Full Comment - March 14, 2022


Signs of hope for Canada’s hopeless young homebuyers


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Length

37 minutes

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196.60443

Word count

7,280

Sentence count

363

Harmful content

Misogyny

3

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Toxicity

9

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Hate speech

10

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Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

When I found out my friend got a great deal on a wool coat from Winners, I started wondering, is everyone paying full price for anything? Is there a housing crisis? An affordability crisis? And what s to be done about it? Gary Maher was a reporter with the Financial Post for almost 20 years. He s now the Canada reporter for CoStar News, the news division of the World's largest real estate data provider. He joins us to break it all down.

Transcript

Transcript generated with Whisper (turbo).
Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
Toxicity classifications generated with s-nlp/roberta_toxicity_classifier .
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
00:00:00.000 When I found out my friend got a great deal on a wool coat from Winners,
00:00:03.760 I started wondering,
00:00:05.460 is every fabulous item I see from Winners?
00:00:08.520 Like that woman over there with the designer jeans. 1.00
00:00:11.240 Are those from Winners?
00:00:12.760 Ooh, or those beautiful gold earrings.
00:00:15.240 Did she pay full price?
00:00:16.560 Or that leather tote?
00:00:17.580 Or that cashmere sweater?
00:00:18.820 Or those knee-high boots?
00:00:20.260 That dress?
00:00:21.040 That jacket?
00:00:21.720 Those shoes?
00:00:22.380 Is anyone paying full price for anything?
00:00:25.800 Stop wondering.
00:00:26.980 Start winning.
00:00:27.900 Winners.
00:00:28.480 Find fabulous for less.
00:00:30.000 Hi, I'm Anthony Fury.
00:00:37.500 Thanks for joining us for the latest episode of Full Comet.
00:00:40.220 Please consider subscribing if you haven't already.
00:00:42.920 Real estate is the go-to dinner conversation for so many Canadians these days,
00:00:47.620 and for good reason.
00:00:48.940 Baby boomers talk about helping out their kids with their down payments. 1.00
00:00:52.120 People in their 30s and 40s lament the massive mortgages they carry.
00:00:56.180 And people in their 20s,
00:00:57.320 Well, they're asking if they'll ever be able to own a home.
00:01:00.740 Does Canada have a housing crisis?
00:01:02.920 An affordability crisis?
00:01:04.460 And what's to be done with it?
00:01:06.460 Gary Maher was a reporter with the Financial Post for almost 20 years.
00:01:09.600 He's now the Canada reporter for CoStar News,
00:01:12.320 the news division of the world's largest real estate data provider.
00:01:15.920 He joins us now to break it all down.
00:01:17.980 Hey, Gary, great to have you.
00:01:20.100 Hey, thanks for having me on the show.
00:01:22.020 You know what?
00:01:22.420 There's always so much talk about housing questions.
00:01:26.200 Is there a crisis?
00:01:27.460 Is there a bubble?
00:01:28.520 Is a bubble going to burst?
00:01:29.800 And, you know, it's become a perennial thing.
00:01:31.740 I know you were saying you've been pretty much talking about these very questions for years of your career.
00:01:37.200 Oh, yeah.
00:01:38.920 I mean, you know, that's the most to be having covered real estate for almost 25 years.
00:01:44.580 We have been talking about a bubble and predictions about a bubble for the whole period.
00:01:49.660 I mean, you go back to the 99, 1995, you know, real estate crash.
00:01:54.780 That was mostly in Ontario.
00:01:56.160 Then it came up in 98.
00:01:57.640 And since 98, what have we had?
00:01:59.800 10% pullbacks?
00:02:01.420 Pretty negligible.
00:02:02.740 And, you know, the real estate industry has used that to say, you know, real estate's a great investment.
00:02:08.000 Leverage it, buy a home.
00:02:09.360 And people have bought into that dream.
00:02:12.920 And you can't really blame them when they see the results right now.
00:02:17.140 So now we're at a question of, are we in a bubble?
00:02:20.420 And it's been asked so many times.
00:02:22.640 But one of the things I always look for beyond, you know, the heads is some of these prices relative to,
00:02:30.640 and this is where the speculation comes in, relative to the income you can produce from real estate,
00:02:35.860 they don't make any sense.
00:02:37.400 Like, you can go into a place like Toronto or even Vancouver,
00:02:41.540 and you can rent an apartment or, I mean, a house for a cheaper, for cheaper than you would buy it.
00:02:48.840 I mean, it's just, then financing it.
00:02:51.840 It doesn't make a lot of sense.
00:02:53.000 And you can invest that money in the market.
00:02:54.880 So, but people are still buying houses because they believe it will outpace the market.
00:02:59.120 Well, is it that?
00:03:01.200 I mean, it's obviously that to a degree.
00:03:02.820 But is it also just this traditional idea of what home ownership means, bricks and mortar,
00:03:08.580 this is my home, you can't take it away from me, this is where I'm raising my family,
00:03:12.820 even if I can get 3% or 4% better percent over in this ETF?
00:03:17.400 Yeah, no question you're right about that.
00:03:19.740 I won't argue with that.
00:03:20.740 I mean, you know, housing policy in Canada,
00:03:23.060 we are a country with home ownership rates about 70%.
00:03:26.860 The housing dream, it's, you know, it's embedded in our DNA.
00:03:31.320 It's interesting, it's south of the border, the crash there, it pulled back,
00:03:36.000 it pulled that dream out a little bit, right?
00:03:38.840 And they don't have that same thought.
00:03:41.660 But one of the reasons if you have kids or you want to raise a family,
00:03:46.320 one of the reasons you have to have a house is
00:03:48.180 we just don't have a stock of housing that fits rental.
00:03:53.200 So really, you almost have no real choice but to own a house.
00:03:57.700 If you want to raise a family, you want the stability of tenure in your house,
00:04:01.940 because you don't want to rent a place and then be kicked out of it
00:04:03.880 because, you know, you found the perfect house and the owner now wants to move into it.
00:04:08.100 You've got that risk factor.
00:04:09.380 So that's why people buy houses, I think, because they want a backyard,
00:04:12.700 they want a place to live, and it is a great way to forcefully save money.
00:04:18.840 There's no arguing with that.
00:04:20.200 I mean, people put money into their house, into their principal,
00:04:24.160 that would, a lot of times, it would burn a hole in their pocket.
00:04:27.060 If they, even if they saved it on rent, somehow it would be spent.
00:04:30.940 Okay, is the bubble going to burst?
00:04:32.200 Is there a bubble?
00:04:32.800 That's a perennial question.
00:04:33.920 Here's another perennial question I'm going to put to you.
00:04:35.780 Do we have a housing crisis in Canada right now?
00:04:38.680 Well, I mean, you know, the summer is about to start
00:04:43.060 and people are going to be living in parks again, maybe.
00:04:45.300 So that would be point one that there is, you know,
00:04:47.920 you wonder about how much housing there is.
00:04:50.260 I think one of the issues on housing is when we talk about affordability crisis,
00:04:54.900 we have to ask ourselves, you know, are we commingling things,
00:05:00.100 affordability for people who could afford it in supermarkets,
00:05:03.500 in certain markets, or people who are never going to be able to afford a house
00:05:07.100 because they've got other challenges in their life.
00:05:09.400 So we have to draw something about that.
00:05:11.640 And we also have to ask a fundamental question about, you know,
00:05:15.600 when we talk about affordability,
00:05:17.240 especially now that we're seeing more remote work
00:05:19.300 and people wanting to live out in suburbs.
00:05:21.440 Does affordability mean affordability in Toronto?
00:05:24.160 Do I have to live in Toronto?
00:05:25.300 Do I have to live in Vancouver?
00:05:27.740 Or does affordability mean, you know,
00:05:29.660 can I afford a house in Sarnia or Vernon, B.C.
00:05:33.040 or, you know, Kamloops?
00:05:36.440 Like, how are we going to define affordability?
00:05:38.360 Where do you have any sort of implicit right to live in the city of Toronto
00:05:43.440 or Vancouver?
00:05:45.380 You know, I mean, there's a great city where there's still pretty good pricing.
00:05:48.820 It's called Montreal.
00:05:49.960 And there's also a great city called Calgary,
00:05:51.940 where people could move to right now and find some phenomenal pricing.
00:05:56.400 And a lot of people don't want to do that.
00:05:57.740 Well, even in Toronto, where I am,
00:05:59.340 I mean, I know there's a lot of young people,
00:06:01.760 a lot of people in their 30s,
00:06:03.000 a lot of people in their 20s who talk about,
00:06:04.800 I can't ever imagine owning a home,
00:06:06.640 but they are, for lack of a better term, downtown elites.
00:06:09.440 They may not be wealthy elites,
00:06:10.480 but sort of culturally they think of themselves as downtown elites.
00:06:13.660 And they only ever look at the condo listings for downtown.
00:06:16.480 Whereas if you go to Northeast Scarborough,
00:06:18.240 like, yeah, guys, you can actually afford that condo more,
00:06:21.420 but they would never consider that.
00:06:22.820 Is that a part of the equation here?
00:06:24.740 I think for sure it's part of the equation.
00:06:27.280 I think, you know, you could move out to Ajax.
00:06:30.960 Now, I will say, in defense of those,
00:06:33.620 a lot of this will have to refer to the nature of work
00:06:36.260 and how jobs go in the next five years,
00:06:40.080 you know, post-pandemic, if we're into that period.
00:06:43.300 But we have seen prices sort of skyrocket in the exurbs too, right?
00:06:48.700 Even the suburbs, but also beyond the suburbs,
00:06:51.560 we're seeing prices skyrocket.
00:06:53.140 So these are also, there's definitely affordability challenges
00:06:57.100 increasing even in and around Toronto.
00:07:00.540 And you look at a place like Burlington and, you know,
00:07:03.580 Burlington is a lovely city on the water,
00:07:05.900 but boy, it's not particularly cheap anymore.
00:07:09.760 I mean, Hamilton, Burlington areas, prices went up 21%,
00:07:14.140 but the average price is about $750,000 in Hamilton, Burlington.
00:07:18.800 So a couple could probably get into the market there.
00:07:21.720 Certainly a lot easier than they get into the market
00:07:23.760 in the downtown Toronto market,
00:07:25.880 where you could be paying $1,400 a square foot for a condo.
00:07:29.800 Gary, should we be better seizing the work from home moment right now?
00:07:33.240 Because one of the things I find interesting
00:07:34.820 is we found that, yes, people can work from home,
00:07:37.120 by and large, depending on their job,
00:07:38.820 for the past two years, and it's fine.
00:07:41.080 Now we find that there are particularly governments,
00:07:43.880 I think Toronto City Hall and I think Ontario Public Servants,
00:07:46.720 they've been mandated to return to work
00:07:48.880 a certain number of days a week,
00:07:50.820 beginning on a certain day.
00:07:52.600 And I find it kind of interesting
00:07:53.760 because I've always,
00:07:54.740 I don't want to get into the whole pandemic conversation,
00:07:56.480 but I've been sort of opposed to rigid mandates
00:07:58.640 in many respects.
00:07:59.780 It wasn't crazy about many of the lockdown measures,
00:08:02.260 but at the same time, I'm also not crazy about,
00:08:04.160 look, if someone wants to stay home for whatever reason,
00:08:06.160 either because they're still COVID worried
00:08:07.500 or other reasons, I don't see the problem.
00:08:10.280 Why can't we just let them work from home 0.99
00:08:12.680 if it's proven fine in the past?
00:08:14.620 And yet governments now seem to be pushing
00:08:16.520 for a return to the office.
00:08:20.100 Well, I think there's no question
00:08:21.460 they're pushing for a return to office
00:08:22.840 because it's good for their tax dollars,
00:08:24.980 their tax base, and our economies.
00:08:26.840 It will be a rough transformation
00:08:29.180 to go away from that.
00:08:32.300 Not to mention the people who own these office towers
00:08:34.700 are some of our biggest pension funds.
00:08:37.420 They're important investors.
00:08:40.400 Right now, office towers haven't really declined
00:08:42.780 in value a lot.
00:08:44.140 They've had some decline.
00:08:45.900 Can you imagine what those office towers
00:08:47.380 will look like if, you know, on renewal,
00:08:49.820 they're 50%?
00:08:51.040 They'll look like Calgary.
00:08:52.480 You want to know what they'll look like?
00:08:53.840 There's a city out west.
00:08:55.340 And, you know, it's funny,
00:08:56.220 Toronto Mayor John Tory has pretty much acknowledged
00:08:58.160 that one of the reasons he wanted to mandate
00:08:59.980 a return to the office was because
00:09:01.440 there's all these underground shopping malls
00:09:03.380 that are only ever used
00:09:04.460 by the nine-to-five workforce
00:09:06.480 who comes into the city.
00:09:07.900 So that's a part of the factor there.
00:09:09.920 But then again, you were previously,
00:09:11.380 we were previously complaining
00:09:12.360 about traffic issues,
00:09:13.480 got to build more subways, more highways,
00:09:15.320 the many billions of dollars attached to that.
00:09:17.420 A certain degree of telework changes all of that.
00:09:19.860 It changes those policies.
00:09:21.020 It changes the housing issues
00:09:22.420 we're talking about.
00:09:23.720 So I wonder,
00:09:25.140 can we not find a more sort of middle ground here?
00:09:27.900 I think we are.
00:09:29.040 I think what's interesting is
00:09:30.340 the market is actually doing that
00:09:32.800 to a degree right now.
00:09:34.100 Like what you're seeing is the nature of work.
00:09:37.060 And obviously this was created through,
00:09:38.900 you know, a pandemic,
00:09:40.100 which was government regulated.
00:09:41.700 And I'm not going to, you know,
00:09:43.160 get into an argument about that.
00:09:44.480 But the point is it's happened.
00:09:46.620 People have moved to the suburbs
00:09:48.060 and it's happened at the same time
00:09:49.740 or even the excerpts.
00:09:50.920 And it's happened at the same time
00:09:52.660 that real estate,
00:09:53.640 certain types of real estate,
00:09:54.560 maybe not office,
00:09:55.400 but if you look at something like warehouses
00:09:57.880 and e-commerce,
00:09:59.600 like you want to talk about something
00:10:01.020 that's gone up in value like crazy.
00:10:02.620 It's all that stuff.
00:10:04.320 And what's happened is
00:10:05.380 those places need workers, right? 0.99
00:10:08.840 So you can't really locate your warehouse
00:10:10.820 to Brantford
00:10:11.520 if you don't have anybody to work in it,
00:10:14.120 do you?
00:10:14.880 So that's why suddenly,
00:10:16.160 you know,
00:10:16.380 your warehouse is now in Brantford, Ontario,
00:10:18.660 where prices are cheaper
00:10:20.140 and you were reluctant to go out there
00:10:22.020 because you might not find the workers.
00:10:23.580 But now suddenly the wage
00:10:24.840 you're offering that warehouse,
00:10:26.140 it looks a lot more competitive
00:10:28.380 to the person living in the house there
00:10:30.400 than it would in downtown,
00:10:33.820 maybe not downtown Toronto,
00:10:35.040 but even in Scarborough.
00:10:36.540 You know,
00:10:36.760 if you have a job
00:10:37.780 at an Amazon warehouse in Scarborough,
00:10:40.040 I mean,
00:10:40.360 maybe you can commute in,
00:10:41.620 but you're probably living in Scarborough.
00:10:43.160 So that's going to be
00:10:43.900 a very expensive place to live
00:10:45.300 and have that job.
00:10:46.180 One of the things that's interesting
00:10:47.080 even about the phrase housing crisis,
00:10:48.840 and you alluded to it
00:10:49.620 when you're talking about
00:10:50.120 people sleeping in parks,
00:10:51.400 is there are anti-poverty activists
00:10:53.080 who use the phrase housing crisis,
00:10:54.620 meaning there are people
00:10:55.680 who are sleeping out on the streets.
00:10:57.260 There are people
00:10:57.780 who literally can't afford
00:10:58.980 any roof over their heads.
00:11:00.980 And then the other usage
00:11:01.720 of the phrase housing crisis
00:11:03.040 is more affordability crisis.
00:11:05.220 You know,
00:11:05.800 25-year-olds,
00:11:06.640 maybe they're a married couple,
00:11:07.460 they're both working.
00:11:08.660 The total household income
00:11:10.000 is six figures,
00:11:10.960 but they go,
00:11:12.000 I can't see myself
00:11:12.880 actually getting on a track
00:11:13.920 of home ownership.
00:11:14.900 So we're talking about
00:11:15.800 very different things
00:11:17.500 that would come with
00:11:18.060 very different policy toolkits
00:11:19.600 in response.
00:11:21.300 Yeah,
00:11:21.440 they're two completely
00:11:22.420 different issues.
00:11:23.360 They're not,
00:11:23.720 I mean,
00:11:24.740 we know that young people
00:11:27.500 are living at home
00:11:28.520 in record numbers,
00:11:30.120 like people under 30.
00:11:31.680 It's,
00:11:32.000 I think I saw a number
00:11:32.980 that was closer to 40%.
00:11:34.540 The head of the largest landlord
00:11:37.500 in the country
00:11:39.120 was just on a conference call
00:11:40.900 saying these people
00:11:41.500 haven't moved back
00:11:42.260 out of their house.
00:11:43.160 Well,
00:11:43.380 they're not going to move back
00:11:44.220 out of their house
00:11:45.520 to go live in a park.
00:11:46.500 We know that,
00:11:47.060 right?
00:11:47.940 You know,
00:11:48.420 they're going to stay
00:11:48.860 with mom and dad
00:11:49.780 and they probably don't want
00:11:51.260 to retire with mom and dad.
00:11:52.900 So if there's a,
00:11:54.800 I don't know how you define
00:11:56.100 that,
00:11:56.440 the language,
00:11:57.120 but the point is
00:11:57.800 they don't want to,
00:11:58.600 I don't know about you,
00:11:59.340 but I never wanted to live
00:12:00.380 at home with my mother
00:12:01.740 and father into my 30s.
00:12:03.420 So I don't know too many people
00:12:05.580 who want to do that.
00:12:06.420 I don't know too many kids
00:12:07.240 who want to do that.
00:12:08.220 You're not even a kid at 30.
00:12:09.720 So,
00:12:10.240 so the issue is
00:12:11.440 those people
00:12:12.180 that,
00:12:13.440 that is a problem.
00:12:14.640 Like a 30 year old
00:12:15.860 does not want to live
00:12:16.540 at home with his parents.
00:12:17.360 It's probably not healthy.
00:12:18.540 They're starting later
00:12:19.520 at household formation
00:12:20.700 because they can't hold,
00:12:21.720 because they can't own a house.
00:12:23.980 So that's,
00:12:24.700 that's a problem right now.
00:12:26.520 And they bought into,
00:12:28.180 we've done a bunch of things
00:12:29.560 to help them buy into that.
00:12:31.180 We're,
00:12:31.420 we're,
00:12:32.200 we're increasing RRSP contribute,
00:12:34.740 you know,
00:12:34.980 the amount you can contribute
00:12:36.280 from an RRSP.
00:12:37.620 We,
00:12:37.920 we've,
00:12:38.340 we've lifted that up.
00:12:39.980 We're telling people
00:12:40.540 to raid their retirement savings
00:12:42.060 to buy a house.
00:12:43.220 So we're doing a lot of things
00:12:44.400 that,
00:12:45.200 you know,
00:12:45.480 I don't know that
00:12:46.660 are really going to increase
00:12:48.760 the supply of housing
00:12:50.340 as much as their demand side tools.
00:12:53.260 I mean,
00:12:53.480 we,
00:12:53.800 we keep imposing demand side tools
00:12:56.360 on a market
00:12:57.620 that probably needs
00:12:59.020 a lot more supply,
00:13:00.400 especially if we're to believe
00:13:01.640 the immigration numbers
00:13:02.760 that are being promised now,
00:13:04.320 you know,
00:13:04.780 a half a million immigrants a year.
00:13:06.640 I think it was brought up
00:13:08.180 by the same landlord
00:13:09.360 at one of the largest
00:13:10.500 real estate investment trusts.
00:13:12.160 Sure.
00:13:12.420 I have a hundred,
00:13:13.540 half a half a million people
00:13:14.740 coming to this country,
00:13:15.720 but you got to have a place
00:13:16.500 to house them.
00:13:17.000 Well,
00:13:17.200 you just opened several
00:13:18.200 can of worms there
00:13:18.960 and I want to break them all down
00:13:19.980 in greater detail.
00:13:20.900 Obviously talking about
00:13:21.680 these policy toolkits,
00:13:23.080 how immigration affects
00:13:24.280 all of this
00:13:24.820 and also development,
00:13:26.660 land,
00:13:27.420 growth of,
00:13:28.500 of where we're actually
00:13:29.240 building housing.
00:13:30.300 Let's just go back
00:13:31.220 to some of those policy toolkits
00:13:32.300 for a moment
00:13:32.780 because to your point,
00:13:33.640 it's almost like every year
00:13:34.840 there's a new announcement
00:13:35.700 from,
00:13:36.180 from a provincial government,
00:13:37.300 from Justin Trudeau,
00:13:38.220 whoever saying,
00:13:38.980 here's how we're tinkering
00:13:39.840 with CMHC rules
00:13:41.140 or RRSP rules
00:13:42.200 or here's some grant
00:13:43.100 to incentivize your purchase
00:13:44.960 and I think there are some people
00:13:47.060 who are maybe getting a boost
00:13:48.120 into home ownership
00:13:49.160 because of that.
00:13:50.160 There's others
00:13:50.560 who are maybe
00:13:51.080 just going to see themselves
00:13:52.000 further into debt
00:13:52.800 that they shouldn't be in
00:13:53.820 and is this not only
00:13:55.080 also just increasing
00:13:56.260 the competition
00:13:57.060 and upping the bidding wars?
00:14:00.080 Yeah,
00:14:00.280 I mean,
00:14:00.520 I think it's inflationary.
00:14:02.200 Like I don't,
00:14:03.160 if,
00:14:04.020 I mean,
00:14:04.620 I don't have an economics degree,
00:14:06.560 I admit that,
00:14:07.140 but if you're just
00:14:08.460 not increasing the supply,
00:14:10.200 and we are increasing
00:14:10.980 the supply,
00:14:11.540 let's be clear,
00:14:12.580 there have been moves
00:14:13.760 and there have been
00:14:15.440 increases in supply.
00:14:16.920 It is happening
00:14:17.640 and it is happening
00:14:18.420 on the rental market
00:14:19.420 and we're seeing that.
00:14:21.280 But if you're telling people,
00:14:23.080 you know,
00:14:23.340 you used to be able
00:14:23.880 to take $25,000
00:14:24.980 out of your RRSP,
00:14:25.920 now you can take $35,000
00:14:27.360 and you can repay it
00:14:28.260 over 15 years.
00:14:29.840 I mean,
00:14:31.080 I forget when that happened,
00:14:32.280 a few years,
00:14:32.720 I think it was on the Liberals,
00:14:33.780 but a few years ago
00:14:34.540 that happened.
00:14:35.080 And like,
00:14:35.800 what does that do?
00:14:36.320 It gives you more money
00:14:37.060 on the table,
00:14:37.540 but everybody else
00:14:38.360 has the same option,
00:14:39.600 right?
00:14:39.820 And so that's going
00:14:40.500 to be inflationary.
00:14:41.920 And I think all the things
00:14:43.640 that are happening now
00:14:44.760 are generally inflationary.
00:14:46.560 And we haven't even talked
00:14:47.740 about,
00:14:48.220 you know,
00:14:48.700 the whole bank
00:14:49.940 of mom,
00:14:50.740 mom dad
00:14:51.660 and how much that
00:14:52.460 is contributing
00:14:53.120 to inflationary prices
00:14:54.780 in housing.
00:14:55.900 Well,
00:14:55.980 yeah,
00:14:56.120 let's talk about that
00:14:57.000 because there are
00:14:57.560 so many people out there
00:14:58.480 who are getting
00:14:59.340 their inheritance early
00:15:00.440 or getting an early
00:15:01.160 down payment on it.
00:15:02.080 Here's a hundred grand,
00:15:02.900 two hundred,
00:15:03.360 five hundred thousand dollars
00:15:04.500 from mom and dad,
00:15:05.780 which they feel
00:15:06.780 it's a necessity.
00:15:07.560 I mean,
00:15:07.680 it wouldn't be happening
00:15:08.340 if they didn't need
00:15:09.020 the money at the same time.
00:15:10.620 If you're someone
00:15:11.360 who can get that
00:15:12.020 from mom and dad,
00:15:12.860 that's great.
00:15:13.780 But then that whole cohort
00:15:15.060 of people
00:15:15.600 is so greatly advantaged
00:15:17.500 over those
00:15:18.120 who just don't have
00:15:19.020 that money
00:15:19.460 from mom and dad.
00:15:20.340 I mean,
00:15:20.500 they've lost
00:15:21.180 those bidding wars.
00:15:22.920 Without question,
00:15:23.940 that's happening.
00:15:24.500 It's actually interesting
00:15:25.500 because I was listening
00:15:26.400 to a presentation
00:15:28.240 by CIBC economist
00:15:30.300 on this.
00:15:30.700 He says it's actually
00:15:31.460 the bank of grandma
00:15:33.140 and grandpa
00:15:33.880 in some ways right now
00:15:35.120 because that's
00:15:35.700 where the money is
00:15:36.420 and by the time
00:15:37.660 the parents are getting it,
00:15:38.660 they're almost too old
00:15:39.600 to spend it.
00:15:40.300 But the issue
00:15:40.840 with sort of limiting that
00:15:42.340 and I don't even know
00:15:43.120 what that would really
00:15:43.800 look like is,
00:15:45.460 you know,
00:15:45.860 who's to say
00:15:46.720 what a parent
00:15:48.100 should,
00:15:48.620 you know,
00:15:49.940 want to support their kid,
00:15:51.260 want to help their kid.
00:15:52.120 I mean,
00:15:52.240 maybe that's a reason
00:15:53.100 why I'm still working
00:15:55.000 and maybe I don't work
00:15:57.020 and maybe there's
00:15:57.580 a larger macro effect
00:15:58.900 if I stop working
00:15:59.960 because I'm looking
00:16:01.480 to support my kid
00:16:03.020 in their ownership.
00:16:05.280 And, you know,
00:16:05.740 I also question
00:16:06.520 whether some of the,
00:16:07.500 we've seen an uptick
00:16:08.600 of investment property
00:16:10.200 supposedly in the marketplace
00:16:12.080 and I guess
00:16:12.680 I would wonder
00:16:13.660 how much of that
00:16:14.340 is second houses
00:16:15.500 where people are
00:16:16.260 helping their children.
00:16:18.580 And I don't know,
00:16:20.140 I mean,
00:16:20.440 I don't know
00:16:20.840 how that number breaks down
00:16:22.140 but I do think
00:16:23.420 you're going to tell people
00:16:24.340 they can't save
00:16:25.140 for their children.
00:16:27.320 It's one of the existential
00:16:29.040 questions for parents
00:16:30.340 in the market right now
00:16:31.480 I think is
00:16:32.200 if you're in Toronto
00:16:33.380 and you hear it
00:16:34.340 all the time
00:16:34.960 from anybody
00:16:35.680 in a certain age bracket
00:16:36.840 is do I have to save
00:16:38.440 money for kids?
00:16:39.760 And I'm kind of wondering
00:16:40.960 maybe we should change
00:16:42.440 the,
00:16:43.060 it's just a thought
00:16:44.040 but right now
00:16:44.640 we have children,
00:16:45.860 you know,
00:16:47.200 emptying their RSP.
00:16:48.660 Maybe there should be
00:16:49.340 a housing savings plan
00:16:50.600 like there is
00:16:51.160 for the RESP
00:16:52.240 for your children
00:16:53.380 and then everybody
00:16:54.980 can participate
00:16:55.780 into a degree
00:16:56.840 and,
00:16:58.000 you know,
00:16:58.180 again,
00:16:58.460 it's another
00:16:58.900 demand side tool
00:17:00.640 as opposed to supply.
00:17:02.000 But it's an interesting point
00:17:02.760 if you have a lever
00:17:03.460 to allow the RSP
00:17:05.180 or an RESP
00:17:06.600 even to revert
00:17:07.480 to a home purchase
00:17:08.440 then why not
00:17:09.140 just create the vehicle
00:17:10.540 for what you intended for?
00:17:12.700 Yeah,
00:17:13.100 I think so.
00:17:14.220 Like I think the idea
00:17:15.100 of withdrawing
00:17:15.720 from your RSP
00:17:16.740 to pay for house
00:17:17.460 I really wonder
00:17:18.700 about the impact
00:17:19.740 of that
00:17:20.100 on people's
00:17:20.720 retirement savings.
00:17:22.180 Like we've created
00:17:23.280 a culture right now
00:17:24.740 that your retirement
00:17:26.620 is your house,
00:17:27.920 right?
00:17:28.560 Like how much,
00:17:29.080 like,
00:17:29.780 in no world
00:17:31.080 should your net worth
00:17:32.160 be 50%, 0.80
00:17:33.580 for some people
00:17:34.240 it might be 75%
00:17:35.600 and their net worth
00:17:36.280 might be in their house.
00:17:37.840 It violates probably
00:17:40.000 the single most important
00:17:41.820 investment rule
00:17:43.360 is not to put all your eggs
00:17:44.760 in one basket,
00:17:45.780 right?
00:17:46.280 Like it is a number one rule
00:17:47.860 and that's what
00:17:48.800 we're all doing
00:17:49.480 and then at the same time
00:17:51.080 which after we've told
00:17:52.140 everybody to do this
00:17:53.340 which is interesting
00:17:54.600 you know,
00:17:55.540 there's all this
00:17:56.140 talk that,
00:17:57.260 hey,
00:17:57.320 we're going to tax it now.
00:17:58.880 Like,
00:17:59.560 I mean,
00:17:59.940 if you talk,
00:18:00.600 and I don't know
00:18:01.420 whether that's going
00:18:02.000 to happen or not
00:18:02.640 but can you imagine
00:18:03.820 the idea that
00:18:04.600 for the last 20 years
00:18:05.840 we've told people
00:18:06.540 to pump money
00:18:07.200 into their houses
00:18:07.980 and now we're going
00:18:09.080 to tax it.
00:18:10.020 I mean,
00:18:10.980 oh,
00:18:11.340 that's just wild.
00:18:11.920 It would be an incredible
00:18:12.900 turnaround if that happens.
00:18:13.800 The political outrage
00:18:14.760 on something like that
00:18:15.740 would be immense.
00:18:16.800 I mean,
00:18:16.920 Gary,
00:18:17.120 what's your sense
00:18:17.800 of how many
00:18:18.480 persons out there
00:18:20.260 in the Baby Boomers cohort 0.70
00:18:21.840 and other older Canadians
00:18:23.200 who were like,
00:18:23.920 yeah,
00:18:24.040 the original idea
00:18:24.700 of retirement,
00:18:25.560 you know,
00:18:25.720 I downsize,
00:18:26.800 I sell the four bedroom
00:18:28.000 detached property
00:18:29.160 and move into the condor
00:18:30.120 or what have you
00:18:30.640 so I can tour the world
00:18:31.920 or so I can go
00:18:32.860 to the more expensive
00:18:33.600 golf courses
00:18:34.400 I want to check out
00:18:35.080 or whatever it is
00:18:35.920 and then they're like,
00:18:36.980 oh,
00:18:37.420 actually what it is
00:18:38.500 is I'm downsizing
00:18:39.440 so I can take
00:18:40.560 that extra 400k,
00:18:41.960 500k
00:18:42.600 and split it in months
00:18:43.540 by two kids
00:18:44.180 for them to buy a property.
00:18:45.100 I mean,
00:18:45.200 that is a major change
00:18:46.260 in what you thought
00:18:46.740 your life arc would be.
00:18:48.720 For sure,
00:18:49.620 that is a question
00:18:51.160 but also,
00:18:51.840 you know,
00:18:52.080 we've seen some people
00:18:53.140 inheriting wealth
00:18:54.040 in their boomer years
00:18:56.740 in like 60s,
00:18:58.080 70s
00:18:58.400 or buying bigger houses.
00:19:00.060 We never saw it
00:19:00.820 be that
00:19:01.620 and there is more debt
00:19:03.260 for people over 60
00:19:04.600 than there has ever been.
00:19:06.700 There's been numerous
00:19:07.780 studies on that.
00:19:08.560 Like general mortgage debt.
00:19:10.020 More mortgage debt,
00:19:11.040 yeah,
00:19:11.300 because they're helping kids
00:19:12.300 and it makes sense.
00:19:13.720 Like if let's say
00:19:14.300 you have,
00:19:15.040 I mean,
00:19:15.320 your kids are going
00:19:15.860 to inherit it anyways.
00:19:16.880 Let's say you lived
00:19:17.680 in Midtown,
00:19:18.380 Toronto.
00:19:19.020 You bought your house
00:19:20.000 a gazillion years
00:19:20.820 for,
00:19:21.320 I don't know,
00:19:21.780 300,000.
00:19:22.520 It's now worth 2.5 million.
00:19:25.020 You know,
00:19:25.880 you're probably going
00:19:26.860 to give at least half,
00:19:28.340 you're probably going
00:19:29.020 to not spend
00:19:30.240 all that money,
00:19:31.120 right?
00:19:31.680 So,
00:19:32.240 I mean,
00:19:32.600 what's the point
00:19:33.280 of giving it to them
00:19:34.080 500,000 now
00:19:35.460 versus later?
00:19:36.300 I mean,
00:19:37.320 especially if you can
00:19:39.440 keep your job
00:19:40.200 and continue to pay it down
00:19:41.420 or work on a,
00:19:42.760 you know,
00:19:43.140 on some sort of basis
00:19:45.500 where you work
00:19:46.060 three days a week.
00:19:47.040 I mean,
00:19:47.300 a lot of that
00:19:48.120 adds up for adults,
00:19:49.760 but you're right.
00:19:50.220 It is a bit of a,
00:19:51.180 it's a bit of a betrayal
00:19:53.280 that you thought
00:19:53.900 you'd be done
00:19:54.440 and you'd be traveling
00:19:55.060 the world.
00:19:55.560 Well,
00:19:55.700 it's the new life plan too
00:19:56.960 in that I certainly,
00:19:58.400 so my kids are under 10.
00:20:00.720 So we're nowhere near,
00:20:02.420 we're not near them
00:20:02.980 going to university.
00:20:03.620 We're certainly nowhere
00:20:04.220 near them buying a home,
00:20:05.220 but at the same time,
00:20:06.200 not only do I think,
00:20:07.220 oh yeah,
00:20:07.400 I got to do the RASP
00:20:08.320 contribution,
00:20:08.960 which I do,
00:20:09.400 but we also have
00:20:10.020 those conversations
00:20:10.820 about helping them
00:20:12.080 with the home
00:20:12.680 and we're like,
00:20:13.160 well,
00:20:13.260 hold on a second.
00:20:13.960 Okay,
00:20:14.080 if you've got,
00:20:14.780 if you've got two kids,
00:20:15.660 I mean,
00:20:15.840 what's inflation adjusted?
00:20:17.240 I don't know,
00:20:17.600 but that's a hundred grand.
00:20:18.740 It's not just one.
00:20:19.320 Okay,
00:20:19.440 200 grand.
00:20:20.060 Okay,
00:20:20.180 I need 200 K
00:20:20.980 to help out the kids.
00:20:22.260 All right,
00:20:22.620 three kids.
00:20:23.100 All right,
00:20:23.220 I need 300.
00:20:23.940 How do we do this equitably?
00:20:25.120 What's fair and everything.
00:20:26.220 It's,
00:20:26.560 it's quite something
00:20:27.540 to even be grappling
00:20:28.500 with when,
00:20:28.980 when your kids are young.
00:20:30.980 And you know,
00:20:31.560 the,
00:20:31.740 the reality is the market
00:20:32.740 might solve some of this.
00:20:33.940 Your kids could end up
00:20:35.260 moving to Sarnia
00:20:36.160 and wherever,
00:20:38.040 London,
00:20:38.860 Ontario,
00:20:39.300 and you're actually
00:20:40.480 seeing condos
00:20:41.720 that are targeting
00:20:42.500 older people
00:20:43.300 because they want to be near
00:20:44.280 where their kids
00:20:44.840 have moved out to.
00:20:45.940 That's certainly happening
00:20:46.900 in the suburbs.
00:20:48.140 In the suburbs,
00:20:48.840 we have seen condos built
00:20:50.140 and they're built for,
00:20:51.540 I don't know where you call
00:20:53.480 quasi retirement,
00:20:54.480 people downsizing.
00:20:55.760 That is a market
00:20:56.660 that exists out
00:20:57.480 in the suburbs.
00:20:58.640 We'll be back
00:20:59.020 in just a moment
00:20:59.700 with more full comment
00:21:00.580 after these messages.
00:21:05.680 Did you lock
00:21:06.400 the front door?
00:21:07.040 Check.
00:21:07.280 Close the garage door?
00:21:08.760 Yep.
00:21:09.260 Installed window sensors,
00:21:10.340 smoke sensors,
00:21:11.040 and HD cameras
00:21:11.820 with night vision?
00:21:12.760 No.
00:21:13.540 And you set up
00:21:14.140 credit card transaction alerts,
00:21:15.300 a secure VPN
00:21:15.960 for a private connection,
00:21:17.040 and continuous monitoring
00:21:18.000 for our personal info
00:21:18.760 on the dark web?
00:21:20.020 Uh,
00:21:20.880 I'm looking into it?
00:21:22.560 Stress less about security.
00:21:24.340 Choose security solutions
00:21:25.460 from TELUS
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00:22:14.020 Scotiabank.
00:22:14.620 You're richer
00:22:15.100 than you think.
00:22:15.700 Gary Maher,
00:22:18.120 let's talk a bit
00:22:18.660 about the immigration
00:22:19.580 component
00:22:20.140 that you were discussing.
00:22:21.480 You know,
00:22:21.820 the headline item
00:22:22.740 for immigration,
00:22:23.580 we often think about
00:22:24.560 welcoming in refugees
00:22:26.280 as we're talking
00:22:26.960 about doing from Ukraine,
00:22:28.040 the last intake
00:22:28.860 of Syrian refugees,
00:22:29.720 but when it comes
00:22:30.860 to the actual
00:22:31.540 regular annual volume
00:22:33.020 of refugees,
00:22:33.760 most of them
00:22:34.160 are economic,
00:22:35.020 pardon me,
00:22:35.360 not refugees,
00:22:36.080 immigrants.
00:22:36.740 Most of the volume
00:22:37.740 is the economic class
00:22:39.180 of immigrants,
00:22:39.840 people who have
00:22:41.020 good education
00:22:42.500 and they bring
00:22:43.720 money with them.
00:22:44.320 They bring equity
00:22:44.960 with them
00:22:45.500 and that plays a role
00:22:46.500 in what's going on
00:22:47.080 in our housing numbers.
00:22:48.740 I think that's
00:22:49.700 for sure.
00:22:51.040 I mean,
00:22:51.700 you hear this
00:22:52.940 anecdotally
00:22:54.020 from realtors
00:22:54.700 about students
00:22:55.900 who are buying houses.
00:22:57.600 Their parents
00:22:58.020 are buying a house
00:22:58.760 for them
00:22:59.240 while they go
00:23:00.080 to school
00:23:00.600 in Toronto
00:23:01.640 and the immigration
00:23:03.600 numbers,
00:23:04.420 there's absolutely
00:23:05.100 no way
00:23:05.600 that they cannot
00:23:06.200 have an impact
00:23:07.040 on demand
00:23:08.000 and that doesn't
00:23:09.100 even include,
00:23:09.820 you know,
00:23:10.180 I think seasonal
00:23:10.960 temporary workers
00:23:12.280 like who are,
00:23:13.680 you know,
00:23:13.860 they're not,
00:23:14.480 you know,
00:23:15.460 picking tobacco
00:23:16.240 always.
00:23:17.600 Some of them
00:23:18.820 are very high skilled
00:23:19.900 and they're going
00:23:21.120 to consume
00:23:22.740 some of the housing
00:23:23.580 that is out there,
00:23:24.860 whether it's
00:23:25.340 high-end rental,
00:23:26.160 whether it's
00:23:26.600 buying it
00:23:27.140 and that's a factor.
00:23:28.620 Like one of the
00:23:29.140 great problems
00:23:29.920 in this federation,
00:23:31.720 this great federation
00:23:32.640 that we have
00:23:33.580 is the federal
00:23:35.300 government controls
00:23:36.620 the demand side
00:23:38.200 of the equation
00:23:38.940 through interest rates
00:23:40.120 and through,
00:23:41.240 you know,
00:23:42.040 immigration
00:23:42.640 and the provinces
00:23:44.040 and cities
00:23:44.580 control the supply
00:23:45.600 side.
00:23:46.680 It's been,
00:23:47.640 you know,
00:23:47.840 that is the conundrum
00:23:48.880 that continues
00:23:50.200 to exist
00:23:50.840 in the Canadian
00:23:51.500 housing market
00:23:52.380 which can only
00:23:53.440 be overcome
00:23:53.980 by,
00:23:54.620 you know,
00:23:55.240 governments,
00:23:56.560 you know,
00:23:56.840 of many different
00:23:57.600 political stripes
00:23:58.460 working together,
00:23:59.300 I think.
00:24:00.540 Where do we go
00:24:01.120 on the immigration
00:24:01.800 file vis-a-vis
00:24:02.900 its impacts
00:24:03.500 on real estate?
00:24:04.120 Well,
00:24:05.720 I think you need
00:24:06.300 to build
00:24:06.600 more real estate
00:24:07.580 or reduce
00:24:08.020 immigration,
00:24:08.820 one or the other,
00:24:09.640 but reducing
00:24:10.140 immigration,
00:24:11.340 you know,
00:24:11.700 that is a
00:24:12.600 toxic concept,
00:24:15.240 right?
00:24:15.740 We've seen that.
00:24:16.700 It is a toxic
00:24:17.500 discussion
00:24:18.740 and most people,
00:24:20.220 you know,
00:24:20.420 I'm not going to say
00:24:21.420 what CEOs told me
00:24:22.840 to do this,
00:24:23.300 but he said
00:24:23.880 to me,
00:24:24.700 you know,
00:24:25.220 Canadians are for 0.98
00:24:26.000 immigration as long
00:24:26.860 as it's not in their
00:24:27.560 neighborhood
00:24:27.900 because they don't
00:24:28.780 want any more
00:24:29.240 density.
00:24:30.600 And is that the issue?
00:24:31.700 Is it density?
00:24:32.480 Because we talk
00:24:33.260 about whether we
00:24:33.900 build up
00:24:34.380 or whether we
00:24:35.060 build out.
00:24:35.720 In the GTA,
00:24:36.660 there's big controversy
00:24:37.480 around what's called
00:24:38.120 the green belt.
00:24:38.840 There's areas
00:24:39.400 where they say
00:24:39.880 absolutely not
00:24:40.600 a single further
00:24:41.400 acre,
00:24:42.460 hectare of
00:24:43.000 development going on.
00:24:44.460 Lots of tensions
00:24:45.200 with developers
00:24:45.840 in terms of
00:24:46.420 where they want to head.
00:24:47.420 I mean,
00:24:47.700 is it,
00:24:48.440 what's the answer
00:24:49.820 to that continual
00:24:51.340 headache
00:24:52.420 that people debate over?
00:24:54.600 Well,
00:24:54.900 density has to be
00:24:55.860 part of the discussion.
00:24:57.080 There's little
00:24:57.980 question about it
00:24:58.920 and,
00:24:59.240 you know,
00:24:59.400 I know
00:24:59.940 even with
00:25:00.780 on a street
00:25:01.260 like Yonge Street,
00:25:02.100 you go up
00:25:03.040 and down Yonge Street,
00:25:03.860 which is our
00:25:04.320 Marion Thorough Fair
00:25:05.100 in Toronto,
00:25:06.080 and you do see
00:25:07.060 density building
00:25:08.100 around places
00:25:09.360 like Eglinton
00:25:10.140 and other stops.
00:25:11.300 But a lot
00:25:12.220 of Yonge Street,
00:25:13.140 think of how many
00:25:13.720 two-story buildings
00:25:14.760 there are in Yonge Street.
00:25:15.980 Good point.
00:25:16.320 You know,
00:25:16.560 there's a couple
00:25:17.320 apartments
00:25:18.900 and a top.
00:25:20.040 Like,
00:25:20.440 how many of those
00:25:21.100 things could be
00:25:21.620 four or six?
00:25:22.960 Like,
00:25:23.240 you know,
00:25:23.480 you can chip away
00:25:24.580 at a lot of
00:25:25.620 density
00:25:26.740 all over the city,
00:25:28.220 right?
00:25:28.440 You know,
00:25:30.240 you can do it
00:25:30.740 right away,
00:25:31.200 but one of the
00:25:31.760 problems,
00:25:32.300 and I hear
00:25:32.660 from developers,
00:25:34.140 and yeah,
00:25:34.540 I'm not going to
00:25:35.180 be on the
00:25:35.760 developer side
00:25:37.420 on everything,
00:25:38.120 but they do say
00:25:39.480 the process
00:25:40.180 of getting
00:25:41.980 these things
00:25:42.640 approved
00:25:43.140 is time-consuming
00:25:44.700 and it costs money
00:25:45.900 to do all this stuff
00:25:47.180 and that is
00:25:47.900 also inflationary.
00:25:49.080 What role is
00:25:51.240 inflation playing
00:25:52.140 in these challenges
00:25:52.940 right now?
00:25:53.660 We all know
00:25:54.060 those stories
00:25:54.560 of someone who
00:25:55.220 at the very
00:25:55.900 beginning of the
00:25:56.400 pandemic said,
00:25:57.180 all right,
00:25:57.520 I'm doing the
00:25:58.080 addition on the
00:25:58.660 house.
00:25:59.000 I mean,
00:25:59.120 I'm not allowed
00:25:59.460 to go anywhere,
00:26:00.180 so might as well
00:26:00.620 do this or I'm
00:26:01.180 going to build
00:26:01.480 the deck
00:26:01.920 and then they
00:26:02.540 get it costed
00:26:03.160 out.
00:26:03.500 Six months
00:26:03.880 later,
00:26:04.340 the contractor
00:26:04.900 says,
00:26:05.280 by the way,
00:26:06.020 the price of
00:26:06.520 lumber has gone
00:26:07.120 up by a third
00:26:07.720 or it's doubled
00:26:08.260 or what have you.
00:26:09.400 What is that
00:26:10.080 doing to the
00:26:10.900 broader real estate
00:26:11.500 sector?
00:26:12.920 Oh,
00:26:13.100 I think for sure
00:26:13.800 it's raised
00:26:14.260 prices and
00:26:14.940 you raised a great
00:26:16.620 point,
00:26:17.080 I kind of
00:26:17.740 wonder whether
00:26:18.320 post-pandemic
00:26:19.500 that some of
00:26:22.180 this will pull
00:26:23.900 back a little
00:26:24.560 bit.
00:26:25.140 I was actually
00:26:26.080 talking to
00:26:26.480 somebody about
00:26:27.520 cottage rentals
00:26:29.140 just recently,
00:26:30.220 you know,
00:26:30.420 the cottage
00:26:30.820 market.
00:26:31.180 Oh,
00:26:31.320 good luck
00:26:31.780 with renting
00:26:32.200 a cottage
00:26:32.720 in Ontario,
00:26:33.480 yeah.
00:26:34.120 Well,
00:26:34.400 what I was told
00:26:35.320 is some of
00:26:35.820 that isn't as
00:26:36.440 strong as last
00:26:37.180 year because
00:26:37.480 people are
00:26:37.920 starting to
00:26:38.340 think about
00:26:38.700 vacationing
00:26:39.420 for real
00:26:40.460 this summer,
00:26:41.280 like going to
00:26:41.900 Europe,
00:26:42.300 going to other
00:26:42.760 places.
00:26:43.580 Now,
00:26:43.740 we might actually,
00:26:44.740 I would not
00:26:45.300 call it a
00:26:45.880 correction by
00:26:46.560 any stretch
00:26:47.380 of the
00:26:47.940 imagination,
00:26:49.400 but there
00:26:50.500 was no
00:26:50.880 competition for
00:26:51.900 a cottage
00:26:52.320 last year.
00:26:52.860 If you wanted
00:26:53.260 to go to a
00:26:53.700 cottage with
00:26:54.100 your kids,
00:26:54.660 right,
00:26:55.380 you were up
00:26:55.840 against everybody
00:26:56.540 else and
00:26:57.020 what else were
00:26:58.300 you going to
00:26:58.840 do for two
00:26:59.460 weeks of your
00:27:00.080 summer?
00:27:00.720 You weren't
00:27:01.160 even going to
00:27:01.560 go,
00:27:02.020 you couldn't
00:27:02.340 even cross
00:27:02.840 the border
00:27:03.340 without hassles,
00:27:04.500 so you couldn't
00:27:05.760 go to Europe, 0.93
00:27:06.540 so where were
00:27:07.060 you going to
00:27:07.340 go?
00:27:07.940 Cottages,
00:27:08.540 everybody wanted
00:27:09.100 to go to
00:27:09.460 cottages,
00:27:10.100 and then that
00:27:12.940 dovetails into
00:27:13.720 people deciding
00:27:14.400 maybe I'll buy
00:27:15.300 one.
00:27:15.660 But as you
00:27:17.520 can sort of
00:27:18.000 take big
00:27:18.900 trips and
00:27:19.620 consider other
00:27:20.320 things,
00:27:21.260 maybe even
00:27:22.600 buy a summer
00:27:23.720 property across
00:27:24.820 the border,
00:27:25.280 who knows?
00:27:26.360 But I think
00:27:27.560 that could 0.68
00:27:29.500 relieve some
00:27:30.420 pressure on
00:27:31.320 that vacation
00:27:32.720 ownership market.
00:27:33.760 Gary, let's
00:27:34.120 talk about
00:27:34.520 interest rates
00:27:35.140 for a bit
00:27:35.580 here.
00:27:36.260 I have
00:27:36.780 certainly had
00:27:37.160 those experiences
00:27:37.880 where I talk
00:27:38.460 about, oh,
00:27:38.840 I can't believe
00:27:39.520 I signed on to
00:27:40.260 the 3.8
00:27:41.060 mortgage, oh,
00:27:41.720 I got to get
00:27:42.240 it back to
00:27:42.920 2.8%,
00:27:44.000 and then the
00:27:44.580 baby boomers 0.93
00:27:45.100 in the room
00:27:45.440 say, gather
00:27:46.140 around,
00:27:46.580 children, I
00:27:47.040 shall tell
00:27:47.340 you a story
00:27:47.880 of 1990,
00:27:49.340 what have
00:27:49.660 you, 18%.
00:27:50.740 One time I
00:27:51.480 had a mortgage
00:27:52.440 term with all
00:27:53.380 of that.
00:27:53.820 How privileged
00:27:54.920 are we in
00:27:55.500 this situation
00:27:56.300 where being
00:27:57.400 at a 2%
00:27:58.440 interest rate
00:27:59.140 and then being
00:27:59.620 told, oh,
00:28:00.080 you're going
00:28:00.380 to go up
00:28:00.720 25 basis
00:28:01.660 points next
00:28:02.780 time the
00:28:03.140 Bank of
00:28:03.440 Canada makes 0.97
00:28:03.900 an announcement,
00:28:04.360 oh, no,
00:28:04.820 run for the
00:28:05.280 hills, rates
00:28:05.740 are rising,
00:28:06.400 but compared
00:28:06.920 to then,
00:28:07.380 no, they're
00:28:07.660 not.
00:28:08.400 What's the
00:28:08.980 real take on
00:28:09.840 what's happening
00:28:10.460 with interest
00:28:10.960 rates now?
00:28:12.700 Well, I
00:28:13.380 think, you
00:28:13.840 know, I
00:28:14.500 would call
00:28:14.900 it privilege
00:28:15.440 because, you
00:28:16.200 know, that
00:28:16.580 translates into
00:28:17.420 higher prices,
00:28:18.160 but the
00:28:19.540 problem with
00:28:20.080 interest rates
00:28:20.840 is, you
00:28:22.100 know, the
00:28:22.400 average consumer
00:28:23.380 thinks, what's
00:28:23.960 my monthly
00:28:24.400 payment?
00:28:24.960 They do that
00:28:25.420 with a car.
00:28:26.680 They do that
00:28:27.480 with a house.
00:28:28.240 So, you
00:28:29.000 know, if you
00:28:29.400 can carry it
00:28:29.960 at a 2.0,
00:28:30.980 you know, and
00:28:31.860 you qualify
00:28:32.600 based on that
00:28:33.400 too.
00:28:34.000 The qualifying
00:28:34.680 rate, if it
00:28:35.460 goes down,
00:28:37.220 you know, and
00:28:37.800 the government
00:28:38.580 tries to make
00:28:39.220 you qualify at
00:28:39.960 higher rates
00:28:40.660 and they
00:28:40.960 fool around
00:28:41.400 with that.
00:28:42.380 And, you
00:28:42.600 know, they've
00:28:42.880 done so many
00:28:43.460 things to make
00:28:44.220 it more
00:28:44.540 affordable.
00:28:45.180 I remember
00:28:45.500 at one point
00:28:46.240 when I was
00:28:46.920 covering real
00:28:47.380 estate, they
00:28:47.860 allowed you to
00:28:48.460 amortize a
00:28:49.140 mortgage over
00:28:49.680 40 years to
00:28:51.040 try to lower
00:28:51.560 the monthly
00:28:52.040 payment.
00:28:52.700 Now it's
00:28:53.140 25.
00:28:54.220 But the
00:28:54.700 point is, I
00:28:55.340 think consumers
00:28:56.900 are used to
00:28:57.500 that because it
00:28:58.120 lowers their
00:28:58.540 monthly payment.
00:28:59.680 So, as it
00:29:00.760 goes up, and
00:29:01.520 I, you
00:29:02.040 know, I
00:29:02.300 remember when
00:29:02.840 I, my
00:29:03.300 first house, I
00:29:03.920 got a 565
00:29:05.220 mortgage and I
00:29:06.160 think, I
00:29:06.760 thought that was
00:29:07.220 the deal of
00:29:07.660 the century,
00:29:08.380 right?
00:29:08.600 Because, you
00:29:09.260 know, we've
00:29:09.580 come out of
00:29:09.980 the 90s and
00:29:10.680 everybody thought
00:29:11.260 it was great.
00:29:12.420 So, I think
00:29:13.160 rates will go
00:29:13.800 up and they
00:29:15.120 can only go
00:29:15.680 up, I think,
00:29:16.420 so much until,
00:29:17.940 yeah, that will
00:29:18.500 have a detrimental
00:29:19.520 effect on
00:29:20.500 affordability.
00:29:22.100 Maybe not as
00:29:22.740 much as people
00:29:23.420 think, though,
00:29:24.120 because of, if
00:29:25.120 we go back to
00:29:25.700 what we were
00:29:26.040 talking about
00:29:26.700 with the, you
00:29:27.740 know, the
00:29:28.000 bank of mom
00:29:28.760 and dad or
00:29:29.480 grandpa and
00:29:30.140 grandma.
00:29:30.800 If you're
00:29:31.240 buying a $2
00:29:31.880 million house
00:29:33.240 and, you know,
00:29:34.340 you just got a
00:29:35.000 million bucks for
00:29:35.980 hard, that's
00:29:36.880 a, you know,
00:29:37.300 the payments on
00:29:39.240 a million dollar
00:29:39.820 mortgage are not
00:29:40.980 going to be the
00:29:41.420 same as a $1.6
00:29:42.740 million mortgage if
00:29:43.940 you just got your,
00:29:44.800 you know, you're
00:29:45.460 20% down to
00:29:47.260 avoid CMHC
00:29:48.500 insurance, so
00:29:49.820 that would be a
00:29:50.500 factor.
00:29:51.380 Plus, it'll take
00:29:51.980 time, I think it'll
00:29:52.960 also take time to
00:29:53.920 have an impact
00:29:54.540 because Canadians,
00:29:55.880 we're a fairly
00:29:56.480 conservative lot in
00:29:57.620 this country and we
00:29:58.420 like to have a
00:29:59.040 five-year, we love
00:30:00.140 the five-year
00:30:00.680 mortgage, right?
00:30:01.840 Which means, you
00:30:02.920 know, you set a
00:30:04.020 rate every five
00:30:04.960 years and you
00:30:05.520 don't worry about
00:30:06.160 it and I think
00:30:07.240 half of the market
00:30:08.040 or so is locked
00:30:09.500 in for five
00:30:10.320 years and we
00:30:12.140 don't lock in
00:30:13.040 generally like the
00:30:14.140 Americans for
00:30:14.760 these long-term
00:30:15.460 rates, so, you
00:30:16.660 know, a certain
00:30:17.100 amount of that
00:30:17.620 market is going to
00:30:18.340 roll over and
00:30:19.140 that could affect
00:30:20.240 the housing
00:30:21.540 market, I think.
00:30:22.420 Gary, I want to
00:30:22.960 have a little bit
00:30:23.360 of fun here for a
00:30:23.940 moment and talk
00:30:24.460 about the real
00:30:25.500 estate glamour
00:30:26.740 and glitz market
00:30:27.800 and world that I
00:30:28.880 think has become
00:30:29.980 much more prevalent
00:30:30.860 in recent years.
00:30:32.040 We talk about
00:30:32.540 foodie culture and
00:30:33.640 how the food
00:30:34.320 network and
00:30:34.960 what we call
00:30:35.520 food porn has
00:30:36.520 created, has
00:30:37.380 changed the
00:30:37.960 general public's
00:30:38.620 interest in the
00:30:39.280 culinary world.
00:30:40.040 I think there's
00:30:40.420 something similar
00:30:41.180 going on with the
00:30:42.100 real estate world.
00:30:42.780 I got to be honest,
00:30:43.660 it's a thing that
00:30:44.240 I'm really into.
00:30:45.700 I don't watch much
00:30:46.340 reality television.
00:30:47.300 I watch the real
00:30:48.520 estate shows, though.
00:30:49.300 I love the
00:30:49.660 million-dollar listing
00:30:50.480 program.
00:30:51.340 I read the books. 1.00
00:30:52.240 My sort of trash 0.99
00:30:52.940 reading is, I've 0.97
00:30:54.100 written books on an
00:30:54.840 entire, just one
00:30:55.960 building, you know,
00:30:56.640 the story of
00:30:57.120 building one
00:30:57.700 Manhattan building
00:30:59.200 and all the
00:30:59.920 different residents who
00:31:00.820 tried to build the
00:31:01.400 units and so forth.
00:31:02.060 I'm just so into
00:31:02.740 that stuff.
00:31:03.400 To what degree is
00:31:04.540 that just a sidebar
00:31:05.800 and that's just, you
00:31:07.100 know, leisure media
00:31:07.880 consumption?
00:31:08.780 And to what degree
00:31:09.440 does that play a role
00:31:10.480 in how we buy homes,
00:31:13.240 how we build them?
00:31:13.840 Even something like
00:31:14.720 staging was just not
00:31:16.340 as prevalent, you
00:31:18.140 know, decades ago as
00:31:19.080 it is now.
00:31:19.560 Oh, I think you're on
00:31:21.680 to something for sure
00:31:22.500 there.
00:31:22.840 And it's not just
00:31:23.580 real estate.
00:31:24.320 I mean, social media
00:31:25.760 is bragging rights,
00:31:26.900 you know, and shows
00:31:28.440 are, and they
00:31:29.060 encourage it in shows.
00:31:31.020 I mean, how many
00:31:31.660 times do you see on
00:31:32.840 your, you know, on
00:31:34.020 your Facebook feed or
00:31:35.340 Twitter, hey, look,
00:31:36.200 there's a house in my
00:31:36.980 neighborhood for sale.
00:31:38.100 And it's some reverse
00:31:39.220 way of showing how
00:31:40.220 much housing prices are
00:31:42.140 in your neighborhood.
00:31:43.280 And people like to
00:31:44.560 show renovation.
00:31:45.560 There's, I think
00:31:48.300 there's something, you
00:31:50.580 know, about, about,
00:31:52.240 about media consumption
00:31:53.920 and I'm not maybe in
00:31:54.980 the media by any
00:31:55.700 stretch that is bragging
00:31:57.500 rights and bragging
00:31:58.620 rights means you'll pay
00:31:59.500 more for something,
00:32:00.400 right?
00:32:01.000 I mean, it, housing is
00:32:02.700 part of that.
00:32:03.300 It's like, you know,
00:32:04.260 why did you pay $500
00:32:05.500 to go to a Raptors game
00:32:07.620 in the playoffs?
00:32:08.300 Why?
00:32:08.780 Because I just posted a
00:32:09.900 picture saying here I
00:32:10.840 am at the Raptors game,
00:32:12.180 right?
00:32:12.580 It's part of the value
00:32:14.260 of way it extracts
00:32:15.540 some value out of,
00:32:16.540 of that.
00:32:17.340 And I think a way to
00:32:18.680 extract value out of
00:32:19.980 housing is, um, it's
00:32:22.400 because you get to brag
00:32:23.260 about it to a degree on
00:32:24.520 in your, in your world.
00:32:26.140 And, and we're
00:32:27.320 encouraged all these
00:32:28.360 shows that you're
00:32:28.980 talking about.
00:32:29.540 And I like them too.
00:32:30.460 Who doesn't like them?
00:32:31.700 They, you know, they're
00:32:32.440 like watching lotteries,
00:32:33.820 you know, they're like
00:32:34.460 imagining winning the
00:32:35.440 lottery or something.
00:32:36.760 And they, they, they
00:32:38.200 feed on that.
00:32:38.900 It's like, oh God, I'd
00:32:39.980 love to have that.
00:32:41.180 I'd love to have that
00:32:42.180 house in the hills of LA.
00:32:44.300 I mean, or, you know,
00:32:45.360 on the waterfront in
00:32:46.580 Toronto, that's, you
00:32:48.120 know, it feeds on our
00:32:48.960 dreams.
00:32:49.380 You know what I don't
00:32:49.800 get, Gary?
00:32:50.260 I don't get the house
00:32:51.480 hunters thing.
00:32:52.060 And I have friends who
00:32:53.040 watch the house hunters
00:32:54.240 nonstop every episode.
00:32:56.220 I only do the glamour
00:32:57.360 stuff because my
00:32:58.040 attitude is, you know,
00:32:58.640 you watch these house
00:32:59.220 hunters episodes and
00:32:59.960 they're like, well,
00:33:00.940 Stacy take the one
00:33:02.780 bedroom, 1.5 bathroom,
00:33:04.840 or will she take the
00:33:05.980 one bedroom with den and
00:33:08.360 the balcony that
00:33:09.080 overlooks nothing?
00:33:09.900 I'm always like, these
00:33:10.540 are like these units.
00:33:11.960 You need to be able to
00:33:12.800 dream watching these
00:33:13.680 things.
00:33:13.960 Some of the house
00:33:14.460 hunter stuff, I'm
00:33:15.000 always like, who's
00:33:15.580 interested in this?
00:33:16.560 This is like my
00:33:17.140 regular life.
00:33:17.860 Take me away from my
00:33:18.760 regular life.
00:33:19.340 There should be some
00:33:19.820 escapism.
00:33:21.340 Although we love those
00:33:22.380 stories of, you know,
00:33:23.620 what people, stories
00:33:24.460 people love is, look at 0.98
00:33:25.980 this piece of junk that 1.00
00:33:27.360 sowed for a million 1.00
00:33:28.120 dollars.
00:33:29.020 Like I used to get the
00:33:30.040 most clicks on, and
00:33:30.960 they're always for the
00:33:31.800 land, right?
00:33:32.740 You know the story I'm
00:33:33.580 talking about.
00:33:34.420 Oh, this tiny house in
00:33:36.060 downtown Toronto sold
00:33:37.460 for, you know, $10
00:33:38.720 million.
00:33:39.520 Well, yeah, because
00:33:40.520 they're not buying the
00:33:41.260 tiny house.
00:33:41.880 You're buying all the
00:33:42.840 property.
00:33:43.480 You're buying the right
00:33:44.020 to build a condo there,
00:33:44.940 right?
00:33:45.240 But people love that
00:33:46.340 story.
00:33:47.040 There's a certain, I
00:33:48.000 guess, I don't know,
00:33:50.340 triumph.
00:33:51.200 I don't know if you
00:33:51.780 feel triumph of just
00:33:53.840 looking at this thing. 1.00
00:33:54.740 What a fool. 1.00
00:33:55.380 Who would pay a million 1.00
00:33:56.100 dollars for that?
00:33:57.660 And people love those
00:33:58.720 stories.
00:33:59.200 Maybe it's healthier at
00:34:00.020 least because real estate
00:34:00.820 is an asset.
00:34:01.820 You know, it's buying
00:34:02.780 something that can
00:34:03.520 increase in value.
00:34:04.660 The car junkies, or
00:34:06.240 I like to buy the
00:34:06.920 expensive clothes and so
00:34:08.080 forth.
00:34:08.440 We can at least
00:34:09.040 poo-poo them. 0.91
00:34:09.620 Ah, you're buying
00:34:10.380 depreciating things.
00:34:11.480 But no, my interest in
00:34:13.520 glamour real estate, at
00:34:14.300 least I can say it's my
00:34:15.220 retirement savings.
00:34:16.920 It's true.
00:34:17.740 I mean, I will say,
00:34:19.100 though, I mean, there's
00:34:19.820 a real, the land
00:34:20.980 appreciates.
00:34:21.780 There's a real, I
00:34:22.760 always say if you're
00:34:23.380 going to buy a house,
00:34:24.180 you can buy it and
00:34:25.420 you're buying, you
00:34:26.200 know, something brand
00:34:26.880 new, you're buying it
00:34:27.580 to consume it.
00:34:28.680 Because most, the
00:34:29.820 minute you redo, you
00:34:30.860 know, they'll tell you
00:34:31.500 build a kitchen, it'll
00:34:32.280 make your house worth
00:34:33.140 more.
00:34:33.960 Not really, because by
00:34:35.240 the time you sell it,
00:34:36.080 your kitchen's 10 years
00:34:37.620 old, right?
00:34:38.240 And it's out of
00:34:39.220 style.
00:34:39.720 I think you, I think
00:34:41.240 you're buying to
00:34:42.280 consume, real estate's
00:34:43.700 an odd thing, because
00:34:44.640 it does go up in
00:34:45.400 value.
00:34:45.720 It's a great place
00:34:46.400 to, it's a great way
00:34:48.740 to save your money, but
00:34:49.700 it's also this
00:34:50.420 consumable product that
00:34:52.300 you will consume over
00:34:53.580 the lifetime of the
00:34:54.840 house.
00:34:55.180 Gary, before we go, I
00:34:57.320 get the sense that
00:34:58.920 you're not, you're not
00:35:00.760 optimistic that
00:35:01.540 everything's going to be
00:35:02.320 great for the homebuyer
00:35:03.140 moving forward, but
00:35:03.760 you're not all doom and
00:35:04.560 gloom, those people and
00:35:06.100 generations of people who
00:35:07.180 are hanging their heads
00:35:07.880 going, oh no, what's
00:35:08.860 going to happen?
00:35:09.340 Because you're seeing the
00:35:10.520 negatives, but you're 1.00
00:35:11.240 also seeing the potential
00:35:12.920 for optimism, some
00:35:13.880 positives around the
00:35:14.880 corner.
00:35:15.520 What's your outlook for
00:35:16.380 the next 10, 20 years?
00:35:17.460 What's your outlook for
00:35:18.260 a young person saying,
00:35:19.640 you know, here I am
00:35:20.480 looking to be in the
00:35:21.000 market?
00:35:21.220 I think people at the
00:35:24.700 policy level are finally
00:35:26.080 starting to get it.
00:35:27.100 Maybe I'm just feeling
00:35:28.980 optimistic, but I
00:35:30.800 actually think people at
00:35:32.120 the policy level have
00:35:33.140 finally realized we need
00:35:35.000 to build more supply and
00:35:36.400 there's a big push on to
00:35:37.780 build more supply, more
00:35:39.540 rental housing, more,
00:35:41.120 you know, you know, more
00:35:43.100 whatever you want to call
00:35:44.520 it, affordable housing,
00:35:45.580 more housing that fits the
00:35:47.200 market.
00:35:47.760 And I also believe the
00:35:48.700 market is surprisingly how
00:35:50.740 efficient the market is
00:35:51.960 that people are now, you
00:35:54.160 know, moving to places
00:35:55.160 that are more affordable,
00:35:56.680 creating lives.
00:35:57.820 I mean, you go to some of
00:35:58.560 these towns and, you know,
00:36:00.340 last summer I was in
00:36:01.460 Cornwall, believe it or
00:36:02.460 not, I was going to the
00:36:03.380 East Coast and we stopped
00:36:05.620 in Cornwall.
00:36:06.700 It's got a funky little
00:36:08.140 downtown that would look
00:36:09.340 like it was a lot of fun.
00:36:10.560 It wouldn't be that.
00:36:11.620 It would be a nice place to
00:36:13.160 live if you could have a
00:36:14.360 decent job there.
00:36:15.400 And I think that's kind of
00:36:17.380 something that the consumer
00:36:18.640 and the market has figured
00:36:19.540 out that maybe we can find
00:36:20.720 some great places to live
00:36:22.820 in this country that
00:36:24.440 aren't named Toronto,
00:36:26.560 Vancouver, Montreal,
00:36:28.060 Edmonton, Calgary, or
00:36:29.080 Ottawa.
00:36:30.100 The future is friendly if
00:36:31.280 you're willing to look
00:36:32.360 around just a little bit.
00:36:33.820 Gary Marr, this has been
00:36:34.560 a really fun conversation.
00:36:36.200 Thanks so much for
00:36:36.700 stopping by.
00:36:37.720 Okay, thanks.
00:36:38.660 All the best.
00:36:39.660 Full Comment is a
00:36:40.540 post-media podcast.
00:36:41.860 I'm Anthony Fury.
00:36:43.000 This episode was produced
00:36:44.060 by Andre Pru with theme
00:36:45.560 music by Bryce Hall.
00:36:46.980 Kevin Libin is the
00:36:47.940 executive producer.
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