Canadian Real Estate Market Crashing | My Toronto Condo Is Down $50,000

追加: 2026-05-23

[00:00:00]I want to talk about real estate specifically. I'm I'm I've been looking across the social media sphere with Caleb Hammer. I'll show some clips up.

[00:00:06]Graham Stephan. Like these guys have been like real estate moguls. I mean, especially Graham Stephan, right? On his channel, his whole channel started as real estate channel. And now these guys are flipping out. And it just seems because like this is the first time in 10-15 years that real estate's gone the other way. What's a financial mistake that you make? My rental properties. I mean, I'm exiting them. And I've been coming at this from a bit of another angle. Now, I don't like rental real estate, but I mean, the condo we bought I thought I was buying at a good time.

[00:00:31]Probably down 10% on it at this point.

[00:00:33]But I'm like, man, like everybody was complaining about they couldn't get a house, they couldn't get a house. And for the first time ever, like real estate prices have actually become quite a bit more affordable. The rates have come down at this point. I mean, I get people are this writing me being like, oh, you're the idiot that bought like real estate at the worst time. But I'm like, my cost of living is significantly lower. And like you, by the time this thing's paid off, which hopefully we can have it paid off in the next year because of GTA 6, you know, at that point my cost of living's going to plummet. I mean, like the cost to carry this thing for two of us working in the household is like it's nothing, right? So, I'm like this is part of my like financial independence journey. I don't look at it as an investment vehicle, but it is an asset and it's going to lower my overall cost of living. But what do you think about the dynamic real estate market in Toronto or just abroad?

[00:01:19]Yeah, Toronto got hit hard. I had Daniel Fochon my podcast. He has the number one real estate podcast in Canada. Because I was like, am I tripping out here? Cuz I was doing a lot of research into buying real estate and I was like, none of the math adds up. Like, I'm at break even even if I have rental units in that property at best. Like but I'm probably not break even cuz when you add in property tax or anything, I'm in a deficit. If something breaks, I'm in a deficit. None of the numbers added up when I was looking for real estate. And he even said he's like, this is the number one guy in Canada top real estate. He's like, it's not really worth it. He's like, Vancouver's tanking, Toronto's tanking. The condo market is getting decimated, especially here in Vancouver. Like those pre-sales, like it's brutal. Like I think that's is dead. I don't think anyone's going to be doing that now any moving forward after the like that the stuff they have going on right now.

[00:02:05]So, he said unless you find like a good crazy good deal, cuz a good deal is a good deal at any moment, take that great deal. Other than that, it's not really an investment. So, you said it best. Like I don't like the house I live in is paid off. I got it really cheap cuz I got it like way a long time ago. I live in an older house.

[00:02:23]I've talked about this. But, I don't work it into my net worth cuz I'm never selling it. So, when someone goes, "How much are you worth?" I go like, "I don't factor in my home, regardless of whatever it's priced at. I'm never selling it. I'm not doing anything. It just It provides me a roof over my head and it reduces my overall cost of living because it's fully paid off. And you, your condo's being paid off, but when you merge your both incomes, it is so much cheaper than if you were to do something else. So, I just have it as like uh it's like me including how much did I buy in groceries this week for my net worth. It's like I wouldn't do that.

[00:02:54]It's like an essential thing I need to do. So, I don't equate it. So, when I'm looking at real estate now, I've completely I take off my investment hat.

[00:03:01]It's just not First off, I don't want to manage rental units. I realized I don't want to deal with tenants. I don't want to deal with any of that. And now that a lot of in BC, we have a lot of Indian students and a lot of them are not re-upping the government's not re-upping their whatever their work visas or student visas. So, they're getting sent back to India. So, there's less of a rental market because all the students are gone. The students are the ones inflating that market here in BC. That's why everyone can rent cuz like 30% of the rentals are like a bunch of dudes from India. They're all gone. They're all back there. So, that actually hurt the rental economy here in BC. And then And then also, what do I want to deal with them? No. I want to get the same return even investing in the S&P at all-time highs. No, it's still better to invest in the S&P at an all-time high.

[00:03:42]You're also using cash. When I buy a home, I'm leveraging banks to do it for me. I'm not using my own capital, right?

[00:03:47]I'm using it like a HELOC and then you'll get a and then you'll get a mortgage on top of that. So, and if I have it set up in a way where renters are paying off most of the stuff, I'm only out a little bit of my own cash, right? To cover anything weird. So, like I'm not using my own capital where investing I am.

[00:04:00]The only reason like literally the only reason why I'm even looking at property I'm looking at a farm is cuz I I have a third kid on the way and I'm brown. And brown people just have a hard time where we like where we want like make sure our kids are set up in the future in some sort of way. So, I was like, "Okay, well, I want to make sure like my kids all have some level of real estate by time they're like 30, right? And if I get in on now, it'll be cheaper than if I get in 30 years. And even if they make good income, will they even be able to buy into real estate? What's that like Orson Welles, you will own I think it was Orson Welles, you will own nothing and be happy for it. I think nobody will own anything in 30 years cuz it'll be too expensive, right? So, I'm just kind of dooms day in that scenario. So, I'm only looking at and I have some real estate agents looking for this is acreage that I can subdivide into three or four lots. So, then you don't really know until you actually subdivide it if it So, even if it looks like the regulation that you subdivide it today, doesn't mean you can subdivide it in 30 years. They can just change all the regulation and like, "Nope, you're just stuck sitting on acreage." So, I'm only looking for acreage that I'll build a house on, I'll live there, I'll rent out this house. This house cuz it's paid off will help cover the cost of both. But, I make zero profit off it. Like it's just break even using this house as a rental and I live in a farm with some like goats with the intention of then just giving the additional lots to my kids.

[00:05:18]None of it is an investment decision.

[00:05:20]It's purely a family decision. And that's what real estate is to me. It's like, "All right, it goes it's up 10% or down 10% like your condo." I will never think of that cuz I will never be selling anything. I'm really looking at the rental economy of can I keep this house rented the entire time? And that's going to be a struggle, I feel like. And that's going to be a headache where I'll probably take a loss on it. I mean, I'll probably not sort of take less profit and just have some other company manage that for me cuz I don't want to do it.

[00:05:45]Like you know you have management like I'll be just take your cut. Whatever it is, I just never want to think about this. You just think about it." And it's very similar to when you have like an index ETF or even a covered call ETF. I don't want to write calls. I don't want to deal with tenants. You just do it.

[00:05:58]So, I'm a guy who's more than willing to pay people a percentage fee to think on my behalf and deal with stuff on a day-to-day basis on my behalf so I can go do something completely unrelated.

[00:06:08]That's how I'm looking at real estate.

[00:06:09]Like, it's not an investment. Yeah, I I've kind of come to view it more in the the Dave Ramsey sense uh cuz I feel like a lot of people just always seem to want to hate on real estate. When it's when it's impossible to get they hate it. Now that it's more affordable, they still hate it cuz it's crashing. And it's and it's like you I I never looked at it from the investment standpoint, but it's crazy like when uh cuz I always think I'm struggling, right? Cuz I look at my real estate is not of any value, but then when I zoom out and I look at my net worth because of this property, I'm like, "Okay, like all of a sudden I'm like, it's crazy." Uh and I think it's it's a good path for most people to actually still build wealth just because you again over it depends on where you're going to live in for how long. I think in the long run you're always better off owning. So, if you know you're going to be stable, you're going to be somewhere for 10 or 20 years, like if you can get a good value and a good deal on something that makes sense where you're not putting more than 25 30% of your net take-home pay into that property, then you're going to do excessively well cuz you're going to be like you and I where you just have these assets and you they they don't exist in your brain. So, you're like, "I'm too busy working. I got to pay the stupid mortgage off. I I want to build a portfolio." And then before you know it, you've got your you know, a multi-million dollar portfolio, but you never look back at the real estate. And then when you look back at it, it's like later in life like if you want to give it to your kids or like us, we would never sell what we have in Toronto. It is so hard to get in the market here that like once you've got something, okay, well, we can leverage it down the road. We can rent it out if we want to move uh if we really want to go down that path. I mean, you have so many options, right? There after and when you own some real estate in the most valued places in the world, like it it does give you that that uh a sense of like well-being to me anyways cuz I'm like, "If I can make it here, like I could sell this if I really wanted to or just leverage it and go move anywhere else in the world, right? Like it's such a Yeah, it's such a good feeling in that sense, but like you, it's weird cuz when you don't consider it, I feel like your ability to build wealth accelerates because once you've paid it off, if you can keep it in a 15-year under mortgage, now you've extended your cash flow, you're not stuck to inflation on rent. I was doing a research on this cuz I was thinking what is better to just rent and invest in the S&P 500 or to buy. And you're the And I did the video was like, well, you'd make this much money if you just rented and you put in S&P you'd have, you know, like 10 million the I just random number, 10 million in the stock market and you only your property only be 1.2. But then when I kept digging deeper and deeper, I factored in human psychology. Yeah.

[00:08:25]>> not work out that way because most people who rent and have the access income are not dumping that into the markets. They're spending it on BS. So they're actually not And that's majority of people. So unless you're highly disciplined, and this is just part of your routine like in Investing's part of my routine, part of your routine, we could do it. We'll take that access income and it's like do it. We'll probably feel weird if we dumped into something that we didn't need. Like I always feel weird when I buy something I feel like I don't need. I I'd rather have it working for me. But most people don't do that. They're like, oh, I have like an extra like two grand sitting around. I'll go do buy this thing. Yeah.

[00:08:57]>> Rather than putting into investment. So that argument makes sense on paper. Like yeah, you will have a lot more money if you rent. But when you factor in human psychology, almost for most people, I'm not saying you person watching this, you're probably disciplined, but for a lot of people it just doesn't factor in.

[00:09:11]They just end up spending that excess money on eating out and doing stuff like that. Cuz how do you maintain that healthy habit, that disciplined habit for the 30 years it would take you to pay off that house? Could you do that for 30 years? Discipline for 30 years?

[00:09:22]>> though too, right? I mean, to me it's the peace of mind. Like I've watched friends go through like just nightmares of at any point time depending on where you are, it's time to get out, I'm giving you six months and I hate moving.

[00:09:32]I moved once and I just the paperwork and the and everyone calling and if you didn't change your insurance there's they're reaming you out and back charging you. Like it's just such a headache to not have control over your living space and like I can pin stuff to the walls. Obviously like with condo life I think people always get the idea well you can just call your landlord.

[00:09:51]I'm like well in a condo you just you just call security and they come and fix your problems. I'm like you might window need replacing. I didn't do it. That's why I live in a condo right but I'm paying for that. So I'm like the trade-offs aren't that much indifferent.

[00:10:03]It's just owning homes come with a lot more expenditures I get it but you know.

[00:10:07]>> One last thing on that if you are someone who's looking at a home you got to factor in all the costs associated associated with home ownership. So you have your mortgage and you also have property tax. You have I have like utility tax. I have all this random then stuff just breaks. Like I changed up my roof not too long ago. It's factor all that in and I'm I guess I'm kind of talking to like Indians right now.

[00:10:26]>> [laughter] >> My fellow Punjabi people out there. We have a bad habit of like oh we'll like buy a 1.6 million dollar house and cuz it's like the other guy has it and we don't want to look bad. Don't do that.

[00:10:38]Like I have an old house for a reason. I did not want to pay a crazy mortgage.

[00:10:43]Right? I wanted a smallest mortgage as possible. So I was I was honest with myself. Like hey what will be the fastest pay off? What meets my needs?

[00:10:49]This is a roof over my head. So I was more than willing to not care how I looked. I just got an older house that met all my criteria to exponentially smaller mortgage. So when you're looking for a home and you're someone a especially a first time home buyer don't feel the need to like max out of 300,000. Don't. Just like have some cash. Have a buffer. Like what's meeting your needs? What is all your criteria? And buy that thing. Have your costs as low as humanly possible. It will reduce your stress. It's just so much easier. Like I'm so grateful I bought this home and not another one.