Cautious call on Canadian banks as mortgage risks rise: Strategist

[@hersdera]

A Bank crash/crash in the stock or real estate markets has less of an immediate impact on people's standard of living than inflation or currency devaluation. That the market is so negative at the moment shouldn't be shocking. If we are to survive in this economy, we need assistance right away. The ETF and stock markets are still quite volatile, just like the property market. Now all that's left of my $370K portfolio is ruins.

[@ScottKindle-bk3hx]

Many people are still getting fantastic returns on their investments during this time. Simply maintain a strong sense of reality or ask for professional assistance.

[@Jersderakerguoe]

Due to my demanding job, I lack the time to thoroughly assess my investments and analyze individual stocks. Consequently, for the past seven years, I have enlisted the services of a fiduciary who actively manages my portfolio to adapt to the current market conditions. This strategy has allowed me to navigate the financial landscape successfully, making informed decisions on when to buy and sell. Perhaps you should consider a similar approach.

[@SandraDave.]

That does make a lot of sense, unlike us, you seem to have the Market figured out. Who is this consultant?

[@Jersderakerguoe]

Finding financial advisors like Margaret Johnson Arndt who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.

[@Kin-28-8]

Appreciate this recommendation, hopefully I can get some insight to where the market is headed and strategies to beat the downtrend with when I hear back from Margaret.

[@graywilliams_77.]

Real estate investors losing money is music to my ears. They are a major reason why the real estate market is the way that it is now.

[@susannicky]

Actually, you can blame the Fed for manipulating the market by keeping interest rates artificially low for the last decade. They created this mess and now there's no way to fix it without completely crashing the market. And I'm OK with that.

[@graywilliams_77.]

You can also blame the Fed but most of it goes to those investors that have made life difficult for the 61% of people that are living paycheck to paycheck and can’t afford to buy a home because of these investors that gobble up the properties and jacking up the rent and buying price for a home. That’s BS.

[@susannicky]

He's mainly talking about CA real estate in the Bay Area for this video. Many real estate investors in other parts of CA, and even other states, are still doing well. In CA, I'm sure the lack of supply to meet demand, rising construction costs, extremely long process to approve housing projects, and high property taxes are just a few things causing high housing prices in the state. It's bias to just use real estate investors as the scapegoat to "a major reason why the real estate market is the way that it is now".

[@DividendFiend]

Yeah no gray Williams is right, it's mostly investors fault. The fact that someone can buy a house for let's say 100k but then turn around and sell it for double is crazy. Or they can charge rent that only go a up.

[@jasonhessels]

Actually you can blame yourself/ourselves. The population is ultimately the one spending the money.

[@Andrew-hp1jk]

Canada is totally screwed.

[@jq9474]

The BOC is focused on inflation. It will not cut rates. The BOC will not care about the real estate. Realtors are only concern about decreasing rates.

[@gsin311]

Dude home owners want rates down as well

[@msteele2214]

you can tell who is and isnt affected by interest rates eh@@gsin311

[@rafial81]

​​@@gsin311inflation is much more important than the value of a person's home. It's a big bubble anyway. People take a risk price goes up and they think they rich. This can quickly backfire

[@-37driver]

​@@gsin311Correction - Highly leveraged home owners and retail real estate investors want rates down. They aren't going to see it in the near future. The housing bust is inevitable.

[@mr.uthamaputhiran9790]

A recession is coming and it will be difficult for especially people with debt when they lose jobs. Canada dug itself into this spot with speculative gambling on house prices. Blame the govt.

[@MrFanstar007]

3 major Canadian Banks (CIBC, TD and BMO) reported negative amortization on their mortgage loans with a combined of approx. $130 billions in negative territory. With that said, its clear that we have 130 billion reasons to believe that we are heading for a massive correction in the housing market. Prolong high interest rate cannot co-exist with a bunch of mortgage loans in negative territory for the Banks. Banks have to pay a lot of interest in investments and obviously they cant keep holding negative mortgage for too long and keep losing money on them. Something will break very badly.

[@Frumbler]

I hope you are right and houses have a massive correction

[@MrFanstar007]

@@Frumbler Yep. The level of mortgages falling into negative amortization is about 20 percent in those 3 major banks which are considered A lenders. This is just the beginning. Let alone whats going on the B lender sides. Likely worse than what is being reported by the A lenders. Canadians are simply running out of financial fire power and ammunition to continue supporting these insane debt bubbles. Too obvious to hide or ignore at this point.

[@truthteller6743]

Banks are not paying interest. The banks are adding to the mortgage holders with these type of mortgages. Majority of these loans are probably insured. Banks know how to protect themselves and screw everyone else. How do you rob a bank? Own one. They do the robbing for you.

[@reneb3063]

Hell is coming

[@truthteller6743]

@@reneb3063 To the indebted.

[@citizenm9590]

What goes up must come down. Last time house price went down big was in early 90s it lasted 5 years to bottom out. This is just the start nownot will take atleast 7 years to bottom out the kast two decades run up was something unreal.

[@lapraxi]

First time home buyers don't get too excited. The rental corporations and investors will scoop whatever they can get before you even realize it

[@VictoriaPorscheGuy]

Why would they buy at inflated valuations? That’s what idiot retail “investors” do. Institutions don’t catch falling knives.

[@jctai100]

Not in a high interest environment. Most of their money is borrowed and the cap rate for return now is abysmal.

[@Peglegkickboxer]

This. There is no bubble. Demand is at an insane high, supply is disturbingly low for housing. There is so much international, old, institutional money waiting to buy these assets while Canada imports a million immigrants a year who need housing.

[@dougstewart3243]

@@Peglegkickboxer getting over like a fat rat yep

[@mr.uthamaputhiran9790]

@@Peglegkickboxer It is a bubble if there is a huge disparity between wages and house prices. Feds are artificially holding off recession but its actually happening all around us, lots of businesses getting shut, people getting fired etc.. Companies are slowly starting to shed labor and a major shockwave will come when commercial real estate renews at higher interest rate in 2024-25

[@esparda07]

I like how just a few months ago nobody in public media actually wants to call it a "bubble". Now, just a few months after it's now well-known as a bubble lol.

[@michael2275]

Housing bust is a done deal. Canadians in denial.

[@cwx8]

And yet... everyone including me has been saying this for 5 years now. I think there are 1.5 million new reasons each year why it might not collapse.

[@michael2275]

@@cwx8 I haven't. The catalyst is now here. Strong US market will force Canada to hold rates high for long crashing the Canadian RE market. How it crashes is now clear as day.

[@mr.uthamaputhiran9790]

@@cwx8 5 years ago interests were zero and people saved a lot of money during covid which they have been spending/using for down payment but now all the signs are there. Canadian household debt is the highest in G7 that means more people are not living, just surviving with credit cards. Also with the recent spat with India lots of students have been advised to look elsewhere which is good for housing but bad for business as cheap part-timers will be less now so grocery/restaurant prices will go up again. There is no simple solution I guess.

[@daiseman]

Canada's housing bubble inadvertently made me a millionaire, by relegating me to renting, forever saving for a down payment. Now with GIC rates where they are, I have absolutely zero interest in owning property. Thank you, Canada! Gladly sitting on the sidelines, eating popcorn, enjoying the gongshow.

[@canadahodl5941]

I gotta agree with you. Watching coworkers now having to pay an extra 10-20k more after tax income to just keep up with interest rate increases leave me no incentive to buy whatsoever.

[@stephenn88]

GIC will not last forever and you cannot save a cent at the current rent

[@Jag-leaper]

Only your money is losing more and more value..everyday...

[@jimmason8502]

Until your rent goes up 25% cause your landlord renewed his mortgage.

[@canadahodl5941]

Yup 5% is still a negative return with inflation. And no way would I park any money in a GIC. There are much better ways to invest than something that still loses.

[@dootdoot1867]

If canada focused on drill baby drill. Mine baby mine, log baby log. Liquifaction, icebreakers and opening the northern passage? We couldnt build banks fast enough to store the money.

[@BellaBella-jw9ef]

So true

[@mateuszliese1059]

Racist?!!

[@BellaBella-jw9ef]

@@mateuszliese1059 🤣🤣

[@domjohnson2579]

Please Please Please let the Canadian housing bubble crash!

[@andrewb5412]

Yes ! Worst case scenario is it stays this way. Income to house price are the 4th worst in the world

[@Mehmed317]

@@andrewb5412they are not 4th worst but 77th on the world place

[@cheesefries4920]

How will it crash when demand stays high while supply is at seafloor level?

[@domjohnson2579]

@@cheesefries4920 How did it crash when demand was high and supply low in 2008???

[@cheesefries4920]

@@domjohnson2579 Uh in the years leading upto 2008 the supply was literally in excess + speculative construction + lax lending standards. We're quite the opposite in Canada where we have a horde of people looking to buy VS the houses available are scarce. As soon as something goes south in the housing market, folks who are holding bags right now will swoop in and guess what happnes when more # of folks wants to buy something rare.

[@brettlongfield3291]

And HERE WE GO!

[@Davidjune1970]

CPI in Canada is tied to food, fuel and clothing costs which the retailers are raising the prices of every time the interest rates are raised to combat a higher CPI. The government cannot figure out why their raising rates isn’t stopping CPI prices from going up. Yet banks are seeing credit debt increase and mortgage debt increasing due to the higher cost of everything. This is the equivalent of not only seeing an iceberg… but they purposefully steered towards it and are telling everyone not to hit the iceberg.

[@mateuszliese1059]

What people dont understand is that people who have been buying houses is 5 families...one buyer and 4 cosigners. .... condos big money

[@proudcanadian1837]

Anyone who thinks just lowering rates and getting things back to how things were is a good thing. All we are doing is pushing things down the road for future generations to have to pay for. When you see the housing to income ratios, debts, and all other points, there is no reason for things to continue the way they are or were on a national level, let alone in any way. Either way, it will be interesting to see what happens here and if the bailouts, corruption, and mismanagement continues.

[@ms.carlson3904]

I wish I sold my house last year or the year before. Damn. I could have bought a really nicer and bigger house when there is a big crash.

[@citizenm9590]

Its not to late next frw years will get worse. BRICS are looking to take the Western power down and our assets will get devalued with our currency

[@chesspain6704]

If you are highly leveraged. Get out ASAP! If you owe more than 3 years of salary on your property, run away immediately. If you have 300k in Mortgage and you make 100 k per year... no problem really. If you 700 k to a million. You better make a tonne of money every year

[@purethinking269]

Can you ask the guest to sloooww down. His info is gold

[@kassandramarie3789]

Man, I just want to have a child, and this world is making it impossible…

[@mortdigo]

We were told that the carbon taxes on Canada's primary industries of energy and agriculture was gonna to solve all our problems....were we lied to ?

[@GrampiesCorner]

The only ones be benefiting from the high interest rates are the banks, just as the ones causing inflation are the gas and oil companies and large property owners like true north and retailers, not the average canadian!!

[@892303001]

braindead

[@cwx8]

Interesting the blame is always placed on housing and not $60B in new deficit spending, 1.4B for Ukraine, carbon and CFS taxes impacting food, etc.

[@schmo7777]

Trudeau spent 400 billion during the pandemic. I don't think 1.4 billion to ukraine did much damage, in fact probably a good thing to weaken Russia to no longer be a threat to NATO countries and avoid Canadians from dying. Just send our equipment.

[@chesspain6704]

Quasi delinquent mortgages 😂. You mean the massive mortgage defaults that are currently being put off by unprecedented amortization? LMAO😂

[@mr.uthamaputhiran9790]

Yeah, sugarcoated crap is still crap. lmao

[@RobinetteBowman]

Scary time to invest in CANADA 🇨🇦 😬

[@user-cario]

Hit 200k today. Thank you for all the knowledge and nuggets you had thrown my way over the last months. Started with 7k in August 2022...

[@zomgoose]

The Canadian economy is screwed.

[@SS-bg6ht]

For that resiliency USA goes through recession every few years and Canada doesn’t.

[@mr.uthamaputhiran9790]

Which is good otherwise US will be like Canada where wages increase 10% but Celery and house prices increase 200%

[@SS-bg6ht]

@@mr.uthamaputhiran9790 200% increase in real estate ! To say that is an exaggerated assessment would be an understatement. The world should be investing in real estate in Canada!

[@KM-sr9cc]

CIBC & TD underwater

[@ediddysmith2500]

What happened to Canada when the US dollar collapse

[@CalCalCal6996]

Keep rates north of 5% until 2030

[@dmitrydk92]

15% rate is needed to fight inflation

[@GrampiesCorner]

No, the average canadian cannot bear those interest rates that long!!

[@dmitrydk92]

@@GrampiesCorner I can handle it

[@msteele2214]

glad you are not effected by the interest rate hikes. 🙄@@dmitrydk92

[@Marsalien100]

@@dmitrydk92Cause you aint a home owner LMAO I can't wait to see the boomers lose their houses! GO MILLENIALS

[@matbsaccounting1685]

We are in the recession already. 2008 recession is here to stay,

[@Doctor_Bong]

Living in a van, down by the river. Who's laughing now?

[@jeremynewell9903]

House of cards

[@Funktastico]

Meanwhile, Australian housing market continues to rise.

[@victoriacorcoran1258]

Australians like "it won't happen here" until it does !

[@Mehmed317]

Mass Default in credit market will break the bond market. Bond holders when they feel increase in defaults will start capitulation and prices will come down. Not worth the risk compared to equities

[@Marsalien100]

Bond investors aren't that naive as Real Estate investors. If there is any crash to foresee, Bond investors will jump ship to Credit Default Swaps. I'd bet my parents' house that Default Swaps are going for a premium in this market.

[@Peglegkickboxer]

I hate to break it to everyone in the comments but there os no housing crash on the horizon. There will be a lot of pain for people who are over leveraged but there is too much foreign money, immigrants, old money, and institutions invested in real estate or waiting to buy it all out. The middle class is going to shrink, the elites are going to get very rich.

[@peterbedford2610]

Does Canada have 30 year fixed rate mortgages?

[@sapper986]

No

[@chriswhynder8311]

no

[@Marsalien100]

It's 5 years max. That's why people are shitting their pants with these rate hikes lol

[@BellaBella-jw9ef]

@@Marsalien100there are also 7 and 10 year mortgages but most common is 5

[@vhateverlie]

Pretty sure the USA is one of the only places on Earth with 30y fixed and it's because your government buys the loan.

[@twinsiesyt]

The Feds and BOC went too far. The two raises over the summer put a nail in the coffin in terms of Hard Landing. RE is in free fall where I am. The data is so~~~ backward looking.

[@andrewmccoll1582]

Boohoo

[@mr.uthamaputhiran9790]

Not really, 8% interest is kinda considered normal. 0-2% was an anomaly to boost economy but people with their greed kept increasing house prices to the maximum affordable monthly payment limit and now are paying the price after normalization.

[@berhanu1631]

Real expert tells truth like you.

[@sindobrandnew]

Getting real tired.....