Toronto home buyers must watch out for rapid price slides, says Realosophy’s John Pasalis
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- čas přidán 2. 07. 2024
- John Pasalis, President of Realosophy Realty, joins BNN Bloomberg to discuss the latest Toronto housing data that show home sales in July plunging 47% from last year. Pasalis says the transmission of monetary policy into the housing market is destroying demand, and sees sluggishness continuing into the fall. He expects more stability in the market with fewer distress sales. He says it’s now a buyers’ market, but adds buyers should watch out for quick price drops.
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Real estate boards and associations that suggest longer amortization period and eliminating stress test are saying such for their own interest, not in the interest of real estate buyers, that over time get screwed over with mortgage that last into retirement (unaffordable) and might run into default respectively.
Let it slide and crash and burn
🤣😂 yahhh that's what the elites allow lol... You forget who run politicians 🤣😂
Development charges are obscene $350k???!! you can buy an entire home in another city for the same cost as the DCs in Toronto you can understand why this city is totally unaffordable for people
It’s not declining. It’s just going back to normal
Realtors say it’s correction on crash making fool to buyers
It seems like prices haven’t really moved, if government raised interest rates in November prices would have never skyrocketed in February. What goes up must come down is the lesson, except for government spending, they just keep doubling up since the leader has no care for monetary policy and teaching Canadians budgets balance themselves until inflation smashes everyone in the face.
@@jason4130 that would be true but the money that gov funds our programs comes from loans from the central bank of which they are very happy loaning to canada
@@vmtl4659 No - actually the gov funding of programs is a direct creation of money. The central bank when it pays the cheque or honours the payment is NOT taking some Canadian money it was holding and loaning it to the Govt. To the extent that it receives money from Gov of Canada bond purchasers to issue bonds it is simply replacing one liability (cash) for another (bonds). Although this transaction creates a demand for future interest payments it in itself doesn't change the money supply (cash plus bonds). But the spending of the money by the govt and the honouring of the payment by the Central bank is actually creating new money. Monetary policy is a separate matter involving influencing interest rates. When the central bank actually issues money itself by buying securities of the private and non federal govt issuers it also increases the money supply - this is what quantitative easing was about.
@@citizenadvocate euh No - Actually. Nice try with your long text 👍
No stress test neeeded. All you need to do is stop using tax paying dollars to insure that banks get paid via CMHC. The free market has to be allowed to price in risk. Let banks lend money at their own risk! Then you will see prices come down as no financial institution in their right mind would lend the money they are lending knowing they would get bailed out. All this is, is crowny capitalism!
I agree Sean!
"destroying demand" yeah, demand from speculators.
What's everyone's obsession with scrapping the stress test? Sure maybe it could use some refining but is it really the worst thing to ensure that those with mortgages have a little bit of financial cushion before taking on such a massive loan? Resiliency for the long- term should be the goal for the benefit of everyone.
And instead of pushing demand destruction and forcing many people to sell and make their property available to a buyer, BUILD MORE UNITS! While I don't think being a landlord is inherently wrong by any stretch more should be done to tip the scales back to the favour of home buyers rather than financializing housing as an asset class to just scoop up properties and wealth off the back of renters which in a lot of cases are would-be buyers if the circumstances were different.
The only issue is then what is the point to even stress test if it just keeps changing. They might aswell stress test at 20%.
Been considering going into the housing market but with the number of bad news coming from the sector, I am not confused. Given the present conditions, is it better to invest into Real Estates or into Stocks? Which would yield better output especially with one with less time on his hands.
Has got to be Stocks but of course, you have to be well informed on the right ones or better still, get a pro to handle it for you (that way, you save time and minimise risks). Made my first million this way earlier this year. One more thing, one can wake you up by 2am to complain about a leaking pipe, the other can't.
@@paulagoodman7530 Very sound advise! I have been into both for long and though I won't say I have lost a fortune, I have squandered quite a lot... If it's not a problem, do you mind recommending the pro you worked with? I could definitely use the help of one right now... I look forward to your reply...
Why not both??? diversify!!!
@@luzmullins7691 Funny enough, I can honestly relate. It's not as easy as it may sound and takes some level of decisiveness and discipline. I don't know if I am permitted to drop it here, but her name is "Leah Marie Sandock". Was in the news a lot in 2018. You may look her up for more.
@@paulagoodman7530 wow I know this little lady. Once attended a fundraiser she was also in attendance in Vancouver,, Great speaker with a funny accent,, She's American though, I doubt she works with foreigners,,,
Another person in RE industry trying to pump higher house prices. Much lower prices are good
I thought we had a supply shortage 😂
We do.
When credit is cheap and banks can issue mortgages faster than they can build then sure. So many people became speculators and ghost hotel operators. Helocs funding lifestyles and retirements.
We have supply shortage for greedy investors. No amount of supply can quench their greed except killing the greed by high interest rates. 😜
Real Estate Margin Call coming on September 7th. Lots of supply will be coming on the market.
@@sharinglungs3226 nothing lasts for ever..Some will pay dearly for all this greed and stupidity..
Well spoken, good content John ! 👍
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Her > telegram @coin_signal10
I have been investing with Mrs. Stacy Huth, I came across some nice comments about her here on CZcams and I gave it a try, and honestly, I don't regret the move.
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I'll agree with you because I've used her strategy in the past and was able to raise a total profit of 10.5 BTC in 6 weeks..
Few words of advice for everyone, "Market price does not matter, Buy the dip".
It's truly unbelievable that anyone could be crying foul after property went from 300K too 1.3M in just 10 years. Since 2020, housing went up 50% in cost... Btw, rate hikes have ABSOLUTELY NOTHING to do with demand. The housing demand in Canada is not driven by consumers, it's 100% driven by super rich investors that do not use mortgages, they pay cash! What is actually happening, is that these same investors know that consumers cannot afford the price of housing. So if they pause their purchasing, housing prices will drop and give them cheaper purchases for investment. As long as they purchase above the price that an average person can afford, then they can afford to wait and let the market drop to steal housing out from under Canadians. It's 100% collusion from investment firms! Disgusting! Heads need to roll!
Sir ,
You are 100% right!
most likely , the media told us we have a housing shortage, current low inventory, price drops, yet houses are not selling Hmmm
@@johnnycroat well months of inventory is still very low. The amount we have would still be considered a buyers market but since buyers are on the sidelines either waiting on lower prices or getting priced out by higher rates.
Absolutely and the real estate agents, and analystes are in on it, by giving terrible advice to their clients and by suggesting that these exploding prices are due to a housing shortage, and long term rising housing values.
@@taralynnhoffmann5831 100% they are in on it.. The realtors know who their clients are. I've spoken to many of them and they agreed that there is a ton of money laundering, "foreign investment" and that the vast vast majority of buyers are "investors" who are either large corporations/hedge funds, or they are ppl who own multiple properties already and are currently using leverage against their previous purchases to buy more and more, then sitting on them or renting them while watching the equity sky rocket as government and laundered money drive prices higher... Btw, all of our government parties are also 100% liars and in on it as well. If they wanted lower prices, it would be very easy to pop this bubble. If they got the Chinese/Indian money laundering out, our housing market would tank! Canadians cannot afford these prices. They've turn Western housing into the largest money laundering scheme on planet earth.
I sold at the absolute top and cashed out, now living on a air mattress in an attic of a garage... life is freaking great watching it all crash and burn
Lol yeah right
Sellers need to just stop panic selling with declines in price.
If a buyer wants a home but rates go up.. let them adjust their expectations on affordability. Cant afford a 1800 sq ft so buy a 1400 sq ft... From a detached to semi to town to condo.
Toronto always bounces back. And goes even higher. $$.
Inflation is starting to rollover.. so in 3 months will be 6%. Rates will begin to pause soon so bottom of RE is this winter
The Canadian government printed FIVE TIMES the amount of money in circulation. Inflation will continue rising.
@@taralynnhoffmann5831 this didnt age well
The Home Prices in Canada MUST GO DOWN & go down SIGNIFICANTLY, We're talking 40, 50, 60, 70 & even 80 percent in some areas, if not, the HIGH COSTS OF LIVING will NEVER go DOWN and the HIGH INFLATION will be entrenched in the fragile Canadian economy FOR YEARS TO COME.
Unfortunately, this will never happen , without bringing Canada in a very deep recession.
Those are peoples retirement funds going away
@@evdochiaprotopescu1302 Putin will bring it down, once he starts invading another country, then expect double digits rates with gas prices at $3.00 and an inflation rate of %10 plus
@@evdochiaprotopescu1302 western economies entering a massive recessionary period the likes of which most Canadians aren't prepared for.
@@evdochiaprotopescu1302 It certainly will happen. I see house prices come down as much as 40% in the next two years.
My opinion, 70% price drop from Feb/March peak
back to 2014 prices?
Lol not likely. We are almost near the bottom now.. maybe 10% more to go down. But once it shifts it goes up pretty quick as ppl know where prices can go. Fomo
@@baseline6786 i can live with that
Absolute nonsense !!!
@@baseline6786 No way, you haven't seen anything yet. The Canadian real estate market is nowhere near the bottom. Major crash is coming in 2023/2024.
The bubble must burst to release the infection, for healthy market.
Prices should drop at least 60% to be reasonable.
Stable real estate market for healthy economy, rates should never be less then 5-6%
Won’t happen as long as ppl can pay their mortgages it won’t and the BOC will never force a price declines like the 2008 US housing crash it would be economic suicide
Generational debt, 40 year mortgages are not the solution
The BOC rate is 2.5%. Their target is 3.5-4%. Expect another hike of 0.75 on Sept 7th. And then another 0.5% in the fall. We are only half way into the real estate correction. And don't expect rates to drop anytime soon. The American CPI data just came in at 8.5%.
Don't buy when things are trending down like this. Don't catch the falling knife. Look to the past for guidance price wise. 2017, 2018 levels for support.
Canada's not halfway into the real estate correction. It's only in the beginning. Prices have started to come down but they will really drop massively in 2023 and 2024. They're gonna be wonderful years for buyers.
@@YoBoyMarcus when I said half way, I was referring to time. Any speculation beyond 6-12 months is a fools errand.
The only issue is that this is not lowering demand. Its man made priced out individuals still want to buy. Its not like we ran out of buyers which would be a completely different story. Once the interest rate come down buyers will be swarming once again. If anything we are just delaying the process for most meaning demand will be back but with more force. The best way to actually truely lower would too just get everyone a home then prices will have no other option but to drop.
So we have a guy in Ottawa “who doesn’t think about monetary policy” that literally printed hundreds of billions of dollars and quite literally flung the money around. This insane fiscal irresponsibility is going to take YEARS of higher interest rates to damp down the nearly uncontrollable inflation that has resulted. Home owners are completely deluded if they think they are somehow immune to the broader economic disaster that is coming. Tighten your seatbelt.
The Canadian Real Estate stinks like a rotten tomato 🍅
Owners of condos are welcome to rent them out if they can't sell them wait in 6 months as the layoffs really start lol. Try getting your rent then.
in other news, water is wet.
Excellent news
I'm revising my interest rate target. I'm expecting 4.5% by Q1 of 2023. Don't buy now. Sellers seem to be in denial and not until they figure this out, either volume is going to evaporate and/or prices are going to plummet.
Can't wait for all mortgages back to 5 - 7%. Including those who have fixed for now and renewing at that rate.
I want to see how those with a million dollar mortgage service at 5-7%. May be they will tech us someting.
GOOD!!!!! Hopefully they keep going so our young folks can own a home again...
The real estate cartel is panicking. Their golden goose just laid an egg.
What does anyone expect. Homes are not what there worth. No one knows when the bottom will end. And this is what happens when people live above their means. And governments spend money they don't have !!!!!!!
Good. This is a dozen years overdue.
I think the future rate of decline will be higher as interest rates are set to rise. The low rates has given many financial fools a false sense of being wealthy! For many the bankruptcy trustee will be in the wings!
This just basic economy.
Recession makes housing crash
I have zero regard for any economic insight by real estate agents
Crooks all of them
They take a 6 week sales course and then think they are economists.
Nowadays, unelected bureaucrats are virologists and have the power to shut down the entire economie, techies are immunologists and a drama teacher and journalist are at the head of our country....so, it wouldn't be a proper appocolypse if not to also declare real estate agents as economic experts. Why do things half way.
All markets correct. The Toronto market was way over valued. What goes up must come down. Nothing new. It’s cyclical.
It’s only going to get worse. Govt created this mess don’t look to them to fix it. Time for a rest.
Too bad Canada is just an empty, barren land with just real estate. No industries, lucrative jobs, innovation, etc.
You know how many people work Construction after market drops no body build hose with this triple material or some more than than triple . If somebody pay mortgage $3000 for house 3 month ago . Right know he need pay more than $4500 . You kicking many many worker buyer home owner because of control house market. This is joke. Really joke . People have more than Enough problems with price for life every single tings . This is over and over
I thought there was a housing shortage..... TFBS artists
It was a healthy market before pandemic. This supply shortage came because of cheap loans offerd by banks, and game well played by investors and real estate firms. First few months after pandemic started, investors or real estate firms, initially listed one or two properties at a time to show there was shortage of homes, and created a panic in the minds of common people. So the common people paniced and purchased property at the maximum ever possible price, even though some homes were just not worth it. So, now is the time to bring back prices to normal, for healthy economy.
People who bought homes to call it their home, and for long term would try to manage keeping it. But the flippers, and market players would be more effected by this rate increase and stress test. So there would definitely be a lot of pressure put up on the federal govt. to change mortgage rules, and make things easier, so that these players who have a lot of properties in hand can dispose it off quickly. I feel the govt. should think for the common man, and not the investors and take a wise decision.
In this market condition, if a person can get a mortgage approval for 500k, then that's Ok, and they should look out for deals within their capable reach. I don't think any common person or people who already have their homes, would approach the federal govt to make changes in mortgage stress test and other rules. Its surely the investors who want this sorted out.
Home is a place to live for a family, and not something that investors should play around for profit.
The bond market could trend up any day as cash holders look for higher returns. Also, lenders will not be so quick to deep discount and the stress test spread may get increased by the government believe it or not. Why? Because they have proven it was necessary. I suspect they want to show the Reform/Conservatives how wrong Poilievre is squealing about house prices. And squeeze the speculators and investors. Expect rentals to lose capital gains exemptions next. And possibly investors will lose interest deductibility. Radical but possible. With 25% of sales to small-medium size investors not to mention the REITs entering single family they have to strip out that demand. How many realtors were competing with their buyers to build their rental portfolios. Many were were for sure. I know some. Hope they get fleeced. Unethical garbage.
Toronto Has One of The Highest Concentration of real estate Agents In The World.
Government creates a situation when no body wants to work anymore, its much easier to speculate in real estate and makes millions doing nothing.
It is interesting (disgusting) how realtors were telling us all that the market had just corrected upward in 2020-2022 and prices were now normalized !!!! And now listen to them backpeddle. I sold my house last November and decided to rent for 2 years. Made $250k after tax in not losing on that already. I expect to be $350k ahead. Thing is even with a low five year rate last fall I am still going to be way ahead (for once !) in 5 years. I listed myself on MLS and dealt with incredibly arrogant, self important and unethical “professionals”. One who got in my face saying I was not qualified. Another told their buyer there as a 10% discount from my well priced asking if no competing offers. This all despite my deep experience as a Chartered Accountant working for major developers. I have zero respect for the real estate “profession”. It is a scam and a sham.
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@@jmcg5838 realtors are scum? shocking
@@jmcg5838 I feel you. I dont think there is a worse profession
Not true. There are all kinds of taxes and fees to pay in case you didn't know
Canadian Home values: Personal projection from June 2022:
by December 2022:
Expect 5 year fixed rate of 6.25%. Stress test at 8.50%
Average price drop from peak in early 2022:
* Canada wide 20%. High end of market 25%
* GTA and Vancouver 30%. High end 35-40%
* Large urban (non GTA or Vancouver) 25%. High end 30-35%
* Non urban 15%, High end 20%
2023: No price improvement until spring of 2024 and then very small increases. High end may not recover for longer.
Key words:
Steep interest rate and payment increase
Overheated pricing
Inflation
Recession
Psychology
Impacts?:
Deals will not close putting homes on the market to be sold again
Refinancing will cause some to have to sell because that cannot afford higher costs
Banks COULD force requalification on renewals at strict terms
Appraisers will be more conservative and banks may want pre-close appraisals
Builders will stop spec builds and buyers under contract will fail to close at contract price fro 6-18 months ago.
Forced sales from divorce, death and job loss will fuel the supply.
Baby boomers will be selling at increasing rates also fuelling the oversupply.
Stress test will get dropped , rates will fall ... You can look to the USA or UK to see exactly what's coming..... The Ponzi scheme never ends 🤣
@@cultoffreedom9068 Not a chance. Stress test will be touted as the saving grace. BoC is in inflation fighting mindset and has one tool - interest rates. The flight from equities upcoming could push up bond yields. This is for real.
@@jmcg5838 lol if you believe them and think their word is worth anything you sir are a fool.... They can and will pivot .... Stress test was put in place with falling internet.... Canada needs housing to stay afloat ... Wait watch and learn my friend ..... Don't pay attention to the MSM ... This is a blip just like 2017 ... Like I said wait watch and learn
@@cultoffreedom9068 when anyone calls me a fool the civil convo ends. Take care.
@@jmcg5838 I said if you believe them you think their word is worth anything then you are a fool , so I take it you take their word for what they say .. if that was the case then why aren't the rates near zero like tiff said they would be untill 2023 lol..... Being sensitive is how Canada became the laughing stock of the world... You must be apart of that group 😂🤣 , not sorry.... Cuckolds get no respect
If you want help people cut this money they need to buy hose from your side . Interest rate not option. Only make rich people richer . And also /%50 Construction job is gone. No body build hose .
😂😂😂I have the best interest of my life right now at 1.8 for the past 20 years my interest was 4.7 and my first 5 years it was 6.75 so what are you all crying about . You should be crying about the value being 250 -300 thousand over what it should be. 🍻
Hay quá
What goes up……….. been a thirty year immigration driven ride. So now they are trapped in a cycle
Glad I sold last month at the top. 😂
If you buy a house now you are insane
Expert ? Everybody become expert .
So a housing crash...Just SAY IT...
Middle class and low class need to leave Toronto and the elite with losses on their real estate. Remote work means don't need to live in the hole.
We need to get rid of that stress test ASAP. If people ople want to borrow money then let them borrow.
yeah sure mate! LOL
🤣🤣🤣🤣🤣
I ain't worried at all. It ain't me paying the mortgage in the first place anyway. All I gotta do is simply increase the rent. My tenants will pay all those hiked interest 🤣🤣🤣
Everything back to middle/working class and poor 😇
This Strategy is sh……t because make bank richer and people can’t pay there mortgage. Also bank not approved price many people Bought hose .
Biggest real estate crash of history in Ontario Canada 🇨🇦 on the way good luck 👍 seller’s current homeowner’s 😂
Cant wait to afford a house at 1/3 of my middle wage earning in come as suggested by the experts lol
boo hoo. toronto homeowners have made 1000% profit on their homes
Get a job