Move Smartly (movesmartly.com) is a leading source of data, analysis and insights on Toronto area real estate It is powered by Realosophy Realty in Toronto, Canada.
It features John Pasalis (askjohn@movesmarlty.com; @JohnPasalis on Twitter), President and Broker of Realosophy Realty in Toronto, and other experts in all aspects of real estate - consumers, market trends, government policy and social impacts.
The Move Smartly channel is moderated/produced/edited by Urmi Desai.
Why does it matter? You bought a house and so therefore you are going to live in it for many years and being an active member of the local community....... COOORRRECT ?????
Ppl are flocking to Calgary recently but the unemployment rate is higher and higher, 7.7% now. Ppl cannot find a job . I want to see how they are going to do in Calgary , stay or leave with no job opportunities.
When the buyers say "Theres not a lot to look at" what they probably mean is that there isn't a lot of listing that shows up on their Zillow/Redfin searches after they filter for price.
So the permanent immigration target is 500k plus 300k in "Temp residents" EACH YEAR . We only build 200k homes a year as a nation.... I'd still be bullish on housing if I had property. The demand is still through the roof, its just that certain markets like Toronto and Vancouver are unaffordable in terms of price.
Wrong! That is not the target. And the target is not permanent. The government can change it in 5 minutes. It doesn't need any new legislation or parliamentary approval to do that. The next conservative government will drastically cut it.
Great discussion. Appreciate you guys keeping me informed Regarding policies designed to mitigate price declines: I would prefer less policy involvement in the resale and in the rental market. Let the over-leveraged go belly up and stop trying to force the private sector to provide subsidized housing via rent control. Too many unintended consequences/inefficiencies as a result of policy makers trying to micromanage. Let the market sort shit out as much as possible (obv we need some regulation, but gov’t involvement is way beyond optimal now).
14:32 is bang on. Everyone is thinking the rate cut will benefit them. Buyers thinking lower monthly payment, but then sellers saying prices to the moon once rates drop. Both can’t be right!!
Dumb money goes to real estate. An unproductive asset with a lot of black swan risks. Most folks who buy investment real estate in the last ten years are all cash flow negative BEFORE rates rose. The smart money is in the equity markets. If you invested $100 in the S&P 500 at the beginning of 1990, you would have about $3,058.10 at the end of 2024, assuming you reinvested all dividends. This is a return on investment of 2,958.10%, or 10.50% per annum. In 1990, the average GTA home would have cost a buyer $255,020. In the first quarter of 2024, home prices in the GTA increased to $1,177,700. A 362% increase. Let me seee hmmmmmm 2958% increase versus 362% increase... ???? And that 2958% increase includes a LOT of ups and downs in the stock market including the crash of 08 and 09 and again the covid crash. Now - add on to your RE investment... tenant risk, risk of damage, vacancy risk... tonnes of black swan events that do NOT haunt people who invest in well diversified markets. By all means buy an investment property but it should NOT occupy more than 10-15% of your well diversified investment portfolio. Educate yourself people... stop listening to the rhetoric of real estate agents and your dinner party guests.
Now with the foreign buyers out and the decrease in international students and permanent residents plus high interest rates, and all negative government interventions, the real estate market is really doomed. Price will further decline month over month. More and more people are leaving the Canadian market permanently and go to nicer, friendlier countries where your money goes a long way....
Well, the tenant didn't know if anyone was telling the truth since there are also bad landlords. These tenants can't be compared to those who don't pay rent and trash houses. it was also fortunate that the buyer really wanted the house or else they would have walked away as well.
The flipside in this theoretical condo crunch is high unemployment of tradesman will lead to lower wages, lower wages will shrink the building companies' bottom line by quite a bit and could allow them to build and sell homes more cheaply. There's a ton of demand for housing, just not at these sky-high prices.
Fantastic discussion. Look forward each month to this podcast. Looks like trouble coming to RE market in next few months..years....maybe opportunities?
As a potential move up buyer and condo seller, i am frozen since i need rates to go down to at least breakeven when selling my condo. I think alot of other people are probably in the same scenario.
There’s a reason we have rate cuts that many don’t understand. Economy might be tanking and higher unemployment. Do rational people normally buy houses when unemployment is high and the economy is bad?
Great show guys!! I hope that every investor isn’t crapping their pants. Let’s face it, in Toronto, a 20% down payment hasn’t worked in the condo market for years. Question that buyers need to answer is, do I have the extra funds to put down more to capture the P+I, condo fees and property taxes with the market rent out there? Is this the best use of MY money? If they need a 30 to 35% or more down payment (which in the big Canadian cities is required) and their plan is to hold the property, we need not have to have a condo bloodbath. The biggest f’n problem, in my opinion, for Ontario anyway, is the LTB. This, to me, will be at the top of the list on why people will want to sell. If the LTB gets fixed, investors will keep investing in all rental properties, including condos. It’s sad that the government is destroying an investment incentive they created and now they’re shitting on it. I hope this tide shifts because I believe that if you keep your property, over time, those owners/investors should do fine. Thanks to all 3 of you for the work you do! Jumping on the Looney Hour right after this!!
Big Condo crash coming it will also bleed into single homes, Eventually the high property taxes and insurance will also force many to load their large homes, with no buyers prices will drop
@@user-vi8ci2bi6b that would require a depression in Canada. Could happen but I wouldn’t bet on it. Condos collapsing to mid 2010s prices are already a massive crash when you factor in inflation and the missed opportunity cost of other investments (stocks)
I think there is tremendous downside risk in real estate prices in Canada. If the BoC is cutting rates 6 times, think about why they would be doing that.
the more you Agents talk about interest rates and try to get people to jump back in, it shows the true nature of who you really are. Agents have inflated the Market and your endless talk talk talk is beyond tiring. Maybe yiu could take time off from the endless banter and comb the hair.....move a comb smartly
Ten of thousands of investors/flippers in bed with real estate agents all pumping the market like a correction should never happen.... the gov't loving their land transfer taxes not wanting the market to correct. Yet, we hit a record divergence between wages and home prices while BOC in rates are at multi decade highs.... LOL. And the homebuyers are the suckers still buying. I get it, some people are just moving houses but 150-200k of agents fees and land transfer taxes just to move? Again. LOL. Don't buy into this market people. Many people are renewing the mortgages and many will eventually be forced out.
my take: China's wealth fueled by the biggest real estate bubble of all time with the government deeply intertwined in it, exacerbating the problem. This unnatural wealth spilled out of China and into other global re markets wherever Chinese citizens are involved and expat themselves to and invest like the USA, Australia, New Zealand and Canada... this new inflow of capital was enough to destabilize traditionally very stable and predictable markets. makes sense if a market is stable, add anything to it and it will logically lose it's stability. Now that the Chinese RE bubble popped, taking the air out of all RE bubbles they created around the world. The collapse is already massive in China, sucking back in all the excess... And now the fire has been extinguished from traditionally sleepy markets. What fueled the bubbles isn't there anymore, like taking the foundation, the legs from under the table. So all these international RE bubbles are now suspended, hanging in the air like Wile E Coyote, before what seems to be an inevitable free fall of a scale never seen before. Government and people will try to slowdown the fall as much as they can, but there are no real safety nets below. it seems it will be a race to the bottom and a painful landing unless some miracle happens
I agree with this take. This played a role for sure and look at Evergrande much of this wealth was fraud. Canada was mostly safe in that era as well now the area these people frequented: Victoria, Vancouver, Toronto is destabilizing a bit. Canada is not that attractive at the moment. I'm not saying it's over for Canada but there is a clear change in the quality of life. Car thefts are through the roof for example.
@@hanswhite8620 not necessarily, I'm not saying it's the only factor and that low rates are not an important factor, But the facts the Nordics or somewhere else experienced a bubble as well could still be more ripples of the tsunami of artificial wealth that has spilled out of China, the secondary waves of new rich benefitting from the secondary bubbles in Canada, Australia etc..., now pouring their own overflowing wealth in other markets, shifting their balance...
One immigration thing people are not taking into account is the fact that the government is not just decreasing the number of international students, but also not allowing their spouses to work, which was the primary strategy to come to Canada and be able to afford it while studying. This used to give the spousal a Canadian experience which was used to apply for Permanent Residency. Only Master's degree students will be exempt from this rule.
More than the interest rates it is the ridiculous prices that is the issue at hand. Look at the average household income versus mortgage on an average home, with taxes and other expenses, what percentage of the population can shell out over 5 to 8k every month for 25 years!
The bottom line is that housing is inflated far beyond wages, interest rates have little effect if the housing was sold at a true value not inflated, if you purchase far beyond your means, then the higher interest rate becomes a problem, so the lemmings in the market that over paid and the speculators are now in trouble
Makes sense. My parents once had 9 beauty salons. And suddenly in 2014, someone made an offer to buy 5 off of us and my dad agreed. And very quickly he also sold off all but 1. He took the cash and purchased 2 condos and 2 SFHs. Flash forward 10 years and we now own 8 SFHs and 2 condos. I thought my dad was crazy for ditching those profitable salons and choosing real estate. It was the smartest move we ever made.
its all fraud lmfao. lots of landlords on paper are millionaires but fucking broke in actuality. banks are going: wanna borrow more? put more of your own money up.
This is just my personal opinion as a financial professional. It is still fine at the moment. Within 18 months when the majority of low interest mortgages (around 1.5-2.5%) mature, way more supplies will kick in to dramatically bring down the Real estate markets, especially in ON (10%+ drop in price); plus, our governments may launch new policies to bring down the housing prices. After that, the markets may get stabilized for a short period of time because of the "buying the dip" and then crash due to lack of immigration, credit crisis, and slow economic growth. (15%+ in ON). We are probably in the late of 2026 or beginning of 2027 by that time, and we shall see the bottom of the housing markets in Canada with a 5-year fixed rate around 3%, unless any black swan events happened. Crash in ON housing market is not a black swan event, it is a must happen event. You don't need to believe my opinion, and I will come back to read this comment again in 18-36 months to see how accurate I am today.
I think declines are going to be even greater as the knock on effects of the destruction of real estate economy fully kicks in. It’s not the just housing that collapses, it’s the entire industry that will collapse.
It would be very interesting to see how many buyers are the first time buyers. This would give better picture about strength of the market in my opinion. Otherwise, it might be same buyers who recently sold their properties during the pick, pushing the market. What do you think? Also, we need to remove M2+ homes from analysis, as they probably represent less than 1% of all deals, however, put a weight on average, especially in Toronto.
I disagree. There is not a GTA Real Estate 'market' anymore.... only a liquidations based deleveraging platform to lower price discovery valuations longer term. The current condo collapse as precon executions fail now headed into rapidly rising developer insolvencies/court action incipient speaks volumes.... a 'canary in the coal mine' of contagion into SFD collaterialized instruments/mortgages/helocs as Investor Cashflows collapse negative versus financing proportional to renewals and Tenancy Board eviction applications exploding to now 57,000 in the GTA for non payment ! Figure it out.... simple math says '3' don't go into '2' without a ZERO in front ? As in the now ~$3 Trillion combined Mortgage/Consumer DEBT imbalance is now unserviceable by available servicing incomes(GDI) that can be derived from stagnant ~$2 Trillion Canadian GDP, much of that GDP Debt instrument expansion reliant... under any 'normalized' rate Policy maintained positive on the zero bound above cpi inflation against further debasement based Debt expansion ? And with still ~700,000 Canadian Mortgages(40% Negams) still to renew now through 2026 all at far higher rates than when initiated.... the connotations to our 67% consumer spending relaint already stagnant Canadian GDP are significant..... as consumers re-allocate spending to higher Mortgage servicing costs. This is a Real Estate CRASH unfolding... get over it !
Do you think it’s fair to compare listings, sale and active inventory numbers for last 10 year without taking into account how many new homes got built in this time period. I think all these stats should be relative to how many total homes are there in the region.
Not relative into current fundamentals.... There is not a GTA Real Estate 'market' anymore.... only a liquidations based deleveraging platform to lower price discovery valuations longer term. The current condo collapse as precon executions fail now headed into rapidly rising developer insolvencies/court action incipient speaks volumes.... a 'canary in the coal mine' of contagion into SFD collaterialized instruments/mortgages/helocs as Investor Cashflows collapse negative versus financing proportional to renewals and Tenancy Board eviction applications exploding to now 57,000 in the GTA for non payment ! Figure it out.... simple math says '3' don't go into '2' without a ZERO in front ? As in the now ~$3 Trillion combined Mortgage/Consumer DEBT imbalance is now unserviceable by available servicing incomes(GDI) that can be derived from stagnant ~$2 Trillion Canadian GDP, much of that GDP Debt instrument expansion reliant... under any 'normalized' rate Policy maintained positive on the zero bound above cpi inflation against further debasement based Debt expansion ? And with still ~700,000 Canadian Mortgages(40% Negams) still to renew now through 2026 all at far higher rates than when initiated.... the connotations to our 67% consumer spending relaint already stagnant Canadian GDP are significant..... as consumers re-allocate spending to higher Mortgage servicing costs. This is a Real Estate CRASH unfolding... get over it !
@@dashthe6 Immigration doesn't matter at all into basically stagnant 10+ years barely ~$2 Trillion Canadian GDP..... that's a completely false/moot narrative perpetrated typically by Real Estate Industry cheerleading..... because when GDP remains stagnant as it has ~$2 Trillion for 10+ years, so too does the "GDI" or Gross Domestic Incomes of Canadians and their Debt 'servicing' capabilities on the now exploded ~$3 Trillion combined Mortgage/Consumer DEBT. Simply put.... and as so eloquently highlighted by Deputy BoC Governor Carolyn Rogers most recent "break Glass" on Canadian productivity speech..... when you have stagnant 10+ years GDP/GDI or Gross Domestic Incomes therein derived by Canadians from that GDP.... just adding 1+ Million immigrants merely intends smaller pieces of a very 'finite' GDP/GDI pie for all Canadians.... albeit, 'competition' for those smaller pieces intensifies 'suggestive' of enhanced productivity conditions as more poorer people compete, albeit, with no guarantee's of growth ? More akin to attempting 'pushing on a string' than anything else ? So back at you here.... how does population growth into stagnant GDP/GD Income for ALL Canadians cut into smaller 'pieces' for all.... how does that save the day.... exactly ?
I can empathize how most people don't understand the problem with pricing manipulation (ie. rent control). I wouldn't have understood this if I didn't happen to take Economics 101 in college. It's like math, physics, etc. (eg. 1+1=2; gravity causes objects to fall from high to low) Most people never understood nor studied these subjects. (I happen to be a math major and took an Economics course in school). Economics 101 - when you manipulate the price, you artificially cause the natural equilibrium of supply and demand to shift, hence the supply and demand becomes out of balance (depending on how you manipulate the price, you get either excess supply, or excess demand) Economics is sort of like the subject of math, physics, etc. These subjects study the way things naturally work: 1+1 equals 2; water flows from high to low due to gravity; supply and demand naturally creates an equilibrium. The Economics concept of supply, demand, equilibrium, price manipulation also applies similarly to labor, job, wage.
John, the evidence does not support your belief that rent control doesn’t affect supply. In fact, the evidence overwhelmingly shows the opposite. You are not being objective.
