Spot on. The term for inflation slowing is disinflation. You are currently experiencing inflation (inflating? :) .. a state where you are losing weight is deflation.
Government bailout? Seriously? So the Canadian taxpayer who has managed their finances responsibly should pay for those who have purchased what they cannot and never could afford? Nah...some personal responsibility in this country would sure go a long way....
Never happen unfortunately where I live we can only get rogers internet and it is well over $100 per month its slow we have major problems and have for years but we have no choice so they get to keep on charging.
@@robertguay3773or you could get star link and split it with the neighbor of your choice. Maybe don't just take the pine apple up the chocolate star fish, and figure your way out of things
@@wiseoldowlshowStupid is as stupid does. let them lose everything. If I go to a Casino and Gamble 1 million dollars and lose the government does come by and give me my money back.
Even with people who have passed the stress test, there are many many who passed it with false documentation. Banks and mortgage agents at the time were in the "high" phase, no one cared to cross check or they in fact knew but did not want to cross check and land in a position of denying someone.
Too many people have their heads in the sand and aren't paying attention to what is going on.. they have Trudeau syndrome... their budget will balance itself...
the budget actually was balanced until the interest rates started shooting up....a 10% interest rate would mean 200b in interest on Canada's 2T of debt.... federal revenues were only 400b last year. 5% interest is 100b interest...... guess what happened to go from 0 to 50b deficit.... some of the bonds got rolled over at the higher rates. lets not forget that Harper only balanced the budget once in his 8 years and that guy had high oil prices to fluff up his numbers.
@@philippickles693 you snowflakes love to cry about anything. FYI the current gov was the first (among all major countries) to regain all jobs lost to covid, spent the least per capita, first to raise rates (because economy was strong, guess what it still is)... had the highest gdp early on and is projected to have highest again next year. There's a reason why a million people a year want to come here..... and ut aint because they want to move to conservative areas like Alberta lmao! And much like the only parts of Texas that are growing are the areas where California's excess people move in to, such is the way of Alberta....the only parts growing are the metro areas of Calgary and Edmonton where the liberals move to.
Since recession fears have been validated, is there a concern that the rate shock risk is turning more into a delinquency risk, since unemployment is rising and folks who lose their jobs may not be able to pay the mortgage at all.
If they do it right it might be good. Wait for the developers, buyers and banks take their loses and litigation to resolve, then buy the whole building for $1 a unit for cheap government rentals. In the precondo market Ponzi scheme everyone involved should take a bite of the sh** pie before the government gets involved.
Great video and analysis/analogies. Never been a fan of variable fixed mortgage or buying pre-construction. To much reliance on market and government stupidity. They are both pigs in a blanket. Your client might have to back out and buy outside GTA.
When I was like 6 days to close on my property (2 years ago) my property was appraised 80k below the value. I got it appraised again and then it got passed for the price. My broker did work a bit of her magic to make it happen because every unit the same size as mine in the same building was sold for the same value, one of them closed 2 weeks before mine so I'm not sure what the appraiser was thinking to appraise it so low. I'm living in this unit as we speak and nothing is wrong with it structurally. Sometimes appraisers can be conservative. Anyway, this story is from 2 years ago, it's probably different now.
Are you a carpenter or structural engineer? How do you know it's fine? Also, ok great it's structurally sound, fantastic. Does that mean it's worth 1.8M$?
I have a question I'm hoping someone can answer. I was under the impression that if I have a variable fixed mortgage (let's say 3 years with TD) that I can choose to switch anytime to a fixed rate within those 3 years if I wanted to. Is that not correct? If I'm right, wouldn't someone switch from a variable fixed mortgage to a fixed mortgage when they realize that the interest rate is going up out of control? I'm specifically talking about TD bank I don't know about the other Banks. Have I been misinformed?? Is this not something people can do? I would love to know because I may be choosing a 3 year variable fixed rate very soon with TD because I was told that was possible.
Rates are dropping because Canada is in recession. Now factor in job losses (which is happening now) with still higher rates. That’s a far worse scenario because people won’t be able to pay the bills at any lower rates. This is just getting started.
If they cut rates too much inflation will soar. With falling oil prices due to a slowing world economy, the Canadian dollar could plummet which will require interest rate increases. There will be no relief from debt slavery for most of these people. Rates below 4% are unlikely to be permitted ever again because the ultra low rates led to this problem in the first place.
" Fixed Rate Variable" Mortgage. Must have come from the Ad men of Madison Ave and the Hucksters of Wall St., sounds very catchy. I'm guessing this will be good for the Banks and bad for the consumer, they'll be debt slaves to their houses.
The government got out of (social) affordable housing after the 70s because it is a permanent money loser, all year every year when you rent for a lot less than maintenance/funding costs........ there are apartment buildings with the CMHC MLI select funding for sale on MLS right now..... they can't sell them because the rents are so low (maintenance costs exceed rents even if you got the building for free aka no financing costs.... which you don't get). Ain't nothing new getting built for the next decade (because cost of construction is so high) and people think prices will drop??? uuhhh no they will be correcting upward to the cost of construction..... especially over the next decade as we hit 50 mil in population.
@@GreenBeanGreenBean Haha new immigrants are leaving this country in droves that’s why they need to replenish with even higher amounts of immigration. We aren’t going to 50 million, the country can’t handle it, we don’t have the infrastructure and social services including health care will collapse. In regard to prices they will collapse because no one can afford to buy. Immigrants make substantially less than Canadians and people who are from here definitely can’t afford. Investment buying is drying up and they are dumping existing inventory. You will see substantially more impoverishment, more tent cities, and a resemblance of a third world country. So who is going to buy? Who would loan money in this environment? There is a reason the OSFI mandated the banks to loaning less mortgages and better quality of the applicants. Get your head out of the sand.. this country is about to hit a wall full stop.
So lets get the facts here. People took out mortgages they could not afford then rates went up a small amount and now they are broke. That sounds like a bank problem and not a government problem. If we need to bail them out we take control shares go to zero and we sell off everything worth anything. then we shrink the banks to no bigger then 1-3% share of the market forcing more competition and less problems if one or 2 get wiped out.
Ha ha I can relate to weight gain inflation. Still haven’t entered weight deflation 😂 That’s the thing what people really want is deflation so we get back to pre pandemic pricing but that’s not what central bankers are trying to engineer. Hopefully the gov doesn’t bail out the sector as the housing market really needs a purge of the over leveraged so we can get back to a healthier market. I suppose with an election next year we might start to hear the parties ramp up bail out talks if the real estate market doesn’t improve.
How is it that US mortgages have a fixed rate for the duration of the Loan? But Canadian borrowers have to accept the vagaries of banks' deals every few years.
The real problem is the coming primary residence gains tax the Liberals plan to drop early 2025, on residences over $1 million. It will be called something positive like the "home equality plan" but the more your property is worth, and the more it's appreciated, the more tax you'll end up paying. This will push home values down in our big cities.
People are cheering for lower interest rates because they are morons who think the only thing in this world worth a damn is investing in real estate. The term "get a life" comes to mind.
Govt bailout is not happening... BUT what is coming down the pipe is Universal Basic Income, along w/ a digital currency which will be attached to your digital ID (you'll use that ID to login things like social media apps, banking etc etc)
you are right about the government mortgage charter. I am in the middle of renewing my mortgage with my mortgage broker. I didn't think it was a problem, but I am asking them to go back to a 25 years amortization. They are making it very difficult and asking for so much paperwork. They said even if I get them all the information, it's not guaranteed they will go back to a 25 years amortization.
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What did you all think of my weight/inflation analogy? Thanks for tuning in and comment below!
It was very good, spelled it out clearly for me👍
Great way to state the problem
Spot on. The term for inflation slowing is disinflation. You are currently experiencing inflation (inflating? :) .. a state where you are losing weight is deflation.
Bro, you live in a commie country, wealth redistribution
Government bailout? Seriously? So the Canadian taxpayer who has managed their finances responsibly should pay for those who have purchased what they cannot and never could afford? Nah...some personal responsibility in this country would sure go a long way....
Yes especially people who with fake income documented
Never happen unfortunately where I live we can only get rogers internet and it is well over $100 per month its slow we have major problems and have for years but we have no choice so they get to keep on charging.
@@robertguay3773or you could get star link and split it with the neighbor of your choice.
Maybe don't just take the pine apple up the chocolate star fish, and figure your way out of things
Couldn't agree more. The people have been fiscally responsible are getting f*ked.
You got that right brother...fuckin' eh!
Boo hoo on pre con buyers. Only fools would do such a thing. 😮 No bailouts and make them pay for their foolish decision.
Pre-cons will have a challenge closing…
@@wiseoldowlshowStupid is as stupid does. let them lose everything. If I go to a Casino and Gamble 1 million dollars and lose the government does come by and give me my money back.
I'm so glad we paid off our mortgage and retired to Alberta.
Even with people who have passed the stress test, there are many many who passed it with false documentation. Banks and mortgage agents at the time were in the "high" phase, no one cared to cross check or they in fact knew but did not want to cross check and land in a position of denying someone.
My guess is this is the case in 5-8% of applications.
The weight-to-inflation example was a good example, actually. Enjoyed the video.
Thank you. Maybe next week I'll do another analogy using canolis!
I love listening to these vids. As a new Realtor this is very valuable insight. 👍
Glad it was helpful!
Too many people have their heads in the sand and aren't paying attention to what is going on.. they have Trudeau syndrome... their budget will balance itself...
Many will be surprised when they wake up.
the budget actually was balanced until the interest rates started shooting up....a 10% interest rate would mean 200b in interest on Canada's 2T of debt.... federal revenues were only 400b last year. 5% interest is 100b interest...... guess what happened to go from 0 to 50b deficit.... some of the bonds got rolled over at the higher rates.
lets not forget that Harper only balanced the budget once in his 8 years and that guy had high oil prices to fluff up his numbers.
@@GreenBeanGreenBean are you defending the current government?. lol.. I'm embarrassed for you
@@philippickles693 you snowflakes love to cry about anything.
FYI the current gov was the first (among all major countries) to regain all jobs lost to covid, spent the least per capita, first to raise rates (because economy was strong, guess what it still is)... had the highest gdp early on and is projected to have highest again next year.
There's a reason why a million people a year want to come here..... and ut aint because they want to move to conservative areas like Alberta lmao!
And much like the only parts of Texas that are growing are the areas where California's excess people move in to, such is the way of Alberta....the only parts growing are the metro areas of Calgary and Edmonton where the liberals move to.
@@philippickles693 you snowflakes love to cry about anything and everything.
Delighted with information... very well articulated
Thanks for the feedback! ❤
Great analogy on inflation Vince, thanks for the chuckle.
Glad you enjoyed it
Inflation is still much higher than what they're reporting. Cutting early is going to lead to a resurgence. This is just the beginning.
Agreed. Thanks for the comment!
You are not wrong but our GDP is so low and they are trying to boost or rivive the economy.
@@eddobond76 GDP or GDP per Capita? How are they going to boost GDP with inflation?
Since recession fears have been validated, is there a concern that the rate shock risk is turning more into a delinquency risk, since unemployment is rising and folks who lose their jobs may not be able to pay the mortgage at all.
Payment shock will subside as rates move lower but you are correct, unemployment’s ugly head will play a vital role in household cash flow crashing.
one very important issue is unemployment is rising that will cause more problems to the issues you talked about.
Absolutely will be an issue. Most new jobs are public service based and impact will borne by the taxpayer.
Whatcha mean, there are Tim's and McDonald's being built more and more.
Most new jobs are just part time… just look it up. Yes the public sector is growing way faster than the private sector.
@@huskavarnapunkband those jobs are going to TFW..
Shhhh. Don’t give the government ideas to socialize corporate losses and put the burden on the rest of tax payers.
If they do it right it might be good. Wait for the developers, buyers and banks take their loses and litigation to resolve, then buy the whole building for $1 a unit for cheap government rentals. In the precondo market Ponzi scheme everyone involved should take a bite of the sh** pie before the government gets involved.
It’s in their playbook. They did buyout a multi-billion dollar pipeline earlier in their tenure. 😢
Great video and analysis/analogies. Never been a fan of variable fixed mortgage or buying pre-construction. To much reliance on market and government stupidity. They are both pigs in a blanket. Your client might have to back out and buy outside GTA.
I wish people would stop referring to Usury as a product. 1:50. Lorne.
Inflation will never end
RE up an average of 7% per year over the past 30 years. That stat says it all.
When I was like 6 days to close on my property (2 years ago) my property was appraised 80k below the value. I got it appraised again and then it got passed for the price. My broker did work a bit of her magic to make it happen because every unit the same size as mine in the same building was sold for the same value, one of them closed 2 weeks before mine so I'm not sure what the appraiser was thinking to appraise it so low. I'm living in this unit as we speak and nothing is wrong with it structurally. Sometimes appraisers can be conservative. Anyway, this story is from 2 years ago, it's probably different now.
Different market today than two years ago….
Are you a carpenter or structural engineer? How do you know it's fine?
Also, ok great it's structurally sound, fantastic. Does that mean it's worth 1.8M$?
So good. The inflation analogy is hilarious!
Thanks! I now have to lose the weight!! 😅
Someone sold 15 LMIA built 2 million home no mortgage.
Canada has become a largest Cash under the table economy. Which Economist woul never know.
Privatized profit, Socialized Loses.
Good info. What do you hear about m.p.a.c updating their rates for property tax. Most mill rayes are based on house values as of 2016.
Subscriber count growing nicely, Great content, Congrats!
Yes! Thank you! If you have any topics you want covered, please share and I will do my best to discuss it and share my thoughts.
I think eventually they will stretch the amortization to 40 years like it was in 2008/2009 or at least 35 years like Community Trust
That was a good analogy with weight 😊 👍
Glad you think so!
Great content pal, very informative and great presentation
Glad you enjoyed it
I have a question I'm hoping someone can answer. I was under the impression that if I have a variable fixed mortgage (let's say 3 years with TD) that I can choose to switch anytime to a fixed rate within those 3 years if I wanted to. Is that not correct?
If I'm right, wouldn't someone switch from a variable fixed mortgage to a fixed mortgage when they realize that the interest rate is going up out of control?
I'm specifically talking about TD bank I don't know about the other Banks. Have I been misinformed?? Is this not something people can do?
I would love to know because I may be choosing a 3 year variable fixed rate very soon with TD because I was told that was possible.
Variables do have conversion options.
Rates are dropping because Canada is in recession. Now factor in job losses (which is happening now) with still higher rates. That’s a far worse scenario because people won’t be able to pay the bills at any lower rates. This is just getting started.
If they cut rates too much inflation will soar. With falling oil prices due to a slowing world economy, the Canadian dollar could plummet which will require interest rate increases. There will be no relief from debt slavery for most of these people. Rates below 4% are unlikely to be permitted ever again because the ultra low rates led to this problem in the first place.
Yep, all you have to do is look at fed interest rate cycle history to know what happens next.
This all sounds like the Weimar Republic of 1920's Germany, check your history to see how well that worked out for Germany.
" Fixed Rate Variable" Mortgage. Must have come from the Ad men of Madison Ave and the Hucksters of Wall St., sounds very catchy.
I'm guessing this will be good for the Banks and bad for the consumer, they'll be debt slaves to their houses.
The government got out of (social) affordable housing after the 70s because it is a permanent money loser, all year every year when you rent for a lot less than maintenance/funding costs........ there are apartment buildings with the CMHC MLI select funding for sale on MLS right now..... they can't sell them because the rents are so low (maintenance costs exceed rents even if you got the building for free aka no financing costs.... which you don't get).
Ain't nothing new getting built for the next decade (because cost of construction is so high) and people think prices will drop??? uuhhh no they will be correcting upward to the cost of construction..... especially over the next decade as we hit 50 mil in population.
@@GreenBeanGreenBean Haha new immigrants are leaving this country in droves that’s why they need to replenish with even higher amounts of immigration. We aren’t going to 50 million, the country can’t handle it, we don’t have the infrastructure and social services including health care will collapse. In regard to prices they will collapse because no one can afford to buy. Immigrants make substantially less than Canadians and people who are from here definitely can’t afford. Investment buying is drying up and they are dumping existing inventory. You will see substantially more impoverishment, more tent cities, and a resemblance of a third world country. So who is going to buy? Who would loan money in this environment? There is a reason the OSFI mandated the banks to loaning less mortgages and better quality of the applicants. Get your head out of the sand.. this country is about to hit a wall full stop.
So lets get the facts here. People took out mortgages they could not afford then rates went up a small amount and now they are broke. That sounds like a bank problem and not a government problem. If we need to bail them out we take control shares go to zero and we sell off everything worth anything. then we shrink the banks to no bigger then 1-3% share of the market forcing more competition and less problems if one or 2 get wiped out.
Ha ha I can relate to weight gain inflation. Still haven’t entered weight deflation 😂 That’s the thing what people really want is deflation so we get back to pre pandemic pricing but that’s not what central bankers are trying to engineer. Hopefully the gov doesn’t bail out the sector as the housing market really needs a purge of the over leveraged so we can get back to a healthier market. I suppose with an election next year we might start to hear the parties ramp up bail out talks if the real estate market doesn’t improve.
Thanks for the comment and sharing your insight! ❤
How is it that US mortgages have a fixed rate for the duration of the Loan? But Canadian borrowers have to accept the vagaries of banks' deals every few years.
Traditionally, 5 year terms have been the investor sweet spot for the MBS paper. The US market has always been 25-30 year terms.
We borrow for a lot less then they do. You can borrow for 10 years 20 years etc in Canada but no one wants to pay the premium here.
They were getting 25 years at 2.2%@@robertguay3773
Inflation might be slowing but prices, taxes are higher and your purchasing power is 3/4 what it you use to be my weight went up too
That's the canadian way...reward the losers.
The real problem is the coming primary residence gains tax the Liberals plan to drop early 2025, on residences over $1 million. It will be called something positive like the "home equality plan" but the more your property is worth, and the more it's appreciated, the more tax you'll end up paying. This will push home values down in our big cities.
Why are we cheering lower interest rates? That means we are heading into a recession. Buckle ip everyone
People are cheering for lower interest rates because they are morons who think the only thing in this world worth a damn is investing in real estate. The term "get a life" comes to mind.
Govt bailout is not happening... BUT what is coming down the pipe is Universal Basic Income, along w/ a digital currency which will be attached to your digital ID (you'll use that ID to login things like social media apps, banking etc etc)
No thanks Justin.
you are right about the government mortgage charter. I am in the middle of renewing my mortgage with my mortgage broker. I didn't think it was a problem, but I am asking them to go back to a 25 years amortization. They are making it very difficult and asking for so much paperwork. They said even if I get them all the information, it's not guaranteed they will go back to a 25 years amortization.
Are you located in the GTA? Ontario? You should contact Vince, maybe he can help you.
@@pillz123 I am in the GTA. I tried emailing his office before renewing , but I got no reply.
Mortgage cliff wont happen. Big nothing burger.
Time will tell... ;)