Here is What's Good About The January 2025 Real Estate Market Stats

Lots to unpack here! In this episode I discuss the market stats for January 2025 and the global market trends, highlighting the predictable downward trend in the average price for January and Bank of Canada's overnight rate, which I attribute to the high inventory environment in the condo sector and the decline in sales volume during the first half of December and January. 

Welcome to a new episode of Building Wealth Through Real Estate...Brick by Brick with me, Nico James-Bock, Founder of The CondoWiz™ Group and Broker at Royal LePage Signature Realty in Downtown Toronto.  

For Buyers, Investors and Sellers: 

1. Buyers to consider purchasing properties in Oakville due to high inventory levels and potential opportunities.
2. Buyers to focus on making purchases in the next 4-6 months to take advantage of the declining interest rate environment.
3. First-time buyers to explore opportunities in Mississauga's condo market, particularly around the Square One area.
4. Sellers to carefully price their properties in line with market conditions to avoid turning away potential buyers.
5. Investors to monitor the condo market for potential opportunities as prices are expected to rebound in late 2025 and early 2026.
6. Market participants to closely watch the March 12th Bank of Canada interest rate announcement for potential further rate cuts.
7. Buyers and investors to pay attention to the Durham Region market, which is currently in seller's market territory with low inventory.
8. Market participants to monitor developments regarding potential U.S. tariffs and their impact on the Canadian economy and housing market.

Ciao ciao

Transcript

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Nico James-Bock: We've passed the 1st week of February. We're now well into the second week.

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Nico James-Bock: A lot has transpired in the past few days, and in particular, the market stats for January 2025 are in. I want to share with you the insights that come from those market stats as well as what is happening in the global markets today.

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Nico James-Bock: This is a new episode of building wealth, brick by brick

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Nico James-Bock: with me, Nico James Bach, a broker and CondoWiz at Royal Lepage signature in downtown Toronto.

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Nico James-Bock: the TRREB average price and Bank of Canada overnight rate. I am sharing a graphic that I share monthly. So let's start with that.

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Nico James-Bock: The 1st thing that you'll notice when you look at the graph, if you are following just through, the, podcast.

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Nico James-Bock: You can check out the graph on my Instagram account as well as my Facebook business page. At the end of the podcast episode, I will also have a link to those social channels. You can also send me a request.

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Nico James-Bock: And I'll email the graphs and the presentation to you. So the 1st thing that you'll notice with the Treb average price and Bank of Canada. Overnight rate is the downward trend

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Nico James-Bock: in the overnight price average price as of January. Now, if you look more closely at the graph. You'll notice that during January the prices do dip, the average price will dip, and that is a trend that took place

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Nico James-Bock: ever since we had. The overnight lending rate increases from the Bank of Canada way back in 2022. So this is not unusual, even though we're now in a declining interest rate environment. January, December the 1st week of the 1st half of December to the 1st half of January, typically sees a decline in sales volume

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Nico James-Bock: as well, and that is reflected in a decline in the average price. Remember that the average price is a conglomerate of all housing types, so that includes the condo market. The condo market is seeing a bit of a lag as a result of the high inventory environment that we're in so many more days of

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Nico James-Bock: or minimum months of inventory in the condo sector, and that's having an effect on the drag in average price. We're going to see this trend line tick upwards as we go into the spring market. Another fact that I want to point out are the

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Nico James-Bock: events that took place over the past year and a half that contributed to the fluctuation in the average price. Remember that there are 7 factors that determine market value.

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Nico James-Bock: The cost of ownership is number one, and that is reflected in part in this in this graph with the Bank of Canada's overnight lending rate. But there are also other costs involved, and those include shelter costs like mortgage and rent. There was an announcement on December 15, th 2024,

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Nico James-Bock: which overhauled the rules, mortgage, lending rules as well as raising the cap to 1,000,500 for those looking to get into the market with less than 20% down. So those are contributing factors as well as global factors. So we all know

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Nico James-Bock: what's happening in the the Us.

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Nico James-Bock: With the the new trump administration taking power as of the 20th of January. So with the immediate announcement that there will be tariffs

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Nico James-Bock: on exported and imported goods from Canada, Mexico, and China. We're seeing a lot of uncertainty in the market and the Bank of Canada is going to look very closely at how this unfolds the interest rate

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Nico James-Bock: announcement. The 1st interest rate announcement that we received was rate reduction. We're expecting another rate reduction at the next announcement, which would be on March the 12.th

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Nico James-Bock: But if tariffs are levied against the Canadian Government, the Bank of Canada will look very closely at how that will affect inflation, because remember that their priority is to keep inflation at the 2% level. And that's where we're at now. So it remains to be seen. If number one we will get to tariffs and number 2,

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Nico James-Bock: if there will be other measures taken by the Us. To that will affect our economy.

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Nico James-Bock: Looking at the macro stats, the Gta market stats show the average price at 1,000,049 94, which is up slightly, 1.4%. Notice immediately that there are 4.4 6 months of inventory.

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Nico James-Bock: anything below 3 months of inventory that puts us in seller market territory. Anything between 3 and 4 and a half, or will be anything between 3 and 4, let's say, will put us in a balanced market, and anything over 4 puts us in buyer market territory. So we are in most

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Nico James-Bock: markets, most macro markets in buyer territory because the months of inventory in all of those markets are showing above for more than 4 months of inventory, 37 days on average, to sell a property that goes for all types of housing, and the Condo Corner shows an average price of 670,670,

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Nico James-Bock: 75. That's generally what the prices are in the macro market. Obviously the micro markets will show

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Nico James-Bock: a different picture. So that's why it's important to in order to get the the

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Nico James-Bock: overall picture in your specific market. Then you need to take a look at the micro stats. I am able to provide those at your request, and that will give you a detailed look at what's happening in your specific market. It may reflect what's happening in the Gta

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Nico James-Bock: or in some of the other macro markets, or it may be slightly different. As an example, if we go to Toronto's market stats.

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Nico James-Bock: it shows an average price of slightly just under a million, but still up from this time last year, so 2024, and in the Condo side we're seeing 691,039.

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Nico James-Bock: The Toronto market stats show 4.9 9 months of inventory. So just basically just 5 months of inventory, and that, as I indicated at the beginning puts us easily into buyer market territory. So the market will be favoring the buyer. And that's because also because that there is

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Nico James-Bock: such a high level of inventory, particularly in the condo sector. And it's that sector that is having a great effect on the overall numbers. So, including average price

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Nico James-Bock: for all types passing to Oakville, which is one of the more expensive markets, the average price is at 1,352,531 and looking at the condo on the Condo side. Specifically, the average price for a condo is 789,745.

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Nico James-Bock: But Oakville also has probably the highest number of months of inventory at 5.8 3. If I were a buyer, or, as I'm counseling or advising clients. I would advise them to look in Oakville, where there will be more opportunities.

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Nico James-Bock: even though the price point is higher, there will be more opportunities because of the number of months of inventory. Keep in mind that savvy buyers, buyers who are actively in the market and taking advice from people like me are active, and they're actively looking, will be able to capitalize on those opportunities. So if you are interested in

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Nico James-Bock: making a purchase, I suggest you do so

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Nico James-Bock: in the next 4 to 6 months. We are in a declining interest rate environment. But that's not going to last forever. So it's really really important to take these stats to heart. Look at them closely in the markets that you are in which you are interested, and you will be able to make your buying decisions accordingly keep in mind that there are also

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Nico James-Bock: many changes to the mortgage

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Nico James-Bock: rules offered by Cmhc. And other government agencies which bodes well for buyers, particularly 1st time buyers.

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Nico James-Bock: we go to Durham region. Durham region is on the opposite sector in terms of months of inventory, 2.9 0, which is the lowest of all of the regions that I'm highlighting here. So 2.9 months, just under 3 months of inventory puts Durham region in a seller market territory. Interestingly enough, it's also one of the regions that has the lowest

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Nico James-Bock: average price of just under 900,000. So, as I mentioned with Oakville and some of the more expensive markets because of the change in the mortgage rules, allowing buyers to get into the market at the, you know, the 1,000,001.2 even 1.3 million dollars mark

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Nico James-Bock: with lower than 20% down where you see opportunities, is where you should be directing your attention. Durham region has a lot of different options for buyers, but with 2.9 0 months of inventory those options will be eaten up by the savvy buyers

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Nico James-Bock: who are actively in the market.

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Nico James-Bock: We go to Mississauga, Mississauga market stats show a similar situation to Toronto and the Gta. With 1,047,000. As the average price condo Corner is slightly lower at 601,000, so there may be opportunities in Mississauga for particularly 1st time buyers getting into the Condo market. 4.4 3 months of inventory

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Nico James-Bock: is still quite high, so we are still favoring the buyer in most pockets of Mississauga. Mississauga is getting quite popular because of the addition of other transit options. So as we know, transit is a huge motivating factor

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Nico James-Bock: that helps buyers make their decisions. So anything that's added to the grid will make the area more popular. So the area around square one and it goes all the way up to Brampton. That's what the plan is, for. The Lrt. Will open up a whole bunch of other options for the buyers. Looking in those areas. It also helps sellers.

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Nico James-Bock: This is not just a buyer picture. It also helps sellers with more buyers getting off the fence and taking advantage of the new rules. Sellers will see

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Nico James-Bock: that their properties are staying on the market for fewer days, and they are getting more or less what they are asking for. Pricing needs to be tight in a buyer's market. So most sellers that are paying attention and listening to their advisors are pricing their properties accordingly.

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Nico James-Bock: The last region that I want to look at is York region. It's also one of the more expensive regions. It has 4.9 9 months of inventory so similar to Toronto, exactly the same as Toronto. Actually, actually, it has a slightly higher average price at 1,216,000 on the Condo side, it's 662,000

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Nico James-Bock: as the average price for a condo in York region. Keep in mind. When I mentioned average prices, it means that there are a lot of products that are priced higher and a few that are priced below. So that allows you to arrive at an average price. So keep that in mind, you're not necessarily going to get a condo in York region for 662,000. But you can generally use that as a

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Nico James-Bock: as a guide when you're looking for areas in which to concentrate and to put your your buying dollars.

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Nico James-Bock: The Trev forecasts 76,000 home sales in 2025. So that'll be a 12.4% increase over 2024. So we're expecting more sales to occur primarily because the new mortgage rules will allow more buyers to get into the market. So this projection, this forecast, is driven by lower borrowing costs and ample supply.

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Nico James-Bock: Always keep supply in mind because it's going to take a while for that supply to be absorbed. The average home price is expected to rise to 1,147,000 in 2025. We're talking about the Gta average. So that's a 2.6% increase with stronger growth for single family homes over condos

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Nico James-Bock: condos will remain fairly flat, as I'll mention shortly. January 2025. Average home price is a million 40, and that's up 1.5% year over year. Months of inventory stands at 4 and a half, approaching a buyer's market, or well into a buyer's market, giving buyers more negotiating power and pressuring sellers on pricing. So Sellers, as I mentioned, have to be very, very careful with pricing

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Nico James-Bock: and not overshoot, because that will just turn buyers away.

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Nico James-Bock: The condo market saw a 13% drop in sales. And, as I mentioned, that is because there is a large number of completions, not only in 2024, but there's expected to be a record number of completions in 2025. So that's going to continue once these completions are absorbed, however, and that's going to start in the next 6 to 12 months

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Nico James-Bock: we'll be dealing with a completely different crisis, because now we're dealing with many different fires to put out, and one of those is the high level of Condos saturating the market, and nobody really taking advantage of them. But we have a lot of people that are coming into the Gta. They'll continue to come in, even despite

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Nico James-Bock: the curb in the student population that's entering the Gta or Ontario, it's not going to matter much. There are still at least 350,000. That will come into the Gta, particularly into the Gta in 2025, and that is easily going to be enough

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Nico James-Bock: to absorb a lot of the inventory, so the condo shortage will be what we'll be looking at in start starting in the end of 2025, and starting in 2026, and prices will rebound

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Nico James-Bock: fairly quickly. So keep that in mind single family home prices are expected to grow faster than condos due to lower supply and higher demand. So detached and semi-detached freehold properties are expected to obviously grow faster than condos and home price drop and dip in sales is typical. In January, as I mentioned at the beginning of this, podcast

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Nico James-Bock: the threat of Us. Tariffs might alter the landscape, but only if those tariffs materialized. Remember that there are threats for now, and if the Trump Administration decides to levy those tariffs on Canadian goods.

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Nico James-Bock: it'll hurt both economies and drive up inflation. So I don't think that's in anybody's best interest. So we'll see what happens after the expiration of this 30 day. Pause.

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Nico James-Bock: We will take a look now at what the insiders

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Nico James-Bock: are saying. The threat the stats that I provide are curated by well, myself and those at Royal Lepage signature. They're taken from Trev's announcement. Whenever there's a

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Nico James-Bock: a stats announcement by Trev. Trev releases that data and we quickly curate it as well. We have contributors exclusively to royal le pay signature, one of those being Dr. Sherry Cooper, who's a chief economist at Dominion lending centres. She says that the recent acceleration in job growth may not prevent the Bank of Canada from cutting interest rates further this year.

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Nico James-Bock: because we're also looking at employment. The recent wave of hiring likely won't be enough to placate concerns that a potential Canada Us. Trade war could plunge the economy into a recession still overnight. Swap traders eased expectations for a cut

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Nico James-Bock: at the March 12th meeting to about 60% from close to down from close to 80% previously. So Sherry is saying that they're expecting another 25 basis point cut at the March and June Bank of Canada meetings.

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Nico James-Bock: The March announcement is on the 12th Wednesday, the 12.th The announcements are always on a Wednesday, followed by an announcement in April, April 16, th and then June 4.th So those are the next. That's the next round of interest rate announcements. We're expecting 2 cuts at those.

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Nico James-Bock: I want you to keep in mind that the Bank of Canada has announced that their target rate for the overnight. Lending rate is about 2% or 2 and a half percent, but not lower. So we're coming close to that. With these next 2 cuts, we're standing at 3% right now.

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Nico James-Bock: Another contributor.

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Nico James-Bock: a very valued contributor to our analysis of the market stats, and our take on what is happening in the market and allowing us to advise our clients is Sean. Hildebrand Sean is the president of urbanation. Urbanation is a widely expected, a widely respected

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Nico James-Bock: data company, and they provide a wealth of information exclusively to royal opaque signature. Sean is saying that from time to time buyers should represent a leading growth segment. This year to 2025, due to the impact of the new mortgage rules and lower interest rates, as well as the record number of condos available for purchase at prices not seen in years.

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Nico James-Bock: move up buyers and higher income 1st time buyers will also help push activity higher in the one to 1.5 million dollars. Segment as homes can now be purchased with less than 20% down the condo market will continue to face challenges in 2025 as completions remain at a record high this year.

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Nico James-Bock: however, opportunistic purchasers, those that are listening to the advice will take advantage of their improved negotiating power, and will be rewarded with stronger market conditions in a couple of years, as completions begin to fall dramatically due to a sharp downturn in the Presale market.

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Nico James-Bock: A 3rd contributor, and also highly respected, is Pedro and Tunis, who's a chief economist at the Conference Board of Canada.

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Nico James-Bock: Personally, he says he doesn't think that markets believe that tariffs are going to be applied for any length of time, primarily because of what I said earlier, that it would damage both economies because we're not seeing a reaction in equity markets. He says they're not seeing a reaction in the equity markets and stock markets, or in the value of

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Nico James-Bock: our Canadian currency, which, if we did see a 25% tariffs, I think our currency, according to Pedro, would fall to the 60 cent mark. So markets really don't believe it.

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Nico James-Bock: So, in his opinion we are probably not going to get tariffs, and if we do, it won't be for a very long period of time.

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Nico James-Bock: He also he goes on to say that the Bank of Canada keeps telling us that the neutral rate may be 250, maybe 275 basis points.

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Nico James-Bock: We're not quite sure where they're going to land, and so there is not a lot more room to maneuver on the downside. He also says we may get another increase, but it's unlikely that it will be in the next few announcements. If we do get an increase it will be later in the year after a rate hold.

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Nico James-Bock: And finally, there's Benjamin Tall, who is the chief Economist at the Conference Board of No. At the Cibc.

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Nico James-Bock: And the Conference Board of Canada. At the end of November Ben spoke to the real estate management students at Ted Rogers School of management. I'll have a link to that Youtube video.

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Nico James-Bock: Which is, it's quite interesting, quite insightful. Ben always provides quite a bit of detail in his insight

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Nico James-Bock: with regards to inflation and interest rates. Benjamin describes inflation as a lagging indicator, comparing it to a brown spot on a banana. By the time it's visible it's too late. While central banks, fight, inflation, rising, rent and mortgage interest costs make affordability worse.

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Nico James-Bock: That's why the Bank of Canada is keeping a close eye on the inflation situation and being quite cautious with any further interest, rate drops, and will not likely have an interest rate increase for quite some time.

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Nico James-Bock: Housing crisis and solutions. According to Ben. The current housing crisis stems from poor planning, advocating for purpose-built rental buildings and multifamily homes with accessory dwelling units to improve affordability is his suggestion with regard to the Us. Policy impact on Canada. Potential trump policies like tariffs on building materials could raise construction costs

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Nico James-Bock: in both Canada and the Us.

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Nico James-Bock: Further inflating housing prices in cities like Toronto and Vancouver, a rising Us. Budget deficit may also increase inflationary pressures globally, and finally, according to Ben, the future outlook. Tao predicts that while interest rates may continue to decline, better planning and construction strategies are needed for sustainable housing growth.

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Nico James-Bock: So a lot of areas that need to be addressed. We'll see how the picture unfolds.

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Nico James-Bock: That's it for this episode, as I mentioned before, if you want to receive these stats in an email, just send me a comment. You can also mention in the comments, if you agree with what the insiders are saying and what the outlook is

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Nico James-Bock: in terms of the Us. Tariffs. Do you think that we'll get them? Do you think they'll be long lasting? So let me know in the comments? My name is Nico, James Bach, and you can find all of my contact information

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Nico James-Bock: in the show notes, and you can reach out to me through the various channels.

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Nico James-Bock: Ciao Ciao.