If it's "obvious" that all properties aren't sell, sell, selling, why write that they are, John? Of course people are going to respond to more hyperbole from the real estate pumpers. Thank you, Steve, for being real, and calling a dead cat bounce what it is...only time will tell for certain... in the meantime, honest analysis is much appreciated. Thanks!
Sorry John, Steve is right. Higher house prices do mean more inflation and the Bank of Canada is aware of this. Doubly so when house prices rise, or even hold flat, in a rising-rate environment, because that means (a) higher mortgage interest and (b) higher market rents.
CPI is interest *payments*, not interest *rates*. Payments are the product of interest rates times home price. They stay flat if rates rise and prices drop, or if prices rise while rates drop. But if rates rise and prices hold flat or rise, then interest payments increase. This means more inflation, and the BOC will have to respond by increasing rates further until prices are crushed.
@@Paul-km8ko If that is true, it follows that rates will climb above 5%. Take a look at how the CPI is calculated, and the consequence of home prices holding stable at 5% is that inflation will hold above 3%.
John is trying to make the case that the exception makes the rule. The fact is that most of today's home buyers are home sellers first. If people are not listing their homes to sell, you not only have reduced inventory, you have fewer Buyers who can afford today's high prices of homes. A self-fulfilling prophecy. But hey, John keep up with the "anecdotal" evidence - it's what Realtors do best.
Uncertainty in any market usually results in lower prices, at least on a short term basis. Remember, we are early into this housing cycle still. The true effects won't be felt for another 12 to 18 months.
Excellent show! Steve did a particularly good job this week of citing very credible articles and analyzing them well. Just one note on the Australian CB. Australia has approximately 40% exports and 20% imports to China. Much more than the US or Canada on a percentage basis. If “the world’s factory” is experiencing importing inflation and passing on export inflation, Australia is going to feel it first and feel it much more than the US and Canada. (Also, ask yourself, what do you think the odds are that the Australians raise the prices on their exports to China, especially when Australians are feeling a financial pinch? Of course, they are going to jack those prices all they can. But when the manufactured products come back to them, the Chinese will pass on that jacked up price plus add their own bonus on top.) And this type of inflation will spread everywhere from China. Not China’s fault, merely inevitable economics. So, for certain issues, Australia is a leading indicator. (Btw, Canadian exporters to China will do the same as the Australians because in an inflationary world they can, which is good for those getting the inflated payment, but ultimately a little inflationary for Canada.)
Steve is making logical arguments without any biases. Is might be a bull trap, 99% possiblity is that the prices can't go up any more due to median income levels. That's it. We'll see how good are the predictions of people who are in the industry.
@@Observer168 well I should say price / income ratio can't go up anymore. Doesn't matter where prices do, if the incomes done keep up then the debt can't be serviced. It's becoming hard as it is right now. Canada will be a terrible country to live in. Let's do it, together we can.. let's have multiple homeless people, tent cities and drug addicts. The great Canadian dream. And I shake my head with what current government is doing. When you call more and more immigrants without proper resources to support them (not only in housing but medical too), they will be used to working their a** off and will give tough competition to born Canadians and the life will be miserable. I'm sorry to see where this country might be going.
@@parthppatel28 Same thing is happening in every big city in the world. Every big city has its own slums. Income levels isn’t a good gage anymore because some are extremely rich and some are extremely poor.
@@Observer168 so that's why people with average to believe levels immigrate to find a good living. If cities Canada become like that I don't think People will immigrate to live in slums that too in cold winters. People will rather go to Mexico, Bahamas, Thailand and live in slums. It'll be so interesting to see what happens. There's some things that make sense and some things are pure baseless propaganda.
@@parthppatel28 Hong Kong, Singapore, London, New York, LA, etc.. all the same. I can name every single famous city one the planet. All have affordability crisis
The very activity of Vancouver and Toronto will push BOC to act to raise rates until the real estate market and stock markets break. This is the elements of deflation. 1970's groundhog day?
how do you know when you are in a bubble or not? 1. At your neighbor's house party you say you are gonna buy a investment rental unit with a 9% net rental profit. Everybody laughs and says you are nuts. 2. At your neighbor's house party you say you are gonna buy a investment rental unit that has -2% net rental loss. Everybody laughs and says good idea we should to.
Great show and overall discussion. We need to assume rates will stay high in Canada and US for the year, BOE is also increasing (it’s the same all over), I’m in Brazil with double digit rates and sticky inflation will be a topic with China coming back from zero Covid. Easier to believe at this time that multiple offers still happen because people need to purchase property from time to time and there’s no inventory available, than because the market is already rebounding i would imagine.
John got it totally wrong. Rents are not dictated by interest rates, they are dictated by state of economy. Rents only went up like crazy because of pent up demand and rising goods inflation. As interest rates rise and economy come to halt or goes into recession, rent inflation will go down. If the most sensitive part of economy which is housing goes into overdrive again then certainly lot more needs to be done by the central banks. The only positive for housing here could be immigration but that's only going to cause more people hitting food banks in the looming recession. Trudeau and his clowns are going learn their lesson hard way.
Interesting discussion. I agree that it’s much too early to tell what’s going to happen. There are also so many world events happening that will continue to occur for the next couple months at least that will have an effect on all markets, including real estate that were not brought up in the discussion.
Great information. Here's my take on it. People are taking their money out of banks and looking for investment. So they buy up rental properties and keep their money invested that way. I'm no expert it's just based on what I've heard from people and our realtor. Vancouver island is still hot although prices have lowered slightly. Alberta is definitely the best place to retire as BC is overpriced.
Realtors like John are doing disservice to themselves. The only reason inventory and sales are low is because all sellers are waiting for the market to go back up. The fact is that the market could easily take a long time to come back, may be even a decade. This has happened before and can easily happen again.
@@Kevin.Boyle007 Sure, but the current inflation ( that we are still currently experiencing )WAS largely caused by the inflation of the housing crisis. It’s not the first time this has happened either.
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Unprecedented immigration levels will eventually stimulate the market. 1.4 Million new immigrants between now and 2025. GVA and GTA will be impacted in a significant way, it's not if but when.
Thank you Steve so much for your podcasts... as lower mainland resident Ive been closely following real estate for the past 20 plus years, as a person whos a home owner, and works in construction, the housing market is a serious cog in the Canadian economy.... i knew back in 2008 the market would slow down for long as i was building new homes for people in kits, who finally realized their dream homes... theres always going to be a market for the low end of homes... thats the only thing thats been selling... causing house prices to drop 20%... i just recently saw an article om bc housing assessment for 22, both Langley and abbotsford homes in the #2 spot for most expensive homes in those neighborhoods, i built both of those... i haven't even looked to white rock, where i built an 8 mil house to see where that lies in the median house price... its that market im curious about... im not sure where the future home buyers are...
@@Observer168 i agree its clear that the low end of the market is still busy, it would be nice to have a break down in data of the high end market... i dont think there's any sales in tge 30% plus median market.
Real estate is a stock market. , People don't click sell when their stock dropped. They wait till it's in the green to sell. Right now housing is in the red , a bear market for some years to come
But even if it is true that prices will fall further, say another 10%, it is still a good time to buy if you plan to hold for at least 5 years. For people who are looking to get a quick return it may be a problem, but not for those who need a place to live.
If it's "obvious" that all properties aren't sell, sell, selling, why write that they are, John? Of course people are going to respond to more hyperbole from the real estate pumpers. Thank you, Steve, for being real, and calling a dead cat bounce what it is...only time will tell for certain... in the meantime, honest analysis is much appreciated. Thanks!
💯 time for the pumpers to at least be honest.
Sorry John, Steve is right. Higher house prices do mean more inflation and the Bank of Canada is aware of this. Doubly so when house prices rise, or even hold flat, in a rising-rate environment, because that means (a) higher mortgage interest and (b) higher market rents.
CPI is interest *payments*, not interest *rates*. Payments are the product of interest rates times home price. They stay flat if rates rise and prices drop, or if prices rise while rates drop. But if rates rise and prices hold flat or rise, then interest payments increase. This means more inflation, and the BOC will have to respond by increasing rates further until prices are crushed.
@@jbay088 5% rates are no problem. Lots of people with lots of money and huge down payments
@@Paul-km8ko If that is true, it follows that rates will climb above 5%. Take a look at how the CPI is calculated, and the consequence of home prices holding stable at 5% is that inflation will hold above 3%.
John is trying to make the case that the exception makes the rule. The fact is that most of today's home buyers are home sellers first. If people are not listing their homes to sell, you not only have reduced inventory, you have fewer Buyers who can afford today's high prices of homes. A self-fulfilling prophecy. But hey, John keep up with the "anecdotal" evidence - it's what Realtors do best.
Agreed.
I wish Steve or someone else had pushed back a little.
John has warped understanding of how the economy works.
The host Is self sufficient - no need for guests. Providing answers to own questions.
I don't see anyone in the comments agreeing with John.
Uncertainty in any market usually results in lower prices, at least on a short term basis.
Remember, we are early into this housing cycle still. The true effects won't be felt for another 12 to 18 months.
Steve got a new background. Way better than a blank wall but he should put the picture down a bit.
Excellent show! Steve did a particularly good job this week of citing very credible articles and analyzing them well. Just one note on the Australian CB. Australia has approximately 40% exports and 20% imports to China. Much more than the US or Canada on a percentage basis. If “the world’s factory” is experiencing importing inflation and passing on export inflation, Australia is going to feel it first and feel it much more than the US and Canada. (Also, ask yourself, what do you think the odds are that the Australians raise the prices on their exports to China, especially when Australians are feeling a financial pinch? Of course, they are going to jack those prices all they can. But when the manufactured products come back to them, the Chinese will pass on that jacked up price plus add their own bonus on top.) And this type of inflation will spread everywhere from China. Not China’s fault, merely inevitable economics. So, for certain issues, Australia is a leading indicator. (Btw, Canadian exporters to China will do the same as the Australians because in an inflationary world they can, which is good for those getting the inflated payment, but ultimately a little inflationary for Canada.)
Is there somewhere I can find accurate data on how many existing units of all types there are in Canada and how many are built each year?
Interesting show. Enjoyed it. Some good points............
Steve is making logical arguments without any biases. Is might be a bull trap, 99% possiblity is that the prices can't go up any more due to median income levels. That's it. We'll see how good are the predictions of people who are in the industry.
Prices go up because currency will always lose value the more it gets printed. Money supply! Money Supply! Money Supply!
@@Observer168 well I should say price / income ratio can't go up anymore. Doesn't matter where prices do, if the incomes done keep up then the debt can't be serviced. It's becoming hard as it is right now. Canada will be a terrible country to live in. Let's do it, together we can.. let's have multiple homeless people, tent cities and drug addicts. The great Canadian dream. And I shake my head with what current government is doing. When you call more and more immigrants without proper resources to support them (not only in housing but medical too), they will be used to working their a** off and will give tough competition to born Canadians and the life will be miserable. I'm sorry to see where this country might be going.
@@parthppatel28 Same thing is happening in every big city in the world. Every big city has its own slums. Income levels isn’t a good gage anymore because some are extremely rich and some are extremely poor.
@@Observer168 so that's why people with average to believe levels immigrate to find a good living. If cities Canada become like that I don't think People will immigrate to live in slums that too in cold winters. People will rather go to Mexico, Bahamas, Thailand and live in slums. It'll be so interesting to see what happens. There's some things that make sense and some things are pure baseless propaganda.
@@parthppatel28 Hong Kong, Singapore, London, New York, LA, etc.. all the same. I can name every single famous city one the planet. All have affordability crisis
We are living in transitioning era from QE to QT.
Waiting for QE or preparing for QT. You sell earlier you lose less….
Thanks guys, informative chat !
The very activity of Vancouver and Toronto will push BOC to act to raise rates until the real estate market and stock markets break. This is the elements of deflation. 1970's groundhog day?
how do you know when you are in a bubble or not?
1. At your neighbor's house party you say you are gonna buy a investment rental unit with a 9% net rental profit. Everybody laughs and says you are nuts.
2. At your neighbor's house party you say you are gonna buy a investment rental unit that has -2% net rental loss. Everybody laughs and says good idea we should to.
Great show and overall discussion. We need to assume rates will stay high in Canada and US for the year, BOE is also increasing (it’s the same all over), I’m in Brazil with double digit rates and sticky inflation will be a topic with China coming back from zero Covid. Easier to believe at this time that multiple offers still happen because people need to purchase property from time to time and there’s no inventory available, than because the market is already rebounding i would imagine.
John got it totally wrong. Rents are not dictated by interest rates, they are dictated by state of economy. Rents only went up like crazy because of pent up demand and rising goods inflation. As interest rates rise and economy come to halt or goes into recession, rent inflation will go down. If the most sensitive part of economy which is housing goes into overdrive again then certainly lot more needs to be done by the central banks. The only positive for housing here could be immigration but that's only going to cause more people hitting food banks in the looming recession. Trudeau and his clowns are going learn their lesson hard way.
I believe what you guys are saying. There really does seem to be an uptick. Its not clear how sustainable this is though.
Interesting discussion. I agree that it’s much too early to tell what’s going to happen. There are also so many world events happening that will continue to occur for the next couple months at least that will have an effect on all markets, including real estate that were not brought up in the discussion.
TENT CITYS EVERY WHERE!
Great information. Here's my take on it. People are taking their money out of banks and looking for investment. So they buy up rental properties and keep their money invested that way. I'm no expert it's just based on what I've heard from people and our realtor. Vancouver island is still hot although prices have lowered slightly. Alberta is definitely the best place to retire as BC is overpriced.
Sounds like you've gotten ypur opinion solely based on word of mouth. Look at the statistics and I think you would understand the trend better. ↘️↘️↘️
Realtors like John are doing disservice to themselves. The only reason inventory and sales are low is because all sellers are waiting for the market to go back up. The fact is that the market could easily take a long time to come back, may be even a decade. This has happened before and can easily happen again.
I partially agree but it is all manufactured. If boc see fuck it we lost. Lets go to 2 percent then market will pick up quickly
“Rising home prices aren’t going to be the biggest driver of inflation in Canada”
Seriously? I thought this discussion was based on factual data.
Their not right now, that was true 1 year ago. But right now, it's gov't interest rate policy.
@@Kevin.Boyle007
Sure, but the current inflation ( that we are still currently experiencing )WAS largely caused by the inflation of the housing crisis. It’s not the first time this has happened either.
New all-time highs incoming
@@Paul-km8ko
If you’re sure, then go out and buy during a long term housing price downtrend. I dare you.
@@dukemocchi No, you have to double dare me
Maybe you should watch “ The Non-capitalist Solution to the Housing Crisis”
Can someone pls buy Urmi a better mic. Im sure you can write it off..
It's no longer a story that the world is experiencing a global economic downturn, I'm so happy that I've been receiving $64,000 from my $15,000 investment every 8 days
HOW !! I know it's possible , I would appreciate if you show me how to go about it .
I've got up to 700K returns since I came across Mrs Virginia Ruth Sterner trading platform , My financial life has completely changed all thanks to Mrs Virginia Ruth Sterner awesome trading strategies !!!
Oh please , how can someone get to speak with Mrs Virginia Ruth Sterner !! ?, m
@@almamarin6454 She's always available
On what's
App.
Unprecedented immigration levels will eventually stimulate the market. 1.4 Million new immigrants between now and 2025. GVA and GTA will be impacted in a significant way, it's not if but when.
Thank you Steve so much for your podcasts... as lower mainland resident Ive been closely following real estate for the past 20 plus years, as a person whos a home owner, and works in construction, the housing market is a serious cog in the Canadian economy.... i knew back in 2008 the market would slow down for long as i was building new homes for people in kits, who finally realized their dream homes... theres always going to be a market for the low end of homes... thats the only thing thats been selling... causing house prices to drop 20%... i just recently saw an article om bc housing assessment for 22, both Langley and abbotsford homes in the #2 spot for most expensive homes in those neighborhoods, i built both of those... i haven't even looked to white rock, where i built an 8 mil house to see where that lies in the median house price... its that market im curious about... im not sure where the future home buyers are...
There will always be home buyers or there will be no future.
@@Observer168 i agree its clear that the low end of the market is still busy, it would be nice to have a break down in data of the high end market... i dont think there's any sales in tge 30% plus median market.
Lol I need to own, let's just make the worst largest financial decision of my life... cause renting is for peasants.
Next step needs to be job losses and people not able to find another one. LOL
Real estate is a stock market. , People don't click sell when their stock dropped. They wait till it's in the green to sell.
Right now housing is in the red , a bear market for some years to come
😂😂🤣🤣
But even if it is true that prices will fall further, say another 10%, it is still a good time to buy if you plan to hold for at least 5 years. For people who are looking to get a quick return it may be a problem, but not for those who need a place to live.
I disagree that it's a good time to buy, the prices of RE is still insanely high and thinking the way you do keeps them there.
Bears losing their minds at any mention of prices going up 🤣🤣🤣🤣
They won't