Oliver Foote

Is Now a Bad Time to Enter The Workforce?

https://youtu.be/8l5jzZKb8eU

Update Dec 14, 2024: Added Newsletter Email Archive at End of Post.

Statistics Canada Thinks It Is

I have been hearing from many people recently that they are having a hard time finding work. This is not just anecdotal, Stats Canada came out with their most recent labour force survey and the unemployment rate is sitting at 6.4% as of June 2024 and has increased 1.3% in total since April 2023 which was a recent low (low = good). Among these groups, returning students (those who are going back to school in the fall) are at their lowest June employment numbers since June 1998. You may be saying not a big deal, students still have time to figure things out. While this is true, they are also the future of the labour market, and one of the most common ways for students to find their full time employment is through their summer internships or other jobs. If there are fewer students interning and less work for students overall I think this is a concerning development.

I think this lower student employment rate, and the overall high unemployment rate are leading indicators that we are heading for stagnation or even some form of a quiet depression. After having conversations with people from many different industries and hearing by word of mouth from friends of friends, a lot of companies are holding off on hiring right now, because there may be some level of uncertainty about whether their clients will continue to be in business in the coming year or two. This is leading to hesitation across the board regarding hiring people, and especially for new grads. This is making it even more challenging since companies that are shrinking their workforce or looking to hire would rather hire one senior person who can do the work of two people rather than hiring two junior people who need training.

Signs of a Drawn Out Downturn?

Of the types of economic downturns, in this case specifically a job market downturn. It is almost better to have a COVID-like situation where people get hit very hard but can bounce back relatively quickly. A long, slow, protracted downturn, meanwhile, may be felt by fewer people as a whole, but for those who do feel it they will not get a lot of relief in the coming years. It has become apparent that although the Bank of Canada has cut rates, the effect of the rate cuts will be fairly muted, as borrowing power only improves marginally for those looking to take out loans such as a mortgage and businesses are still hesitant to borrow money in order to invest. Because leverage is expensive as a whole right now, we will likely see less economic growth. In order for a business to get a good return on their investment they will need a rather high ROI to justify their cost of borrowing and justify a higher risk investment when a relatively risk free investment is still hovering around 3-4%. With inflation coming down below the risk free rate, there is almost no reason for businesses or investors to look towards higher risk investments which means that less money overall will circulate through the economy.

Canada is also in a special situation because we are always welcoming new highly skilled workers into the country, this could be a good thing for businesses because if there is more demand for their jobs they can theoretically pay a lower rate and get the same output. From the workers side this puts them in an unfortunate situation, they will have to find a way to stand out from the crowd or accept a much lower wage at a time when the cost of living is not improving much.

Real Estate Indicators of Slowing Growth

From the real estate side we are seeing some relief in the rental market, as a recent rentals.ca report showed the year over year rental prices in June 2024 were similar or lower in some of the larger metro areas compared to this time last year. We can also look to the resale market and the pile of inventory that is building up, especially in some segments such as condos. This has yet to manifest in much lower prices, but there are some individual great deals for those who are looking. The market is a whole isn’t seeing much price pressure likely due to the fact that owners are finding a way to hold on until they get the price they are looking for and aren’t in a rush to sell. The number of truly “distressed” sales has only increased marginally anecdotally speaking and banks have been instructed to help those who are in distressed situations to manage their real estate. We likely won’t see a significant decline in prices in the coming years, but prices may slide slowly downward until borrowing becomes a bit more affordable.

I do foresee a time in the next 3-5 years as things improve with respect to borrowing costs that prices will jump up due to the lack of new construction sales. New condo projects have been taking longer to sell and fewer people have been purchasing them. This also corroborates my previous point about lower investment as we’ve reached a point in Toronto where about 50% of condos are owned by investors which means that they are soon to be the majority of the potential buyers, if not already are, and if investors are not investing their money, condos are not going to be built. If condos are not built, there will be less housing while more people continue to come to the Toronto area which simply supply and demand says higher prices.

Potential Improvements in Student Economics

Another interesting development has been the cap on student visas. On balance I view this as a positive development as I believe the intention of capping them was to prevent predatory “career” schools from taking advantage of students and not providing them a proper education. I quite frankly see nothing wrong with this, although it may inconvenience people who were all but too happy to take advantage of these students whether for cheap labour or for absurdly high tuition fees. The only potential downside to this is that some reputable institutions may lose some of the funding they were anticipating from international students and have to make cuts. But again, I see nothing wrong with a little competition, and competition breeds innovation, so maybe in the end this will turn out to be a positive development across the board. I also see positives when looking at student adjacent market such as the student rental market around campuses.

They will likely become somewhat less competitive with this change. I recall from my time at university that it was truly a crapshoot trying to find a half decent student house. The number of questionable landlords who didn’t take care of their properties was high, the inability of students to clean up after themselves was bad, the SERIOUS lack of supply was horrendous. Overall, there were frequently poor outcomes and often just plain unsafe living conditions. So some relief in that regard is well overdue in those markets. Although, I’m not certain that this will affect the larger universities who may not be as highly affected by the student visa quota. Interestingly, Graduate level visas have not been affected at all which is in line with the concept that Canada is interested in highly skilled workers. (although arguably our problem is with trades workers not highly skilled workers).

Signals from The United States

Interestingly though, if you look to our friends in the south (the US) their stock markets are continuing to do well, which is arguably signaling that things are improving over there and there is confidence that they will continue to improve. The US employment rate is still hovering around an all time high (a positive development) and since they have a more diverse economy they are more resilient overall. You can’t predict the market, but generally when I look at my portfolio and get very happy that is usually a sign that it’s time to sell some of it and cut down on the risk. However, I’m more of a buy and hold type of investor rather than a time the market investor, so I’ll probably just ride whatever wave comes and try to build up some cash in order to purchase any opportunities that may come along in the next little while.

It will be interesting to see how all of these different aspects of the economy develop in the next couple of years, I will be following them closely and doing my best to keep you up to date on them. Hopefully you found this discussion interesting. Feel free to let me know your thoughts any time, I’m always interested to talk economics.

Keep investing,

Oliver

Sources:

Stats Canada Labour Force Survey June 2024: Click Here

Student Visa Cap News: Click Here

My last post: https://oliverfoote.ca/dont-invest-in-stocks-or-real-estate/

Newsletter #17: Cooling June Market, Rates Cut Not Enough, Unemployment Higher

This Weeks Blog Post:

Is now a bad time to enter the workforce?:

I talk about the employment numbers and general economic outlook
How interest rates will affect the economy and real estate market
Student visas and students high unemployment numbers

Read the full blog post here: https://oliverfoote.ca/is-now-a-bad-time-to-enter-the-workforce/

Real Estate News:

June market stats for the Toronto Real Estate Board:
Listings of all home types up 67% compared to June last year prices have remained consistent at an average price of $1,162,167, down only 1.6%. The number of sales were down 16% compared with the same time last year.
Even with the Bank of Canada quarter of a point rate cut last month, June’s sales results are suggesting that buyers will require more to encourage greater activity throughout the market. Many buyers kept their home purchase decisions on hold keeping the market well-supplied.
TRREB’s Chief Market Analyst Jason Mercer stated that the GTA housing market is currently well-supplied and recent home buyers have benefitted from substantial choice along with negotiating power on price. As sales pick up throughout the balance of the year alongside lower borrowing costs, increased inventory levels will help mitigate against any run-up on selling prices.
Months of inventory levels have doubled since June of last year, homes are simply taking longer to sell, however we are not seeing the downward pressure on pricing one would expect. This shows the resilience of the GTA housing market and the continued demand for real estate in southern Ontario. As the Bank of Canada lowers its lending rate expect more buyers to enter the market and prices to remain strong.
Traditionally July and August are relatively slow months of the year as people go on vacation with their families and put off and big decisions, so it’s likely that supply will continue to build up during the summers months and provide even more selection for buyers.

Market Performance as of open Tuesday July 9, 2024:

S&P 500: 5,584.45 (+17.73% YTD)
NASDAQ: 18,474.51 (+25.12% YTD)
S&P/TSX Composite: 22,058.45 (+5.68% YTD)

Canada CPI Inflation May 2024: 2.9% (0.2% Increase from Apr 2024)
Current BoC Benchmark Interest Rate: 4.75% (0.25% Decrease on June 5, 2024)
Unemployment Rate June 2024: 6.4% (0.2% Increase from May 2023)

Hope you have an amazing week! Chat soon!

Best regards,

Oliver Foote

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Investing in Real Estate With Only $5000

Update Dec 14, 2024: Added Newsletter Email Archive at End of Post.

Private investment funds. That is the topic of todays discussion. You may have heard of something called a REIT or Real Estate Investment Trust, often these can be public companies who might raise money using capital markets. The goal of a REIT, like a normal “company” is to provide it’s investors a return on their investment, specifically through Real Estate. Frequently, the reason that people invest in Real Estate is due to tax benefits, and REITs tend to benefit from tax benefits as well. However, you don’t necessary have to invest in a public REIT, if you know the right people (*cough cough, call/email me), you can find private companies, some of them quite sizeable with hundreds of millions or billions of dollars in assets under management who operate like a REIT.

The benefits of investing privately rather than on the open market is that it is less costly to operate privately than it is to operate on the open market. The open market has very stringent accounting and financial reporting regulations which becomes costly. But, just because a private company doesn’t have these regulations doesn’t mean they are a bad investment or that they aren’t regulated at all. Many private companies, especially those that are sourcing funds from large numbers of investors, will create internal reports similar to what you would get on the open market, maybe monthly, maybe quarterly, as well as your usual MD&A (Management Discussion and Analysis) discussing what their plans are and how they plan to invest going forward. There is also governmental oversight, and securities regulators that get involved when a company is sourcing funds from investors, so generally they are quite safe to invest in and can provide better returns than open market REITs.

Usually these privately run REITs will have a variety of offerings. The one that I’ve connected with in the past offers a minimum initial investment as low at $5,000, and this “segment” of their business exclusively invests in large multifamily rental apartments. They aim to purchase well, fix up, and create a consistent cash flow as a dividend to investors and have a track record to back it up. They also have another division which focuses on development projects, think new construction condos. But the minimum investment for this is closer to $25,000 and you do not get your money back until the project is fully completed. But the total returns on these projects can sometimes be a doubling of your initial investment. You are effectively a source of funding for a well managed construction company and once the properties all get sold you get a payout. The downside is your cash can be locked up for extended periods of time, but it’s almost as passive as real estate investing gets.

Now you might be wondering, well how do the people who run all this stuff get paid? The answer is that there is a management fee baked into the return that you get back. This management fee depends on the type of project, the sector of real estate in which you are investing and various other things. But this is really where smaller, (i.e. Less than a billion dollar) companies tend to shine. They tend to run leaner operations than public companies and can choose to undergo things like development projects that take multiple years without the investors being able to pull out at any time when they fell like it. There are multiple other ways in which private real estate investing is superior to public REIT investing and I would highly recommend this route for people who want some exposure to real estate, but don’t want to manage it themselves and want to get good value for their investment.

There is no such thing as a guaranteed investment, but real estate is a tangible asset so you know your money is backing something that actually exists. The goal of many REITs is to provide cash flow, as mentioned above. Which means that the market fluctuations shouldn’t have a significant impact on the amount of money that you see, because the price of the real estate only matters when they go to sell it, and as long as they manage the properties well and continue to improve them and attract better rental prices, your investment will pay you dividends for years to come regardless of what the market is doing. Every investment has risk, but well managed real estate can be one of the lowest risk investments out there if you know where to look.

Now if you do have a higher amount of capital, you could do something like this yourself, or even if you just have a few hundred thousand dollars you may after some analysis that you can get better returns if you do it yourself. That’s fine if you have the time invest the money yourself, often if you’re making a high income, you may not time outside of earning that income to put the money you’ve made to use, and in that case this is a perfect win-win situation of you’re that type of person. You may not get as high of a return as doing it yourself, but it’s not a bad way to invest your money while you build up more capital to make your own moves.

Additionally, considering the real estate industry in Canada is so robust with high immigration rates, constrained supply, and interest rates that will (eventually) come back down. It’s a pretty good bet that going forward you will continue to make money in real estate. The only caution I’m going to throw in here is that there is now a concerted effort from all levels of government to get more homes built, which in years to come could slow down the appreciation we’ve seen in prior decades (you may only get 5% growth rather than 10% growth like we saw from 2010-2020). This I think overall will be a good thing as it will get more people into the homeownership market, and I know that myself and lots of other young people still would like to own a home some day so any relief in pricing will be appreciated.

That being said I also do think that a bigger issue is going to be rental prices. As more investors enter the market (which is the trend we are seeing). These investors will want rents to cover expenses and make continued cash flow. But valuations are so high, that from the POV of many investors rents just aren’t keeping up (high interest rates aren’t helping either). So investors either will have to become more creative, or they will have to pool more of their money together to purchase with less debt, since debt is so expensive right now, and this is again, where crowd sourced capital is a very neat idea.

In a way these high valuations and low rents make sense because there is this principle of highest and best use in real estate. The principle asks if a certain lot is being maximized and put to the “most profitable” use within the current laws. If the answer is no then your investment will look like a bad idea and rents won’t cover expenses. Often in order to achieve this highest and best use, you have to take on risk, do some redevelopment of a property (which has city council approval risk) or have private investors that will lend you their money at below market rates and expect a good ROI. Highest and best use can make it more challenging for individual investors in places like the downtown core since competition will continue to heat up for rental properties. The only people with the money to take on conversion projects might just be larger companies like the ones I mentioned earlier in this post.

If this sounds interesting to you and you just want to test out private investing, I encourage doing so with a small amount of money (as little at $5000), into a private REIT project, and then increasing your investment if you like the results. If you send me an email mentioning this blog post I’ll introduce you to the CEO of a company that operates out of Toronto and throughout the greater golden horseshoe area doing basically exactly what I described in this post, he’ll give you a much clearer and concise rundown of how they operate and what their strategy is. They are top notch and very professional and I would highly recommend them to anyone.

Hope you found this interesting.

Keep investing,

Oliver Foote

Newsletter #15: Investing in Real Estate With $5000. Summer is approaching.

This Weeks Blog Post:

Investing in Real Estate with Less Than $5000:

I talk about what a REIT (Real Estate Investment Trust) is
Why and when you should consider investing in one
What the difference is between a private smaller REIT and a publicly traded larger REIT

Read the full blog post here: https://oliverfoote.ca/investing-in-real-estate-with-only-5000/

Real Estate News:

CPI inflation fell as of the report this Wednesday from 2.9% in March to 2.7% in April (year over year changes). The largest driver of the slowdown in inflation was a slowdown in food prices increasing. Meanwhile gasoline (which impacts much of the other components of the index) increased 6.1% in April compared to 4.5% in March. Shelter costs remained high as well showing a year over year increase of 6.4%.
While interest rates remain high, prices for homes have not moved considerably in either direction up or down. Even with more inventory coming onto the market than last year prices remain steady. Notably, lower priced homes have more inventory and fewer buyers, while higher priced homes are trading hands more often. This is an interesting dynamic and is keeping the average price steady, while individual micro markets are behaving quite differently depending on location, even within a few blocks of each other.
The numbers tell one story, but in order to get a clear picture of what is really going on in the particular markets you are interested in a where the opportunities lie it requires some investigation. There are still many opportunities out there if you know where to look.
I am going to continue to stress this in upcoming newsletters, but now is a good time to be an investor (even with the coming capital gains increase). Because you will be buying in a relatively cool market, and inflation is finally approaching 2% and is already within the BoC’s “margin of error” range of 1-3%. Once they cut rates, people will come back, and if you can get into the market before that happens, you will ride the wave of people returning to the market.
Many people are predicting rate cuts towards the later half of this year, I’m inclined to believe the first rate cut will come after the summer and a second one in the winter for a total of 0.5%. We’ll see what ends up happening, since things tend to be taking longer than anyone expects.

Market Performance as of close Friday May 24, 2024:

S&P 500: 5,304.72 (+11.85% YTD)
NASDAQ: 16,920.80 (+14.59% YTD)
S&P/TSX Composite: 22,320.87 (+6.94% YTD)

Canada CPI Inflation Apr 2024: 2.7% (0.2% Decrease from Mar 2024)
Current BoC Benchmark Interest Rate: 5% NC (Next Meeting: June 5, 2024)
Unemployment Rate Apr 2024: 6.1% (0.0% Change from Mar 2023)

Have a great week,

Oliver

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How To Add Secondary Units (or ADUs) in Ontario

Update Dec 14, 2024: Added Newsletter Email Archive at End of Post.

The New Legislation:

Back in 2019 the Ontario Government introduced a law that allows up to 3 units on a single property without a zoning bylaw amendment. It was up to municipalities to individually change their zoning bylaws and now in 2024, the majority, if not all municipalities across Ontario have implemented some version of this bylaw. Some municipalities are allowing up to 4 units without requiring a zoning bylaw amendment. This may not seem like anything special to an outsider, but this is a very big change in the status quo. If you’ve ever tried to change a zoning bylaw or know someone who has some form of development you’ll understand what I’m talking about.

How Things Used to Work:

Let’s talk about how things would have worked prior to this new law in order to give you a better idea about how these changes make building housing easier. For those who are unaware of how land planning works in Ontario here’s a brief synopsis. The Ontario government administers something called the Planning Act which is the overarching legislation of what Ontario as a province wants to achieve with respect the land use, housing, transportation, environmental concerns etc. The Planning Act provides the basis for each individual municipal government to come up with something known as an Official Plan for their city. This document outlines on a more granular level how the municipal government plans to use all of the land in their municipality. They administer things like building permits and enforce zoning bylaws. A zoning bylaw is effectively a list of requirements for each land use zone. For example you might have agricultural zoning, single family residential zoning, industrial zoning, retail zoning, or mixed commercial and residential zoning. Each of these zones will have rules like maximum building height, minimum setback from the lot lines, maximum buildable areas, parking requirements, etc. Most municipal websites have all of this documented and easily accessible so if you’re curious or you plan to build or develop land, it’s always advisable to get familiar with your zone. You can also find past city council decisions on the municipal website or the Ontario Land Tribunal website to learn what council tends to decide when people want to apply for special exceptions similar to one you might be considering. You can also call up the city and ask a city planner there if your proposed change would fall within the zoning bylaw.

Generally speaking if the change you want to make to your property is within the zoning bylaws rules, even if it’s a teardown and rebuild, you will have no trouble applying for a building permit. However, if you are proposing a change that falls just outside of the zoning bylaws you‘ll have to apply for a minor variance (e.g. taller building height than generally allowed). Depending on how big the change is and how reasonable the city views the change with respect to the surrounding properties you may or may not have your minor variance accepted. This process alone, can sometimes take multiple months depending on how back logged the city is. Then we get into the big scary monster of trying to re-zone a property. All I have to say is best of luck to you if you plan to re-zone something. I hope you have lots of time and lots of money ready to go. Changing zoning bylaws is a system that, in my opinion, was not very well thought out and now leads to significant delays in housing development.

Before this new law allowing up to 3 units on a single lot. If you wanted to change your “single-family residential” property to 3 or more units, that would usually fall well outside the current zoning bylaw and you would have to apply for a re-zoning. When you apply for this re-zoning, you have to hire planners and architects to prepare a proposal for the city, then once the city has received your proposal they put up a big sign on the property explaining the proposed change. Then they mail out a letter to all surrounding properties explaining the proposed change, and set a date allowing people to voice their concerns. Overall, I’m in favour of allowing people who have pre-existing homes to voice their concerns, especially if the proposed change could or would have an impact on the property owners quality of life or impede on their existing properties somehow.

However, like anything, you will get people who will simply disagree for the sake of disagreeing and will not allow ANY change to happen no matter how small. This is where this process falls apart in my opinion (and where the term NIMBY comes from). As cities grow and run out of land, the natural progression is to increase density. So as property values increase you will get developers or homeowners who would like to add a second or third unit legally to their property in order to help pay for the mortgage or simply to add more housing supply to an already suffocating city. But often times this means a re-zoning application. So instead of the city being able to simply approve the building permits and plans like they can now thanks to the updated legislation. There would be a whole rigamarole process that could often take multiple years and could even involve lawyers or paralegals to represent the arguing parties, which adds expense and delays to what often times could be a more simple process.

So effectively your options were, build a unit illegally and hope no one finds out (like a lot of Brampton, sorry Brampton), or spend multiple years and lots of money fighting for a simple change that at most will add a car or two to the street and probably won’t inconvenience your neighbours. I think that two things can be true at once, people having the right to voice their concerns, and the city looking out for the citizenry as a whole. They should consider the needs of the city and make decisions that help solve problems rather than exacerbate them.

Thoughts on a New System of Land Development:

Briefly, I want to discuss very big redevelopment projects and the problem with the way things are currently done. I think that the city requiring developers to submit a plan first and THEN allowing citizens to voice their concerns, and (usually) tear it top bits, is counter-productive and wastes everyone’s time and money. In my opinion a better approach could be allowing citizen to voice their opinions BEFORE tens of thousands of dollars have already been spent (sometimes more). This would allow community groups to consult on how land will be redeveloped alongside developers, architects, and city planners to come up with a plan that considers everyone’s interests BEFORE submitting the application and proposal to the city. I think this would ultimately speed up the city planning process and would make all parties much happier in the end rather than standoffish. With this model all stakeholders were considered and collaborated in the creation of this new development. I’m not sure how practical something like this would be but I think it’s worth considering as a better method of city planning.

What The New Legislation Makes Easier:

As mentioned the new rules allow up to 3 units per lot. Depending on your municipality their implementation of the rules might be a little bit different. For example in Toronto depending on your property you may have access to a laneway, which could allow for the construction of a laneway house or Accessory Dwelling Unit (ADU). There are already companies out there which specialize in developing plans for laneway suites. If you want to find out if your property is suitable for a laneway suite there is a very handy tool called adusearch.ca which allows you to looking up certain cities and determine if your property can have one. In Toronto a majority of the existing land can have an ADU built. There is potential for over 400,000 new units (either attached or accessory to the existing building). The website says that there are currently 126 permitted ADUs in Toronto, I’m not certain I believe that the number is so low. But it could be that most basement apartments in the city do not have permits or maybe don’t fall under their definition of ADU.

In other cities like Mississauga for example you would most likely be looking at building a basement apartment, garden suite, or garage conversion. This was approved very recently in Mississauga in November of 2023. I would recommend looking at proposed bylaw amendments that show how a potential garden suite could be constructed (it’s also just fun to look at the renders). You can find the meeting notes here (pg. 83-134, pg. 112 and beyond are the renders). Depending on the size of your particular lot the allowable garden suite size will vary up to a maximum of around 1000 sq ft. The Region of Peel also has a forgivable loan program which can provide around $20,000 to upgrade a pre-existing basement apartment to a legal basement apartment if certain conditions are met. There might be similar programs in your region or municipality and if you are considering developing a secondary unit I would highly recommend speaking to the city planners at the city and expressing your intentions to see if they might be able to help you with your planning process and make sure that it goes according to plan.

It’s Still Not Enough:

While it’s great that all these changes are being made to add density. Quite honestly, all of these will be a drop in the bucket compared to the actual amount of housing that is needed across the province to help solve our housing crisis. Larger developments and purpose built rental housing will be more likely to put a real dent in the situation. While there is more funding at provincial and municipal levels to speed up development approvals and speed up timelines at the Ontario Land Tribunal we are still quite a ways away from building the housing that is going to be required to improve our current situation. We can’t solely rely on the private sector to develop all the housing the province needs as has become very apparent over the past few decades. There have been improvements to purpose built rental housing over the past few years after an almost 30 year lull in development thanks to different programs that assist larger developers in either redeveloping older properties or providing them HST breaks among other things to make the numbers actually make sense for this type of development. However, I do hope that many people decide to take advantage of the easier development and approval processes across Ontario because any amount of new housing is better than no new housing.

As always thank you for reading, feel free to let me know what you thought in the comments or via email. I’ll see you back here in two weeks.

All the best,

Oliver

Newsletter #11: Adding Secondary Units Legally, Renter Rights, Spring Market Predictions

Happy Easter long weekend! I hope that those of you who are able to take some time off do so. For those who haven’t yet started their taxes, this is your reminder to get on it! This week there is some interesting news articles that came out about the federal government and renters rights. I have a small analysis of what may be to come in this Spring real estate market. Spring is officially here and this is seasonally the busiest time of year for buying and selling homes, it will be interesting to see how many sales happen this Spring and through to the end of the year, many analyst are predict this to be a more active year than 2023 in that regard. Check out the blog post on ADUs and the new laws that Ontario passed allowing up to 3 units on (almost) any pre-existing lot without requiring a zoning change.

This Weeks Blog Post:

How to Add Secondary Units or ADUs in Ontario:

How different municipalities have implemented this legislation
Toronto’s new easy to build “laneway homes” and tool to see if your property is eligible
Some conversation about why this is overall a positive change and how the land planning and use process could be improved by involving the community earlier in the developmental process

Read the full blog post here: https://oliverfoote.ca/2024/03/31/how-to-add-secondary-units-or-adus-in-ontario/

Housing News:

Trudeau government to introduce new measures for Renters: https://globalnews.ca/news/10387043/trudeau-renter-reforms-2024-budget/
- Wants to make it standard to include rent payments into tenants credit scores. Rent tends to be a large payment and showing on time payments could help when looking for a mortgage
- Standardized national lease agreements
- Renters Bill of Rights, crack down on renovictions etc.

Spring Housing Market Discussion:

Some analysts believe that rates could be cut as early as June. Since real estate remains one of the CPI components that is holding inflation higher, I find it unlikely that the Spring market will be conducive to lower rates, since fixed rate mortgage borrowing costs continue to stay somewhat low.
Additionally, with the current stock market Bull Run, some investors may choose to put some of their cash towards purchase other assets (including real estate). This could mean that the real estate market will find itself in short supply once again with upward pressure on prices. There is a well studied psychological effect that an increase in investors assets tends to result in an increase in their overall “consumer sentiment” and thus their spending.
Owners with pandemic low 3-year fixed mortgages are likely to have their mortgages come up for renewal this year, and their cost of homeownership will likely go higher. This could cause people to be forced to sell and lead to increased supply. For others it will untether them from the past mortgage reality into the new one which could see an increased number of people looking to make a move either to downsize or upsize.

Market Performance as of close Thursday March 29, 2024:

S&P 500: 5,254.35 (+10.79% YTD)
NASDAQ: 16,379.46 (+10.93% YTD)
S&P/TSX Composite: 22,167.03 (+6.20% YTD)

Canada CPI Inflation Jan 2024: 2.8% (0.1% Decrease from Jan 2024)
Current BoC Benchmark Interest Rate: 5% NC (Next Meeting: April 10, 2024)
Unemployment Rate Feb 2024: 5.8% (0.1% Increase from Jan 2023)

Have a Great Week!

Best regards, Oliver Foote