sales burst and population bust

The rennie podcast is about the real estate market and the people connected by it. Tune in for monthly discussions making sense of the latest market data.

EPISODE #69: SALES BURST AND POPULATION BUST

In this episode, Ryan Berlin, VP of Intelligence and Head Economist, and Ryan Wyse, Market Intelligence Manager and Lead Analyst, are joined by rennie advisor Mohsen Esfahani to discuss what the October boo-m in housing sales could portend for the market as we round the corner into 2025 and enter a period of slower—and even negative—population growth.

Featured guests:

Ryan Berlin, Head Economist and Vice President of Intelligence

Ryan Wyse, Lead Analyst and Market Intelligence Manager

Mohsen Esfahani, rennie advisor

Additional reading:

the vancouver rennie advance | November

the vancouver rennie review | November

We’d love to answer your real estate questions. Email us at intel@rennie.com or leave a voicemail, and we’ll try to respond in future episodes. 

Transcript:

Welcome to the Rennie Podcast, where we talk about the real estate market and the people connected by it. Our goal is to empower you to make informed decisions and provide context for the real estate world around you. We hope that with every episode, you will become a little more knowledgeable and a lot more curious.

Ryan Berlin: Hi everyone, I'm Ryan Berlin, Rennie's head economist and vice president of intelligence Ryan Wyse, Renee's market intelligence manager and lead analyst within our intelligence division is here as always. Hello Mr. Wyse. And we are very happy to be joined by our friend and Rennie advisor Mohsen Esfahani.

Ryan Wyse: Hello, welcome.

Moshen Esfahani: Thank you. Thank you for having me on the pod. I'm looking forward to it.

Ryan Berlin: our leasure. You've been a rennie advisor for the past two years. Why dont you tell us a little bit about yourself? What your journey has been in, in becoming a realtor and before you joined Rennie?

Moshen Esfahani: I'll start with the reason I got into the real estate more seriously was after my very first transaction because it was so fun and I thought, you know what? I can't stop. I need to get more of this.

Ryan Wyse:  As a buyer, you mean?

Moshen Esfahani: No, as a realtor, yes. But as a buyer, my first transaction was when I was 19. I bought my first apartment in Vancouver. 

Ryan Berlin: Wow. Younger than most. Very good.

Moshen Esfahani: Yes, younger than most but the longer version of the story is I came to Canada when I was 18 to go to university. I studied computer science. And then economics and few other subjects and started my own business. I had my own IT services and marketing business for almost 15 years and stopped that business and they had an exit because my wife and I had twins. So I wanted to kind of slow down, change the pace of the life, and thought I'd give being a realtor a try because I loved real estate so much.

Ryan Wyse: So is the pace any slower now?

Moshen Esfahani:  That's debatable. 

Ryan Berlin: i dont know if ive heard anyone say I became a realtor so I can slow down. Super and in terms of you work with clients in.

Moshen Esfahani: With clients, wherever my clients take me basically, but it happens to be in the lower mainland. I'm mainly focused on Vancouver, West side and East side downtown as well as Burnaby and Surrey.

Ryan Berlin: Super awesome. OK, well, thanks for that. So today we'll be discussing the burst of housing market activity  that we saw in Vancouver and Victoria and Kelowna in October. We're going to shed some light on the all told seismic, federal government immigration policy announcements and what they could mean for housing markets and housing demand, and within all of that, we'll also spend a few minutes picking your brain most and about how you use data to be an amazing realtor and advisor. So much good stuff here, very excited.  Before we get started, this is the first episode that we've recorded in just over a month, and in that time we had two elections. Not, not we.

Ryan Wyse: Yes, we had one. There were two.

Ryan Berlin: We have one.

Ryan Wyse:  So I guess we are two down 1 to.

Ryan Berlin: Go 2 down, 1 to go.

Ryan Wyse:  Provincial election, an election in the US, and federal election still to come.

Ryan Berlin: Yes. And obviously I guess you know, the provincial election here in BC was in the middle of October was actually fairly dramatic, like Canadian dramatic though nobody got their knickers in a knot, but it was tight.

Ryan Wyse:  Yeah, yeah. You know, recounts. It took a while to find out, you know, who ultimately won and a few ridings were razor thin margins.

Ryan Berlin: Razor then including in your neck of woods that you grew up in right?

Ryan Wyse: Yeah. So originally from Cloverdale. So Cloverdale was super close. Yeah. Yes.

Ryan Berlin: And so now we have the incumbent party being returned to power, but with a very, very small majority.  So maybe a diminished mandate to continue the status quo, perhaps much more dramatic in terms of the outcome in the US, obviously.

And any thoughts without getting too political here? Any thoughts on what we saw transpire and and maybe what it mean for us in Canada and and in Vancouver?

Ryan Wyse:  I think first and foremost, it brings a lot of uncertainty for us as Canadians, for Americans, certainly as well in the world. We don't know, which policies are to come, but I think, you know, we'll see it. It'll be challenging times probably for us in Canada, depending on which policies ultimately get implemented.

Ryan Berlin:  Indeed, indeed I agree. I think there's just so much uncertainty.  Moshen, what do you think

Moshen Esfahani:  One of the things I was looking at closely for this election cycle was some of these regions and constituencies, the population has dramatically changed over the last three years.  I was curious to see how does that affect the politics of that area. We had post COVID the move out to the suburbs and all of these other changes. So that's what I was doing. I was going through the riding one by one,  I like how did this change? How did this change?

Ryan Berlin:  In BC. 

Moshen Esfahani Yeah. 

Ryan Berlin: Yeah, very interesting.. I don't know if I heard that talked about much. What did you did you find. Is there anything interesting that you found? 

Moshen Esfahani: There were a few places where we had a lot of people moved to.   Because they wanted more space, because they wanted to have outdoor space and we can see the demographics of that location change. Sometimes it's average age change and as a result we're seeing the change in the politics of that neighborhood.

Ryan Wyse:  Interesting.

Ryan Berlin: Cool. And I think I mean that's just the changing values matter a lot. Changing demographics also is a backdrop to election results. So important and going to continue to be. And it's gonna be really interesting to see how things evolve in Canada. I think when i look south of the border, where things are going to go, maybe not in four years and eight years. I don't know, but sort of longer term, it'll be interesting to see if we do see some bigger shifts in perspectives and politics down there.  It needs to be seen. OK, let's get to the main topics that we're here to discuss today. First off, after what was a, I mean a fairly lackluster  first nine months of 2024, there were some months where we saw elevated activity back in the spring, but by and large, 2024 has looked a lot like 2023, which is to say it's been a very, very slow housing markets. But then across the province, things roared to life in October. So Wyse,  what does the data tell us about that?

Ryan Wyse: Yeah, I think I think we really saw a change in trend like there was a noticeable shift in October. So sort of that typical seasonal pattern that we get is for a smallish increase in sales in Vancouver from September and October like 8% is sort of average increase.  And the pattern for fall is kind of an increase in new listings after Labour Day in September and then that translates into more a few more sales in October. So seasonality is somewhat at play here, but this is definitely beyond that. So we saw a 41% month to month increase in transactions. That is the most ever recorded. In this region, in terms of a September and October increase, we have the data going back to 2005 and Berlin, as you alluded to, we saw similar increases in Victoria and Kelowna, both those markets also saw their biggest September to October increase in monthly sales.  And so what that led us to is still below average sales activity. So we were 7% below average because of the starting point from September from earlier this year was so low. So I think this this new pattern of activity is a much busier market for sales, but not necessarily even back to average.

Ryan Berlin: Yeah, I think that broader context is really important.   We tend to sort of look month to month and focus on those changes very often, but I think stepping back and looking at the broader context to understand where a particular month sort of fits into the bigger picture is always important. So a burst of activity, but still fewer sales than than we're accustomed to seeing for in October. But what do you think is behind this Wyse, what do you think is behind that surge? Because that wasn't even like those numbers really stick out for me. Like when you say that in Vancouver, we typically see an 8% September to October sales bump, but we, this year we saw a north of 40%. jump.. Like, that's incredible. So what is behind that?

Ryan Wyse: Yeah, it's probably a combination of things. So certainly the interest rate story matters. The cumulative effect of a whole bunch of rate cuts, they're now starting to add up. They're giving purchasers both more purchasing power but also more certainty about where we're headed. I think a lot of buyers were maybe a little bit frozen based on. OK. Are we going to see rates fall as much as some people say what? What is the path forward? How long should I wait? And so now we are much closer to that Bank of Canada's target neutral range of 2.25 to 3.25%. We're getting closer to that. So I think a lot of buyers have a bit more certainty along with that increased purchasing power. And as we've talked about for the past few months, there's also a ton of inventory on the market. It's quite an elevated level. At the end of October, there's just under 22,000 listings for this region that's still like 33% off average. So it's choice, it's still, a less competitive market and more purchasing power and a bit more clarity on the path for rates. I think all those things combined matter

Moshen Esfahani: For some of the consumers that we see on in the market on the ground. It’s almost just the right excuse. You know, they were sitting on the fence and you know, they're thinking about all these things that we talked about. But a lot of this is rear view mirror. And they're thinking, you know what? This is good. This does it for me. I'm going to pull trigger now. It's not necessarily going to affect the economics of the purchase decision.  The interest rates are not dramatically different when you actually go to the bank, but this is a good enough excuse for them to pull the trigger.

Ryan Wyse: Yeah, we've talked a lot about the amount of pent up demand in this market as well. And so some of these people have been waiting, waiting, waiting. Maybe their living situation no longer works for them, and now it's like, OK, I feel good about making this decision today. I'm sure there's still lots of people waiting for next spring. They don't feel quite ready yet, but certainly at the margin, I think a number of buyers have finally stepped off the sidelines. 

Ryan Berlin:  So that's an interesting sort of nuanced take because I think what we're saying is that the conditions have improved slightly and it hasn't created new buyers, but it's drawn buyers who have the means to participate in the housing market off of the sidelines.   Housing is a little bit more affordable than it was in the spring. When you look at income growth and rates being a bit lower and prices sort of moving sideways, but it's still very, very expensive and for many people it is not affordable. So the people we're seeing now are those like going but most back to what you said about having that certainty as people who are looking for a reason now. So for you working with clients on both the buy side and the sell side? What kind of opportunities and challenges are you seeing for each of those two groups?

Moshen Esfahani: If we separate the people who are purchasing homes for their own use from investors, it's creating an interesting pattern because they're thinking, OK, the interest rates are high. I'm not sure if the economics of holding this property are good enough for me anymore.  But then they're also looking at, OK, if I cash out and the interest rates continue to drop, do I continue to make high interest rates on the deposit?  So they're having a tough time making that decision. And for the consumers, we're thinking about moving in and using their home as their primary residence.I don't find they're so sensitive to the pricing. I mean those who can afford it obviously, but they want to just not lose out in that they don't want to buy a home and then start losing money on it.  So that's where they're trying to kind of time the market and figure out is this the right time for me to get in?  and because some of that is a lot of that is emotional. That's why I was changing the economics look at the whole macroeconomic situation to a more of an emotional one where this is good enough for me, you know, I'm confident that even if it's going to go down a little bit more in terms of interest rates I'm fine with this.

Ryan Berlin: Right. So as a matter of like, can you actually afford the home now and then and then shifting your perspective from what's going to happen in the next few months or year to, is  this  a reasonable long term investment?

Ryan Wyse:  Yeah, and how long are you going to live in that property for.

Moshen Esfahani: Exactly. Yeah. A lot of times people are thinking 5 to 10 years ahead and in that situation, it doesn't really matter what the interest rates are up today as long as you can afford the home and you move into the home in the long run, it's going to work out.

Ryan Wyse: Yeah. And like we've been talking about, the market is less competitive for buyers today than it has been in, in prior cycles. And certainly as inventory declines to the balance of this year. And you know if sales activity continues to pick up, we could see more competition amongst buyers going forward.

Ryan Berlin: Absolutely. So we look at this market now and there's still in some ways there's reduced uncertainty at least around interest rates because they have been coming down, which is good. But there still remains a lot of uncertainty whether relates to things happening south of the border or it's just intrinsic to this market.   Like what is the directional change in home prices and is demand really coming off the sidelines permanently or is that a one month blip? Is supply moving back towards the long run average or are we looking at like a long term elevated situation like I know a lot of people have a lot of questions and Ryan and I you know working a lot of questions from people when there's uncertainty. Those are times when we lean in on data to sort of try to sift through the noise. And I know you use data in your practice. You, describe it as a data-driven practice that you operate. You come from a computer science and economics background. So maybe you can just tell us a bit about how you apply data to what you do.

Moshen Esfahani: Yeah, I want to be clear on what I mean by a data-driven practice, because the challenge with just looking very closely at data all the time is a lot of it is kind of  like we are historians, it's like financial historians of what had happened.  And we can guess what's coming in the future to  a degree.   But the fact is, housing is an essential need for human beings. So what we're trying to do is come up with solutions that get people the goals that they have in terms of their actual human needs to match what the human constructs of economics and money and finance are all about.   So we bridge that gap with data-driven practice in that we look at the data, we look at your circumstances and then we'll provide you with solutions that can get you ahead. Now one of the interesting things that is a bit of a pattern and we've noticed is a lot of people are trying to, as I mentioned, time the market, but timing the market is not such a high level technique. A lot of people are trying to do this, buy low, sell high, but there are other other techniques. It's kind of like when you're playing chess, you know how the pieces are moving, but you don't necessarily know the specific plays that some of the more advanced players know. What I can say is in every market there are opportunities that you can take advantage of as long as you know how to play.  We come in as advisors and we look at your situation, look at the market, we say OK, you know, this would be a good move for you today. And you will come on top in three years, five years, 10 years. And I'll give you some specific examples.

Ryan Berlin: Yeah, do that.

Moshen Esfahani: 

Recently we had a number of investor clients approach us and say, we have this property. One of them the tenant moved out, one of them the tenant is still there. They're thinking I have these other opportunities, investment opportunities available to me. Why do I need to keep this property? Should we sell this property? Should we keep this property? What is the next step for us? And we're able to calculate with our modeling or spreadsheets of, okay if you keep this property for the next three, five, ten years with these potential projections, and then this is the rents that you're getting and these are the costs of keeping the property, we can calculate backwards and say,  if you can get for example $500,000 for this apartment, this is the right time to sell. If  you get to $480,000, that's the bottom price, and any lower than that, you should keep it. So then we go back and look at the data that the intelligence team here at rennie provides and we look at how that market is performing and do an analysis and say, yeah, you're within range, we can actually have a disposition of this asset at this time, within this range. Or what we find is no, you can't. It's better to keep it. And last month we had the exact situation. Two of those sellers pressed to go on the sale and one agreed to keep the property.

Ryan Berlin That's great. 

Ryan Wyse: Yeah, very cool.

Ryan Berlin: And I think that's  what people are looking for when they're working with an advisor is they're looking for advice, right?  Looking for guidance and that doesn't always necessarily lead to somebody transacting, buying home or selling. Sometimes it means just staying put for the time being.

Ryan Wyse: Feeling like you've made an informed decision, so like you can feel good about whatever decision you make that you've made with all the best information possible and you're comfortable with that move forward.

Moshen Esfahani: Exactly. You can't have blanket advice for that, because we actually have to look at what kind of mortgage are they in? What are their rates?  What are the rental rates that they can get, what is the potential appreciation for this property, what is coming around that area?  For example, is the Skytrain opening at Great Northern Way, 

Ryan Wyse: Yes, in a few years, in a few. Yeah. Yeah, it's coming. It's still late.

Moshen Esfahani: So how is that going to affect your investment decision? Maybe it's not performing that much at this moment, but in five years, it's a whole different story.

Ryan Wyse: So that's why if someone asks you is now a good time to sell or to buy. The answer is it depends. 

Moshen Esfahani:  Depends

Ryan Wyse:  So it's interesting like with that strategy, you have 3 potential sellers and essentially you advised one to hold and to not sell. So that's an opportunity for a sale that you essentially passed up because you felt that was the right decision for your client. I mean, that's something that probably built a lot of long term trust with that client.

Moshen Esfahani: Yes. And my focus  in my data-driven practice is to build trust, and get the consumer to a level where they're so educated on the subject matter that they can make their own decision and they can make an informed decision. And it's not just these. I mean, I think in the past year, just because of the way that the economy has been and the uncertainty and all of the moving variables, I would say there's been a number of sellers that have agreed to not sell their property and find a different solution and have a different game plan for their asset. By focusing on this kind of data-driven approach, what I really take advantage of is the information that the intelligence team ar rennie put together. And looking back at my previous experience in real estate, I feel like I was flying blind. I was advising clients to the best of my ability, but it wasn't informed enough, especially when we have access to this kind of information on a day-to-day basis, our focus is to provide our clients with the most amount of data, and in a way that is comprehensible for them and it fits their situation. It's almost like coming up with a bespoke solution for their special case, based on the current information.  And creating an informed consumer creates a person that makes decisions themselves. So in a way, as long as I provide people with the right information that they can trust, the trust is not so much even in myself. It's in the data because it is backed by facts and it helps the client make their own decisions.

Ryan Berlin: I think it's great. You know,  Bob Rennie always says that people are entitled to their own opinion but not their own data, or some version of that.

Ryan Wyse: For this, it's like if you trust the data and the process, then you inherently trust the results.

Ryan Berlin: Over the years on this podcast, we've discussed many policies and their impacts on housing. I think the reality is that most market interventions by the various levels of  government have brought something ranging from inconvenience to outright pain to only a small proportion of market participants, while not actually effectuating change on a grand scale. So in other words, there's there's a lot of words. In other words, I think a lot of the policies that we've seen announced over the past few years that have impacted housing have had more bark than bite. So think about the foreign buyer ban, the speculation and vacancy tax, short term rental restrictions. Yeah, sure. Maybe there was  a near term impact on rental markets there, but you know we're talking about a very small sliver of the entire housing stock. The capital gains inclusion rate change and so on and so on, right. But I think the the seismic shift that we referenced earlier in immigration policy that was announced by the federal government earlier this year, that it's that's different because I think in that case  the bite matches the bark. So Ryan Wise as we sort of pivot into a discussion about immigration policy in Canada and the changes that we've seen over the past year. Maybe you can fill us in on some of the details and tell us what has actually changed?

Ryan Wyse:  Yeah. So this is like a complete 180 from what we had before. So you know we've talked about this on this podcast before, but we've had record population growth the last few years, all due entirely to international migration.   So we've added more than 2 million people across 2022 and 2023. We've added more than 500,000 people in the first half of 2024 and this massive population growth has been led by non-permanent resident additions. So international students, temporary foreign workers, the International Mobility program, and there's this recognition that it was too much, too fast, and we're growing fast, and were growing faster than we possibly can accommodate.  And so the new immigration levels plan was announced. And again, this is a dramatic shift.  So first, the permanent resident targets, which have been revised downward, the previous plan was for 500,000 for the next two years. We now have targets for the next three years, the 1st 2 being revised downward to 395 and 380 and then additionally 365. And the plan is 40% of those PR's will be conversions of people already living here as non permanent residents, and the other 60% net new probably targeting a lot of specific skill sets.

Ryan Berlin: So in other words, just to clarify with those targets like we're talking over the next three years, 395,380,  365,000, but not all of those permanent residents are not net new warm bodies in Canada because 40% of them are coming from that temporary resident pool. those are people that are already here.

Ryan Wyse: Exactly and over the last few years, an even higher percentage of new PR's were people already living here, so it was over 60% the last couple of years. So the big source of population change in Canada has been those non permanent residents. Those temporary permit additions.And so for the next two years, the federal government wants to have a net loss of 446,000 non permanent residents in each of the next two years.

Ryan Berlin: so 2025 and 2026.

Ryan Wyse:  Yes, so in other words, they want more than one million more people to leave than to come as net new on the non permanent resident side and all of those two things combined,  they expect will lead to population decline and modest population decline in each of the next years, around 80,000 people. So we've never had a single year of population decline in this country going all the way back to Confederation.

Ryan Berlin: So population decline in Canada over the next two years sounds dramatic. It is dramatic. But you know, we're not really gonna perceive that on the ground, right?

Ryan Wyse: Yeah, like Costco's not gonna be any less busy next.

Ryan Berlin: Right, it's not gonna be as busy, but we do expect that this shift in immigration policy will impact a bunch of things, including the housing market. So how do you see things Wyse?

Ryan Wyse: So first and foremost, non permanent residents, overwhelmingly rent.  So the first order effects will be primarily on the rental market. And so I think we can expect less net new rental housing demand across the country.   And it will be disproportionately affecting Canada's largest cities, which is where international migrants tend to flock to. So especially Vancouver and Toronto, I think we can expect less net new rental demand going.

Ryan Berlin: And I think we know like we've run the numbers through our population models for Vancouver. You know, we've modeled at the national level, filtered it through our BC demographic model down to Metro Vancouver. And this reduction in incoming immigrants vis-a-vis the reduced PR targets plus the net outflow of temporary residents. Or at least our models tell us that housing demand will be reduced by 30,000 homes over the next five years  in Metro Vancouver. So that is, I mean, that's roughly equivalent to one year worth of housing starts recently and  that was a record. So it's not insignificant. And then 2/3 of that decline in additional, if that makes sense the decline in additional housing demand,  2/3 of that will be in the rental market.   So disproportionate impact there. And so that's sort of like our initial take on the numbers having just run them through the models. Those are big, right? So Moshen, that I know as with the for sale market, you track the rental market and you follow the data on that and and you're saying that you are already seeing a shift in rental in that. We've already seen  a slowdown in the rental market and follow the data on that. 

Moshen Esfahani: That’s correct. In downtown Vancouver specifically, where I had properties available for rent and helping clients rent out their rental property, one was a furnished rental and the other one was unfurnished. And both of them we were able to after months of work secure a tenant at a lower rate than previously for both of those properties. So one of them was, for example, one was a $3500 a month furnished rental executive rental. It is now rented for 3300 and it took 2 1/2 months, typically in the same suite would go within 10 days. The other one around the $4000 mark. It took a long time to find the tenant and we were able to get 3900 for that unit.   But both took,  again I can't stress enough a long time to lease up.

Ryan Berlin: And were they vacant? The units in that time.

Moshen Esfahani:  They were vacant.

Ryan Berlin: That's a significant hit, especially when you're talking about a financial head. If you're talking about an individual investor owner in that case, not having that cash flow to offset the inevitable costs on the other end of that  is a big deal.

Moshen Esfahani: And it was interesting that reducing the price of the rental didn't necessarily attract more inquiries.  So it's an interesting type of market where there are just not that many renters.

Ryan Berlin: Relative to supply cause I know that in the purpose built space, the purpose built rental market in Vancouver we had, you know, we've been building at a record level over the past year and a half. Not all of those have made it to completion yet and become available for occupancy. But we know that there's is more supply in that segment of the market. 

Ryan Wyse: And we've seen in some sub markets where a number of new buildings have hit the market at the same time and they're competing with each other on lease up. There's like some of that's going on in East van right now. So we're seeing a lot of competition, a few more incentives on the rental side,  and a little bit of softening of asking average asking rates across the market.

Ryan Berlin: Maybe a final comment on this, we know that the rental market became extra tight in Metro Vancouver over the past couple of years in part because of high interest rates because people weren't able to transition from a rental home into ownership like they normally would have, cause it was not affordable.   And so now as rates come down it's going to start to loosen up that rental markets. We have lots of new supply. We have a reduction in demand and we have lower rates, which is going to create some churn. I would be shocked if we don't see an increase in the vacancy rate, I don't think it's going to explode, but I think we'll see some more balance between supply and demand and rents which haven't really changed significantly in this region in the last year.I think are likely to sort of middle for the net for the foreseeable future.

Ryan Wyse: Yeah, unfortunately, we get a vacancy rate once a year, pegged to October. So in a few months, we'll find out what the vacancy rate was a few weeks ago, you know, before these announcements actually came out.

Ryan Berlin: Come on, CMHC.

Ryan Wyse: So we'll be waiting for a while to see how that impacts vacancy, but certainly you would think it would impact turnover as more people are leaving the country. 

Moshen Esfahani: So Ryans are you saying that these policies are going to improve housing availability?

Ryan Wyse: So I like the way you phrase that. I do think it will make a difference to availability and possibly to rental affordability, But at the end of the day, like we're talking about just  slightly less net new housing demand.  I think ultimately we're not building enough supply. We have not built enough supply to accommodate all of the demand that we otherwise would have. So we're not going to this policy will not solve affordability by any means.

Ryan Berlin: We're talking about a dramatic shift in policy that applies to the next two years.   And the assumption is that and the modeling shows that after 2026 the population begins growing again. Migration patterns are so complex that when we talk about a reduction in population at the national level, that does not mean that everywhere is going to see fewer people right?  Because we have domestic migration flows between provinces within provinces, and I think you go back to metro areas that have more dynamic economies than less urban ones like Vancouver, Calgary, Toronto, Montreal. You're still, this tends to be the destination for international migrants in the 1st place.   So you know it'll be interesting to see how it plays out, but I think we'll see a soft spot for the next couple of years. And then, you knowthings will probably tighten up a little bit unless we build a lot more after that. 

Ryan Wyse: Yeah, certainly a second order effect to this could be that we'll see less outflow of people of domestic migrants out of Metro Vancouver with a less tight rental market.  You just see more people not choosing to leave the region for other parts of the country.

OK. So let's move on to our recurring segment, which we call Beneath the Headline,  where we introduce a headline that could use a little more context. And so the one we've selected today, Canadian real estate prices make another sharp drop despite rising sales. So Ryan Berlin, I think prices didn't really drop that much, maybe a little bit nationally. Why don't you throw some more context?

Ryan Berlin: Yeah, we look, I mean, we looked at the data which was in the article and the month over month, most recent month over month changed in the HPI. So the home price index nationally was decline of .6%, which, yeah, on a month to month basis is significant. If you extrapolated that over a longer period of time that would, that would begin to add up. But we do see a lot of noise in the price data month to month. And the reality is you know over the past 2 years, prices are still lower than their peak from 2 1/2 years ago, but over that period we've seen periods of decline, periods of increase, but by and large prices have been pretty stable for the past couple of years. And so, you know, at this point, there's certainly no real directional change in values, particularly downward that we're seeing in the data, whether it's nationally or it's in any of BC's housing market.

Moshen Esfahani:  I think these articles and clickbaits are exciting for people who are timing the market. So this says, oh, you thought the market is picking up. It's not. That's an interesting tidbit for someone, but if you are focused on the fundamentals and focused on your goals, it doesn't really matter.

Ryan Berlin Totally. Next up we have a question from one of our listeners. It's Dean from Vancouver.

Listener Question: Hey Ryans, this is Dean from Vancouver. My question: how does Canada's lower dollar impact the housing market, particularly in regions like the Lower mainland, could it influence foreign investment, housing affordability or the demand for luxury properties? And what ripple effects might we see for local buyers and sellers?

Ryan Wyse:  So thanks, Dean. Great question. So I don't think it's going to have a huge impact on the Lower mainland. We typically don't see a lot of foreign buyers despite all of the headlines out there.  Fforeign buyer participation even prior to the foreign buyer ban was quite low in this region. So I don't expect it to have a huge impact where I think it could have a more of an impact as in Whistler. So whistler is not subject to the foreign buyer ban. It's not subject to the provincial foreign buyer tax and we've actually looked at this before for some of our advisors in the Sea to Sky region. You see when the Canadian dollar is weak, a little bit of increased sales activity, but also a lot of price gains. And I think that's something that we could see again when the dollar is weaker. You potentially have the same number or slightly more foreign buyers, particularly US buyers, but they have a lot more purchasing power when they show up here and so they can push prices up a little more. So we've seen in some historical periods where the dollar is weak, that prices in Whistler appreciate much faster than they do across the region.

Ryan Berlin: And I would also I think that's a really good observation and I think it's also worth noting that the dollar is the Canadian dollar is weaker today than it has been over the past couple of months in the last few years. Currently costs about $1.40 Canadian to buy a U.S. dollar and that's up from it costing about $1.35 Canadian to buy U.S. dollar, on average, over the past couple of years.  So to this point, yeah, we've seen directionally a weakening the dollar, but nothing so material that we would we would perceive change in values in even in in Whistler really as a result of this, I think what's interesting going forward is with your comments in mind, Ryan, about Whistler versus Vancouver as an example, where is the Canadian dollar going right. With all the uncertainty in the States and the changes that are being proposed it might be bluster. We will see come the new year. But you know, we could be looking at a bigger interest rate differential, a growing interest rate differential between the US and Canada.  There’s certainly more inflationary policies that are being proposed.  I suppose they're discussed in the US, including tax cuts, tariffs, and also I mean, quite frankly, mass deportations, right.  So where we go from here will be interesting.  I think the bias is towards a weaker Canadian dollar than we have today. But going back to your comments where I don't think like if we look at Vancouver and Victoria and Kelowna as examples, we won't see a significant change in activity. 

Ryan Wyse: The other thing, there's a lot of discussion about after this election and 2016, all the spiking of searches for Canadian real estate by Americans and then people do that and they quickly find out. It's not that easy to immigrate to Canada on a whim. You need either a permanent resident admission especially now, it's gonna be that much harder. So I think a lot of people think, oh, yeah, I'll just move to Canada for the,  my preferred politician doesn't get it. And it turns out it's not that easy.  So unless we have a whole bunch of returning Canadians that are living in the US, I don't think we're going to see a huge influx of people moving to Canada from the States either

Moshen Esfahani: I think another way to respond to this question can be the indirect effect that this change or the current state of the exchange rate can have on our housing market. The Ryans talked about in the previous episode that the inflation has been defeated with high interest rates at the cost of the economy, and the lower exchange rate creates a competitive environment for Canada as one of the largest trade partners with the United States to participate in their economy and hopefully improve our economy. And indirectly that will affect our housing because hiigher GDP growth for Canadians, higher home prices.

Ryan Wyse: Great point. Yeah, certainly if there aren't tariffs and a weaker dollar, it could be beneficial for exporters.

Ryan Berlin: Moshen fantastic to have you on. I love the discussion that we had today. Now before we go, how can our listeners get in touch with you if they would like to?

Moshen Esfahani: The best way to get in touch with me is to send me an e-mail. My e-mail address is mesfahani@rennie.com.

Ryan Berlin: Excellent. Are you on social media?

Moshen Esfahani: I am on social media. It's mohsen.esfahani.re but best way is to just Google me and you will find everything.

Ryan Wyse: And you can also find them on rennie.com

Moshen Esfahani: That's right.

Ryan Berlin: Superb. Thanks again Mohsin.

Moshen Esfahani: My pleasure. Thank you for having me.

Ryan Wyse: Thank you for tuning into the Renee podcast where we share our passion for homes, housing, community, and cities. We hope that today's episode sparked the same curiosity in you that drives us every day. If you enjoyed the conversation, don't forget to subscribe and follow us on your favorite podcast platform. And if you have a moment, we'd love for you to leave a review. It helps others discover the insights, analysis, and perspective we bring from the rainy intelligence division for the latest market updates, be sure to register at rennie.com.

The rennie podcast was created as another way of sharing our passion for homes, housing, community, and cities. We hope that this will spark the same curiosity in you that we have for everything real estate.

Our rennie intelligence team comprises our senior economist, market analysts, and business intelligence analysts. Together, they empower individuals, organizations, and institutions with data-driven market insight and analysis. Experts in real estate dynamics, urban land economics, the macroeconomy, shifting demographics, and data science, their industry-leading data acquisition, analytical systems, and strategic research supports a comprehensive advisory service and forms the basis of frequent reports and public presentations, covering the Vancouver, Kelowna, Victoria, and Seattle marketplaces. Their thoughtful and objective approach embodies the core values of rennie.