Credit is very restrictive in a lot of other countries to restrain how much money goes into housing. In my country of origin which is part of the UK you cannot get HELOCs or refinance mortgages. The only credit they will issue is a mortgage for a purchase. Canada has experienced wild unrestrained credit expansion over the last 20 years.
The situation might not be as bad as you think since mortgages defaults are still well under 1%. We made a huge deal during the start of the pandemic when we had 30% mortgage deferrals and even named it “the mortgage deferral cliff”. That turned out to be a big nothing and now we are making a huge deal about the extended amortizations. I feel they are just gifts to investors because the main point of investing is to put in the least amount of money and get the biggest returns when you sell after 5-10 years of appreciation. The banks were basically giving out free candy and the investors took it. People took mortgage deferrals and extended amortizations as a sign of trouble but it just makes business sense to take it. The point of real estate investing isn’t always to pay off the mortgage. It’s to maximize returns! You can argue that real estate doesn’t always go up but I can argue the value of money always goes down. The value of money keeps going down as more money gets printed and the amount of money printed during the pandemic was astronomical! Good luck!
If you bought real estate in Vancouver in 1989 and sold in 2000. Your real estate appreciation after 11 years was zero. And you paid for maintenance, taxes , insurance on top of that.
@@Observer168 all public information. You can look at all real estate prices from 1989 to 2000. Rent was at least 80% cheaper. You can look it up. I can't spoon feed you
@@Observer168 my parents paid 27k in 1969 in Richmond and now are mortgage free with you guessed it 2M in tax free equity. Tough to argue that's the best option for any Canadian to spend their housing budget on. My parents lived in the same house thru 1989-2000
Home resale prices feed into the CPI is the reason why recent qtr point increase. Why then did the rate not increase for 1/5th of a century while home prices ascended to over a million canadian pesos? Banks need to be held liable and rhe executives thrown in jail.
Real skills come on. Let’s hope they go and sell cars for a living. Those guys actually earn their money. Car salesman make anywhere form $150-$1000 per car. These guys do about as much work to sell one car as a realtor does for one house. Let that set in.
@@DJRS2178I'm a small electric contractor. I've been studying human nature, leadership, marketing, dealing with various types of people. Selling houses has been the equivalent of selling crack, all you need is to be there with the product in your name, the product sells itself. Mind you they have done a fantastic job of convincing people to pay exponentially more for a clapped out product.
The return on real estate is gone. You can pick up a corporate bond for 7-8%. Best case scenario is real estate is flat….returns for the next number of years. Expect another rate increase in July and August.
Expect higher rates for prolonger periods and real estate prices to stay higher as the impact of unlimited money printing or borrowing is not gone yet.
I think limiting personal mortgages for investment properties to 5 a good idea. They could limit it to 1 or 2. Some investors will state a new home purchase is a primiart residence for a lower mortgage rate. Some will never move in the home. Forcing people to get commerical mortages for invesment properties could slow the demand down from small mom and pop investors.
How does data matter if the rules of the game keep changing? 30, 40, 50 year amortizations, less than interest only payments and so on to keep the banks afloat (no one gives a damn about the people). The crash will come when unemployment skyrockets, especially if as a result of some unforeseen black swan event or events later this year or next.
If you want to know the strength of the Canadian consumer. Look at the knee car market. It’s a forward indicator 6-12 months where the economy is going. New car sales are down. Now wait for q3-q4
Seems call loan to be happening…who had uninsured mortgage before stress test announced are about renewal are going see their payment skyrocket and banks know they cant requalify elsewhere
Buddy have been as right with his predictions as Jim Cramer. You might want to consider doing a channel together. Once the inventory goes up the prices will slide in relation to the inventory and peoples availability to funds.
To be fair.... every "expert" including yourself in the RU-vid comments are just as accurate as Jim Cramer. You are gambling at the end of the day whether it's with real money, or none at all and just talking trash on the sidelines. The only investors that have a great track record are politicians and insiders, hence why Nancy Pelosi out performed every hedge fund in wall street
In spite of how everyone is frightened and calling the crash, there is already an excessive amount of demand waiting to absorb it, which is another reason it's less likely to happen that way. This forecast was not made in 2008, at least not by the general public, as I will explain below. The ownership rate peaked in 2004, according to the other comment. We reached a peak in the second quarter of 2020 and are currently at the median level. From 2008 to 2012, it fell by 3%, and in the second quarter of 2020, it dropped from 68 to 65.
Because they are used to bull markets, most people find it difficult to handle a decline, but if you know where to search and how to get around, you can make a sizable profit. It depends on how you plan to enter and leave.
Given that we are not accustomed to such uncertain markets, the fact that the US stock market has been on its longest bull run ever makes the widespread anxiety and excitement comprehensible. There are opportunities if you know where to go, as you noted that it wasn't difficult for me to earn more than $780k in the previous 10 months. Since I was aware that I would need a reliable and strong plan to get through these tough times, I engaged a F.A
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There are still people buying believing that they can double their money in a few years. That is the only reason they are buying. Once the recession hits, demand will evaporate.
What is so complicated about making banks that issue sub-prime mortgages eat their own loss when the mortgage defaults. That is the fastest way for real estate prices to reflect real supply and demand. it is basic economics. Instead the banks gets to dump that mortgage default on the rest of society and govt obliges this by money printing, bailouts, "stimulus" and other scams.
If I was looking to buy a first time home in Vancouver I would seriously try to adjust my work so I could buy away from the City. Buying first home in the City unless it's a small unit would be enslaving oneself.
Being able to get to work in 30 minutes is also a luxury living in Vancouver. Losing 2-3 hours of your life being stuck in traffic really sucks. This is one of the main reasons people will change jobs if they can’t work from home.
I would find work in a smaller center or be self employed where I could buy. Basically one would have to reinvent their work life balance to make it possible.
Good idea but thousands of people travel to Vancouver for work every single day because that’s where the work is. They could find work closer to home but it isn’t always a option.
Commercial R.E will be the beginning of the end for REALESTATE . The house of cards must fall, and then a new round of players start a new game with the same cards. Currently, just at the beginning of a ROYAL FLUSH
The buying and selling of homes need more government intervention. I rather see the government collect the commission and put it towards affordable housing. Realtors typically have open houses from 2pm-4pm on a Saturday or Sunday and they just stand in a corner on their phones while you look around. The buyers agent just shows you around and spends a few hours of his time during the buying process going over the terms with you and chatting with the sellers agent on how much money is required to close the deal. All this could replaced with a government online bidding process and a government regulated home inspection prior to selling. A government employee could easily handle the open houses and the notary or lawyers could get more involved in the paperwork. The realtors would complain about their livelihoods but they could easily find work if their skills were real that valuable. I have seen kids do more work showing off the prize home at the PNE instead of standing in a corner texting on the phone trying to look important. An notary could handle that if they were paid a open house showing fee.
@@kentA205 could be a solution to finance tons of government housing. Realtors would need to change careers but we would have thousands of government homes built every year. Most people would vote for it.
So people that bought in 2020, 2021, perhaps even last year are already feeling the pain, and people need to extend mortgage amortizations, build zero equity, and have all thier wealth tied up on a highly leveraged asset that they cannot afford essentially. That is the new fundamental fact in the market that has yet to fully burn into the market sentiment. The buyers in the market today either have lots of cash and don't care about market sentiment or they are uneducated retail investors that don't understand how to detect the start of a bear market and not know the pain that comes with being overleveraged just yet.
There will be an end to these increases and there will be an eventual levelling of prices. The big centers will remain unaffordable to first time buyers.
Supply and demand my friend. Commercial realestate down. Where do you think residential will go up. Credit tightening yes but as soon as we hit a recession rates will come down. Canada realize heavy on realestate like it or not. Lets see
I can’t wait for the supply and demand theory to get squashed. It’s not about supply and demand. We have supply. It’s about speculation, which is what is about to get crushed.
@@NavyMoo5e Wrong we dont in places that count. Toronto Vancouver. Affordable places needed true going to a renters market. Has it gotten cheaper in NY no and weather you like it or not those 2 places are Canada. Ever look at a map of the country have a look. It wont get squashed People that over paid for houses in places that are not valued yes. Good luck
What?? Then how do you explain 1M immigrants? Don’t they have to buy or rent a home?? Sometimes I think most people on these forums/platforms don’t live on earth! Seriously… I have renters in my properties and they want homes - same with plenty of my colleagues at work! Demand is out there… do your research
@@Relaxlifeisshort2 how long do you think until we can’t ignore the fact there’s 20 thousand vacant short term rentals in Toronto at the moment? Using the BOC appreciation calculator even shows that the average house in Toronto would be less than $300k if housing market followed proper inflation growth. What makes it higher in value? Speculation on investing. Investing in houses is our problem. This video he’s even explaining regulations coming 😂 good luck
@@Lifeisapartydresslikeit Right and the reason they don't have a home, is they can't get approved... Which is getting even harder with higher rates. You need 250K income to get approved for 800K mortgage, with absolutely no other debts, no car payments, student loans, credit card debt etc, just not that many people in that situation. So something has to give, and it will likely be prices.
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The buying and selling of homes need more government intervention. I rather see the government collect the commission and put it towards affordable housing.
@@Observer168 my realtor got me at least 100k more on my last sale, thank you for your help. I wouldn't have had a clue how to sell my place for what she got.
@@DummMoney-rr1fi you could have done the same with a notary for 2k but you need to do it in person to prevent identity fraud even though fake IDs have gotten very authentic looking.
@@DummMoney-rr1fi your realtor must have been really hot to make you think dumping 50k in commission was a good deal. Hope you had a good time because I prefer spending 2k at a notary or real estate lawyer and pocketing the rest.
From an affordability perspective this doesnt make a whole lot of sense; sure house prices will go down probably but affordability will not improve. If you pay less on the house but way more on interest, the lower prices only benefit cash purchases. You can argue that investors might not be as tempted to invest in realeastate if prices stagnate or fall when they can just buy bonds which are now paying very well, but for the long term, real-estate will continue to be a solid investment avenue while supply cannot even come close to covering demand. Can't really create more land in the desirable cities which most people coming into the country want to go live in. While Toronto/Vancouver are hot spots to live in, and people want to live there, supply will be constrained which will put upwards pressure on land prices..
There is more than enough land. The Lower Mainland is bigger than many countries. BC is bigger than Germany, France and England combined. Who told you that we are running out of land? 😂
@@m.b5777 you never heard of crown land and zoning restrictions? How about all those people that are against building condos in their neighbourhood? How crazy delays in getting building permits? What about the 500,000 immigrants arriving each year?
@@Observer168 Crown land doesn't mean that land is locked up in a vault 😂. Land will be transferred to municipalities as needed. The lower mainland was Crown land too at one point. 500k immigrants across canada is not net immigration. You are not counting the people who are leaving. And immigration targets are not set in stone. A conservative government can change it without any parliamentary approval. The government can change it tomorrow if they want to. No new legislation is needed to do that.
I want the investors and carpet baggers to go bankrupt. Along with realtors that don’t give a shit about their clients well being when they sell them over priced properties and it turns into a turd
It's a circus, banks just keep kicking it down the road. My rent rolls have gone up 50% I. Last 12 months and my fixed variable rate payments are only up 20%. Interest only now lol, but the extra cash flow is sweet $$. I could care less more cashflow less equity gain and more write offs.....gotta love real estate. Buy buy buy!
Yes, put in the least amount of money for max profits when you sell. Investors don’t care about paying off the mortgage. It’s something the renters don’t understand.
@@Observer168 Selling one of our units, so one of my tenants currently has options of dealing with the new owner on under market rents, taking a health buyout from me to leave or agreeing to market rents with a big check upon selling. The word from them is they are taking the cash for keys and moving to Alberta. Trend? or ?
@@DummMoney-rr1fi many people that bought early in West Vancouver sold their homes to rich Chinese in 2016 and bought multiple homes in White Rock or Fraser Valley with cash.
Hmmmm renewing a 500K mortgage at 17.5% would be just under $8k per month, I think that would do more than bring down home prices, it would likely bankrupt the whole country. Heck it costs the government 44 billion to service the debt at under 1%, imagine the cost at 15%
I have a 3 unit home that i bought for $227k in 2016. Can’t wait for this house of cards to come crashing down. Houses are staying on the market longer because it’s over priced sh!t. This regulation is hammering on speculation which Tiff himself said needed to be dealt with. I’d much rather buy my house for what I did than pay 400k for it today.
