Boomers, Zoomers & Millennials: Who Wins & Loses In Real Estate

[00:00:00] Welcome to the Canadian Real Estate Investor, where host Daniel Foch and Nick Hill navigate the market and provide the tools and insights to build your real estate portfolio.

[00:00:13] So what are we talking about today? Baby boomers and maybe Zoomers?

[00:00:20] Are you just trying to make me mad or something? Okay, why would that make you mad?

[00:00:25] I'd like you're just basically yelling out the names of my two least favorite generations.

[00:00:30] Okay, what you're literally like an angry old man now, be nice.

[00:00:34] And not just Millennials listen to the show, okay?

[00:00:37] Actually, according to a study on podcast consumption, the generation with the highest penetration rate for podcasts was a group of Millennials with 59% of respondents saying they'd listen to a podcast within the last month.

[00:00:50] Okay, well, now you just sound like the character who says, well according to my research on, I don't know, was at the magic school bus.

[00:00:58] Other generations still do listen to podcasts and we're doing today's episodes about them, and they are not Millennials.

[00:01:07] But if you are a millennial, you should still stick around.

[00:01:10] Magic school bus is such a millennial nostalgia item as well.

[00:01:13] Really is.

[00:01:15] You're always bound to get a lot of clicks when you do something about boomers or Zoomers.

[00:01:18] I just did a boomer TikTok and I was like 150,000 views or something.

[00:01:22] Like literally never fails if you open with a hook about boomers.

[00:01:26] So anyway, I'm sure everyone listening knows what a baby boomer is.

[00:01:31] But what is a zoomer? Nick.

[00:01:35] Yes, yes, good question, Dan.

[00:01:37] Zoomer generation Z often shortened to Gen Z also known in dearingly as zoomers is a demographic cohort succeeding Millennials and preceding the generation L.

[00:01:51] So researchers and popular media use the mid to late 1990s as the starting birth years and the early 2010s as the ending birth years with the generation most frequently being defined as people born between 1997 and 2012.

[00:02:11] Most members of Generation Z are the children of younger baby boomers or Gen Xers.

[00:02:19] I like how baby boomers were like using zoomers as a term for active, you know, like the cool boomers and then Gen Z was like not we're just going to take that real quick.

[00:02:31] Like where are the zoomers?

[00:02:33] Anyway, why are zoomers relevant today's discussion?

[00:02:39] Yeah, well we're going to go over a few articles and a couple reports today as we're known to do on the show.

[00:02:46] The first one being is we're definitely not going to an old age home. Why seniors aren't downsizing their homes? And what it means for Toronto's Millennials.

[00:02:59] The second article we're going to look at is Canadian universities are facing a surprising rental market downturn and the third piece that we're going to cover here Dan is Canadian University's International Student Enrollment Down 45%.

[00:03:15] 5% after a rule change and the system seems to be just hanging on.

[00:03:21] A couple more I added in here as well from Campus to Community, why student housing shortages should worry all Canadians that's a report from daysharda that sounds like it can flex with the downturn you're mentioning.

[00:03:35] And a report from Equifax we're going to bring Millennials in here. We're going to depress all generations equally in today's episode.

[00:03:43] States and Millennials are living at home longer and are more at risk in the economy according to Equifax. So let's, yeah I mean maybe I don't know what we'll start off with here but let's just generally I think rule probably riff a bunch about demographics student rentals seniors rentals like what the debt these demographic trends mean for the housing market and for real estate investments in Canada.

[00:04:07] Yeah for sure so let's start off by reading this first article.

[00:04:13] So maybe we shouldn't actually read the article let me explain why by reading a four star review here.

[00:04:19] Uh oh. I thought we only got five stars or at least red five star reviews on we are we're going to read this one in an effort to convert them to a five star review because it's a very good piece of feedback and and we actually did read a one star review on the show where the one where they called me a call me but

[00:04:35] Anyway, give me this review the one one star review ever gotten yeah. Okay, this reads great info four stars.

[00:04:44] I feel like there's a star missing here. The review says good information on the Canadian housing market they try to touch on all markets across the country my only criticism is that they often read articles directly

[00:04:55] Just reading the exact words that were written if the general point could be summarized more quickly and then provide your own thoughts on it might shorten the length of pod

[00:05:05] And be able to get the information across more concise otherwise great work and that is from agey 119 11 from apple podcasts.

[00:05:15] That is honestly some pretty good feedback and I always just thought it would be better to read the articles because we couldn't say it better than a lot of these journalists and authors.

[00:05:25] Yeah, so you know what for today's episode and here after we will no longer be reading articles any longer we will summarize them and less.

[00:05:34] Yeah, unless we literally just can't say it any better than the author it you know, it probably won't make the pods any shorter I don't think but hopefully means we get to pack more content into each episode.

[00:05:44] Yeah, you think we'd have figured out you know one or two of our own after 225 plus episodes.

[00:05:52] But thanks for the feedback we appreciate and are always welcome to any further advice or constructive criticism to make this show better.

[00:05:59] Just make sure you leave it with a five star view instead of a four.

[00:06:04] Okay, so let's get into this first article that we are going to summarize and then talk about it.

[00:06:11] It's titled Canadian universities are facing surprising rental market downturn.

[00:06:17] My three key points that I've taken away from this article, Dan, our first and foremost Canadians, cities are experiencing an unexpected downturn in the rental market for student housing which was a long time favorite of investors in those market.

[00:06:33] And it's very profitable and lucrative if done correctly.

[00:06:37] The cap on international students implemented in January 2024 is a significant factor that is contributing to this decline.

[00:06:47] And my third point that I wanted to pull from this article is that there's a noticeable decrease in rental inquiries and rates with some landlords having to actually lower prices to attract tenants.

[00:07:01] Yeah, so it's all great insights and interesting because it seems like it's really evolving into this and we've talked about it a lot on the show almost like a stock pickers market right which you know some cities and municipalities are impacted a little bit differently.

[00:07:14] And honestly we forecasted this happening not like where some crystal ball folks but there was like the government made it pretty clear where the changes to international student population was going to take place geographically.

[00:07:25] And these reports are coming from those places where they said it was going to be reduced.

[00:07:33] So internet student searches from student housing near major universities have dropped significantly especially for private colleges catering to international students.

[00:07:40] The universities have been adding more on campus housing units especially in BC but get your waterloo would be a great example in Ontario where they're doing a lot of that.

[00:07:48] And so that increased supply more competition and policy changes are achieving the intended effective reducing rents but they're also creating challenges for property investors who bought with the intention of renting to students which was one of the only ways to cash flow property in Canada.

[00:08:02] In some of the more expensive markets over the last couple of years.

[00:08:08] Yeah, I mean both you and I have helped investors acquire some of those rental properties and you know know some people that have made just a ton of money in that section of investing but.

[00:08:21] Dan does this mean that the the sun is kind of setting on the student rental investment potential here.

[00:08:29] There are a lot of factors I think the government is pushing institutions to build it and providing funding.

[00:08:38] We're seeing an up zoning around schools which is going to start competing with independent landlords if if the universities are getting funding because remember they added their universities to that apartment construction loan program as well.

[00:08:49] And international student caps which are mentioned there they're visible and predictable around the country I posted in our school group for realists not see I even posted in the free school group actually but there's basically.

[00:09:00] If you if you go in the group in search international student there's like a chart that literally shows you like BC's well lot of you just read it you just you can give me the the.

[00:09:09] The if the areas that'll be increasing in international students yeah so we'll see increasing international students in the following markets Alberta which will be up 10% newfoundland and labored or up 10% Northwest territory is going to see a five X increase none of it a.

[00:09:28] Six X increase now it's important to remember for those two markets specifically none of it in the Northwest tour toys that those are small numbers to start off with like a few hundred so you know that five and six X isn't going to be as massive as we're seeing.

[00:09:42] In some of the other markets moving down the list Quebec up 10 plus percent Saskatchewan again 10 plus percent and then.

[00:09:51] Back up north to the territories where we see doubling in you can.

[00:09:56] And then everywhere else that we didn't mention there you'd be seeing a decrease in international students so BC minus 18% manitoba minus 10% new bronze week minus 10% Nova Scotia minus 10% Ontario minus 41% this is where you're seeing these impacts and it's mentioned in the article P i minus 10% so overall across the country minus 28%.

[00:10:17] So this is where those declines are being described from the article this like that's where they're coming from the examples that in the article are from from BC and I've I've had a lot of people in Ontario verify that this is taking place as well.

[00:10:34] I said always Ontario you know like a month on terrible man we're in Ontario.

[00:10:40] Yes, I mean look I you know Ontario really is worth looking at this regard because of the huge increases that we've seen in certain college cities and I know you posted this on realist as well.

[00:10:54] And and we've covered at a few different times in episodes and the post literally reads risk list international student gap and as discussed on a recent deal workshop call we had within our are realist community.

[00:11:09] This is the list that you know I would use to assess if a market is going to be a high risk to a reduction in student housing demand from the international student cap in the consequences of that.

[00:11:23] So Dan maybe can you can just give me a quick recap on the fastest growing international student populations here in Canada.

[00:11:32] Yeah, these are absolutely mind blowing numbers on the impact of international students on the Ontario college system so.

[00:11:41] Last C.T. College, Al and Ottawa six X increase in international students from 189 to 1400.

[00:11:49] St. Clear College Windsor 11X increase canter or college in north Bay 17 X increase.

[00:11:55] Conestoga, Kitchen Waterloo 15X increase in international students.

[00:12:00] Sue College in Sue St. Marie 39 X increase.

[00:12:05] Loyalist college in Belleville the biggest actually technically not the biggest on volume but I'll get to that Belleville 46 X increase from 79 to 3700.

[00:12:16] And the winner and the winner northern college in timids technically an infinity increase in international students because they started from zero but they also went up a lot to like 3300 international students for an infinite infinite gains.

[00:12:32] What the heck 39 46 and infinity.

[00:12:35] Hard to believe only we could all be so lucky to see infinity returns on our poor.

[00:12:40] Oh my goodness yeah so those markets that you're you're seeing a big drop off in student demand and you know that trickle down effect therefore a big drop off in ransom therefore a big drop off in prices.

[00:12:55] Yeah, and we've read that list before on the show explaining the risks associated with it I feel like we've covered this topic pretty well.

[00:13:02] Okay so then Dan again my question remains is student rental investing dead.

[00:13:09] I don't think so personally but I think it was an overbought market and now it's it's correcting and it's presenting some opportunities with it you know that the saying by with by when there's blood in the streets even if the blood is your own right.

[00:13:25] I haven't heard that one before is that a Daniel Foto original. No it's a nickel yeah. Okay thank you. You know especially considering Canada's housing plan calls for up zoning.

[00:13:36] Any lots with an a certain distance of post-secondary institutions to increase density for specifically for student housing.

[00:13:44] Yeah for sure I think like you know we talk a lot about up zoning in you know places like Toronto you're seeing the national housing act.

[00:13:51] The impacts in cities across Canada everybody's going to four plexes etc. Well the same thing is happening at a federal level the fed the federal government literally said I think it's 800 meters it's in the housing plan we did it episode on it.

[00:14:02] Within that that radius around post-secondary institutions is basically going to be up zone for high density housing so if you own like a house that's across from a college could be like you know and you maybe it was rented out or if it was within that radius that's going to be a future development opportunity.

[00:14:15] And the reality is that I would say that these things are going to continue no policy maker in this country wants to kill the golden goose that is Canada's attractiveness as an international student destination.

[00:14:27] So I think you can rely on them to keep trying to make the housing situation work for private landlords in student areas because they rely on it.

[00:14:36] Yeah, but I mean policy makers may have already killed that golden goose from a Toronto star article that states the international enrollment is down 45% in Canadian universities.

[00:14:49] Some takeaways from this article day and international student enrollment in Canada.

[00:14:54] Canadian, sorry Canadian universities has dropped by 45% and that exceeds the government's intended reduction which was 35%.

[00:15:04] So classic Canadian you know overshooting these these targets now the decline is attributed to recent rule changes in the cap on study permit applications that of course was introduced by the Canadian government.

[00:15:16] And universities here in Canada are now urging the government to not impose further cuts or changes to post graduation work permits.

[00:15:28] I think we you know we talked pretty well about this like it's like maybe you guys have to run a viable business here in said you know what I mean like I don't know it's just like everybody else has to do that so, you know, that's just my two cents on it.

[00:15:42] The the drastic decline in international enrollment is causing big revenue losses for all of these universities potentially affecting education quality is kind of what they're claiming right I don't necessarily think that's the case but to me like the bigger fear is that.

[00:15:57] We actually like lose our stature as a place that international students want to go you know if we lose credibility from that perspective then you've probably killed the golden goose so.

[00:16:06] There's concern about potential for further changes including those that might come with a changing government followed following the federal election I don't think well I don't think we'll see a polyegov government reduce international student enrollment much more than we already have but I guess we'll see.

[00:16:19] And the article also states that final enrollment data won't be available until November after the official register sorry October.

[00:16:28] After the official registration period and so I'm very interested to see what these numbers actually end up coming in at and that's going to be pretty telling for the situation that we're in.

[00:16:38] Yeah for sure now all that being said days are done who seem to know a thing or two.

[00:16:43] They don't seem to agree they see it as a market that needs to be served still and this next report really outlines where there may still be opportunity for student rental investments this.

[00:16:58] How can we figure out how many of the residents are going to have to read from campus?

[00:17:01] To community why student housing shortages should worry all Canadians.

[00:17:08] Yeah so I guess I'll give a couple of key summaries from the document so number one is there's a surgeon in demand for higher education.

[00:17:17] Again, so this is conflicting with the articles that we're seeing and a lot of this would be true

[00:17:22] Like go back to that list that we just read where you're going to see increase in international students and and look at what happened to Ontario

[00:17:29] BC in the student rental markets and you can almost see

[00:17:32] You can foreshadow that those things might take place in some of these other

[00:17:36] areas

[00:17:37] So there's been there has been a surge in in demand for higher education

[00:17:41] It's grown significantly driven by both domestic international students and this increased the need for purpose builds

[00:17:48] Student rental accommodations

[00:17:51] insufficient student housing supply has always been a theme only about 10.3% of Canadian students have access to residents beds

[00:17:58] And you probably remember this even from like a beer millennial or even before that

[00:18:02] You know, there's always there was never like you would only be in resin your first year typically and then you would go and do another one

[00:18:07] Whereas other university systems and other places on earth don't actually work that way

[00:18:11] But this is far below other countries like the US and the UK

[00:18:14] The shortfall forces many students to seek off campus housing further straining the rental market impact on the rental market and housing affordability

[00:18:22] basically

[00:18:23] You know, the shortage has contributed to lower vacancy rates and high rental costs in communities around post-secondary institutions

[00:18:31] Particularly affecting other tenants in those markets

[00:18:34] You know, especially like low-income families and and young adults who are in you know

[00:18:38] You usually see you will see like a university in one of these like smaller older Canadian

[00:18:43] Cities and so you know if you're a young person coming up in kitchen water louour, guile for you know

[00:18:49] I don't know you probably know some better examples in BC

[00:18:52] You're competing with with students who you know there's four of them living paying a per bedroom rental rate

[00:18:58] And it's pretty difficult like I don't want to I don't want to pay seven hundred bucks per bedroom to rent my house right

[00:19:05] Yeah, great great point and you know the article goes on with a with a few more

[00:19:10] key points that that I pull here and

[00:19:13] International student concerns with the lack of affordable housing can

[00:19:20] Detour those students from even wanting to come and study in Canada, which would be

[00:19:26] You know pretty bad and I could potentially reduce you know and eventually the skilled workforce pool that we need

[00:19:32] For future economic growth. I mean we've got some really amazing

[00:19:37] Internationally recognized

[00:19:38] Schools here and it would be an absolute shame if if those started to be overlooked just for

[00:19:44] Because you know our housing supply is the the major deterring factor you know there's also

[00:19:51] The quality and the safety issues that I think probably at this point of whether you've heard it on this show or

[00:19:58] Seeing it on Reddit or Instagram or or in mainstream media at this point the quality and safety issues that many students are facing with

[00:20:05] Standard living conditions and you know including over crowded or or you know living in kind of really

[00:20:11] Slum Lord poorly maintained houses and you know this can have a pretty big negative impact on

[00:20:18] Academic performance and even personal well-being. I mean, you know for a lot of people going to

[00:20:23] University your college or whatever it is you know that's the first time living outside of the house

[00:20:27] I mean I remember my first two years and you know looking back as a girl on man now thinking you know

[00:20:32] Wow, we we didn't really know how to live on our own back then and we were kind of figured it out and yeah

[00:20:37] You're like that's you go you get that independent peer independence period like for I think a big it's a big part of

[00:20:43] Of like the the value proposition of of

[00:20:46] Go post-secondary institution away from home is like you know

[00:20:48] You can outsource your kids going to learn life skills like you just go figure it out like you're an adult now

[00:20:54] Like learn how to do your own laundry and clean up after yourself and whatever right? Yeah, like you can't

[00:20:58] You know you hang clothes up. You don't just put them on the chair. You you know you you don't have you take the garbage out

[00:21:04] You know several times a week not once every two weeks right like these these normal things but if you're

[00:21:09] Essentially being set up for failure in these like overcrowded or poorly maintained homes

[00:21:14] That's that's gonna have a negative impact and of course broader economic and social implications as well

[00:21:19] Right this the shortage of student housing has

[00:21:22] Far reaching effects and that's everything from driving up property values to contributing to

[00:21:28] Environmental health care issues making it really a

[00:21:32] National concern that requires you know collective action across

[00:21:37] many different governing bodies

[00:21:39] Yeah, they show a really good chart in the in the report that says the heading on it says

[00:21:45] Student housing supply hasn't kept up with demand and it shows cities across the country and how they rank

[00:21:50] Above for or sorry above or below the national average on

[00:21:56] Provision of the PBS A beds relative to student enrollment

[00:22:00] So the national average is 10.3% yeah, so at the top of that list you have

[00:22:06] You guessed it Ontario cities

[00:22:10] Waterloo is up over 30% where we're hearing about rents coming down and

[00:22:15] Actually not as many students as is prior looking to rent

[00:22:20] St. Catherine's Kingston Gwelf and London all around 20% all popular student rental investment markets in the past and then

[00:22:28] Moving outside of Ontario we have Frederickton around 20% as well

[00:22:33] Then you get to Colona Vancouver and Camelubes which are the areas mentioned in that original article and that's where

[00:22:41] Still just above the national average at 10 to 12% range so again, you're seeing an increase in the in the

[00:22:49] Beds that universities are providing but then you're also seeing a decrease in enrollment from the caps

[00:22:55] Yes, I mean even with that slight level the

[00:22:58] PBS A beds being added there still is a visible impact on reducing student rental demand

[00:23:06] So why do we want you the listeners of the show to know all of this while

[00:23:11] A lot of people were using student rentals renting by the room

[00:23:15] To cash flow deals over the past few years as rates rose and prices were were higher

[00:23:20] And that's becoming increasingly difficult in today's environment and we want you to be aware of it

[00:23:25] Your assumptions need to change a little if that's the strategy that you're actively doing or you want to be doing moving forward

[00:23:31] Yeah, now let's go back to this chart and look at cities that are providing student housing at

[00:23:38] Or below the national average and unfortunately that list is short

[00:23:44] Halifax Ottawa and Hamilton are currently sitting around the national average and then the areas where you would still have an

[00:23:51] Under supply of student rental housing and and all of these are areas that are due or a lot of these are in areas

[00:23:56] That are due to also seeing increase in international student enrollment based on the other data we presented

[00:24:00] Below the national average you have Prince George Toronto Windsor Calgary Victoria Montreal Edmonton

[00:24:08] Saskatoon Quebec and Winnipeg and Quebec and Winnipeg are like way below

[00:24:12] Saskatoon Quebec and Winnipeg actually all way below the national average so

[00:24:17] Yeah, this is I mean it's I think it's it's definitely a market where again if you are a student rental investor in some of those markets that are below the national average

[00:24:24] That are also going to see an increase in enrollment

[00:24:26] There's probably opportunity if you're in one of the markets that's the other again back to just basic supply and demand

[00:24:32] You probably want to be paying attention and thinking about whether or not you have you know

[00:24:36] Have I padded myself enough for have I done have I have I put this in as a sensitivity analysis or stress tested my model

[00:24:42] Based on these changes

[00:24:44] Yeah, not only that but like you also to think okay

[00:24:47] Things are more competitive right we've seen landlords decrease rent

[00:24:51] You know if you are one of those slum lords that's trying to jam pack, you know a whole bunch of people into a basement or whatever

[00:24:57] It is well that's that strategy's horrible to begin with but probably out the window at this point

[00:25:02] I mean you've really got to be incentivizing people and you know

[00:25:06] Damely talk with the solid-time tenants are the real asset in real estate and they are

[00:25:10] As landlords are clients so treat them as such now

[00:25:14] We'll get back to this because there's some other really great charts in here

[00:25:17] We're looking out we're gonna reference graph 4 right now

[00:25:20] Which is titled students struggle to find available in affordable off campus housing. We're just gonna pause here and do a quick plug for

[00:25:27] Our YouTube which we've really been trying to throw up as many new videos and and full podcast recordings to share some of these visual aids with you

[00:25:34] So if you

[00:25:36] Want to see these charts that we are referencing

[00:25:40] Go watch or end or listen to this on YouTube now

[00:25:44] the most challenging part of your search for housing and the number one and number two answers were

[00:25:53] lack of off-campus student housing and

[00:25:56] Competition and

[00:25:58] then if you go to the chart beside it the most challenging part of your rental experience

[00:26:04] The primary answer by a long shot like I think it's bigger than all of the other ones combined

[00:26:09] It's double all of the other ones combined is cost

[00:26:13] Yeah, so I mean looking at that there seems to be obviously still a lot of room for people to enter this market

[00:26:20] But that costs that they mention is is pretty heavy

[00:26:24] Graph five shows students face a heavy burden from un affordable housing

[00:26:30] This is the impact of housing costs on water loose students in 2023 and the two biggest issues were

[00:26:37] I had to settle for accommodations that did not meet my needs or

[00:26:44] Two I was unable to afford other basic necessities like utilities food or phone man

[00:26:52] This is like honestly reading this makes me realize that we had it so

[00:26:57] Easy when we were students and like it's really like this

[00:27:00] This is like when you actually sat in the little bit to like see the impact of the housing crisis again

[00:27:04] Not that I like other

[00:27:06] Versions, but it's very it's more relatable because it wasn't that long ago that we were in a the same position

[00:27:10] Yeah, that's pretty rattling. I mean okay see Dan this is this is why we need to be nice to the to the Gen Z kids right there try and they're best

[00:27:17] Yeah, I

[00:27:19] I am sorry zoomers. I know you guys have it hard and you're all you are I actually quite quite like

[00:27:25] Zoomers honestly. I think that they're all pretty funny either do you know like they're they're all they all of like decent stuff to say

[00:27:30] I like them just as much as

[00:27:33] As our generation probably now let's move on to a generation to who my I'm not sorry boomers

[00:27:39] Now you savage. I'm just kidding you. I you know I love everyone and I feel like everybody thinks that I

[00:27:45] I

[00:27:46] They would I think I would hope everybody knows that I'm like the annoying guy who just loves everyone

[00:27:51] Yeah, yeah, I mean I know but look there's no way for audience to know that they they don't really know you so

[00:27:57] I just don't get a come across as is the mean guy because you know I think that's you know

[00:28:01] I yours looking out for me. I'm sorry boomers. I love you too

[00:28:04] I'm being I'm just being funny by saying I don't like you and it's I do it to click bait the tick talk folks

[00:28:12] Okay, so back to boomers. This next article that we are gonna be looking at reads

[00:28:16] We're definitely not going to an old age home

[00:28:21] Why seniors aren't downsizing their homes? And this is from the good people at the Toronto Star

[00:28:27] I might have to take back all the nice stuff that I just said about boomers

[00:28:31] Okay, so here are a couple key points that I pulled from the article Dan seniors and baby boomers are choosing to stay in

[00:28:38] Their larger homes those make mansions that we're always talking about and they're doing that rather than downsizing

[00:28:43] Which is of course affecting housing availability for guys like us millennials and you know your favorite generation the zoomers

[00:28:52] And that trend of seniors aging in places contributing to a shortage of ground related housing

[00:28:59] For younger families in Toronto and reasons for those seniors not wanting to downsize

[00:29:06] Includes financial considerations that's a pretty obvious one

[00:29:10] emotional attachments to the home, you know think about your grandmother or grandfather

[00:29:14] You know my European grandmother was like I mean that dying in this home

[00:29:18] Or I'm going back to Italy and you know we couldn't convince her to do it go back so you know

[00:29:23] She did pass away in her home and I think that's a really you know the emotional attachment that a lot of these seniors have to

[00:29:30] That's a hard one to to overcome and in another big one here right financial considerations and emotional

[00:29:36] Attachments those are pretty obvious and I think those are those transcend time and transcend a housing crisis

[00:29:41] What really doesn't transcend a housing crisis is the lack of suitable alternatives?

[00:29:47] Yeah, I think that you know what I'm hearing when I think about okay

[00:29:51] We use the the the

[00:29:52] Zoomer example of like student rentals and even like zoomers. I think you know when we were in our 20s coming out

[00:29:57] We're saying I think a lot of people were like in roommates. I think co-living

[00:30:01] Arrangements will become more more common like there's key niches that we're seeing evolve here and

[00:30:06] The students is one example, but the seniors is another example that not a lot of people are catering to and it's a very

[00:30:11] Interesting end of the market because they have a lot of money right like they all own their assets

[00:30:16] They've been paying them off for a long time

[00:30:17] They have a ton of equity and so that parts fascinating for my perspective

[00:30:21] My key takeaways on this article where that millennials are increasingly considering a

[00:30:25] Affordable housing options or just leaving Toronto due to limited housing stock and and high prices which the

[00:30:31] Equifax thing

[00:30:32] Lends itself well, too. We're gonna get into that

[00:30:34] The city is also implementing an initiative to increase housing supply

[00:30:38] Which we've talked about multiplexes family friendly high rise developments

[00:30:42] Co-living et cetera and the housing situation is creating long term financial challenges for millennials

[00:30:47] And it's not just millennials. This is what the article says. I'm summarizing but minute millennials and basically anybody

[00:30:52] Below boomers. I would say on that kind of housing

[00:30:55] Ladder of hierarchy where they don't they don't have the privilege of oh I personally haven't owned

[00:31:01] A four bedroom home since 1991 because I was busy

[00:31:04] Being born at that point. You need how to walk yeah, yeah, yeah, I had other things on my plate unfortunately

[00:31:10] So you know it obviously

[00:31:12] Creates difficulties for I can only imagine Gen Z's were I don't even know what they were doing at that point

[00:31:17] They were just you know

[00:31:18] Swimming I guess because they were like sperm at that point right so

[00:31:21] You know there's a lot of

[00:31:24] Difficult these facing everybody who didn't make it like who didn't get that privilege of buying a house in the night

[00:31:29] Yes, just makes me think of that those memes were it's like you know

[00:31:32] I was such an idiot and grade two. I should have been buying a home instead of eating my lunchables or whatever

[00:31:38] Right

[00:31:40] Okay, so let's keep moving on here Dan

[00:31:42] from another article here. This is from

[00:31:46] CNN business and it reads boomers are not moving out of their bank homes

[00:31:51] Here's why so here are a couple key points that I took away from this article

[00:31:55] Many baby boomers feel trapped in large homes. They no longer need but face challenges in downsizing

[00:32:03] Must be weird to feel trapped in a large home when you know

[00:32:07] You talk to young people and you really get more of the sense of feeling trapped when you're in a you know

[00:32:13] 390 square full of

[00:32:15] No, he's crying for them for sure

[00:32:18] You've got other rooms to go to okay now

[00:32:22] There's a lack of suitable smaller homes or apartments in familiar neighborhoods for downsizing again that goes back to

[00:32:30] That suitable alternative issue that we're facing right

[00:32:33] High prices more good rates

[00:32:36] They can make the cost difference between current and smaller homes kind of negligible. It's like why

[00:32:42] Why I'm gonna move out of this house? I've spent the last 20 years here. I renovated it

[00:32:46] Raise the kids here. You got all these memories and I got to basically make a lateral move to a much smaller

[00:32:54] Place where I don't have the nostalgia

[00:32:56] I don't have space you know, so I mean I do understand that one as well

[00:33:00] You know they do provide some potential solutions that include adjusting capital gains tax exclusions and increasing

[00:33:06] Missing

[00:33:07] Middle housing options missing middle we have touched a lot on that in other episodes

[00:33:12] So if you're interested in that go type that in to whatever podcast plow for me listen to and

[00:33:17] Dan and I have done episodes. I think we're probably due for another missing missing middle episode

[00:33:22] I think we're in the afternoon with that with Al who's like the he's the god of missing

[00:33:26] Yes, so yeah, well, yes

[00:33:28] Yeah, we're gonna do a free webinar with him actually. I think and I'm just waiting for timing on a me's a very busy very busy

[00:33:33] Yeah, so I mean baby boomer home owners would like to sell but they face hurdles to moving on from their homes

[00:33:42] That they don't necessarily want or or need at this point. Yeah, for sure look

[00:33:46] I mean my key takeaways here look I will defend baby boomers

[00:33:50] I know people probably don't like as I joke around about it a lot so people might not

[00:33:55] Realize this is my perspective, but like I do feel I do believe in property rights and

[00:34:00] I will defend boomers rights to do what they want with their property

[00:34:04] I'm not saying that they should be forced to downsize although

[00:34:07] I have made some tweets that have been admit been misinterpreted that I then I think that boomers should have to have like

[00:34:13] Start housing

[00:34:14] Students and their bed

[00:34:15] There's something like that but any call me how could you that so anyway accidentally

[00:34:19] I accidentally say some call me stuff here in there on Twitter, but but I honestly do think like but I believe what boomers

[00:34:26] You know they should they should have the right to they shouldn't have to be forced to sell if they want to live in a big house

[00:34:31] So they want to die in that big house like that that is their right. They own it on the same token

[00:34:36] I think that and a lot of millennials are doing this, but like

[00:34:40] The world doesn't owe you necessarily like a you know this could do some amazing life right like or or a

[00:34:46] Affordability and stuff like that unfortunately like I really believe in the free market and it's not that I like I don't accept that the

[00:34:52] Consequences are there, but

[00:34:54] the way that we can vote and communicate like what's important to us and the way that we feel about things is by

[00:35:01] Changing our circumstances and so if you can't afford to live in Toronto then go and give your money to a city that that has made an effort to make itself

[00:35:09] A remain affordable for you by moving there and becoming part of their economy and getting a house there and I know it's like it's it's a really

[00:35:15] tough thing to say to be like

[00:35:18] Oh, yeah, like you should just you know move to Halifax or whatever

[00:35:21] But I mean like how how often do you really see your parents?

[00:35:23] You know, okay, thanksgiving blah blah blah. Okay, so and you know you've got kids

[00:35:28] Are they gonna benefit more from living close like in in the GTA or living in you know?

[00:35:34] I'm just saying Halifax, but I use that as an example because you could almost have that U.S

[00:35:38] Version of like oh I could still fly home. It's only an hour and a half or whatever so

[00:35:42] I think that there is like a little bit of it like a lot of people who feel trapped are not always being fully accountable to saying like

[00:35:49] Maybe I have I'm playing a role in this right like there's a little bit of like I call it house

[00:35:54] Like people's or like dream flation right like people's people's dreams are are what's constructing them and maybe like a lot of people do need to

[00:36:02] If they haven't been able to dig or like get themselves out of that hole

[00:36:05] Adjust their standards a little bit right well, I mean it's it's to me. It's almost the same concept of of the golden handcuffs

[00:36:12] Right where but these handcuffs have been placed on our own wrists by ourselves and

[00:36:19] You know we've got blinders on

[00:36:22] Look, there's there's no two ways about it the situation kind of socks okay

[00:36:26] But guess what life is hard and

[00:36:30] The economy is not in a great place right now and there's a lot of things working against us and

[00:36:35] You can sit around to complain about it. You can do something about it and you know I hate to say if that's just the harsh reality and and you know

[00:36:43] There's

[00:36:43] There's people that are doing exactly what Dan just said where there are moving across the country and finding those affordability

[00:36:49] And you know changing their lives for the better whereas there's there's people that stick around and

[00:36:56] Complain and you know, you know, you teach the wrong I guess I'll leave it there. Yeah, it's interesting

[00:37:01] Because we just didn't interview with Sasha Kuku's from Graybrok who's gonna we're gonna have that up on the show

[00:37:06] Soon and he was talking about like how you know in the US like there's so many major Metro's people fly everywhere

[00:37:10] And in the US like it's not uncommon to like live you know he was saying like oh somebody

[00:37:14] You know they they're like oh I was born in New York but I you know

[00:37:17] That I lived in Boston I took a job at this place and you know people have lived in like 10 different cities in the US and

[00:37:22] You don't have that in Canada, but I think that that's a phase that's worth thinking about that we're heading towards where like

[00:37:27] You are starting to see Toronto become this gateway city like New York as an example and people spill out like who can't afford it

[00:37:34] Go to the Halifaxes or the Calgarys or whatever and you get to the point where it's like oh wow

[00:37:38] You know

[00:37:39] Canadians are like connected through all of these different cities

[00:37:42] We're just

[00:37:42] Way earlier in that process than the US like we're where the US was in like the 1920s or 30s

[00:37:47] Where everybody in the world wants to live there

[00:37:49] You know there's a huge the economies growing so much from population growth now

[00:37:53] We're getting to the consequence phase which gets to that that international connectivity phase. So her sorry national connectivity phase. So

[00:38:01] Let's pivot here

[00:38:02] to

[00:38:03] What I would call some very shocking findings in the Equifax report that provide another

[00:38:09] Potential reason that boomers might not be downsizing and it's millennials faults potentially their kids are still at home

[00:38:15] Yeah, we're talking about every generation in this area. I was just like this is we look we you know

[00:38:21] We're equal opportunity angers

[00:38:23] We we just want everybody to be mad at us by the end of this episode so the key points here are consumer debt levels

[00:38:27] So to

[00:38:29] 2 trillion

[00:38:32] 2.5 trillion in Q2

[00:38:34] I don't forget that half trillion please yeah

[00:38:37] So obviously potential financial instability credit card balance is hit a 17 year high

[00:38:43] Cardholders carrying an average of $4,300 indicating growing financial strain

[00:38:47] Delinquency rates are rising alarmingly particularly among

[00:38:52] Younger consumers suggesting a looming credit crisis

[00:38:56] Yeah, to continue with some bad news auto loan delinquencies have reached historic highs

[00:39:03] Pointing it to a potential bubble in the out of motive finance sector. Wow, okay nice

[00:39:08] I you know at this point we basically have a bubble gun with the amount of bubbles that were

[00:39:12] Potentially experiencing here in Canada the surge in multi-generational households reflects the economic pressures

[00:39:19] That are forcing young adults to stay with their parents longer and then of course

[00:39:24] You know interest rates obviously have something to do with high interest rates and soaring home prices are creating significant barriers

[00:39:31] For the first time home buyers potentially leading to a bit of a stagnant housing market

[00:39:37] Yeah, so there's a couple of really interesting

[00:39:40] Headings from the press release it says

[00:39:44] Financial challenges may be driving the rise in multi-generational living

[00:39:49] This is Equifax Canada's market pulse accordingly consumer trends

[00:39:54] Report so we've we've talked about this quite a bit on the show to be honest with you

[00:39:58] You know where I where I just mentioned that's spilling over so if you have access to man

[00:40:02] It can do one or two things number one is it spills over so like too many people on a living Toronto

[00:40:05] They can't afford it. Okay, where they start it starts spilling over in other cities and that's where you see

[00:40:10] Halifax prices rip Calgary prices rip et cetera, right?

[00:40:14] But then the other thing is you can cram it in it's not water, right?

[00:40:18] It's like you know, maybe it's sand or something if you pack it in to the same vessel then you can get more of it into one place

[00:40:25] And that's where we're seeing rather than it's spilling out in some cases like some of it's spilling out

[00:40:30] But then some of it is households are actually combining spaces, right?

[00:40:34] multi-generational

[00:40:35] multi-generational living here and and actually

[00:40:37] Interestingly like a lot of builders are now designing and you know meetups in I are meetups in Peter bro just did some

[00:40:44] towards some purpose built

[00:40:45] Multi-generational houses and one of our sponsors at the missing middle

[00:40:49] or sorry, I'm multi-plex conference pinewood homes actually I want to do a tour of those one

[00:40:54] We're out at the OHPA conference. So let's do that and we're gonna go tour they're doing three unit

[00:40:58] multi-generational

[00:40:59] Living houses in their townhouses

[00:41:03] So builders are responding to this understanding that this trend is taking place and

[00:41:08] A lot of people say like oh, it's you know, it's a huge digression in the quality of life and whatever for Canada

[00:41:12] But multi multi-

[00:41:14] Generational living has been common in other places under a long time hey and Italy they live with their parents until they're like 35 or something like that

[00:41:22] Right, so yeah, you know, you're starting to see this reflected in the built environment which means that it is very obvious right?

[00:41:30] So and you know, I think another obvious thing is those economic pressures that were all

[00:41:36] Experiencing or influencing

[00:41:37] Younger adults to to stay home longer whether that's that's by choice or or not and

[00:41:43] You know housing market challenges for homeowners renewing and and first-time home buyers are prominent as well

[00:41:50] Yeah, for sure. I think Rob Carrick actually just did an article on this

[00:41:56] In in young money which is also a

[00:41:59] It was that little Wayne's rap group was just gonna say it's just a little Wayne and Drake another millennial

[00:42:05] Does anyone know a little Wayne is boomers and zoomer traits cancel? They think now because of the Kendrick B

[00:42:10] Which is just like who knows yeah

[00:42:13] So you know money. Yeah, so the subheadings as young adults are increasingly finding their best financial

[00:42:19] Movistar live with their parents is that bad

[00:42:21] The last time that a generation of young adults moving back home was a was a new story much mockery in suit

[00:42:26] Remember the failure to launch or boomerang kids

[00:42:29] The cliche millennials living slothfully in their parents basement most likely

[00:42:33] Binging on video games it took it took years for society to accept that moving back home was a response

[00:42:39] To tuck tough economic conditions that flowed out of the O809 financial crisis and not a

[00:42:44] Geetraional failing so give me the key points from this article

[00:42:47] Yeah, so we see a trend of young adults moving back home

[00:42:51] And that's researching due to the economic challenges and and

[00:42:55] This is again similar to the

[00:42:57] Global financial crisis and the movement we saw there Dan so this is not the first time

[00:43:02] And it likely won't be the last that we that we see this type of movement now the Equifax report that we've mentioned reports that

[00:43:08] 29.2% of households now include adult children living with their parents and that's up

[00:43:15] 26.7%

[00:43:18] From a decade ago, so major increases on that sort of things and of course financial stress indicators for the

[00:43:24] In adults in question include higher interest rates higher rates of missed payments

[00:43:30] Decline in credit card payments and a whole slew of other not so great financial

[00:43:38] Considerations

[00:43:38] Compining this you've got youth unemployment hitting 14.5% which is the highest in over a decade

[00:43:44] That's like really scary to be honest with you so young people are employed at the 14.5%

[00:43:49] Moving home is increasingly seen as a practical financial strategy rather than a personal failing

[00:43:53] And look like if you want to think about how the market reacted to a lot of this

[00:43:56] Remember what happened in 2018 2021 2020 first COVID lockdown people were like

[00:44:02] Like remember what condo prices just like crater or condo rents just like cratered, right?

[00:44:06] The young people were literally just moving out of the city because they were like, oh, what's the point in being like?

[00:44:11] I don't have to be

[00:44:12] Outwork so they would go and like chill at their parents house because it was a bigger house

[00:44:15] They could hang out whatever and

[00:44:17] Because they didn't need to be close to like restaurants because they were closed

[00:44:20] They didn't be close to the office because it was closed, etc

[00:44:22] So there's there's almost like a recent history that you could use to formulate a bit of an investment thesis around this the

[00:44:28] The next piece is

[00:44:30] You know that what experts are saying that they're suggesting that this continue this this trend may continue with with living costs remaining high

[00:44:36] And interest rate effects taking time to materialize

[00:44:39] So I mean this is one of the things where we've been saying like even even guys who are like stuck in flips

[00:44:43] You know, it's like put a basement apartment in you know

[00:44:45] We have a deal where we you know, we've been kind of kind of stuck in it

[00:44:48] It was just like an unfortunate timing thing that happened as a result of permits etc

[00:44:51] And we're like looking at worst case scenario if we have to do this if I'm gonna if I'm gonna bring this thing back to market

[00:44:56] I would put a basement apartment in it because like that is literally what is

[00:45:00] Commanding and so you're like we are like you said we're seeing changes in the built form environment

[00:45:05] Yeah, yeah

[00:45:05] I think I think that's it. I know we we do have one

[00:45:10] Final piece here day and one of you wanting to read this final piece here for us, okay?

[00:45:15] Yeah, it's a review so and before we do the review go make sure you check out realist.ca

[00:45:19] Free webinars make sure you go to a meetup second Tuesday of every month

[00:45:22] But we got a review we always put these at the end now to remind you hopefully when you're when you're putting it

[00:45:25] That it says save us from the sertax

[00:45:29] Hello Nick and Daniel. I'm a senior who listens to your podcast frequently

[00:45:32] See this is why you can't offend boomers too much Dan cuz they blatantly listen to show

[00:45:38] We have a lovely one right here. We we love boomers and zoomers. We love we actually love all

[00:45:45] listeners to the show. We are generation agnostic, okay?

[00:45:48] Yeah, so so this boomer I'm assuming if they're senior now

[00:45:52] Was listening to the show to say informed about real estate changes in can and macro economics

[00:45:56] As a homeowner in Toronto with adults children of purchase to share at home. I take keen interest in so many of the subjects

[00:46:03] You deal with on your podcast, so very very interesting pretty much exactly what we're just talking about right who per they purchase to share

[00:46:08] Share at home. So two two has holds combining right it has become so difficult to keep up with

[00:46:13] Homeownership costs and this expensive city

[00:46:15] So I appreciate the heads up about ineffectual government measures and new policies keep up the excellent work

[00:46:21] We will we promise

[00:46:23] Reviews like this make it incredibly worthwhile. We we appreciate you

[00:46:28] Taking the time to do that and if you're listening, I would appreciate it if you did the same thing

[00:46:33] The Canadian real estate investor podcast is for entertainment purposes only and it is not a financial advice

[00:46:40] Nick Hill is a mortgage agent with premier mortgage center and a partner in the G and H mortgage group

[00:46:47] Licent number one zero three one seven agent license M two one as zero zero four zero three seven

[00:46:55] Dino photos are real estate broker licensed with rare real estate a

[00:47:00] Member of the Canadian real estate association the Toronto real estate board and the Ontario real estate association