Greetings Friends,
We are lucky enough to be writing this edition from sunny, south Florida’s, Miami Beach!
We decided to escape these endless Canadian lockdowns, get the vaccine of our choosing (both Pfizer doses for free!), and work remotely for our trusted clients and friends for another 6 weeks.
Much like the above image, which easily (and hilariously) transforms a hotdog into a butterfly, it is truly amazing what a small geographic shift does to entirely change one’s perspective.
In Florida, so far, folks seem way more relaxed and “normal”. We feel appreciated at the many local, small-medium sized businesses, which are all open. Wine dine in restaurants and chat with strangers on the beach.
Socially, precautions are obviously being taken, with masks and social distancing still being encouraged inside many stores. However, businesses + schools are open, eyes are smiling, and people are able to earn a living for their families. The sun is shining and the investment scene in Florida is equally as hot!
As our clients/partners have also found, one of the many benefits of investing in cash-flowing, real estate assets is that it affords one this type of time + money (and geographic) freedom!
Congratulations to our multiple Buyer and Seller clients on your property closings this past month! Way to go for taking action! Can’t wait to see your projects progress in the coming weeks/months and for your freedom build too!
Below I’ll outline the signals we are using to help our clients make 2021 a fantastic year…
So, on to the Meat of the Matter: Our monthly highlights of the market and random opinions!
- TRREB STATS: The average price of a Toronto home has now solidified, at over $1M; $1,090,992 in April, to be exact. In TO, we are seeing this WHOPPING 33% increase in avg. sale price (YoY), but remember year over year numbers will be skewed due to 2020’s spring market freezing-up due to fear.
- Across the entire province, we are seeing a decrease in showings and offers, most likely due to the overreaching quarantining of the healthy.
- Peterborough stats for April were just as HOT! The average price of homes sold in April was $681,995, however the more comprehensive year-to-date average price was $691,974. On a year-to-date basis, home sales totalled a record 932 units over the first four months of the year. To our investor clients this month: Good for you on taking action!
- Once we are allowed, Ontario Assets will be restarting our Peterborough investor tours this spring/summer. On these we discuss the strategies we use to buy, renovate and rent for massive gains while touring properties currently on the market! In the meantime, check out this video wherein I breakdown a quick way to analyse rental properties in Peterborough, ON. using two basic tools.
- This month we hosted some FANTASTIC podcast guests and heard expert advice on all things investing. Check out all of the episodes on our YouTube Channel. Please hit that like and subscribe button to help us get to our goal of 100 new subscribers by the end of June!
- And here’s an aptly relevant, funny and yet depressing meme (but keep reading too;):
“I do not think it is an exaggeration to say history is largely a history of inflation, usually inflations engineered by governments for the gain of governments.”
― Friedrich August von Hayek
Random Opinions:
As a real estate agent and investor, I get asked the same handful of questions over and over. Lately, the main questions I receive surround the “bubble” we are seeing in housing (their words, not mine.)
As I outlined last month, I believe we are not in a bubble. I am solidly in the camp which sees these massive price increases in hard assets (like real estate) as being driven by easy monetary policy and low interest rates; on top of the usual levers of supply/demand – increasing demand (population/immigration) and lack supply (new housing.)
This week alone we saw US data come out finally acknowledging that inflation is far above the “projected” rate in both CPI and PPI. However, anyone that has tracked their expenses (or built a deck recently), knows that “real inflation” is far higher than those government stats.
Currency creation (“stimulus”) is happening at an unprecedented rate in both Canada and the U.S.A. This “money printing”, created out of thin air, is what is actually driving prices to soar in everything from groceries to lumber to stocks and, of course, housing.
There are more dollars chasing fewer available goods.
We’ve made it even worse by the ludicrous business, school, and municipal closures in Ontario. Investor Barry Sternlicht points this out aptly, “You’re seeing unbelievable shortages in the economy from chicken wings to sheet rock to curtain wall to couches that everyone is ordering on Pottery Barn and West Elm, that they can’t get for six months because they’re all coming from China,”
“So what we did was write a giant stimulus package and now we’re shopping and buying everything from offshore. We’re not doing anything to fix long-term issues.”
We have closed our businesses; the heart of our economy and more specifically, our small businesses which employ nearly 70% of Canadians. The Bank of Canada has printed BILLIONS of dollars and yet we have fewer places to even spend them in our own country. Not very stimulating.
The media may act “surprised” by the inflation numbers, and the banksters are demanding it is only “transitory“. But anyone with even a basic understanding of economics, knew this would be the outcome.
Inflation is a tax created by central banks and governments.
It robs you of the value of your salary and your savings. It makes your dollars worth-less, because as prices rise you are able to purchase fewer goods with your dollars. This disproportionally affects the working poor and the middle class; since these groups own fewer assets.
Inflation is the enemy of the poor and those sitting on dollars.
Hard assets increase in value during inflationary times. They act as a life-raft for our wealth. Assets help preserve our buying power and, in the case of cashflowing rental properties, increase the number of dollars we have in our wallets.
This is a good time to seek out property investments, understand the reality of this “inflation tax”, and increase your holdings in assets.
Inflation is the friend of anyone who holds these types of assets…
Now, go out and get some exercise, vitamins + sunshine!
Oh, what a wonderful world!
Randall Reashore
Ontario Assets
416-893-8369
Stay sane, stay ready and start planning now
for whatever comes next!