Ponzi or Pyramid Scheme? Should You Buy Now? 2023 Canadian Real Estate Market
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- čas přidán 26. 08. 2024
- Check out the latest data from the 2023 Edition of the Canadian Housing Bubble. I go through the latest real estate headlines, give my opinion on buying and selling, and dissect April's real estate statistics to see what's really happening.
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![Why American Cities Are Broke - The Growth Ponzi Scheme [ST03]](http://i.ytimg.com/vi/7IsMeKl-Sv0/mqdefault.jpg)
If it wasn’t for the banks extending the amortization period for a lot of people, that bubble would have burst already.
Very true. It won't matter how long the amortization is when they don't have a job soon.
Still very unfair that the irresponsible folks who overpaid for houses they cannot afford are being bailed out when first time home buyers who are waiting to enter the market at a fair price are being sidelined.
@@jonflynn
That’s what I thought too. But then I remembered what the government did for people who couldn’t work during Covid. And then I saw what Trudeau just said recently. He is going to help those struggling to pay their mortgage due to recession. Can it be the government will simply give the money to those to continue paying interest to the bank?
@@mikedome9475 There has to be a limit to these bailout policies....at least that is what I tell myself. Perhaps a new prime minister will take a different view and will rip the band-aid off for the few in the circumstances that that they themselves created rather than make the rest of us suffer for their stupidity. What can I say, I know I am naïve, but here's hoping....hope seems to be the strategy most people are using these days...
Correct
As a Niagara resident born here I appreciate the local insight. I would like to own property in Niagara someday, I'm single in my early 30's with a decent job, but I simply refuse to participate in our sham real estate economy. I won't even rent, I instead invested my money into building out a sprinter van and work my remote job out of it. I park it at my parents rural property 1/4 of the year and travel for the balance, typically spending time at Ontario provincial parks and small towns. It's not for everyone and not a permanent living situation but I feel like I'm making the most out of our current times. I can still save money doing so rather than paying some investor from the GTA's second or third mortgage renting in Niagara or elsewhere. I recently came back from a month and a half in Florida/Georgia and the Carolinas and I was surprised at the lack of tent encampments and opioid addicts roaming the streets I saw compared to Ontario. The general upkeep of the public parks, beaches and downtowns I visited was also impressive. In short, I'm embarrassed to be Canadian these days, not something I thought I'd ever say 5-10 years ago. We've been utterly failed on housing by all levels of government, most egregiously with immigration targets and municipal councils restricting supply, to the point where I'm considering leaving the country permanently.
Thanks for the detailed comment. I envy your semi nomadic lifestyle, you're living the life and seeing places. I dream about doing things like that. I agree with you 100% about the state of Canada and Ontario. There's garbage everywhere and the place is in shambles, majority of people are clueless and just drive by in their cars. When you get out and walk all you see is trash everywhere, then it gets hidden by all the foliage and leaves until the fall and it's still there. It's like the movie idiocracy or wall-e.
Glad to hear you are making the most of it. I'm a 32 year female and my bf is 31 and we are also thinking about vanlife as healthcare professionals making $230 combined. We refuse to participate in this. It makes no sense and the homelessness is awful in Calgary now- just an explosion in the last 2 years! Canada is awful and we hope to move to the USA perhaps permenantly.
@@jonflynn The third world has come to Canada.
@@rachelk8368 wouldve thought 230k income should be enough to buy something decent
What kind of remote work do you do? My current employer is forcing us back to the office and I don't want to go back... What industry do you work in? Any tips?
Best quote of tge year from Jon Flynn:”It won’t matter how long the amortization is when they don’t have a job soon”
This ranks right up there with Leonardo DaVinci “learn how to see…realize that everything connects to everything else” 😊
haha, thanks, I can't remember if I said that in a video or in the comments.
It was in today’s comments.cheers!
Great pyramid analogy, its brutal to be a first time buyer right now. Really appreciate the honest assessments unlike most real estate channels that are constant pumpers.
no problem, my pleasure.
Jon, your content is incredible, authentic and legit. I'm not in real estate and I am glued to your content. Thanks for the real posts.
Much appreciated, thanks for the support
Yes, you are the only honest-sounding person in your field, on CZcams, the other agents are such wankers.
Please be careful about advice in this channel. For some reason, the view is very pessimistic and it's not the reality of what's happening in the GTA market. To have a balanced view, check a couple of other resources and consult with experts
@@Ride-an-animal 😂😂😂 those people only think seeing things negative=honest... always ignore upside risk
@@y_y_ryan there's always a risk of doing business. Negative isn't honest in the market. On the flip side, in such a market, that is always moving, there are plenty of opportunities, if one's intention is to make an educated move
Real Estate broker actually talking about the truth? Well done sir.
Thanks.
Thank you for the medicine, Jon. Your videos always restore my sanity
no problem, I truly believe sanity and fundamentals will win.
it’s just so hard for everyone even including those on the top of the pyramid. “if thing could be wrong they will eventually be wrong”, “there are two categories of forecasts: one doesn’t know, and one doesn’t know that they don’t know”, “bubble sometimes last much longer than you expect”. combine all these, you get why it’s so hard to make a decision right now. Canadian housing bubble is heading to its end ever since the bubble start back in 2013 to 2015, 10 years passed it’s still ongoing. Realtors and almost everybody(70% of population) are predicting housing price will only go up, they are right until the day they are not but we don’t know when exactly. for those who doesn’t own a home, it’s a huge long lasting pain, the rent is skyrocketing, just look at the number of homeless people on street. To me, I’d rather invest in business than housing, more housing investment and less business investment is literally helping nobody in this country, but they just cannot help because the lack of supply. there is no way Canadian housing bubble will end well, the day it pop could be way worse than Japan in the 1980s. I am even seriously considering leaving this country
well said, I agree, people should be investing in business development instead of housing speculation.
Really appreciate your videos...keep pumping them out
will do, been a lot of overtime lately but committed to continuing this.
Your prediction from some time ago still holds true: we are currently in the "Return to normal" stage of the bubble (your video from May 9, 2022). A record number of immigration (500,000 per year) will not save us.
I love your reference to Ponzi and Pyramid scheme. It is clearly a Pyramid scheme but does have quite few elements of the Ponzi scheme as well.
Great work as always!
Thanks for the comment. I think I predicted 2024/2025 for good buying opportunity with lower or near bottom prices. It still looks reasonable since most institutions and governments are calling for a recession this year. Once unemployment rises we will see more downward movement in prices, if not before.
How you have only 10k subscribers is crazy. Keep it up.
Thanks, might have to make this my full time job after the market crashes.
Watching from the Philippines 🇵🇭 right now, for this one. Thank you John!
awesome thanks.
This greed for profit is not just in real estate. Last month, my brother wanted to sell his 2011 Toyota corolla (manual transmission) originally bought second hand 5 years ago for $5000. We saw on marketplace most sellers are listing it for $11k. I have never seen people make profit selling their old car until I saw this in Canada. I actually reached out to one of them offering $4000 he laughed and replied that he is getting offers for a little less than his asking price. I saw the same for all sort of used items from baby gear to furniture where sellers are listing for just a little less than the brand new price and all are marked as 'Used like new'. I relocated to Canada 5 years ago but never witnessed such greed before. Arranging to leave the country hopefully very soon.
This is not just Canada, used cars were selling at a high price since covid. It’s come down now a bit.
I also arrived 5 years ago, and experiencing same greed everywhere. Planning to move back in a year. It is really a Ponzi scheme.
I bought my SUV new 10 years ago. The dealer called me last year wanting to buy it back at a very decent price. Didn't sell cuz I really like it.
I'm planning to leave the country next year with my family. There is no hope here for the housing market and what's worse is our industry has only shrunk here since 2008 due to the high cost of living in vancouver. A lot of the people left either own a home or are desperate for any work. The saddest thing is my husband is in the top 5% of income earners and we pay a lot of taxes. He doesn't even have a family doctor anymore, and what do other Canadians say to us instead of looking at things and saying we need to do better as a country? "Don't let the door hit you on the way out!"
There's a lot of people planning to leave, I get comments all the time saying the same thing. People need to go where the opportunities are and right now they're not in Canada.
Thanks for the data. I'm over here in BC and it's terrible.
the epicentre of the bubble
Hi Jon, is there a way that we could find out how mortgage applications are this year compared to the last 2 or 3 years, and what percentage are declined ?
I think that could tell us how soft the market really is...
Your mortgage comparison had two different mortgage amounts. The payment is dramatically higher
They were both based off the average price in Canada then and now, with the downpayment subtracted. Now average prices are less.
It was a buyers market six months ago when you were telling everyone not to buy until 2024.
certain areas, I wouldn't have bought then. If people need to buy or won't/can't wait then buy when it's a buyers market again, not when you have to compete with others. How did that competition work out of the buyers last year? But then again what's an extra $50-100K when it's not real money.
Almost all of his predictions have been unbelievably inaccurate lol
@@jonflynn buyers six months ago were getting better deals than they are today. But they should have waited until 2024 according to you six months ago.
@@GoProBlizzard ain't that the truth. He's been getting pretty desperate with his most recent videos trying to justify/validate his awful read on the market a few months ago.
@@johnnylongstocking183 my timeline to buy last year was 2024-2025, maybe end of 2023 for the people who can’t wait.
Would love to see Jon make a video specifically about the supply issue. Why so few new constructions? How and when will this be addressed? What about immigration on the demand side? With graphs and chats as always. Thanks Jon!
I've done a couple of times in the past but will definitely need to do an updated one with all the new immigration. Right now new home construction is declining due to the slowing real estate market.
Thanks Jon. Just saw one of your videos where you did indeed address the issue in detail. Looking forward your update. I'm from Sherbrooke (QC), only town in the whole country where prices are unchanged since Feb 2020 according to one of your recent charts 🤔
Hahahaha Bottom Feeding the Top 🤭🤧💯 your simple charts and analysis is Bang On Jon
Thanks for the support
Jon, Great video...I hope you dive into the upcoming recession we're heading into. According to Lending Tree in US, 44% of Americans are using "buy now, pay later" to purchase items and 21% of those people are using to purchase groceries.
Canadians' purchasing power is eroding by high interest rates and inflation...double whammy
😒😮💨
I like your pyramid analogy . Interesting way of viewing the wealth created from the housing.
I've seen too many people bragging about their success due to this pyramid scheme and realized all the people entering the market are paying for the lifestyles of the speculators in the market.
wow you brought me back to elementary school when I used to buy double bubble gum from the corner store opposite my school :)
I haven’t spent time to study Canadian RE market but how average people make their mortgage payment is beyond me.
Average people had access to free money for almost 2 years.
lol, and many think it's going to keep going up forever.
@@abudaniel Yeah but even before then it was at an unsustainable level. 2008 RE crash never came to Canada. It kept going up. Seriously, how do average people make mortgage on a multi-million loan??
Just what I needed to hear. Summer/Fall is just around the corner and will hopefully be a buyers market… though I’m in BC on the island so who knows😅. I’ll be looking forward to updates on that next week. Regardless, no need to take a leap now, there will always be more houses.
This is one of my calm spaces, thank you! 🤗 ❤
awesome thanks for the comment.
Hi Jon, thanks a lot for the data sharing. 👍 The rental market is not much different😢
No problem, thanks for the comment .
I started seeing advertisements of multiple families investing on real estate now, that reminded me seeing a lot of flipping advertisements on tv back in early 2000
Every bubble in history was preceded by excess demand and exuberant prices.
Study the spikes on graphs. After spike, a small drop-follows 8-10 years level, then into next spike. About 15 year cycle
thanks for the info.
That amortization extension is something else. Next time they tell you about "free housing market" you can laugh in their face. I've had enough, making arrangements to leave the country.
Sad days
Thanks for honesty It really does help.
Many Thanks , Jon again for bringing us the real story and the facts....!!!!
no problem, thanks for another comment.
how about foreign buyers with a lot of cash ? I have seen a couple of places that house was bought without buyer being present or seen the house
Tell them to come and buy my listings, can hardly get a showing anymore.
Hey I love your local insight ! Any feedback or justification why you wouldnt reccomend to sell your primary residence to rent for a year or two speculationg that prices will drop signifigantly ?
I think primarily it adds unnecessary risk. Unless you have no equity and the payment is high then it's worth it. I'm very cautious in my financial decisions also.
We have not had a buyer's market in the last 10 years if not more.... properties have tripled in value? Housing Market corrected upto 30% in some areas after peaking in Feb 2022. June and July are indeed good time to buy if BOC does not raise at June 7 meeting. Who knows what will happen then if the rates go up.
Thanks for the comment, will be interesting to see what happens, but looks like a recession is coming.
All those who bought in 2018 are due to renew their mortgage
Great vid Jon. We've been looking for a while now to move out to the southern ontario country side. Not much in inventory so hopefully we see more in June and July.
Thanks, inventory should increase soon.
What if it’s different this time? I mean that’s the ultimate question that it never is, but what if we are permanently in an inflationary period and prices are not coming down? What if it’s just the constant increase in price because the value of the purchasing bill is just less and it now takes perpetually more of those bills to buy the item, in this case, a house or condo or townhome
In that case Canadians are doomed for life. Owners will be bank slaves, young Canadians and new immigrants will be permanently priced out. Own nothing and be happy will be the norm. Those who can will try to move down south or back to their homes. Till how long can one keep surviving in this situation by loading up in a pile of debt.
cost of replacement keeps going up (due to $$$ being worth less every year).......this is what most moron bears miss and it's good for a laugh....it keeps them renting year after year.
@@GreenBeanGreenBean what I see here in San Diego is that it’s more affordable to build new construction on an existing property than it is to buy a home. I’m not sure what’s happening with ADU/granny flats in Canada but here in San Diego it seems like every property with a detached house will turn into a property that has an ADU on the lot. One of the primary reasons for this is because you can build a two bedroom one bath unit for about $200,000 but you can’t buy a two bedroom one bath unit in San Diego County for less than $450,000. And many times, these two bedroom, one bath A.D.Us are detached making them somewhat more desirable than a condominium.
@@cricketlovervaruns I think they (government and Banks) will just find a way to spread out the payment. And you’re right, you can be eternally buying a property, but at least you have some ownership rights versus renting where you have no ownership. I was listening to a podcast the other day, and they were highlighting how in the US and North America for that matter, we take for granted the ability to finance a property. Many countries throughout the world, you don’t have that option. Properties are just handed down from parents to children with very few of them actually exchanging as a sale.
@@RobMartinRE where are you getting your prices from lol, because San Diego is one of the most expensive parts of California (behind LA/SF/bay area)...... maybe you can do that out in the desert but anywhere close to metro areas you def can't do that.
You think people would rather live in a garage than a condo unit? lol!
Ontario/BC passing laws to be able to do the 3rd unit ADU, it will be interesting who actually does try and build (and more importantly how many people will willingly live in a garage on someone elses property).
John love the advice. buy in buyers market and sell in sellers market. is this the same like the stock market 101 ive been hearing about, buy low sell high? thanks for the chuckle mate
My husband and I are looking to buy our first property. It’s brutal out there. Barely any supply and what little there is is bought very quickly if it’s reasonably priced. My question is this: why would we wait to buy if we find something that we can afford and that suits our needs? Everyone is talking about how interest rates will start going down at the end of 2023, start of 2024. It will only bring more buyers back into the market and increase competition, which is exactly what we want to avoid.
If you can truly afford the payments and have good job security then maybe you should buy, will you be ok if the house you buy is $100K less in 6-12 months, because this just happened and can happen again. Also, do you think we will never enter a buyers market ever again? I'm just trying to look out for the best interest of ordinary citizens, I gain nothing from you not buying.
There's much better countries and cities around the world in which to buy. This way you aren't subjected to the potential of losing everything and declaring personal bankruptcy. Fort Wayne, Indiana is my top pick in America. I see the minimum wage being boosted from $7.25 an hour to $10.00 an hour in the near future.
I get it. My comment wasn’t meant to criticize your advice, it’s more that the overall trend appears to be rising housing prices as soon as interest rates let up a bit, so I was just wondering if it’s really worth waiting it out and hoping that prices come down in the next couple years. I guess the best one can do I an educated guess. @@jonflynn
40 to 70 years Amortizations = SALE
The banks are pretty worried right now.
I would hope the Bank of Canada does something about this
Best to raise rates higher later this year when inflation increases more.
tightening credit and raising rates is the only way to clean this mess up in a proper way. The sooner it’s done the better for Canadas future
BAHAHAHAHAHAHAHAHAHA NIAVE AS FUCK
yeah they have, they've collaborated wth the big banks for years and bought their debt to keep them liquid so they could keep pumping the market and making record profits.
a catchy thumbnail 👌. Canada housing a pyramid scheme! excellent analogy Jon. great video. appreciate insights. More than the area stats, I find your weekly round up of news and events related to RE very helpful. please keep them on..
Your average canadian cannot afford a house anymore, even with an income above the national average. If this trend continues, nobody will want to live here and create roots, therefore ontario loses economic attractiveness and people will flock to the cheaper provinces. Forget a recession, that will cause a depression. The housing market needs to be bought back in line, and the governments dont really take it very seriously...gonna be interesting to see how this all pans out in the near future. Keep up the good work John.
@@Cutlerypotato Ontario isn't attractive for investment is my point, and most of those immigrants will leave for that reason. John even made a point about refugees returning to their home countries because they couldn't afford anything here #Ukraine
very true, search CZcams for "5 reasons not to stay in Canada" , they're already fed up and making videos about how unaffordable it is.
When the "average Canadian" can't afford to buy something half decent the result is a continued fall in prices.
@@bigbenbuilds3420 yeah right. A million people came here last year. Nobody left. You really think people went back to Ukraine? Canada just issued 100000 PR cards in January and February-a record 44% increase.
@@Cutlerypotato Only because cheap rates back then jacked up prices more and more.Piled piled in. However, here in Greater Vancouver, the market was correcting in 2018 and well into 2019; the BoC rate was 1.75% in December, 2019 and by the end of Q1 (COVID-era) it was lowered to 0.25%. which added fuel to the fire all over again.
Put another way, the 2008 BoC rate of 4.5% was enough to start crushing the GVA market and, that will be repeated. The only reason why Canadian markets didn't get clobbered like other world-wide housing markets during the GFC era is because Canada's Plunge Protection Team jumped in and goosed it to the nth degree (0% down payments, 40 year amortizations) And, by the end of 2009, the BoC rate was 0,50%.
The intent was to goose consumer spending via the wealth effect of rising home values; it worked...until it didn't. So, a huge kaboom is now underway; this bust will surpass anything we saw here in the early 1980's.
There was no reason for any of this mess; it should have been reined in years ago; far too late for that now, though. It will play out as it was always meant to.
Thank you for your opinion...im waiting to buy
no problem
Thank you !!!
no problem
Jon, how dare you call Canada's housing a ponzi or pyramid scheme. Canadians work so hard day & night to inflate the housing through leverage 😂
haha, thanks for the comment
If you're assuming 25% down last year, it should be a higher % now. It's the same person buying supposedly..
Depends what you are buying a house for. For 40 years I've heard the same thing as now. Houses are too expensive, it's a bubble, you are going to lose your shirt.....etc. If you buy a house with the plan on living in it, then it's a good investment. There will be years where the value goes down, and years where it goes up. In the end, getting it paid off makes you somewhat inflation proof.
have you every lived through a bubble of this magnitude?
Some people always "have" to sell for one reason or another. What then?
@@jonflynn I don't think it's a "bubble" in that it is artificially high. I believe that the high cost of housing is driven by 2 things: regulations at every level of government and an unwillingness to compromise. Allow me to explain. First, regulations: Canada and the US have vast amounts of land, all the raw materials needed, and the skilled labour to build houses. The only thing to have changed over 50+ years is the amount of regulations, restrictions, and adminstrative inflation at all levels of government. I built a house in 1999 and in 2019. I calculated that new fees, code requirements, and compliance requirements added over 10% more costs between 1999 and 2019. I didn't calculate the hidden costs of contracted labour where red seals are now required, eco regulations, etc. The second point is the average buyers unwillingness to compromise. Specifically, everyone wants to live in a major urban centre close to downtown/work. I'm not saying this approach is wrong, but I am saying that level of demand in an area approaching max capacity will keep prices up.
Until these issue can be resolved, prices will remain high.
@@billferguson1368 There will always be outliers to any tactic. What I speak of refers to your average person. That being said, you have options. Rent your house out and rent at your new location until the market improves or your situation improves. I did this when posted for 1+ years to Australia on exchange with the Navy. We had just got our first house and the market was still increasing. If we sold and tried getting back in the market 2 years later, we would have struggled. In stead, we rented our house until our return.
@@jonflynn
I did in 2007 in the US , i bought that year and watched 30% shaved off the value . Took 3 years to get it back and then sold at a 300% profit 10 years after that . There is booms and busts all the time
this seems like the most sound advice offered by the YT gurus so far
Thanks
My opinion is that real estate in Canada will continue going up. Population growth coupled with limited supply and restricted construction of new builds will keep this scheme going.
good point, seems to be the major argument in favour of rising prices. I guess it will depend on how much people can ultimately afford and if the economy will hold without significant downturn.
The question is at what point will immigrating become not attractive due to high rental costs and no hope of buying a house.
Unless these new immigrants are really wealthy, they would prefer to rent a house if they want to stay in Canada. However, the current rental prices compared to income have reached an almost unaffordable level. I am very skeptical whether this group of new immigrants will be able to save enough for a down payment to buy a house in many years. Of course, we cannot ignore the local wealthy people who have accumulated a lot of money through speculation in the housing market, as they are the main force in recent purchases.
@@Schweiz392 sure lady. Your home country probably doesnt even have a sewer system let alone free healthcare. Welcome to Canada, we know you arent leaving
@@nolanmiskimmin there are hundreds of millions of poor Indians who would do anything to move here regardless of how terrible it is.. it'll always be better than their slums in India.
Look forward to your video every week! Jeremy Granthan said recently every bubble was followed by recession/depression.
very true, thanks for watching
The housing market in Canada is the exact same ponzi verbatim as the housing ponzi in China. Both governments will not let prices fall. With everything turning communist Canada will be in the same boat as China and prices could rise for several centuries until the rulers are overthrown.
Interesting pyramid idea…. The one difference between the US bubble in 2008 and ours is although there was cheap interest on both we have the stress test and a much higher minimum down payment requirement, probably adverting such a huge crash, although as an average person I wouldn’t mind a huge crash, like many. I wonder how cottage country will do, Haliburton, Muskoka, Bancroft, many city dwellers rent because of high home prices, and then buy a cottage and rent it during the summer to pay the bills, then use it year round, my plan…
High interest is very recently. Most people who bought and contributed to the bubble did so on cheap cheap debt. Interest rates go up, jobs go down, people start listing houses for sale. It takes a bit of time.
Thanks for the comment and info.
PacWest Bank just announced looking at strategic alternatives. Yet another US regional bank collapses. Just wait. It isn't just their banks. Several Canadian ones suffer from duration risk and Commercial mortgages as collateral.
it's just the start just like 2007/2008
@Jon
When do you think we should start off loading stocks? I know when recession will hit, it will hit all the other sectors at the same time. house, stocks etc.. But when stocks go down, they go down real bad. So when you think is the appropriate time to sell them and hold them in a savings account for buying house, when the market falls? I know that's a hubris question to ask, but if you had to guess..
I have no clue or advice about stocks but doesn't look like they've been gaining any traction for the last 6 months. I closed all my positions over a year ago and took profits, I didn't have a ton in there. I took small positions on high risk proshares ultra shorts to cash in if/when things go really belly up, expecting to lose it all but huge payoff if shit hits the fan, especially in commercial real estate. I treat the stock market like a casino though, expect the house to win. Prefer safe haven low yield things like gold, whiskey, and GIC's. I'll save my money for opportunities rather than speculation.
The average dividend yield on U.S. stocks is 1.4 percent. In any other era or decade that would portend about an 80 percent drop in stock values compared to the deposit rates on certificates of deposit in America. Go all in on long term bonds and protect your capital. It's also a good time to go short the U.S. dollar. The falling U.S. dollar will put a floor under stocks so they won't fall as much as they should due to the falling U.S. dollar.
Thanks for the wonderful analysis and contents, Jon. I do agree that buyers can wait for the slower months to enter the market. Besides, your pyramid scheme seems to suggest that pre-construction today is a "big no" because not until those who bought from 2020-2023 become the middle layer of the pyramid, buyers of pre-con who pay a higher margin to the developers will have an even more difficult time down the road when they close. What is your opinion on this? Should buyers lock-in to pre-con today for a more favorable payment schedule and hoping they do not "kick the bucket" down the road?
pre-con isn't for everybody, but it is a forced savings plan (paying smaller $ constantly to build up a downpayment instead of putting it all down at 1 time). Just like a new car is always worth more than an old car, so too is housing. You can buy a 70's house/condo for far less.....don't put too much stock in 'oh it's 10% more than current stock'.....well it always will be 10% more than current stock because if the new goes down 10% so too will the older units below it.
....unless you have the $$ to buy that old house for land value and then tear it down and build something new on top of it.....which requires even more money.
pre construction has always been risky, I think anyone who purchases pre-con should be prepared for the good and the bad. Most pre-con seems to be speculation, we are now entering the bad times for these buyers since appraisals are coming in low and financing is more difficult or not possible. Many assume this housing downturn is temporary or short term.
is there a point? and why does it take so long to get there?
his "point" is the market is for sure going to crash everyone should sell now and no one should buy. But he also said that no one should buy until 2024 and a few months ago this rally wouldn't last. Basically hes got a realy bad read on the market and is getting pretty desperate with this most recent videos.
We will reach the point in 2024/2025, the low point for prices that is.
@@jonflynn let me correct that for you Jon. "I don't have a point other than I have figured out if I make videos about the market crashing, I get lots of views so I keep making the same video over and over again."
Honest guy. Subscribed.
Thanks
What if, due to poor monetary policy decisions, longer amortizations, increased immigration, high material costs and other factors beyond our control as consumers, it’s a sellers market for 2yrs+ and we surpass Spring 2022 price levels?.
And what if prices in the future buyers market (which will come based on natural real estate cycles) are still higher than Spring 2022 prices? Would that buyer not have been better off buying in todays sellers market? Just because it’s a buyers market doesn’t mean you’re necessarily going to pay less than you would in a sellers market.
Time in the market over timing the market.
Good point, at the same time the only thing that will save recent buyers if the market continues to decline to more fundamentally sustainable levels will be time in the market. Thanks for the comment
@@jonflynn thanks for the discussion
Prices are rising quickly. Agreed that a 50 year mortgage can allow more people to have a roof over their heads. Good idea Jon boy, good on ya.
Thanks for the comment
Jon, do you guys only serve Niagara region? Is your brokerage able to take clients looking to buy all the way to let's say Hamilton and maybe even as far as Burlington?
I'm very familiar with Hamilton and Burlington and hateful access to the data. Burlington is as far as I usually go. My assistant Anya helps out usually as I can only handle so much. Give me a call or email anytime, my info is on this channel or website flynnrealestateinc
Thanks for all the insight I've subscribed and told my friends looking to buy about you. What typically happens after spring itch? I currently own a home but haven't played attention for awhile. Inventory goes down but does price follow or increase will little supply?
inventory will increase from spring to summer, reaching yearly peaks in summer. Prices subside in the summer due to higher inventory and less buyers. People are busy vacationing and enjoying summer usually. That's the normal trend, the only exception was 2020 due to the lockdown.
@@jonflynn so a turn back down to lower m/m prices? I feel people can only take so much high mortgage payments before something cracks.
.1% off record low unemployment it can only spell disaster once the job market loosens its grip
Hi, Jon is there a way to figure out a bidding war... I have been in a bidding war it seems like we are going in blind and the seller agent will keep telling us to increase... do we get to request to see bidding after it done? thanks
You always need to base your offer on the most recent sales, it' doesn't matter if there's bidding wars or not. If the price you're going to offer is supported then you'll see it in the sales data. You also have to ask yourself if you're comfortable setting a new record since that's what may be happening.
It definitely seems like a bubble that is inflated by high prices
yep
The Vancouver bubble is growing nonstop, with houses listed in the 2 million range. Considering the supply shortage, do you think Ontario can also get there in time? I am based in Calgary, and I am not sure if I want to buy at this point, considering our market fluctuates with oil prices. No rush at all. Inventory is running very low, though.
Hey! I am also fom Calgary. I moved from Vancouver 5 years ago. It makes zero sense to buy unless you have to right now in Alberta. We have the highest unemployement rate in Canada and we have the highest debt. There is so much room to build and we are not the next Vancouver or Toronto.
No, it isn't; April sales are down along with asking prices/median prices.
@@rachelk8368 Much appreciated. Thank you, Rachel.
In fact, YoY median prices are down for each of the first four months of this year for all residential properties combined. The detached market is seeing corresponding results.
@@billferguson1368 Thanks Bill !!
I had a chat with a colleague who leveraged his gains and re-entered the scheme earlier this year buying an “investment” property in Markham for over 2 mil, he seriously believes it’ll go to 4-5mil in the next couple of decades… guess we’ll see…
that means either
- minimum wage needs to be six figures
- or the central bank needs to print so much money that a bag of chips would cost 120 dollars and they gave up on inflation target
- or people love old homes, almost like wine, the older it is, the more juicy
@@DChensMusic Unfortunately our government has been sending the message that "RE in GTA/GVA always goes up! Greatest investment in Canada!" for decades, all the rich boomers I know are in a hurry to secure more and more property for themselves and for their kids (who are otherwise priced out of the market). I remember seeing some stats that over 20% of homes in the GTA are owned by "investors". So this scheme is more like a self-feeding cycle driven by a lot of people from the top re-entering at the bottom, some of these people are looking at countries with multi-generation mortgages and thinking that's ok, if not dead set on getting us there... Canadian Banks are the ultimate winners here.
I live in Markham and if there's a recession home prices in Markham will certainly double again a few years from now. Virtually no one in this city works so a recession will just mean lower interest rates so the Chinese will be able to buy or leverage a lot more properties. One house on Heritage Corners is still for sale and hasn't sold in about 5 or 6 months. Soon rents in Markham will surpass rents in Toronto. Markham is just barely below Toronto but will soon have higher average rents than Toronto due mostly to all the new properties being sold. Like in China the buyers bid up the price for every next buyer so every next buyer always makes money.
Why are people still believe that the good times are here
no clue
Calgary just reported MORE price increases. Not sure I understand anything anymore…:
Calgary didn't have the same bubble as Ontario and is still considered affordable in comparison.
I know this is very specific, but would you mind telling me if Gatineau, Qc is in a similar position? We are across Ottawa but in general house prices have always been lower here. A significant increase was observed during the pandemic of course, but the prices are still pretty behind Ottawa's.
Edit: looking to buy but the prices may not drop that much here.
Benchmark Franken-numbers; give that metric as wide a pass as possible.
@@maximusfuscus I'm in the Greater Vancouver where this Hinden- bubble is still in implosion mode.
@@jonflynn- Ok. I get that. But please explain to me: how is the bulk of the people moving to Calgary still finding meaningful jobs? There are only so much on the market relative to the newcomers. Or are they all cashing out in crazy markets and retire?
How far do you think they can keep this going? How long can government bail out those who may lose their job due to the recession? We saw how much "money" they were willing to hand out during the pandemic.
funny part is the covid stimulus cheques were less than the corporate stimulus cheques of lower taxes/incentives that get thrown at corps......yet provide a FAR larger impact.
make no mistake the conservatives are hardcore socialists......but only for corporations
Manipulated markets will crack sooner or later, look at the US, Canadian banks have already suffered losses due to investment in them. If they print, inflation comes back, europe just had inflation tick back up after 4 months of declines. I honestly think the government and central banks are out of tricks.
How about i want to sell and buy a bigger home. Good time?
buying and selling that big of a deal buy realistically you want to upsize in a down/bad market and down size in an up/good market. A more expensive home gains say $200K in a sellers market and a less expensive on $100K, both might show a 10% increase. In a down or buyers market you'll lose $100K on your house but pay $200K less for the bigger house.
If I buy a studio apartment for 1 million with 20% down my payments are only $5000 a month. With my new raise adjusted for inflation that’s a super good deal. Get a job with the government people. You make 10000 a month easy just working from home.
1 in 5 jobs are public sector now. Looks like everything is going according the their plan.
"only $5000 a month" "10000 a month easy" 120k a year is in the top 5% incomes in Canada, and your net take home is going to be approximately $7100 a month which leaves you with 2100 a month to pay for insurance/maintenance fees/food/transportation/leisure.
We can go one step further and assume maintenance on a $1mil condo in Toronto will likely be 1200 a month, so essentially you have $900 to deal with all those other expenses. Good luck.
@@alessandroc47 I was being sarcastic. Lol. The way prices are going this will be reality in the near future.
@@darrensmith6782 I had a feeling lol. These days however, you never know when it comes to Canadians making absolutely horrible financial decisions with unrealistic expectations.
What about agents listing houses below realistic market values in order to create bidding wars, then being able to boast about the home selking for over asking? How about the whole offer process? Why are multiple offers allowed to be presented at the same time? What happenned to offers being presented one at a time and allowing the bargaining process to work itself through? I don't know when this multiple offer business started but I'm pretty sure it has a lot to do with the ridiculous prices being seen. Let's face facts, it's less work for the selling agent and a bigger commission. Only the buyer gets burnt.
Finally got into my career in 2019 excited to save money for a downpayment but then covid hit so im still renting...
I have a down payment ready for whenever the time comes
Recession is coming
So do you buy or just wait on the sidelines forever. Lmao. We don’t have supply in Canada, so prices not going down.
I would be waiting, at least for 2-3 months to see what happens with the bigger picture. Already seeing prices subside for the late spring/summer, so no worries now.
@@jonflynn that’s fair. I’ve just been waiting for last couple years and in a worse spot now because we have “high” rates with high prices. Although prices did drop over the past year, they are ticking back up again. I would have been better off buying a year ago atleast when rates were low. Seems like high prices will be the norm in Ontario now. Won’t spike again but probably the normal 3-5% per year now.
I am your first view man :)
Thanks,
Housing prices are directly proportional to how many hundreds of thousands of renters Immigration Canada decides to let in.
Great vid. Your pyramid is exactly what ive been saying years now. If prices were pre 2016 which also was a bubble then Id buy. I wouldnt touch nothing now unless sold my home to move with maybe a little net profit.
Thanks for the support
In 2016 people were saying its a bubble
So when is a good time to buy ?
6 months ago. When he was also saying to hold off lol
@Eric Kyriazis I was leaning towards July once the flood gates open
@@eliaskefalas373 Yesterday was the best time to buy, and any time before that. Sold prices keep rising month to month. He said April would be a massive drop, but month to month sold prices are up. July will be even more crazy. 3 years of buyers all in the market at the same time, while already having a shortage.
@@GoProBlizzard something has to give boc will increase rates. How much longer can people afford this housing market negative amortization can only hold the gates for so long
@@eliaskefalas373 They raised rates it lowered listed prices didn't affect sold prices at all. Everything selling way above asking. There's far too much demand at this point. It may settle but it won't go down. We have a major supply issue, and only getting worse. Not enough housing as is, and bringing in 500k new ppl per year and most settle in SWO
Hi Jon, thanks for the video.
I have a question. I am a FTHB. Called a broker yesterday to get pre-approved and he basically told me to take a variable rate as he is sure interests rates are coming down soon. What do you think about that?
I'd bet the farm he's right. I've got 23 million in GIC's that come due January 4th 2024 and I hedged the future interest rates in the futures market betting they'd fall about 3/4 of a percentage point between now and January 4th next year.
Hmmm, I wonder which mortgage he will make most commission on, that could be a clue...
sorry didn't see your comment until now, my mortgage broker says shorter term fixed 2-3 year
The biggest problem in Canada is not even just what is happening in real estate. Its the fact that rational thinking and financial sense have become very scarce here. Because of how the government has tried to prop up everything the craziness has been normalized and now if you are saying sensible things then you seem like the odd one and something is wrong with you. 1/3 yrs of mortgages were forced to have their amortization extended and nobody realizes that that statistic is literally the kiss of death. People think that banks have infinite money to support this? I guess thats why the banks in the US are crashing. Maybe something is wrong with their infinite money supply. But dont worry we have infinite money here in Canada right? I guess thats why the bank i work at has been laying off people and cutting projects since the interest rate hikes started last year. When things go bad i am going to be very amused by all the shocked people who were repeatedly warned by the very few voices of common sense like this channel. They will be so surprised that this could ever happen in Canada. I can hear the cluelessness now. "Oh my God How could this happen in Canada"?🤦♂️.
So far all your predictions have been wrong. And I've been watching everything. 6 months ago you said it was near it's peak, yet it really was at it's bottom. It was the last buyers market we will see for years. Other viewers just be aware of this...
The market will only correct itself to the point where we would have been without the covid spike. It will never reach pre pandemic sale prices because real estate naturally increases in value. So 3 years of appreciation, even minus the covid spike, will still be up.
remember his don't buy until 2024 because that's when the market was going to bottom out predictions? Or how a few months ago this rally wasn't going to last...?
Still looks like 2024/2025 for good buying opportunities, and this rally won't last long. Funny how you're considering me wrong before the time has come close to arriving. Most major players are calling for a recession by next quarter, just as predicted on my most recently timeline. Don't get too high on a few good months, remember what happened last year?
@@jonflynn already trying to deflect away from the bad advice you have given in your videos before. Last year the Bank of Canada increased interest rates 400+ basis points and the impact of that was felt almost immediately in the real estate market. Do you have some sort of inside knowledge that they are planning on doing that again this year. Also really funny how we shouldn't get up on a few good months when after the first month of price increases you were already saying it won't last long, next month will be down ect etc etc.
@@johnnylongstocking183 He's gonna keep deflecting man good to see other people have noticed his absolute BS and deflection. He says things he hopes become true and has never predicted 1 thing correctly yet. Just giving terrible advice screwing home buyers. "Rally isn't going to last" here we are. Strong as ever. He said that in April the prices would come down significantly. They went up month to month. Guys a dork.
@@GoProBlizzard he doesn't have a clue. He also said a few months ago that the massive spike in immigration wouldn't matter because we didn't have a shortage of houses and we build enough to keep up with demand. He seems to have forgotten he said that now.
who can afford a 3K/mth Mortgage?
it's craziness.
Real estate always going up lol
lol, what happened last year?
😅well expected content
....when the price going not as predicted in previous youtubes...then claim it a ponzi...
Thanks for watching
It’s nothing but bank slavery, work and work and work and pay up those hefty rates, and when u fall short of money and energy refinance and borrow more money and pay up like a slave and then die 🤣🤣🤣🤣
yep, that's how they keep you obedient
I love this guy putting out videos and misleading people. Hope sells! You got more demand than supply lol.
he doesn't have a clue what is going on in the market and the desperation in his recent videos is really starting to show how off the mark he is.
Thanks for the comment
Lol..... Yes Pyramid scheme🙄
thanks for watching
But there is no slow down let along collapsing
That's what people said in Jan 2022 and before
From my 20 years of experience of waiting for that mythical buyers market, don't bother, it never arrives.
where were you in 2008-2011 or so? same with the late 80's and all of 90's?
You have no idea what you're talking about. It shows, too.
@@jonflynn would there be any data to show inventory during those times?
@@jonflynn We sold our place in 2004, waited out the market, got too expensive (Victoria) moved to Ontario got a really cheap rental on the lake, moved just before Covid and watched local prices double (or more). And the prices of listings here are fake (esp. if $499k) with many offers. Most recent example was a $499k listing selling for $722k. The market is never coming down.
You underestimate the HUGE amount of foreign money that is pouring in here, money laundering on a massive scale. It is a big driving force and on the top of that you add massive speculation, houses have become commodities, trading instruments. Pretty much those who got in at least 5-7 years ago have huge equities in their properties which can easily be used for further speculation with HELOCs.
Browsing through Toronto listing is scary, this market is insanely expensive, out of reach for all home buyers who cannot get help from parents etc.. Will it burst? I'm not so sure anymore
They always burst - always. The failure rate of asset bubbles throughout all history is 100%.
well put
Ohh boy not again change of the statement, from crashing to seller market.
You should watch your own old video before make new one to understand you have no idea what you are talking and what is happening in Canadian realstate market.
Don't have time to watch, too busy making them. Please provide your assessment on the market with sound reasoning and I'll share with my audience. Please don't pin ever-rising house prices on immigrants with $30,000 per family arriving here. It's currently a sellers market, it won't last and crash or downturn is coming. You're kidding yourself if you think this is sustainable. We're in the biggest bubble or your and my lifetime.
@@jonflynn when is the actual crash coming according to you? So I can send you screenshot at that time 😃.
are you going to send me the screenshot if I'm right?
@@jonflynn yes sir.
@@jonflynn This greed for profit is not just in real estate. Last month, my brother wanted to sell his 2011 Toyota corolla originally bought second hand 5 years ago for $5000, on marketplace some are listing it for $11k. I have never seen people make profit selling their old car until I saw this in Canada. I actually reached out to one of them offering $4000 he laughed and replied that he is getting offers for a little less. I saw the same for all sort of used items from baby gear to furniture where sellers are listing for just a little less than the brand new price and all are marked as 'Used like new'. I relocated to Canada 5 years ago but never witnessed such greed before. Arranging to leave the country hopefully very soon.
Guys do not listen to this guy, this guy has no idea and he is just getting paid to tell people market is crashing, he is keep changing his own statement in every video, in July he will again come back to tell this is seller market and wait for next July.
Thanks for your comment, if I'm wrong there's going to be a lot of homeless people and you'd better get a good security system because crime will skyrocket.
@@jonflynn now I can tell, you are a emotional personal, you combined crime, security camera with realstate 😮😮.
Waiting for your next video, want to laugh 🤣🤣🤣🤣🤣🤣🤣
THE PEOPLE AT THE BOTTOM ARE YOUNG PEOPLE, YOU (SOCIETY) DOES NOTHING BUT ABUSE ITS YOUNG PEOPLE.
yep.
I really think its the Liberals they have set us up to fail big.
Hey jon hats off to your honest take on real estate.. I eagerly wait every week for ur video , by d way what s ur twitter handle
Thanks Jit, I was going to pop it up on the screen but didn't have time this week. JonFlynnREstats
Pyramid diagram is great, I'm above the it. Must be the all seeing eye up there!?
Nice, you're lucky to be one of the elite homeowners, lol.