About This Channel
Move Smartly (movesmartly.com) is a leading source of data, analysis and insights on Toronto area real estate It is powered by Realosophy Realty in Toronto, Canada.
It features John Pasalis ([email protected]; @JohnPasalis on Twitter), President and Broker of Realosophy Realty in Toronto, and other experts in all aspects of real estate - consumers, market trends, government policy and social impacts.
The Move Smartly channel is moderated/produced/edited by Urmi Desai.
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The bottom line is that housing is inflated far beyond wages, interest rates have little effect if the housing was sold at a true value not inflated, if you purchase far beyond your means, then the higher interest rate becomes a problem, so the lemmings in the market that over paid and the speculators are now in trouble
Makes sense. My parents once had 9 beauty salons. And suddenly in 2014, someone made an offer to buy 5 off of us and my dad agreed. And very quickly he also sold off all but 1. He took the cash and purchased 2 condos and 2 SFHs. Flash forward 10 years and we now own 8 SFHs and 2 condos. I thought my dad was crazy for ditching those profitable salons and choosing real estate. It was the smartest move we ever made.
its all fraud lmfao. lots of landlords on paper are millionaires but fucking broke in actuality. banks are going: wanna borrow more? put more of your own money up.
This is just my personal opinion as a financial professional. It is still fine at the moment. Within 18 months when the majority of low interest mortgages (around 1.5-2.5%) mature, way more supplies will kick in to dramatically bring down the Real estate markets, especially in ON (10%+ drop in price); plus, our governments may launch new policies to bring down the housing prices. After that, the markets may get stabilized for a short period of time because of the "buying the dip" and then crash due to lack of immigration, credit crisis, and slow economic growth. (15%+ in ON). We are probably in the late of 2026 or beginning of 2027 by that time, and we shall see the bottom of the housing markets in Canada with a 5-year fixed rate around 3%, unless any black swan events happened. Crash in ON housing market is not a black swan event, it is a must happen event. You don't need to believe my opinion, and I will come back to read this comment again in 18-36 months to see how accurate I am today.
It would be very interesting to see how many buyers are the first time buyers. This would give better picture about strength of the market in my opinion. Otherwise, it might be same buyers who recently sold their properties during the pick, pushing the market. What do you think? Also, we need to remove M2+ homes from analysis, as they probably represent less than 1% of all deals, however, put a weight on average, especially in Toronto.
I disagree. There is not a GTA Real Estate 'market' anymore.... only a liquidations based deleveraging platform to lower price discovery valuations longer term. The current condo collapse as precon executions fail now headed into rapidly rising developer insolvencies/court action incipient speaks volumes.... a 'canary in the coal mine' of contagion into SFD collaterialized instruments/mortgages/helocs as Investor Cashflows collapse negative versus financing proportional to renewals and Tenancy Board eviction applications exploding to now 57,000 in the GTA for non payment ! Figure it out.... simple math says '3' don't go into '2' without a ZERO in front ? As in the now ~$3 Trillion combined Mortgage/Consumer DEBT imbalance is now unserviceable by available servicing incomes(GDI) that can be derived from stagnant ~$2 Trillion Canadian GDP, much of that GDP Debt instrument expansion reliant... under any 'normalized' rate Policy maintained positive on the zero bound above cpi inflation against further debasement based Debt expansion ? And with still ~700,000 Canadian Mortgages(40% Negams) still to renew now through 2026 all at far higher rates than when initiated.... the connotations to our 67% consumer spending relaint already stagnant Canadian GDP are significant..... as consumers re-allocate spending to higher Mortgage servicing costs. This is a Real Estate CRASH unfolding... get over it !
Do you think it’s fair to compare listings, sale and active inventory numbers for last 10 year without taking into account how many new homes got built in this time period. I think all these stats should be relative to how many total homes are there in the region.
Then you would have to include the increased demand as a result of population growth.
Not relative into current fundamentals.... There is not a GTA Real Estate 'market' anymore.... only a liquidations based deleveraging platform to lower price discovery valuations longer term. The current condo collapse as precon executions fail now headed into rapidly rising developer insolvencies/court action incipient speaks volumes.... a 'canary in the coal mine' of contagion into SFD collaterialized instruments/mortgages/helocs as Investor Cashflows collapse negative versus financing proportional to renewals and Tenancy Board eviction applications exploding to now 57,000 in the GTA for non payment ! Figure it out.... simple math says '3' don't go into '2' without a ZERO in front ? As in the now ~$3 Trillion combined Mortgage/Consumer DEBT imbalance is now unserviceable by available servicing incomes(GDI) that can be derived from stagnant ~$2 Trillion Canadian GDP, much of that GDP Debt instrument expansion reliant... under any 'normalized' rate Policy maintained positive on the zero bound above cpi inflation against further debasement based Debt expansion ? And with still ~700,000 Canadian Mortgages(40% Negams) still to renew now through 2026 all at far higher rates than when initiated.... the connotations to our 67% consumer spending relaint already stagnant Canadian GDP are significant..... as consumers re-allocate spending to higher Mortgage servicing costs. This is a Real Estate CRASH unfolding... get over it !
@@dashthe6 Immigration doesn't matter at all into basically stagnant 10+ years barely ~$2 Trillion Canadian GDP..... that's a completely false/moot narrative perpetrated typically by Real Estate Industry cheerleading..... because when GDP remains stagnant as it has ~$2 Trillion for 10+ years, so too does the "GDI" or Gross Domestic Incomes of Canadians and their Debt 'servicing' capabilities on the now exploded ~$3 Trillion combined Mortgage/Consumer DEBT. Simply put.... and as so eloquently highlighted by Deputy BoC Governor Carolyn Rogers most recent "break Glass" on Canadian productivity speech..... when you have stagnant 10+ years GDP/GDI or Gross Domestic Incomes therein derived by Canadians from that GDP.... just adding 1+ Million immigrants merely intends smaller pieces of a very 'finite' GDP/GDI pie for all Canadians.... albeit, 'competition' for those smaller pieces intensifies 'suggestive' of enhanced productivity conditions as more poorer people compete, albeit, with no guarantee's of growth ? More akin to attempting 'pushing on a string' than anything else ? So back at you here.... how does population growth into stagnant GDP/GD Income for ALL Canadians cut into smaller 'pieces' for all.... how does that save the day.... exactly ?
I can empathize how most people don't understand the problem with pricing manipulation (ie. rent control). I wouldn't have understood this if I didn't happen to take Economics 101 in college. It's like math, physics, etc. (eg. 1+1=2; gravity causes objects to fall from high to low) Most people never understood nor studied these subjects. (I happen to be a math major and took an Economics course in school). Economics 101 - when you manipulate the price, you artificially cause the natural equilibrium of supply and demand to shift, hence the supply and demand becomes out of balance (depending on how you manipulate the price, you get either excess supply, or excess demand) Economics is sort of like the subject of math, physics, etc. These subjects study the way things naturally work: 1+1 equals 2; water flows from high to low due to gravity; supply and demand naturally creates an equilibrium. The Economics concept of supply, demand, equilibrium, price manipulation also applies similarly to labor, job, wage.
John, the evidence does not support your belief that rent control doesn’t affect supply. In fact, the evidence overwhelmingly shows the opposite. You are not being objective.
It’s not ideology, it’s overwhelming empirical evidence (AND common sense)
honestly ? people consult with Accountants and Lawyers / proper channels before investing properly.
In capitalism, there has to be winners and losers. For the longest time, people were making lots from real estate. Now, it is pay back time for the speculators. Let capitalism do its work.
John needs to learn how to control his bias if he wants to be taken seriously. He's very arrogant. High on his success in real estate that has been 100% the result of constantly declining interest rates and 0% on his intellect. Steve Saretsky makes him look like a toddler.
John typically sounds like a socialist moron, and this interview was no different.
3 yrs ago price should be lower than now
Time and price is super important for buying pre- construction condos. If it was bought at a good price, then it is a bad idea to sell.
Just saying, we would all be millionaires if we could time the market.
Great episode. Love the insight and perspective. I would encourage everyone to read the articles provided and google any counterarguments to get both perspectives.
There's going to be a lot of closings before June 25th. Lawyers are going to be very busy at the same time and then, back to very little activity...Since the market is slowly dying day after day. Thanks to the mean government !
Without glasses I read pre-cum condo worth less? Shouldn’t they
It's not a crazy situation at all ? it's called "mark to market" under any financing appraisal. What's crazy is the degree's of what is basically Financial illiteracy that have 'jumped in' doing so-called "investment" in the Casino GTA Real Estate market ? Assets go "up"... and Assets can go DOWN in value as well. "Options" for those assets purchase can go DOWN reflective therein as well.... and will indeed under financing appraisal be reflected by the lower valuation of the base 'asset' the option is based upon..... or any other option 'sales' occurring that are indicative of an accurate 'MARK TO MARKET' valuation in time for margin/financing appraisal purposes ?????????????????????????????????
Omg. That sounds exactly like our situation. Moved out of our 2 bedroom downtown 6 years ago, kept it as a rental, and envisioned downsizing one day or letting our kids live there if they went to school or worked downtown. I DID NOT know that if we did move back and made it our primary residence that we would have to pay captial gains on the portion it appreciated during the time we rented it out! As an aside, we got our condo appraised when we moved out, so we would only pay capital gains on the difference from that point on right? Not on the original purchase price?
That's correct. During the years you lived in the condo as your primary residence, that gain is tax-free. You would only pay a capital gain during the years that it was not your primary residence. This means that when you move back in, you'll want to get another appraisal done so that you have the value of the property at the start and end of the period that it was being used as a rental
Got it. And would that capital gains tax be in the year we would hypothetically move back in? Or in a future year when we sell the property?
Why because builders sold pre con at higher price. They already added 4 years profit when they sold precon condo. But how they sold it to expensive. Because of demand. Why so much demand . Because of unregulated buying preconstructin homes /condos process. Unregulated means anyone with borrowed funds from line of credit can buy a pre con. Fake pre approval letters are given to the builders when speculators are buying the pre con making real estate expensive in Canada. Realtors/ Mortgage brokers/MOBILE MORTGAGE REPS AT BANKS charge 500 dollars and can give fake pre approval to anyone. This increases the demand and everyone rushes to buy. There are Profesional people in the industry who do not do fake stuff but there are many unprofessional who are making it hard for canadians.
Interest, period, is a problem. If lowering interest rates lead to a destabilising cheap credit problem, then in the process of eliminating credit, replace the missing interest rate amount with a fixed, non-compounding, fee. Then, you can eventually get rid of credit.
Appraiser here - depending on where you're located, assignment sales are being advertised on the local MLS and we do use them as comps. In most cases, the sale amount of the assignment sales are in line with other resales of 1 or 2 year old units with minimal depreciation to finishes, so that becomes a clear indicator of value for your unit. Another indicator is rental rates. If the finished units in your new building arent attracting higher rents then units in 1 or 2 year old neighbouring buildings, then what exactly is the extra appeal that your building possesses that the others do not? Most likely none. In terms of pulling the correct comps, thats vital. But ive reviewed tons of other appraisers reports and their comps and nothing comes close to the level of stupidity i see coming from realtors who helped their buyer buy a lemon and now have to justify where they got the number from that they advised their client to pay. Its an absolute shit show.
Plz keep Aferica out of the discussion It's low class and not elegant It hurts your brand
I mean it's a commonly known online scam, the Nigerian Prince...
@@CalCalCal6996 yes I was alluding to this as a well known scam but perhaps chose a stereotypical example - will def be more considered in future in this regard! ~ Urmi
Urmi, love your chair! ❤😀😀😀
@Peter-sz1sn - Haha thanks! Currently WFH while helping a family member who purchased this beautiful dining room set decades ago from the Kitchener-Waterloo Mennonite community. Thank you for watching! ~ Urmi
Great discussion!!
I am an American in NYC. The 8 million people (illegals) that have come into the US the last 3 yrs have had very little impact on housing market. Why? Because they are all economic migrants/refugees that come here with their shirts on their backs. Canada however lets in relatively wealthy immigrants/university students from eastern Europe and India that come into country with university degrees and/or 200k in assets! Can we see the difference there? The US migrants are in no position to drive up RE prices. The Canadian immigrants are in that position! The media never mentions this!
Most of the real estate in Canada are chased by "Dumb" money. The buyers and sellers are mostly not very sophisticated and are no different from those who stand in front of a slot machine in a casino.
I don't understand the $50k analogy. Why does the buyer of the precon have to pay $50k if the value of the house goes down by $50k at closing? If anything his initial down payment should result in a lower mortgage interest due to the now lower house value?
Because the bank will only provide a mortgage for the 50k less appraised value, not the contract value. So he has to come up with 50k more to pay the builder the part the mortgage won’t cover.
@@Wildbore48ahh okay, thanks.
Loved this, but add bookmarks to the video please
Noted! Thank you for watching and feedback - Urmi
Yes sell! Because if you can't answer this question yourself you require assisted living.
The manipulation party is almost over
Great show guys!! Loved the topic! And to your point John, pre construction for flipping is pure speculation and in my opinion, assignment sales shouldn’t be permitted for profit. This would protect prices from inflating or deflating.
Thanks for the support as always Marco! ~ Urmi
This is really good you two, a short video for each question.
@a.m.9344 Thank you for watching and for sharing your feedback! ~ Urmi
Prices are less because Canadians real estate is in a MASSIVE speculative bubble 🫧. And now that bubble is popping...
Don’t sell if you don’t have to. And keep your property forever if you can
Quick question and I think I already know the answer. These capital gains don't apply if you are selling your current primary residence and moving into your new home? right?
Correct, the capital gains change does not apply to your primary residence. It would only apply to investment properties (and of course any other investment where capital gains were already taxed)
This guy is soo ridiculous why would you say if your paying capital gains it means you've made a lot and it's not the end of the world! Canada has the highest income tax brackets on the G7 meaning the money invested into a property was already taxed the the highest level.... To now turn around and take 67% of the profits of already taxed money which citizens risked in an investment is wild! Even if it's after the first 250 its still ridiculous considering the government can't keep cars on the driveway and criminals in prison. Why do they even deserve almost 67 percent on the dollar after already taking the most taxes of any country and also taking 53% of the most productive citizens salaries! Why?
First world problems. Shhh!
They don't "take 67% of the profits"... 33% is tax free... and the other 67% is taxable. So if your tax rate is 50%, you pay 0.5 x 0.67. For gains less than $250K, it's 50% tax free... 50% is taxable.
@@user-rp9my9ki1n You know what I meant your right they still don't deserve anymore money. It's too much
To keep cars on the driveway and criminals in prison, theoretically. Hope that answers your question.
You do not understand how the capital gains taxation works. 67% is the inclusion rate above $250k, not the percent of tax you actually pay.
Presale buyers are not investing. They are gambling
It was a one way sure bet tho
more talk talk talk
I think the woman needs to take a pick: 1. Principle residence for the son. Put it into son’s name. However, not recommend since your son may do whatever with the property once you transfer the ownership. 2. Claim it as an investment property, you can use it to make some deduction from your income. Occupancy cost, electric cost, maintenance cost, and etc. You need to be very careful because there is GST rebate from the builder when you purchased precon, CRA will definitely check if it is self use or investment. (Son is family, so it is okay)
The government is so self-interested. The conservatives are a disappointment.
You need to answer more questions. One long winded response...get on with it!
Wrong. I find value in the long answers
Rude
I'm sure you're investments are rushed decisions and likely suffering bud. Listen to these knowledgeable professionals.. it'll do you some good
Always great content, thanks Urmi and John!
There's tons of supply in Toronto and the Gta now. Inventory is piling up and nobody is buying.....The Canadian real estate is no longer interesting nor productive so buyers are scarce, moving to better countries.
Agree 100%.
There are a whole host of factors that caused the huge run up in prices, with immigration numbers being but one of them. Loved the story about your father.
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
I feel your pain mate, as a fellow retiree, I’d suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes...
@@festusmadidi2634 That's actually quite impressive, I could use some Info on your FA, I am looking to make a change on my finances this year as well
@@Mathilda-Adele My advisor is Victoria Carmen Santaella;
You can look her up online
@@festusmadidi2634 The crazy part is that those advisors are probably outperforming the market and raising good returns but some are charging fees over fees that drain your portfolio. Is this the case with yours too?
John - excellent commentary!