2026 Real Estate Predictions

0:00Welcome to the Canadian Real Estate Investor, where host Daniel Fosh and Nick Hill navigate the market and provide the tools and insights to build your real estate portfolio. Every year we do a predictions episode and every year I say it's one of my favorite episodes that we do. Yeah, same. And look, we don't have crystal balls, but we do read and talk about this stuff almost every day, actually every day, and then kind of on the podcast at least twice a week. And we've made a couple bold predictions in the past few years that have turned out to be correct. And dare I say, maybe ahead of their time. And also I think it's just kind of a fun episode to do. There's something about actually like planting the flag and saying, here's what I think is going to happen that cuts through all the noise. I know we've been told that we're not going to predicting. We've been told that we're excellent at predicting. But it's really just like, for fun, and here's the inputs that I'm putting into my model,

1:00right? Here's what I think is going to happen. No hedging, no, it depends on X, no half answers, I think just real takes that you can hold us accountable for. If we're wrong, I'm always happy to be wrong and admit that I'm wrong and changed my mind. I think, you know, it's a, Naval was like one of the guys who said that it's an indication of like a strong mind that it can change, right? It can change your mind. Yeah. Hell yeah. Yeah. Look, I mean, we've been right. We've been wrong. So have about everybody else in the industry and the good thing is we're just here to talk about it. Today and today, you and I are going to run through 17, 18 predictions, but basically just talking about all the major things and how we see them playing out in 2026, everything from interest rates, the condom market tariffs, where people are moving, and why, and then we're going to go down the rabbit hole of CMHG's 2026 housing outlook report, break it down region by region. So you know exactly what the professionals over at the Canadian, the housing corporation are saying as well. So you're going to hear from us and then you're going to hear our takes and a bit of a summary

2:04on that report. So since we got a lot to get through today, let's dive in. Before I do that, though, a couple quick housekeeping pieces, a tendon event specifically, one of our unpacking multiplexes event, first one April 8th in Vancouver, then we're in Edmonton, then we're in Toronto. So come out and see us. Those are all amazing events. Attend a free monthly event. Those are always great times. Go check out real estate.ca. And if you are looking to buy or sell real estate, reach out to Dan, and if you are looking to fund a building or construction, reach out to me, any more plugs we want to sneak in there, Dan? Well, this one will excite people. I pushed a new update to real estate.ca, of course, was vibe coding as one does the, I made a distress deals tool. So we've had this for a while on that. That's great. Website for just Ontario using like Trab data, but I figured out a way to do it using Canadian real estate association data. So we have, it's not a lot like it, and it doesn't capture the full market, but I'd say about like 30 to 50% of foreclosures, power of sales, listings that stipulate the

3:08sellers motivated deals that offer VTB and seller financing, and they're all color coded on a beautiful little map. Man, vibe coding is, is a good, good deal. Anyway, let's give them the prediction. My prediction is that people will like this tool. Wow. That's the first bold prediction. Okay. Let's see if that one turns out. I hope so as well. Okay. First prediction, and we've talked about this before. So we won't have to, we don't have to belabor this one rates, interest rates. Okay. Are we going to see cuts? Are we going to see the Bank of Canada just hold steady? It depends on so many different things. Are we done pretending that cuts would save us and save the economy and spur all those people to get back off of those proverbial sideline benches and get back into the market if rates hold all year, Dan, who benefits the most and who gets her, give me your high level prediction on rates and then I'll jump in and do the same. Sure. I, we've talked about this a couple of times and we just did fixed versus variable and I've made it clear that I felt that there was more upside risk to rates than downside

4:08risk. The, I think today, Friday, March 13th is when I'm recording this episode, Statistics Canada's Unemployment Print came out, believe or for a survey. I'm good. It, yeah, no, it was the worst one that we've seen in four years. So basically like that pandemic era of, of layoffs, oh, yeah. And the Canadian five year bond yield, cap down below three percent. So that would say that, you know, on a minimum, the industry environment is pricing in greater likelihood of cuts than it was yesterday. And it's not to say that I think that rates, like my philosophy has actually been that rates will probably stay somewhere within the channel that they're in, you know, plus minus 50 basis points for three to five years. And the bond market seems to think the same thing. Like, if they're going to go up, they're not going to go up by 100 or 200 basis points. If they're going to go down, they're not going to go down by 100, 200 basis points. They, this is probably where the rate should be. It's similar to the housing market and the economy sentiment and the fact that people

5:13think prices are going to continue falling seems to be the bigger prohibitor and creating urgency in the, in the housing market right now. All of that to say, yes, I think that the market is done pretending that cuts are going to save us. I think that, you know, you don't, with each passing rate cut and the realtor's going on TikTok and Instagram saying that interest rates, this was, this cut was going to light the housing market back up and that in the market called their bluff eight times or however many cuts we've had. I think that people are done hoping that that's the case and realizing that the correlation that rates can do a lot in, in one direction, but not as much in the other direction. So yeah, I guess my answer is we're probably done and I think that rates will probably, I think there's, now there's probably about an equal likelihood that we see downside in rates as upside given unemployment and these are, these are things that I said would

6:13happen last year, you know, as it stands in November or December, it looks like rates are more likely to go up, but is there data points that are going to be unveiled throughout the early 2026 that would change that and my thought was yes, we would see unemployment continue to rise, we would see GDP continue to fall and so far those two things have been correct, fortunately, well, unfortunately for the economy, fortunately, probably overall, but yeah, yeah, GDP was, so Q, Q4 GDP was down, so we had two negative quarters of GDP growth in 2025, not consecutive, so not a technical recession, and now we're back to falling unemployment and falling unemployment is big right now. So I think that if we continue stacking these bad data points, it wouldn't surprise me if we saw rate cuts. If we continue stacking these bad data points, consumers are going to continue losing confidence so it's not going to say the housing market. Yeah, I'm going to be kind of boring here and pretty much agree, I think if anything were

7:15likely to see cuts, I mean, like 84,000, was that what it is, was it, it was something crazy, like job loss, and again, I think we were supposed to see a rise of 10,000, I also think, you know, geopolitics, the potential of these new and ongoing conflicts, oil, etc. There's just so much at play that has a negative impact, not only that, but I think the Bank of Canada and the economists have learned their lesson in the sense of we wrote, we interest rates went up way too fast, and then they came down way too fast. You know, let's have a steady as she goes kind of market for a little while and really let people sink in and adapt, and I think you're right, 25 to 50 basis points one way or another, isn't going to really do anything, but that's where I see it coming. So my final prediction here would be we see a rate cut of, of maybe cumulatively up to 50 basis points by the end of the year, I don't really think that's going to have a major impact on anything, maybe a little bit sentiment shift, but that's it. Okay, what's the, what's the next

8:17one we're going to chat on here, Dan? The next one would be rents, and I would, I would be curious to get your take on this, because I know you're financing these kind of deals across the country. Yeah, we think that rates are going to continue, or sorry, rents are going to continue softening, and is that a nationwide story rather than just a Toronto story? Yeah, well, I've, you know, not only am I just not only am I talking to investors that on a daily basis that are, you know, we're underwriting these rents for, and whether we use and see, see, see if she bends more, or whether we're using actual rental data that they provided or a combination of both. I also have a couple of vacancies in my, in my small portfolio, Dan, and I'm telling you, I'm probably, I'm lowering the rent on, on two of my units, and I'm incentivizing people like I'm doing like all inclusive stuff right now. So I definitely think that it is a national story, again, hard to paint all of Canada with one broad stroke. There are of course some submarkets and some pockets of markets and certain cities that are always a little bit

9:20insulated to that kind of stuff, but overall rents are softening, and I think that will be at least the story for the rest of this year, if not kind of continuing into the next one to two years before the market, before, you know, before the cycle starts the term, which I think we're, you know, probably minimum 24 months away from. So, yeah, landlords, you know, incentivize, lower your rents, do whatever you need to do to, to fill those units, adapt, adapt or die, or adapt or go broke or adapt or lose money, right? Yeah. Yeah, I would, I would agree, I think, in Toronto and Vancouver, it's very much a, the markets tapped out story, but supplies also playing a big role. So you have demand destruction, population growth basically zeroed out in 2026, or negative in 2025, zeroed out in 2026. That's a lot fewer renters, and a lot fewer renters being added to the market, they're being added at a slower pace, which is zero, and we have a ton of supply. We have, you know, last year, 250, 260,000 units, we have all of the CMHC MRI select stuff coming into

10:22the pipeline. CMHC just put out there housing supply report for spring 2026, which will do a whole episode on. And they expect housing starts are going to come down, but housing starts aren't going to go to zero like population growth. So demand way down supply, you know, softened a little bit, probably in the coming years. But it's less about the supply that is being added on housing starts, and more about completions. We have record completions 2526, probably, and then you've got not a lot of tenants being added to the market. So that's a recipe, and that's not just a Toronto story. Like the CMHC MRI select product that's being built outside of the, or most of it's being built outside of the major markets, Toronto and Vancouver. So it's too expensive to build there, right? That's that's yeah, the economics of an ideal don't really work. Yeah, cities. Yeah. Now the next piece here today, and obviously tied directly to rents, and I kind of already alluded to that in when we started, but rents vacancy, okay? Where does vacancy peak? What markets

11:28are surprising? Do we see a higher vacancy? Does that help renters? You know, what does that mean for landlords? Let's let's break that down. Yeah, so my guess would be that vacancy peaks around 6%. I had sort of always said that it would 3x from the bottom, which was, you know, sub 1%, you know, 1.5%, 2% range, which was just 2% low, 3% would be sort of a balanced market, 5%, which is where we're at nationally right now, according to the Yardee report that we covered on the show is a market that favors tenants rather than landlords, so sort of like a buyer's market. We're at, you know, we're kind of in that high for low five range. I think it pushes to six. It probably hits somewhere in the six range. I don't think we see seven. I don't think we see it come back down anytime soon. It'll take a long time for a lot of that supply to get absorbed with the rate that we're adding demand. If rents keep coming down, you might see people who maybe are living at their parents house right now or, you know, some other, you know, maybe the rooming

12:28together. Yeah, they're, you know, four people in a rooming house and they say, oh, you know, tired of living with four other adults. I want to go get my own place and the rents are affordable enough relative to incomes that they they like to do that. Bentow talked quite a bit about this, sort of like pent up demand for rentals. I agree that that exists, but I think that it's completely dependent on people being able to afford rent. Same as the housing market, right? People will buy houses when they can afford to. People will rent houses when they can afford to. As it stands right now, not really the setup where that's possible. The one thing I'll say, you know, I just did a video for a national bank housing affordability monitor on my YouTube channel and the, you know, they sort of show how wage growth has actually improved affordability for buying and renting more than anything. It's been the biggest contributing factor. The problem with wage growth, kind of. Yeah, so it's the problem with wage growth is not evenly distributed. So there's a lot of people who are losing jobs as we just saw some employment here today. Yeah,

13:30so, you know, yeah, if wage growth is at 4%, doesn't really matter if unemployment or it matters less if unemployment is at 6% or 7%, and a lot of the people who, you know, who don't have jobs can't rent or stopping renting. So yeah, that's my two cents on vacancy. Yeah, I mean, the only thing I'd add there would be, you know, from a from a renter or someone looking to get into the market, this is good news, right? There are more units available. I mean, I remember the days where it was like bidding wars to get a freaking apartment or a constant amount of crazy. You still see it for that one unit, whatever, right? But yeah, you know, I feel like that's overall the thing in the past. And this is good news for renters for those looking to get into their first spot or into a new spot. So that's good. And, you know, this is, I wouldn't say this is horrible news for landlords. This is just news for landlords that you have to adapt to. Okay. So, you know, incentivize. Remember that you are the, you know, you're at the top

14:33of the org chart. This is your business and the tenants are your clients. So go back and treat them like that. It's time to win over that business when you're competing with other landlords, aka other business owners. So I like to see this bit of a competitive edge, right? Hopefully, the units that are nice, the units that are well-capped units that are well maintained by good landlords. Those ones are going to be rented. And the ones that really, you know, unfortunately, I hate to say, but the shitty landlords, the the slumlords and all those kind of people, good. Get out of there. I hope your vacancy goes up. Anyways, because you give a bad name to the whole industry. Let's keep the party going here, Dan. We just did a very controversial episode on this next piece. Talk to me about the fourth prediction here. Yeah. So the condom market, how many small investors are actually in trouble right now? Are we underestimating the impact of this? Is there a bottom in sight for the condom market or does the assignment pile keep growing through 2026 as we hit a lot, you know, kind of get through the, we have passed that big hump of closings that were pandemic purchases? What do you think? Oh, I think the condo story is,

15:38is unfortunately far from over, you know, doing doing the research that we've done and kind of having front row seats to it over the last couple of years, man. I mean, this is not, this is not a quick fix type of issue. This is a systemic issue that that will have a long standing ripple effect. And I think there'll be still people hurting years from now, still people burned or, or recovering years from now. I don't think it's going to last forever. Nothing does. Cycles turn, things get fixed. But, you know, I think there's a lot of investors, a lot of those small cap investors that might have just had one unit, you know what I mean, which really, you're not really an investor. You're just someone that owns another property or another condo. And I think a lot of those people are probably in deep trouble right now. And I hate to see that. I don't think we're on, I don't think you and I are underestimating it. I think maybe the general public or the government, maybe some lending institutions, doing blanket appraisals and that kind of stuff. Maybe they're underestimating it. But, you know, I still think the story is far from over. Maybe there's some, you know, I know there's some private equity

16:40sharks in the, in the, there's a little reason condo condo fund announced actually in partnership with the Ontario Housing Fund. So, yeah. Which is interesting. I think they're like 300, 300 million bucks. So, they'll be buying distress condos. I mean, there's a lot of guys, like I, I consult for a couple of different developer groups and investor groups that are trying to buy distress condos at scale. It's, there's definitely a bid out there. It's just the price at which the bid is, is it reflective of where sellers want to sell? And, in many cases, no, which is a big story of the market right now. And I think someone would have discussed in sort of the next prediction. I would agree with you. I think it's, it's far from over. Mostly, like, I think that will sort of hit peak. Like, the supply and demand gap will be evident by the end of 2026. But it will, like, these things take time to actually, like, we have, we'll have two years probably of condo supply that needs to get absorbed. We have a huge pricing gap between what sellers expect and where buyers

17:43are. You have all of these people closing with blanket appraisals on units that are equity negative. And while Osfi just came out and basically said that, you know, they, or it came out that Osfi had been warning them. That was a story that I was, played, I played a big role in that story over the last five years, I, or two, sorry, two years, three years when this stuff, because I've just been concerned, it's like, are these getting insured into CMHC pools? And also, it's also just a market distortion. Like, you kind of need to let economic Darwinism take place. But I mean, you do, right? Like, yeah, no, a hundred percent. Yeah. But the reality is like, you sort of reality. You're not really doing the buyers any favors by giving them the means to close. Like, they still, if anything, are actually in a worse position because now they're equity negative and cash flow negative, whereas before, they would have just been equity negative and had to absorb that loss by getting sued by the builder. So, but I think that's like, when you think about that plus the renewal wave that's coming this year, you get, you know, multiple hits negative catalysts that throughout the year that will, they take time for the pain to actually

18:45materialize properly. Yeah. You know what I mean? Like debt, debt doesn't kill people instantly. It bleeds them out slowly over time. Yeah. And so. That's like a thousand cuts kind of thing. We're death by a thousand payments, I guess. Yeah. And you're still adding more borrowers to that pool of people who are seeing a payment increase. So, you know, we're adding, I think 60 percent of people that are going to renew mortgages in 2026 will renew a higher rates. So that's not something that's going to improve within the foreseeable future. And then, you know, you add all these people in 26, maybe, you know, a bunch of them get by for a year and then 27. So we've still got quite a bit of of distress forming in the market. And condos are obviously at the epicenter of that. Okay. So I think we can both agree the condo market prediction. Still bad for the next little while. Okay. Next, next piece we're going to cover here, buyers and sellers. Now, what's the prediction here? Well, are we finally going to see this like standoff between buyers and sellers? And, you know, that, well, I still want this price from two

19:47years ago. And I'm willing to, and you know, I'm just lowballing you kind of thing. Are we going to see that change? Are we going to see that standoff kind of break, right? I mean, we just talked about the condos. We just talked about the mortgage renewals. The market is actually shifting in so many ways. You know, who is going to have more power by the end of the year buyers are sellers then? I think, I mean, in the market buyers will have more power like we're continuing to progress towards a buyer's market. The, the way that you kind of described it can also exist. Like, can sellers still hold the line? Yeah. There's a lot of sellers who can afford to hold the line. Then probably more sellers that, right? This is literally going to battle here. Yeah. Yeah. Well, but there's a lot like, there's, there's probably more sellers. Like, if you look at the average loan to value and the amount of equity padding that the average Canadian homeowner has, those people could, could not, like they could elect not to sell. There are a lot of distressed

20:53sellers and those sellers are going to have to sell and they don't have the little luxury of holding the line per se. So that will probably materialize in those sellers who need to sell coming down to meet buyers where they are and the market continuing to experience downward price discovery during that period of time. I would expect that I'll take probably another year. So we'll have been four years of price declines maybe into mid 2027 before you sort of find like a long flat kind of bottom period. And, and I would say that, that you'll see like a year of zero percent growth. And that, so that still means negative real growth, right? Relative to inflation. That, that sort of setup makes sense to me. Then you start burning through inventory. You start having sellers give up because they aren't getting the price that they want and they're not going to keep chasing the market down. The sellers who we're going to chase the market down have already done it and sold and then eventually you get to a point where you start balancing the buy and sell, you know, you

21:56get into a buy a balanced market and then you get into a seller's market much later in the future obviously. But I think we'll stay in the sort of balanced territory for a long time. A lot longer than people can it would think and I think the recovery will be very slow and it'll take us a long time to get there. And that's mostly reflective of the fact that there are a lot of sellers and there's no buyers. What can we do to get more buyers out to the market? Rates can come down, interest rates, obviously, have a pretty big impact. Prices can continue to come down which I expect that they will and wages can go up. Those are really the only things. Yeah. Agreed. I know much to add there. I guess we'll talk about market by market like geography. What cities do we think will win in 2026 and why? Yeah. I guess we'll do a deeper dive on this one as we kind of go through what the CMHC report has and we can get that reference some data there. But just a quick piece on kind of like secondary markets versus Canada's major markets. You know, I'm always a bit more bullish on the secondary markets. Some of them, of course, in Ontario have seen major swings due to that exodus and the essentially almost impossible for

23:02the average person to invest in Toronto. But Dan, you and I have been big secondary tertiary markets guys for space listens. We've known each other. That's where a lot of our investment capitals landed and our portfolios that we've built or helped other investors build. So bullish overall and secondary markets. But let's save that piece for when we dive into the CMHC report at the end of this episode. The next thing I want to chat about briefly here, aging population. Okay. Let's make a couple points or predictions on this. Has anybody really figured out how to build for this demographic at scale yet? And when boomers finally do sell, does that actually have a meaningful effect on urban and suburban inventory? What are your thoughts on that? I think it's the biggest question in real estate in the world right now. It's not just Canada. It's the US as well. You've got a huge cohort, the biggest population cohort ever in history, which is a baby boomers, who have a lot of large houses that eventually, whether they either

24:07decide to downsize or go into assisted living or eventually deceased, they won't not own those homes anymore and or not occupy those homes anymore. And there's not a huge market for, well, there would be a huge market, but not at current prices. You don't have a lot of buyers, second largest cohort in history, which is millennial generation, the children of the baby boomers, they don't have the money to buy the houses off of the boomers. Until they get it from the boomers, right? It's kind of like a chicken egg thing. Yeah, it's an inheritance economy. So, yeah, I think that this is a really interesting, like kind of long-term bear case for real estate. And I think we've always been saying, those are all massive, like McManchin's and the suburbs, excellent candidates for plexes. I think that that's a real thing that we'll see happen, if we can't figure out how to make those homes affordable for the young buyers. The young people

25:09also have the highest unemployment rate. They have the lowest wage growth, the most impacted by AI disruption in the industries because they're more entry level in their careers. So the likelihood of them becoming more capable purchaser of those baby boomers when the boomers go to sell is actually probably lower than the likelihood of them becoming a less capable purchaser. Yeah, I think the other issue here that people maybe are a little hesitant to talk about is that who's in power? It's all boomers, right? Who's making policy? Who's making law? Who's holding things up or who's nimbis? It's boomers. So, all these are obvious problems to some people, but the solutions are being speedbumped or roadblocked by the very people that are causing them. So, and this isn't a hit against boomers or all boomers in general, but I mean, this is a very obvious statistic that is encroaching on just about every aspect of life that we really need to start addressing before it becomes too late. I mean, 25% of the Kansas populations

26:14over 65 already, that is just going to, of course, increase over the coming years. So, you know, solutions are in desperate need. Okay, Dan, hit me with the next one here. Let's keep going through this list. Immigration, are we overcorrecting on the pull back and setting ourselves up for a labor shortage problem? My guess probably not. Are we, is this having a huge impact on supply and demand or on demand? Yes. When will immigration come back? Which real estate markets are most exposed? International students, temporary foreign workers stay low. I think international students, temporary foreign workers, very clear what's happening there with the GTA, GBA, most of your student markets. When will, when will we start coming back? So, as it stands right now, I think you're seeing that temporary or non-permanent residence number being reduced, but it's also impacting the permanent residence number. So like 300,000 of the 450,000 permanent residence spots, I think like two thirds came from people who were already living in Canada. So you actually net population growth is zero. Or last year it was negative, but this year will be, let's say zero. So, you know, you're reducing your, your non-permanent residence number by 300,000

27:18that's taking 300,000 of your permanent residence spots. Now you only have 80,000 permanent residence spots left. And then you also have immigration. So you have Canadians living, which we hit a, we tied a record high number last late last year. I think 80 something thousand, 90,000. So 80,000 Canadians leaving plus a lot of the non-permanent residence leaving. I think you'll probably see negative population growth. It'll be at least zero, but I think negative is probably a more likely outcome. One of the things that you saw during the 1990s, people just left organically. That was the last time we saw the population growth peak at 1.4%. And, you know, we mentioned this a couple of times on the show as, as that, a lot of that stuff was happening. The, basically like, you saw international students stop applying. You saw non-permanent residence stop coming, temporary form, workers stop applying for jobs because the economy was not giving what they thought. And that was the

28:20same thing. We predicted that, right? That was one of our 2025 predictions. And then the policy makers actually followed it. You know, they said, oh, we're going to, we're going to reduce international student population so they could take credit for this economic trend that was already taking place. I think that those things are just going to continue until Canada's economy shows signs of promise and is marketable for people to want to come back in at scale. Yeah. Yeah, I overall agree. I'd say that that my, the one thing maybe I disagree on is I think we did over corrected just in the same way that we, that we literally like, it was like, let's kick the doors wide open and then let's slam them shut, right? It's like, why don't we open the door a little bit and then why don't we close that door a little bit? Like, why does it have to be, it's the same thing with rates, why does everything have to be like one extreme or the other? I also think with immigration, I'll say this, you know, we have a desperate need. We have, we suffer from brain drain in this country. We have a whole bunch of young people leaving. I want to be attracting the best

29:21people from around the world that would like to come to Canada. And I think we can eventually get there. We just need to, again, as you said, Dan, have a better Canada and a better economy for them to come into. So let's keep ripping through the rest of these here. The next one is office. The return to mandate for office is that actually sticking or people still doing that like quiet quitting or that quiet working from home or, you know, who's kind of winning that battle. I am going to say that I think the return to office is a great thing. And I think we are going to see more and more of a return to office, which is a good thing for real estate, a good thing for young people and old people and just anyone going into the office and networking and meeting and spending time with other human beings. It's good for our public transit system. It's literally just good for the entire infrastructure that has been built for the last, you know, 100 years to service central business districts across this country. So return to office. Let's, let's keep it going. I like it. I think that is going to be a story

30:23for 2026 and beyond. Yeah. I'm, I still love the opinion that return to office is a stealth layoff tool. And it's going to help them expedite layoffs. So I think you will see a huge return to office. But I also think you're going to see a lot of layoffs. So I don't know if we ever get back to pre-pandemic levels of inquiry about 80% right now. Yeah. And I think I'm okay if we stick around there. I think, you know, to, without derailing the conversation here and going into AI, I think that there is going to be obviously a ton of layoffs and a ton of people that like if your job could be, if your job can be very easily replaced by AI like your entire job. That probably wasn't a great job to begin with. Let's be real here, right? Like, you know, like, let's think about the movie office space. Like, what would you say? Yeah. No, I agree. Like what you do around here go somewhere else. If we're automating bureaucracy, I actually think that's a good outcome for humankind. Like, it's just sucks for people who are actually going to lose jobs in the short term. But I think in the long term, it's actually super good because they will be able to pursue more meaningful things. Yeah. It's our assembly line, right? It's our

31:27Ford plant assembly line. Yeah. Yeah. Missing middle. Or is it actually going to get built? We still just talking about it. I can opine a little bit on this one. I mean, the reason, like, there are guys in our space that have other events as an example, you know, named missing middle. But we've found that that's very like the corporate ESG kind of like developer crowd likes that. And I'm not like saying that to be insulting. I just think that the market has already been bifurcated into two spots. One is sort of the top end kind of coming down into the missing middle space and looking for larger scale missing middle developments. And from my perspective, a lot, I would call that mid rise. Okay. And I think that we're almost mid rise. Like, it's basically, you know, everything like six units to whatever your six stories or four stories. I don't see that working in most markets right now. I think, yeah, I guess like a lot of your smaller sub markets, you're seeing like apartment buildings succeed in like Calgary, Edmonton,

32:28some areas of Ottawa, Quebec, like most of your smaller markets, but the markets that need supply and have acute supply shortages of the most Toronto Vancouver, you know, Ontario, lower mainland or most of BC, those types don't work. So I would guess I would call it like a tale of two countries, right? You have Ontario and BC, you're on affordable markets where the only thing that's actually working in that is Plex, I think. And that's why we've branded our events business multiplex, right? multiplex Vancouver, multiplex Toronto, multiplex, we're going to be doing one in Alberta and and Quebec as well and Montreal. So stay tuned for for those releases and make sure you subscribe to the show so you don't miss them. Though those markets will see Plex, I think until your land costs and or some something in the cost structure repairs missing middle or missing like larger format missing middle for city of Toronto, lower mainland or GTHA and lower mainland. And I think in the meantime, it's a feeding frenzy for a small retail investors

33:34who can can and will be the only supply creators in in these major urban markets for the next, I am guessing like two to five years to be honest. So I think missing middle is going to create a lot, a lot of a lot of housing. And I think it's, it's going to do it in smaller formats. Yeah, couldn't couldn't agree more, man. And you know, I'm super fired up about this. As are you, we've been talking about this for years. I have a whole events business around it. I've been doing podcasts around it. You work in the space helping find these properties and helping buy and sell them. And I work on helping fund them just to break down what you said in like one sentence. I think missing middle stuff for the secondary and tertiary markets where it makes sense to build bigger and I think plexes all the way for the major markets across the country. The next couple, once you're done, let's just rip through these ones quickly. Industrial, I think the whole industrial sector, I don't think we've overbuilt. I hope not. I know that industrial. I would take the, I would take the alternate on that one. I mean, rent growth is tapped out, vacancy rates are rising.

34:34There's still a bunch of supply in the pipeline, wholesale retail trade was the biggest job loss in February. I think consumers probably tapped out like recessionary. I don't think it's massively overbuilt, but I think we're definitely overbuilt. Yeah, okay. That's a bad thing. I mean, these things are expensive and inflationary on goods. But anyway, you can give me the bull case. No, I mean, it's not just a bull case. I just think if it is overbuilt, maybe it maybe is slightly, slightly overbuilt, I think that I mean, from the people that I know in that industry, things are still ripping. And I think with AI and robotics and that kind of stuff, you're probably going to see more of more large scale industrial stuff come onto the market over the next couple of years with, you know, a million square feet and like five people, five human beans in there kind of thing. So, okay. Next one here. Retail, yeah. So I think retail is interesting. I would consider that kind of the opposite of the way that I see industrial. And again, I'm not, you know, dunking on industrial. I think it's a great asset class. And I think it'll be strong. It'll be

35:36stronger than multi-family from a yield perspective. And you know, it had comparable metrics to multi-family for most of the pandemic. But retail is interesting because industrial made sense, like online shopping, you know, people not working in the office or you get some maybe small base satellite offices, whatever retail, nobody was like bullish on retail during the pandemic. You know, restaurants were shut down. Nobody was shopping in stores, blah, blah, blah. And so nobody was really building, building retail at a large scale. And now all of a sudden, you know, things come ripping back. And we, you know, in population, we have 10% higher population than we did at the beginning of the pandemic. And we don't have 10% more retail. You know, we do have 10% more industrial. We don't have 10% more retail. So retail, I think is an interesting one to watch for 2026. I think it'll do okay. It'll be a good performing asset class. The only headwind for it is is the consumer breaking. Yeah. Well, this is another one that we might slightly disagree. And I think retail is probably in trouble. I've seen some scary stats on

36:37on thousands of like restaurants closing, you know, you walk down some of the major streets in Calgary, Vancouver, Toronto, some of the major cities across the country and the amount of closed storefronts that have been either recently closed or literally just sitting vacant for years is scary. And I think I think that the recessionary and spending habits of Canadians are, are, you know, a little more reserved and careful than they have been. So I'm a little more bearish on retail. Again, we both know some guys in the space stand that are doing well. I think, you know, any any grocery anchor or big anchor tenants strip plas up, blah, blah, blah, good. This is I'm not trying to paint the whole retail space with one broad bad stroke. But I do think there is definitely some headwinds in in the retail space. Now speaking of headwinds, let's make this one kick quick because we could talk about this one for an entire episode, tariffs and trade uncertainty. Obviously, this is just not good. I don't know if they're the like, I mean, the Supreme Court

37:41stepped in. I don't think that they're the story anymore. And I think that by the like it seems like Trump is grateful that they're not the story like he, you know, there's a war and so he's changing stories on other things. Yeah, like you switch from and I think of that to trade to care of stuff, you know, actual war like. Yeah. So I think look, I think there's a lot of uncertainty. I don't think trade uncertainty is as big of an issue. I think you've got oil price. You've got the straight of hormones right now. There's like, you know, I mean, obviously what's happening in Iran, geopolitics that there is uncertainty. People have a reason to be fearful of purchasing and exercising caution. But is it trade that's purely a target on Canada's back? And I actually think that this is probably one of the ones that's going to get more smoothed over. I mean, Kuzma was up for renegotiation in February. I think we predicted that they were just going to ignore it and let it continue. And they did. They have so far, right? They haven't blown it up yet. So let's see what happened. So yeah, I agree. If anything, I think the damage is the damage that could have happened has already been done. And I agree. I think it's probably, this is probably

38:44yesterday's news. Yeah. Now speaking of it, I mean, not to say that it's going to go away completely. Like there's still there. We still have tariffs, etc. But like, it's not the, it's not the uncertainty piece. Exactly. Well, there's, and that might be a bad thing because there's a lot more bigger problems, right? Like if it was just trade uncertainty, those were the good old days, right now. But now you have geopolitics in the east, oil price shock. And the next one we're going to talk about, which is recession. If we tip into a recession, which asset class gets hit first in the hardest, I, I think Q1 is going to look bad. GDP, I think we'll see a risk. I think we'll be in a recession in Q2. But I've made this call like four times already. So I'm always happy to admit, I said that I thought we'd see, I thought we would see one when we saw our first declining quarter of GDP in 25 in Q2. I thought we'd get one in Q3, but military spending propped it up, some company spending propped it up. And then we had, so we had, I actually think that this is worse, by the way, than a recession, like then a technical recession, a fee recession. Well, then go back to the 1990s. They had a bunch of quarters down, a bunch of quarters up, down, up, down, up. And it was like the slow grind, you know, like what you don't want

39:50when your, when your economy is super indebted is a long and shallow recession. You want a deep and fast one. So deep central bank response, give people some stimuli, give them low rates, get out of it as quickly as possible, V-shaped recovery. That is not what we're going to get out. No, we're getting, like, long slow grind down. And that bleeds people out when they're, when they're, when they're strapped to debt. So yeah. I always call it like this, like I've, like, put it this way. I've been sick for like the last week and a half. Okay. And I haven't been like horribly sick, but I've just been feeling like feel 40, 50% there. You know what I mean? Everything sucks. I'm sore. I'm not getting great sleeps. I would way rather be like horribly sick for like two days and have a quick recovery. And like the Canadian economy has been like what I'm feeling like for the past couple of years. Let's keep going. Yeah. We've got three more here. Construction costs. I'm going to make this very brief. I don't think we're seeing a rebound or any major relief in construction or labor costs. Yeah. This year, maybe not next year. I've seen a lot to be fair. Like,

40:52well, that's what I mean, I'm going to have to down like 20%. But from, from there, from where we are right now. Yeah. I know. I know. I know. We might see a little bit more compression. Like, there's a lot of trades unemployed right now. Well, that would be a lot of guys looking for work. So that would compress that and that would be, but like, I mean, that overall, that's just that that's not the reason we want to see these these. No, I agree. But they could. Yeah. Yeah. So, okay. So let's let's say I don't think I don't think I don't you think we're going to see some relief there. I don't think we're going to see much. A little bit more. Yeah. I think you see a little bit more compression and in construction. Okay. Nice. Well, look, we can't agree on everything. So that's good. Let's let's we'll we'll we'll revisit this later on. Finish it up with the interprovincial migration. Yep. Let's Alberta, right? Alberta has been, well, Alberta has been calling, you know, the EWOL index says it, CMHC data says it. Most of my clients are in Alberta or or they're investing from other provinces into Alberta. So yeah, you know, it's, I think Alberta is still calling. And now there's all this crazy talk even on Polly,

41:54market where there's predictions of, you know, Alberta actually leaving. Yeah. So the Alberta story continues to evolve and continues to be a very interesting one. It's funny. Like to see US markets speculate on Canadian separatism because like it's such an easy trade. Like everyone in Canada knows that we're not that's probably a super unlikely outcome. That's easy money to be honest to take the counter. The other side of that bet. Anyway, let's wrap it up here. We'll skip the CMHC housing market outlook. We're going out. We're going to report with the Matthew there anyway. But yeah. So we'll do a couple. Yeah. And CMHC is going to be sponsoring our multiplex event. So make sure you come out to that April 8th in Vancouver. And that thing that's it. Anything else? Go check out the the vibe coded realist AI Slop website. I'm playing about this to me. They're like, oh, more AI Slop. I'm like, dude, like, do you not get that like you're not like a, you're not like a frickin food critic or like an art critic. Like, you know, like, you can be. That's cool. But like nobody likes those people, frankly. Like, you're the guy who's like going on Yelp, like, giving out one star reviews. Yeah.

42:55Yeah. The floppy Joe's were too sloppy. People. People love Slop. People love, like, I mean, they do look at the most successful companies in the world. Amazon, Walmart, McDonald's, Netflix. It's all Slop. Anyway, I'll leave you with that. Have a good one. Thanks, folks. The content of this podcast is for educational and informational purposes. Only it is not intended as financial legal or investment advice. Always consult a qualified professional for advice tailored to your unique circumstances. The views expressed are those of the hosts and guests and do not necessarily reflect the opinions of affiliated organizations. Daniel Fosh is a real estate broker license with Valerie real estate Inc website is Valerie dot CA VAL E R Y dot CA and a member of the Canadian Real Estate Association, the Ontario Real Estate Association and the Toronto Real Estate Board. Nick Hill is a mortgage agent and partner at Owl mortgage license number 10317 agent license

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