Just How Bad Will The Lack Of New Low Rise Homes Be In 2 Years? REALLY BAD

The math is inescapable: New Construction Starts of all homes to buy (Rental Projects are happening) flat-linned in Ontario & BC but Low Rise had already dropped to less than 25% of new builds

2/ For the last few years the building of Low Rise has fallen off for a number of reasons: land costs is extremely high, uncertainty of final materials costs, a huge chunk of final price was Development Fees & Taxes & likely the most important reason: Hi-Rise was more profitable

3/

How Bad Is It In New Home Starts In BC & Ontario: Really Bad

To be clear: Homes to BUY

We are experiencing a boom in Purpose Built Rentals like we haven't seen for 35 years

Government has made many moves on tax relief & aggressive financing that makes Rentals attractive

2/ And there is nothing wrong with building rental units: it's smart & important

Much of Ontario & BC's rental stock is old & tired all of these new units are needed & welcome

And rental rates are way too high, the only solution is much more supply

How about homes to buy?

3/

Everyone In Canada Should Watch This Video: Why Virtually Every Grant From All Levels Of Government To Business Is A Scam Or In This Case Graft

Your Tax Dollars

The Video is an incredibly damning indictment of Graft, Corruption & by all appearances a BC Government cover up

2/

https://twitter.com/jenniferelle_/status/1776469433055150094

I believe every word that Chace is saying, it all rings true particularly since the company I work for has & observed similar things in mortgages

The totally rigged & endless waste of money that is the government grants business

Particularly in all things Tech

3/

One True Thing: Young Canadians Want To Own Their Own Homes

Not as an investment
Not to flip
Not as a source of leverage

Just to live in & raise a family

And if they see that idea as hopeless they will be pissed off & no one should wonder why they're mad

Let's be clear

2/ Young people understand that 25 years ago in most Big Cities in Canada average houses cost between 2.5X & 3.5X average income & most couples could buy one

They also understand that in many cities in Canada that's now 4.5X to 10X average family income

Massively harder to do

3/

This Video Is Ridiculously FALSE

I Believe The Housing Minister is an intelligent, well intentioned person

Virtually every word is false with the possible exception of "and" & "the"

The falsehoods:

1) Millions of Renters want to buy homes..... except they're unaffordable

2/

https://twitter.com/SeanFraserMP/status/1773093178674921849

Nothing about tracking Rental Payments will reduce houses prices to the point average Renters can produce enough down payment or pass the Stress Test

2) OSFI the Government's own Bank Regulator insists Borrowers have provable acceptable Credit History how could anyone

3/

Is The Golden Era Of Real Estate Rental Investment Finally Hitting A Wall?

There are signs & portents, some immediate some long-term

Since 2004 the success of Investors buying Rentals was pretty much a SURE THING

RE Values went straight up, vacancies were very low

2/ Rental rates went up, Mortgage Rates were ridiculously low & mortgage credit plentiful

Even Covid which should have been an unmanageable disaster for Landlords was short-lived & Government provided a ton of support

After Covid Property Values & Rents soared

Perfect really

3/

OSFI The Canadian Bank Regulator Wants To Add Another Layer Of Difficulty To Getting A Bank Mortgage

To simplify: the Regulator wants to test mortgage lending at 4.5X income on a Portfolio basis

NOT on individuals like the Stress Test applies to each individual mortgage

2/ This Income versus Mortgage Amount Test looks at each bank's book of mortgages to determine if the book has over leveraged borrowers

CMHC mortgages are excluded because the Government backs those & there are exceptions for asset rich borrowers

Sounds prudent right?

3/

The Craziest Thing In My Life: Canada's Change To Hating Resource Extraction

As kid in school 55 years ago I was taught how lucky I was to live in a country with vast natural resources that would make Canada wealthy

Now it looks like we are supposed to try to avoid it

2/ I don't believe any child today is taught that the path to our country's success stems from Energy, Mining, Forestry, Agriculture

I think almost no young person is ever pointed at a career in any of those fields

From an economic point of view that's just completely insane

3/

5% Real Estate Commissions In The USA Are FINISHED: Canada Next? Not So Fast

The decision by the National Association of Realtors in response to $1.8B in lawsuit claims means that Buyer's RE Agents can no longer be paid any of the Seller RE Agents commissions

BIG change

2/ The foundation of the RE Sales Industry in North America had been the sharing of the Seller's commission with Buyer's Agents

Home buyer's always had the feeling their RE Agent's service was FREE. Of course they weren't they were just added to the house price the Buyer paid

3/

COPS: Just Leave Your Car Keys Where The Thieves Can Find Them: Sounds Insane? But Cops Know The Truth

This story has been making the rounds on X

Sounds crazy? Make it easier to steal the car so people aren't hurt in Home Invasions

But Cops know there's no fix for this

2/ Cops know the thieves who are caught are out on Bail in 3 or 5 days

Cops know until the stolen cars being effortlessly shipped out of Port of Montreal are STOPPED this massive Car Theft will keep going because it's too profitable

Cops know the true danger of Home Invasion

3/

How Did Real Estate Get So Screwed Up In Canada? Because It's Really Screwed Up

House Prices Are Batshit Crazy, Immigration is at its highest levels in decades, we will build FEWER homes to buy this year than previous years & Mortgage Rates remain at 20 year highs

Disaster

2/ Oh & we TAX new builds at 6X the rate wr did 30 years ago

It's almost laughable how obvious this mess is

If you asked how to create the worst possible outcome here's the list

High Prices
High Taxation
High Finance Costs
Suppress New Supply
Rapidly Population Growth

3/

Let's Talk About CRA: There's Something Seriously WRONG With This Organization

Bear in mind I am NOT an anonymous account. If they read this, they may come after me

But I am 66 & don't give a fck anymore

CRA is mistreating tax payers DAILY let's catalog the main abuses

2/ Firstly, if you're solely go to work T4 employee, the abuse is minimized

You have virtually no deductions other than some government savings programs like RRSPs & generally pay full pop taxes deducted at source

But if you're ANYTHING ELSE then CRA will make your life HELL

3/

Mortgage Delinquencies Rise Says Equifax Report: Big Problems Coming?

Yes & No, the report looked bad: over 100% increase in Mortgage Delinquencies in Ontario with the worst problems among those under age 35

Let's break it down:

Under age 35 have the biggest mortgages

2/N Because they bought more recently at the highest prices. They typically have less savings & more inclined to take Variable Mortgages

The Equifax report does not break down which delinquencies are on Rentals versus Primary Residences, Rentals are a quicker decision to sell

3/

What's Happening With Fixed Mortgage Rates: What Is The Bond Market Telling Us?

It's telling us: QUIT PREDICTING because for the last 6 months volatility is all that we're getting

Oh, you think Bond Yields (which create Fixed Mortgage Rates) are headed down?

Boom Back Up!

2/ Oh, you think inflation will rock again & and yields will sky rocket?

Nope, they head back down

Prediction is ALWAYS a Crap Business

But analysis is required: it's obvious that the Canadian economy is slowing for individuals

How's that? Individuals? What about Canada

3/

Just How Hard Is It For Young People To Buy A House In Canada? Really Frigging HARD

Don't get me wrong: small towns on the Prairies or Quebec or Atlantic buying a home is still within reach

But Canadian Cities: NO, so hard to do

I have a front row seat for this

2/ Let me sum up: without massive parental help people under 35 find it almost impossible

Every Boomer who says: "It was just as hard for us" just shut the fck up

No, it was MUCH easier for you so please just quit saying it, quit thinking it, just stop

Let's run it down

3/

2 Guys Steal $400M From All Of Us Taxpayers: They Knew How To Do It Because One WORKED For The Department Of Defense

Turns out one of the Arrive-Scam guys works for the Department of Defense so he had a front row seat to the art of ripping off Government with crap contracts

2/ So he thought: WHY NOT ME TOO!

He & his Buddy set up several companies in a basement & started getting Bullshit App & Software contracts from several government Departments: Defense, Indian Affairs, Border Services

Maybe $400M worth, no one's sure yet

Always the same trick

3/

Ontario Housing Size History: Detached Homes MUCH Bigger Condos MUCH Smaller

Most people know this instinctively but actual average numbers since 1960 to 2022:

Detached: 1490 sqft to 2580 sqft

Condo / Apartments: 819 sqft to 665 sqft

And people per home down 36%

WTF?

2/ This info courtesy of @JackPrenter using StatsCan data

Important points:

Post WW2 homes in Ontario were effectively mandated to be smaller to build faster & manage the post war housing crisis

From the 60's on people seemed to want bigger homes

Wild trends though

3/

Are Young Urban Canadians Ready Give Up On Owning A House? Because DENSITY Means Condos

And density is all we hear from Urban Leaders, Planners & Academics

By Urban I mean people living in cities: Vancouver, Surrey, Winnipeg, Ottawa, Toronto, Montreal cities large & small

2/ Because we should start telling the truth about this: without massive parental help or a family income over $300K young people in cities will need to live in small Condos Units in a Hi-Rise or a small stacked Condo Townhouse

That's realistic
That's truthful

We don't say it

3/

7 Rentals Already: Needs A Mortgage On The Next New Rental Has 10 Mortgages At CIBC & No Longer Lives In Canada

What a Great Country RIGHT?

Some people think posts about multiple condo unit ownership are exaggerated, but they absolutely are NOT

There's a ton of leverage

2/ These condo acquisitions took place over an 8 year period & the first 4 condos were refinanced to extract equity to produce down payments on the next set

All were purchased on a Pre-construction basis and the first 6 have had very significant value increases

3/

House Sales In The GTA Go Up But Prices Do NOT: What's It Mean?

It's only 1 month so there's a lot to play out & IMPORTANT: last year was a 24 year low in Real Estate unit sales in the TRREB system & 800K people have immigrated to Ontario in the last 2 years = pent up demand

2/ Mortgage Math does NOT work for virtually any investment property purchase. Though rents are way up to buy a Rental condo unit today with 20% down payment: you lose money every month

Unless Condo prices have a massive drop Investors won't be flocking back & they're vital

3/

Mortgage Investment Fund Blowing Up Soon: What Investors Need To Know About Mortgage Related Funds

We will read about a multi-million dollar Mortgage & Promissory Note Fund blowing up in the coming days & weeks

I will let big media with lots of lawyers name names

2/ But I want to cover the realities of what to look out for in Mortgage Investing

The MOST important thing: avoid anything to do with Promissory Notes like it was the Bubonic Plague

The whole point of Mortgage Lending is that a mortgage is on the title of a property

3/