GTA home prices are down, listings are going up. With Central banks cutting rates last week, it’s impossible to escape the doom and gloom headlines from the media.
So - is the housing market going to crash?
Answer: Nobody knows.
It’s not helpful, so let’s try something that is – flip the question and try to come up with a reasonable answer.
Here’s a scenario - the housing markets stabilizes and recovers.
- US jobs numbers continue to weaken
- Powell gets tossed next May, and the federal reserve keeps cutting rates next year
- As US interest rates go down, so does the US dollar. The Loonie appreciates. Not great for exports in a trade war. The Bank of Canada has to cut rates too.
- Variable rate mortgages and HELOC rates drop. With lower borrowing costs, the buildup of housing demands comes off the sidelines. FOMO kicks in.
Cheaper money, lower home prices, motivated buyers and sellers.
Add it all up – that’s not the recipe for a crash.
Could Canada slump into a recession, see unemployment rip higher, buyers retreat, and sellers are forced to take crazy low-ball offers?
Possible. But not probable.
After two weeks in Europe, it’s great to be back. Travelling abroad always provides new adventures and perspectives. A sense of gratefulness too - we’re lucky to call Canada home. For any other travel enthusiasts, here’s a few tips for your next trip.
- Best Pastel de Nata goes to Manteigaria
- Best way around Lisbon is by Metro, Uber, or on foot.
- Lisbon is a city of hills, bring a pair of comfy running shoes.
- Narrow streets, parking is a nightmare, rent a car if you’re leaving the city. Hazard lights are a license to park anywhere.
- Costa da Caparica and Cascais make for great day trips to the beach.
- Krakow is underrated. Beautiful city and a must for history buffs
- The Polish and the Ukrainians have a Spidey sense for an empty glass. Blink, and they’ll top you up.
Portfolio Update
- Our Balanced Model was +1.8% in August
- The Paper Portfolio is up to $1,101,339, +10.13% ytd
Thank you for your patience, technical difficulties prevented a timely update.
For September, we made the following changes.
- Swap XBM etf for ARG and HBM
- Swap Canoe Defensive International Equity Fund for VIDY etf
- Added Constellation Software and H&R REIT
As always, If you have any questions or comments – let me know!
Much love to you and yours,
Lucas
About the Paper Portfolio – Balanced Model
The Paper Portfolio is a model and NOT a real investment account. For any readers interested in a full list of positions and/or Monthly Performance, they are available upon request. No individual should act on this as investment advice, please consult a professional. The Paper Portfolio does not take into consideration taxes, or income requirements.