Your understanding of finance is hilarious, do you think they just give out a million dollar mortgage to anyone?? Lol only if the household is earning like 300k per year so their TDS ratio can handle it, or if they've got millions of dollars already and put 30% down. I don't think you'll see people making 300k per year worrying about their house value going down 30% if it happens. You seem to think everyone is stupid, perhaps that is because you are; however, most of us are doing very well and really don't mind if rates go up or down, in fact, if they continue and the markets go lower, I'll be happy to scoop up another property.
@@thanks4that261 wow seems like that comment really triggered you. Now that's funny lol. You seem very sensitive. I mean come on. 1 little sentence almost sent you off the deep end. Pour yourself a stiff drink and just relax dude
@@robnisbet6797 oh yes robby, inlo e when clowns use the word "triggered", the irony is that you were so triggered that you felt the need to comment as well, now that's funny. You raise very valid points in your comment, great stats and facts, it seems like you're a really smart guy and you've certainly done a great job in this thread, thank you for contribution. We are all more informed thanks to your brilliance. I'm going to guess you're about 14 and all you ever do it comment that someone must be "triggered".... thanks bud, I was actually laughing when I read the comment, so yes it triggered a chuckle from me
UBS says the Toronto real estate market is the most overvalued market in the world. It's relevant now because the bubble is bursting. Downside risk is colossal.
You got that right. 2023 will start with a bang... hopefully not nuclear but who knows. Then the fear of ressesion and job losses will begin. The drop has just begun.
@@T.dot. When the emotion is drained from the market to leave the dire economic reality .. it will see desperation and foreclosures spike. Why do you think banks and credit unions were pushing insured mortgages so hard for last 5 years. To leave the Canadian taxpayer on the hook for billions in losses? I have played along in this game 4 cycles now. Waiting for the carnage since 2018. Like buffets quote. “When the tide goes out, you get to see who is swimming naked”. E
True one would initially thing that 20% of homes are renewing in the next 12 months as they were on a 5 year term BUT those that had signed a new 5 year mortgage in 2019-2020 for example may have refinanced since as mortgage rates were at their lowest. I think many were able to improve their position with an earlier refinance and could weather the hikes longer. It will be interesting to see the coming months.
@@thanks4that261 my cousin will be renewing on his rental next November. He purchased in the pandemic and locked in for 3 years. He's very optimistic that rates will come down by then. I think the pain train 🚆 is about to roll thru. He is currently renting the house with only a couple hundred a month cashflow. He told me if he renews at 4% the investment will cost him over 500 a month plus potentially being negative in equity by then. It's not going to be pretty for many. I know another person that recently overleveraged themselves on a condo. Bank only locked there rate for 1 year I wonder why ?
Do you have any idea how many homowners heloc and credit card debt themselves into a deep hole every year a massive portion of people are forced to refinance mid term just to keep the lights on not everyone is a so called perfect mortgage user...actually based on stats canada data we know most homowners are less then $ 200 away from insolvency...and in this highly indebted time of our life and this highly inflated cost of living that accelerates the debt cycle...
@@jaymar1615 oh yeah my uncle is one of them. He prides himself on changing houses 5 times in 10 years. The real reason was to get his head above water ans pay off debts.
I think John's comment is spot-on about mortgage defaults being the last man standing. People will cut back on everything before defaulting on their mortgage. GDP will take a hit before mortgage defaults becomes a collateral issue for the banking system.
The CPI numbers in the US just came in hot this morning. I've been saying for 8 months real estate is rolling over and now those CPI numbers are going to allow the American Fed to continue to raise rates at an aggressive rate. We will be 1.5-2% higher by Q1 of 2023. This will trigger a Canadian real estate market capitulate in the next 8 months. 20-25%. Anybody trying to buy right now are crazy. They aren't reading the tea leaves. The BOC will NOT do a 0.25% raise in October. They will go min 0.5 but probably 0.75% in October. They will be forced to mimic the Fed. The Nasdaq just blew through it's 200 week moving average. This almost never happens. Last time was 2008. Think about that. Go ahead, hold your property, but rates are going up and real estate prices will adjust downward with people who need to sell. Rents are part of the CPI so if it keeps going up, interest rates will keep rising. Mortgage rates will also be keep going up.. This is going to be a hard landing.
I'll drop some knowledge on you, "everyone knows it's coming" has never happened in the history of finance and investing. The majority has never been right, ever. That is a fact, but you can think what you'd like.
@@thanks4that261 The thing is that the majority thinks that prices are going to stay flat, then keep going up. They are waiting for the BOC pivot. This is what is pushing sellers to delist and rent instead. The doomsayers are the minority. According to your own knowledge, the majority thinking that prices are going to stay flat and go back up are wrong, but you can think what you'd like.
@@SzybkiTom I don't disagree with you. Either way I will be happy. I have assets and cash, I hope there is another leg down so I can buy something cheap. But my assets are long term plays anyway, no plans to sell anything. Impossible to predict markets nowadays with so much power in the hands of the fed so I'd never go all in or all out of the markets
Those "sellers" will be HODLING for the decade. How many need to sell to retire? How many haven't paid off 50% of there mortgage need to sell for retirement?
I will be a first time buyer and my agent is proposing that I look into pre con condos ( express 2 condo) due to their incentive called home ownership program . I’m obviously concerned due to inflation how it would impact the precon projects . What do you all think ?! Some r saying that I need to stay away from precon but I need a very educated reason that someone can explain .. I’m pretty much clueless when it comes to real estate ..
Lol Guys! We can't have low rates for a few years now (definitely now lower than 4%) and shouldn't they be higher than inflation anyways? There's a very good analogy for this. Low interest rates are like drugs. Yea you had drugs for short duration but don't get use to it. Historically even these are really low rates. When you go off drugs you'll be uncomfortable and will have withdrawals but does it mean you should not do that!? No it's necessary and imperative. In order to have a healthy economy you'll have to have higher interest rates for a few years and In my opinion they should have close to 4% as normal rates!!
This is what I have been told by my father in law who is 80 years young. Interest rates need to be higher than inflation to bring it down. With interest rates at 6% and inflation soon to be around 6.5% we are already there.
That 40% of sellers will be relisting there house in the spring. Even more desperate than before. BoC will cut rates when the inflation rate is lower than the unemployment rate. Historicity when that pivot happens asset values crash. You guys are to optimistic. Only time will tell.
People (sellers) are not that ignorant about the monetary policy dilemma. IMHO, really this is just my best guess of an opinion and I may be wrong (It wouldn't be the first time). I think people can read the writing on the wall that inflation is here to stay and the central banks are really powerless to control it. Real Estate and Gold have been historically the best layman's hedge for inflation. Politicians can't handle normalizing interest rate sufficient enough that would create an economic depression sufficient to bring down inflation. Moreover, these same politicians can't stop running massive fiscal deficits that are the root cause of the inflation problem. They just can't fathom politically that you can't borrow your way out of debt.
There will not be a spread between the US and the Canada rates for any duration whatsoever. So, the Fed has openly telegraphed its next steps. Inflation getting “baked in” occurs when a significant number of people gain wage increases. The Fed, thus, wants to prevent wage increases and the best way to do that is through unemployment and a recession. So, bluntly, the goal is a recession and unemployment with an accompanying crash in large asset prices-e.g. homes. So, home prices are inevitably falling. Also, consequences of credit debt and car payments have yet to kick in yet.
Don't underestimate the amount of well capitalized owners that opted for a high LTV mortgage because of having no consumer debt. I don't have car payments, student loans, or any debts outside of my mortgage. Smooth sailing.
The UK example shows what will happen in the near future to the bond market and the government doesn't even have to make a mistake. All it takes is the stock market to crash due to slow increase in bond yields or something else and the bond market will crash like we never seen before. There is huge demand for bonds as a bank collateral to borrow money to bet in a derivatives market. Banks get spooked, stop lending and those bonds are not needed. Boom goes the bond market, real estate and the stocks go from bad to worse. These are nuclear devices just like MBS during 2008.
The solution is very simple. Get more housing built. Cancel all taxes related to construction. No income tax for construction companies. No sales tax and no import duty on building materials. No fees for building permits. Simplify and expedite building permits process. Let people build more than one home on their land.
@@donm2067 lol ok Don, in your opinion, what would be the joke in my statement? You'd want to sell your RE now when it's down 25% and rates are near the top, when you can rent it out at the higest rents we've seen? Or you'd want to sell your bitcoin and capitulate after a 70% drop? Historically both of those choices have been the worst thing you could do. But I'm very curious about your thoughts.
@@thanks4that261 pain train is coming buddy and it looks like your tied to the track. Cash is king like never before. This goes against everything you were told 💯
@@davidkania3720 **you're. You clearly have no investing experience... Cash is king? I've made more in the markets this week alone then I would in a year in any cash yield. Perhaps for someone with no financial education or investment knowledge like yourself then cash is a good place to stay safe, sucks to be losing about 20% of your buying power though, doesn't it? Assets are king buddy, I just rented my 2nd house for a nice $600 monthly cash flow, hoping for RE to go down more so I can buy a nice vacation property too. So nice to have lots of assets and cash, like a smart person lol, are you a renter?
Amazing how many people here think they're experts on finance and economics without ever studying. Their barber tells then we're going to 18% rates again and they accept it, no idea about consumer debts, sovereign debts, globalization, fiat currencies, never once looked at historical data sets. Quite fascinating... time in the market outperforms timing the markets. Take a few years to study econ and financial data then come back and preach about how everything will crash and tell us how selling everything in a down market makes sense... I wrote my dissertation on the incoming financial crash 3 years ago, but I still wasn't stupid enough to exit all markets and just hold cash lol always stay in the markets boys, and always have cash to buy the blood. Free lesson for you. Your homework is to figure out how your returns in the S&P500 would differ over the last 30 years if you missed out on just the 12 best days by trying to time the markets.
I would not sell my investment property even if the market is to fall by 60%. The inflation rate is high, and money is losing value, why would I even sell not only for cheaper but for the devalued dollar? Even if the inflation is coming down, that doesn't mean deflation, it just means a bit less inflation. Nah, I ain't selling even if I have to wait another 10 years. I feel bad for those that have to.
@Gabriel Sagula What do you mean by "bank property"? If you mean that I have a mortgage, I do have it, but it is covered by the rent. They can raise the interest rate, I can still afford it, and can afford it at much higher rates. I could keep it even at 10%. Bank probably wouldn't let me buy more properties because I couldn't qualify, but that is ok. I will qualify at a later point and I am ok with that. Time is on my side. Again, I feel bad for those who have to sell now...
@Gabriel Sagula you seem to think that borrowing money to buy something means that the money lender owns it. That is incorrect, and I can promise you that the bank does not want that house, or any.
dollar is losing 8% a year. real estate has lost 10-30% over 6 months depending on the area. stock market has lost 25% in 9 months. So dollar is still stronger than everything else.
Typical Salesmen who don’t have much business coming in. Trying to somehow staying optimistic. My suggestion would be go back to school and get a different degree and switch career. There are realtors on our street ended up loosing remaining hair on the head as well in last 2 months. Emotions invades ability to think logically. Give yourself a break :)
Next rate hike should clear the confusion up.
I wonder how many people with million dollar mortgages will be going to the food bank… Probably more than a few.
Would love to see that stat.
Your understanding of finance is hilarious, do you think they just give out a million dollar mortgage to anyone?? Lol only if the household is earning like 300k per year so their TDS ratio can handle it, or if they've got millions of dollars already and put 30% down. I don't think you'll see people making 300k per year worrying about their house value going down 30% if it happens. You seem to think everyone is stupid, perhaps that is because you are; however, most of us are doing very well and really don't mind if rates go up or down, in fact, if they continue and the markets go lower, I'll be happy to scoop up another property.
To donate? Probably a ton.
@@thanks4that261 wow seems like that comment really triggered you. Now that's funny lol. You seem very sensitive. I mean come on. 1 little sentence almost sent you off the deep end. Pour yourself a stiff drink and just relax dude
@@robnisbet6797 oh yes robby, inlo e when clowns use the word "triggered", the irony is that you were so triggered that you felt the need to comment as well, now that's funny. You raise very valid points in your comment, great stats and facts, it seems like you're a really smart guy and you've certainly done a great job in this thread, thank you for contribution. We are all more informed thanks to your brilliance. I'm going to guess you're about 14 and all you ever do it comment that someone must be "triggered".... thanks bud, I was actually laughing when I read the comment, so yes it triggered a chuckle from me
UBS says the Toronto real estate market is the most overvalued market in the world. It's relevant now because the bubble is bursting. Downside risk is colossal.
Prices are leveling off cause they are listing at assessment here in BC.
Just wait till 2023…….
You got that right. 2023 will start with a bang... hopefully not nuclear but who knows. Then the fear of ressesion and job losses will begin. The drop has just begun.
Price freeze is typical market reaction . Wait for the capitulation. Then the REAL price correction. Same as 1980’s and 90’s
Capitulation lol....we're not talking stocks here buddy, it costs a lot to build a home.
It is the same psychological dynamics of greed and fear playing a major role just as with stocks.
@@T.dot. When the emotion is drained from the market to leave the dire economic reality .. it will see desperation and foreclosures spike. Why do you think banks and credit unions were pushing insured mortgages so hard for last 5 years. To leave the Canadian taxpayer on the hook for billions in losses? I have played along in this game 4 cycles now. Waiting for the carnage since 2018. Like buffets quote. “When the tide goes out, you get to see who is swimming naked”. E
True one would initially thing that 20% of homes are renewing in the next 12 months as they were on a 5 year term BUT those that had signed a new 5 year mortgage in 2019-2020 for example may have refinanced since as mortgage rates were at their lowest. I think many were able to improve their position with an earlier refinance and could weather the hikes longer. It will be interesting to see the coming months.
I agree, we might not see a huge amount of renewals until 2025/2026.
@@thanks4that261 my cousin will be renewing on his rental next November. He purchased in the pandemic and locked in for 3 years. He's very optimistic that rates will come down by then. I think the pain train 🚆 is about to roll thru. He is currently renting the house with only a couple hundred a month cashflow. He told me if he renews at 4% the investment will cost him over 500 a month plus potentially being negative in equity by then. It's not going to be pretty for many. I know another person that recently overleveraged themselves on a condo. Bank only locked there rate for 1 year I wonder why ?
Do you have any idea how many homowners heloc and credit card debt themselves into a deep hole every year a massive portion of people are forced to refinance mid term just to keep the lights on not everyone is a so called perfect mortgage user...actually based on stats canada data we know most homowners are less then $ 200 away from insolvency...and in this highly indebted time of our life and this highly inflated cost of living that accelerates the debt cycle...
@@jaymar1615 oh yeah my uncle is one of them. He prides himself on changing houses 5 times in 10 years. The real reason was to get his head above water ans pay off debts.
@@davidkania3720 where did your cousin buy if you are saying he'll be negative I equity after 3 years???? I find that extremely hard to believe
I remember vancouver in 1981 when most houses with mortgages were underwater. People were desperate to get out.
Literally? Was there a tsunami?
@@Rawdiswar You know the meaning of "mortgage under water"?
@@deltaskyhawk My poor attempt at humour missed the mark.
Yeah, an underwater mortgage is where you owe more than what the property is worth.
The individuals with that debt haven't even experienced 6 months of these higher rates the hike cycle has been so quick
The vast majority that are mortgage free are 65+yo, the rest of us have mortgages.
Where's the stats for this? Why can't we break it down ?
Inventory is low because sellers are hoarding like a bunch of Smeagles.
Oh yeah everyone wants to be a landlord and build a portfolio of rentals hahahha. That's gonna change real quick
Myy precioussss
I think John's comment is spot-on about mortgage defaults being the last man standing. People will cut back on everything before defaulting on their mortgage. GDP will take a hit before mortgage defaults becomes a collateral issue for the banking system.
I think the next 8 weeks will be telling with 2 raises and the economy turning to the pits for the next year.
The CPI numbers in the US just came in hot this morning. I've been saying for 8 months real estate is rolling over and now those CPI numbers are going to allow the American Fed to continue to raise rates at an aggressive rate. We will be 1.5-2% higher by Q1 of 2023. This will trigger a Canadian real estate market capitulate in the next 8 months. 20-25%. Anybody trying to buy right now are crazy. They aren't reading the tea leaves. The BOC will NOT do a 0.25% raise in October. They will go min 0.5 but probably 0.75% in October. They will be forced to mimic the Fed.
The Nasdaq just blew through it's 200 week moving average. This almost never happens. Last time was 2008. Think about that.
Go ahead, hold your property, but rates are going up and real estate prices will adjust downward with people who need to sell. Rents are part of the CPI so if it keeps going up, interest rates will keep rising. Mortgage rates will also be keep going up.. This is going to be a hard landing.
The sellers are as dumb as Bitcoin bros, they will HODL until they can't
I love these casual stories like they are not Sh+*^ their pants in Van and TO
Everyone knows it’s coming.
I'll drop some knowledge on you, "everyone knows it's coming" has never happened in the history of finance and investing. The majority has never been right, ever. That is a fact, but you can think what you'd like.
@@thanks4that261 The thing is that the majority thinks that prices are going to stay flat, then keep going up. They are waiting for the BOC pivot. This is what is pushing sellers to delist and rent instead. The doomsayers are the minority. According to your own knowledge, the majority thinking that prices are going to stay flat and go back up are wrong, but you can think what you'd like.
@@SzybkiTom I don't disagree with you. Either way I will be happy. I have assets and cash, I hope there is another leg down so I can buy something cheap. But my assets are long term plays anyway, no plans to sell anything. Impossible to predict markets nowadays with so much power in the hands of the fed so I'd never go all in or all out of the markets
Those "sellers" will be HODLING for the decade. How many need to sell to retire? How many haven't paid off 50% of there mortgage need to sell for retirement?
I will be a first time buyer and my agent is proposing that I look into pre con condos ( express 2 condo) due to their incentive called home ownership program . I’m obviously concerned due to inflation how it would impact the precon projects . What do you all think ?! Some r saying that I need to stay away from precon but I need a very educated reason that someone can explain .. I’m pretty much clueless when it comes to real estate ..
Lol Guys! We can't have low rates for a few years now (definitely now lower than 4%) and shouldn't they be higher than inflation anyways?
There's a very good analogy for this. Low interest rates are like drugs. Yea you had drugs for short duration but don't get use to it. Historically even these are really low rates. When you go off drugs you'll be uncomfortable and will have withdrawals but does it mean you should not do that!? No it's necessary and imperative. In order to have a healthy economy you'll have to have higher interest rates for a few years and In my opinion they should have close to 4% as normal rates!!
This is what I have been told by my father in law who is 80 years young. Interest rates need to be higher than inflation to bring it down. With interest rates at 6% and inflation soon to be around 6.5% we are already there.
Cbc market
place it’s on tonight .
Heads up, rental prices are already crashing in the US.
That 40% of sellers will be relisting there house in the spring. Even more desperate than before.
BoC will cut rates when the inflation rate is lower than the unemployment rate.
Historicity when that pivot happens asset values crash.
You guys are to optimistic. Only time will tell.
People (sellers) are not that ignorant about the monetary policy dilemma.
IMHO, really this is just my best guess of an opinion and I may be wrong (It wouldn't be the first time).
I think people can read the writing on the wall that inflation is here to stay and the central banks are really powerless to control it. Real Estate and Gold have been historically the best layman's hedge for inflation.
Politicians can't handle normalizing interest rate sufficient enough that would create an economic depression sufficient to bring down inflation. Moreover, these same politicians can't stop running massive fiscal deficits that are the root cause of the inflation problem. They just can't fathom politically that you can't borrow your way out of debt.
There will not be a spread between the US and the Canada rates for any duration whatsoever. So, the Fed has openly telegraphed its next steps. Inflation getting “baked in” occurs when a significant number of people gain wage increases. The Fed, thus, wants to prevent wage increases and the best way to do that is through unemployment and a recession. So, bluntly, the goal is a recession and unemployment with an accompanying crash in large asset prices-e.g. homes. So, home prices are inevitably falling. Also, consequences of credit debt and car payments have yet to kick in yet.
Oh my realtors caught doing fraudulent mortgage applications, no way !
Don't underestimate the amount of well capitalized owners that opted for a high LTV mortgage because of having no consumer debt.
I don't have car payments, student loans, or any debts outside of my mortgage. Smooth sailing.
Thinking of buying my first home but like I have no debt at all ( finished paying last week 🤩)
They’ll be lay offs in the construction industry big time. if houses aren’t selling, they stop building them.
The UK example shows what will happen in the near future to the bond market and the government doesn't even have to make a mistake. All it takes is the stock market to crash due to slow increase in bond yields or something else and the bond market will crash like we never seen before. There is huge demand for bonds as a bank collateral to borrow money to bet in a derivatives market. Banks get spooked, stop lending and those bonds are not needed. Boom goes the bond market, real estate and the stocks go from bad to worse. These are nuclear devices just like MBS during 2008.
Wishful thinking 🤔. A fool has a half a million dollar or more mortgage. Boom 💥
Realistate agents gonna get hungry real quick
At least they'll know how to spell realestate
@@thanks4that261 thanks for correcting me.
The solution is very simple. Get more housing built. Cancel all taxes related to construction. No income tax for construction companies. No sales tax and no import duty on building materials. No fees for building permits. Simplify and expedite building permits process. Let people build more than one home on their land.
CMHC still making wicked predictions LOL. Seriously, like just go away already.
Thanks Steve, good time to hang onto RE and buy bitcoin
Please tell me that's a joke... Alot of people actually think like this.
@@donm2067 lol ok Don, in your opinion, what would be the joke in my statement? You'd want to sell your RE now when it's down 25% and rates are near the top, when you can rent it out at the higest rents we've seen? Or you'd want to sell your bitcoin and capitulate after a 70% drop? Historically both of those choices have been the worst thing you could do. But I'm very curious about your thoughts.
@@thanks4that261 pain train is coming buddy and it looks like your tied to the track. Cash is king like never before. This goes against everything you were told 💯
@@davidkania3720 **you're.
You clearly have no investing experience... Cash is king? I've made more in the markets this week alone then I would in a year in any cash yield. Perhaps for someone with no financial education or investment knowledge like yourself then cash is a good place to stay safe, sucks to be losing about 20% of your buying power though, doesn't it? Assets are king buddy, I just rented my 2nd house for a nice $600 monthly cash flow, hoping for RE to go down more so I can buy a nice vacation property too. So nice to have lots of assets and cash, like a smart person lol, are you a renter?
Amazing how many people here think they're experts on finance and economics without ever studying. Their barber tells then we're going to 18% rates again and they accept it, no idea about consumer debts, sovereign debts, globalization, fiat currencies, never once looked at historical data sets. Quite fascinating... time in the market outperforms timing the markets. Take a few years to study econ and financial data then come back and preach about how everything will crash and tell us how selling everything in a down market makes sense... I wrote my dissertation on the incoming financial crash 3 years ago, but I still wasn't stupid enough to exit all markets and just hold cash lol always stay in the markets boys, and always have cash to buy the blood. Free lesson for you. Your homework is to figure out how your returns in the S&P500 would differ over the last 30 years if you missed out on just the 12 best days by trying to time the markets.
stale mate... wait till things don't pick up and panic sets in... listings will skyrocket
Yup this is the denial stage
I would not sell my investment property even if the market is to fall by 60%. The inflation rate is high, and money is losing value, why would I even sell not only for cheaper but for the devalued dollar? Even if the inflation is coming down, that doesn't mean deflation, it just means a bit less inflation. Nah, I ain't selling even if I have to wait another 10 years. I feel bad for those that have to.
By all means if you can do it I agree.
Thats exactly the right way to look at it.
Time in the market, not timing the market
@Gabriel Sagula What do you mean by "bank property"? If you mean that I have a mortgage, I do have it, but it is covered by the rent. They can raise the interest rate, I can still afford it, and can afford it at much higher rates. I could keep it even at 10%. Bank probably wouldn't let me buy more properties because I couldn't qualify, but that is ok. I will qualify at a later point and I am ok with that. Time is on my side. Again, I feel bad for those who have to sell now...
@Gabriel Sagula you seem to think that borrowing money to buy something means that the money lender owns it. That is incorrect, and I can promise you that the bank does not want that house, or any.
dollar is losing 8% a year. real estate has lost 10-30% over 6 months depending on the area. stock market has lost 25% in 9 months. So dollar is still stronger than everything else.
Typical Salesmen who don’t have much business coming in. Trying to somehow staying optimistic.
My suggestion would be go back to school and get a different degree and switch career. There are realtors on our street ended up loosing remaining hair on the head as well in last 2 months.
Emotions invades ability to think logically. Give yourself a break :)
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