People Are Screwed For Housing In Canada!
So guess what that's going to do to the rental market when people can't afford to buy it? The rental market is just going on fire next couple of years, I think over the next few years, I just think the rental markets can be booming, which will probably even bring in more demand on housing.
Transcript**
There's policies such as banning foreign buyers, but there's so many loopholes that allow them by here just by allowing them to buy a primary residence and foreign buyers that are students that are here for work. Permits are exempt at the end of the day.
We've had a huge issue bringing in Canada for the past two decades and even more so in the recent years, we're in a housing crisis because a huge percentage of our population can't afford buy homes. Yeah. We keep bringing more people into the country. We have a goal of over 430,000 permanent residents this year alone with 450,000 next year.
And even more in 2024, we've had pretty much flat per capita GDP growth for a very long time. And so we need to have these skilled immigration, uh, skilled workers come into our country so that we can compete in a global economy. And so that our aging population can be supported, but thing is we need to house these newcomers and we don't have enough housing for everybody.
And you know what that means. It means that prices are going to go up. It's just basic supply and demand curve. I know the interest rates are quickly creeping up and it's having a short-term effect on sales activity, but in the long run, it's going to be a problem. We have historically low interest rates and inflation is running wild because central banks can't keep, they just keep printing more money because the government can't balance a budget.
And look, I'm not pointing fingers at them or anything like that. It's a hard job. It's just the. It's a giant Ponzi scheme at the end of day, and we're just hurting future generations by debasing our currency. And right now real estate is too big to fail. So we're in a crisis. Roughly two thirds of the population are homeowners.
And about 41% of those homeowners are owned by multiple homeowners. So there's one third of the population that's forced to rent and they're trying to buy, but prices are just too high. So what are the policymakers do? They're going to create legislations that bring down home prices and you know, if they take the market, they'll lose a huge percentage of the voters in the next election.
And even worse, they might even create a recession and crash the economy, but if they don't do anything about it, which is going to allow the wealth gap to get bigger and bigger causing an even bigger divider between the rich and the poor. So instead what they did was create some policies that just really didn't mean much.
It really didn't do anything. So it seems like they're doing something, but in fact, it's really the interest rates that are rising, that is going to be hurting. That's going to be slowing down the real estate market there's policies such as banning foreign buyers, but there's so many loopholes that allow them by here.
Just by allowing them to buy a primary residence and foreign buyers that are students that are here for work. Permits are exempt at the end of the day. There's also a tax on flippers. So if you sell your home within 12 months, the income is fully taxable and not as a primary residence or capital gains.
However, many of these instances that I kind of just don't see it affecting anything. If you're a builder and you're doing these several times a year, you're going to claim it as businesses income anyway. So I just don't see it as. Uh, an issue it's not affecting these aren't changing anything. There's also the HST applicable assignment sales, but realistically assignments are generally sold under market value.
Anyway, as it required a lot of capital to pay for the profit and the original deposits with such a short timeframe, it just means that a lot of times you can't see the property because the place isn't built yet, or it's a construction zone. Maybe this might affect wholesale. There's those are people that lock in contracts with no intention on closing the property only to resell it to somebody at a higher price.
But I just don't see this making too much of an effect on housing prices. Like there's only so much of a spread you can make on such a short timeframe. Realistically, the housing market will likely slow down in the next few months because of interest rate hikes from central banks, which will also increase the mortgage qualifying rate on the stress test, which may takes away buying power from the average buyer, as we get a real accustomed to higher mortgage.
The market probably will bounce back over time. Real estate prices for the next few months will bounce up and down like a yo-yo, but in the long run price is going to continue to rise. It's almost like taking a yo-yo and riding up an escalator of that makes sense, a strong demand through loose immigration policy supply, not being able to keep up with demand and people qualifying for less and less of a mortgage and, and, and actually interest rates rising as well, too, with strong demand through a loose immigration.
Supply not being able to keep up with demand people qualifying for less than us mortgage, boring power and rising interest rates and cost the new constructions rising through inflation, through labor materials. And then more of the population would probably give up on home ownership while they, while they forced to rent and save up for a down payment for a home.
So guess what that's going to do to the rental market when people can't afford to buy it? The rental market is just going on fire next couple of years, I think over the next few years, I just think the rental markets can be booming, which will probably even bring in more demand on housing. It's a vicious circle that just can't be fixed easily through government policy.
And you can't please, everyone. It's funny. Everybody wants the housing prices to come down when you're in the process of buying home, but then, you know, they want higher once. It's just the way it is. So until then, you know what they say, if you can't beat them, join them. So, Hey, getting them housing market, if you can't, if you aren't ready.
And if you're wondering how to do it in the next few months, we'll be hosting seminars on how to get in the real estate market if you're currently renting. And you're also a first time home buyer, or if you're first time investor or even experienced investors as well, two different seminar series in seminars, stay tuned with us, subscribe if you like it.
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