Tariffs Chaos Reigns: When Does It End? What Happens With Mortgages & Real Estate?

When does this craziness end? Because if someone said last September: Hey, I think the entire basis of trade between Canada / USA will change utterly EVERY DAY

Nobody would believe it

2/ Seriously: Take all the US booze off the shelf, okay put it back, now take it off again, should we put it back now?

It's just nuts

And the likelihood is that it keeps going

If people think that Trump will wake up one morning & say: Yeah, I'm gonna give up the Tariff Stuff

3/

Look Like The Tariffs Are Here: What Happens In Real Estate & Mortgages

It's about how long the Tariffs stay, if some deal is worked out in 3 to 6 weeks it's a hit but not devastating

6 months of these Tariffs & Canada is in a hellacious Recession & Ontario devastated

2/ The effect on Real Estate in Ontario is massive

If these Tariffs hit even the 3 month mark expect Government backed programs to provide assistance to people who can't make mortgage payments due to job loss

Mortgage rates will fall particularly Variable

How big a drop?

3/

Is The 416 Condo Crash Day Of Reckoning Coming? What Will It Look Like?

Been thinking about this for over a year. What's the demarcation point in the Pre-Con Condo Crash in 416? What moment will we look back on & say "Yeah, June 2025 when it blew up"

Not saying it's June

2/ Suggesting there will be a moment where all of us following this will watch a large totally completed Project just flop

50% to 60% of the Pre-Con Condo Buyers will walk away from their deposits & purchase agreements & tell the Developer: I QUIT

I don't think that's today

3/

Home Buying Has Become Ridiculous In Canada: First Time Buyer Disaster

Sometimes people push back on the idea that Home Purchase for Young Canadians is becoming incredibly hard but the statistics are sure proving the truth of it

The most recent info paints a sad story

2/ Average age of First Time Home Buyer: 36 - highest ever

Percentage of First Time Home Buyers in total Real Estate Purchases 24% - Multi Decade Low

Yep really bad

25 years ago the Average Age was high 20's & FTHB were over 40% of total transactions

This likely gets worse

3/

The Great Mortgage Renewal Battle Between Banks Has Commenced In Canada

The first volley in the Renewal War was struck by RBC who has rolled out a sophisticated Renewal App that is designed to let existing RBC Mortgage holders renew efficiently & get any info they need

2/ It produces an aggressive proposal on all rates for all terms RBC offers, allows for payment calculations, gives tons of info & will connect with Renewal Retention Specialists if the Borrower wants human help

This is such a smart move for the Bank with the most mortgages

3/

Magical High Speed Rail Line: Can We Get The Money Back If It NEVER Gets Bullt?

On the long list of totally stupid examples of lighting $3.9 Billion on fire this one is at the top of the list

This thing will never be built. it's just some kind of SNC Lavalin pay day

2/ This was all done before in 1995

Same thing $Millions$ spent on Studies, Plans Consultants & nothing built

Same company Lavalin

There's nothing wrong with the idea itself

I love Montreal & Quebec City & a faster way to get would be fine

But it's not happening

3/

It's Been A Lousy Year In Ontario Real Estate: Why Aren't Home Prices Falling?

The Toronto Condo Crash is evident to anyone paying attention but resale prices of Dog Crate Condos haven't imploded 30%. Sure, prices are grinding down but so slowly

And is Single Family down?

2/ Yes if someone bought at the absolute highest point in the Bidding War frenzy of late 2021 & Q1 2022 those ultra Batshit Prices are way down likely 15% to 25% depending on neighborhood & just how nuts the Bidding got at the time

But some regions not much price drop at all

3/

How Bad Will Ontario Real Estate Get This Year? Likely Pretty Bad

As we begin the RE year in Ontario we see Listings soaring, sales at 10 year lows & prices about the same: Condos grinding lower & Low-Rise trading sideways

People are asking me about Single Family Trends

2/ If Dog Crate Condos are facing a Sales & Pricing Debacle won't those problems spill over to Single Family, Semi's & Townhouses?

It's critical to understand how different they are

Hi-Rise Condos are products bought by Investors 85% of cases, they are almost always Rentals

3/

Toronto Condo Crash: Stuff Just Keeps Getting Wilder

As a direct to consumer mortgage sales organization, we record all our calls

One of our Associates had a banger last week

Dog Crate Condo Crazy Town

A woman calls about 2 Pre-Con Condos coming to completion in March

2/ She had been an active Pre-Con Investor since 2010

She had purchased her first Pre-Con Condo in 2010 & kept it to this day as a Rental

Then she started working with an aggressive Pre-Con RE Agent & bought 7 Condos between 2013 - 2014 & sold all of them by Assignment by 2000

3/

Bank Of Canada Cuts 25 BPS: The Totally Expected Rate Reduction

Market Certainty of this drop to 3% at the BoC was 99% so zero surprises from Governor Tiff Macklem

NOW IT GETS INTERESTING

Because quite possibly Saturday the Bank of Canada will face a crisis like Covid

2/ No one, except President Trump knows if Tariffs will start on Feb 1st & no one knows the severity of the disaster for Canada

The only certainty is there WILL be Tariffs soon

Bank of Canada will be a huge part of the Tariff response

Just like Covid

The Government in Ottawa

3/

Should I Buy A House Now? In The Mortgage Business You Get That Question Alot

The classic Real Estate answer: It's ALWAYS a good time to buy

Which is utter BS, how do the people feel today who won a 25 bid contest by paying $400K over asking in 2021?

They're screwed now

2/ What about the 55K buyers who bought 416 Pre-Con Dog Crate Condos in 2019 - 2022 at $1100 - $1500 a sqft that are worth $850 a sqft today?

The standard RE response is: 15 years from now that RE will go way up

2 Points:

- Alot of people will have to sell before 15 years

3/

Mortgage Rates & Trade Wars: What Should We Expect

Will there be 25% Tariffs on Feb 1 or maybe April 1 but maybe they won't be 25%, yeah confusing but there will be some Tariffs eventually

How does it effect mortgage rates?

Let's break it down

US Tariffs on Canadian goods

2/ That's bad for our Economy & fuel for the Recession fire therefore the Bank of Canada's reaction is to continue to lower rates: Take Variable Mortgages

BUT Canada puts Counter Tariffs on American goods coming to Canada which is inflationary & may drive BoC to raise rates

3/

Unemployment In The GTA: A Made In Ontario Recession?

What happens to House Prices?

Unemployment Rate in the City of Toronto hit 9%....

And the trend is clearly UP

Ontario Unemployment is 7.6% & will also certainly climb

What's up with Canada's economic engine?

2/ The cracks in Ontario's economy that have been building for years are finally opening up

The decline of Manufacturing is a very long sad trend decades long

It was offset by a boom in Construction, Finance & huge growth in the Public Service sector

That's all changed

3/

There Are Just 2 Candidates For The Liberal Leadership: Freeland & Carney

Everyone else is meaningless

It's an incredibly short campaign, it will all be over in weeks

Yesterday, Mark Carney had a Leadership announcement that was just plain awful

It was every bad thing

2/ It was amateurish & poorly organized

The speech was very poorly delivered & badly written

His energy level was very low

The people in charge of his Communications & Strategy should be replaced immediately

It doesn't matter what he said, if he doesn't improve it's over

3/

Rents Are FALLING: Will It Get Worse For Landlords? Oh Yeah BIG TIME

A smart person asked yesterday: We have been told for years there is a massive housing crisis in Canada how can Rents be FALLING?

It wasn't expected but it's real: how it happened & why it will continue

2/ We have a Housing Crisis in Canada but this ongoing drop in Rental rates is a result of over building of a specific housing product & the previous ridiculous run up in Rents

Firstly, rents fell more than 5% in the GTA, GHA, less in the Vancouver area

They will keep dropping

3/

Canada Deserves An Elected Leader: Enough Of This Election Avoidance BS

Whoever the next Liberal Leader is (who will immediately become Prime Minister) they will not be a person who never received one vote to lead Canada

I get that is how Westminister Parliament's works

2/ It's a flaw, and so be it, BUT what if someone who has NEVER been elected to Parliament becomes the Prime Minister? Because that's what Carney & Clarke would be NOT ELECTED

Again, under our system, this is actually possible

It's utterly WRONG

A new PM must call an election

3/

The New Government Is Coming: What Should They Do?

Let's forget about the coming Dog & Pony show that is the Liberal Leadership Race: It's meaningless

In 4 or 5 months a new Conservative Government is installed

What should they do?

2/ 1) Reduce Taxes - all kinds of taxes, should be reduced or eliminated Canada is one of the most taxed countries on Earth

2) To allow for reduced taxes without program cuts Public Service jobs must be radically reduced & efficiencies installed

Cancel every contract job

3/

The Prime Minister Decides To Go & Canada Says THANK GOD

At 10:45, we will know exactly how he's going & how he will actually depart the job, we will get the announcement with details to follow

It doesn't really matter how he finally goes: Bottom Line is he's finished

2/ And Canada needs that: the feeling of chaos in Government is palpable

People can deal with adversity, we can fight through difficult situations but the feeling of total uncertainty is likely the toughest thing the human mind encounters

75% of Canadians want a new Government

3/

Things Can Be Better In 2025: Here's How

Many things could really be improving

First: A new Federal Government means we won't have 1000 posts a day about the Prime Minister, some of which are just crazy & sickening

There will be bitching & moaning about Conservatives

2/ But not the tension of this last year of the current Prime Minister, there's always some months of "Honeymoon" with a new Government, most people just watch what happens without going crazy

That's something to look forward to we could all live without so much politics

3/

$10 BILLION In Losses Over The Next 2 Years: Will GTA Pre-Con Condos Break Some Investors?

Will the losses scar some RE Investors? Will the Developers take big hits?

The number is just back of the napkin: 55K Pre-Con Units closing over 24 months with $175K loss per unit

2/ Some people may say "Just paper losses, in 5 years the prices will recover"

Actually NO

These losses will sure as hell be real to the Investors

If they don't close their deposits are seized & they're sued for losses

If they do close, they have to raise money

3/

Did The Federal Government Enhance CMHC Mortgage Rules To Bail-Out The Ontario & BC Construction Industry?

The answer is a strong MAYBE

A massive increase in the Cap for CMHC mortgages from $1M purchase price to $1.5M (USA is $806,500) & amortization from 25 years to 30

2/ Smart people like @daniel_foch and @SteveSaretsky suggested that these changes could bailout some GTA Pre-Con Condo Buyers & help some of last of the recent Single Family projects priced under $1.5M (mainly Semi's & Towns)

I was a bit doubtful for a few reasons

3/