April 2024: What Does Capital Gains Mean For Real Estate Investors & Market Update #capitalgaintax

Summary

In this market insights video, Ryan Coyle from connect.com discusses the GTA real estate market, highlighting significant changes in capital gains tax for personal and corporate investments effective June 25th, 2024. He provides a detailed analysis of the Toronto real estate board's market watch, noting price appreciation in various housing types except townhouses. Coyle emphasizes the importance of understanding market trends and supply-demand dynamics, particularly the decrease in new construction supply and its impact on future prices. He also shares investment opportunities in the Dominican Republic and upcoming developments in Toronto, encouraging viewers to reach out for personalized market updates and advice.

Takeaways

• 📊 Ryan Coyle from Connect.com provides monthly macro market insights and offers to analyze micro markets upon request.
• 📈 As of June 25th, 2024, capital gains tax on personally held real estate investments will increase from 50% to 66.7% for profits over $250,000.
• 💼 Corporations will face a capital gains tax increase to 66.7% on every dollar, not just above $250,000, but this may still be advantageous due to generally lower corporate tax rates.
• 🏢 The media may not always provide the right context for numbers; for example, a reported 26% increase in mortgages refers to a very low number of borrowers entering AAR.
• 🔍 Toronto Real Estate Board's market watch shows mixed results with price appreciation in most asset classes except townhouses.
• 📉 There is a significant affordability gap between detached homes and condos, which is wider than ever, indicating potential shifts in the market.
• 📉 The gap between 905 and 416 areas is also widening, suggesting affordability concerns are pushing buyers further from downtown Toronto.
• 🏘️ Condominiums, once a hot market segment, are currently experiencing a soft market with increased supply and reduced demand.
• 📊 Despite increased listings, average prices have remained relatively flat, suggesting a balanced market with potential for growth.
• 📈 Historical data indicates that interest rates and property prices are inversely correlated, suggesting that lower rates in the future could lead to higher prices.
• 🏢 There is a significant future supply shortage of new construction in Toronto, which could drive up prices as supply and demand dynamics change.

Q & A

What is the purpose of the GTA market analysis presented by Ryan Coyle from connect.com?

The purpose of the GTA market analysis is to provide year-over-year month-over-month macro market insights, focusing on the Greater Toronto Area (GTA) real estate market. It aims to help understand market trends, affordability gaps, and what's currently hot in the market, which can be useful for real estate investors and those interested in micro-market updates.

What is the change in capital gains tax for personally held invested real estate as of June 25th, 2024?

As of June 25th, 2024, the capital gains tax for personally held invested real estate will increase. It will go from 50% to 66.7% on profits over $250,000. This means that profits up to $250,000 will still be taxed at 50%, but any profit above that threshold will be taxed at the higher rate of 66.7%.

How does the new capital gains tax affect corporations differently from personal holdings?

Corporations will see an increase in capital gains tax on every dollar, not just on profits over $250,000 like personal holdings. However, corporate taxes are generally lower than individual taxes, so despite the higher capital gains rate of 66.7%, investors might still be left with more money in their pocket after taxes when investing through a corporation.

What is the significance of the mortgage stress test introduced in 2017 or 2018 in the context of the current market?

The mortgage stress test, introduced in late 2017 or early 2018, required borrowers to qualify for their rate plus two percentage points or the overnight lending rate plus two percentage points, whichever was lower. This policy has contributed to a historically low number of borrowers going into arrears, indicating that despite higher interest rates, the market remains stable due to borrowers being more qualified to borrow.

What is the current trend in the Toronto real estate market regarding different housing types?

The current trend shows price appreciation across all asset classes except for townhouses. Detached homes have seen a 2.2% year-over-year growth in the 416 area and 1.2% in the 905 area. Semi-detached homes have a 3% growth in the 416 and a 2.6% decrease in the 905. Townhouses, surprisingly, are seeing year-over-year price depreciation.

What does the term 'AAR' refer to in the context of the real estate market?

AAR stands for Arrears, which refers to a situation where borrowers have missed payments on their mortgage and are behind on their mortgage obligations. The script mentions that the number of borrowers going into AAR has increased from 0.14% to 1.18%, which is still considered very low.

How does the number of new listings compare to sales in the current Toronto real estate market?

In April 2024, there were about 7,000 sales, which is comparable to the previous year. However, the number of new listings has almost doubled, with 18,000 new listings compared to 10,000 in the previous year. This increase in listings without a corresponding increase in sales is adding more months of inventory to the market.

What is the historical average price change for the Toronto real estate market since 1980?

Since 1980, the historical average price change for the Toronto real estate market has been a compounded annual growth of 6.73%. This long-term outlook helps to illustrate the market's overall stability and growth over time.

Why is the downtown Toronto condo market currently considered a soft part of the market?

The downtown Toronto condo market is considered soft due to an oversupply of completed units compared to demand. There are 'panic sellers' who are selling aggressively due to affordability issues and high interest rates, which is driving down the overall average price in this segment of the market.

What are the implications of the current market conditions for buyers and sellers?

For buyers, the current market conditions present an opportunity to take advantage of lower prices and increased inventory. For sellers, it is advised to wait out the market if possible, as historical trends suggest that the market will likely recover and appreciate in value in the future.

What is the significance of the drop in the number of cranes in the GTHA?

The drop in the number of cranes indicates a decrease in new construction projects, which could lead to a lower supply of new housing units in the future. This is a sign that the market may be adjusting to the current oversupply and could lead to a tighter market with potentially higher prices in the future.

What does the affordability gap between detached homes and condos in the 416 area currently indicate?

The affordability gap between detached homes and condos in the 416 area is over a million dollars, which is a significant difference. This suggests that condos may be becoming more attractive to buyers who are priced out of the detached home market, potentially leading to increased demand for condos.

What is the current state of the future supply of new construction in Toronto?

The future supply of new construction in Toronto is expected to drop drastically by 2028, with record low deliveries of new units. This is due to a combination of cancelled and halted construction projects, which could lead to a tighter market and potential price appreciation in the future.

What are some of the current real estate opportunities being promoted by Ryan Coyle?

Ryan Coyle is promoting several real estate opportunities, including Secret Garden in the Dominican Republic, Cliffside Condos by LCH Developments in Scarborough, and upcoming projects like Rain by LanLamb Developments in Streetsville and assignments in Burlington. These opportunities offer various incentives, tax benefits, and potential for capital appreciation.

Outlines

00:00

📈 GTA Real Estate Market Insights and Capital Gains Tax Update

Ryan Coyle from connect.com provides a year-over-year macro market insight for the Greater Toronto Area (GTA). He offers to delve into micro-market statistics upon request, mentioning specific areas like Yorkville and City Center. Coyle discusses two key metrics, affordability gaps, which he uses to predict market trends, and current hot topics in the market. He addresses the increase in capital gains tax for personal and corporate real estate holdings, effective June 25th, 2024, explaining the implications for real estate investors. Coyle clarifies that while profits up to $250,000 will still benefit from a 50% capital gains tax, profits above this threshold will be taxed at 66.7%. He also differentiates the tax implications for corporations versus personal holdings, suggesting that despite higher tax rates, investing through a corporation could still be more profitable due to lower corporate tax rates. Lastly, Coyle dispels media-driven fears about mortgage rates, explaining that the number of borrowers entering Arranged Assistance Rate (AAR) is very low due to government policies like the mortgage stress test introduced in 2017.

05:00

🏘️ Toronto Real Estate Market Analysis and Long-Term Outlook

The script continues with an analysis of the Toronto real estate market, highlighting year-over-year price changes and market activity. Coyle emphasizes the importance of not relying on a single month's data and instead looking for consistent patterns to predict market direction. He notes a surprising decrease in townhouse prices and discusses the overall price growth, which has remained relatively flat despite an increase in listings. Coyle points out that while sales are comparable to the previous year, the number of new listings has nearly doubled. This influx of listings is increasing the months of inventory, but prices have not dropped significantly, indicating a resilient market. He also presents a long-term market outlook chart, showing the average price change from 1980 to the present, with a compounded annual growth rate of 6.73%. Coyle suggests that the market may be near the bottom of its cycle, based on historical patterns and government interventions, such as adjusting interest rates in response to market fluctuations.

10:02

📊 Current Market Trends and the Impact on Condos and Housing Supply

Coyle discusses the current state of the condo market, particularly in downtown Toronto, where there has been an oversupply due to a high number of completions and a decrease in demand. This has led to 'panic sellers' aggressively pricing their properties, affecting the overall average price. Despite this, he sees opportunities for buyers, as some properties are being sold well below market value. Coyle also addresses the correlation between interest rates and property prices, noting that historically, when interest rates decrease, property prices tend to increase. He advises buyers to take advantage of the current market conditions, as waiting for rates to decrease further could result in higher property prices. For sellers, he recommends waiting out the market due to the expected future appreciation in property values. Coyle also highlights the significant drop in new construction supply, which is expected to drive future price increases due to the principles of supply and demand.

15:03

🌐 Global Real Estate Opportunities and Upcoming Projects

The script shifts focus to global real estate opportunities, specifically mentioning a development in Punta Cana, Dominican Republic, by Novel Properties. Coyle discusses the attractive cash flow and capital appreciation projections, as well as tax incentives for investing in this region. He also highlights upcoming projects in various Canadian locations, including Cliffside condos in Kingston and Rad in Scarboro, and new developments in Streetsville, Mississauga, and Burlington. Coyle invites viewers to reach out for more information on these opportunities and to discuss their specific real estate needs, whether buying or selling.

20:04

🔍 Market Updates and Opportunities for Buyers and Sellers

In the final paragraph, Coyle encourages viewers to contact his team for personalized market updates and valuations of their properties. He mentions the availability of assignments and resale opportunities in Toronto, providing an example of a recently sold two-bedroom unit at Noou Residences. Coyle stresses the importance of understanding the current market dynamics and the potential for significant savings and opportunities, especially for buyers looking to enter the market at a favorable time.

Keywords

💡GTA Market

The Greater Toronto Area (GTA) Market refers to the real estate market encompassing the city of Toronto and its surrounding regions. The video discusses year-over-year changes and trends within this market, which is a central theme as it provides a macro view of the real estate landscape being analyzed.

💡Micro Market

A Micro Market is a smaller, more specific segment within a larger market, such as a particular neighborhood or district within the GTA. The script mentions the possibility of breaking down statistics for micro markets like Yorkville or City Center, indicating a more detailed, localized analysis of real estate trends.

💡Affordability Gap

The Affordability Gap refers to the difference in cost between different types of housing or between different areas. In the context of the video, it is used to discuss the disparity in prices between detached homes and condos, as well as between the 416 (Toronto) and 905 (surrounding regions) areas, which is crucial for understanding market dynamics and potential investment opportunities.

💡Capital Gains

Capital Gains are the profits made from the sale of an investment or real estate property. The video script discusses changes to capital gains tax rates, which will impact real estate investors, particularly those holding properties personally versus through a corporation. This is a key financial consideration for investors in the real estate market.

💡Mortgage Stress Test

A Mortgage Stress Test is a financial assessment that determines whether a borrower can afford their mortgage payments under different interest rate scenarios. The script mentions the introduction of such a test in 2017 or 2018, which has contributed to a historically low number of borrowers going into arrears, showcasing government policy's impact on the housing market.

💡Price Appreciation

Price Appreciation refers to the increase in value of a property over time. The video discusses price appreciation across various asset classes, except for townhouses, indicating a positive trend in the market and providing insight into which types of properties are gaining value.

💡Months of Inventory

Months of Inventory is a measure of the supply of homes on the market, calculated by the number of active listings divided by the rate of sales. The script notes an increase in new listings and the impact on months of inventory, which is a critical indicator of market balance and future pricing trends.

💡Days on Market (DOM)

Days on Market (DOM) is the average number of days a property is listed before it is sold. The video uses DOM as an indicator of market health, with lower numbers suggesting a more competitive or 'hotter' market. The script mentions the DOM for the current market, providing insight into the pace of sales.

💡Condo Market

The Condo Market specifically refers to the segment of the real estate market dealing with condominiums. The script highlights that downtown Toronto condos, once a hot segment, are currently experiencing a softer market with an oversupply and 'panic sellers', indicating a shift in this particular segment of the real estate market.

💡Supply and Demand

Supply and Demand are fundamental economic concepts that influence the price of goods and services, including real estate. The script discusses the future supply of new construction and its potential impact on prices, emphasizing the importance of understanding these market forces for both buyers and sellers.

💡Interest Rates

Interest Rates are the cost of borrowing money, which significantly affects the real estate market as they influence mortgage costs. The video mentions the inverse correlation between interest rates and property prices, and how waiting for rates to decrease could lead to higher property prices, a strategic consideration for potential buyers.

Highlights

Ryan Coyle from connect.com provides monthly Greater Toronto Area (GTA) market insights.

Year-over-year and month-over-month macro market insights are examined for the GTA market.

Micro market updates and statistics are available upon request for specific areas like Yorkville or City Center.

Affordability gaps and market trends are key metrics watched to predict market direction.

Capital gains tax on personally held invested real estate will increase from 50% to 66.7% over $250,000 as of June 25th, 2024.

Corporations will see a capital gains tax increase on every dollar, not just amounts over $250,000.

Media may not always provide the right context; understanding numbers is crucial, such as the low AAR rate of 0.14% to 1.18%.

The mortgage stress test introduced in 2017 has contributed to historically low AAR rates.

Toronto Real Estate Board market watch numbers show price appreciation across all asset classes except townhouses.

There's been a surprising year-over-year price depreciation for townhouses in the 905 area.

Sales figures are comparable to last year, but new listings have almost doubled, affecting market dynamics.

Despite increased listings, prices have remained relatively flat or slightly increased month-over-month.

Long-term market outlook shows an average 6.73% compounded annual growth since 1980.

Government policies have helped control market volatility and price fluctuations.

The condo market, particularly in downtown Toronto, is currently soft with a higher supply than demand.

Opportunities exist for buyers as some sellers are aggressively pricing properties to sell.

Interest rates and property prices have an inverse correlation historically.

Buyers are encouraged to take advantage of the current market conditions.

Future supply of new construction is expected to drop drastically by 2028.

A visible sign of lower supply is the decrease in the number of cranes in the GTH.

Affordability gaps are widening, especially between 905 and 416 areas, and between detached homes and condos.

Investment opportunities in international markets like Secret Garden in the Dominican Republic are being promoted.

Upcoming developments like Rain in Streetsville, Mississauga, and assignments in the resale market are highlighted.

Transcripts

what's up everybody Ryan Coyle here from

connect.com Market insights we like to

just look at a year-over-year month-

over Monon macro Market Insight every

month so we're taking a look at the

entire GTA market for those of you

interested in micro Market uh updates

statistics please reach out to me or a

team member we can look at that uh

specific Market with you for example

Yorkville Mr Saga City Center we can

break down those stats for you as well

then we're going to look at the

affordability gaps these are two um

metrics that I tend to to watch because

they can tell a story of what direction

the market might be going in and then

we're going to look at what's hot in the

market

today all right capital gains so what

does this mean for Real Estate Investors

well first of all let me clarify I'm not

an accountant so seek professional

accounting advice if you have a detailed

complicated situation I just want to

give you a high level overview of what

is happening with these changes so as of

June 25th 2024 capital gains will

increase for personally held invested

real estate it'll go from

50% um to

66.7% over

$250,000 so if you make a

$250,000 profit it'll still be a 50% cap

tax capital gain so anything above

250,000 will now be a

66.7% capital gain now I mean if you're

making

$250,000 there's a lot to celebrate but

the tax is obviously going to cost us uh

Real Estate Investors who are investing

over a long period of time and are

seeing huge gains now what is the

difference between a corporation and

being held personally so corporations

are going to now

see a tax capital gains increase on

every dollar so not every dollar over

250,000 but every single dollar will be

a capital gain of

66.7% now corporate taxes are generally

much lower than individual taxes so for

me for example still makes sense to

invest in a corporation my profit will

now have to pay more tax but I will be

left with more money in my pocket versus

doing it personally based on my personal

tax rate

is the media showing us the right

picture you really need to understand

the context behind the numbers so a lot

of people have expressed fears or

concerns over this number that was I

think it was in a glob Mail article a

few weeks ago stating mortgage or rear

are plus 26% so if you really look at

the data what does that actually mean so

they've gone from

0.14% to1

18% what that means

literally two out of every 1,000

borrowers have gone into AAR doesn't

mean they have gone into

foreclosure um this means they've gone

into AAR now that is a very very low

number in fact it's it's you know the

numbers used to be considerably higher

one of the things we have to actually

thank for that is one of the policies

the government made that I think was

actually an intelligent one and that was

the mortgage stress test so in 2 and

late 20177 or maybe it was early

2018 they introduced a stress test that

stated that oros would have to qualify

for their rate Plus two% or the

overnight lending rate plus 2% whichever

was lower and that would allow them to

then get financing based on that

qualification so people are more

qualified to borrow today and that's why

that number is historically very low

today24 April Market recap let's take a

look at the numbers so all right so

let's look at the Toronto real estate

board market watch numbers these are all

high level we're going to look at the

different housing types then we're going

to look at the 416 and 905

year-over-year

prices anyone who wants us to break down

a specific Market a specific building in

a market Home Street in a market uh

reach out to us because there's just so

many markets within markets that we

can't do that on this presentation I

really want to keep this uh monthly

market update within uh 10 minutes so uh

I'm going to fly through these numbers

and please reach out if if you have

further questions so we're starting to

see uh price appreciation across all

asset classes except for tow houses um

you know we've got 2.2% detach over-year

growth 905 is 1.2 uh 3% for semis we've

lost 2.6 and the 905 for semis townhouse

is surprisingly we're seeing

year-over-year price depreciation which

I think is actually surprising now you

know this is this is one month of data

set uh year-over-year month of April so

I'd like to see what happens next month

um but you know when when you're seeing

consistent months and a pattern that's

when you can tell where the market is

going so you often have to take a single

month with the grain of salt and that

might be the case of town houses so

we're looking at condo Apartments this

is not a surprise for me we're seeing

price appreciation in the 416 uh and

some softness in the

9905 I really like looking at this chart

because it breaks down the number of

sales active listings months of

inventory average prices and days on

market for the last 12 months so where I

just showed you year-over-year growth we

could actually see the month-over-month

patterns and this will give you a more

telling story of what direction the

market might be going in so right now

you'll see in in April 2024 we're at

just over 7,000 sales which is very

comparable to April last year what is uh

maybe an alarming number is we're seeing

18,000 new listings versus is 10,000 so

almost double the amount of new listings

but sales are relatively the same as

last year so what is that naturally

going to do that's going to add more

months of inventory now what's really

really interesting and a lot of people

are having a hard time wrapping the head

around it is prices have remained uh

relatively flat and then some of the

housing types have actually gone up

increased month over month uh which

we'll jump into a little bit further

here so this is overall price uh growth

uh you know we're we're we're just

slightly above the year-over-year but

you know we took a run up here early

last year as we thought rates were going

to hold and then rates uh started coming

up again then we saw prices start to dip

back again so we're starting to see

prices make their way back up again I

think that's mainly based on consumer

confidence so although there all are a

lot more listings in the market we're

starting to see buyers come off the

sidelines in specific asset classes

we're not seeing so much of that uh yet

in condo but we are seeing in the

lowrise market more condos now we're

still in a healthy days on Market here

um you know the average is probably uh

based on all of this um you know 18

we're currently at 19 so we're in a good

position

there I always like showing the

long-term Market Outlook so we can see

the average price change over a long

period of time this is all the way from

1980 and you can see the volatility here

the spikes up and down down and you can

see right here that we've averaged

6.73% compounded annual growth over that

same period of time so the reason why

this is a really telling and important

um graph to look at is because you can

see different patterns in history for

example this is where we saw

prices shoot to the roof in the mid 80s

we probably heard people tell us about

our parents grandparents I've read a lot

about it um but you can learn a lot from

history so what happened was that was a

prolonged period of a Down Market it

went up so quickly prices shut up what

comes up always comes down but what's a

lot different in these markets where

we've seen these ups and downs in

previous markets is the government has

learned a lot from these These past

Corrections and and they really do do a

good job believe it or not at um you

know controlling prices from taking off

and when prices come down so they'll do

that through monetary policy through

government policy taxation different

things like that so you'll see here that

we saw Price's plummet here that was due

to covid what did they do they dropped

interest rates we saw them come up now

this is a short period of

time from when they spiked and then we

saw them come

down so what this tells me is that we're

probably close to the bottom of the

cycle I me many believe that we already

have passed the bottom and we've started

to see some month-over-month

growth

and treb average price so this is a very

important chart to understand and pay

attention to so as I just mentioned we

saw in covid prices take a run up due to

interest rates despite the economy

interest rates increased drastically

quickly very quickly so we saw prices

fall very quickly there's a direct

correlation to interest rates

and then we saw them come up again we

thought rates uh early last year were

going to to to stay still and then they

went up prices went down so why is this

line so important because histo history

over 45 years of of recording this data

has followed this line so although

there's going to be blips up and you

know above and below this line you're

always going to be able to end up at

this line at some point in time over a

short period of time so what this tells

me here is that within probably the next

6 12 18 months we know that this is

eventually this line is going to

continue this way and these price

average price will eventually line up

with that so real estate as we was

always said always said is is is

especially for investing is about

holding for the long term because we

know where prices will be over a long

period of time we don't know where it'll

be over a short period of time so these

are the average prices for all housing

types in the tronto real estate board

data now I want to talk about condos

because one of the segments that was

actually it was the hottest segment in

Canadian real estate before the pandemic

was downtown Toronto condos that has

become a very soft part of the market

currently and and what's really

happening in that market is we're seeing

last year more completions than we had

ever seen but we're not seeing the same

amount of demand so right now there are

uh let's call them Panic sellers that

are selling because of affordability

because of rates rates are way too high

so they can't afford to keep the condos

or the properties so they're selling

them very aggressively and that is

bringing down the overall average but

especially for that segment of the

market so you know I'll just take a step

back if you look at months of inventory

we're sitting at 2.54 months of

inventory for housing types but in the

condo Market that's actually over to

four so that's an average uh whereas

condos is about four and a half right

now so the market really has to work

through that Supply which I have no

doubt it will as soon as rates start

coming up condos are mainly entry level

buyers where they want cheaper mortgage

rates but what's really important for

those of you buyers that are watching

and we work with Buyers we work with

sellers um that affordability um also

doesn't it doesn't necessarily have to

do with interest rates it also has to do

with the price of the property so

there's no better time to actually buy

right now and let me walk you through

what I mean by that so this is an

example of a building that recently

registered in

Cumberland these prices are being sold

well below what they originally paid and

well below market value for Yorkville

and what this is It's a small few people

uh not all these properties that are

listed here on the MLS there's a small

few people that are pricing so low

because they have to get out of the deal

because they can't afford it so there

are opportunities like that speckled all

throughout downtown Toronto now that

number this month is way lower than it

was last month and as rates come down

and and demand starts picking up I think

we'll work through this inventory in a

relatively quick time but uh for right

now there is an incredible opportunity

for buyers to take advantage of this

situation where sellers have to sell now

for sellers if you can I strongly

strongly urge you to wait out this

Market because that line I showed you we

know where the market is going to go and

it's probably going to go

soon now just to highlight the value in

that project if any of you are

interested uh there's many of these

projects throughout Toronto but this

building a Cumberland is located in

Yorkville you could buy here for around

1,200 less than 1,200 per square foot

two years ago it was 15600 per square

foot on the resale Market um this

building is currently selling on the

resale market for about $1,400 per

square foot it's one block north so that

is just one example of a new building

where people took on mortgages but but

they can't afford them and they're

selling them for very cheap it's driving

down a bit of pricing and uh some of the

numbers this is also a very important

chart for buyers so any of you that are

waiting for prices to go up or should I

say rates to go down what's going to

happen when rates go down prices have

historically gone up there's a direct

correlation I showed you that in that

chart when when rates went up prices

went down and and vice versa so it's an

inverse correlation so let's let's just

give you an example if you were to wait

uh sorry if you were to have bought in

February 2022 at that one Spike that I

showed you that same property today

would most likely be worth around

$800,000 so you would have bought that

at a 2 and a half% interest rate today

you'd buy at a four and a half

5% down payment would have actually been

a lot higher back then so you'd save

40,000 there land transfer tax you're

saving money there as well now the

mortgage payment because you're paying

for the same property lower purchase

price putting less money down is

relatively the

same so that is why I urge anyone

wanting or waiting to get into the

market to get into the market right now

because there are advantages a

$200,000 advantage in this

case this is a similar slide that

highlights what buying now will look

like in the future so if you're take

advantage of buying now you know and

this is based on that line where we've

seen history to re repeat itself over

and over again buy today a property of

1.18 million in the near future that's

1.26 five so interest rates today are

5.6% or 5% but in the future we believe

in the near future it'll be 4.25% this

is just for the sake of an example I

don't know exactly what the rates will

be right but so today you could put down

a lower down payment versus waiting

which many people will wait because they

want lower rates they want to know the

Market's going up so they want to buy

when it's going up where you can take

advantage of buying right now at the

bottom there's tremendous amounts of

opportunity up there and your monthly

mortgage payment you know relatively the

same with the higher rate versus paying

$200,000 more and getting a lower rate

in the

future future supply of new construction

supply so I keep mentioning this I just

mentioned it it's very important for

sellers to be aware of what the future

Supply looks like because supply and

demand is what's going to drive future

prices and the the supply story has

never

been darker in the city of of Toronto or

the GTH which this is for so this is a a

slide that I put together complement of

Z providing the data and it's just

showing the amount of completions and

units that are going to be delivered and

you'll just see how that just drops

drastically now some of this 35,000 unit

units that hit the market or expected

hit the market will get pushed and this

will get pushed further down but we're

going to start to see record record low

deliveries

completions by 2028 I actually saw a

number we didn't include here I saw it

just yesterday when I was doing research

1,900 completions are expected for 2029

1,900 new

condos um sort of new constructions not

just condos so anyone who can weather

this storm there are going to be very

good opportunities for investors and

price appreci price appreciation the

very near future based solely on Supply

this is a really interesting uh chart

that I like to follow as well

compliments of urban chonto so they

created this new uh crane study that

they've been doing now for about a year

and this is a visible sign of lower

Supply number of GTH cranes showing a

slight but persistent downward Trend so

these are the amount of cranes that you

see when you're driving downtown Toronto

or wherever and you see cranes in the

sky I went looking for this data because

I was driving around Toronto last week

trying to count cranes there are way

less cranes than there were 6 12 months

ago they're not everywhere anymore and

that's really interesting I mean you can

look at the data all you want but when

you're actually out there in the field

and you're seeing things uh you have to

look a little deeper and look between

the lines because

I believe that this is a direct sign of

fewer units hitting the market than were

originally anticipated we've had

buildings that have cancelled we've had

buildings that are even started

construction that have stopped

construction so there's a lot of

different things that are going to drive

down even this year's uh completion and

next year's completion so we'll have to

watch that closely because we don't

really know what that number is but this

is an important sign so you'll see

cranes drastic drop just this year it's

going to keep going

down all right let's look at my key

indicators the affordability gaps I love

looking at this

stuff so gaps can be a leading indicator

of what's to come now just looking at

one month of data doesn't always tell

you a full story so you want to watch

this month over month and you can

usually see a trend you can see where

prices are going to go for the different

housing types so this is really

interesting the average price

appreciation for a detached home in four

6 is currently 1.82 million and 766

th000 for a condo that's a difference of

over a million dollar that is the first

time since I've been doing this that is

over a million dollars so typically what

that'll mean is when people move to

Toronto everyone wants to buy a house

with a backyard and a pool they can't

afford it so they'll end up buying um

you know the next affordable home which

is typically a a condo in downtown

Toronto and then you can assume if they

can't afford in downtown Toronto they're

either going to be a renter but if they

want to be a homeowner they're going to

move to 905 so this is another

affordability Gap we like to look at and

we like to look at the gap between 905

and 416 because the assumption is that

majority of people work and want to live

in downtown Toronto but because of

affordability they get pushed down uh

this Gap was very narrow last year and

we were talking about that and we

actually got a lot of buyers into the

market in Toronto and since then we

we're actually right by looking at this

data because prices in 905 condos have

actually gone down as they slowly

started going up in Toronto um now the

gap's gotten bigger so so the

affordability Gap is quite wide and 905

condos are now looking like an

affordable option for some entry level

buyers and owners all right what's hot

so Secret Garden is a development in

puana Dominican Republic by novel

properties many of you know I've now

been investing in condos and

preconstruction in Dominican the cash

flow projections are amazing the capital

appreciation is amazing the incentives

the tax incentives there are many many

reasons why I'm now diversifying over

there specifically this is one project

that we're currently promoting many of

our clients have invested here very

close to the beach uh in Bavaro the hot

area of pakana reach out to me if you

guys have questions there some really

really great opportunities in Dominican

Cliffside condos by lch developments

this is actually a stunning building

it's located on Kingston and rad in

Scarboro a lot of the views to the South

will have water views and they're doing

a very low deposit 10% uh 15% deposit I

should say but they're giv 10% interest

on

deposits um so that's a really great

opportunity now what's coming soon Rain

by Lan lamb developments is coming to

Streetsville Miss Saga so any of you

watching this that are from miss aaga

you know that Streetsville is a very

high demand area and they have added

relatively no new homes or condos in the

last many years so uh this will be a

really interesting project to launch I

think it's going to do incredibly well

that's in Streetsville msaga launching

in June 1989 my last developments in

Burlington close to the Burlington

Waterfront this is a great project and

we're excited to learn more about

that and assignments so any of you

interested in buying or selling please

reach out to our team we can price out

your unit give you the best idea of what

we think we could sell for today any of

you thinking about buying there are some

incredible opportunities currently

available in Toronto that we can share

with you uh we've got uh many

assignments and where buyers want to get

out of their contracts and there's also

opportunities in the resale Market uh

this particular unit actually we just

sold it was noou residences two-bedroom

uh 7 149,000 that is now sold

conditional guys I just flew through

this I want to do Market updates at a

very high level what's really important

is reach out to us if you want to

understand what your condo is worth what

your home is worth uh and you want a

market update for your specific uh

micromarket we'd be happy to do that and

reach out if you have any questions

about any of the opportunities that we

discuss and we're always here to help