise to 3.5 to 4%. Investors are pretty convinced this will happen by the end of 2022. The hyperinflation in the real estate industry in the past 20 years has brainwashed people into thinking what has happened in Canada is based on fundamentals and will never stop. Let's get real though. Canada saw a 297% increase in prices since 2005. Germany has seen 97% and the US has seen 66% increase overall.
The government kept telling everybody they will support real estate prices no matter what. You know what domestic and foreign investors and flipper heard? Pile in, you can't lose. And profits will end up through the roof and who cares when they aren't the bag holders. The bag holders are the people buying at any price thinking prices will keep skyrocketing forever.
Anyways, don't be a sucker, prices always lag interest rate increases and interest rates are still going up. And never in history has the BOC been able to have a soft landing from this kind of high overall inflation. So if you have to buy, use 2017 or 2018 prices as a point of guidance. A trading chartist would call those levels the first support level. Watch the volume. If volume is low, there's no support.
Lol... We will top out at 3.5 and come Q1 2023 we will drop it to 2.5 , nothing will stop this train .... Canada is a ponzi scheme.... Wake up
@@cultoffreedom9068 thank you for that insightful response.
@@kevinn1158 do you think the fed chooses Growth over fighting inflation .. BC I don't .....they don't care about the common man.. this is a machine that needs to keep its wheels turning ...
Thank you John for all you done! I am a big fan!
Thank you!!
I saw this coming months ago, sold at the peak, and moved to renting in a much more affordable market. Maximum capital preserved, zero debt, lower cost of living, full mobility, liquidity and agility to move when the markets turn...
must have paid capital gains a lot
your cash is Depreciating
if you have it invested, the market is crashing also
you may feel you have done superbly but chances are you're marginally better than the rest.
@Mogul Rider oof cash is king lol.. cash is nothing.... It's being printed alot more then houses are being built ... Wait till 2023 and your cash won't be able to buy shit .... Fiat is fake
that's hella smart. I think houses will be 30-40% less in about 2 years.
buy low sell high😎
@@bilsid Zero capital gains on primary residence in Canada. Cash is in guaranteed investments. Doing just fine, thanks.
Congratulations!!!
Well played!!! 👏👏👏
Rockstar presentation well done
We love you John!!! Great insight!
Very kind of you! Thanks
@@john_pasalis Thank you sir. also, dont let the trolls get to you. They're on every channel spouting nonsense. You should see the hate Steve Saretsky gets from some of these guys... not sure what their problem is.
You have a good presentation style. Thanks for your perspective. I own a home in Orangeville, technically just outside the GTA. I would be interested in hearing your thoughts on how migration from the "city" might affect house prices in my situation.
Absolutely helpful
Thanks, glad you enjoyed it
Levelheaded reality. Good content as always, John.
Thank you!! Glad you enjoyed it
Soon many homeless. I am from China, all my family and friends purchased houses at the peak. All underwater and going to lose their homes. Going to be homeless everywhere.
How would you predict real estate prices in upcoming months? Is it going to come down?
Very high home prices directly contribute to high cost of living (hence to inflation).
I think for a long term policy prudence, BOC would like to hold the high interest rates for a while.. even after the inflation on paper returns to 2%.
That would also give them room to 'reduce the rates to neutral' in case they need to stimulate the economy amidst the recession.
Infact... BOC would love if the house prices come down to the level of current wages... instead of other way round... because otherwise it would trigger a chain reaction of wage price spiral...
Great insight John.... the foreign buyer's tax was there .. they just up"ed the percentage.. also .. you can't compare our current situation to 2007/2008... COVID... lasted for 2 plus years and impacted SEVERAL VERTICALS.. not just the housing market... which seemed to be contained in the US ONLY in 2007 with sub-prime market collapse... its also VERY MUCH a global thing.. impacted several markets... SYDNEY ... HONG KONG ETC... several economists have already warned about an imploding housing /bond market... because of several LARGE developers falling short on payments etc... should be interesting to see what the year end has in store....
Many indebted individuals will soon be visiting the bankruptcy trustee!
@2:39 Prices go down because we have rapidly rising inflation - ha ha ha…. Good one
High inflation in a short term 1-2 years is not so bad for the country.
Boc was irresponsible letting trudeau spend 900B .. and now being irresponsible raising rates too quickly.
their job is to keep inflation at around 2%...Last time inflation was this high was in 1981, and the BOC set rates to 20% to fight inflation. If anything, the BOC was extremely slow to react this time (their excuse was that inflation is transitory, turns out it's spiralling out of control) .
@@momo777777777777777 ppl can afford 8% thats why they r spending. Sure it sucks.. but ppl r out spending regardless. Inflation will slowly drop in months to come. Even if boc left rates at current level.
Many people don’t get the concept. Interest rates are not the problem. They are the cure, not the poison. What’s the poison? 10 years of rampant asset inflation disconnected from incomes, from low rates. Excessively Low rates = poison. This is how the system steals your wealth people. Shezzzzz.
Thanks - good reflection - sounds accurate - you may inspire me to go into real estate - like your team up with your Vancouver colleague buddy Steve ... have a Good Day ...
- you need to brush your hair :)
Can you explain how exactly does war in Ukraine affect Gas prices in Canada?
Thank you so much! Please bear with my ignorance of finances and the economy - I struggle understanding how this one (tragic) Ukraine war can impact us so significantly in this, our "global economy"? As I'm now a self-employed person (by choice) and potential new homebuyer, my incentive to learn more about the market, my investments, taxes (!), etc. has increased significantly - I really appreciate your resource, John, and will look into your offers.
Hi Betty, the war in Ukraine has contributed to the rise in the price of oil, foods and other commodities that come from Ukraine and Russia. This is not to suggest that this is the primary cause of high inflation, it's not, but it has contributed to today's high prices
Great hair but Viva Frei can't be beat although he is now living in Florida so technically you are number one hair hopper in Canadastan.
john...no haircut...looks very stylish..
Thank you for your feedback, and for having an eye for style 😉
Awesome job. Great concise breakdown. The govt propaganda networks will never give this content. They prefer keeping everyone in the dark.
This coming event will more closely
resemble the late 70's and earth 80's . Fuel has doubled in a very short time, the real estate market is tanking and people are struggling to put food on the table. Shrinkflation is rampant and the quality of the ingredients is dropping. Soon unionized workers are going to strike for wages that match the cost of living increase, look for much more labour market unrest. Inflation is much more than the government is admitting, probably closer to 15%, interest rates will have to rise above 10% to 15% to cool inflation. Prepare for a decade that looks quite different from the one that just passed.
Yes, they are listened to BOC - Tiff 😥😥😥😥😥
Purchased this course but looks like it was originally a $50 as it says in the FAQs.
The course was actually $150 and we decided to relaunch it for $100. There must have been some sort of mistake or typo when we updated the page. Sorry for any confusion
@@john_pasalis just been through two chapters. It's worth every penny.
@@nanrey That's great to hear! Glad you're enjoy it.
There are A LOT of videos up there, maybe a bit intense for some people, but I'm a bit intense about real estate so had to squeeze in as much as possible :)
History ALWAYS repeats itself....... unless you never study history
I think Mark Twain had it right when he said “History never repeats itself, but it does often rhyme.”
Banks have to throw the price of houses to ground 0 by increasing interest rate, to earn the money by starting afresh again
BOC uses Milton Friedman's monetary policy theory with increasing interest rates to possibly cause a recession which will lower prices. The PM giving free money to the tune of over 600 billion dollars has caused prices to sky rocket out of control. There is also too much leverage because of the cheap money available through low interest rates. Good luck to us all!
not true, the BOC uses Keynesian macroeconomic theory to control inflation.
If you believe Canadian inflation is 8.1% I have a bridge for sale for you.
I created an NFT that goes with the bridge . You can pay in Doge coin. Real inflation likely 20,%. On conservative side. Take a look at food and gas prices....
Having a massive reduction in house prices is not a bad thing. The houses will not go any where
just different owners
And there's the Fed raising another 0.75%. BOC will follow. People need to get it out of their heads that the rate will drop anytime soon. It's going to take a yr to get overall inflation under control and the reality is real estate and everything else will need to correct to the new norm.
We are so over leveraged and in debt in Canada. Hold on tight. Real tight. This is getting greasy ( insert hair joke).....
Marc Faber look out, this is the new Dr. Doom
The bank of Canada may not be able to control supply and demand, but profits can be capped by implementing rent and price controls.
i hear Newfoundland next condo boom
How will this end? Will this bubble ever crush or we will stay inflated and go sideways?
Prices across Ontario are insane, detached home even in a small town few hours drive from GTA will still cost you +$1M Why? Toronto downtown condos are another story, insane prices, who's buying those $1M bachelors??
Because the GTA has a lot of high income earners and boomers with significant equity in their homes
Greedy people will not go Scott free by throwing keys of houses. They have to pay to bank by selling their assets
Home prices goes up blame to the brokers they were d one who benefit d most
Who could have seen this coming?
Lol!🍁
GTA Real Estate will see substantial price declines..... substantial equity evaporation.... substantial numbers of distressed assets...... and substantial Mortgage Insurance involvement.
NOT Good.
Hopefully people rein in there debt.
I think the DECLINE will be WAY WAY WORSE than what you're projecting...!!
Canada has no industry 2t economic GDP with 1t housing what a joke ha 😁
They should let ice cream top melt from the cone let people enjoy their excessive bidding war money
Why is everyone talking about interest rates as the only way to tackle inflation? Interest rates are not the only way, and bankers are not elected democratically so they should not have undue power over our economy. There are Price controls and there are Rent controls. They also act as a brake on inflation if there is the political will to use them. We can also use a wealth tax to generate new affordable housing which would help drive down rents. People have to stop acting like "the market" exists independent of political will.
So this is whats called a summer lull and prices will pick up again in the fall
Totally man. You nailed it. Lol.
Soon many homeless. I am from China, all my family and friends purchased houses at the peak. All underwater and going to lose their homes. Going to be homeless everywhere.
Unless you address the massive debt and unrecorded liabilities, you're headed for a mess. Write downs are required. These little adjustments are meaningless
Not sure how many wealthy Asian immigrants will come here as our health care system crumbled/country frozen 7months a year and taxes insane....
What's up with the hair tho?
Real estate collapse has just begun.
John's hair is an economic condition.
Looks like you combed your hair with a pork chop bone lol
Time for a haircut 💇🏻♂️
This market is going to be the exact opposite of the the smug no conditions BS blind bids frenzy. And I blame the realtor community for not standing up for the public interest. You lost a huge amount of professional credibility. Hudak is a complete dolt.
Realtors have no conscious they new what was going on was effed but when they were selling a ton of houses and knew they were sinking people they didn’t care , they have been a huge part of the problem and are no better then used car sales people.
@@Hoser584 I trust used car people 100 times more. They won't cost you half a million and charge you $50k to do it. For zero expertise.
Gross.
What did you want realtors do exactly? Do you also blame realtors when the market is down or balanced?
@@penrose2942 Charge fair prices and stop playing the massive commission game. Be flawlessly honest. I blame realtors for being greedy and unscrupulous. The most arrogant people I have ever met in most cases and not worth a 50th of what they charge. Like I said, if buyers paid you would get a few hundred bucks to do the paperwork. Maybe the greatest sham in business ever. In left the game many years ago an became a CA. A real profession with ethics not a sleazy cash grab with fools posting their photos on bus benches. Better Call Saul has more integrity.
@@jmcg5838 lol who hurt you ?
This man needs a haircut.
nah ..he looks very stylish...looks good..
Devastated by this 🤣
@@john_pasalis no haircut...looks really good...keep it..
@@v.p9412 the brain part - maybe...history does repeat itself...and will big time very soon...nothings happened yet...just the prelude of whats to come.
Get a haircut
Noted! 😆
@@john_pasalis no need...
@@john_pasalis Jokes. If you saw a picture of me - we have the same hairdo. We need a haircut. :)
@@jimmaynard I have the same long hair.lol