True Patriot Love - The math behind cost of starter homes in Canada

00:00:00.000 the gap between those looking for a home and those hoping to actually afford to buy a home

00:00:10.560 in Canada is getting wider and wider and unfortunately there seems to be no end in

00:00:15.600 sight pomacucci to that gap between what people make and how much you need to make to buy a home

00:00:21.180 in this country yeah thanks Jim you know it's interesting because affordability let's let's

00:00:26.760 it down yes because um i get this question all the time you know my my background of course yeah

00:00:32.840 being a finance guy or being an accountant early in my career and then you know getting into the

00:00:40.200 development business at a young age and then spending time in the residential side of the

00:00:45.880 business so you know people come to me all the time they say you know nothing is affordable i

00:00:50.360 can't find a house that's affordable i can't find a property that's affordable and they try to compare

00:00:56.440 all the time when they do it what the prices were back 20 years ago to what they are today and they

00:01:03.880 try to figure out income appreciation and then they come up with these ratios and i thought it

00:01:09.480 was interesting preparing for the show liam put together a deck for us and you know it's interesting

00:01:15.000 because he came and he said listen on a nationwide basis 41.3 percent of people's income goes towards

00:01:25.800 their home purchase now based on the price of the purchase and it was 36 in 2019 exactly that's a

00:01:32.760 big difference yeah so it is going so the the gap he's trying to analyze the gap and he's saying

00:01:38.360 you know in the bigger markets uh your which is kind of a weird way to look at it but it's fine

00:01:43.960 he's saying the the median price of a home so like in the vancouver market the the toronto market the

00:01:50.040 medium price of a home is say a million bucks correct and he's saying basically if a couple

00:01:55.160 uh a couple makes a hundred thousand or 98 000 then it's a 10 times multiple that they'd have

00:02:02.360 to spend to cover their their price of their home well and but here's the scary thing so the the

00:02:09.000 median household income in the toronto area is just under 100 000 right now the income needed

00:02:16.760 to qualify for a median home is 236. so two people will full-time jobs combined making a hundred

00:02:24.680 grand are still way short of the what the minimum is to buy that average home in the toronto area

00:02:31.560 right well yes the average home yeah so the average so the average being you gotta remember

00:02:38.280 being in that market you have some luxury homes in toronto that are four or five million

00:02:42.600 dollar homes and then you have some you know six seven hundred thousand dollar homes not many

00:02:49.240 well unfortunately that's the problem there there i live 40 minutes north of toronto in a bedroom

00:02:55.320 community you are hard pressed to find a home under 750 right and then that home needs work

00:03:02.440 that's the problem for a young couple well it is the problem for a young couple but think about

00:03:07.080 it for a minute jim because when i was when i started out now different time um and different

00:03:12.200 price range i guess but also different salary base a very quick favor before we continue a large

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00:03:38.280 there directly it takes just five seconds costs nothing keeps you informed so thank you now back

00:03:45.560 to the show so you know and i started out when i was single and uh in the home purchasing you know

00:03:53.720 world and and basically i went i mentioned to you i my first home i bought i bought uh basically 18

00:04:01.400 people lived in it had been subdivided my backyard uh right across the backyard was a

00:04:07.800 seven-story apartment building um it had a broken down chain link fence overgrown trees

00:04:14.840 like i mentioned 18 people lived in the house they had subdivided it so i had to go in and i had to

00:04:20.520 gut the whole house i had to build the fencing i had to redo all the lawns put the landscaping in

00:04:26.840 and really rebuild the whole thing now my father just i tell you this story because

00:04:32.920 he was mortified my and my dad had done a lot of home renovations with my uncles my they were

00:04:37.800 very handy guys and when they retired you know they take homes and they get them and fix them

00:04:42.840 up and resell them so they did very well for themselves kind of in a trade that they had

00:04:47.800 learned or multiple trades they had learned right right i knew nothing at that time i had seen it

00:04:53.800 but you hadn't done it but i hadn't done it yeah but here's the interesting thing this is the and

00:04:58.520 then what i tell people and then you know um i just finished a project at a business uh and it's

00:05:05.080 a tile project and i was interested that all the young guys that work in that business and the

00:05:12.200 gentleman who was doing it for me um and he was he was there for a couple weeks it was pretty

00:05:17.480 fairly sized project putting tile on didn't spend any time with him

00:05:23.800 but in my generation to learn something you had to spend time with someone who actually

00:05:28.680 knew how to do it there was no youtube so you had to spend time and watch someone mix mortar

00:05:33.240 you had maybe ask a question and ask a question yeah i had to figure out you know when they put

00:05:37.640 the the shims in the middle between the tiles you you the spacers you had to ask how he did it so

00:05:44.520 in my generation you had to kind of ask people questions and that's the only way you'd learn 1.00

00:05:49.240 right because we knew we had to learn because if we didn't learn we would never get into a

00:05:54.680 house so it was out of necessity that you had to learn to do those things in order for you to

00:05:59.720 actually kind of buy your first house buy your second house so i get it and but those are the

00:06:05.640 things that oh here's the reality the house i live in now yes has gone up three and a half times

00:06:12.440 since my wife and I bought it in the early 2000s right my salary is only 20 percent more than it

00:06:19.320 was back then yes that doesn't match I I could not afford to buy my own house right now that

00:06:26.100 is the biggest issue for young Canadians right so if if I all of a sudden had to buy my house

00:06:31.400 there's no way I could come up with I might be able to come up with a down payment but I couldn't

00:06:36.020 carry the mortgage every year every month on what the cost would be and that's the big issue 1.00

00:06:41.240 can you save a down payment so you have young people who are living at home well into their 0.96

00:06:47.480 late 20s early 30s even after they're a couple to help save for the down payment and then scrape by

00:06:54.320 hopefully find a place that they can pay the monthly nut and that is so difficult in the big

00:06:59.860 cities in canada right now oh it is it is well and you know i'm having this conversation interesting

00:07:04.820 conversation i'm having this conversation with my youngest son yeah right and he's saying dad i want

00:07:09.300 go to school i said great i said how are you going to go to school he says well i i don't know you're

00:07:15.140 gonna you know i guess you're gonna help me and i said okay i'm gonna help you right to get started

00:07:20.340 so that's what we did yeah i'm gonna help you to get started but you know you have to do something

00:07:25.940 because when you graduate you can't come out with school loans he said what do you mean i said you

00:07:30.420 can't come out with school loans because they expect you to pay them back yeah well you know

00:07:35.940 and a lot of people don't unfortunately yeah you know in the us in the in the us i was actually

00:07:40.820 reading the other day you can't default on your school loans they follow you forever

00:07:45.460 oh like a credit collection yes oh so so but here you know some people do but quite frankly

00:07:51.700 so you got to make sure the first thing is jim like you can't come out of school in debt so for

00:07:57.540 young people when they ask me all the time i'd say listen that's a non-starter if you have to take

00:08:01.940 debt to go to school you're done don't i don't even don't even start because but paul 75 percent

00:08:07.860 of the kids graduating college university in this country have debt i get it i get it and this is

00:08:13.220 this you know um and we can get into i don't want to get into osap because honestly that whole osap

00:08:19.220 mess that came up in ontario the other week depressed me to no end it just it bummed me

00:08:25.220 out jim because quite frankly when you start seeing people ripping off systems like that

00:08:31.060 it just you lose your faith in mankind in the system so you know let's say but but the problem

00:08:37.700 is the challenge is right now you come out of school and you're carrying debt

00:08:45.380 of course you're not going to be able to get into getting enough money saved you got to get that

00:08:49.940 debt paid off so that's a five-year plan to try to get your school debt when the rent average in

00:08:56.260 the country is 2 000 a month right and then you have to pay off that student debt before you can

00:09:01.780 start saving for a down payment exactly so you have to you have to you have to get busy and you

00:09:07.780 have to get that school debt so that that's why i tell people whatever you have to do don't take

00:09:13.220 school debt whether it's free whether you get it whatever you however you get it don't take it

00:09:18.500 you got to keep those loans you know and what i i think i've told this story on the show before

00:09:23.780 for one thing my dad my dad as I mentioned to you you know the Italians the one thing he did teach

00:09:30.680 me quite frankly when I went to school I found a way to hustle through school so I didn't have

00:09:35.600 any when when I graduated from school I graduated with a be calm from U of T I had no school debt

00:09:43.940 I had a a used car that I had bought a new used car I had an apartment I had new clothes I had

00:09:52.280 enough money to get going again because I knew the economics the practicality of my life I knew

00:09:58.580 he had taught me to be on my feet and figure out what I needed to do but okay that's Paul I think

00:10:04.460 that's incredible what your your parents and your father taught you that is an outlier you are in

00:10:09.200 the small percentile of young grads in this country that are in the same boat like there's I mean what

00:10:15.320 are you being honest but how many kids graduate college University similar to what you did 10

00:10:20.780 15. but but you don't see that's where i'm trying to get to now you have to start earlier so i'm

00:10:27.580 talking to like parents of kids who are going now you got to tell them you can't do it can't do what

00:10:34.380 you can't take loans to go to school so you either have to and i know people you know it's interesting

00:10:39.660 because we're brainwashed into the and i'm going a little further back before i get to where the

00:10:43.580 housing is we try to brainwash people into the fact that they graduate and they graduate very

00:10:49.340 young now they graduate at grade 12. they're coming out for high school yeah they're like

00:10:53.580 17 years old and then you have to immediately go to school and start school and do everything

00:10:59.580 take a loan get going to school kid doesn't really know what he wants to do most for the

00:11:04.620 most part so quite frankly if you need to take a year or two off make some money bank some money

00:11:11.260 get your get started get enough money if you need to live at home get some cash in the bank

00:11:16.620 and then get going again but many of the young people that do that all of a sudden have a job

00:11:22.060 they're making money and the idea of going to college university yeah i got a job i'm making

00:11:26.220 money they made a lot of them don't go to school and that's what they tell you okay that's what

00:11:30.700 and i hear that i agree right i went to school i mentioned i worked full-time when i went to school

00:11:36.940 and i always remember i was actually in one of my economics classes and this rough-looking character

00:11:42.780 walked in and he had uh uh you know he had a uh chain that went from his pocket to his belt oh

00:11:50.140 yeah yeah and so i i i recognized it because i grew up with a truck driver i mentioned that's

00:11:55.500 what my dad was in the trucking business and i started talking to him and we got to know each

00:11:59.980 other and i said what are you doing he says he says i drive all day i'm a truck driver i drive

00:12:04.620 all day and i take night courses and he said that's how i'm getting through university and

00:12:09.180 it was similar to me so we got to know each other and we became friends but you know it's interesting

00:12:14.620 because we graduate we don't have loans today we're talking about the fact that people don't

00:12:21.420 have down payments that they get down payments on to get the loans so take a look jim let's talk some

00:12:26.540 some numbers for a minute and you know it was interesting because i agree with you if you're

00:12:30.780 going to live in the core of the city of toronto and you're going to buy a house you're going to

00:12:34.860 to pay a million bucks so that's why the the option is uh like innisfil which is growing

00:12:42.140 at the cambridge newcastle milton also lose all those bedroom communities that are on the go train

00:12:49.320 line or you're willing to commute an hour and a half because that's your only option living

00:12:55.600 actually within the city limits it's it's pretty non it's a non-starter unless you're willing to

00:13:01.660 live in a small condo yes and you're that's what that you know probably no pets or anything like

00:13:07.920 that but you have a place yeah but if you want actually a house with a little bit of a yard of

00:13:13.000 a garden or anything have some space right you have to go way outside the city limits you have

00:13:18.400 no choice and that's for Vancouver and all the major cities basically in in Canada right now

00:13:23.320 right that's your starter home that right so that's your start home and so now you've been

00:13:29.680 you've been fiscally responsible through your education hopefully yeah hopefully so you come out

00:13:35.640 small amount of loans or no loans yeah so you come out you're on your feet so now you start working

00:13:41.820 okay are you are you gonna get married are you gonna meet someone i mean the stats are showing

00:13:49.260 that uh you're probably it's gonna be a few years mate because they the amount of couples that are

00:13:55.760 the average age of couples getting into serious relationships living together or marrying are

00:14:02.160 older now than it was 20 years ago right so now this is interesting so i didn't have that luxury

00:14:08.000 so i'll be toothy with you when i was kind of finished and i got out on my own and i was

00:14:13.840 through school and everything else the only way to actually meet some of those goals was to meet

00:14:19.280 a partner who could actually financially be as successful as i was okay interesting right no

00:14:25.040 that's a i know that sounds cool that doesn't sound like romantic and loving and everything

00:14:29.840 but but it was realistic right i knew the the hardcore truth was with one income

00:14:36.320 i was going to struggle to actually pay the mortgage on the the homes that i wanted to buy

00:14:42.000 right so therefore i did find someone else who i had an upwardly mobile income i had an upwardly

00:14:46.800 mobile income we could figure it out and quite frankly we could combine them together and we

00:14:51.200 could meet those so but that's a commitment right again you know people today are like oh i can't

00:14:56.400 bind up you know my bank because when the stats that liam put together for our show is very

00:15:01.440 interesting he puts them together with two incomes right he's showing well yeah i mean okay so he's

00:15:07.600 showing two two incomes because it like 236 right is the the average person making 236 no 236 between

00:15:18.320 right but how many people solo make 236 not very many not very many but you're probably a management

00:15:25.760 or you're a physician or you're a lawyer or something your chances are you're not in your

00:15:31.200 20s making 236 in canada and there's not a lot of young lawyers making 236 no right so but but

00:15:38.000 if you have two lawyers or you have one doctor one lawyer or now you're talking or one entrepreneur

00:15:43.600 and yes now you you can carry the monthly cost assuming you find a place and scrape up the down

00:15:50.080 payment right there you go so now you but but this is the interesting part you've made the

00:15:56.880 you've said to yourself hey you know and again i'm not gonna uh we can go into college and all

00:16:04.640 the craziness and all the weird stories the last couple weeks we just heard about colleges and

00:16:09.280 university right and there's there's been a few right and they're terrible stories right

00:16:16.400 and i and people say well you know you need to let your kids go and be free and go to college

00:16:21.280 and go to university and have fun and everything else honestly jim you know i'm sorry i'm not

00:16:26.960 trying to be again the bearer of bad news but you know what in this day and age with the costing and

00:16:32.640 the house prices and everything else you don't get that opportunity you have to be focused you have

00:16:38.880 to be focused when you go there there is a social aspect to post-secondary education

00:16:45.360 you can't be a robot and all you do is study and work because you are missing out in a life

00:16:50.400 skill the life skill of interacting with other people meeting other people socializing with

00:16:56.160 other people is a skill that you will need in life so there has to be some kind of balance we

00:17:01.360 we can't be a country where the homes are so expensive that you basically have to if you're

00:17:06.880 not studying all day you're working all day and you're not able to go out and go to any get

00:17:11.760 togethers or parties because you have to be focused and make all the money and work work work

00:17:15.920 because there's no options for you listen i get it i get where you're going there are limited

00:17:24.560 let's say it curtails your lifestyle i get it quite a bit so you know when i listen to these

00:17:30.880 kids who are going to university and getting all these hijinks and doing all this stuff and

00:17:34.800 silly stuff i think to myself not that i would want to do it i never had the opportunity to do

00:17:40.640 it jim okay you know my my dad was very blunt with me when i went to go to school he said to me

00:17:47.520 you know you're going to cover this and you're going to cover that you will work yeah this is

00:17:51.440 the way it's going to go and if you want to make it work which then tweaked me to say okay i better

00:17:55.280 get my my act together now did i love did i love university no but we had kids who got stuck in

00:18:02.400 their bedroom in covid yeah and when they went to university we wanted them to socialize because

00:18:08.160 they had an unnatural end to their high school experience no prom no grad nothing we wanted them

00:18:15.680 so i mean we're trying to help them the best they can the bottom line is homes in canada are more

00:18:22.160 expensive than what average people are making when you get out of school right you're only making x

00:18:27.120 amount of dollars and there's no way you can qualify so yeah hopefully you meet someone you

00:18:32.960 develop a relationship you can combine the incomes and maybe get in the housing housing market but

00:18:38.480 we're losing a lot of good people from big cities because they're going to the ottawa area halifax

00:18:45.120 maybe regida maybe a red deer or somewhere else because they know that a they're nice communities

00:18:51.920 but b they can actually afford to buy a place there i went in realtor today i can get a 900

00:18:57.760 square foot three bedroom two bath bungalow for johnny nice city for 300k right that's not a

00:19:04.240 reality in the major cities in the rest of the country no chance right well and i you know we

00:19:09.760 looked at a couple before this it's interesting we were looking at uh properties between six and

00:19:14.800 seven hundred thousand in uh montreal suburbs oshawa calgary hamilton ottawa um and uh surrey

00:19:26.640 milton and uh halifax so you need 120 down to buy 600 grand house in canada yes 120 000 down payment

00:19:35.520 but you can't start with school loans to get there and when you get out at some point jim you got to

00:19:40.800 make the commit you know it's a combined partnership right you got to find someone

00:19:44.640 who's had the same goals as you do and doesn't want to wait till they're 40. well i was 32 when

00:19:50.160 i met my partner because in my 20s i'll freely admit i was a mess yeah i wasn't thinking about

00:19:55.440 long-term relationships i didn't think i'd ever own a place i could barely pay my rent and feed

00:20:00.000 myself from month to month while i was trying to establish myself and there's a lot of young people

00:20:04.400 in this country who probably are similar both that i was and i until i i met the person that's

00:20:10.240 my wife now i'm the idea of home ownership was not even a thought there's no way i'll ever own

00:20:16.320 anything in this country because i could barely pay my bills from month to month but but you know

00:20:21.680 i'm not a good example mind you but no no i get it and you know everyone listen everyone has

00:20:26.720 different goals at different times but if you want to you know if you're in this environment sure you

00:20:32.640 want to home ownership is something you see in your future you can't attain it it just you have

00:20:38.320 to start planning earlier to do it and it because of the market shift you can get there but at the

00:20:44.880 same time here's the next thing because this you're going to say wow this is like because now

00:20:49.040 you're telling me i know this it sounds right you're telling me not to take loans at university

00:20:53.680 at some point you can't wait till you're 35 or 30 what dude you actually meet a partner you have to

00:21:00.640 go earlier and quite frankly you're now telling me that i have to learn to be handy but you do

00:21:07.920 like you do when people come to me and say my son's not handy i say well no one's born handy

00:21:13.360 right like you're not born you you take an interest in something you want to achieve so

00:21:19.200 i want a nicer house right so why did i why did i become handy it wasn't because i enjoyed doing

00:21:24.800 this stuff it was because honestly when i started working i started looking at people's homes and

00:21:30.320 what they were driving and i said you know i would like to own that home one day and then i looked at

00:21:34.560 the economics of that home i thought i can never own that home but the only way i could own that

00:21:38.880 home is to buy a beater home and then fix it up fix it up or yeah live in it for a few years

00:21:45.120 knock it down so it wasn't until i and it was interesting and then i had to go so then at that

00:21:50.480 point because there's no youtube i had to go work along with home builders and work along with

00:21:56.480 friends who are building new homes to learn about sub pumps and i had to learn about foundations

00:22:02.320 and i learned about excavation so i had to go learn all those things so when i went to do it

00:22:07.760 you had an idea i had an idea and i could actually i could at least articulate what i wanted to a

00:22:12.560 builder i was working with but you would admit paul there's a large segment of the population

00:22:16.480 people who don't even want to learn how to do that they'd rather not and that's the one thing

00:22:20.800 there is bargains to be had right in the condo market in this country there's a glut of condos

00:22:26.240 yeah and if young people have some money and whether they're single or with a couple combined

00:22:32.000 income and they are happy with a condo lifestyle and you don't have to do a lot of sump pump work

00:22:39.200 and foundational work you can get into the housing market via the condo market in this country

00:22:44.640 because there's so many that are available right now i'm with you but

00:22:48.880 just you know i think condos are good for certain people i don't disagree are they great value right

00:22:54.800 now no can you buy them for a lower price sure are they going to go up yeah maybe you know but then

00:23:01.520 that's a lifestyle because your condo living now is you're committing years ago you used to buy a

00:23:07.040 condo used to either buy it as an investment live in it or not live in it rent it or not rent it out

00:23:13.120 quite frankly then you would keep it a few years it would appreciate then you'd sell it right now

00:23:18.320 you're buying that condo that's a that's a long-term investment now it's not a short-term

00:23:22.960 investment because you're going to buy it then you're going to have to stay in it till the market

00:23:26.640 starts to climb so you know you're you're a decade investment like your plus just waiting for that

00:23:32.080 thing to clear and start to make some money again hopefully but some people look at it paul like

00:23:36.400 this i don't have to mow grass i don't have to shovel snow i don't have to do home improvement

00:23:42.720 that's all covered i live there i when i want to travel i close the door i leave and i come back i

00:23:49.680 just so there are people that look at it that's the lifestyle they want and that's the one thing

00:23:55.040 in the country now that we do have for people who are like i really not interested in having kids

00:24:00.640 i'm gonna be with my partner i just want a place to live the condo lifestyle is is perfect for them

00:24:06.080 yeah it is perfect and there's bargains out there listen everyone has their thing right exactly

00:24:12.080 if i for those people who want to plan to have a family then you you're probably going to need

00:24:17.120 some kind of townhouse or house right so now is not the time to so jumping in now to buy a condo

00:24:22.640 that has a long-term horizon on it won't work so but if you don't think you do then you could get

00:24:28.640 something at a good price oh yeah but you're committing for a period now exactly so which

00:24:33.040 means if you can't change it well that's the tough part you know especially for anyone at a younger

00:24:36.800 age then you can't change your mind the middle gym then you're you're really in it unless you

00:24:40.800 can rent it oh but unless you know what can i in for there um you have to be a certain personality

00:24:48.880 who can do that and i i can't do it i had uncles that did it honestly um and bless their hearts

00:24:57.600 they're not with us anymore but i watched the pain of them with bad tenants for years

00:25:04.240 painting the walls black well there's horror stories all over the news flooding flooding

00:25:09.040 their places and the crazy people that used to they used to have people move in and then there'd

00:25:14.640 be a biker gang living there the next week and you know my uncle used to come you know the old 0.99

00:25:19.040 italians right put his head in his hands and cry on you know in our kitchen about the the bad 0.95

00:25:24.720 tenets he had in seven homes and i used to think to myself why are you still doing this this is

00:25:29.840 killing you so i never found that model a great model okay and can i throw something please

00:25:36.400 a little advice for those uh for the viewers that are new to the market because i'm sure some of the

00:25:40.720 mature viewers you have to have the right uh disposition to do that to be the person leasing

00:25:47.520 the apartment to be the leaser yeah you really do because i i've seen guys try it and it literally 0.51

00:25:53.760 kills them and i mean kills them they get ill and die so i've seen guys try it and i've seen guys

00:25:59.520 sit on mortgages for like 40 years doing an industrial and commercial properties i've seen 0.99

00:26:04.720 guys okay i bought this three four five million dollar property i'm going to lease it out for 40

00:26:10.720 years and at the end of it i'm going to be it's going to appreciate i'm going to own it and they

00:26:14.880 sell it the next day and they die almost immediately because they bite their nails

00:26:18.960 passive income is a hard thing to do you really got you have to have a right disposition for

00:26:23.920 passive income and that's something that doesn't bother you because people who play the passive

00:26:28.720 income game which is really leasing and yeah and anything like that that's a hard because you're

00:26:34.800 most of the decisions that happen to you are outside your your own fate and so you have to

00:26:40.000 kind of you have to be able to throw the world into someone else's hands and say please treat

00:26:45.040 me well and if the world doesn't treat you well that's your fate and i i i i i can see that but

00:26:51.680 here's my question to you because obviously you grew up with builders yeah i grew up in a small

00:26:56.480 military housing yeah my wife grew up in a small bungalow in the suburban toronto scarborough

00:27:03.360 back in the day in the 50s and 60s and 70s most canadians grew up in small homes no problem yeah

00:27:09.360 why don't they build 1 000 square foot two-bedroom bungalows yeah if there's so many canadian couples

00:27:16.320 having no kids or one kid that's all they need it would be a lot cheaper and a lot easier for people

00:27:20.960 to get in the housing market but all the subdivisions and all the new builds i see

00:27:25.520 they're mcmansions they're all there's no actual small reasonable house new build to get into i

00:27:32.560 don't understand why they don't build them smaller anymore they all seem to be so big well we bypass

00:27:37.920 it's interesting you talked about the condos jim it's too bad because what would the mistake we

00:27:42.720 did make was just that we bypassed that market and went to this mega condo market and went up

00:27:48.880 in the air 700 square feet thinking we could as a developer and i always talk about condo developers 0.96

00:27:55.040 condo developers for the most part are nuts like crazy and what i mean crazy they're crazy because

00:28:01.280 quite frankly the number of risks that you take to get that tower up right are astronomical so 0.81

00:28:07.760 and then hope you sell all the units and so you you gotta you gotta be such a risk taker that

00:28:12.800 it's almost like you're the maximum gambler you're the gambler of all gamblers to actually be and so

00:28:18.560 quite frankly they got into it and a bunch of them got into it and they were so good at it

00:28:22.880 that they took off and they started doing seven eight hundred square foot condos they bypassed

00:28:27.200 the market you're talking about which is a shame because that's the market that would sell right

00:28:31.120 now given the environment absolutely with a small lot people would eat that up and so now we have

00:28:36.400 now we have all these mega condos everywhere but no one in them but some of them are under 400

00:28:41.360 square feet well 450 like the crazy sizes we just did a show on vaughn which is quite frankly north

00:28:48.320 they're sitting on uh you know basically 40 something percent of their units that they're

00:28:54.800 trying to pre-sell are unsold right now so they're they're stopped right they're literally stopped

00:28:59.840 for like i said a decade until they can get back into the market with doing condo development again

00:29:05.440 so all those condos they're still struggling with the supply the demand's not catching up and so

00:29:11.200 that's going to take a while but so what here's my question if i'm a premier i have a group think with

00:29:17.600 the local mayors in my community of the bigger municipalities and the prime minister and get

00:29:22.480 together and have some sort of strategy i have not seen a strategy they talk about build homes

00:29:28.560 better and all these fancy names but i've not seen a strategy like you talked about like well

00:29:33.680 get rid of the gst right well new homes they can't afford new homes so right but smaller homes

00:29:42.160 smaller lot sizes you know building to the the public's demand building to the demographics 0.90

00:29:48.320 building to what people can afford and want and then you give them a choice i mean there are so

00:29:53.600 many people that i know who are older who can't afford to downsize because they there's the places

00:29:59.040 they would downsize to they simply can't afford hey before we go any further please hit the subscribe

00:30:04.400 button right now if you want the raw debates the full uncut conversations you won't see here

00:30:09.760 head straight to tplmedia.ca subscribe and lock in your membership trust me you don't want to

00:30:15.440 miss what happens behind the paywall all right back to the show well it's interesting because

00:30:20.020 you do we're going through it right now the biggest wealth transfer the world will ever seen

00:30:25.120 but the baby boomer is actually shifting into the next next exactly part of their life but we don't 0.60

00:30:31.320 have a plan to get those people out of their homes those homes you're mentioning you know

00:30:36.180 the challenge is a lot of those homes that they have now that have appreciated in the city

00:30:40.860 have gone up so much there's no buyers for those homes so they're sitting in those homes well they

00:30:46.160 bought them in the 70s and 80s they think about that but a lot of them very nice they yeah they

00:30:51.160 renovated them they upgraded yeah yeah yeah they even knocked them down and rebuilt on that land

00:30:55.660 but they went up so much but there's no market coming in so now they're going to try to open up

00:31:00.600 the foreign buyers in 2027 they're going to open up the former hoping that foreign buyers are going

00:31:05.820 come park their money here like we had it with justin trudeau like we have with justin trudeau

00:31:11.180 we blame that we then blame the foreign buyers for what happened to us right so then we we countered

00:31:16.540 with okay we got to stop this because foreign buyers are sending up the price then we lost

00:31:21.420 all our custom home builders because our custom home builders left or quit or went away who stopped

00:31:26.140 building so stopped building so that died off they've actually relocated so a lot of the custom

00:31:31.020 home builders are another they're in the us they went to other countries oh is that right they're

00:31:34.860 gone so getting that back is going to be even tougher now because who's going to get back into

00:31:39.700 that business uh the stuff they build now is a lot of junk and so quite frankly that's kind of

00:31:46.040 what's coming on to the market so you look at it now and you think to yourself okay where do we go

00:31:50.940 the plan should be and this is interesting is to go back to the people that own homes and figure

00:31:56.620 out a way to your point jim is to transition them out but then you have to figure out a way to get

00:32:01.300 those double income people that we're just into those homes into those homes at a reasonable 0.99

00:32:06.660 price to transition them so you know and there's got to be ways to do it you know and if you look

00:32:12.040 at and i know that challenge is 25 year mortgages uh you know right two three million homes it's

00:32:18.960 tough to get people to cover them it's tough to get people with the income to make it happen even

00:32:23.720 if they do not have school loans even if they do get their down payments down it's still tough for

00:32:28.720 them to get into the because they're carrying such a big a payment every month can i throw some

00:32:34.480 money please the market will drop and the market's got it so what's happening now is we're still

00:32:40.480 sitting we're hovering you know it's going to drop further you believe especially into the larger

00:32:45.040 markets the market has to drop because if the if at some point we had started to see the market

00:32:51.280 budge i'd say okay you know it's going to go but now you have what you have now is you have enough

00:32:57.040 people sitting on pensions and assisted incomes that are actually sitting there in the stall mode

00:33:02.760 but that inevitably they will time out because of age and health and everything else and they'll

00:33:08.300 have to transition i'm going to throw something next they'll have to budge down and i agree

00:33:11.740 but here's a theory that's been floated out there mark carney and the senior liberal brain trust

00:33:18.460 do not will not allow the market to sink too much because those boomers who bought those homes in

00:33:25.380 the mid early 80s who made all that equity are their voting base and they don't are worried that

00:33:31.460 if they lose their value they could lose votes now that has been floated out there Paul I don't

00:33:37.440 know if it's true or not or if that's a reality or not but there's a feeling that Carney would

00:33:42.180 only allow the market to come back so much before they put brakes on it but how can he stop it I

00:33:47.760 see but that's the interesting part and then the only thing that I would counter with that Jim that

00:33:52.460 don't understand is then why do they why do they keep changing the bylaw for affordability

00:33:57.580 so by building more affordable residents around these uh in the cities yes you're devaluing the

00:34:03.820 value of those homes anyway so you're you're you're counterintuitive the more you go into

00:34:09.500 the market with public housing with affordable housing with subsidized housing you're actually

00:34:14.220 diminishing the ability of people who own homes to get out of those homes and that's where i think

00:34:19.340 think it's short-sighted I think you have to go back to those people that actually own homes now

00:34:23.960 right every size and level right they'd be 1 million 2 million half a million whatever they

00:34:29.660 are and you have to say okay here's an exit plan for your home and here's how we get new people

00:34:34.640 to transition in and if you need to subdivide properties so to your point if you need at some

00:34:40.460 point to go into a subdivision you need to say okay this area needs to be subdivided the lots

00:34:45.440 are you know the lots are 60 by 200 they're too big anyways quite frankly we we can subdivide all

00:34:52.480 of these right yeah so build some smaller homes and smaller lots but at least you give the people

00:34:57.600 who are in the existing home the ability to get out because they've subdivided to get the value

00:35:01.840 out so they can do that on their own right but you need to do that in a tactical that's a tactical

00:35:06.720 discussion that you need to have on all levels of government right well and with seniors today

00:35:10.960 people who are baby yeah which which they're petrified i've been to the public meetings with

00:35:15.280 these people they're petrified because all they see is no communication they see bylaw changes

00:35:21.760 and they don't know how they fit into that either they don't well no one's told them anything

00:35:25.520 exactly so that's the communication that they need right now to figure out and then if you do that

00:35:30.080 i think you could probably get buy-in because then they'll start to transition out they'll

00:35:34.800 they'll get their money out at a value that they can live on because that's their equity for their

00:35:39.120 retirement of course it is i mean i tell you there are there are pockets of this country where the

00:35:43.200 the value really hasn't gone down right and that's you know west mount montreal north vancouver oh

00:35:49.520 yeah you know king city ontario north of toronto has actually gone up in the last year yeah i have

00:35:55.120 a friend who's a custom home builder has been but he's still building places and they they call it

00:36:00.480 the county prince edward county yeah in the muskocas and that's just their summer places

00:36:04.640 like the the gap between the people with money in this country and the middle class is wider now

00:36:10.400 than it's ever been paul oh yeah well we did a show on it right it's crazy it's crazy where the

00:36:15.200 wealth sits in the country right now and it's it's not a lot of families i think no it's that you

00:36:19.760 know we were talking it's it's not hundreds of thousands of families it's thousands and that's

00:36:24.960 it that's it it literally the wealth the the you know the 60 of the wealth is sitting with a couple

00:36:30.960 thousand canadian families it's crazy it's a crazy number yeah and that's scary when you look at it

00:36:36.720 but it it's reality but the transition on this one jim has to come from there now young people

00:36:42.400 young people today back to that for a minute before we get but young people today i think if

00:36:48.080 they're if they're seriously interested in homes it is a number of commitments that i think they

00:36:54.400 need to think through and that's the challenge and i know people don't like to hear that but

00:36:58.400 you know doing it on your own probably not feasible so unless you're unless you're really

00:37:02.640 killing it on the your career and you're you probably have to have the bank of mom and dad

00:37:06.400 help you out yeah well you do and you you need a partner yeah to sustain so you'd have to think

00:37:12.080 about that and that's a whole family discussion well there's been also talk about joint ownership

00:37:17.120 they're not even strictly a partner but you've heard those theories brought out there that two

00:37:22.560 or three people jointly own the property until they get their equity out and then they move on

00:37:27.920 yeah the co-opping or whatever exactly yeah well it's it's popular in europe well we're at the

00:37:34.960 point now with the prices we have to start seriously looking at it in some of the major

00:37:38.320 cities in this country yeah i mean i i mean at least the one thing that's happened in a lot of

00:37:43.280 the bedroom communities a lot of the cities in canada they're building new purpose-built rental

00:37:48.640 apartments yeah which is good so there there is choice out there the average price of rent which

00:37:54.720 i still think is a little high has come down to a semi-affordable rate so for young canadians

00:38:01.280 hopefully but like i know for our kids we have daughters in their early mid-20s they're like

00:38:07.120 they make everything themselves they bake their own bread they only go to thrift stores they're

00:38:12.400 always looking for a way to cut costs and do things in a low-cost way because they're trying 0.98

00:38:17.280 to save money and pay bills yeah you know so i think we have to give young people in this country

00:38:23.040 a little bit of credit they have really transitioned they're they're more educated

00:38:27.040 and i think some of the politicians in this country realize they look at the reality they

00:38:31.120 look at what they make they look at the cost like we're going to find a way well it's interesting

00:38:35.520 you know and preparing for this show because number one uh you know ai so a bunch of the

00:38:42.880 crew preparing were actually uh speak you know trying to figure out mortgage calculators off ai

00:38:48.480 siri can i find an affordable house in canada yeah no no they were they were actually you

00:38:52.800 know because i was asking them questions you know i was just trying to see if they knew the numbers

00:38:56.800 and they were like you know pick up their phone yeah their phone and i you know and i i said go

00:39:02.320 to the rbc mortgage calculator or whatever so i was talking through it with them and it was

00:39:06.640 interesting to listen to them go because they were they were tweaking they were getting it so

00:39:12.560 the technology that's on their side to understand this last one of the last things before please yes

00:39:19.120 for guys and gals and it's not just guys anymore it's gals to get handy today and take an interest

00:39:28.480 in it is is is doable well because i know it sounds like full disclosure my wife basically

00:39:35.520 builds everything i make her sandwiches i'm only allowed to use two power tools yeah she does 1.00

00:39:39.840 everything else for safety reasons and health protocols yeah so there are more women who are 1.00

00:39:44.880 handy and capable of building and doing things now than ever but you're 100 right get that skill 0.99

00:39:50.320 yeah get that skill and you know when i'm working with young trades and it's interesting whether it

00:39:54.560 be in uh commercial or residential and i'm moving along i always get a kick out of them in the

00:40:00.000 morning because number one they hate the early morning that's fine so you know you you meet them

00:40:04.480 in you know job sites four and five in the morning when it starts in there yeah yeah and but but you

00:40:09.760 know they sit down and have a coffee and the first thing they do is they pick up their phone and if

00:40:13.920 you're doing something new for the day they start watching it on youtube so interesting so they

00:40:18.720 learn differently than we do but they do learn and you know when uh i did a project pre-covered

00:40:25.360 i did it up in ottawa and it was a big project it was a couple hundred million dollars i was

00:40:30.720 building the project and i was having trouble getting trades so i ended up getting trades out

00:40:36.480 of north bay oh okay and so it was a and it was really refreshing to me as a young guy because

00:40:42.560 i had these kids coming in from north bay electricians plumbers uh drywallers they were

00:40:48.000 coming in and they were staying they were they were staying in cheap crappy motels and hotels

00:40:53.600 they're there to work working the week out yeah they work two weeks on and then go home to see

00:40:58.080 their girlfriends and their wives so they're coming in and they're all driving new trucks

00:41:02.000 they were all moving and they all had homes up in north bay impressive yeah but they were moving

00:41:07.120 around the the province and the country smart projects but they were knocking out and they

00:41:11.920 all were showing me pictures of their homes and their cottages and stuff but these are guys didn't

00:41:17.440 go to university went to trade school got a trade started work putting their money away

00:41:23.840 building their own homes building their own you know and they're able to fix up stuff driving

00:41:28.400 their rigs yeah you know and they're making it work yeah and they're making it they're commuting

00:41:33.840 to do it and it's a lonely life at times but they're making it work and so you know that's

00:41:39.040 why today you know i i try to tell every young person i come across like spend the time learn

00:41:45.520 it and you might have to live a little differently at the beginning but once you get your first

00:41:51.280 second or third home under your belt you get some appreciation you get a down payment that's the

00:41:56.640 next home you get to that's the home you probably end up living in you know what and like paul all

00:42:01.040 of us when we were young we're like i don't have money to go out so i'm like now we have netflix

00:42:05.120 and amazon prime i didn't have that when i was in my 20s so there's more things to watch and then

00:42:09.360 i'll get up and so yeah sometimes you have to like hey i'm not going to that game or that concert or

00:42:14.560 that event because i can't afford it but in a few years it will pay off yeah go to work go to work

00:42:20.240 and then you too can be like paul micucci i don't know about that thanks

True Patriot Love - October 20, 2026

The math behind cost of starter homes in Canada

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