68% Of Canadian Think Its Going To Get Worse In 2024

[00:00:00] Welcome to the Canadian Real Estate Investor, where host Daniel Foch and Nick Hill navigate

[00:00:06] the market and provide the tools and insights to build your real estate portfolio.

[00:00:13] Welcome back to another episode of the Canadian Real Estate Investor podcast.

[00:00:17] My name is Nick Hill.

[00:00:19] And I'm Daniel Foch.

[00:00:21] And we've been getting a lot of new listeners lately so if you are joining us for the first

[00:00:28] time today, welcome.

[00:00:31] We're so happy to have you here and so happy that you found us and we hope that you

[00:00:34] enjoy all the work that we put into this podcast and all the episodes.

[00:00:40] And our goal here has always been to provide the most value we can by covering breaking

[00:00:47] news, covering as many different reports as we can and distilling them down into non-biased

[00:00:54] and taking a kind of no-b-s approach, as well as talking about investing fundamentals,

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[00:01:22] all the links in the show description.

[00:01:25] Anyways, Dan, what are we chatting about in today's episode?

[00:01:32] Today, we are going to be looking at a recent report from Advocates data that measured

[00:01:37] the Canadian public outlook for the rest of 2024, including housing and personal finances

[00:01:43] and let me tell you some of it is not exceptionally pretty.

[00:01:47] Yeah.

[00:01:48] And to preface that, we are actually going to be looking at yet another report that illustrates

[00:01:55] just how crazy real estate in Canada is right now.

[00:02:01] And we're going to be looking at some of the data on how many homes are over $1 million

[00:02:08] in certain areas of the country.

[00:02:12] So if you are telling me that we're going to be looking at two different reports covering

[00:02:17] a bunch of data that today, then I will probably start off by reading this great review

[00:02:24] and highly relevant.

[00:02:25] It says loving the podcast, Gents five stars as a new investor and numbers guy CPA in brackets.

[00:02:32] I really appreciate your fact based analysis and summarizing of reports, keep up the good

[00:02:37] work.

[00:02:39] And that comes from chilling with digits via Apple podcasts.

[00:02:44] I love, I got to say, I love all the names.

[00:02:47] Chilling with digits, you are welcome.

[00:02:49] Okay, so let's get into it in many cities in both Ontario and BC.

[00:02:56] More than half the homes for sale are listed for more than $1 million.

[00:03:03] And that's according to recent point two homes dot com analysis of February real estate

[00:03:10] listings in Canada's 70 largest cities and towns.

[00:03:15] The report from the online real estate marketplace company found that 15 of those cities in

[00:03:21] Canada had 50% of its listings priced at more than $1 million.

[00:03:28] And that is based on active listing data from realtor.ca.

[00:03:32] And that is of February 19th, 2024.

[00:03:37] Now all of them, all of those 15 cities were Ontario and BC home to of course Canada's

[00:03:44] hottest housing markets.

[00:03:47] And most of the 15 benchmark locations surpassed 50 million, sorry $1 million.

[00:03:53] So Dan, start me off with this list.

[00:03:55] And let's read the first 15 cities that had 50% of its listings priced at more than

[00:04:01] $1 million.

[00:04:02] Say we go one from one until we hit that 50% mark.

[00:04:07] Yeah, so Delta BC's at the top of the list with 80% of their listings over $1 million.

[00:04:15] 80% yeah.

[00:04:17] And then not so far away from Delta, we've got Vancouver, British Columbia at 70% of its

[00:04:25] listings at over a million dollars.

[00:04:28] Oakville had 69.1% of its listings over a million dollars.

[00:04:34] Richmond Hill, Ontario had 65.3, sorry 63.5 of its portion of its listings, a million

[00:04:43] dollars plus Richmond BC 63.2% over a million dollars.

[00:04:50] Dan just in your backyard here, new market Ontario 61% of its listings over a million

[00:04:56] dollars.

[00:04:57] Vancouver BC 60.7% over a million dollars.

[00:05:02] Maple Ridge BC 59.9% and then Vaughan and Mark both at about 58% of their listings were

[00:05:13] over a million dollars to finish off that part of the list.

[00:05:17] And then over to Coquitland BC and Ciri BC, both coming in at 54%.

[00:05:25] We had Abbott's Ferd at 53.9% over a million dollars.

[00:05:31] Brampton, Ontario at 51.6% and the last one over 50% is Whitby, Ontario with 50.3% of

[00:05:40] their listings over a million dollars.

[00:05:43] Kind of kind of crazy to see that many of those views up there.

[00:05:47] Yeah.

[00:05:48] And I mean some outliers too like Whitby at 50% over a million bucks.

[00:05:52] I mean I like Whitby don't get me wrong.

[00:05:55] I guess in the market, the GTA becomes very much where they have not a lot of condos supply

[00:06:03] to skew it, right?

[00:06:04] Because sort of the fact that Toronto's not on there because there's so many condos for

[00:06:09] sale below a million bucks.

[00:06:11] Yeah.

[00:06:12] Okay, so let's look at the cities now with the lowest portion of one million dollar listings.

[00:06:17] So this is on the last page of the report, August 7th of the report.

[00:06:21] So it starts off with Levis Quebec in 4.4% of their listings is above the one million

[00:06:31] dollar range.

[00:06:32] So obviously a more affordable market for sure.

[00:06:36] Yeah, and speaking of affordable markets and a place that I recently got back from Winnipeg

[00:06:42] Manitoba comes in at the exact same 4.4% of its listings are above one million dollars.

[00:06:50] And just as just for like a numbers portion, that's 52 out of 1,180 total listings above

[00:06:58] one million dollars in Winnipeg Manitoba.

[00:07:01] Kate Breton was next on the list at 4.3% of their total listings.

[00:07:05] So four of their 94 listings were over a million dollars.

[00:07:10] It's not that's pretty easy math right there.

[00:07:12] Four to 94 Saskatoon 3.6% or 25 out of 693 listings were above a million dollars.

[00:07:21] Last bridge Alberta 2.9% of their listings were over a million dollars.

[00:07:26] T Bay baby otherwise known as Thunder Bay Ontario 2.2%.

[00:07:31] And only two listings, only two out of 93% is above a million dollars.

[00:07:37] The giant is to scratch on 2.1% were over a million dollars.

[00:07:42] Red deer or Alberta 2% on the dot?

[00:07:45] We like red deer on the show actually.

[00:07:47] I think we like every one of these markets on the last page.

[00:07:51] Yes, sure.

[00:07:52] I mean this is basically a list of cities where you're more likely to get a good deal.

[00:07:55] We do have a meet up in red deer by the way.

[00:07:57] So go check them out with a listener of the show.

[00:08:01] She was in the five day challenge as well which thank you to everybody who came up to

[00:08:05] participate in that.

[00:08:06] That's a good intimate meet up I've heard and we actually have one of our course members

[00:08:10] looking at deals out there and connecting with that meet up group.

[00:08:13] So it's really cool to see the whole community start coming together now.

[00:08:17] It's all coming together.

[00:08:18] Yeah, yeah.

[00:08:19] What's the final one on this list here Dan?

[00:08:22] St. John's Newfoundland is 1.5% of their total listings are over a million dollars.

[00:08:29] So the lowest supply of $1 million listings in Canada isn't St. John's.

[00:08:37] So again, that is data taken from point two homes.

[00:08:40] They just did analysis on this and it's so interesting to see what makes up the it's

[00:08:47] really just I guess Vancouver makes up the we don't see Toronto on the list of the first

[00:08:52] 15 that have it but Daniel right that's just I think a supply supply discrepancy.

[00:08:58] I'd like we've got a lot more single family homes or I guess more expensive condos in Vancouver

[00:09:03] but these is essentially just a list of like very expensive suburbs in Ontario and BC.

[00:09:11] And then when we get to the last page, these all look like very investable markets that

[00:09:16] have come up on the show many, many times.

[00:09:18] So definitely go check out that list now a separate survey again because you know we

[00:09:24] talk about surveys and reports on the show.

[00:09:26] A separate survey from Royal a page released last month found that two thirds of Canadians

[00:09:32] are about 64% believe it.

[00:09:34] One million dollars in today's real estate market is a reasonable budget to afford a home

[00:09:42] to meet their household needs.

[00:09:45] And I quote years ago, a one million dollar budget could buy a generous amount of square

[00:09:51] footage and access to a sought after neighborhood in almost every market.

[00:09:57] Over time, however, we watched the purchasing power of a million dollars very more widely

[00:10:05] between cities.

[00:10:06] And that's from Royal a page chief operating officer Karen Yolveski and she said these

[00:10:13] days this budget can be a luxurious detached home one location or a two bedroom condominium

[00:10:21] in another.

[00:10:22] And she is right about that because you know, you look at some of these St. John's Newfoundland

[00:10:28] where only 1.5% or 5 out of 337 listings over a million dollars and I'm guessing you

[00:10:34] get in a probably like a nice waterfront or something like that.

[00:10:36] It's a little like even like Cape Breton, probably a nice waterfront for an inbox, right?

[00:10:42] And then you're looking at you know, a two bedroom standard condo in Toronto.

[00:10:49] So the discrepancy between what a million dollars gets you across Canada is likely at

[00:10:56] an all time high.

[00:10:57] Yeah, I think we were kind of almost getting to that US level of like disparity between

[00:11:02] different markets, right?

[00:11:05] Anyway, let's move on to the next report here from Advocates data from their website.

[00:11:09] It reads, we are full service market and public opinion research agency through qualitative

[00:11:15] and quantitative research methods.

[00:11:17] We ask the right questions that capture insights and help for client help our clients navigate

[00:11:22] some of their biggest challenges deep in relationships with customers and stakeholders

[00:11:26] and better understand the road ahead.

[00:11:28] So the report is called the Canadian public outlook for the rest of 2024 housing personal

[00:11:33] finances and geopolitics.

[00:11:35] Are we going to do the geopolitics part?

[00:11:37] We're not really experts.

[00:11:39] I left that part out.

[00:11:41] Okay, so I'm going to read this part directly from the report and then we're just going

[00:11:45] to start going through some of the data they've extracted.

[00:11:49] But this is how they came to their findings, which I think is important.

[00:11:53] So between February 29th and March 6th of 2024.

[00:11:58] So this report will only concluded about two weeks ago as we're doing this live day in

[00:12:02] Abys data conducted a nationwide survey with over 1500 Canadians aged 18 and above to

[00:12:10] examine the multi-faceted challenges Canadians anticipate in 2024, particularly focusing on

[00:12:18] the persistent housing crisis, the financial insecurity and more.

[00:12:23] The results reveal widespread concerns regarding housing affordability and financial stability

[00:12:29] and the sentiment not only reflects the adversity's Canadians face but also signals a growing

[00:12:37] disillusionment with the perspectives for improvement.

[00:12:41] So again, we had a little warning at the top of the show that data presented here isn't

[00:12:47] great but you know what?

[00:12:48] We're going to go through it and we're going to distill it down and have our own takeaways

[00:12:54] from it as we do with all reports.

[00:12:56] So Dan, start us off.

[00:12:58] Yeah, before I do, I will actually mention that RCMP thing that came out as well.

[00:13:04] Did you see that?

[00:13:05] Yeah, I mean a lot of these data points tell me that housing crisis isn't going to get

[00:13:15] better and the RCMP basically said that if the housing crisis doesn't get better than they

[00:13:22] consider that to be a destabilizing force, I think is the language they use.

[00:13:27] So you know that they actually anticipate that disenfranchised angry young people who

[00:13:32] realize that they have no prospects of owning a home are going to start protesting and

[00:13:37] you know, so lead to some sort of civil unrest and not that it will but that it's a high

[00:13:44] threat.

[00:13:45] It's a possibility to destabilizing force.

[00:13:48] I mean, I think it's pretty wild when like you might have messed things up on the housing

[00:13:53] side when the police, the national police forces concern that it's going to create civil

[00:13:59] unrest but anyway.

[00:14:01] I mean, this would be like the CIA coming out and being like, hey, not enough young people

[00:14:05] are like living in condos.

[00:14:07] So we're worried about uprisings but like that would just be a joke in America but here

[00:14:11] in Canada.

[00:14:12] I think I think by any other country would probably consider that like a huge political

[00:14:19] failure and do something about it.

[00:14:21] And I mean, I think we're just really behind now.

[00:14:24] Like it's not even really like a political stance or a partisan.

[00:14:29] It doesn't matter what party it is because it's something that exists at every level.

[00:14:34] Like it's municipal, it's provincial and it's federal and those are all different parties

[00:14:40] and so everyone's invested up equally guys.

[00:14:43] Yeah, we're not choosing favorites.

[00:14:45] Yeah, whatever party yeah, we upsets everyone equally.

[00:14:51] Anyway, so the report starts off the first heading says the ongoing housing crisis.

[00:14:57] I was actually going to put a video out on this today so I'm going to have to do that but

[00:15:01] a significant 68% of Canadians are deeply concerned about the housing crisis anticipating

[00:15:07] worsening affordability and accessibility by 2024.

[00:15:10] Only 10% are optimistic about potential improvements and that 10% is baby boomers who already

[00:15:16] have sick houses.

[00:15:18] I made that part up.

[00:15:20] That's not directly reported from the report.

[00:15:22] They're like, oh yeah, well, I'm optimistic about the housing crisis because my house

[00:15:25] is going to go up and value this year because I'm 71 years old and I'm going to take

[00:15:31] a little run in history.

[00:15:33] Three car garage.

[00:15:34] These numbers clearly highlight the importance of addressing these issues.

[00:15:38] So there's a graphic and the question says when thinking about 2024, how would you describe

[00:15:45] your overall outlook considering each of the following?

[00:15:49] So 1% said they expected to improve significantly.

[00:15:53] 9% said they expected to improve slightly.

[00:15:57] 23% said they expected to remain stable.

[00:16:01] 38% said they would expect it to worsen slightly and 30% said that they expected to worsen

[00:16:07] significantly and that's where they come up with that 68% data point.

[00:16:12] Those last two worsening slightly and worsening significantly 38% combined comes to that 68%

[00:16:19] of Canadians who believe the housing crisis is going to worsen in 2024.

[00:16:25] So yeah, I mean, I wish there was something good that I could add here or like a good

[00:16:36] sped that you could put on this.

[00:16:39] I just wish that politicians would actually treat this like an emergency.

[00:16:44] It's not like, you know, I mean, this is also the worst place in the world to have a homelessness

[00:16:49] crisis.

[00:16:50] Right?

[00:16:51] Like our climate isn't necessarily exceptionally friendly to homelessness.

[00:16:56] Oh God no.

[00:16:58] I mean, I can add or I just kind of, we're also recording this at 7am so far crankier than

[00:17:05] it typically would be but I'm not, I just wish that they would do something about it.

[00:17:10] That's it.

[00:17:11] Brian recording time for Dan is about 10am when he's had a couple of coffees and it

[00:17:15] would be a cold.

[00:17:16] I haven't had a coffee yet today which is wild.

[00:17:19] What are we doing this?

[00:17:20] What are you even doing?

[00:17:21] I know.

[00:17:22] I'm basically still asleep.

[00:17:24] Okay, let's keep it going here so the report goes on and the next thing we're going

[00:17:30] to be looking at here is housing affordability for first time buyers.

[00:17:35] Now the situation for first time buyers is particularly concerning as a staggering

[00:17:41] 74% of Canadians for C the housing market becoming more unaffordable and less accessible

[00:17:51] for this demographic sharply contrasting with the meager 5% holding out for hope for better

[00:17:57] affordability and excessively.

[00:17:59] Additionally, a concerning 57% of perspective for first time home buyers express pessimism

[00:18:05] about their chances of home ownership or have them abandoned the idea altogether compared

[00:18:11] to 40% who held the same view back when I guess abacus did a similar survey the year prior

[00:18:18] in September of 2023.

[00:18:20] So this question and graphic, the next one here is when thinking about 2024 how would

[00:18:26] you describe your overall outlook concerning housing affordability for first time buyers?

[00:18:32] Well, we have got that solid 1% here at the top saying, hey, it's very affordable, accessible

[00:18:39] to first time home buyers.

[00:18:41] The 1% that is, you know, that's actually almost comical that only 1% said that top 1%.

[00:18:47] I guess living, living that 1% lifestyle.

[00:18:51] We then have 4% saying it's relatively affordable with some limitations and then we start

[00:18:57] to get into what is likely the rest of the population here 20% saying somewhat affordable

[00:19:04] but with difficulties, my assumption is those people have likely had help from them

[00:19:08] and dad or maybe they are in more affordable markets.

[00:19:11] And then we have got the 74% here that is 31% to believe moderately unaffordable housing

[00:19:21] challenges.

[00:19:22] First time home buyers and a whopping 43% that think it is extremely unaffordable hindering

[00:19:31] entry into the housing market.

[00:19:33] So that 43 plus 31, making up that 74% at the bottom list that believe housing unaffordability

[00:19:40] and accessibility will worsen for first time home buyers over the next year.

[00:19:47] And you know what Dan, throw me in that 74% because I tend to agree with those people.

[00:19:54] Yeah, it's the first time home buyers piece is interesting because this is where like

[00:20:00] you have a lot of people who, and I'm examining this from a political lens because policy

[00:20:06] makers are really the only ones who can probably fix this like other than the economy crashing.

[00:20:11] You really have only two ways that this gets better.

[00:20:15] Number one is there's drastic policy change.

[00:20:17] And number two is the economy burns to the ground and nobody wants door number two.

[00:20:22] So let's stick to the political realm and how they like that doors.

[00:20:27] Yeah, but I was recently asked this.

[00:20:30] I got asked questions like this by politicians all the time.

[00:20:33] You know what would you do to improve housing outcomes for first time home buyers or

[00:20:39] what would you do to fix CMHC or whatever?

[00:20:42] Like just random questions like that.

[00:20:45] The first time home buyers one is interesting and I thought of this fascinating concept.

[00:20:49] I'm going to run it by you and then you can tell me what you think.

[00:20:52] Perfect.

[00:20:53] So I thought, you know, one of the biggest issues with first time home buyers is they don't

[00:20:58] they never get to buy new houses like never right.

[00:21:00] They're always buying like really worn out housing stock.

[00:21:04] And just because that's all we can afford right as first time buyers.

[00:21:08] And this means that we're we end up spending a lot of time managing the house fixing stuff

[00:21:13] up or spending money fixing stuff up rather than focusing on what we should be focusing

[00:21:18] on as first time home buyers like starting families or starting a business or focusing

[00:21:25] on our career at peak earning potential.

[00:21:28] And so wouldn't it be great if first time home buyers could get new houses?

[00:21:32] And I thought one of the biggest things that stands in the way of I'm going to be

[00:21:36] presenting at the Ontario Home Builders Association.

[00:21:40] There's a panel that I'm on next week and one of the questions is about this like sort

[00:21:45] of what are the obstructions to housing creation?

[00:21:49] What can municipalities do?

[00:21:50] And development charges seem to be a big thing from my perspective right.

[00:21:53] And like, you know, they range from 10 to like 30% of the total cost structure of a house

[00:21:58] and depending on the area.

[00:22:00] The federal government could probably simulate the entire market very easily by giving

[00:22:06] development charge rebate to first time home buyers.

[00:22:10] You know, and you hear about like Pierre came out with this idea like, oh, I'm going

[00:22:13] to pay municipalities only if they have their housing targets which has always existed

[00:22:17] by the way it's not nothing groundbreaking like places to grow act in Ontario which was

[00:22:21] put in by the wind government did the same thing.

[00:22:24] Then the chuteau government started actually doing basically what Pierre had suggested

[00:22:29] by going and giving municipalities money to opt on.

[00:22:32] Go ahead.

[00:22:33] Just covered that on our last report right.

[00:22:35] For Toronto got $114 for not only for not even hitting it but for hitting 80% of it.

[00:22:41] Right.

[00:22:42] You don't even have to hit the target.

[00:22:43] You just got to get close and you win.

[00:22:45] I like I said $114 when it was $144 million.

[00:22:49] Yeah.

[00:22:50] Thank you.

[00:22:51] No worries.

[00:22:52] But yeah, so I also have not had coffee this morning yet.

[00:22:56] The easy way for like there's a direct mechanism to make sure that municipalities get paid

[00:23:05] for housing and they already collected it which is development charges.

[00:23:09] Like why do they need more money?

[00:23:11] It wasn't the idea that development charges are supposed to be like this growth, pace

[00:23:14] for growth kind of thing.

[00:23:16] Like why are we giving them more money right.

[00:23:17] So my thought was like if you're going to give them money why don't you just give first

[00:23:21] time buyers a rebate on their development charges if they're buying a brand new home.

[00:23:26] Because the biggest issue was the reason that housing starts to fall off is because nobody

[00:23:31] can afford brand new homes.

[00:23:33] And so nobody's buying them and so nobody's building them.

[00:23:37] And now all of a sudden we have this housing supply problem exacerbated.

[00:23:40] It's like you have millions of first time home buyers that would love an opportunity to buy

[00:23:44] a new house.

[00:23:45] Why don't you just give them that opportunity?

[00:23:47] Anyway, that's my that was my cause.

[00:23:49] So this is my concept that I presented.

[00:23:51] Yeah.

[00:23:52] Anyway, so the next question is which of the following things best describes your feeling

[00:23:58] about the possibility of buying a home in the community want to live in.

[00:24:02] So this is a measurement basically the perspective of non-owners that are helping a one day buy

[00:24:05] a home in the area they actually want to live.

[00:24:08] So the heading says the perspective of future homeownership among non-owners 8% said I'm

[00:24:15] very optimistic.

[00:24:16] I'll be able to buy a home 11% said I'm really optimistic that I'll be able to buy

[00:24:21] a home so that combines to about 19% feeling optimistic about their ability to purchase

[00:24:26] a home.

[00:24:28] 24% were optimistic but becoming worried that it may not happen.

[00:24:31] So that's kind of the middle of the road there.

[00:24:34] And then 20% were pessimistic about being able to buy a home and 37% have completely given

[00:24:42] up believing that they'll be able to buy a home.

[00:24:45] So that combines for 57% being pessimistic about their chances of buying a home or have

[00:24:51] given up entirely.

[00:24:52] See, this is where I wish we had like a real editor that we could be like a drop in

[00:24:57] not journey don't stop believing right there at the end.

[00:25:01] I think you would have to buy the rights to that though but remember like in university

[00:25:06] just the entire bus full of people in Guelphs and that song.

[00:25:10] God every single karaoke I've ever been to somehow that song comes up journey.

[00:25:15] I love karaoke actually.

[00:25:16] Huge karaoke guy.

[00:25:17] And I was just out like two weeks ago for karaoke we should maybe we should get those

[00:25:22] at going at the meetups and he thought it has to do with like real estate or houses will

[00:25:26] make up we should make up real estate playlist.

[00:25:28] I'm going to take that as a we're getting way off top.

[00:25:31] I can't take that as an aside but 37% there is 7% have just given up believing that they'll

[00:25:39] own a home or that they have the chance to buy a home.

[00:25:41] I mean that is sad and then pretty pessimistic you had that 20% in there and it's 57% of

[00:25:51] non homeowners right now.

[00:25:54] 57% of them are almost completely given up on buying a home and I mean that is just

[00:26:03] not good right.

[00:26:04] We always talk about how important consumer sentiment is in the market and that to me

[00:26:09] is a sign of sentiment that is not so good.

[00:26:13] And unfortunately in the next piece here it doesn't look like it's getting any better

[00:26:16] because the next heading that I'm going to go over is financial insecurity.

[00:26:22] Now there is a troubling pattern regarding Canadians financial security with half of

[00:26:27] the population 52% expressing feelings of personal financial insecurity well 33% acknowledge

[00:26:37] having some concerns despite considering their finances adequate.

[00:26:42] This concern is exacerbated by the revelation that 71% of Canadians report their household

[00:26:48] debt levels are increasing leading to more financial strain and more instability.

[00:26:56] I feel that like that's the world development like my like my my dad is definitely going

[00:27:02] out like in there's no they just really nothing you can do about it right now.

[00:27:06] You know honestly I mean you just kind of hope that yeah I'm like and I've never been

[00:27:11] that like you know the type of person to like differ a decision down the road or you

[00:27:18] know what I mean like spend money today and be like oh yeah I just have to pay it back

[00:27:23] when things aren't absolute garbage.

[00:27:26] Yeah I don't know man it's a really weird feeling I can only imagine what most like

[00:27:30] what you know the average person is really feeling in Canada.

[00:27:34] And you know the one I'd say the difference with us at least is that we've got businesses

[00:27:40] and we've got we've got professions that allow us to go and make like we have variable

[00:27:46] income right now very more because we've got variable income you and I don't get the

[00:27:49] same paycheck every two weeks or every week or whatever.

[00:27:52] So we have the ability to go make more this is even scary because when I talk to some

[00:27:57] of my friends that have you know I make X number dollars a month and I know there's no

[00:28:01] more coming in until you know maybe the Christmas bonus kind of thing so if your debt

[00:28:06] level is going up but there's no way for your income to go up as well and try to match

[00:28:11] that debt level.

[00:28:13] I mean that's when you're on yourself in a hole right like that.

[00:28:17] Well I guess the only thing at that point you can do is start expense management right

[00:28:22] like I think a lot of people spend too much money on dumb stuff myself included.

[00:28:26] No.

[00:28:27] You've never bought it a dumb thing in your life.

[00:28:29] I do a lot by lots of dumb stuff but I think I also think it's like did you see that

[00:28:34] video I think I sent it to you on TikTok thank guy from New York he ended up being

[00:28:38] from like it's like a super viral video on on TikTok right now and it's like he's

[00:28:43] like I live in like I don't know is like so ho or he's like he's like it's like one

[00:28:48] of the most expensive places it has to be like one of those expensive places in the world

[00:28:51] and he's like and I came home to like new market Ontario and he was like I don't get how

[00:28:56] Canadians are alive like how do you how is anyone making it and I think we're all up.

[00:29:01] Yeah I'll send it to you.

[00:29:03] It's a really really funny video but anyway I mean I think that that's that's where we're

[00:29:07] out right now it's sad and it's scary man it really is like anyway the average credit card

[00:29:14] balance for Canadians in the third quarter of 2023 was 4265 dollars according to Trans

[00:29:20] Union credit card debt is growing for Canadians too that number is up from the second quarter

[00:29:25] of just over $4100 and $3900 in the first quarter of the same year it's almost double

[00:29:32] the average Canadian credit card debt from the third quarter 2022 which is 2,400.

[00:29:39] And so Trans Union put a report but Equifax put out a report as well and a Q4 of 2023

[00:29:45] the total consumer debt hit 2.45 trillion dollars and that is up 3.2% from the previous

[00:29:54] year.

[00:29:56] Non mortgage debt also rose by 4.1% mainly fueled by a 15.9 billion dollar rise in credit

[00:30:06] card debt during 2023 to $116 million so serious serious numbers here.

[00:30:17] Yeah yeah it's pretty dire financial situation happening here.

[00:30:22] Just as expanded it says Canadians owed 1.82 dollars in credit market debt for every dollar

[00:30:29] of household disposable income in the third quarter of last year so I think that's

[00:30:34] the highest household in debt in this we've ever had and I also believe it's the highest

[00:30:37] household in debt in this in the world.

[00:30:40] Yeah now I mean obviously none of this is great and actually getting this kind of this

[00:30:44] kind of reminds me of that that chart that we just posted on Instagram together that compared

[00:30:50] the standard living based on a GDP per capita comparing to United States and Canada and

[00:30:57] you know the graph that we posted clearly which was taken from national bank and statistics

[00:31:01] Canada data clearly illustrates how far Canada has fallen behind especially in the last

[00:31:07] couple years and man I got to give it to you the shutdowns that you had some of the comments

[00:31:14] yeah don't come for Dan in the comments it was I didn't see those because like the video

[00:31:21] has like I think over 300,000 downloads and like 10,000 shares now so when you start getting

[00:31:26] that many you don't see all the action on it but I went through and it was like Daniel

[00:31:29] Fosch is responding to this he's responding to this and I was like oh Dan's been in the comments

[00:31:33] and I went and looked and people are like this is a horrible representation GDP doesn't matter

[00:31:38] blah blah blah per capita and Dan you just went and referenced all these like Bank of Canada statistics

[00:31:44] Canada national bank it was it was good stuff so yeah I didn't see that video it illustrates pretty

[00:31:49] clearly how bad things have gotten here in recent times well like I mean we're basically just at

[00:31:55] the point where we've lost a decade of economic progress right like I think our GDP per capita is

[00:32:00] almost back it it's back at 2016 2016 and it's still trending down and to be frank it's going to

[00:32:07] continue to trend down like our population is outgrowing GDP like GDP is growing and that's great

[00:32:14] I guess it's probably not that great because most of it's fueled by the fact that we have

[00:32:19] a growing population so you know more people means more consumption more GDP so basically what's

[00:32:27] happening is the GDP let's say it would grow at like in the 1% range and population would grow

[00:32:35] in like the 3% range so your GDP per capita is falling because there's more people than GDP

[00:32:43] on a year of a year basis so in 2026 we'll likely hit another new low and another new low and

[00:32:50] another new low until we figure out a way to diversify the economy and grow it properly or

[00:32:57] maybe population growth slows which I think both of those things will probably happen in the

[00:33:02] form of some time population growth is likely going to slow just because it's not super compelling to

[00:33:07] come here right now if you're you know an international student or somebody looking for a new job

[00:33:15] you know someone looking to start over and then you know build build something right

[00:33:21] that's used to be the way yeah words out that it's maybe no longer the promised land here so

[00:33:27] I would expect I've said this for a while like and I think that the Q3 of last year will probably be

[00:33:33] the peak population growth that we've ever seen like I don't think we'll ever see a number like

[00:33:37] that maybe in our lifetimes in Canada so Chris of all we'll see let's see if I'm right I like

[00:33:43] making correct calls so it'd like just for fun it's more like a sport for me I go and do it for

[00:33:48] any other reason than that so Q3 let's put that one on the board Q3 2023 peak population growth I

[00:33:56] think it was that like if you annualize it at that point it would have been like 4.4 percent remember

[00:34:01] where you heard it first ladies and gentlemen that's a that's a prediction right there and we don't

[00:34:06] do it often on the show but when we do it they they have been right to hell a lot more than they

[00:34:11] have been wrong yeah I think I also got that 2021 would be record record number of home sales in

[00:34:20] Canada so let's see we're so far I'm right only two years have gone by though so okay so next

[00:34:26] question here back to the abacus report when thinking about 2024 how would you consider your

[00:34:32] overall outlook on personal financial stability and security only 2 percent of Canadians felt

[00:34:37] very secure and confident and those are the baby boomers with the big homes 13 percent said secure

[00:34:45] and stable 33 percent work on the middle of the road adequate with some concerns 52 percent

[00:34:54] noted that their financial stability is insecure and their financial security is uncertain

[00:35:00] and that is divided into 30 percent someone insecure with concerns for the future and 22 percent

[00:35:07] insecure and uncertain so not a good data set there no and speaking of not good data sets the next

[00:35:16] one unfortunately gets even worse this next question is how would you describe your outlook on

[00:35:22] household debt levels and financial strain 2 percent identified decreasing significantly but

[00:35:29] improving financial health 4 percent decreasing slightly and feeling some financial pressure 23

[00:35:37] percent said stable and then 71 percent note that their household debt level are increasing

[00:35:44] and that is impacting their financial stability and again that part that 71 percent was broken up

[00:35:51] between rising moderately and just increasing overall so household debt is going up and that's never

[00:35:59] that's never fun when you're watching your debt levels go up and you're again if you don't have

[00:36:03] variable income if you don't have multiple streams of income or ways of making more money

[00:36:09] you know it's hard right you're trying to you know you're in a sinking ship and you've got a little

[00:36:13] cupping or trying to get the water out but you can't do it fast enough and it's kind of like if one

[00:36:18] more thing goes wrong right and I mean this this just adds stress to people I mean listen I've

[00:36:25] been a very broke entrepreneur and being broke sucks there's there's no way but it financial stress

[00:36:32] financial stress sucks so that one sucks to see especially from the household debt because

[00:36:37] you know that families are suffering on that one I think the other part is like I like that

[00:36:45] you humanize it I'm not as good at that right so the part that concerns me is like on aggregate

[00:36:51] like when you add all that together like to think 71% of the people that you know or 71%

[00:36:56] of participants in the Canadian economy are seeing their household debt increase like that's not a good

[00:37:04] okay right and so that will it just leads to a bad outcome like and so it just makes me

[00:37:10] increasingly fearful that there's some sort of like really bad event well I think we're kind

[00:37:16] of like this is what a recession feels like like we're in a recession right but we haven't

[00:37:21] admitted it to ourselves yet well I think it's just being washed with with really high population

[00:37:25] growth right yeah it's being it's being exacerbated by really high population growth on a per capita

[00:37:30] basis but it's also being washed with it like because you can always be like oh GDP's growing like

[00:37:35] and the government can be like oh we added 58,000 jobs or whatever right but like I don't know

[00:37:41] I really don't know anyone who's like yeah my life is way better than it was a year ago or two

[00:37:47] years ago you know like I don't know anybody and so it's kind of it's just one of those kind of sad

[00:37:53] scary situations to be in as a country yeah so I guess we're going to go to expectations for

[00:38:00] economic recovery and growth prospects seems to be marked by skepticism 65% of Canadians expect

[00:38:08] a slow and uncertain trajectory in the economy 69% of Canadians believe that inflation and the cost

[00:38:15] of living are going to continue to rise affecting people's financing so one thing about 2024

[00:38:20] the question says how would you describe your outlook on the economy

[00:38:24] or economic recovery and growth prospects of Canada 1% said very strong indicating growth

[00:38:31] 1% again I think that's the just showing up on everything I think that's the current

[00:38:37] federal government maybe 3% strong with positive indicators of growth

[00:38:46] 31% on the on the fence steady with cautious optimism 31% gradual with some signs of improvement

[00:38:54] and 34% slow and uncertain with significant challenges ahead with that last those last two

[00:38:59] categories combining for 65% believe economic recovery will be slow with challenges ahead

[00:39:05] one of this last charts we're going to I'm going to look at here and one of the last ones on

[00:39:10] the survey is the overall that look when it comes to in flat shion and the overall cost of living so

[00:39:18] again a couple things that have come up on the podcast before inflation and how that affects

[00:39:24] the general Canadians lifestyle 1% again expected to decrease significantly so I don't know where

[00:39:31] they're getting that 1% but they keep showing up on all of these surface statistics right here

[00:39:36] 6% expected to greet decreased slightly again this is inflation and higher cost of living so we

[00:39:41] got 7% of the population hoping that it's going and believing that it's going the right way

[00:39:47] 24% kind of as Dan said on the fence expected to stabilize but here we go 69% the combined

[00:39:56] to believe rising moderately or continuously rising believe in faith inflation and the cost

[00:40:02] of living will continue to rise in 2024 and Dan you can add me into that 69% because I don't

[00:40:10] think it's getting better this year unfortunately yeah I think inflation well like just based on

[00:40:16] base effects alone like inflation would have bottomed basically when Kristia Freeland tweeted out

[00:40:21] that victory lap that inflation was in the 2% range and I'm not even really chirping them I was

[00:40:26] just like I just remember saying like that's going to age so badly anyway yeah I mean pretty much

[00:40:35] bottom then I think we're kind of in the twos again but not 2.6 and then for 2.8 right so

[00:40:40] just because of base effect like as once you get to that bottom let's call it then

[00:40:46] things the gap between that low bottom and the new prices makes inflation appear higher so it'll

[00:40:53] take it'll probably take a while for inflation to really normalize in that range that they want

[00:40:59] also I would mention that the like when you look think about the stock market and stuff like that

[00:41:05] that all the bad stuff like the actual economic crash typically typically happens after rates are

[00:41:09] cut just a heads up for everyone no yeah yeah so the next one actually just want to say something

[00:41:16] because we haven't done any Latin on the show recently but the way that you said inflation it made

[00:41:21] me realize that inflation and the word flatulence come from the same Latin roots so that's pretty

[00:41:28] cool right makes sense right bloke stuff like blowing up like air you know inflating in your maybe

[00:41:34] you know gassy I guess yeah makes gentleman and a scholar yes appreciate that no problem just

[00:41:39] in case anybody was was worried if there was a parallel between inflation and and tuts

[00:41:45] so next is economic inequality and social disparities 3% of people felt that

[00:41:53] that these were shrinking significantly and that we're seeing inclusivity being promoted so I

[00:41:58] guess was the question at the top here when thinking about 2024 how would you describe your

[00:42:02] overall outlook considering each of the following and then this is economic equality and social

[00:42:08] disparities narrowing slightly addressing some disparities 13% felt that way 31% on the fence here

[00:42:15] stagnant with persistent inequalities 28% felt that disparities were increasing and growing

[00:42:21] moderately and 25% felt that there was a widening or exacerbating social divides so that basically

[00:42:27] leaves 53% of the country believe economic inequality and social disparities will widen

[00:42:34] in 2024 increasing the divides yeah so overall these findings reflect widespread pessimism if you

[00:42:42] haven't picked up on that tone already uh and uncertainty about 2024's economic outlook now

[00:42:49] policy makers should address economic stability inflation control and affordability concerns

[00:42:55] to help restore some of that consumer confidence and consumer sentiment measures amid

[00:43:02] to uh my sorry measures aimed at promoting economic growth stabilizing prices and supporting household

[00:43:09] admits rising living costs maybe necessary to address these challenges effectively so the report

[00:43:17] finishes with a subheading called the upshot that it says the upshot overall the data reveals deep

[00:43:23] seated challenges facing Canadians across housing affordability financial stability and trusting

[00:43:29] governance the prevailing sentiment underscores a pervasive sense of uncertainty and frustration

[00:43:36] regarding the future while encountering challenging times is not uncommon the overarching concern

[00:43:43] is the dwindling hope for positive change individuals feel as though they're paddling against

[00:43:48] the current fostering a strong sense of pessimism the sentiment reflects not only in the

[00:43:54] adversity faced by Canadians but also amounting disillusionment with the prospects for improvement

[00:43:59] these perceptions have the potential to influence the behaviors and expectations

[00:44:05] of consumers workers and voters molding their decisions and attitudes the erosion of trust

[00:44:11] and optimism regarding one's future outlook poses considerable challenges and

[00:44:16] for effective policy making governance particularly as many Canadians feel disillusioned with

[00:44:21] current efforts don't so yeah so i mean look okay two lessons learned one you and I are not

[00:44:28] allowed to record episodes like this without a coffee before and the second one is um

[00:44:36] um man this really illustrates how grim a lot of this stuff as when we're seeing literally

[00:44:43] you know the two like it goes green to red here okay and like the greeting is the 1% that we've

[00:44:49] been mentioning and kind of joking about but then like we're seeing 50 60 70 plus percent

[00:44:56] of Canadians that are not feeling optimistic or or that like any of this stuff is going to get

[00:45:03] better again 74% believe housing affordability and accessibility will worsen for first time home

[00:45:09] buyers in the coming year like these are not the kind of statistics that we want in our country so

[00:45:16] all i can say in my positive spin on this day is less than when the going gets tough the tough get going

[00:45:24] and i think this is gonna be as we've said for literally years now a renaissance period in Canada

[00:45:31] and there's going to be a ton of opportunity for people for young people for kind of mid-young

[00:45:38] people middle-aged people to turn all of this stuff around and hopefully in years we'll be looking at

[00:45:47] the same abacus data report and everything will be changed and i'm looking forward to those times

[00:45:55] and i'm looking forward to being a part of the vehicle that gets us to that new world that were

[00:46:00] that we deserve as Canadians big motivate when are you launching your motivational podcast next

[00:46:07] i agree with everything that you said you know there's there's some data behind a lot of this too

[00:46:12] i think startup activity increases during recessionary periods the

[00:46:19] m and a activity mergers and acquisitions activity ramps up during recessionary periods i mean

[00:46:23] you look at some of the some of the the mainstays of today's economy uber airbnb right these

[00:46:32] these are all companies that started during that oh eight downturn solving real problems um think

[00:46:38] about the problems that need to be solved to make today's economy better and that's and the

[00:46:42] housing being a big one obviously glaringly obvious in Canada's economy and the report that we just

[00:46:46] read you know i'm heading down to this missing middle advisory panel event that the city of Toronto

[00:46:53] today actually and and and i think progress is being made so i would encourage people to get involved

[00:46:59] in that because i i would agree with you like i do think that a lot of people consider me to be very

[00:47:02] economically pessimistic but what i really feel is that the system isn't working right now and it

[00:47:07] just took a lot of other people you know until today to realize this according to this report

[00:47:13] whereas you know i kind of saw this and i'm not trying to say that but i just i saw the the signs in

[00:47:18] 2017 to be honest with you like when when the housing market was nuts then and now that we're actually

[00:47:25] and so the reason that i cared about that is because like when a system is broken you got to

[00:47:28] the got to let it break fully right and then you have to fix it and so it's like you know a phoenix

[00:47:34] rising from the ashes if i'm gonna get i'm gonna do my motivational podcast stuff now right yeah

[00:47:40] you know you got to let it burn down you really do honestly unfortunately that's the unfortunate

[00:47:43] reality for Canada's economy right now so and then the rebuilding phase is what's going to be really

[00:47:47] fun and exciting for those of us who you know who who are here now and who see see the opportunity

[00:47:55] and who want to be a part of it so yeah and if you want to be a part of something like this that's

[00:48:00] literally what we're trying to do through this podcast through the event series we do through

[00:48:04] bringing the community together at realist.ca and and this is why we're trying to shed light on

[00:48:10] things like garden suites and d8u's and permitting processes and ml i select and all these other things

[00:48:18] all these government incentives and all of these past awards making this better because if it's

[00:48:25] not clearly obvious now that that things are are broken and and and and desperate need to repair

[00:48:31] then i don't know what is so there's one thing to do now and that's to get on the road to make this

[00:48:38] better and uh damn i'll see you on that road brother see you there thank so much for listening

[00:48:45] everybody we'll see you soon the Canadian real estate investor podcast is for entertainment

[00:48:50] purposes only and it is not financial advice nick hill is a mortgage agent with premier mortgage

[00:48:57] center and a partner in the g and h mortgage group license number one zero three one seven agent

[00:49:04] license m two one zero zero four zero three seven deno foch is a real estate broker licensed with

[00:49:11] rare real estate a member of the Canadian real estate association the Toronto real estate board

[00:49:18] and the Ontario real estate association