Forest Hill Real Estate, Yorkville branch sales representative Jennifer Chan had the opportunity to represent the Forest Hill Brokerage at the LandPRO Conference, March 7, 2017 at the Paramount Conference Centre in Woodbridge, Ontario, just north of Toronto.
LandPRO Conference is a day of leaning, insights and strategies for GTA’s top Land Professionals, that will help them outperform in 2017. Ten thought leaders and industry experts discussed the factors and trends that will shape the remainder of the year. Beginning with the fundamentals of land and real property and how they are evolving, to topics of significance delivering a balance of technical expertise and strategic insights. All participants took away the best practice and strategies to succeed in 2017 and how support an enduring business.
One such speaker was Benjamin Tal, Deputy Chief Economist with CIBC World Markets Inc. His keynote presentation, “2017 Economic and Real Estate Outlook,” explored real estate and economics globally and how each market affects another, and specifically looked at the GTA and the rental, buyers and sellers markets and what opportunities, if any, are there for the area.
Thank you to Jennifer Chan for representing Forest Hill and for sharing her notes on Benjamin’s presentation.
Benjamin Tal – Deputy Chief Economist for CIBC, Global Economies
Mismatch between US jobs vs wage increase
US manufacturing jobs were falling before China entered WTO (World Trade Organization)
Participation rate decreasing in US labour market
Trump is inflationary (so interest rates will rise)
Government will be borrowing
Trade is complicated
Trump simply can't pay for it (revenue lost from tax cuts in the coming decade, vs maximum borrowing allowed in the coming decade)
In Canada, share of low-paying jobs is rising
Canada most university-educated people living at below average wages (!!!)
We are heading for a deflationary cycle, possibly flat or lower mortgage rates
Look at Japan the same for Canada?
Bank of Canada has unofficial agenda to get a weaker Loonie
In next couple of years, fear of the devaluation of the Chinese Yuan
Chinese are still trying to get their money out of China, via Hong Kong etc
Mexico has also gained market share
The total inheritance in 2016-2025 will be up to 700 billion largest generational wealth transfer in the last 10 years
The wealthier and more highly-educated will inherit proportionally more
Real Estate in Canada
Vancouver is much more volatile than Toronto
The government needs to slow down the market, so that we can get past this stage
Doesn't directly address the question if we are in a bubble
Increasing demand, but there is NO supply
Places To Grow Act has put a greenbelt around the GTA, so developers must build up, not out (preventing sprawl)
There is little affordable housing in the GTA
Rising price disparities in the types of housing in GTA (condos vs houses)
Government is using demand tools to decrease the demand (such as new federal mortgage rules), but this is not addressing the supply issue
Propensity to rent in the GTA should rise soon
Falling rental turnover rate suggests long-term renting on the rise
Solution: purpose-built starting to close the gap for GTA rental market, and developers are now making money on it (vs only building condos)
Good time to be an owner/landlord, since rental rates increasing, and renting is continuing for longer = less turnover
Developers should build more rental housing, to help ease the market