I Used To Think "You Will Own Nothing & Be Happy" Was A Dumb Slogan: Not So Sure Anymore.....

Because in Canada & other countries in the world Homeownership has become very difficult for young people without parental assistance or top 10% Income levels

And that's wrong

2/ Only 20 years ago house prices in Canada allowed the bulk of couples in their 30's to own a home of their own based on 5% Down Payment & their personal incomes

Not anymore

Everyone understands that house prices are down from their insane highs in March 2022

But not enough

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3 Million Immigrants In 3 Years Was The Worst Government Policy Mistake Of The Last 50 Years

We'll need more than 1 year of zero population growth to reverse this hellacious error

It's just math, screwing up the world's best Immigration system will take time to correct

2/ Let's put 3 Million new people in 3 Years into perspective

Imagine 28 Million new people coming into the United States LEGALLY

Roll that around in your head a moment

It's fair to say America would have have been in armed revolt at around 16 Million

Yeah, that serious

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In Ontario House Prices Only Go Up...... Welcome To 2025 Reality Prices Go DOWN

So many stories of homes selling below their 2020, 2021 & 2022 purchase price it's front page of the Business Section in @TorontoStar now

People watching Canadian Real Estate on X knew this

2/ Likely knew it 15 months ago

Let's put the 416 Condo Crash aside because that's a universal thing now & will just get worse next year

What about Low-Rise in other parts of the GTA and Ontario

Its regional

Let's start in Cottage Country: Sales have totally collapsed

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Is It Getting To Be A Good Time To Buy A House? Because We Are Starting To Hear That Alot

RBC published a study suggesting the best Housing "affordability" in 3 years

Real Estate analysts point out Homes in expensive markets are down in price

And it's true, prices are down

2/ But in some regions prices are down from a peak price moment that was the highest in the history of Canada

Some house prices went up 30% in 2021

Are prices down from Peak Crazy: Yes

The bizarre nexus of 1.69% Mortgage Rates & Batshit Crazy FOMO

Yeah, down from there

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Microsoft Terminates Another 10K Employees Will AI Decimate White Collar Jobs?

Yeah, it will

Why does a MortgageGuy keep posting about this?

Because Unemployment is the by far the biggest influence on Mortgage Default

And Canada has EXTRA trouble on this issue

2/ Because unlike the USA who is on a mission to restore Blue Collar Manufacturing Jobs through Trump's Tariff program Canada is watching Manufacturing Jobs dissappear

If the USA is determined to destroy Canada's Manufacturing capacity & AI is set to gut White Collar Jobs

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Bank Blanket Appraisal On New Construction Condo Says It's Worth The 2020 Purchase Price: Every Other Appraisal Says Its Worth 25% To 30% LESS

WTF is going on here?

Let me explain how this stuff works

Hi-Rise Condos take 4 to 6 years to build

Today that's a problem

2/ Because in 2020 some people bought Dog Crate Condos at insane prices, also in 2021 & part of 2022

550 sqft Condos for around $1M, it was a crazy price even back then but now thousands of those sized units are being offered for at $675K - $700K

But it's a firm contract

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AI Will Destroy Jobs: It's Coming Faster Than I Thought

As an old guy I am wrong person to comment on AI but I just encountered it in Mortgage Brokerage role that knocked me over

In the mortgage business we talk to people

Pure Digital Mortgages are just 4% of originations

2/ Only Licensed Mortgage Brokers can discuss rates, terms & mortgage products with the public but others can schedule calls, request documents, & deal with service calls

For the last year our company has been shown AI models to address these functions

They were OK but clumsy

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Single Family Real Estate: Heartbreak & Losses Or Will It Snap Back Quickly?

In Ontario & BC we understand the Condo Crash but what's happening with Detached, Semi's & Towns?

In some regions very bad news but what's the final outcome?

Let's be clear: other places are fine

2/ Quebec Real Estate good: sales up prices up, Alberta steady, some slight cracks on pricing emerging but nothing serious

Atlantic fine, Saskatchewan busy, Manitoba fine

But Ontario & BC: Ultra-Slow Sales volume & prices starting to sag

Old sins are coming to the surface

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First Time Home Buyers Getting Older & Guess What: Need Parents Help!

CMHC Reports confirm something we knew: in BC & Ontario, even older, higher income FTHBs often need Parental Help

The Feudal System is COMING BACK

The Medieval System of land rich families is reborn

2/ People talk about Boomer wealth transfer, it's happening before our eyes, even Gen X parents helping their kids with Down Payment Gifts

Or in a more dangerous move: Co-signers on Mortgages

Does Canada want to return to this Feudal System?

Doesn't matter, it's happening

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Blow-Ups Happen! We Enter The Phase Where Homeowners Are Forced To Sell

Don't get me wrong: its not a wave

But our company would typically speak to borrowers who HAD to sell their homes based on inability to pay 3 or 4 times a year

There were of these 4 just in May

2/ It's strictly anecdotal but it's factual 4 homes that have to be sold

First or Second Mortgage in 30, 60 & in one case 90 day default

One not in arrears but scared enough of it happening soon, list the house now

Is there a common thread with these situations?

Employment

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Homeowners Filing For Bankruptcy: Something That Never Happened For 14 Years Is Now Normal

Since 2008 Homeowners represented less than 5% of Bankruptcies in Ontario, some years less than 2%

Homeowners did have financial problems but they solved them without a Trustee

2/ Homeowners didn't need assistance from an Insolvency Trustee due to the endless increase in the values of their homes

Getting behind on Credit Cards? - Get a Heloc
Big Debt Problems? - Refinance your House
Job Losses, Can't pay the Mortgage? Sell the house & have $350K cash

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Ontario Unemployment Problem Eminent Danger For The Canadian Economy

I know most Canadians hate to hear about problems in Ontario, people in other provinces are so tired of the Ontario as the center of the Universe theme

But 38.5% of all Canadians live in Ontario

2/ It's as if Texas or California had populations of 155M

And the wheels are starting to come off Ontario's economy

Things we covered before & a few new things

The collapse of the new home industry in Ontario has become big news

Sales of brand new construction SFD homes

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Wake Up One Morning & Your HELOC Is Gone: The Bank Took Your Limit To ZERO

This is starting to happen again, let me explain what this is

Many Homeowners have a Home Equity Line Of Credit

It goes by many names depending on the Bank; Homeline, Flexi-Line, STEP

All the same

2/ A Line of Credit secured by your home, their is a charge on the Title of your home or one huge Global Charge that encompasses both a Mortgage & a Line Of Credit

This HELOC has a limit, $10K to a $1M depending on the house value

The Borrower has access to the Line at will

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Just How Bad Are Home Sales Getting In The GTA: REALLY BAD

It looks like May will set 30 Year Low Numbers just like the previous few months of bad sales data from the biggest Real Estate Board in Canada

We know the Condo Story: looks like it's hit 10K of Listings

2/ The Condo Disaster will NOT resolve anytime soon, in fact it will worsen through the rest of this year

Low-Rise Homes (Singles, Semi's & Towns) continue very slow resales but that may start to change by Q4 this year

It's NOT going to radically improve but may stabilize

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This Condo Is Crap: The Dog Crate Condo Story
Why Did They Build Garbage?

I watch a lot of Real Estate Videos: TikTok & Insta

A very consistent theme has developed around Condos 550 sqft & smaller: they're crap

And the Buildings are crappy

It's sorta amazing & awful

2/ As the RE Agent walks around the unit showing it live on the TikTok, it's just bad

Sometimes the front door opens to a Bedroom

Sometimes the unit resembles a Bowling Lane or a big hallway

Sometimes there is zero Eating Area: not even a tiny island to pull up a chair to

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Federal Housing Minister Says "NO" To Any Reduction In House Prices In Canada

Only rational response is: WTF is going on here?

Canada has some of the highest house prices on Earth

Canadians 35 & younger see Homeownership rates plunging

High home prices are spreading

2/ The price of homes in small city Fredericton New Brunswick has risen 85% in 5 years, nearly double

While wages in New Brunswick have seen wage increases slightly less than CPI inflation

But on his first day on the job the Housing Minister in Ottawa declared his priorities

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416 Condo Collapse: Here's How Buying A Pre-Construction Unit Leads To Bankruptcy

The call came in Monday & it was possibly the worst outcome yet in the total disaster that is 416 Pre-Con Condo Crash

A woman considers Bankruptcy as the final option in a hopeless situation

2/ She purchased a Pre-construction Condo in a VERY prestigious Toronto location in Jan 2020 & now it is time to close the deal

She paid $1710 a sqft for a 580 sqft Unit

Yep, slightly over $1M for a 1 Bedroom Condo

She did very well on her first Condo Pre-Con purchase in 2013

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People Are Starting To Calculate What Price Dog Crate Condos Need To Get To In Order To Be Good Investments

And Sweet Jaysus, it's a low number

What emerges is both really frightening & strangely fascinating

Because many people want to ignore the numbers in favor of HOPE

2/ When we analyze an easy to achieve rent that quickly produces a quality tenant on a Downtown 416 tiny 550 sqft Condo it's about $2K a month (yep, I know some are paying $2350, let's assume rents are falling)

$2K a month rent, an 80% mortgage at 4%, $400 monthly maintenance

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The Moment Everyone Knew The Apocalypse Showed Up: Ontario Real Estate Capitulates

The event that Ontario RE has been working towards for over a year has occurred

The Signs & Portents were clear but their always needs to be "The Moment"

It's happened, what to do next?

2/ The TRREB announcement of multi-decade Sales Lows in homes traded is bad

But the year on year price drop was totally crushing

-21% Detached -30% Condos

It's 1990 again, folks & it ain't over yet

But as someone who has seen this all before 35 years ago: some perspective

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If You're 25 To 35 Years Old In Canada How's It Going? Statistically Pretty Crappy

Last week a deep dive of Employment Data showed Employment participation under age 25 hit the lowest level since 2008

Oh, Homeownership rates for Under 35's hits lowest levels in 40 years

2/ Belief in the possibility of Homeownership for those under 35 has reached the lowest level ever since researchers have been asking the question in surveys

AI & Automation look to eat into entry-level jobs in North America

For English Grads, the job of Copywriter is gone

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Should I Buy Now? The Real Estate Question We Hear More Today Than Ever Before

Why are we hearing it more often? Simple. Because in some parts of Canada, listings (Selection) are WAY up & Mortgage Rates are down from 6.5% heights

What's the right answer?

Probably WAIT

2/ Naturally if faced with Marriage Breakdown or some other time sensitive issue people need to take action: no choices

But if it's just "we can wait" then wait

I know 50K RE Agents will say: You CANNOT time the market!

But today is hardly a time anyone could call normal

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