Transcript: The Cooling of an Overheated Market | Jun 16, 2017

Nam sits in the studio. She's in her early forties, with shoulder length curly brown hair. She's wearing glasses and a dark gray blazer over a striped red and blue shirt.

A caption on screen reads "The cooling of an overheated market? Nam Kiwanuka, @namshine, @theagenda."

Nam says THE REAL ESTATE MARKET
IN THE GREATER TORONTO AREA HAS
BEEN SO HOT FOR SO LONG THAT IN
APRIL, THE PROVINCIAL GOVERNMENT
EVEN STEPPED IN WITH MEASURES
AIMED AT COOLING IT OFF.
NOW, AS AN UNEVEN SPRING MARKET
HEADS TOWARD SUMMER, SOME ARE
SAYING THE BOOM IS FINALLY
BUSTING.
OF COURSE, MANY OTHERS SAY IT'S
NOT.
JOINING US NOW ON WHAT'S GOING
ON AND WHAT'S BEHIND IT:
TESS KALINOWSKI, THE TORONTO
STAR'S REAL ESTATE REPORTER...

Tess is in her late forties, with blond-dyed gray hair. She's wearing glasses, a gray blazer over a white blouse, and a chain necklace.

Nam continues AND JOHN PASALIS, FOUNDER OF
REALOSOPHY REALTY INC.

John is in his forties, clean-shaven, with wavy brown hair. He's wearing a gray suit and a checkered pink shirt.

Nam continues THANK YOU BOTH FOR BEING HERE.
WE'VE BEEN CHATTING ABOUT REAL
ESTATE BEFORE WE STARTED BUT
IT'S SUCH A HOT TOPIC.
TESS, ON TUESDAY, YOU REPORTED
ON TORONTO HOUSING PRICES.

A slate appears on screen, with the title "Toronto housing prices. Multiple listing services (MLS) average price for all home types."

The slate shows two sets of bar charts comparing the prices in April 2016 and 2017, and May 2016 and 2017.

Nam reads data from the slate and says
THIS DATA IS FROM THE TORONTO
REAL ESTATE BOARD WHICH SHOWS A
DROP IN HOUSE PRICES ABOUT 6 percent IN
MAY 2017 COMPARED TO APRIL OF
THIS YEAR, AND YET ON THURSDAY,
THE GLOBE AND MAIL REPORTED THAT
TORONTO HOUSING PRICES ROSE BY
3.6 percent IN MAY COMPARED TO APRIL.
AND THEY WERE USING DATA FROM
THE TERRANET NATIONAL BANK
HOUSING INDEX.
HOW CAN PRICES BE GOING UP AND
DOWN AT THE SAME TIME?

The caption changes to "TESS KALINOWSKI. Toronto Star."
Then, it changes again to "Up or down?"

Tess says I DON'T
KNOW A LOT ABOUT DATA RESEARCH,
BUT I HAVE LOOKED INTO THIS A
LITTLE BIT, AND WHAT I
UNDERSTAND IS THEY ARE TWO
DIFFERENT INDEXES.
SO THE TORONTO REAL ESTATE BOARD
AND OTHER REAL ESTATE BOARDS USE
THE MLS AND THEY HAVE A
BENCHMARK INDEX BASED ON THAT
DATA, BUT TERRANET USES A
DIFFERENT KIND OF DATA.
THEY ACTUALLY DON'T REGISTER
DATA, THEY REGISTER CLOSINGS, SO
SALES THAT ACTUALLY WENT THROUGH
ON ALL SALES THAT HAVE HOMES
THAT HAVE SOLD MORE THAN ONCE.
SO THEY REGISTER THE SECOND SALE
OF HOMES.
AND WHAT THEY TELL ME IS THAT
EVENTUALLY ACTUALLY THE TWO SETS
DO TEND TO FOLLOW ONE ANOTHER,
BUT THE TERRANET DATA HAS A BIT
OF A LAG ON IT BECAUSE MOST
PEOPLE BUY A HOME AND THAT'S
WHAT THE REAL ESTATE BOARD
MEASURES, BUT THEN IT TAKES, I
DON'T KNOW, 60, 90, 120 DAYS FOR
THAT SALE TO CLOSE, AND SO
TERRANET DATA SHOULD BE COMING
UP BEHIND.
BUT IT'S ALSO A DIFFERENT DATA SET.

Nam says ISN'T THIS CONFUSING?
JOHN, IF SOMEONE IS CONSIDERING
BUYING OR NOT BUYING, ISN'T THIS
CONFUSING?
WHY NOT MAKE IT SIMPLER?

The caption changes to "JOHN PASALIS. Realosophy Realty Inc."

John says YEAH, IT IS CONFUSING.
IT IS CHALLENGING.
AND IT'S ABSOLUTELY RIGHT.
THE NUMBERS PUBLISHED BY
TERRANET NOW ARE ACTUALLY KIND
OF REFERRING TO SALES THAT
HAPPENED IN MARCH FOR THE
MULTIPLIER.
THAT'S WHY THEY'RE STILL UP.
AS TESS SAID, A DIFFERENT
APPROACH IS TO LOOK AT THE
PRICES.
I MEAN, THEY'RE BOTH CORRECT.
IT IS JUST CHALLENGING FOR
CONSUMERS TO MAKE SENSE OF THIS.
ONE WEEK THEY'RE READING PRICES
ARE FALLING, THE NEXT WEEK
PRICES ARE UP AND THERE'S NO
SLOWDOWN.
EVEN IN THE INDUSTRY, PEOPLE ARE
MESSAGING ME TRYING TO FIGURE
OUT WHAT'S GOING ON AND TRYING
TO MAKE SENSE OF THIS.

Nam says SHOULD WE BE HAPPY
THAT PRICES SEEM TO BE GOING UP?

Tess says IT DEPENDS
WHAT SIDE YOU'RE ON.
AS A SELLER, YOU MIGHT FIND IT
CONFUSING.
A FEW WEEKS AGO, PEOPLE WERE
LINING UP TO BUY YOUR HOUSE,
BIDDING CRAZY AMOUNTS OF MONEY,
AND ALL OF A SUDDEN YOU'RE
COMPETING AGAINST DOZENS MORE
HOMES IN YOUR MARKET.
SO YOU'VE GOT TO BE COMPETITIVE
IN YOUR PRICING.
FOR BUYERS, I THINK IT'S A GOOD
THING.

Nam says IT IS A GOOD THING.
I WAS RECENTLY A BUYER.
JOHN, IN MARCH YOU WROTE A
REPORT ON INVESTOR DEMAND FOR
HOUSING IN THE GTA, WHERE YOU
SAID THAT RISING HOUSE PRICES
ARE A SYMPTOM OF UNDERLYING
PROBLEMS.
WHAT PROBLEMS ARE THESE?

John says WHAT WE FOUND
WAS THERE WAS A SIGNIFICANT
INCREASE IN THE NUMBER OF PEOPLE
WHO WERE BUYING SINGLE FAMILY
HOMES STRICTLY TO RENT THEM OUT
AS INVESTMENT PROPERTIES.
NORMALLY THAT'S FINE AND THAT'S
NORMAL.
THAT'S HOW PEOPLE INVEST IN REAL
ESTATE.
THE PROBLEM WAS THAT, YOU KNOW,
WHEN WE LOOKED AT THE PRICES
PEOPLE WERE PAYING FOR HOMES AND
THE RENTS THEY WERE GENERATING,
THEY DIDN'T MAKE SENSE.
THEY WERE BUYING 2 MILLION dollar
HOMES AND RENTING THEM FOR 2 800.
SO THE RENT WAS NOT HIGH ENOUGH
TO COVER THE MORTGAGE COSTS, THE
PROPERTY TAXES, AND ALL THE
OTHER EXPENSES.
SO WE BELIEVE THAT A LOT OF THIS
TYPE OF INVESTOR DEMAND WAS
ACTUALLY A SYMPTOM OF LIKE A
SPECULATIVE DEMAND.
PEOPLE WHO WERE BUYING THESE
PROPERTIES STRICTLY BECAUSE THEY
BELIEVED THAT HOUSE PRICES WOULD
KEEP GOING UP 20 TO 25 PERCENT A
YEAR.
AND THIS IS WHAT ANECDOTALLY...
I MEAN, WHAT LED TO THIS,
ANECDOTALLY WE NOTICE THIS IN
OUR OWN BROKERAGE, A LOT OF
PEOPLE WANTING TO BUY HOMES AND
NOT CARING ABOUT IT BECAUSE THEY
BELIEVED PRICES WERE GOING TO GO
UP EVERY MONTH.
THAT WAS NOT RATIONAL BEHAVIOUR.

Nam says THE LIBERALS PROPOSED...

A quote appears on screen, under the title "Taxing times." The quote reads "A new 15 percent NON-RESIDENT SPECULATION TAX (NRST) ON THE PRICE OF HOMES IN THE GREATER GOLDEN HORSESHOE (GGH) PURCHASED BY INDIVIDUALS WHO WERE NOT CITIZENS OR PERMANENT RESIDENTS OF CANADA OR BY FOREIGN CORPORATIONS."
Quoted from the Ontario Ministry of Finance. April 20, 2017.

Nam continues HAS THE NEW TAX WHICH ACTUALLY
CAME INTO EFFECT ON APRIL 21ST,
HAS IT CONTRIBUTED TO THE
COOLING OFF IN THE GTA THAT
WE'RE SEEING IN HOUSING?

The caption changes to "I'm speculating."

Tess says I THINK
PSYCHOLOGICALLY, IT HAS.
BUT I HAVEN'T FOUND ANYBODY WHO
HAS ANY FIRM DATA ON HOW MANY
FOREIGN BUYERS ARE ACTUALLY
INVOLVED IN THE TORONTO MARKET,
AND I CERTAINLY HAVEN'T FOUND
ANYBODY WHO SUGGESTS THAT IT'S A
GREATER LEVEL OF FOREIGN
OWNERSHIP HERE THAN IN
VANCOUVER, FOR EXAMPLE.
SO I THINK IT'S HAD A BIG
PSYCHOLOGICAL IMPACT BUT I'M NOT
HEARING IT'S HAD MUCH IMPACT IN
THE SECTORS YOU WOULD EXPECT
FOREIGN BUYERS TO BE BUYING UP.

Nam says WHAT'S THAT, TESS?

Tess says PRECONSTRUCTION CONDOS AND
LUXURY HOMES BECAUSE THERE'S A
PERVASIVE FEELING THAT FOREIGN
BUYERS BUY HIGH INVESTMENT
PROPERTY OR CONDOS, AND I'M TOLD
PRECONSTRUCTION CONDOS ARE STILL
SELLING OUT, SOME BIG PROJECTS
HAVE BEEN ANNOUNCED.

Nam says DO YOU THINK THIS IS
THE WRONG APPROACH BY THE
GOVERNMENT, JOHN?

John says I DON'T THINK
IT DID ANYTHING.
IT'S IN THEORY IMPORTANT TO HAVE
DONE THAT, BUT THE PROVINCIAL
GOVERNMENT PUT IN SO MANY
EXEMPTIONS THAT PROBABLY NO ONE
FITS THE DESCRIPTION.
SO IF YOU HAVE A STUDENT THAT'S
GOING TO UNIVERSITY, THEY'RE
BASICALLY SAYING, YOU CAN COME
HERE AND SPECULATE ALL YOU WANT
AND ALL OF YOUR PROFITS ARE
TAX-FREE BECAUSE YOUR CHILD IS
LIVING THERE AND IT'S A
PRINCIPAL RESIDENCE NOW AND
THEY'RE EXEMPT.
THEY DON'T HAVE TO PAY THE
NON-RESIDENT SPECULATION TAX AND
ALL OF THEIR CAPITAL GAINS ARE
TAX-FREE.
I THINK THAT'S PROBLEMATIC IN A
MARKET OF OURS THAT IS
APPRECIATING AT THIS RATE.
THEY PROBABLY SHOULD HAVE GONE
FURTHER AND MADE IT A LITTLE BIT
MORE DIFFICULT.

Nam says IN WHAT WAY, THOUGH?

John says NOT HAVE ALL
OF THESE EXEMPTIONS, RIGHT?
THE PROBLEM IS WHEN YOU OPEN UP
YOUR DOORS AND BASICALLY ALLOW
YOUR MARKET FOR SINGLE FAMILY
HOMES TO BE A MARKET THAT PEOPLE
CAN JUST SPECULATE IN, WHO'S IT
ON THE BACKS OF?
IT'S ON THE BACKS OF MIDDLE
CLASS HOME OWNERS AND HOME
BUYERS WHO CAN'T AFFORD HOMES
NOW OR WHO HAVE TO SPEND AN
EXTRA 200,000 dollars OR 300,000 dollars ON A
HOME.
A YEAR AGO THEY COULD AFFORD A HOME.
NOW IT'S 900 AND THEY HAVE TO
MOVE TO EAST GWILLIMBURY OR GUELPH.

Nam says TESS, WHAT CAN BE DONE
TO REIN IN THIS PROPERTY
SPECULATION?

The caption changes to "Tess Kalinowsky, @TessKalinowski."

Tess says TO BE
HONEST, I DON'T REALLY KNOW.
I THINK YOU COULD RESTRICT
MORTGAGE HOLDERS MORE.
THE LENDING RULES ON SECOND
PROPERTIES COULD PERHAPS BE
TIGHTER.

The caption changes to "Connect with us: @theagenda, TVO.org, Facebook, YouTube, Periscope, Instagram."

John says YEAH, ABSOLUTELY.
I MEAN, THE REQUIREMENTS ON WHEN
YOU'RE... THEY CHANGED THE
REQUIREMENTS ON BUYING SECOND
PROPERTIES A WHILE AGO.
ONE EXAMPLE WOULD BE INCREASE
THE DOWN PAYMENT REQUIREMENTS
WHEN YOU'RE BUYING A SECOND OR
THIRD OR FOURTH PROPERTY, AND
THERE ARE A LOT OF... THERE ARE
COUNTRIES AROUND THE WORLD THAT
HAVE DIFFERENT MEASURES.
THEY PUT IN ADDITIONAL TAXES IF
YOU'RE FLIPPING HOMES.
IF YOU'RE BUYING AND SELLING IN
A SHORT PERIOD OF TIME.
THEY DO THESE THINGS NOT AS AN
OVERALL RULE THAT'S WHAT YOU
WANT TO DO IN YOUR MARKET, BUT
THEY INTRODUCE THESE MEASURES IN
PERIODS WHERE IT LOOKS LIKE THE
MARKET IS FROTHY AND
SPECULATIVE.
IT'S NOT DONE KIND OF
UNIVERSALLY ALL THE TIME.
IT'S THESE NEW MEASURES ARE
INTRODUCED FOR A SHORT PERIOD OF
TIME TO TRY TO COOL THE MARKET.
I THINK THE PROVINCIAL
GOVERNMENT MISSED AN
OPPORTUNITY.
A LOT OF THESE MEASURES SHOULD
HAVE BEEN INTRODUCED EARLY IN
2016, NOT IN 2017.

Nam says WE'VE BEEN HEARING A
LOT ABOUT PEOPLE FROM TORONTO
MOVING TO HAMILTON.
PEOPLE CALLING IT THE BROOKLYN
OF ONTARIO, OR CANADA.
BUT THERE'S ALSO BEEN REPORTS
THAT SOME PEOPLE HAVE BEEN
PUSHED OUT TO MONTRÉAL, WHICH TO
ME IS SHOCKING.
SO HOW BIG A RIPPLE HAS THE
GTA'S HOT HOUSING MARKET CREATED
IN SURROUNDING COMMUNITIES?

Tess says I THINK IT'S HUGE.
I MEAN, BOTH TERRANET AND THE
REAL ESTATE BOARD DATA SUGGESTS
THAT SOME OF THE HOTTER MARKETS
ARE THE ONES OUT TOWARD GUELPH
AND I TALKED TO PEOPLE IN
HAMILTON WHO ARE CONCERNED THAT
THE BUYING FEVER FROM TORONTO IS
ACTUALLY PUSHING HAMILTONIANS
FURTHER DOWN THE NIAGARA
PENINSULA.
SO I THINK IT IS SIGNIFICANT.
THE MARKETS AROUND LONDON ARE
APPARENTLY HOT.
EVEN AS FAR AS WINDSOR.
SO I THINK IT'S HAD A BIG
IMPACT.

Nam says TESS, IN YOUR ARTICLE
ON TUESDAY, YOU WROTE THAT...

Another quote appears on screen, under the title "Election issue." The quote reads "Research for the Ontario Real Estate Association (OREA) showed 37 percent of Ontarians strongly believe housing affordability belongs on the upcoming provincial election agenda with 30 percent saying they would be more likely to vote for a party that takes on the issue."
Quoted from Tess Kalinowsky, Toronto Star. June 13, 2017.

Nam says ARE THERE MEASURES IN
THE ONTARIO FAIR HOUSING PLAN
THAT COULD SATISFY THESE VOTERS?

The caption changes to "An affordability platform."

Tess says I THINK
PROBABLY RENT CONTROL IS
SOMETHING THAT COULD SATISFY A
LOT OF VOTERS.
I IMAGINE THAT'S PRETTY POPULAR.
BUT THERE'S A WHOLE ISSUE AROUND
RENTING HERE.
PEOPLE BELIEVE THAT IF WE HAD
MORE RENTALS, OUR HOUSING WOULD
BE MORE AFFORDABLE, NOT JUST
BECAUSE PEOPLE COULD HAVE THE
OPTION OF STAYING IN RENTAL
APARTMENTS LONGER, BUT IT WOULD
JUST... IT WOULD COOL THINGS
DOWN CONSIDERABLY.
SO THERE IS THAT, ALTHOUGH NOW
THERE'S THE COMPETING OPINION
THAT PEOPLE WON'T BUILD RENTAL
APARTMENTS BECAUSE THEY CAN'T
MAKE THEIR MONEY BACK ON THEM.

Nam says DO YOU THINK THAT'S
THE WAY TO GO, JOHN, HAVE MORE
RENTALS?

John says WE DEFINITELY
NEED MORE RENTALS.
I THINK THE DECISION TO SORT OF
LIMIT THE INCREASE ON
CONSTRUCTION IS PROBLEMATIC
BECAUSE IT'S NOT GOING TO
ENCOURAGE MORE CONSTRUCTION.
JUST AS DEVELOPERS WERE
ANNOUNCING MORE PURPOSE-BUILT
RENTALS, YOU KNOW, THE PROVINCE
INTRODUCED THIS MEASURE AND IT'S
PROBABLY GOING TO CURB IT.
I BELIEVE THE PROVINCE MIGHT BE
OPEN TO SORT OF CHANGING THAT
AROUND SORT OF NEWLY BUILT ONES,
SO WE'LL SEE.
I DON'T THINK THIS IS LAW YET.
SO THEY CAN POTENTIALLY OPEN IT
UP TO NEWLY BUILT PURPOSE-BUILT
RENTALS THAT GIVES THEM MORE
FLEXIBILITY.

Nam says I READ A LOT OF
ARTICLES THAT PEOPLE SHOULD GIVE
UP THE IDEA OF OWNING A DETACHED HOME.
IS THAT FAIR?

Tess says I THINK
EVERYBODY HAS TO MAKE
COMPROMISES IN LIFE, AND I
THINK, WITH THE REGION THAT
WE'RE BUILDING, THERE WILL BE
COMPROMISES.
I DON'T THINK PEOPLE WHO MOVE TO
MANHATTAN EXPECT TO LIVE IN A
DETACHED HOME.
AND I THINK WITH THE ONTARIO
GROWTH PLAN AND...

Nam says BUT MANHATTAN ARE ON
AN ISLAND.

Tess says I KNOW THAT.
BUT WE'RE IN AN ISLAND
ESSENTIALLY WITH THE GROWTH PLAN
AND GREENBELT AROUND THE CITY.
THE GOVERNMENT IS TELLING
BUILDERS, THIS IS THE LAND FOR
BUILDING HOMES NOW, AND THERE'S
STRONG DATA SUGGESTING THERE'S
LOTS OF IT, BUT BEYOND THAT, YOU
CANNOT GO.
SO WE'RE GOING TO BE SQUASHED
INTO CERTAINLY A DESIGNATED AREA
AND THEREBY SOME COMPROMISES
THAT PEOPLE HAVE TO GET.
THE QUESTION IS: IF YOU'RE
WILLING TO BUY A STACKED
TOWNHOME OR A TOWNHOUSE WITH A
LITTLE PATCH OF GRASS AND YOU
HAVE TO TRAVEL TO ONE OF THE 905
COMMUNITIES AROUND TORONTO TO
LIVE IN THAT, IS THAT STILL THE
DREAM?

Nam says RIGHT.
JOHN, AT THE BEGINNING OF MAY,
TIM HUDAK, WHO IS NOW THE CEO OF
THE ONTARIO REAL ESTATE
ASSOCIATION, SPOKE TO STEVE
PAIKIN ABOUT SOME OF THE THINGS
HIS ORGANIZATION ASKED THE
GOVERNMENT TO PUT INTO THEIR
HOUSING PLAN.
LET'S TAKE A LOOK.

A clip plays on screen with the caption "Tim Hudak. May 4, 2017."
In the clip, Tim speaks to Steve in the studio. Tim is in his forties, clean-shaven, with short brown hair.

He says SPEEDING UP THE APPROVALS PROCESS.
IT TAKES WAY TOO LONG TO GET A
NEW HOUSING SUBDIVISION
APPROVED.
IT COULD BE UP TO 10 YEARS IN
SOME MUNICIPALITIES.
WE GOT THAT.
MORE OF THE MISSING MIDDLE
HOMES.
THESE ARE MORE AFFORDABLE, SO
GOOD STARTER HOMES FOR PEOPLE.
MAYBE IN TORONTO, STACKED
TOWNHOMES IN THE GTA AND
TORONTO, SEVEN TO NINE STOREYS.
IT'S ALSO GOOD FOR EMPTY
NESTERS.
THEY MOVE IN, STAY CLOSE TO THE
GRANDKIDS, THE ORIGINAL HOME
OPENS UP FOR SOMEONE ELSE.
THAT WAS A BIG STEP FORWARD FROM
WHERE WE WERE A YEAR AGO.

The clip ends.

Nam says JOHN, WHY AREN'T MORE
STARTER HOMES BEING BUILT?

The caption changes to "Smarter homes."

John says I THINK IT'S
JUST A FUNCTION OF HOW OUR
MARKET HAS CHANGED.
WE'RE BUILDING MORE CONDOMINIUMS
THAN WE ARE STARTER HOMES.
AND THE CONDOMINIUMS ARE THE NEW
STARTER HOMES, RIGHT.
TO TESS' POINT EARLIER, PEOPLE
HAVE TO CHANGE THEIR EXPECTATION
OVER THEIR FIRST HOME.
WE ARE BUILDING A LOT OF HOUSES.
IN FACT, THE CONSTRUCTION
INDUSTRY AND THE NEW
CONSTRUCTION INDUSTRY IS
BUILDING PRETTY MUCH AT PEAK
CAPACITY.
SO, I MEAN, WHILE THE SUPPLY
MEASURES THAT THE PROVINCE HAS
PUT IN PLACE, I MEAN, ARE GREAT,
IT'S NOT LIKE THE BUILDERS CAN
GO OUT AND BUILD 60,000 UNITS
EVEN IF THEY WANTED TO.
THAT'S BEEN THEIR ARGUMENT FOR
TEN YEARS.
THERE IS NOT ENOUGH LABOUR, NOT
ENOUGH ELECTRICIANS AND
DRYWALLERS TO BUILD THEM.
THEY'RE ALREADY AT PEAK
CAPACITY.

Nam says ARE TRANSIT AND
SCHOOLS KEEPING UP?

John says TRANSIT IN
PARTICULAR IS A HUGE PROBLEM.
IF WE HAD AN INTERCONNECTED
TRANSIT SYSTEM WHICH OF COURSE
METROLINX IS WORKING ON NOW, I
MEAN, A LITTLE BIT BEHIND, IT
WOULD MAKE LIVING IN SOME OF
THESE FURTHER-OUT MUNICIPALITIES
A LITTLE BIT MORE LIVABLE IF
YOU'RE ABLE TO GET TO WORK,
DOWNTOWN IN AN HOUR, RATHER THAN
TWO HOURS.
AND THAT ALONE TAKES HEAT OFF OF
YOUR HOUSING MARKET BECAUSE YOU
DON'T ALL HAVE TO BUILD NOW IN
THE DOWNTOWN CORE, YOU CAN START
BUILDING IN SOME OF THESE
FURTHER-OUT AREAS AND THEY
BECOME PLACES THAT PEOPLE WANT
TO LIVE IN PARTLY FOR
AFFORDABILITY AND BECAUSE
THEY'RE CONNECTED TO DOWNTOWN.

Nam says I HAVE A FRIEND WHO
LIVES IN PENNSYLVANIA AND SHE
COMMUTES TO NEW YORK CITY.
SO I GUESS THEIR INFRASTRUCTURE
IS REALLY WELL-DEVELOPED.
ANOTHER THING THAT COMES UP A
LOT IS SCHOOLS.
A LOT OF THE NEW DEVELOPMENTS
WILL ACTUALLY... SAY YOU FIND A
NEIGHBOURHOOD THAT YOU WANT TO
LIVE IN AND THEN YOU BUY IN THAT
NEIGHBOURHOOD AND IF IT'S A NEW
BUILD, A STACKED TOWNHOUSE OR
CONDOMINIUM, THEY USUALLY HAVE
THESE SIGNS THAT SAY YOU MIGHT
NOT BE LIVING IN THIS CATCHMENT
AREA.
YOUR CHILD MIGHT HAVE TO BE
BUSSED OUT TO A DIFFERENT PLACE.
DOESN'T THAT CREATE ANOTHER SET
OF PROBLEMS, TESS?

Tess says IT SURE DOES.
I REMEMBER COVERING THE SCHOOL
SYSTEM WHEN MILTON WAS BOOMING A
FEW YEARS BACK, AND PLACES LIKE
BRAMPTON WERE JUST BUILDING LIKE
CRAZY.
AND YOU WOULD HAVE KIDS GO TO
TWO AND THREE DIFFERENT SCHOOLS
BEFORE THEY HIT GRADE 8 BECAUSE
THEY WOULD BUILD ONE, OPEN IT,
AND THEN CHANGE IT TO, SAY, AN
ELEMENTARY SCHOOL, AND THE KIDS
WOULD BE BUSSED OFF TO ANOTHER
MIDDLE SCHOOL.
YEAH, IT'S A HUGE PROBLEM.

Nam says WHAT ROLE DOES THE
BROKER PLAY IN ALL OF THIS?

John says I MEAN, IN
THE CONTEXT OF SCHOOLS, IT'S DIFFICULT.
BECAUSE A LOT OF PEOPLE BUY, YOU
KNOW, BECAUSE THEY WANT TO BE IN
A PARTICULAR CATCHMENT AREA OR A
PARTICULAR SCHOOL DISTRICT.
IT'S DEFINITELY DIFFICULT WHEN
PEOPLE ARE BUYING NEW
CONSTRUCTION PROPERTIES HOPING
THEY'RE GOING TO BE IN A NEW
SCHOOL DISTRICT AND THEN SIGN
THE PAPERS AND SAY, OH, BY THE
WAY, YOU MIGHT NOT BE IN THAT
DISTRICT.
THESE ARE IN AREAS THAT HAVE
VERY GOOD-QUALITY SCHOOLS,
RIGHT?
IT'S A WAY TO GET INTO THESE
SCHOOL DISTRICTS.
THE THEORY IS IN AN AFFORDABLE
WAY RATHER THAN 2 MILLION dollars, A
600,000 dollar CONDO.

The caption changes to "tvo.org/theagenda."

Nam says THAT'S STILL A LOT OF
MONEY.
A HALF MILLION DOLLARS, RIGHT?
THE STAR DID AN ARTICLE RECENTLY
COMPARING WHAT YOU COULD GET IN
TORONTO AS OPPOSED TO WHAT
CELEBRITIES AROUND THE WORLD
LIVE IN AND IT WAS ASTONISHING.
TESS, DO YOU ANTICIPATE THAT
THIS COOLING TREND IS GOING TO
LAST FOR A LONG TIME?

Tess says WELL, I
DON'T BELIEVE...

Nam says OR IT'S COOLED A
COOLING TREND.

The caption changes to "A longer-term forecast."

Tess says PEOPLE
THINK IT'S COOLING.
THE BEST COMPARATIVE WE HAVE IS
PROBABLY VANCOUVER, AND
VANCOUVER, WHEN THEY INTRODUCED
A SIMILAR TAX AND THEY
INTRODUCED SOME VACANT HOME
MEASURES TO DISCOURAGE STREETS
OF EMPTY HOMES, THE MARKET
DEFINITELY DID COOL.
I MEAN, PEOPLE STOPPED BUYING
FOR ABOUT 6 OR 8 MONTHS.
IT'S BOUNCING BACK.
AND A LOT OF PEOPLE BELIEVE,
BECAUSE THERE'S NO REAL REASON
FOR THINGS TO HAVE COOLED HERE,
WE STILL HAVE GOOD EMPLOYMENT,
WE ARE STILL A VERY DESIRABLE
PLACE TO LIVE, A LOT OF PEOPLE
ASSUME WHEN THE PSYCHOLOGICAL
IMPACT OF WHAT THE GOVERNMENT
JUST DID WEARS OFF, WE'RE GOING
TO BOUNCE BACK AGAIN.

Nam says ANY ADVICE ON HOW
SELLERS AND BUYERS SHOULD REACT
TO ALL THIS, JOHN?

John says NOT TO
OVERREACT, I'D SAY.
[LAUGHTER]
I THINK THAT'S THE MOST
IMPORTANT THING.
BECAUSE CERTAINLY IT CAN BE
ALARMING.
SALES ARE DOWN QUITE A BIT,
RIGHT?
BUT A LOT OF THIS IS
PSYCHOLOGICAL.
AND IT'S VERY POSSIBLE THAT COME
SEPTEMBER, YOU KNOW, I DON'T
THINK WE'RE GOING TO BE IN A
MARKET IN SEPTEMBER WHERE PRICES
ARE GOING UP 20 percent A YEAR AGAIN,
BUT THIS VERY LIKELY WILL
PROBABLY BE A LITTLE BIT MORE OF
A BALANCED MARKET AGAIN BECAUSE
THE MARKET IS QUITE SLOW RIGHT
NOW, AND I THINK SOME SELLERS
ARE GETTING ANXIOUS AND BUYERS
ARE GETTING ANXIOUS.
BUT FOR SOME BUYERS, THERE'S
OPPORTUNITY OUT THERE.
AND FOR SOME SELLERS, THEY'RE
GOING TO TAKE THEIR HOMES OFF
THE MARKET AND WAIT FOR THE
FALL.

Nam says TESS, WHAT DO YOU THINK?

Tess says I THINK
JOHN'S PROBABLY RIGHT.
I DON'T THINK THAT 33 percent, WHICH IS
I THINK WHAT SALES WERE UP IN
MARCH, IS A SUSTAINABLE NUMBER.
I MEAN, IF WE HAD THAT ON ANY
OTHER COMMODITY WE USE IN OUR
LIVES... EGGS, GAS... WE WOULD
NOT ACCEPT THAT.
YOU WOULD HAVE PEOPLE IN THE
STREETS RIOTING.
I JUST DON'T THINK PEOPLE ARE
READY TO ACCEPT THAT AND I DON'T
THINK THERE'S ANY REASON FOR IT.
I THINK THE UP AND THE DOWN IS
LARGELY A STATE OF MIND, AND
PROBABLY PEOPLE WILL REGAIN
THEIR BALANCE ALONG WITH THE
MARKET.

Nam says BUT IT'S HARD FOR
SOMEBODY WHO IS TRYING TO GET
INTO THE MARKET, YOU KIND OF
HAVE A FEELING OF POWERLESSNESS.
SO WHAT DO YOU DO?
BECAUSE THE MEDIA IS SAYING
SOMETHING, THE NUMBERS SAY
SOMETHING, AND THEN, YOU KNOW,
IT'S A HUGE NUMBER TO... AND IF
THE BUBBLE POPS.
YOU DON'T KNOW WHAT TO DO.

John says WHAT WE DO,
WE LIKE TO... I MEAN, EDUCATE
PEOPLE.
BECAUSE WHEN YOU LOOK AT THESE
STATISTICS, NUMBER ONE, THEY'RE
FOR THE ENTIRE GTA.
AND WHAT WE'RE FINDING IS THAT
THE NUMBERS ARE ACTUALLY VERY
DIFFERENT ACROSS THE ENTIRE CITY.
SO IN DOWNTOWN NEIGHBOURHOODS,
THE MARKET IS ACTUALLY STILL
RELATIVELY COMPETITIVE.
THERE'S LIKE ONE OR ONE AND A
HALF MONTHS OF SUPPLY.
MEANING IF NO OTHER HOMES GOT
LISTED, EVERYTHING ELSE ON THE
MARKET WOULD SELL WITHIN A MONTH
OR TWO.
IN THE 905, THEY HAVE SEVEN OR
EIGHT OR NINE MONTHS OF HOMES
SITTING ON THE MARKET.
AS A CONSUMER, THAT'S WHAT I
WANT TO KNOW.
IF I'M GOING TO BUY, I PROBABLY
WANT TO BUY IN A NEIGHBOURHOOD
THAT'S MORE COMPETITIVE.
THE HOMES THAT HAVE A LOT OF
INVENTORY USUALLY HAVE A
DEADLINE IN PRICES.

Nam says WE WERE LOOKING FOR A
LONG TIME AND DIDN'T HAVE ACCESS
TO THAT INFORMATION.
DO YOU THINK REGULAR PEOPLE
SHOULD HAVE ACCESS TO WHAT'S ON
MLS INSTEAD OF HAVING TO GO
THROUGH AN AGENT?

John says 100 PERCENT.
THEY SHOULD HAVE ACCESS TO THE MLS.
WE'RE WAITING TO HEAR BACK THE
APPEAL FROM THE COMPETITION
BUREAU ON THIS ISSUE.
IT'S ACTUALLY A LITTLE BIT MORE
THAN MLS DATA.
IT'S TRYING TO FIGURE OUT HOW TO
MAKE SENSE OF THESE NUMBERS AND
TRENDS AND STATISTICS AND HOW
YOU USE IT TO HELP MAKE A MORE
INFORMED DECISION.
WE FIND THAT'S ALWAYS THE
HARDEST PART.
IT'S A LOT OF MATH AND NUMBERS
AND TRENDS AND STATS.
HOW DO YOU COMMUNICATE TO
PEOPLE, OKAY, I DON'T THINK YOU
SHOULD BE BUYING HERE.
IF YOU WANT TO BUY, MAYBE WE
WAIT IT OUT BECAUSE PRICES ARE
NOT GOING UP ANY TIME SOON WITH
8 OR 9 MONTHS INVENTORY.

Nam says AND MAYBE TAKE OUT
SOME OF THE EMOTION.

John says I THINK
THAT'S IMPORTANT.
I GREW UP IN A REAL ESTATE
FAMILY, RIGHT?
AND THEY'RE NOT EMOTIONAL.
PRICES GO UP, THAT'S FINE.
PRICES GO DOWN, WHO CARES?
THERE ARE PEAKS AND VALLEYS ALL
THE TIME.
I THINK THAT'S THE BEST WAY TO
MAKE A BALANCED DECISION.
THE PEOPLE WHO MAKE THE WORST
DECISIONS ARE THOSE THAT GOT
CAUGHT UP IN THE PEAK, FEELING
ANXIOUS THEY'RE NEVER GOING TO
AFFORD A HOME, AND THE ONES
GETTING CAUGHT UP FEELING OVERLY
ANXIOUS AND SITTING BACK.
MAYBE IT'S AN OKAY TIME TO BUY
NOW.
IF YOU'RE BUYING FOR THE LONG
TERM AND YOU'RE GOING TO BE
THERE FOR TEN YEARS, YOU'RE
GOING TO BE FINE.
WHETHER PRICES FALL A LITTLE BIT
NOW OR 6 YEARS FROM NOW, YOU'RE
GOING TO BE FINE.

The caption changes to "Producer: Gregg Thurlbeck, @GreggThurlbeck."

Nam says JOHN AND TESS, I COULD
TALK TO YOU FOR ANOTHER HOUR.
THIS IS ONE OF MY FAVOURITE
TOPICS.
THANKS FOR BEING HERE AND
SHARING YOUR INSIGHT.

John says PLEASURE.

Nam says APPRECIATE IT.

Watch: The Cooling of an Overheated Market