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There is a Global Margin Call happening in 🇨🇦 Canada’s Real Estate Market as we speak. In this video, we talk about where the Housing Market Cycle is in U.S. and Canada and why it continues to be a place to definitely Avoid for first-time homebuyers. Share your thoughts in the comments below. Please subscribe, turn on the notification bell 🔔, and share this video with your network.
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Hey folks welcome back to my channel it’s great to be back during the last several months I’ve been doing a lot of research on the state of the economy traveling to China to understand the local landscape there and also doing a lot of personal development to take my
Own skills to the next level I’m getting ready for an enormous reset in Global Financial markets next year once the chickens come home to roost things that I will share with all of my friends here on YouTube and Beyond in today’s video I want to provide you an important update
On the real estate market in North America the US and with an extra emphasis on Canada in future videos I will also share some of the on the ground insights from China that I observed on their real estate market so make sure to subscribe turn on the Bell
So that I can keep you updated on the situation let’s just say across the world East and West the challenges that the real estate markets are facing are only just beginning I also post post a lot of content on substock Twitter and Instagram to keep everyone updated so
Please join me there now okay last time I made a video on my channel I talked about the US real estate market and why I believed that buying a house in 2023 is probably one of the worst ways to allocate one’s hard-earned savings my opinion of this has not changed and in
Fact I’m going to go out further intensify my opinion and say that people are getting short changed for their money if they enter the real estate market today now I know real estate is local and neighborhood by neighborhood specific but the big picture for Real Estate has actually gotten worse since I
Made my last video the home price to income ratio has actually increased since I last talked about this and many more people are getting priced out of the market some studies suggest that it may now take well over a decade or longer to save up for just your first
Down payment more specifically we can see here that the homes are unaffordable for 99% of people within the US for the typical American now back during March 2020 a $300,000 home could get you a 2,000t property today that same amount would only get you a 1,400 ft property in other words home
Buyers are not getting the same value from a price per square foot standpoint and are getting squeezed by higher mortgage rates a double whammy now we can see that mortgage rates with decent Credit in my state in the US is now well over 8% this means that if we do the
Amortization schedule of real estate payments made on a monthly basis assuming a down payment of 20% almost all of the monthly payments for the first 20 years out of 30 are dedicated towards just the interest in other words there is very minimal Equity buildup for the first 10 years and that means
Mathematically even a slight drop in home prices could wipe out any Equity that you’ve built with your monthly payments now in terms of consumer sentiment I want to share data that points to a worrisome Trend we can see here from this photo that the number of people feeling worried about their
Finances is becoming staggeringly High it appears that every single year the number of people feeling anxious about their financial situation is climbing now if we extrapolate this data it seems that within 5 years we could have 65 to 70% of the entire country feeling anxious about their finances this is not
A solid foundation from which strong prospects for individual home ownership and the real estate market is built because I personally don’t think it is right to have institutional investors own such a large percentage of homes in the US now small business owners aren’t keeping up well either as we can see
That small business sentiment has deteriorated with most owners not expecting sales to pick up in the next 6 to 9 months and if small business owners and regular n to five employees are feeling this pinched I think that this makes the US real estate market even
More eLiquid than it is now now the macro conditions for the average person are quite unfavorable rents are up food is more expensive transportation is more expensive home ownership is inaccessible the breaking point may not be now for the country but for the typical person these are some dire circumstances and
Should ordinary hardworking people have to give up their home in the event of higher unemployment and an upcoming US recession MetLife Investment Management believes that institutions will come in to buy these newly available homes and it’s possible the institutional investors could own up to 40% of the
Single family rental Home Market by 2030 please comment what you think what are you seeing I’d like to know now all this is leading to what may eventually become a credit crunch for small to medium-sized organizations in the US where High interest rates rates cause higher bankruptcy risk now if you think
That the US is in a bad spot we need to talk about Canada we need to talk about our friends north of the border the real estate situation in Canada is definitely dire if there’s going to be a credit event I think that we’re going to see
What happen real time in Canada as we speak I think the Canadian real estate market is essentially going through what I think of a global Margin Call I will explain let me first show you some data so a significant portion of Canada’s mortgage system tends to be variable
Rate and even those folks who are on fixed rate mortgages will eventually have to see their rates adjust based on Market circumstances this is fundamentally different from the system here in the US here in the US if you’re locked into your mortgage in a 30-year fixed you do not have to worry about
Rising rates and what the FED is likely to do that is not the same situation in Canada because the rate hikes from Bank of Canada can directly impact homeowners whose mortgages are up for renewals for instance Bank of Canada’s Relentless rate hikes after following the usfed now has direct consequences for variable
Rate mortgage payers and also fixed rate mortgage households that are up for Renewal to give you some perspective it’s estimated that onethird of Mortgage Debt is variable in Canada so I’ll let you put two and two together mortgage payments in Canada take up over 60% of household earnings and for most
Canadians most of the property prices in Toronto and Vancouver which are north of $1 million cad have priced out a generation of hardworking gen Z and Millennials affordability in Canada real estate prices have gotten so stretched that investment Bank UBS recently classified Toronto and Vancouver’s a
Real estate market as one of the most overvalued markets in the world close to Hong Kong one of the central problems that have caused Canadian home prices to SAR is the Confluence of limited supply of homes and large population growth due to immigration policy makers are so
Desperate to solve the problem that they are thinking about capping foreign student numbers to Halt the population growth which has added a lot of demand to short-term housing there’s this stunning poll that I have to share with you I don’t know if this is fully accurate but there’s a study that Yahoo
Canada conducted that says up to onethird of Canadians may not be able to ride out the rate hikes from Bank of Canada for more than 10 months and this poll was conducted back in February of this year and we are now seeing headlines that homelessness is exploding in Canada as homeowners relinquish their
Properties because they can’t handle the high rates now in terms of where a credit event may occur I think that Canadian real estate is even more vulnerable than us real estate in a previous video I talked about how us investors own nearly 20% of all single family homes I already thought that was
Quite extreme but look at this Canadian investors own between 20 to 30% of single family homes across a variety of provinces depending on the neighborhood so with high leverage on the books a backdrop like this is the recipe for a global Margin Call in Canada real estate
Which I will explain in a few minutes but first I want to talk about resources available to everyone that can help us save money during this period of time and I’m specifically partnering with companies that I believe can help you budget better plan better and save better so today’s video partner is
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Serious part of the video I need to bring up the concept of negative amortization yes it’s a fancy term but I need to explain it because millions of people and investors now face this phenomenon in Canada and not so much in the US and it is a recipe for breaking
The system given how indebted the country is so amortization means that whenever you pay off a loan with regular payments the amount that you owe goes down with every payment that makes sense with negative amortization that means that even when you pay even when you fulfill your obligations the amount that
You owe still goes up because you are not paying enough to cover the interest in other words you are fighting compound interest now Albert Einstein once said that compound interest is the eighth wonder of the world well imagine having this Eighth Wonder of the world working against you now imagine this Eighth
Wonder of the world working against millions of people in Canada and the gravity of that situation is going to have on the financial system here’s the problem that is imminent three major Canadian Banks Show that 20% of their Residential Mortgage borrowers are seeing their balances grow as their
Monthly payments no longer cover the compounding interest in other words banks have a loan portfolio where 1th of their book is seeing negative amortization now can you imagine a situation where 1 of homeowners in a country sees the number of years on their mortgage being extended because their monthly payments aren’t even
Covering interest here’s the Practical impact of this on millions of hardworking Canadians this means that many people will have to increase their monthly payments to get the balance down because if they don’t that means the mortgage timeline could be greatly extended to pay off all the debt here’s
An example Michael from Canada he took out a 25e variable rate mortgage just last year and because Bank of Canada raised rates at a ferocious Pace his mortgage timetable went from 25 years into 47 years before the full principal and interest balances will be paid off in
Other words if the US fed stays stubborn in their quest to keep rates higher for longer our friends up north in the Bank of Canada will follow our lead and unlike the US where many homeowners have fixed rate mortgages that can weather the storm Canadians are facing a
Situation where every single month that goes by without reprieve from their Central Bank a larger problem is compounding in the background real time and last I checked Bank of Canada is not relenting they say more rate hikes are still on the table so chickens May soon
Come home to roost a global real estate Margin Call won’t originate from the US or China I think it begins in Canada now I share my work almost on a daily basis on substack Twitter and Instagram so connect with me there please subscribe to me here on YouTube leave a like if
You enjoyed the video thank you so much for your support and I will see you next time and thank you to Rakin for sponsoring today’s video
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No one except the very wealthy can even buy a house.
Living in one of the most expensive cities in Canada, I can confirm the housing and therefore debt situation is ridiculous. Will not be surprised if it all collapses, in fact I'm surprised it hasn't happened yet. Glad I never jumped into the real estate frenzy.
U underestimated the power of new immigrants in real estate sector in Canada. 😊
The problem though is that when the interest rates fall the housing market will raise in prices. Right now it will remain the investors market regardless if it crash. Income can't keep up with cost of housing. I think if prices of homes drop investors will still own more. I think the problem is that it can only be fixed if the government put limits on investors which we know will probably never happen. So the reality is that you have to buy while the interest are where it's at because the prices are low on homes because u can refinance on lower rates later. because come ending of 2024 or 2025 when rates drop the people who didn't buy will never have the income to buy a house that's raised in value.
Canada is a scam, when you agree to buy a house for a certain price… In 5 years that price you agreed on , can go up by 200,000 by the bank wanting more money for the purchase. This could happen 4 more times.. Crazy huh.
Well I know those who are stuck in Canadian mortgages will not want to comment. Feel so sorry for them. So why is it that Canada cannot have long dated fixed rare mortgages like the US? It really feels like the rest of the world has to suffer to prop up the US. No wonder so many countries want to create their own currency for trade
Whats mind boggling to me is the bidding war…🤷🏻♂️🤷🏻♂️we used to bargain not bid…until were back to that im not buying.
These investors should be prohibited to buy single family home.
FED will do their magic just like Powell did in 2017-2019 it's so funny how people do not realize Powell has already been in this rodeo before and it was only a few years ago??
There is no housing crash coming!! Supply is way too low and inflation is the primary reason for the "price increases" anyway. Your dollar's value was destroyed. Homes didn't get much more expensive. The prices are here to stay.
I believe the housing market has been highly overpriced. There are different factors. Some of it is more buyers than sellers. People get in bidding wars over a home. Most homes sell within 2 weeks.
Then if vou want land in the country between the rich folk and China who are paying way to much for property they make it impossible for average people to purchase in the country. It's going to implode because all the people who paid a premium for house's are a paycheck away from losing those homes. Look at the trucking company that just went out of business. How many of those employees will lose their homes. Look at other big companies that announced layoffs. Housing will be taking a big hit and prices will drop
"You'll own nothing and you'll be happy." – The Great Reset. The crash won't come when the wealthy control the entire market. The wealthy get to choose if we crash and none of them want to lose money so they can keep the bubble going as long as they want.
This administration is putting many families into difficult situations. A lot of people are financially struggling to live, put a roof over their head and put food on the table. You've helped me a lot Ms Jerrika Greg, imagine investing $2,000 and receiving $12,600.
In my opinion, a housing market crash is imminent due to the high number of individuals who purchased homes above the asking price despite the low interest rates. These buyers find themselves in precarious situations as housing prices decline, leaving them without any equity. If they become unable to afford their homes, foreclosure becomes a likely outcome. Even attempting to sell would not yield any profits. This scenario is expected to impact a significant number of people, particularly in light of the anticipated surge in layoffs and the rapid increase in the cost of living.
Institutional investors can only get so far, that’s the thing here. If virtually no one can afford their dealings, or the market in general, then the market will crash. That’s not to guarantee that that is what is happening here as there are other forms of mayhem like super high inflation or the like, but I feel like at the end of the day when the need is great, humans in this country will work out a way to be sheltered, and if that involves institutional investors going belly up on the numbers then it will come to pass. The government may intervene on their behalf all they want but if the momentum for money making isn’t there they won’t make money. It may be messy in the interim but the market is the market
In the current economic climate, a home is not the best investment. I've already sold my Boca Grande area home, but I want to invest roughly $200,000 in stocks since I've heard that even in challenging times, investors may turn a profit. Any excellent ideas for stocks?
One thing people should know is that a crash and bullish market provides equal high-yield potential, it's all about information and strategy application, I've seen folks make huge 7 figure profit in crashing market and pull it off much easily in bull market. Personally I’ve made over $310k this year. There are lots of opportunities in the market, unfortunately people are not utilizing them.
Buddy of mine has been predicting the same thing every year for the past six years. In that time, my house has more than doubled in value. And don't get me wrong, at some point housing will go down. Maybe I could predict it every year; then delete my errorneous predictions every year. Repeating the same prediction. Then….. Celebrate my MASSIVE VICTORY and eerily accurate prediction after twelve years ?
I predict a housing crash due to people buying homes over asking price, lacking equity if prices decline further. Foreclosure becomes likely if they can't afford the house, and selling won't yield profits. With anticipated layoffs and rising living costs, many individuals may face this situation.
I don't see housing prices falling much until the supply is increased. In the USA we are short millions of housing units, and we aren't building nearly fast enough. People always need a place to live and we are constantly making new people. Any slight dip in prices unlocks a bunch of buyers who will gobble up that supply instantly. I want to buy inexpensive houses in 2024 and maybe invest in stocks. When's the best time to buy stocks? Some people say they make money, but others say it's risky. Any advice?
I’m in Ohio and the housing market here over the last 7-8 years is unlike anything I’ve ever seen. Homes that were bought for $130K in 2015 are now being sold for $590k. I’m talking about tiny, disgusting, poorly built 950 square foot shit boxes in quite mediocre neighborhoods. Then you’ve got Better, average sized homes in nicer neighborhoods that were $300K+ 10 years ago selling for $750k+ now. Wild times.
I think it's time to make it more appealing for potential buyers. Real estate can be quite the rollercoaster! the stress and uncertainty are getting to me. I think I'll cut rents to attract potential buyers and exit the market, but i'm at crossroads if to allocate the entire $680k liquidity value to my stock portfolio?
these comments are atrocious
how about australia ?
I predict a housing crash due to people buying homes over asking price, lacking equity if prices decline further. Foreclosure becomes likely if they can't afford the house, and selling won't yield profits. With anticipated layoffs and rising living costs, many individuals may face this situation.
Feds a month after this video announced dropping rates mid 2024 so be that will adjust but there’s too much greed still