The Vancouver Life Real Estate Podcast

With the inflation print in Canada coming in lower than expected, there was some good news that the over sized rate hikes we’ve all been through over the last 6 months appear to be working. While this was largely driven by lower gas and commodity prices, things like food continued to inflate in price. It will take a significant amount of time before food prices begin to fall as it’s the one commodity everyone must continue to spend money on, not to mention the global constraints on grain and other products from war torn countries. Car sales in the month of August hit a 23 year low as Canadians begin to reign in their discretionary spending. In many ways, the summer presents the most expensive time for fuel, food and recreational activities as many families took advantage of the first pandemic free summer in 2 years. As we move into fall and subsequently into the winter, expect more and more families to batten down the hatches on their discretionary spending as interest rates continue to climb. This will hopefully accelerate the outcome we are all hoping for.So what does this mean for housing? Buyers, if you’ve been holding off the time for you to start seriously considering a purchase is coming into play over the next 6-8 months. With every other headline reading a looming recession is coming next, the time to strategically position yourself is here. While to BoC continues to suggest they will avoid a recession (they’ve been wrong before), just about every other bank in Canada has stated otherwise. Furthermore the World Bank has also come out saying the possibility of a global recession in 2023 continues to grow as many of the developed nations with centralized banks began oversized rate hikes at nearly the same time. This level of global financial synchronicity has never been seen before and it will be interesting to see how it plays out. _________________________________ Contact Us To Book Your Private Consultation:Dan Wurtele, PREC, REIA604.809.0834dan@thevancouverlife.comRyan Dash PREC778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com _________________________________ 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

With inflation print hitting 8.3% in the U.S. shedding only 0.2% from it’s previous print is showing consumers continued to spend through the Summer (which was widely expected). The continued strength of the U.S. dollar continues to push the price of domestic products further reinforcing the inflationary cycle. The news was so impactful that the stock market had its worst day in over 2 years. We discuss why we feel the BoC isn’t done raising rates and how its dual edge sword brings down prices while also restricting purchasing power and increasing the monthly cost of a mortgage by drastic amounts. It's largely expected that the Feds down south will raise their interest rates by 0.75% matching Canada’s overnight rate of 3.25%. It’s very possible we will see 4%+ interest rates by Q1 of 2023.Check out the tale of two stories as inventory climbs in Toronto and yet somehow here in Vancouver, inventory has shrunk as September is on pace to be the lowest sale month of any September on record. With median prices in Vancouver having fallen by about 14% and down a further 23% in Toronto, the housing price declines continue to slide.  _________________________________ 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 BC government came out this week and capped rental increases by 2% - Renters say that’s too much! And Landlords are incredibly frustrated as inflationary costs have inflated their cost of ownership by much more than 2%. Historically, the government has increased rates in unison with inflation, but this time around they have suggested a lift of that magnitude would only hurt the Renters. However, the housing providers, folks who have a rental suites that helps offset the cost of their rising mortgages and property taxes are left holding the bag.. often times renting their suites out at a loss. The long term affects of rental caps have historically proven to be more negative than positive. There’s a consequential butterfly effect to these decisions and ultimately kicks the problems further down the road, creating a divisive point of contention between tenants and landlords. This is a result of not having enough housing stock, compounded by the time it takes to create homes in Vancouver - yet Landlords are having to pay the price. Vancouver has a massive housing supply issue and the largest provider of rental housing are investors and local property owners. While the government needs new rental stock they are handcuffing themselves and the providers they need so desperately for their stock. And with inflation being a bigger issue than rent control, expect housing providers to turn to services like Air BnB to make up the shortfall. Landlords will entertain more short term fixed tenancies so they can deal with inflationary pressures.Ultimately, Developers building market rentals for the city will back off from these building types and move to more capital friendly markets where rents are not controlled further restricting the supply of market rental housing. Alberta by comparison has 85% of the population that BC has and they have zero rent control - they also don’t have a rental crisis. The move makes very little financial sense and puts unnecessary pressures on providers to come up with their own solutions. www.thevancouverlife.com _________________________________ 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

Mychal Ferreira, Mortgage Specialist from BMO,  joins us today on this special podcast where we discuss the impacts of the new 0.75% rate hike. With average mortgages in Vancouver being substantially higher than the rest of the country, Vancouverites can expect their variable rate mortgage payments to increase by another $350-$700 dollars per month - s staggering $4,000 to $8,000 increase in payments each year. Will this be enough pressure to force Sellers to reduce the prices of their homes on the market? Will it be enough pressure to erode disposable income so the economy slows down? Perhaps to some degree, but with recent GDP data showing the economy still running strong and over 1 million job vacancies, the idea of major sell off or panic selling is not something we are expecting.With another oversized rate hike announced today, it’s pretty clear that the Bank of Canada does not yet have inflation under control and are continuing down the path of demand destruction and active wealth erosion. With the benchmark rate now hovering at 3.25% - a mere 0.25% away from the BoC’s target rate and inflation proving to be less transitory than first believed, a future recession and further rate hikes is almost all but guaranteed at this point. Remember, it typically takes a full 18 months before we see the results of a single rate hike - let alone the 4 oversized rate hikes we’ve seen in the last 6 months.Historically, and over the last 30 years almost every time the BoC has risen rates by more than 1.5% we’ve seen a correction back down between 1.5% - 4.5%. So while rates continue their roller-coaster ride up, if history has anything to say about it, it’s highly probable that within a similar time frame we will see the BoC reverse course. If you’re a Buyer expecting to pick up a property from a grovelling Seller, they will be few and far between as many Sellers dig their heels in to combat raising rates while they wait for demand to return. And it will - with an aggressive immigration policy and inventory in Vancouver lower than it was this time last year, it’s clear we have a supply issue mounting and an outcome we’ve seen before when rates begin to fall.Mychal Ferreira can be reached at:https://www.linkedin.com/in/mychalferreira/ _________________________________ 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

With the Fall market on our doorstep, it’s time to review how the summer market performed and what’s in store for September and October. While we have just come out of a couple of the slowest months in 20 odd years, you would think the market is at a stand still. But with prices having dropped by more than 30% in some areas across the nation, Vancouver remains one of the most resilient marketplaces in North America with prices having only slid by about 7% according to the Housing Price Index. While we are expecting to see this number continue to drop by about another 2% in the foreseeable future, what’s less clear is the bubbling activity behind it. Sales to Active Ratios (think of this number as the pressure gauge for the market) are on the climb across ALL property types and most noticeably in townhomes (rising by 5% month over month). The average ratio across all property types climbed 1.1% month over month putting the market back on the precipice of a sellers market and revealing that we still have a housing crisis on our doorstep. The underlying issues that created the housing crisis we’ve seen over the last decade will continue to persist even with an imminent rate hike that we’ll see in September. With both local, national and international pressures applying themselves to the Vancouver market, expect to see more sustained pressure in the fall months as consumer confidence begins to recover. With anecdotal stories of our Agents going into multiple offers in the last few weeks, chronically low inventory and new listings reducing in numbers… where do the Buyers and the overheated rental market go from here as the search for shelter continues. Stay tuned for the SPECIAL RELEASE coming Sept 7th right after the BoC announcement. www.thevancouverlife.com _________________________________ 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 weeks’ episode we explore where the CORE inflation is sitting and why we feel the result spells an almost certain .05% - 0.75% interest rate hike increase on September 7th. While it’s debatable what the BoC will do, what isn’t debatable is the huge drop in real estate prices we have seen in the last few months as a result of rising interest rates levels and inflationary pressures. Canadian home prices have fallen a staggering 9.9% nationally since the peak of the market in late Feb 2022. This is the steepest decline in recorded history, even surpassing the Global Financial Crisis of 2008 when prices dropped 9.1%. Toronto is without a doubt taking the brunt of it with prices down a concerning 13.2% and inventory up nearly 60%. Vancouver by comparison has only seen a correction of about 4.5% with much tighter inventory levels - in real terms, Vancouver’s inventory is actually down from this time last year, it hasn’t increased. While Inventory has generally climbed across the nation, we are sitting at only 3.4 months of inventory whereas the long term average is closer to 5 months.Immigration numbers are at all time highs and while housing starts are as well, they are far out from completing and continue to provide little relief in the face of an intense rental market. With more than 230,000 permanent residents having already arrived in the first 6 months of the year, expect Canadian immigration to continue to drive growth in the long term. With over 1 million job vacancies and skilled labour making up 56% of the available jobs, it’s no wonder Canada remains one of the best options for skilled immigrants around the world.www.thevancouverlife.com _________________________________ 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 government has long said it wants to create affordable housing for its citizens and has historically pushed developers and the communities they govern to design or ownership alternatives for it to approve. Those include co-op housing, leasehold land, income verified property and many other forms of “affordable ownership”. To be real, these do nothing but stigmatize property, they don’t allot the same rights and privilege as those with a fee simple interest but rather dilute ownership under the guise of affordability. The government has never suggested that it lower its own development or building related permit fees - a cost that gets indirectly passed onto the consumer with each project that gets built. A new report by CMHC has concluded that the government is responsible for at least 24% of the average home cost BEFORE you consider property transfer tax or GST. Add those government fees to the equation and it rises to 33%! That’s right, 33% of the cost of your new home is thanks to government fees. In Vancouver that translates to $180,000 in fees and taxes of a typical new condo. This is significantly more than any other party involved in the transaction. Without a doubt there needs to be some consideration for government fees as none of the work is free and development rules and guidelines need to be adhered to - but how did it become a third of the cost of an average condo in Vancouver? Today we explore the information, the hypocrisy and some solutions that could help reduce the cost to the community. www.thevancouverlife.com _________________________________ 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 tackle the new inflation print from our friends down south (US) and we take a macro look at the Real Estate Market across the country. As inflationary pressures begin to ease, we ask the question - Are we starting to see signs of relief or is this a bear trap that will lead to further downward pressures?The US Federal Reserve and Jerome Powell have been quoted as saying that they will not change the course of the current tightening of monetary policy until there’s compelling evidence that we are headed back to their target policy rate of 2-3%. While a massive rate hike may be off the table come September, we still think there will be a sizeable interest rate hike - perhaps multiple - as we head towards the end of the year. We also cover the current state of the Real Estate Market in majors centres like Toronto which has seen an HPI (Housing Price Index) drop of 13%. A huge swing considering it’s a lagging price indicator. What’s worse, we are hearing stories of some markets in Ontario seeing price corrections as high as 48%! While inventory still remains tight in Vancouver, up just 5% - Toronto has a seen a whopping 58% increase in inventory. A recession is still very much a possibility with some asking the question if it’s already here. Another major concern we discuss is that the Yield Curve on the Canadian 10 year Government Bond has fallen 50 basis points which now puts it below the 2 year yield. Analysts typically refer to an inverted yield curve as a strong indicator of a coming recession. With the BoC still targeting a policy interest rate of 3.5% (currently sitting at 2.5%) it’s possible we’ll see a recession before the end of inflation. www.thevancouverlife.com _________________________________ 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 biggest take away from the July real estate numbers is the 43% decline in sales volume. This comes in a full 35% below the 10 year average, which more dramatically demonstrates the current landscape.   Equally as notable, new listings dropped 25% last month contributing substantially to the decrease in total inventory.    That number dropped for the first time in 6 months and speaks to the market ‘freeze’ that we’re in right now.   Both buyers and sellers are on the sidelines watching with bated breath. The result of these numbers is that the GVRD has entered a Balanced Market for the first time in almost 3 years, furthermore, detached homes are actually in a Buyers Market.   Rejoice?   Well - not so quick.   The recent interest hikes have pushed buying power down 25% when looked at from a monthly payment perspective.  Meaning prices would have to drop 25% from the peak to have an equal mortgage payment as it was before the rate hikes took place this year. So where are prices?   Well the HPI suggests a 4.7% decline from the March peak, whereas the Median and Average are closer to 11%.    Not nearly the 25% some buyers are hoping for.Looking forward, we can expect August numbers to look quite similar, with prices dipping further.   It will take until September to see volumes pick up, though those will be dampened with the expected 0.5% interest rate hike by the Bank of Canada on September 7th.   Rates will fluctuate, they always have.   So think of it this way, you marry your house, but you date your rate.  So make sure you love your home, and know that the only constant is change. www.thevancouverlife.com _________________________________ 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 take a look at what our economy is doing from a National perspective. Some of the key take aways here include signs that we are seeing inflationary pressures beginning to ease, Bond Yields are continuing to come down and housing starts are beginning to increase again while we deal with sky rocketing rental increases. Home sales in the month of June and no doubt in the month of July are down by a serious margin (-33% in BC and -36% in Ontario) and continue to stall out the market. While prices are coming down, it appears as though inventory is holding strong and hasn’t risen with only 3.1 months of inventory on the market. With strong national unemployment at 4.9% and record levels of immigration (over 400k) the fundamentals still look strong. Locally speaking, we have entered into a Balanced market which is something we haven’t seen since January 2020! The median home price is also holding strong at 900k - although we suspect that will continue to fall as the Fed’s continue to raise rates throughout the rest of the year. BC is down 33% in home sales year over year and while BC’s inventory climbed +21% - the GVRD’s inventory remains largely unchanged. It’s crazy to think that just a year ago, households were paying just 2.5% average interest rates across ALL outstanding debt....credit cards, auto loans, mortgages, HELOCs....all of it but with higher interest on credit cards, rising levels of insolvencies (still low but rising), negative wage growth, falling prices and more expensive mortgages - Consumer confidence in Canada’s housing sector has fallen off the map. If you bought a house today with prevailing rates, you are paying 55% more in payments for the same home than you would have just 10 months ago.Activity levels across major real estate offices is down on average by 15% and climbing - this is mostly because of the rising costs of borrowing and the continued cooling of home sales across the country. With the re-sale property market accounting for nearly 10% of our country's GDP, it’s all but certain that a recession for part of 2023 is on our doorstep with the Central Banks attempt to control inflation.  www.thevancouverlife.com _________________________________ 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