The Vancouver Life Real Estate Podcast

This week we are taking a macro look at debt burdens, mortgage insolvency rates, credit card rates and how real estate is performing in other major parts of the country relative to our own. We also touch on, consumer confidence, Toronto real estate, credit tightening, inflation in the US, and some affective new ways to stimulate the housing market coming out of the UK.Let's start by discussing mortgage delinquencies. Mortgage delinquencies are an essential indicator of the health of the housing market and the economy. Currently, mortgage delinquencies remain near a record low of 0.16%, with most not reported until six or more months of arrears. However, this is a lagging indicator, and it is expected that debt servicing ratios will hit record highs in 2024 as more and more renewals occur, leading to less discretionary spending. It is worth noting that one in five existing mortgages has felt the impact of rising interest rates, but the low unemployment rate has helped in Ontario and British Columbia.Moving on to credit card loss rates, we see that this trend is ticking up fast. Before COVID-19, the loss rate was 3.5%, which dropped to 1.5% by January 2022. Since then, it has increased to 3%, indicating that the trend in credit cards leads the trend in mortgage arrears by around six months. Consumer insolvencies are also on the rise, and just saw the highest number of filings since March 2019, basically back to pre-COVID-19 levels. However, consumer proposals, restructuring unsecured credit, such as credit cards and LOCs, are at an all-time high (dating back to 2007). This indicates that there is stress under the surface.Despite these concerns, consumer confidence is on the rise since Q3 2022, currently at 53%, up from 43% lows. Pre-COVID-19, it was 56%, and we are almost back to that level. The same trend can be seen in real estate confidence, currently at 40%, up from 20% at the end of 2022. Pre-COVID-19, it was 45%.This confidence can be seen in Toronto home sales, which jumped 27% in April, the largest rebound since COVID-19 lows. This occurred at a time when listings were down 40% YoY, and active inventory down 21% YoY, the lowest in over a decade. Similar to Greater Vancouver, the GTA inventory has been flat all of 2023, with prices up 2.4% just last month. The GTA Sales to list price is 104%, compounding the issue is that dwellings under construction have declined for three months straight, including a 1.1% drop in March.Even with debt burdens and high interest rates, prices are surging in Toronto and Vancouver. This could threaten further credit tightening from OSFI/BOK, making existing debt burdens even more challenging to meet.The US added 236k new jobs, and services costs (like insurance, restaurants, education, medical care, etc.) are still surging because the labour market can't retain workers and is being forced to pay them more, creating a sticky inflation issue. The Fed in the states has raised interest rates dramatically in the last year by 5 percentage points to the highest it's been in 16 years. As it sits now, interest rates are actually higher than the inflation rate.Where do we go from here? Check out the full episode for more! _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

This week we review the April Stats and without question, the Vancouver real estate market has been experiencing a trend of price acceleration over the past three months, with prices rising for the third month in a row. This is happening at a time when rates are down, which is a surprising development. The market has also seen inventory doing something that has never been seen before, which is particularly significant. In this article, we will take a closer look at the Vancouver real estate market and what to expect next.Total Sales Are Up!In April 2023, there were 2,741 total sales in Vancouver, which is an increase of 8% from March. This is the third consecutive month of increases in sales volume, indicating a trend of growth in the market. However, the total sales volume is still 16.5% lower than it was in April 2022, and 15.6% below the 10-year seasonal average. It is important to note that last month was the highest sales volume in 11 months, dating back to June 2022. Additionally, for the first time in four years, April sales were higher than March sales, which could be a positive sign for the market.New Listings: Some but not enough!There were 4,307 new properties listed in April 2023, which is slightly lower than March by 30 units. This is an unusual development, as the last three years have seen lower listings in April than in March. The number of new listings is also 30% lower than in April 2022 and 22% below the 10-year seasonal average of 5,525. This raises concerns that new listings may have already peaked for the spring market, which could be problematic for the market going forward.Inventory: Critically Levels!The inventory is the most significant story in the Vancouver real estate market. In April 2023, there were 8,231 properties available for sale, which is a decrease from the previous month. This is a rare occurrence, as the only other times in history when inventory has decreased from April was during the 2009 Global Financial Crisis and the April 2020 COVID-19 lockdown. The current landscape is very different from those times, making this development even more notable. Moreover, this marks the fifth consecutive month of flat inventory, all below 9,000. Since December, total inventory has only moved up by 800, which has never happened before. The closest comparison is 2016 and 2017, which were red-hot years in the Vancouver real estate market. The current inventory level is 4.2% lower than it was in April 2022 and 21% below the 10-year seasonal average.Price:In April 2023, the average price of a home in Vancouver was $1,170,700, which is up 2.4% since the previous month. This marks the third consecutive month of price increases, with March seeing an increase of 1.8% and February seeing an increase of 1.1%. Over the past three months, prices have increased by 5.3%, with an increase of $56,400 since January 1, 2023. Tune into this weeks podcast and catch the full story there on our YouTube channel! _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

This week we saw the Bank of Canada release its curated Monetary Report and as it reads (BoC) officials considered the possibility of raising interest rates again on April 12, 2023, according to a summary of the deliberations that led to the latest monetary policy decision. This development suggests that the central bank is leaning more toward rate hikes than cuts as it waits for inflation to fall. The minutes revealed that there are two perspectives within the BoC on whether to raise rates or not. One rationale is that markets continue to price in a probability of a severe economic contraction and a sharp drop in interest rates. The other perspective is that markets expect that policy rates will naturally ease back as inflation softens and supply and demand return to balance. The meeting suggests there was an active debate about restarting the rate-hike campaign!The Canadian economy has proven to be “a little stronger than expected,” and the labour market remains tight, with unemployment near a record low and wages growing quickly. This resilience was one of the arguments in favour of another rate hike, along with the concern central bankers have that inflation may get stuck above the bank’s 2-per-cent target. “While governing council was more confident that inflation in Canada would continue to fall in the coming months to around 3 per cent, the second stage of disinflation all the way back to 2 per cent could prove more difficult,” the summary said.The Canadian real estate market is experiencing a shortage of inventory. In 2015, there were 250,000 listings in Canada, but by 2022 that number had dropped to 100,000. While it rose to 140,000 in January, it has been falling for three months, which is unusual for a time when inventory typically rises. National new listings have been at 20-year lows for four months in a row, not adjusted for population growth. The national sales-to-new listings ratio is the leading indicator for where  prices are going, with prices lagging about six months behind. The ratio is up about 15% in the last six months. The housing starts collapsed 11% in March, the fourth decline in five months, and is now at the second-lowest reading since 2004.The Canadian economy has been performing well in terms of employment with unemployment just above record lows and there are still 900,000 job vacancies!! Canadians are also managing the costs of servicing their debt, with credit card delinquencies rising but still below pre-pandemic levels. Housing prices are expected to pick up momentum over the next 3-6 months, with the national sales to new listings ratio being the leading indicator for where prices are going. The collapse of housing starts in March and the record number of new PRs admitted into Canada are factors that could contribute to the increase in housing prices for 2023. In terms of who's buying, the wealthy appear to be driving the housing market for the time being and we are seeing more and more competition for homes as inventory really becomes the main struggle in Vancouver. The plex plan, should it pass, could result in the largest private sector construction boom in BC's history and as such people should expect building supply prices to increase dramatically, trade costs and availability could shrink compounded with longer permitting time to get projects pushed through the city. _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

Market Update:The latest consumer price index report released by Statistics Canada on Tuesday, April 19th, revealed that inflation in Canada has dropped to 4.3% in March, a decrease from 5.2% in February. Higher mortgage interest costs were offset by lower energy prices,  resulting in the easing of the headline rate. However, the country's annual inflation rate is mostly tracking along the Bank of Canada's forecast of reaching 3% by mid-year. The central bank's preferred measures of core inflation, which are used to look through  volatility in prices, also trended downward in March. The central bank is particularly concerned that getting from 3% to 2% might take a while. According to its latest forecasts, the Bank of Canada is expecting inflation to return to its 2% target by the end  of 2024. While it will take just over a year to go from 8.1% down to 4.3%, the hard part is ahead as it could take another year to get from 3% to 2% inflation. This episode will explore the potential of a soft landing, the impact on homeowners, and the recent increase in Canadian home prices.Potential for an Economic Soft Landing:The decrease in inflation in Canada has brought some relief, but it may not be enough to stabilize prices in the short term. The energy, services, and shelter sectors have all shown a decrease in prices, but this may only result in stabilization before prices begin to come down at the end of the year. The Bank of Canada's concern about “sticky" inflation largely stems from persistently high wage growth and service price inflation, which may cause prices to remain elevated for longer than expected. While the central bank's forecast suggests that inflation will return to its 2% target by the end of 2024, the challenge lies in getting from 3% to 2%, as it may take another year. A potential soft landing in the housing market may be difficult to achieve given the persistent wage growth and service price inflation, but the central bank is taking steps to protect Canadians and ensure that banks provide fair and equitable access to relief measures.Impact on Homeowners:The decrease in inflation has not brought much relief to homeowners with new mortgages or those renewing their mortgages at high interest rates. Mortgage interest costs rose at the fastest pace on record last month, up 26.4% from a year ago. The federal budget  aimed to codify assistance for distressed mortgage borrowers, with new guidelines now proposed by the Financial Consumer Agency of Canada (FCAC). The government is taking steps to protect Canadians and ensure that banks provide fair and equitable access to  relief measures that are appropriate for the circumstances they are facing. This includes extending amortizations, adjusting payment schedules, or authorizing lump-sum payments. Existing mortgage regulations may also allow lenders to provide a temporary mortgage amortization extension, even past 25 years. While this may be seen as government intervention in the housing market, it signals that regulators and policymakers are willing to do everything possible to soften the blow.If you have more questions about what this means for you and your home, reach out to us at anytime to discuss your unique situation. _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

In this podcast episode, we will be diving into the Homes for People initiative, a government plan aimed at delivering more affordable housing for people. The government has pledged to invest $12 billion over the next ten years in this initiative.The Homes for People initiative aims to deliver more middle-income small-scale multi-unit housing, including townhomes, duplexes, and triplexes through zoning changes and proactive partnerships. The initiative also offers forgivable loans to homeowners to build and rent secondary suites below market rates to increase affordable rental supply quickly.One of the biggest criticisms of the initiative is how to determine below-market rates. It is a challenging task to ensure that landlords charge affordable rent to tenants without negatively impacting their profits. The government will need to develop a robust mechanism to calculate these below-market rates to prevent exploitation and maintain a balance between landlord and tenant rights.The government has also introduced a flipping tax to discourage short-term speculation. The tax aims to curb the rapid buying and selling of properties for profit. However, there is skepticism about how effective this tax will be in practice. The government's past achievements in delivering affordable housing have also been questioned, with concerns over the effectiveness of similar policies in the past.The Secondary Suite Renovation Incentive is another element of the Homes for People initiative. It aims to encourage homeowners to build secondary suites in their homes to increase the affordable rental supply. Homeowners can receive a grant of up to $20,000 to renovate their properties and build secondary suites. This incentive has received mixed reactions, with some questioning whether $20,000 is enough to cover the costs of building a secondary suite.The Housing Supply Act is another government policy aimed at delivering more affordable housing. The Act will allow municipalities to expedite housing developments by streamlining the approval process. This policy has been welcomed by developers, who hope to take advantage of the streamlined process to deliver affordable housing quickly.Overall, the Homes for People initiative is an ambitious plan aimed at delivering more affordable housing for people. However, there are valid concerns over how the government will determine below-market rates and the effectiveness of the flipping tax. The Secondary Suite Renovation Incentive and Housing Supply Act have also received mixed reactions from the public. The unique housing market may also cause concerns for individuals wondering whether to sell or buy property.To navigate the housing market successfully, individuals should seek guidance from experts and research thoroughly before making any decisions. The government needs to develop a robust mechanism to determine below-market rates to prevent exploitation and maintain a balance between landlord and tenant rights. If implemented effectively, the Homes for People initiative has the potential to address the ongoing affordable housing crisis and improve the quality of life for many individuals. _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

In this episode, we discuss the recent trend of increasing home prices in Vancouver, which have risen for a second consecutive month. We examine the various metrics that indicate the current state of the housing market in the city is getting hotter and hotter with all property types (single family homes, townhouses and condos all now firmly in a seller's market. However, we also acknowledge that this situation is somewhat artificially inflated due to the lack of available inventory. New listings remain low and total inventory sits below 9,000 units for 4 months in a row now - there were only 3 other times in recent history where this has happened and all of those markets were in strong bull markets. Is this where we are headed next?Despite the high prices, multiple offer scenarios are once again becoming commonplace, and new listings are remaining at a low point not seen in decades. We provide an in-depth analysis of these trends, exploring the reasons behind them and what they mean for both buyers and sellers in the Vancouver housing market. If pressure continues to mount and job numbers continue to outperform expectations, we recognize the Bank of Canada will begin to find itself caught between price stability and the inflation flight. The next interest rate announcement will be an interesting one.Furthermore, prices median prices are up $20,000 for the month which equates to $80,000 over the last 3 months putting us only 5% off of peak numbers we saw in 2022. Even more astonishing is the average price of homes is up over $102,000 in the last 2 months putting us at May 2022 numbers with days on market coming down quite quickly.Finally, we offer some insights into what can be expected in the upcoming month of April. Based on our analysis of the available data, we provide our predictions for how the market will evolve in the near future, and what this means for anyone looking to buy or sell a home in Vancouver. So whether you're a seasoned real estate professional or simply interested in the state of the housing market, be sure to tune in to this informative and insightful episode. _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

This weeks podcast explores the financial implications of the recent Federal GDP Numbers and the complications they create for the Bank of Canada. Furthermore we explore the revived buzzword “Extend and Pretend” in reference to the Banks extending amortization periods for mortgage holders. Historically it involved banks extending loans to borrowers who were struggling to repay their debts, but instead of recognizing the loans as non-performing or defaulting, the banks would "pretend" that the loans were performing by extending the payment terms. Essentially, the banks would grant borrowers temporary reprieve by extending their loan terms, often by several years, while still counting the loans as performing on their books. This practice allows the banks to avoid recognizing losses on their balance sheets and maintain the appearance of financial health. In the context of mortgage lending, "extend and pretend" can refer to a bank's decision to extend the amortization period of a loan in order to reduce the borrower's monthly payments. This can provide temporary relief to borrowers who are struggling to make their payments, but it also increases the overall cost of the loan due to the additional interest that accrues over the longer repayment period.  We talk about how to best deal with this scenario so that you  can come out without relatively unscathed when it comes time to renew your property.We also look at the recent federal budget and the government’s infinite wisdom in when it comes to spending more than we earn, pushing the federal deficit to -$40.1 billion, nearly $10 billion more than what has been forecasted in the 6 months prior.The country's overall debt is set to rise to $1.31 trillion over the next five years, and with continued high interest rates, the federal government is projected to pay $43.9 billion next year just servicing Canada's debt. We also consider the Fed’s decision to backtrack on their decision to ban Foreign Buyers. Stay tuned to hear about the changes to that policy, a quick market update where we discuss the return of multiple offers, how the Median price of Single Family homes is up a staggering $132,000 this month and sales volumes are up 40%! _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

Canada's inflation dropped more than expected this month and came down to 5.2% from 5.9% the previous month. This was the first year-over-year drop as inflation registered at 5.7% last February. The 0.7% drop was the largest since April 2020. However, year-over-year base effects still make this an almost 11% growth over the last year. For example, groceries still lead the pack in growth, up 10.6% year-over-year, driven by supply chain issues and bad weather. The energy sector was a significant contributor to the drop in inflation but what was very significant about this print was that mortgage interest costs are showing up as an ugly component of the CPI basket, and that metric is surging. 0.7% of the 5.2% is from this! Meaning the Fed is creating the very same inflation they're trying to fight. March of 2022 inflation was at 6.7%, so base effects should see next month's inflation print continue to drop at a similar pace to last month's, placing it around the mid to high -4s should the trend continue.This trend will impact mortgage rates eventually. The 5-year Canadian bond is now sitting at 2.79% and trending lower since bonds corrected downwards. If 5-year Canadian bonds stay low, mortgage rates in Canada are likely to follow suite as well. This is because mortgage rates are influenced by long-term interest rates, and 5-year bonds are one of the benchmarks for long-term rates in Canada. The last time bond rates were at 2.8% was back in 2010 when fixed mortgage rates were 5.4% and variable rates were 2.2%. While mortgage rates don't always move in lockstep with the central banks, expect to see variable and fixed rates continue to fall if we continue in this direction.Did you hear population grew by over 1 million people last year in Canada? This is certainly an interesting development for Canada, as a population growth of over 1 million in a single year is very significant. It's worth noting that Canada has long been a destination for immigrants, and it seems that international migration is the primary driver behind this recent population growth. It will be interesting to see how this trend continues in the coming years and what impact it has on various aspects of Canadian society, such as the economy, healthcare, and infrastructure. This marks the first 12-month period in Canada's history where population grew by over 1 million people, and the highest annual population growth rate (+2.7%) on record since that seen for 1957 (+3.3%). The previous record population growth rate in 1957 was related to the high number of births during the post-war baby boom and the high number immigration of refugees following the Hungarian Revolution of 1956 - however this did not break the 1 million mark. The reason behind Canada's record-high population growth is definitely different, since international migration accounted for nearly all growth recorded in 2022 (96%).How will the government deal with this? According to CMHC Canada needs to build 3.5M additional homes (over and above current projections) by 2030 in order for housing to be affordable again  (500k per year!)  Our government's solution is the Housing Accelerator Fund. According to the National Housing Strategy this will be implemented in June 2023. A full two years since they were elected on that promise. _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

Qualifying for multiple mortgages can be a complex and challenging process. It requires a thorough understanding of the mortgage industry, as well as the financial requirements needed to secure more than one mortgage. For individuals who are interested in purchasing multiple properties or refinancing existing ones, seeking the help of a mortgage professional is essential.A mortgage professional who specializes in this area can provide valuable guidance and expertise throughout the process. They can assess your financial situation, review your credit history, and determine the best approach to securing multiple mortgages. Additionally, they can help you navigate the application process and ensure that you are meeting all the necessary requirements.There are several factors that can impact your ability to qualify for multiple mortgages. For instance, lenders will take into account your debt-to-income ratio, credit score, and other financial obligations when evaluating your application. In some cases, you may need to provide additional documentation or evidence of income to demonstrate your ability to make multiple mortgage payments.Another key consideration is the type of property you are interested in purchasing. Different lenders may have different requirements for investment properties, second homes, or vacation homes. It is important to work with a mortgage professional who understands these nuances and can help you identify the best options for your needs.When considering multiple mortgages, it is also important to carefully evaluate the potential risks and benefits. While owning multiple properties can provide additional income and investment opportunities, it also comes with added expenses and responsibilities. You will need to consider the ongoing costs of maintaining and managing multiple properties, as well as the potential risks of market fluctuations or changes in interest rates.Ultimately, qualifying for multiple mortgages requires careful planning and a strategic approach. By working with a mortgage professional who specializes in this area, you can gain valuable insights and guidance to help you make informed decisions and achieve your financial goals. Whether you are a seasoned real estate investor or a first-time homebuyer, a mortgage professional can provide the support and expertise you need to navigate this complex process with confidence.Mychal FerreiraBMO Mortgage Specialist778.994.3222mychal.ferreira@bmo.cominstagram.com/mychalmortgages---  _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

The collapse of SVB, the 15th largest regional bank in the US, sent shockwaves through the financial industry in March 2023. The bank announced on Wednesday that it was attempting to raise $2.25 billion and complete a $21 billion asset sale to overcome the difficult situation it found itself in after rates accelerated by 450 basis points over nine months. However, by Thursday afternoon, reports emerged that there was a $42 billion bank run on deposits, leading to the bank's negative balance of $958 million and a 60% drop in the stock price by the end of the day.The collapse of SVB highlighted several key issues in the financial industry, including what feels like the age of institutional negligence creating a conversation around the re-emergence of personal responsibility, and that there should be major consequences for actions that are taken by people in these positions. For instance, the CEO of SVB sold $3.5 million worth of personal shares one week before the collapse, and in the last two years, there were nearly $84 million worth of insider share sales.One of the significant impacts of the collapse of SVB was the sharp fall in bond yields. The 5-year government bond fell from 3.57% to 2.89% in just three days! The largest drop in 27 years - more than the pandemic and the 08’ GFC causing markets to price in two rate cuts instead of one rate increase by summer. The collapse of SVB had significant implications for the financial industry and the economy, and it highlighted the importance of taking personal responsibility for one's financial well-being and keeping  the majority of savings in hard assets that produce consistent cash flow.The collapse of SVB is not an isolated incident in the financial industry. According to the FDIC, between 2001 and 2023, the US experienced 562 bank failures, which is an average of one every two weeks. This indicates a lack of accountability and responsibility in the financial industry, and it raises concerns about the stability and security of the banking system. By contrast, Canada has not experienced any bank failures with assets over $1 billion. This is a testament to the country's stable banking system and regulations that prioritize accountability and responsibility. The absence of bank failures in Canada is noteworthy and provides an example for other countries to follow in establishing stable and secure financial systems.The issue of bailouts is not limited to the financial industry. The COVID-19 pandemic has also led to a significant increase in government bailouts for homeowners and businesses. For instance, the B.C. government provided a $479 million bailout to TransLink to help the transit system deal with the impact of the pandemic. The funding kept fares stable for transit users and avoided service cuts.The collapse of SVB also had implications for the housing market in Canada. Canadian home prices fell $130,000 since their peak, and the housing market recorded the fewest number of new listings for the month of February since 2003, with a 20-year low on a national basis. National home sales hit their lowest levels for the month of February since 2009, and house prices have fallen $130,000 on average from peak to trough. Check out the conversation in this weeks podcast and get the local numbers for Vancouver. _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com