An individual may invest in the money market by purchasing a money market mutual fund, buying a Treasury bill, or opening a money market account at a bank.
According to my manager "Angela Lynn Schilling" an expert trader, the money market is characterized by a high degree of safety and relatively high rates of return.
She is right, that the real fact because the money market investments are characterized by safety and liquidity, with money market fund shares targeted at $1.
Condos were already a bad investment as rental properties when interest rates were 2%. Now with interest rates at 6%+ they have gone from being concrete boxes in the sky to black holes in the sky.
Long time realtor.....retired in 2013. WAKE UP.......an investor would pay 1K a square foot in Miami, California, etc. How we ever accepted this 1k a sq foot to now $1500 a sq ft.... in the snow, rain, etc, negligent industry. Condos traditionally were never aeen as an investment. Good luck. I enjoyed your channel.
@@miloradrabasovik7938 Apples and Oranges. Salary levels are much much higher in Switzerland, which also has one of the world's best performing economy and currency, superior healthcare, education and direct democracy.
@@lakepoet Helooo do you know avg 3 bedroom condo in Zurich is 3-4 $ millions or Single house between $ 5-10 million! More than 80 percent of population are renters.
@@miloradrabasovik7938 As I said, apples and oranges. Switzerland does not have a culture of home ownership or housing as investment. Instead, rents are very stable due to rent control which makes for a vastly superior quality of life and living standards. The currency is stable and inflation is low,, unlike in North America where real estate is really a protection against continuous currency debasement.
@@miloradrabasovik7938 You're wrong, the weather is much better, lowest temperatures in winter -5C vs -15C in Toronto. Not mention the scenery is much nicer with the alps visible on clear days and are only a 2 hour train ride away. Its an absurd comparison.
That's where experts like DESIREE RUTH HOFFMAN come in ,She a former Wells Fargo advisor. Her predictions and guidance have been instrumental for many speculator during these turbulent times.
@@BrianAlbert-hh3pi Wow, that's impressive! I've heard of her. I'm excited to hear about her success stories….I've actually had my mortgage paid off by following her guidelines calls.
That's amazing! I've been thinking of getting a fiscal advisor too. I did a quick lookup and found it so easy to schedule a call with DESIREE RUTH HOFFMAN
Can do the math right now. 600,000 condo with maintenance fee, property tax, insurance with 20% down payment at 5.4% is around 4k a month. Renting an equivalent condo are 2.5k. You save 1500 per month. Do a 25yr saving under 5.5% for 1500 every month + down payment under the same term. You’d be surprised how much that condo have to go to make sense. Not accounting for wear and tear, renovation, transfer tax, RE commissions, job loss risk, and relocation opportunity lost. Then compare condo price on house sigma and see the sold price from 25 year ago under low interest environment, and a time when developing country like China and India was seeking better standard of living.
When you say there’s a record number of listing (most in 25 years for condos) - are those numbers adjusted for population growth or total inventory change, otherwise they are out of context
@@cthymnn2010 It used to be that people paid off their loans first, then bought homes before they started having kids. I get the sense that people want everything right away.
I was looking at condos in Toronto, Oakville, and Etobicoke to rent for a year…. Can’t believe how poor quality most of units were in terms of layout, size, and finishes.
Same thing happening in Calgary, big luxury condo units built but suddenly switched to rentals because they have overbuilt.....no takers on rentals either.
Peak bubble behavior doesn't work forever, then people start losing money, then they start selling, then the fire sales start and the bubble pops. We could have a year or two left, probably not more.
If a property turns cashflow negative it either gets repositioned or sold. Here in Winnipeg it seems crazy to me to PAY 2000/mo, to what, subsidize someone else's lifestyle? What about repairs? Its not an investment its a charity at that point
I don't think the challenge is the lack of people that desire to buy, but the lack of the regular person to be able to support the prices required to buy a condo. Investors pushed up the prices, but when you have too many investors and not enough organic demand you get a bubble. Prices will have to correct down, it is an inevitability.
Wait for the foreclosures to pile up at the banks and credit unions then negotiate hard against the banks. First house I purchased in 80’s was 30% of what the previous owner paid. The bank was sitting on thousands of foreclosures as they will be again.
I think his point was more: when you have positive cash flow by renting, then, there is no risk. Giving this abnormal return, everyone is willing to buy at high price, with high price rises as expectations. Bubble. Voilà.
The only reason to invest in real estate is because banks don't loan money to invest in the stock market, which has greater returns without the headaches. If you have cash, owning a condo as an investment is just shooting yourself in the foot.
Is negative gearing allowed in the Canadian Tax Code? Negative gearing could be the reason why some property investors are happy to carry a higher cost of mortgage when compared to rental income. Negative gearing has been a thing in Australia for quite some time.
Hi John, What is you take on entry level luxury units in the condo market ( 1.5M +... say to 3M)? Let's exclude the specialized penthouses etc. I've been following the market at the Shang (looking to get a corner 2br unit). What was ~ 2.1M is now offered at ~1.9M. I got to think there is more downward pressure coming (especially with maintenance and taxes biting harder at that size/price point - thus more negative cash flow for investors on top of the interest expense). I'm of the option that these units (entry level luxury) will fall more than entry level units (always a market for the cheapest housing) and detached homes (because of the scarcity). Am I correct in expecting that relative action in this environment? I'll take any opinion you got on this. Thanks in advance and keep up the great content.
Thanks for the feedback! I haven't looked at the data closely, but my instinct is that these investors are not as leveraged. You have to have quite a bit of cash to buy a $2M condo as an investment property. I don't think these are the average mom and pop investors. They likely have more capital down. They may want to sell eventually, but I don't think we are seeing that in any big numbers yet
The only investors at risk here are the ones who stock up on those 300 square feet units People that are in the buyers market now or end users and they are not just looking for a washroom in the sky they need space to live somewhat comfortable
This last quarter just set a record for the most new people in the country in a quarter with over 420,000 new people. That would be a 1.68 mil total if it continues over the year, about a 4% increase in the total population of the country. When are you expecting to see that pressure decrease?
Its an savings account that pays a negative yield...until it doesn't ....on good credit and at a 2.5% interest rate ........its still a good idea to buy a condo !
Don t call them investments ,they are liabilities . Investment will give you a ROI that is your first things you look at. There is a time to get in and a time to get out and waiting for opportunity.
Just install 4 bunkbeds into each bedroom (total of 8 for a 2-bedroom condo), and install another 2 bunkbeds into the livingroom, and rent each bunkbed out for $450 per month, for a total income of $4,500/month. You won't be bleeding cash, you will be net cash positive at the end of the month.
Toronto has encouraged the massive production of these tiny condo units and the agents and their friends have hoarded them for 2 decades. Sorry but why aren't these investors not paying commercial taxes? The city needs to wake up. Cut the land transfer tax and charge a commercial tax on investors. And for families? Well they've basically done nothing. Hundreds of kms of main streets in the city with 2 to 3 storey buildings. What a joke. "House substitutes" ie smaller boutique infill projects that have large units are basically non existent.. NIMBYs, land transfer costs, wildly high development fees, years to get approvals, GST taxes add up to ridiculous levels. I got news for city council. Affordable housing isn't public housing ghettos. Those are perpetual money pits. Affordable housing is small developments that aren't taxed into the ground.
the never ending increases in fees, taxes, and utilities are killing condo and mobile home markets here and in the US. mortgage costs and rents are out of control and no one is talking about canadian fed gov deficits. no foreseeable balanced budget means more taxes which means more inflation and less buying power. we are broke and spending like we have free money. 10 cents from every dollar goes to interest alone on fed debt and the debt is increasing 4.5 million an hour 24/7 and all the while unemployment goes up..... there are solutions but none include liberal or ndp politicians
my cousin bought 2 luxury shoe box's in toronto a couple years ago. They are still in development but they are desperate to sell now. I think the only way they get out of it is if they lose 250k minimum on each unit. They don't think so because they told me they are "luxury buildings and are not that effected. for example they said elton john bought a penthouse for one of his lovers in the very same building."
@@m.b5777 That is guaranteed only in the long term . In the short term, you can lose money on real estate . The problem is too many people want a big short term gain . It's all in the timing .
Any broke can be on the receiving end of positive cash flow. Those than can afford to lose money for a few years will be more than fine. Just like stock market crashes, its the weak hands that solidify their loses.
Well, I picked the challenge to put my finances in order. Then I invested in cryptocurrency, stocks, through the assistance of my discretionary fund manager
I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than $21k passively by just investing through an advisor, and I don't have to do much work. Inflation or no inflation, my finances remain secure. So I really don't blame people who panic.
I think you didn't address the biggest threat... investors walking away from downpayments and not closing. I've heard that could be as high as 30% of units. That would likely trigger a crash.
@jeffdanson lookup RBC article -> How lowering the number of non-permanent residents will impact Canada’s economy. The plan is to reduce non permanent residents from 6.5% of the population to roughly 5%. In theory this will reduce some rental inflation pressures.
Most people don't know the difference between speculating and investing. I have no sympathy for speculators who get burnt with condo purchases that they never intended on living in. If enough of them lose enough money, perhaps prices will return to levels which actually represent some value for the buyer.
Those mom and pop investors created cheap rentals, and brought supply to the market. We would have had far fewer condo projects built without those condo investors.
People, including this channel, need to wake up about interest rates. They are normal right now. Today . The low interest money printing days from 2008 to 2021 where NOT NORMAL. If you are expecting those "not normal" rates to return, you are either very young with no perspective or lying to yourself. For years every thinking person was saying when rates normalize things are going to get tough for a lot of people. Now that has happened the clueless are running around begging for rates to go back down. Sad.
The situation will be compounded by the fact that most of the builds in the last 10 years are absolute trash. Builders should be ashamed at the garbage they put up. Maintenance fees and reserve funds are a ticking time bomb. Wouldn't be surprised if at some point you will have trouble giving away one of these future slums.
An individual may invest in the money market by purchasing a money market mutual fund, buying a Treasury bill, or opening a money market account at a bank.
At the wholesale level, it involves large-volume trades between institutions and traders.
it includes money market mutual funds bought by individual investors and money market accounts opened by bank customers.
According to my manager "Angela Lynn Schilling" an expert trader, the money market is characterized by a high degree of safety and relatively high rates of return.
She is right, that the real fact because the money market investments are characterized by safety and liquidity, with money market fund shares targeted at $1.
I’ve been looking to switch to an advisor for a while now. Any help pointing me to who your advisor is?
Condos were already a bad investment as rental properties when interest rates were 2%. Now with interest rates at 6%+ they have gone from being concrete boxes in the sky to black holes in the sky.
Says the keyboard warriors who inherited daddy’s moment 😮
@@afzalshaikh2128 No, says someone with many years of RE investing in rental properties and who understand the math.
Long time realtor.....retired in 2013. WAKE UP.......an investor would pay 1K a square foot in Miami, California, etc. How we ever accepted this 1k a sq foot to now $1500 a sq ft.... in the snow, rain, etc, negligent industry.
Condos traditionally were never aeen as an investment.
Good luck. I enjoyed your channel.
Not much better weather from Toronto in Zurich Switzerland but 1 sq is $5000 right?
@@miloradrabasovik7938 Apples and Oranges. Salary levels are much much higher in Switzerland, which also has one of the world's best performing economy and currency, superior healthcare, education and direct democracy.
@@lakepoet Helooo do you know avg 3 bedroom condo in Zurich is 3-4 $ millions or Single house between $ 5-10 million! More than 80 percent of population are renters.
@@miloradrabasovik7938 As I said, apples and oranges. Switzerland does not have a culture of home ownership or housing as investment. Instead, rents are very stable due to rent control which makes for a vastly superior quality of life and living standards. The currency is stable and inflation is low,, unlike in North America where real estate is really a protection against continuous currency debasement.
@@miloradrabasovik7938 You're wrong, the weather is much better, lowest temperatures in winter -5C vs -15C in Toronto. Not mention the scenery is much nicer with the alps visible on clear days and are only a 2 hour train ride away. Its an absurd comparison.
The money market hasn't been too kind to commoners lately. I feel like I'm not making as much as I could be.
Have you considered getting a certified expert in Wealth Management ? They could help optimize your investments.
@@BrianAlbert-hh3pi Hmm, who do you use?
That's where experts like DESIREE RUTH HOFFMAN come in ,She a former Wells Fargo advisor. Her predictions and guidance have been instrumental for many speculator during these turbulent times.
@@BrianAlbert-hh3pi Wow, that's impressive! I've heard of her. I'm excited to hear about her success stories….I've actually had my mortgage paid off by following her guidelines calls.
That's amazing! I've been thinking of getting a fiscal advisor too. I did a quick lookup and found it so easy to schedule a call with DESIREE RUTH HOFFMAN
It's only the beginning of the end. Going to get very bad imo.
Can do the math right now. 600,000 condo with maintenance fee, property tax, insurance with 20% down payment at 5.4% is around 4k a month. Renting an equivalent condo are 2.5k. You save 1500 per month. Do a 25yr saving under 5.5% for 1500 every month + down payment under the same term. You’d be surprised how much that condo have to go to make sense. Not accounting for wear and tear, renovation, transfer tax, RE commissions, job loss risk, and relocation opportunity lost. Then compare condo price on house sigma and see the sold price from 25 year ago under low interest environment, and a time when developing country like China and India was seeking better standard of living.
Interests won’t stay elevated for very long. So in the long term it’s a buy
@goldguilder9554 yes it will BoC don't want to devalue the CDN dollar or else everything we buy will be more expensive
When you say there’s a record number of listing (most in 25 years for condos) - are those numbers adjusted for population growth or total inventory change, otherwise they are out of context
Condos are for a couple who each make a little over minimum wage.
Price will drop until this group can qualify for a mortgage for it.
? I know a young couple, one a family doctor, the other a MBA and they cannot afford a condo, Young children and student loans,
@@cthymnn2010
That's the problem.
They should be able to have a condo while they get out of debt, then buy a house in 4 or 5 years.
Condos prices are likely headed lower but no two ppl on minimum wage will never be able to afford one
@@cthymnn2010 It used to be that people paid off their loans first, then bought homes before they started having kids. I get the sense that people want everything right away.
@@HaydonAshurstFamilywrong Toronto and Vancouver Area are expensive but 99 percent Canada housing is affordable.
I was looking at condos in Toronto, Oakville, and Etobicoke to rent for a year…. Can’t believe how poor quality most of units were in terms of layout, size, and finishes.
Same thing happening in Calgary, big luxury condo units built but suddenly switched to rentals because they have overbuilt.....no takers on rentals either.
Peak bubble behavior doesn't work forever, then people start losing money, then they start selling, then the fire sales start and the bubble pops. We could have a year or two left, probably not more.
Who would buy overpriced tiny 500 sq over half million in Downtown Toronto !
And don't forget the bs condo fees!
Chicks man
If a property turns cashflow negative it either gets repositioned or sold. Here in Winnipeg it seems crazy to me to PAY 2000/mo, to what, subsidize someone else's lifestyle? What about repairs? Its not an investment its a charity at that point
I don't think the challenge is the lack of people that desire to buy, but the lack of the regular person to be able to support the prices required to buy a condo. Investors pushed up the prices, but when you have too many investors and not enough organic demand you get a bubble. Prices will have to correct down, it is an inevitability.
Wait for the foreclosures to pile up at the banks and credit unions then negotiate hard against the banks. First house I purchased in 80’s was 30% of what the previous owner paid. The bank was sitting on thousands of foreclosures as they will be again.
The market can stay irrational longer than they can stay solvent.
it's a joke that "investors" were able to build assets whilst someone else paid off their mortgages. How to create a bubble 101
No body ask anyone to rent, go ahead and buy your own? , who's holding you?
I think his point was more: when you have positive cash flow by renting, then, there is no risk. Giving this abnormal return, everyone is willing to buy at high price, with high price rises as expectations.
Bubble. Voilà.
@@Japanese_king why would you buy your own ... that's even more stupid.
I hope they hold on tight and lose their shirts.
I smell a renter....lol.
The only reason to invest in real estate is because banks don't loan money to invest in the stock market, which has greater returns without the headaches. If you have cash, owning a condo as an investment is just shooting yourself in the foot.
True.
Return on GICs is even more profitable.
Underrated comment. Most Canadians think residential real estate when they hear the word 'investment'....
Is negative gearing allowed in the Canadian Tax Code? Negative gearing could be the reason why some property investors are happy to carry a higher cost of mortgage when compared to rental income. Negative gearing has been a thing in Australia for quite some time.
It makes the losses less.
But they are still losses
Hi John,
What is you take on entry level luxury units in the condo market ( 1.5M +... say to 3M)? Let's exclude the specialized penthouses etc.
I've been following the market at the Shang (looking to get a corner 2br unit). What was ~ 2.1M is now offered at ~1.9M. I got to think there is more downward pressure coming (especially with maintenance and taxes biting harder at that size/price point - thus more negative cash flow for investors on top of the interest expense).
I'm of the option that these units (entry level luxury) will fall more than entry level units (always a market for the cheapest housing) and detached homes (because of the scarcity). Am I correct in expecting that relative action in this environment?
I'll take any opinion you got on this.
Thanks in advance and keep up the great content.
Thanks for the feedback! I haven't looked at the data closely, but my instinct is that these investors are not as leveraged. You have to have quite a bit of cash to buy a $2M condo as an investment property. I don't think these are the average mom and pop investors. They likely have more capital down. They may want to sell eventually, but I don't think we are seeing that in any big numbers yet
The only investors at risk here are the ones who stock up on those 300 square feet units
People that are in the buyers market now or end users and they are not just looking for a washroom in the sky they need space to live somewhat comfortable
Appreciation doesn't pay the bills in real estate investment. Your tenants are supposed to.
If you think that the tenants can flip all the costs you better of only financed 50% of the purchase price, or of bought 10 years ago.
This last quarter just set a record for the most new people in the country in a quarter with over 420,000 new people. That would be a 1.68 mil total if it continues over the year, about a 4% increase in the total population of the country.
When are you expecting to see that pressure decrease?
Power of sale coming
If the business of investment you can lose money as well as make money. If you lose money , investors must not panic. They must have patience.
Looks like drop is closer to the end as rate cuts will be the savior
Investors will be the straw that brakes the Camels back ...
This contagion will spread across Canada fueling the crash
*breaks
*camel’s
The bubble gotta burst insane prices
Interest rate cut is around the corner
Its an savings account that pays a negative yield...until it doesn't ....on good credit and at a 2.5% interest rate ........its still a good idea to buy a condo !
Where is the 2.5% interest rate?
I always thought $1000 for an Acre was a good deal?
Don t call them investments ,they are liabilities .
Investment will give you a ROI that is your first things you look at.
There is a time to get in and a time to get out and waiting for opportunity.
Some people are going to learn very expensive lesson😢
Oh well.
Just install 4 bunkbeds into each bedroom (total of 8 for a 2-bedroom condo), and install another 2 bunkbeds into the livingroom, and rent each bunkbed out for $450 per month, for a total income of $4,500/month. You won't be bleeding cash, you will be net cash positive at the end of the month.
Profits over privacy.
Toronto has encouraged the massive production of these tiny condo units and the agents and their friends have hoarded them for 2 decades. Sorry but why aren't these investors not paying commercial taxes? The city needs to wake up. Cut the land transfer tax and charge a commercial tax on investors. And for families? Well they've basically done nothing. Hundreds of kms of main streets in the city with 2 to 3 storey buildings. What a joke. "House substitutes" ie smaller boutique infill projects that have large units are basically non existent.. NIMBYs, land transfer costs, wildly high development fees, years to get approvals, GST taxes add up to ridiculous levels.
I got news for city council. Affordable housing isn't public housing ghettos. Those are perpetual money pits. Affordable housing is small developments that aren't taxed into the ground.
the never ending increases in fees, taxes, and utilities are killing condo and mobile home markets here and in the US. mortgage costs and rents are out of control and no one is talking about canadian fed gov deficits. no foreseeable balanced budget means more taxes which means more inflation and less buying power. we are broke and spending like we have free money. 10 cents from every dollar goes to interest alone on fed debt and the debt is increasing 4.5 million an hour 24/7 and all the while unemployment goes up..... there are solutions but none include liberal or ndp politicians
my cousin bought 2 luxury shoe box's in toronto a couple years ago. They are still in development but they are desperate to sell now. I think the only way they get out of it is if they lose 250k minimum on each unit. They don't think so because they told me they are "luxury buildings and are not that effected. for example they said elton john bought a penthouse for one of his lovers in the very same building."
Real estate only goes up 😂
@@m.b5777 That is guaranteed only in the long term . In the short term, you can lose money on real estate . The problem is too many people want a big short term gain . It's all in the timing .
Any broke can be on the receiving end of positive cash flow. Those than can afford to lose money for a few years will be more than fine. Just like stock market crashes, its the weak hands that solidify their loses.
How do most of you guys still make profit, even with the downturn of the economy and ever increasing life standards
Well, I picked the challenge to put my finances in order. Then I invested in cryptocurrency, stocks, through the assistance of my discretionary fund manager
Mrs Nancy Williams Laplace
I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than $21k passively by just investing through an advisor, and I don't have to do much work. Inflation or no inflation, my finances remain secure. So I really don't blame people who panic.
Nancy is considered a key Crypto Strategist with one of the best copy Trading Portfolios and also very active in the cryptocurrency space.
This is correct, Nancy's strategy has normalized winning trades for me also and it’s a huge milestone for me looking back to how it all started..
I think you didn't address the biggest threat... investors walking away from downpayments and not closing. I've heard that could be as high as 30% of units. That would likely trigger a crash.
where are you getting that population growth is slowing down?
@jeffdanson lookup RBC article -> How lowering the number of non-permanent residents will impact Canada’s economy. The plan is to reduce non permanent residents from 6.5% of the population to roughly 5%. In theory this will reduce some rental inflation pressures.
@@jamesimcb Not really
It will slow.
No work permits are being issued to students who come for a 1 or 2 year course anymore.
Trudope`s housing crash is just getting started.
Just blaming Trudeau is missing the forest for the trees. The last 20 years of idiot politicians are all to blame as prices went up and up.
Good
@@quixomega
True.
But no other PM let the country get so populated so fast.
Most people don't know the difference between speculating and investing. I have no sympathy for speculators who get burnt with condo purchases that they never intended on living in. If enough of them lose enough money, perhaps prices will return to levels which actually represent some value for the buyer.
Duh !
They created the problem in the first place.
Those mom and pop investors created cheap rentals, and brought supply to the market. We would have had far fewer condo projects built without those condo investors.
Vancouver market is going the other way.
Chinese money
Sad for the honest.. but the money launderers.... too bad so sad
People, including this channel, need to wake up about interest rates. They are normal right now. Today . The low interest money printing days from 2008 to 2021 where NOT NORMAL. If you are expecting those "not normal" rates to return, you are either very young with no perspective or lying to yourself. For years every thinking person was saying when rates normalize things are going to get tough for a lot of people. Now that has happened the clueless are running around begging for rates to go back down. Sad.
$800 to $1,500 Maintenance Fees, down the drain, waste money $$$$$$$$
"Investors" 😂😂😂
Condo fee condo fee uggh
"Condo investors" LOL sounds like NFT bros eating their cake
Bubble crash 😂🎉
this is great news, now the poor are coming with their 10,000 deposits to buy those luxury condos. lol.
Still couldn't afford it !
GREED
The situation will be compounded by the fact that most of the builds in the last 10 years are absolute trash. Builders should be ashamed at the garbage they put up. Maintenance fees and reserve funds are a ticking time bomb. Wouldn't be surprised if at some point you will have trouble giving away one of these future slums.
High interest rates only good for banks , private lenders and large corporations on the cost of lower income tax payers.
Investing in property in Canada? Negative cash flow, not the hallmark of a savvy investment.
Cut to the chase - most investors were looking for a quick buck.