Will Rate Cut Spur Flat Market? + Global Housing Blues - Toronto & Vancouver Roundtable Sept 2024

[@LisaPrincic]

Love the deep dive presented on this one. The objective analysis is much appreciated.

[@stevemorrison9838]

Here in Fergus I see more SOLD signs in the last week then we have seen for a month. I worry that Inflation may up tick. Time will tell. love getting your take on things. Thanks.

[@jupitereye4322]

We should all remember the stagnation in Canadian markets after 2008 and how long it lasted. I was just looking at condos selling around 2008 and not gaining ANY value until 2015. It could be argued that the sudden jump in 2016 was due but then overshooted by 2021. Now it may very well be the case that real estate won't see price growth for a number of years from now regardless of the interest rates.

[@Hightower613]

Yes correct but you are not allowed to speak facts or truth these days.

[@lcbrianyuen]

Houses undoubtedly should be considered as bread and butter period. Enjoy your valuable content, thanks !!!

[@fatimaalzahra2644]

Those who will buy a detached home have to sell their condo first. Only 2%-3% of condos are selling. Therefore detached home prices is linked with high degree to condo market. They are not seperate. Even if investors want to buy detached home, they have to sell their condo first. Condo prices will go down considreablly before detached home markets picks up.

[@ronbambrick7116]

opposite, strong single family demand and shortage makes prices so high people turn to condo market instead

[@Stealyourgfinance]

Huh..? ​@@ronbambrick7116

[@Matt-YT]

Boomers across all Western countries have setup zoning & construction barriers. While initially rooted in good intentions (e.g. safety, neighborhood aesthetics) have led to unintended and often negative consequences

[@rifleman4005]

Not boomers but those who vote left wing.

[@Matt-YT]

@rifleman4005 most of these regulations came in the late 80s and thru the 90s

[@rifleman4005]

@Matt-YT again it those who vote left wing.

[@paulbadics3500]

Prices overall same since early 21 except for short 22 peak frenzy while over all inflation rose 20%

[@cindybrown9898]

these guys know the problem is the Interest Rates!!! we are waiting. houses are Not worth 800,000 dollars and condo fees are ridiculous

[@debbielockhart7762]

The problem is our stuoid prices. This housing market needs to crash big time.

[@tylerpeck8047]

The market is flat because the government is artificially propping up Canadian real estate. The government has literally thrown everything including the kitchen sink to keep prices elevated while interest rates went up. Job losses will be the deciding factor on where prices are going and the unemployment rate is rising quickly.

[@baltejkler9981]

Hey John- I want to ask if somehow prices become greatly affordable in Southern Ontario then why will people move to other places in Canada.I have experience moving from Sydney to Melbourne and finally Adelaide and all because I could buy bigger house for same 💰..

[@john_pasalis]

If prices become more affordable in Southern Ontario, then we would see fewer people leaving Ontario for more affordable provinces

[@baltejkler9981]

@john_pasalis Thanks for replying. I want to ask if Canada were even to allow immigration of only 1% of its population and 70% of it keeps settling in southern Ontario, I don't see how housing will become affordable in this region. The market will force people to move to other regions and I don't think there is anything wrong in it.

[@john_pasalis]

@@baltejkler9981 You are correct. Even under more modest population growth rates housing will only become more affordable if a) prices fall or b) wages grow faster than house prices

[@headab9027]

I was at a dinner party last night - nauseating how so much of the conversation was investing in RE. ie. buying buildings in Edmonton and how much rent they can extract. If we take the profit out of RE investing, maybe we will be more productive and successful as a country. But I guess it is the Canadian lazy way of making money --

[@123catz]

Gonna be blood on the streets when these people realize their houses aren't worth as much as they think they are and all these mortgages go up for renewal!

[@ElectronicWasteland-p2x]

I don't really buy the decade-long sideways premise. If major investors realize that their investment could depreciate in real terms for 15-20 years, they're not going to hold on they're going to rush for the exits. The price dynamics are completely different than they were in the 1990s, for one thing the amount of investors participating is way way higher. The two most likely outcomes in the next phase have to be re-acceleration in growth of prices, which I personally feel is unlikely, or land price collapse, there's no real middle ground there.

[@jmc8076]

Others who saw flat returns in most markets for 8-10 yrs: Jamie Dimon/JP Morgan, world bank and Stanley Druckenmiller. Diff factors and evidence to support them. Very credible sources.

[@GreenBeanGreenBean]

real estate moves in a stair step fashion, it always has.... a 100% boost and then 5 years of flatline, then another rip higher, then more flatline. inflation (higher cost of stuff including flooring, appliances, everything that makes up a house/condo) makes real estate go higher.... you do not lose purchasing power by holding it..... when you say investors will lose in real terms you just prove how much you don't know what you are talking about.

[@Hightower613]

​@@GreenBeanGreenBeanThere is nothing normal about what happened during covid. Real estate gained 30 years of equity in 2. The days of easy money with real estate are done for at least a decade. Change in government is also coming, and it won't be equity friendly for asset owners.

[@GreenBeanGreenBean]

@@Hightower613 say no to drugs, thinking the conservatives are going to help is complete lunacy..... they were the ones that cut spending on social housing

[@GreenBeanGreenBean]

@@Hightower613 say no to drugs, which you are clearly on. Conservatives cut social housing spending, they won't be helping one bit.

[@Bharatnamo]

Basically... Real estate is the only cash cow industry in Canada. Make best money talk just real estate and think we are a developed economy 😅

[@MacroAnimationStudio]

Condo owners try to keep those price so high for no reason. The real value is at least 20/25% lower. The real estate agent sold dreams, turn into nightmares

[@BChiarcos]

No reason? Condo owners don't want to take a hit on their asset. Speculative buyers who are capable of making their own decision heard what they wanted to hear in the frenzy and bought at the peak.

[@adamnarbeaux5898]

Go Urmi Go!

[@MR007-r3f]

FOMO Pumper Saretsky says business is busy but the market is slow. Does it make any sense to you?

[@john_pasalis]

Pretty sure he said he is busy, and I think I said the same thing. We are both relatively busy even though the market is slow in terms of sales volumes relative to historical trends

[@cashmeoutside.]

Both are likely in the top margin of realtors in their respective areas. If i’m understanding correctly, he’s prob saying they’re both busy (ie. capturing market share) while other realtors are on bread and water

[@MrLIVELINESOLUTIONS]

In other words they are listing lots of houses for sale, IE "busy"

[@thejuice3819]

To Steve’s point about homes getting cheaper based on the price of gold. Wouldn’t that also mean wages are going down? Holy F

[@cashmeoutside.]

Always have been

[@AG-hl1ni]

We have much more to fall! No buyers market is dead.

[@Lifeisapartydresslikeit]

Finance Minister Chrystia Freeland announced two significant changes to federal mortgage policy Monday, raising the price cap for insured mortgages to $1.5-million, up from $1-million, and expanding eligibility for 30-year mortgage amortizations to all first-time homebuyers

[@Wolfpack1298--3]

The seller are waiting for the market to puck up. Whomever has their property now, they will wait until then. The rate cut has been started and the market will flip at some point, no doubt about that

[@DarR1299]

As a potential seller of develop-able land, I remain barely caution-ally optimistic. Rates need to really crash for me to be optimistic about land development.

[@Wolfpack1298--3]

@@DarR1299 as you mentioned, the developers aren't active now and the inventory will be low in a few years. The rates are dropping as well. This is a recipe for a good market. It's a good investment to buy now and keep for a few years and sell

[@Casey-qm1nd]

​​​​​​​​​@@Wolfpack1298--3a lack of investor interest is a lead indicator of the sentiment shifting negative. What is smart money doing? They took some leverage off the table, out of overvalued asset classes, and have money waiting for better opportunities on the sidelines. Who do smart investors offload too? To first time home buyers and speculators. They bid up the prices because they were closer to the money printer, and who do they dump on? The less intelligent. As more time passes, the supply of fools runs out and activity comes to a stand still. The higher and longer that house prices stay elevated, the more money gets sucked out of productive areas of the economy which ends up slowing growth because it really hurts business. As growth slows, population targets are adjusted lower as a reflection. Also factor in, a negative sentiment towards immigration and politicians will do whatever to score points. Look at the shift in europe that is happening now, I can see that sentiment coming here. It's hard to grow the population when you don't have the jobs, and when unemployment is already high. Think of a snake choking on its own tail, that is canada's economy summed up.

[@Stormshfter]

Buy next fall for 10 to 15% less.

[@Wolfpack1298--3]

​@@Stormshfterwith the lower rate, the price will go up

[@bc5810]

If the investors have left, maybe that's part of the current slow activity in the rest of the market? Our financial advisor says banks are stepping back from Canadian real estate for the next 10 years, it could be quite a lot like the 90s.

[@DarR1299]

The real problem with saying that banks are stepping back form Canadian RE is the question as to where they are going to go? A bank that does not lend is a bank with no revenues.

[@bc5810]

He told us exactly where the banks are going and why, and we moved our capital out of our investment property into those same areas. That's why he makes the big bucks. Never steered us wrong yet.

[@Stormshfter]

​@@DarR1299 The hard fact here is that Canadian's are already maxed out on the amount of debt they can hold. OSFI is cracking down on banks that indulge in risky behavior. Banks might have no choice but to find different ways to earn apart from the residential mortgage market.

[@DarR1299]

@@Stormshfter If banks can't lend in Canadian real estate, perhaps they will not renew our mortgages, take possession of our home and collect rents?

[@DarR1299]

@@Stormshfter If banks can't lend in Canadian real estate, perhaps they will not renew our mortgages, take possession of our home and collect rents?

[@fretstain]

I'm not asking this from an anti-China point of view, but is it possible that the assetization of housing was a sentiment that came out of Asia/China? China joined the world trade organization in 2001 and its my understanding (could be wrong) that housing was seen as an asset class already in China by that point. Is there anything to that timing?

[@MoveSmartly]

@fretstain - Thanks for watching! The financialization of real estate is something we will be covering in more depth on Move Smartly this fall/winter, there are many factors to look at including the international hunt for investment opportunities - Urmi

[@rationalanalysis960]

It is heathly for any asset market to retrace, create liquidity and continue appreciating in a fundamentally inflationary economy (as the entire West is based on - easy never ending credit). A "flat market" is simply buyers and sellers consolidating at a new price/time expectation. Interest rates are going to zero again and everyone can sense it with Bank of Canada cutting schedule/pattern. The Canadian economy is in dire straits, characterized by low growth, low productivity, and high debt/deficit spending. Our food and energy prices restrict innovation and business opportunity and success; Canada as currently configured is not business friendly nor competitive on the global stage (see import taxes on Chinese EVs as an example). We have technically been in a recession (stagflation style) and this consolidation will continue to a modern new depression.

[@Ricardo-gs2ce]

Ofcause sales will drop, interest rate are still too high currently. Is common sense people Gov earn a lot of real estate, they wont let house price to drop. There are a lot of lever to push to push the house price up again if they need to.

[@jay1645]

Roughly half of mortgage holders have yet to face higher rates ( tostar) headline today. Party just getting warmed up or in 3rd innings of the collapse ? Can only see corp. buyers like Blackrock to replace the money laundering groups (China in deflation) to light a fire again as the mkt. tanks in the next 1-3 yrs. so need to see rules around them too ?

[@bobwinters5572]

I wonder if, by the time any of these new multiplexes get built, the condo investors will have finally cracked and sold off those condos at prices that work to companies who actually have the skillset to be slumlords. The cure to most market imbalances is almost always just time. Eventually markets will clear. Clearing those condo markets will go a long way to dealing with the rental property shortages and high rents that multiplexes would supposedly be an answer to. Leaving the rates where they were last spring would have been useful for speeding up that process of clearing the market. The low rates will just give extra time for the zombie investments to fester.

[@jshin5991]

“I have heard economy is not doing well but there will be buyers always and I am providing free AC installation promotions, it will work. Come on it’s only 1.1m townhomes. Today will the lowest priced day.” Wtf???😳 JT : Get some donuts and chill

[@MM-xg2td]

People should buy now and worry about rates later, your going to save more if you buy instead of waiting when the rates are gone and everything skyrockets again.

[@klnrklnr4433]

seriously bad advice

[@supermash1]

Sure thing mister realtor.

[@MM-xg2td]

@@klnrklnr4433 not at all, BOC rates will be going down to around 2.75 to 3 but if the same house goes up $300 000 in a bidding war you will pay more for the house in interest its simple math.

[@MM-xg2td]

@@supermash1 I am not a realtor, you do not need to be a realtor to be good at math.

[@supermash1]

@@MM-xg2td Explain to me how real estate can keep rising in Vancouver when incomes are stagnant. Are all the locals going to move away so the mega-rich can move in to primp and preen in their towers overlooking the soggy landscape? But then maybe you do believe that. I think Vancouver is over and it's a mess of gross inequality. The fat lady just needs to sing now. When the federal government has to stop printing and borrowing money Vancouver - and a lot of Canada - is going down the drain.

[@paulbadics3500]

-1% with 3% inflation = -4%

[@TDonitrowsb]

I'll tell you why people want to move back after coming here, lol. It's got nothing to do with work. After a short period, we find out quickly that there's not much to do around here. One of the poorest provinces in the history of Canada. Corrupt provincial government. Poor infrastructure with poorly designed roads and conditions is horrible. Good luck owning a sportcar. A conglomerate of businesses owning everything. Much higher utilities and property taxes... and much more.

[@gjo1232]

very very true…so called 1st world with 3rd world mindset and now 3rd world infra… so slow .. no innovation .. crime n all bla bla… y to waste ur good life in a stangnant ..backward and un productive unsafe place

[@lynnesunshine]

Let the municipailties dictate or we will be a massive concrete country without any distinguishing Neighbourhoods.

[@paulbadics3500]

Sales down, inventory up, new condo market total collapse, rates still too high for another year & prices still 20-25% over priced..

[@klnrklnr4433]

nope, no chance.

[@supermash1]

Well if prices don't go down, say goodbye to a middle class. A full-on depression must happen, so I'll bet it will. Just a matter of time. Note to Canadians / Australians / Swedes / etc. : Your shit-box condo is not worth a million dollars.

[@JJTMStudio]

Urmi is a fox.

[@baseline6786]

Pasalis "uh hum"

[@quixomega]

I don't think market sentiment is that bad right now. People don't want to buy, but sellers aren't panicking. The real estate cycle won't reset until sentiment falls off a cliff. It'll be interesting to see if that happens in the next year or two or if the current cycle will keep on going.