November 11, 2025 • 42 mins
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EPISODE DESCRIPTION
Episode 109: Matt and Taylor are joined by Ben Smith. Ben is the President & CEO of Avesdo Technologies from Vancouver, BC, and a pioneer in digital marketing within the real estate development industry and more recently is leading the way for digital sales.
Having marketed more than 15,000 homes and launched hundreds of new communities, Ben's leadership in digitizing the new home sales process was solidified in 2020 when he led a developer to the first online sales transaction in Canada. His experience and commitment has made him a trusted leader to set a path for the new home sales and marketing industry into a more digital future.
Avesdo provides a single, integrated Transaction Management Software (TMS) solution for new home sales, built to manage the unique processes and data associated with new home transactions and their evolution through the entire lifecycle of development. Avesdo has helped hundreds of developers to transact tens of thousands of homes worth billions of dollars.
Ben is here to discuss: → His journey in real estate, what Avesdo does, and how Boomers play a huge role in Canadian real estate. → When the data showed we were going to have a housing problem, Canada's difficulty with project financing, and what's selling right now for pre-sales. → Possible solutions to help the housing crisis, current market opportunities, and predictions for 2026 & 2027.
Avesdo Website: www.avesdo.com
Avesdo Instagram: @avesdo.technologies
Avesdo LinkedIn: @Avesdo
Ben Smith's LinkedIn: @BenSmith
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
All right, welcome back to theKelowna Real Estate Podcast.
(00:01):
I'm your mortgage broker host,Taylor Atkinson.
Yeah, hot topic kind of backaround Kelowna, short -term
rentals.
The city had their council meeting
November 3rd.
They're advocating for option two,
which would be allowing theprevious designated properties
like Discovery Bay and the onesthat are zoned.
(00:22):
for short -term rentals.
They're advocating to the province
that they should be allowed tocontinue to operate as short -term
rentals as long as our vacancyrate is up above that threshold,
which we don't have that data yetfrom CMHC, but I think they're
projecting that it's going to belike five to 6 % vacancy, which is
well above.
I know I feel like there should be
(00:42):
a mechanism for them to likecontinue to allow these to operate
even if that vacancy drops belowthat you know with those specific
buildings because yeah you'reright you can't just have it going
back and forth every other yearyeah so they now have to go back
(01:07):
to the province they now have togo back to the province advocate
for Kelowna, tell them, you know,we would like option two.
In addition to that, I think, youknow, the legislation doesn't have
it coming to pass until I thinkit's March, 2026.
So we want them to implement thisimmediately.
Basically like, Hey, it'sNovember.
Here are the vacancy rates.
You know, we want these properties
(01:28):
back to what they were in 2023.
So yeah, we'll keep you posted on
that.
It is.
Yeah.
Good for Kelowna.
Appreciate what council's doingthere.
Trying to get it back on track.
Yeah.
What are your thoughts on that?I was kind of thinking like, you
know, over the next two rateannouncements, we'd probably see
(01:52):
one cut.
I was a little bit surprised to
see it come in so early just withwhere inflation is going.
Inflation is kind of still upthere in terms of that data.
So I was surprised to see themmake this cut.
It's obviously positive.
from a mindset point of view where
people are at and helps withbudgeting.
I think we are at that lower endof the rate cycle for sure though.
There's not much more they can doto cut it.
(02:13):
This is now getting below theirneutral point.
So this is now getting into astimulus style of approach.
It's a tough one.
They can't really stimulate the
economy when inflation's on therise, right?
That's their one lever to pull tocontrol inflation.
So, you know, they're back at thatpoint where they were a few years
(02:39):
ago that if they keep cutting,inflation's going to come back in
and then they're going to have torise rates.
Like you don't want thatvolatility.
A lot of things we cannot predict.
Yeah, yeah, absolutely.
Mm -hmm.
Well... yeah i mean to talk about
it getting transactions back upyou know like today's guest ben
smith awesome guy really enjoyedspeaking with him he's kind of got
like the magic eight ball in theindustry on the pre -sale side
(03:38):
yeah so he has implementedtechnology into real estate
seamlessly and basically does youknow the majority of pre -sales
across canada and tapping into youknow north american and global
markets so really really switchedon guy but he's basically got the
data in front of him that sayslike pre -sales are dead right now
(03:59):
you know profitability is reallytough for developers like all the
stuff we know has been happeningover the last couple years but
he's like interest rate cuts willnot be the catalyst to get this
going it was super interestingtalking to him i mean the one real
big takeaway i got from that islike the wealth transition with
baby boomers and not just you knowgenerational wealth being passed
down but just opening up housingstock that you know is latent
(04:20):
Yeah.
And it feels weird to talk about,
but as you know, people pass onlike that baby boomer generation,
which is kind of like over thenext say 10 years, it's weird to
talk about, but there is going tobe like a, a large transition of
estate planning.
So he thinks that could be, you
(04:43):
know, a real mechanism to maybebalance out real estate or get
things going again from atransaction point of view.
Yeah.
But super fascinating show and
really, really cool guy.
Yeah.
All right.
Ben Smith.
Welcome to the show, my man.
Coming from Tofino.
How's it going over there?Yeah, it's going great.
Thanks for having me, guys.
You know what?
It's sunny.
It's not too bad.
I mean, it's West Coast for sure.
(05:05):
Got a bit of moisture, but it's
okay.
Can you kind of give us an
(05:43):
elevator pitch, who you are, whatyou're doing in the real estate
industry, or maybe I should saythe tech industry?
Would that be more accurate foryou?
Yeah, maybe now.
So yeah, Ben Smith, President and
CEO of Avesto Technologies.
Spent the last 20 plus years in
real estate development, mostly inthe lower mainland, but in the
last five years internationally,actually.
So kind of grew up on thedeveloper side in the sales and
marketing role, moved around.
I worked for Polygon, who's a
(06:04):
major developer in Vancouver, andthen moved to Rennie and then kind
of learned the agency side.
Then went out on my own and had a
consulting company.
And then in that process, I was...
Pretty big client of Avesdo, whichis a software company.
I'll get to that in a second.
They bought my consulting company
and I joined them to go on thesoftware side.
And so Avesdo, we are a contractmanagement software strictly for
(06:28):
new home developers.
Our clients are developers or
sales and marketing firms and anyother industry you would think of
us as a point of sale software.
So we're really the cash register
for new home sales.
Awesome.
And you piqued my interest there.
Where internationally have you
been?So Avesda would be the largest of
what we do across Canada.
Avesda would be the largest of
what we do across Canada.
(06:49):
But right now we've got products
in Denver, California, Miami,Bahamas, Texas as well.
You know, not every market is thesame as how we do it in Canada.
I think that's maybe a misnomer.
In fact, between Vancouver and
Toronto and the in -betweens,we're probably one of the leaders
in the world for selling pre-sales.
I'd say maybe Florida is next.
Texas is up there as well, just
because there's a lot.
(07:09):
lot of guys from up here that have
gone down there.
That's kind of how it works.
What solution are you guyspresenting?
Like, how are you kind of bridgingthe gap and evolution here for
real estate?I'll give a throwback to our
founder, who is Richard Bell.
For those that are in Vancouver
and know Bell Alliance, RichardBell started the company years
(07:30):
ago.
It was originally called Yongle.
To my understanding, his firstintent was he was trying to become
a paperless law firm.
And he was doing a lot of closings
and realized, you know, in the newdev space, the amount of paper is
enormous between disclosurestatements and long.
contracts and all that kind ofstuff so he set out to build an
app that was going to get rid ofpaper and doing that basically
turned us into a point of salesoftware and so over the years we
(07:51):
moved from essentially what iwould call docusign for contracts
for new home now we have inventoryin the system so we can start
doing other things we can start todo things with that inventory we
can do stuff with the contractitself and move forward and
backwards so we can start tounderstand demand by taking in
selection requests we can start tomanage you know that post sale so
from what happens after thecontract signs through to closing
(08:15):
and then last couple of years,we've even added payments.
So you can pay your deposits withcredit cards and everything's
synced.
So kind of where we've gone to.
So call us a cash register, butessentially that's what we are.
And in every other industry, you'dhave a POS software that's
managing the transaction itself.
And it's so different for new
homes.
It just happens that we have this
really long contract and a bunchof disclosure statements and all
(08:37):
these different things that haveto happen in certain timeframes.
But we're essentially doing thesame thing.
We're a software to manage thetransaction process for this
specific niche.
Something really cool is the fact
that like you guys have a massiveamount of data and Intel.
you know, kind of where themarket's going.
And we talked a little bit, superbriefly off air that Shane Stiles
said, you kind of have the crystalball to real estate.
(09:00):
So I guess that said, can we diveinto that a little bit?
Like, what are you seeing on newdevelopments in the past few years
currently?And, you know, we can kind of wrap
up the show with like what'shappening in the future, but
what's launching for successfuldevelopments now?
And like, what are the strugglesthat our developers see?
Yeah, great question.
I mean, the answer is nothing.
Nothing is launching.
(09:21):
In the other markets, where you
get into it, like what about inthe... states are is it slow there
too like here yeah i mean i wouldtalk about canada first it's slow
across the country and it has beendeclining for probably four years
so it hasn't just started we're inthe trough and so just quick stats
we're seeing that the market'sprobably down 50 versus last year
which was already down of whathappened at the peak we're at
about 20 of that today it's worsein toronto than in vancouver and i
(09:44):
think that's just a function ofproduct types and what happened So
Kelowna would be closer to theVancouver market, i mean i would
talk about canada first it's slowacross the country and it has been
declining for probably four yearsso it hasn't just started we're in
the trough and so just quick statswe're seeing that the market's
probably down 50 versus last yearwhich was already down of what
happened at the peak we're atabout 20 of that today it's worse
(10:04):
in toronto than in vancouver and ithink that's just a function of
product types and what happened SoKelowna would be closer to the
Vancouver market, but maybepushing a little closer to
Toronto.
You know, we don't really have
single family home on the far westcoast anymore.
So everything's multi.
And so even though it's slowed
down, if anything is going to getbuilt, it's still going to be
multi.
So we're still going to see it
through our system.
Whereas in the east coast, in
Toronto especially, it was verysplit.
So you had like single family,which was, you know, for owner
occupiers and everybody.
And then you had, you know, urban
high rise.
And when urban high rise stopped,
it was just over.
So just turn on the news and
you'll see what's going on inToronto condo.
But it's a bad scene.
And so in between markets,
Calgary, Kelowna, Calgary is aninteresting one where similar to
(10:26):
Toronto, it's more like they havea big single family market.
So their multifamily is really,really small.
And so when it does really well,the numbers are so small, it
doesn't really swing much.
It could be measured in like a few
thousand.
It's not a lot.
Kelowna, we saw a real boom in2020, if my memory serves, where
there was a bunch of towers thatall went.
I think there was 12 in the onesummer alone, which is really
(10:47):
abnormal.
i would say a lot of those are
still trying to sell so there'snot really much happening or
launching within your market youknow and then looking into the us
again like really low numbers highnumbers would be like miami you
know you hear about the miamimarket was really booming i think
there was 400 cranes in the skywith projects under construction
so we've seen a huge slowdown inthat market for sure i think
(11:08):
you're seeing a slowdown acrossthe board is how i'd project it
but the ones where it's reallyvisible as well there was a lot of
units that were happening so thiscontraction is sizable is someone
doing something that's making themsuccessful in today's market or is
it just kind of like you know whatwe're just going to wait until
things get sorted out like we justhave this thing in place for the
foreseeable future someone doingsomething that's making them
(11:29):
successful in today's market or isit just kind of like you know what
we're just going to wait untilthings get sorted out like we just
have this thing in place for theforeseeable Pretty much.
And I mean, I would say that wehave to remember, we talk about
housing and the housing market.
And this makes me really
frustrated with the government,especially like housing is a
(11:49):
continuum.
There is a lot of different
segments within that continuum.
So to say that housing is over or
housing is stopped, it's notentirely true.
There's still pockets that work.
So like low density, either a
townhouse or a wood farm apartmentin a suburban area where they can
make the numbers work, that canstill go.
I think what's... unanimous crosscountry is like no one's doing a
concrete high rise because it'salmost impossible to hit your
(12:11):
presale.
So if you can really chunk out and
you can, especially withtownhomes, let's say you could do
blocks of eight at a time, youcould sell and just pace yourself,
you know, those still work, thoseare still happening.
We do have significant pressureson the cost side of things to
build these things.
So that's even slowing down that
suburban product as well.
But if you can make the cost work,
that suburban kind of low densitything can.
still work but yeah anything ofhigher density or that's going to
cost you some money it justdoesn't make sense it's in pencil
it's way too expensive to buildanything these days and there's
(12:32):
just a real ceiling on what pricescan get to so i'd say that's the
other thing we're seeing acrossthe country is let's say you had
like 800 bucks a square foot inthe burbs for some product and
then the spectrum was you know2500 downtown urban market so say
like vancouver out to the burbsthat was your spectrum and then
chunk out like $100 increments asyou go.
Now it's like, I don't know like$900 to maybe $1 ,400 if you're
(12:55):
lucky.
It's just so compressed because
there's such a ceiling on whatthat purchaser is willing to spend
or can even afford to spend.
On the bottom, the bottoms come up
because the cost is raised so muchthat they can't deliver that thing
for $800 a foot.
They just can't do it.
So you've got this realcompression making housing pretty
similar in price wherever you go.
So that's another factor that
we're seeing playing out in thenumbers.
(13:16):
So you mentioned Prescale.
targets so on the show we've had a
few people complaining aboutgovernment intervention and
forcing like the pre -sale targetslike is that a canadian thing or
does the u s have the same targets they need
to get the financing for theseprojects had a few people
complaining about governmentintervention and forcing like the
pre -sale targets like is that acanadian thing or does the u
(13:38):
s have the same targets they needto get the Yeah, I mean,
definitely, I'm no expert on howyou finance a project in the US by
any means.
But just really simply, you think
of, depending on the size of theproject, especially a large high
rise, let's say you got $250million in costs you got to cover.
The only way you're going to dothat is by reducing some risk.
(14:01):
And the only way to do that iseither to put up some kind of
deposit or guarantee, or you'regoing to have to put up equity.
And so I think the capital cominginto the market is really a
problem everywhere.
And the more governments intervene
and make it less likely thatyou're going to get a return on
that capital just.
And whether that money's coming in
(14:22):
through kind of a financinginvestor or more likely in pre
-sales, it's coming in throughinvestors by way of deposits,
which is the big conversation, itstopped.
So we have this huge cost ofdelivery issue where it's so
expensive to go.
You need huge amounts of monies to
do projects.
Like, you know, when I started in
this business, like early 2000s,you could do a project for 20
million bucks.
It'd be a small project, but that
doesn't exist anymore.
Like projects are huge and
expensive.
And so when you've got that much
debt against something, like youneed some kind of mechanism to
fund it.
And, you know, in Canada, it's
(14:42):
laughable, like 13 billion, we'regoing to spend to get 4000 homes
or something.
I mean, that's By my math, like $3
.25 million a home, like thatdoesn't make any sense.
You know, you see articles ofsocial housing getting built for a
million dollars a door.
Like, how are you financing that?
Where's this money coming from?So it's certainly a problem.
It's a massive part of theequation.
Quite frankly, I don't think it'sgoing to get solved because
(15:02):
fundamentally there's a problemright now and it's a PR problem
and no government is going to beseen to bail out.
a rich developer.
In the US, it's a bit different.
You've got some public companiesthat are developers.
We don't have that in Canada.
So most of the developers carry a
family name.
No politician is going to be seen
(15:23):
to give that family a leg up or arebate or some kind of thing to
make it go.
So they have to create scenarios
where somebody faceless can be theone that wins.
I could go on and on.
You started me.
I'm sorry.
It resonates with us for sure.
You've obviously like had a fingeron the pulse here in the last say
five years.
(15:43):
Like when was the writing on the
wall for you guys?Like when did, you know, you start
seeing the data that's like,there's some major issues here.
Oh, right away after like the boomof 21, it sort of wrapped a year,
right?So it kind of ended in the spring
of 21.
Is that right?
The boom in February, 22, 22.
That's so after that, it was done.
And it never came back.
(16:04):
And so we saw it then.
It was clear.
That was on the pre -sales?
was on the pre -sales?Like pre -sales, just nothing was
moving anymore?Yeah.
The whole country, our transactionvolume just went off a cliff and
you could just see it.
And if I looked at like
transaction volumes quarter toquarter, they fell then and they
never came back.
At that point, we kept, oh, we
need rates.
We need rates and we need this and
(16:27):
that.
But then it was just this
onslaught of a death by a thousandcuts.
you know the rates got worse andworse and worse government
intervention was like worse andworse and worse on the capital
side so what did they do they'relike well they created a bunch of
boogeymen and then they went andattacked them so they said okay
nightly rentals no more and theyhit that then they said okay long
(16:49):
-term rental well we're gonna haveto protect the tenant and so then
they hurt that so they basicallyone by one started taking away any
benefit for an investor to havemoney in a deal and so that's how
they killed it and then at thesame time developers just said
well then we're not going tolaunch anything so it was really
(17:09):
interesting i think one of themost surprising things people
don't realize that i get to see isi get to see supply and i get to
see demand so on the demand sidewe see the transactions because we
see the contracts so we can seeacross the country what contracts
are happening and where but wealso know supply because nobody's
signing up for us if they don'thave a project and so we had this
huge backlog of projects that wereall slated to launch in you know
(17:30):
the spring of 2022 and immediatelyit was held back and then what
happened is those things juststarted like a tidal wave to keep
delaying keep delaying and thenthey grew so in spring of 2022 the
projects that should have launcheddidn't so then summer comes along
well those projects didn't launchso you add those fall and then it
keeps going so we're four yearsnow of this rolling thunder of
supply that hasn't gone and it isuncanny like for an industry
(17:51):
that's essentially mom pause andwe're not public companies so it's
literally just guys talking toeach other their ability to
control supply is unbelievablelike it is crazy when the taps
shut off so fast when the salesstop and so we don't have this
huge glut of supply.
You know, people are like, oh,
there's 2000 units downtownwherever that we have.
Okay, like, that's nothing.
Like, it's nothing.
There is a problem specificallywithin Toronto, specifically
(18:13):
within a certain unit type,specifically in the segment right
now.
That's the only part.
And that's a more complicatedproblem.
But we don't have huge supplyoverruns because that is the one
thing i can see is developersability to control it is
unbelievable they just know ifthey can't sell it they won't
start so then you know think ofthe math on that let's use easy
math because i'm not that smartyou got 100 units you need a 60
(18:36):
pre -sale well now you're dealingwith 40 units but you're not
putting another 100 on top of itso those 40 units four years ago
have whittled down to maybethey're 10 units now And maybe
they're getting close tocompleting construction, but we
just don't have a huge problem inthat area.
So what's the solution then?I mean, very tough question, but
(18:56):
like if the problem came out threeyears ago and, you know, question,
but like if the problem came outthree years ago and, you know,
kind of maybe it started withinterest rates and then, yeah,
like you said, we have spec tax,vacancy tax, Airbnb legislation,
anti -flipping, like just death bya thousand cuts.
What do we do now?Like what's a lever that, you
(19:20):
know, either the government notthat we want them more
intervention but like from youseeing it as to support developers
like how do we get them back inthe game yeah and i'll say this
two ways we knew the answer fouryears ago i wrote about it in my
column but i don't think it'sgoing to happen i mean that's the
(19:42):
difference now is i was making alot of noise then but based on
what i just told you about howgovernments see the development
community they're not going tomake these changes so i'll tell
you what i think they should beeven though i don't believe
they're going to happen so it'sreally simple we have a cost
problem so and i'll say this twoways we knew the answer four years
(20:03):
ago i wrote about it in my columnbut i don't think it's going to
happen i mean that's thedifference now is i was making a
lot of noise then but based onwhat i just told you about how
governments see the developmentcommunity they're not going to
make these changes so i'll tellyou what i think they should be
even though i don't believethey're going to happen so it's
(20:26):
really simple we have a costproblem so let's look at where the
costs come from.
Well, we have two building codes
in this country, you have afederal one and provincial ones,
they got to go look at the codes.
And if you look at all the fluff
that's in there, we're trying tosolve every problem under the sun
with the building code, right?So, you know, we've got these
things that can have 100 -yearevents, and they'll be left
standing.
And, you know, some of that's
(20:47):
great.
We need that for safety.
Some of it's fluff.
And that's how we went from, like,
you know, I remember working atPolygon in the late 2000s, and we
did a concrete tower.
I think we built it for $150 a
foot.
That same thing today is $500 a
foot.
How does that happen?
And it's all these extra costs.
I mean, the funniest one, I think,
is, you know, you think of in BC,you have to have flushable toilets
on a construction site now.
flushable toilets like what's the
(21:07):
cost of that really oh there'sridiculous ridiculous things that
you add and then i mean just gotalk to a trade and ask them all
these extra costs that they havethat they never used to have you
know the wcb costs like all thesafety costs they have to do like
it's insane so i would say we gotto go and attack those and say
let's get rid of the fluff Andlet's get rid of it's not just the
fluff within it, but it's all theregulation associated has to get
paid for.
So WCB is a great example.
Like how big is that organization?It has to pay its bills.
How is it going to do it?It has to charge trades to do
things, has to charge developers.
And that's how that happens.
You know, go to the cost.
There's a ton of costs that could
be stripped out of there for one.
Associated with costs, I don't
have to say it.
Everybody knows the development
cost charges.
Like, it's just insane what that
(21:28):
costs.
That's not changing because that's
a structural change where how domunicipalities make their money?
Well, of housing.
And they're going to do it from
your property tax.
So they don't have a lot of
levers.
And they kind of fell in love with
the DCC because they were makingso much money off of it, right?
Like all of a sudden development'sbooming, their budgets are
(21:48):
ballooning on the back ofdevelopers, so they can't actually
get rid of it.
And so they need the Fed to come
in and replace that somehow or tocreate a new structure to be able
to offset that money.
I don't think visitor parking
downtown is going to do it.
So that's a big challenge.
And I think why we've seen them,they just haven't touched it,
(22:08):
right?They just can't do it.
So that would be a huge one thatwould release some pressure.
Rates, rates for sure is going tohelp.
Rates coming down is helping.
We're seeing a little bit of help
on that level.
But again, it's a thousand cuts.
So they needed to do it all.
And now that they haven't, these
little gestures here and therejust aren't enough.
Like we need to cut way more outof it.
So how do we get there then is thequestion if they're not willing to
(22:31):
do any of those things.
I think it's going to have
something to do with the babyboomers.
I think the baby boomers are ahuge player in this movie.
And I think they were a hugeplayer in the pre -sale movie
previously.
We just didn't know it.
And the government talks about thebooby man investor and they blamed
what they called the foreigner andthe spec.
calculator and we had all thesenames for them right and then we
(22:52):
shut them down right the realityis like i mean i worked a lot of
floors as you guys have and youknow the investor is like You
know, Joey and Susie, who have,you know, maybe a $3 million house
that they've got a $500 ,000mortgage on that they're levering
the heck out of.
They're giving their kids some
money to get into their first homeor to buy an investment.
That was what pre -sale lookedlike.
(23:13):
And there was a few people thatwere professionals that had a lot
of homes.
By and large, there was a lot of
people that had one or two extras.
And that was the game, right?
But they were like regularcitizens.
The baby boomers stopped makingsense when they took away all.
the avenues for them to get theirmoney back or to minimize the
risk.
And so now that baby boomer is
sitting on call it three milliondollars in clear title real estate
(23:34):
they're just not doing anythingwith it right they're not levering
it to help their kids they're justsitting and waiting but that baby
boomer the oldest baby boomer isnow reaching the age of death in
canada and it sounds really morbidbut the reality is over the next
10 years they're gonna be anenormous part of our population
that's going to pass on andthey're going to transfer that
wealth and they're also going toleave these homes so the other
thing that we have to watch isThey didn't downsize, you know, a
(23:57):
very small number downsize.
Most of them are still in that
home.
You know, they've got four
bedrooms that are empty and, youknow, they're still in that home
sitting on all that equity.
So once that starts to move and
they're just such a hugepopulation, like it's going to
shift a lot.
The other thing I talk about that
is you think of their kids.
So who are the two biggest
populations?Well, baby boomers and then their
(24:18):
kids, which is the millennials,right?
Those millennials are all sittingin homes waiting for mom and dad's
money or for mom and dad's home.
So they're leaving that home stuck
as well.
Because if you know you're going
to inherit like 10 grand, itdoesn't matter.
It doesn't change your life.
But if you might inherit.
100 ,000 or 300 ,000 or a millionor whatever that number is coming
(24:38):
out of that house, you're going towait.
And so you might be sitting in ahome that you're waiting for that
money before you go do somethingand act.
So I don't think we know theimpact of that whole scenario,
that domino effect when that goes,you know, you're going to have mom
and dad's have come free.
You're going to have, you know,
baby boomer kids house come free,or you're going to have a lot of
movement.
And so my belief is that's
(25:00):
probably when we're going to see abig shift.
You know, we'll see.
Do you think it's going to shift
one of two ways?Like, is it going to open up some
real estate and release some ofthat pent up supply and demand
because some of those houses arefreeing up?
Or is it going to like, you know,fuel spending because now.
You know, those kids have aninheritance and now they can go
out and buy their house.
(25:20):
Like what's it going to do to that
supply and demand issue?and demand issue?
It's quite a complex problem.
So I haven't seen anything to know
which way it's going to go.
I think part of it might be like,
is that money real?Like, let's say you have this huge
flood of these huge homes come on.
I mean, you know what's going to
(25:41):
happen, right?Those things are worthless now.
So is that money real is a realquestion we need to know.
It's like, is there going to beanyone to buy it?
A big part of that's going to bewhat happens with immigration.
So we've decided right now thatimmigration is bad and we don't
want it.
But like once this starts
happening.
if we had somebody to buy that
home i e think back you know mainland
(26:03):
chinese large number of southasians that used to come in this
country and buy these homes ifthat's allowed then now you have a
buyer for these homes so i thinkthat still needs to be worked out
and seen but I think what is goingto be true is either way, you're
going to have an influx ofcapital.
And, you know, one of the bigproblems I shared earlier within
our business is we have a capitalproblem.
(26:24):
Like we can't do new projectsbecause there's no capital to fund
it and we don't have a mechanism.
So I think we have to see how that
plays out.
The other thing we're seeing right
now, which is interesting, I thinkit's going to be a same problem
later, is I spoke earlier aboutthe Toronto condo problem.
And why that one's unique isreally what it is, is you've got
an enormous number of studios.
(26:45):
with no one to tend to use them.
So, you know, who used to usethose things?
Well, two people, students andpeople new to the country because,
you know, as a condo is ready togo, they'd move into a tiny studio
and then they'd figure themselvesout.
Oh, the other person, sorry, thethird one would be like the
downtown Strader University doingthe Bay Street shuffle.
I'm going to go get my firststudio.
But that person's not workingdowntown, may not even have a job.
So you've kind of cut off.
(27:05):
all of the people who would use
that unit type.
So now it's like, oh, we have too
many of these things.
We have the wrong unit.
Well, that could happen again.
I think we have to see what gets
freed up from these boomers and ifthere's a buyer for that thing, if
anybody wants it.
So there's a few bunch of factors
that have to play out.
But either way, you're going to
have like a whole bunch of peopleleave the market and leave behind
(27:26):
a bunch of money.
So that's going to do something.
Yeah, that's fascinating.
I haven't really thought of of
that.
before and I guess do you think
when that happens like will ourshort -term memory be so bad that
the confidence just comes back inpeople have capital to spend these
projects start going like willeverything just go back to normal
and we'll go tough what happenedin 2020 to 25 I don't know we're
(27:47):
back to normal that's tends to bewhat happens in our business right
and I think part of it is becausetends to be what happens in our
business right and I think part ofit is because you know we get old
and then it'll be somebody newit'll be that young guy who's a
young girl who's in freshly new inthe industry and they're like oh
this is the greatest and they haveno memory of what happened because
(28:08):
they weren't alive or they don'tyou know they were children you
know that was us right like iremember when i started in this
business and the old dogs werelike oh well i remember in you
know 80s that this happened andi'm like oh i heard about that but
i was 13.
So I think that'll happen for
sure.
But let me ask you this, like all
of a sudden, you know, God forbidyour parents die and they hand you
(28:29):
half a million dollars.
Like, what are you doing with that
money?You're probably going to buy a
house or spend it on something.
So we'll see it'll be part of the
equation for sure.
I'd probably take my through
school to become an estatesettling lawyer.
settling lawyer.
So I was like, yeah, there you go.
Don't be fooled.
The government is going to take
their pound of flex.
They're going to find a way.
(28:50):
They're looking for ways to takethat equity.
They want it themselves.
It's trapped in the homes.
Yeah.
Yeah.
Yeah.
You touched on something with the
Toronto market.
Yeah.
I mean, it sounds like obviouslythey have a pretty major issue
there.
Optimistically, like what are you
seeing in projects?Like what's selling right now for
pre -sales?What's working?
What size of unit?Like what are buyers looking for?
I mean, you can talk nationally orWestern Canada, but yeah.
(29:10):
what's working right now yeah imean first i'll say it's a tricky
question because what are buyersbuying well they're buying what's
available and remember i said thatdevelopers control supply so it's
a tough thing because what'savailable is what's left over so
there's very few projectslaunching so there's not really
anyone going okay this is what themarket wants right now let's go
build that i mean first i'll sayit's a tricky question because
what are buyers buying wellthey're buying what's available
(29:32):
and remember i said thatdevelopers control supply so it's
a tough thing because what'savailable is what's left over so
there's very few projectslaunching so there's not really
anyone going okay this is what themarket wants right now let's go
build that If anything, it's likeI got to get rid of these things.
So most of the sales happening noware existing inventory that guys
are trying to unload other thanlike I said, like the kind of low
density towns, which You know,it's the same products it's always
been.
And townhouses are usually small
families or people who want tohave families.
You need a few bedrooms, like it'sthe same kind of product.
(29:54):
So that stuff just moves and it'swhether you can hit the right
price point.
But other than that, it's really
hard to say because, you know,you're dealing with whatever's
left over.
And so when I look at the system
at what the sales are,predominantly it's skewed two
bedroom because that's what'sleft.
And I mean, that's interestingtopic as well is there's lots of
discussion around like, oh, we'vegot way too many one bedrooms.
(30:14):
These, you know, matchbox in thesky, we shouldn't.
And I think that's what peoplesound like, right?
When they get all weird like that.
I sound like that.
Yeah, exactly.
But the reality is like the
majority of the unsold stuff isnot that.
Like that was the stuff they couldsell.
So the stuff that couldn't and,you know, never mind on resale
what happens once they have to tryto resell that thing.
But from a new home standpoint,that's inventory is all gone.
(30:35):
The inventory that's left is allthe big stuff.
And it's not flying off the shelfbecause everybody wants a two
bedroom or a three bedroom.
No, they don't.
They just don't.
We know that, right?
There's a small number of peoplethat want to live in a two or
three bedroom condo, right?Most people in Canada are still
chasing that single family dream.
And so they'll go townhouse or,
you know, further out into theburps to try to get it.
(30:57):
And so There is that misnomer isthat like most of what's available
is bigger stuff.
It's still hard to sell because
not a ton of people are dying tolive downtown in a condo or live
in the burbs in a condo for thatmatter.
So that's kind of the deal.
To piggyback on that before we
(31:17):
jump into some other stuff, otherstuff, what are your predictions
for like 2026, 2027?Like when do you think the
market's going to start to gainsome momentum again?
Sadly, I wish I had better news.
I think we're going to be more of
the same for a while.
You know, I do think with that
last rate cut, I don't know if youguys saw on the floor, but I feel
like that helped for sure.
That did change some things for
some people.
I think we're also going to see a
whole bunch of people who weresitting on mortgages that are
coming up for renewal and that'sgoing to change their whole game
plan over the next year.
That's going to be a big shift.
So we might see some people like,well.
Might as well like get out of whatI have because I'm going to have
(31:39):
to start fresh anyhow.
And so you might see some movement
there with some upsizing.
It's actually a really good time
to upsize because that thingyou're moving into is going to be
suppressed more than likely thething that you're already in just
by the law of numbers ofpercentages.
So I think we might see some ofthat.
So I think we'll see a little bitof health.
But on the presale side, I don'tsee anything changing enough that
(31:59):
a developer can start a project.
in the next 12 months any easier
than they can now.
Let's say there's some crystal
ball that somebody's going to makethis maneuver and it's going to
have an impact.
You know, we're still going to
take a bunch of time to workthrough the cycles.
And so many of these projects havebeen shelled for so long.
Like, let's say tomorrow I canmake it happen.
(32:21):
Well, I'm probably going to go andreview those floor plans and be
like, OK.
what works today?
Is this really what we should bedoing?
And then you're gonna havechanges.
So I don't think over the next 12months, we're going to see much
change at all.
To be honest, I think what will
happen is we'll create a betterplace for maybe 2027.
And a lot of that inventory isgoing to get cleaned up.
(32:45):
And we'll be out of the way.
So if the numbers did start to
make sense to launch something andthere was a market to sell it in,
then people might be willing tolaunch in 2027.
That's interesting.
Do you think 2026 will be a time
to sell all the buildings that Ijust can't sell?
Totally.
I haven't looked at a stat
recently to know exactly when allthese rental buildings are all
(33:05):
finishing.
That's the next problem we're
going to see is, you know, anyonewho's got a rental right now, they
know how hard it is to rent it up.
and so we didn't scratch the
surface of what's coming rightbecause over the last four years
when everything died the onlystuff that was going was stuff
that was subsidized and was goingto be rental and you know most of
those buildings the rent roll wasway higher than what's real And so
(33:26):
now we're seeing how hard it is torent those up.
So if you pour a bunch of supplyon top of that, like we're going
to have a rental supply issue overthe next couple of years before we
get back to a condo scenarioagain.
Yeah, I think we're seeing that inKelowna right now for sure.
And it's just going to keep goingthat direction.
Way a bit more company in Kelownatoo.
Yeah.
Asking for a friend, what would
(33:47):
you... buy right now like itsounds like the market's flat it's
going to be flat for the next yearand a half but you're you know
potentially optimistic of you knowmidterm future especially with
baby boomer kind of transitioningsome wealth.
Yeah.
Where do you see any opportunities
like for either a homeowner?Like, yeah, you said looking to
upsize or investor geographicallyand product.
Great question.
I'd say, again, given the
continuum, there's a bunch ofscenarios that are playing out.
(34:07):
I think right now I'm personallylooking to upsize.
I'm like, this might be a reallygood time for most of us.
You know, the value of our home ismaybe down, but it's not too bad.
And versus that thing that wemight step up into, that thing has
come down more than.
of thing we're in.
So with rates as well coming down,like, you know, you can get a
decent mortgage nowadays.
And I don't think anyone needs it
(34:27):
to get back to, you know, two anda half or sub 2%.
Like, I think we're getting prettyclose to, you know, a point that's
really nice.
It's like, you know, not a bad
number.
So I think, you know, that kind of
stuff's really great for an owner-occupier.
I can tell you investors arecircling.
They've been circling for the lastyear, you know, and what are they
looking for?They're looking for really...
distressed assets for sure.
There's a lot of still looking for
(34:50):
blood in the streets and thosethings exist.
Again, like I say, Toronto is oneof those.
There's a lot of people liketrying to do bulk sales and bulk
buys in those markets for sure totry to own a bunch of that and
just rent it out.
So, you know, those are
opportunities.
The other opportunities are
developers getting to the end oftheir road.
Some of them might really need tosell something and really need to
(35:11):
give it away for a really gooddeal.
So I believe there are some pre-sale deals out there for sure.
Anyone who's interested insomething new that's either
finished or close to completion, Ithink those are go for sure.
Just based on developers want toget out and they want those things
gone.
So if you can stomach a bigger
unit, which is probably what it'llbe, then you could do really well.
One thing I should tell you data-wise, it's surprising how little
(35:35):
prices have fallen.
I don't want to say prices have
fallen across the board becausethere's lots of markets where
prices are way up.
And again, it's just a function of
that cost side.
Like the replacement value of a
home is humongous.
So that raised the floor to what
it's going to drop to.
And so I think the places where
things where people are like, oh,it's way off.
(35:55):
Well, it's way off from somestupid number that somebody got
during COVID for sure.
But anything like any real number,
prices are really not that far offfor the most part.
And in fact, in a lot of cases,they're up.
Yeah.
And I mean, I think we spoke to
Brandon Hugginson.
a long time ago about this but
historically like canadians haveso much equity built into their
homes and you know especially withthe appreciation it's had over the
(36:15):
last few years like if you're totell someone their home value is
decreased they're going to reallyoppose that opinion and you know
they're likely not going to sellSo it's not like people are fire
selling these things because inour minds we have this, well, this
is, this is what the value is andI've got a ton of equity and I'm
not willing to just throw it away.
Who owns the most inventory?
(36:36):
What I was saying before, the babyboomer.
Baby boomers own most of it andmost of its clear title are pretty
darn close and they don't want toleave.
Like there's some stat, I wish Ihad it handy.
I don't, but there is a stat aboutthe number of seniors who live in
a single family home and it's wayhigher than you think.
It's something like.
30 % of seniors actually believe
(36:57):
their single family home.
So most of them aren't leaving.
They're staying there.
And again, that's the other part
is like when your home'sappreciated and it's now, let's
say it's worth 1 .5 million bucksjust for easy numbers.
And you paid a hundred thousand orsomething stupid for it.
And you're like, okay, if I sellthis thing, I'm going to lose a
hundred grand in closing costs,just like between realtors and
moving.
Well, I'll just stay here forever.
(37:18):
Like you just won't make sense ofthat.
So I think that's a big part ofit.
Funny too, like there are buyers.
I know I've experienced that.
Like if you try to fire yourselfright now, like there's a buyer
there that's just going to stop itat some point.
Yeah, totally.
That's it.
There's enough deal shoppers whereif you get sharp on your price,
enough deal shoppers where if youget sharp on your price, it's
gone.
Like there's still multiple offers
happening.
You guys have this, right?
(37:39):
Yesterday, multiple offer, fullprice offer, regular offer lost.
There wasn't that much buyer sale.
So like there are enough buyers to
make sure that doesn't happen.
The bottom is definitely not
falling out.
We're kind of at the sweet spot
now where there's, you know, thereare enough people on the sidelines
waiting to buy.
interest rates have come down
confidence is kind of back it'sjust like you know a lot of the
(38:02):
subject to sales are still kind oflingering but it's a fairly
balanced you know transactionwhere we have like hey two week
for subject removal likeeveryone's kind of comfortable
yeah like you said the next yearis going to be a bit flat but
after that might be some someopportunity for growth totally
well yeah thanks for coming on mani really appreciate the time and
like honestly i thought it wasprobably going to be a little more
(38:24):
doom and gloom just like wherestats are coming from especially
on the pre -sale side but I lovedyour take on everything.
So yeah, I really appreciated yourtime.
Yeah, no worries.
I mean, it is not good.
There's not a lot of stuffhappening.
We need launches.
We need to get back to the pace of
launches.
That's the single biggest thing.
And we all know we've had a lot offriends who are changing jobs
(38:46):
because of it.
So our industry really could use a
leg up for sure.
I don't know if we could get much
worse, but I just see this kind ofstaying around for a while and
we'll have to figure out how to.
how to be successful moving
forward, right?How to use innovation.
We've got all the tools and we'vegot so many ways in our industry
to cut costs and be moreefficient.
One thing I will say just to closeoff is, you know, on the
technology side, somebody said tome once, I thought it was so
(39:09):
smart.
They said, you know, it took 20
years to go from a hammer to anail gun in this business.
And I see every day on thetechnology side, we're using so
little of the technology that'sout there.
And, you know, with AI and allthese things, like our industry
has a huge opportunity.
to start leveraging technology in
a meaningful way.
And you could save so much money
and efficiency if we could justchange our ways.
(39:31):
And in the past, the risk was toogreat.
So we just don't adopt technologylike every other industry.
But if we did, that's a hugeopportunity for sure.
Good point.
Okay, Ben.
Well, yeah, thanks for your time.
And we'll look forward to having
you back on soon and enjoy thestorms in Tofino and surfing then.
Awesome.
Thanks, guys.
All right, welcome back to theKelowna Real Estate Podcast.
(00:01):
I'm your mortgage broker host,Taylor Atkinson.
Yeah, hot topic kind of backaround Kelowna, short -term
rentals.
The city had their council meeting
November 3rd.
They're advocating for option two,
which would be allowing theprevious designated properties
like Discovery Bay and the onesthat are zoned.
(00:22):
for short -term rentals.
They're advocating to the province
that they should be allowed tocontinue to operate as short -term
rentals as long as our vacancyrate is up above that threshold,
which we don't have that data yetfrom CMHC, but I think they're
projecting that it's going to belike five to 6 % vacancy, which is
well above.
I know I feel like there should be
(00:42):
a mechanism for them to likecontinue to allow these to operate
even if that vacancy drops belowthat you know with those specific
buildings because yeah you'reright you can't just have it going
back and forth every other yearyeah so they now have to go back
(01:07):
to the province they now have togo back to the province advocate
for Kelowna, tell them, you know,we would like option two.
In addition to that, I think, youknow, the legislation doesn't have
it coming to pass until I thinkit's March, 2026.
So we want them to implement thisimmediately.
Basically like, Hey, it'sNovember.
Here are the vacancy rates.
You know, we want these properties
(01:28):
back to what they were in 2023.
So yeah, we'll keep you posted on
that.
It is.
Yeah.
Good for Kelowna.
Appreciate what council's doingthere.
Trying to get it back on track.
Yeah.
What are your thoughts on that?I was kind of thinking like, you
know, over the next two rateannouncements, we'd probably see
(01:52):
one cut.
I was a little bit surprised to
see it come in so early just withwhere inflation is going.
Inflation is kind of still upthere in terms of that data.
So I was surprised to see themmake this cut.
It's obviously positive.
from a mindset point of view where
people are at and helps withbudgeting.
I think we are at that lower endof the rate cycle for sure though.
There's not much more they can doto cut it.
(02:13):
This is now getting below theirneutral point.
So this is now getting into astimulus style of approach.
It's a tough one.
They can't really stimulate the
economy when inflation's on therise, right?
That's their one lever to pull tocontrol inflation.
So, you know, they're back at thatpoint where they were a few years
(02:39):
ago that if they keep cutting,inflation's going to come back in
and then they're going to have torise rates.
Like you don't want thatvolatility.
A lot of things we cannot predict.
Yeah, yeah, absolutely.
Mm -hmm.
Well... yeah i mean to talk about
it getting transactions back upyou know like today's guest ben
smith awesome guy really enjoyedspeaking with him he's kind of got
like the magic eight ball in theindustry on the pre -sale side
(03:38):
yeah so he has implementedtechnology into real estate
seamlessly and basically does youknow the majority of pre -sales
across canada and tapping into youknow north american and global
markets so really really switchedon guy but he's basically got the
data in front of him that sayslike pre -sales are dead right now
(03:59):
you know profitability is reallytough for developers like all the
stuff we know has been happeningover the last couple years but
he's like interest rate cuts willnot be the catalyst to get this
going it was super interestingtalking to him i mean the one real
big takeaway i got from that islike the wealth transition with
baby boomers and not just you knowgenerational wealth being passed
down but just opening up housingstock that you know is latent
(04:20):
Yeah.
And it feels weird to talk about,
but as you know, people pass onlike that baby boomer generation,
which is kind of like over thenext say 10 years, it's weird to
talk about, but there is going tobe like a, a large transition of
estate planning.
So he thinks that could be, you
(04:43):
know, a real mechanism to maybebalance out real estate or get
things going again from atransaction point of view.
Yeah.
But super fascinating show and
really, really cool guy.
Yeah.
All right.
Ben Smith.
Welcome to the show, my man.
Coming from Tofino.
How's it going over there?Yeah, it's going great.
Thanks for having me, guys.
You know what?
It's sunny.
It's not too bad.
I mean, it's West Coast for sure.
(05:05):
Got a bit of moisture, but it's
okay.
Can you kind of give us an
(05:43):
elevator pitch, who you are, whatyou're doing in the real estate
industry, or maybe I should saythe tech industry?
Would that be more accurate foryou?
Yeah, maybe now.
So yeah, Ben Smith, President and
CEO of Avesto Technologies.
Spent the last 20 plus years in
real estate development, mostly inthe lower mainland, but in the
last five years internationally,actually.
So kind of grew up on thedeveloper side in the sales and
marketing role, moved around.
I worked for Polygon, who's a
(06:04):
major developer in Vancouver, andthen moved to Rennie and then kind
of learned the agency side.
Then went out on my own and had a
consulting company.
And then in that process, I was...
Pretty big client of Avesdo, whichis a software company.
I'll get to that in a second.
They bought my consulting company
and I joined them to go on thesoftware side.
And so Avesdo, we are a contractmanagement software strictly for
(06:28):
new home developers.
Our clients are developers or
sales and marketing firms and anyother industry you would think of
us as a point of sale software.
So we're really the cash register
for new home sales.
Awesome.
And you piqued my interest there.
Where internationally have you
been?So Avesda would be the largest of
what we do across Canada.
Avesda would be the largest of
what we do across Canada.
(06:49):
But right now we've got products
in Denver, California, Miami,Bahamas, Texas as well.
You know, not every market is thesame as how we do it in Canada.
I think that's maybe a misnomer.
In fact, between Vancouver and
Toronto and the in -betweens,we're probably one of the leaders
in the world for selling pre-sales.
I'd say maybe Florida is next.
Texas is up there as well, just
because there's a lot.
(07:09):
lot of guys from up here that have
gone down there.
That's kind of how it works.
What solution are you guyspresenting?
Like, how are you kind of bridgingthe gap and evolution here for
real estate?I'll give a throwback to our
founder, who is Richard Bell.
For those that are in Vancouver
and know Bell Alliance, RichardBell started the company years
(07:30):
ago.
It was originally called Yongle.
To my understanding, his firstintent was he was trying to become
a paperless law firm.
And he was doing a lot of closings
and realized, you know, in the newdev space, the amount of paper is
enormous between disclosurestatements and long.
contracts and all that kind ofstuff so he set out to build an
app that was going to get rid ofpaper and doing that basically
turned us into a point of salesoftware and so over the years we
(07:51):
moved from essentially what iwould call docusign for contracts
for new home now we have inventoryin the system so we can start
doing other things we can start todo things with that inventory we
can do stuff with the contractitself and move forward and
backwards so we can start tounderstand demand by taking in
selection requests we can start tomanage you know that post sale so
from what happens after thecontract signs through to closing
(08:15):
and then last couple of years,we've even added payments.
So you can pay your deposits withcredit cards and everything's
synced.
So kind of where we've gone to.
So call us a cash register, butessentially that's what we are.
And in every other industry, you'dhave a POS software that's
managing the transaction itself.
And it's so different for new
homes.
It just happens that we have this
really long contract and a bunchof disclosure statements and all
(08:37):
these different things that haveto happen in certain timeframes.
But we're essentially doing thesame thing.
We're a software to manage thetransaction process for this
specific niche.
Something really cool is the fact
that like you guys have a massiveamount of data and Intel.
you know, kind of where themarket's going.
And we talked a little bit, superbriefly off air that Shane Stiles
said, you kind of have the crystalball to real estate.
(09:00):
So I guess that said, can we diveinto that a little bit?
Like, what are you seeing on newdevelopments in the past few years
currently?And, you know, we can kind of wrap
up the show with like what'shappening in the future, but
what's launching for successfuldevelopments now?
And like, what are the strugglesthat our developers see?
Yeah, great question.
I mean, the answer is nothing.
Nothing is launching.
(09:21):
In the other markets, where you
get into it, like what about inthe... states are is it slow there
too like here yeah i mean i wouldtalk about canada first it's slow
across the country and it has beendeclining for probably four years
so it hasn't just started we're inthe trough and so just quick stats
we're seeing that the market'sprobably down 50 versus last year
which was already down of whathappened at the peak we're at
about 20 of that today it's worsein toronto than in vancouver and i
(09:44):
think that's just a function ofproduct types and what happened So
Kelowna would be closer to theVancouver market, i mean i would
talk about canada first it's slowacross the country and it has been
declining for probably four yearsso it hasn't just started we're in
the trough and so just quick statswe're seeing that the market's
probably down 50 versus last yearwhich was already down of what
happened at the peak we're atabout 20 of that today it's worse
(10:04):
in toronto than in vancouver and ithink that's just a function of
product types and what happened SoKelowna would be closer to the
Vancouver market, but maybepushing a little closer to
Toronto.
You know, we don't really have
single family home on the far westcoast anymore.
So everything's multi.
And so even though it's slowed
down, if anything is going to getbuilt, it's still going to be
multi.
So we're still going to see it
through our system.
Whereas in the east coast, in
Toronto especially, it was verysplit.
So you had like single family,which was, you know, for owner
occupiers and everybody.
And then you had, you know, urban
high rise.
And when urban high rise stopped,
it was just over.
So just turn on the news and
you'll see what's going on inToronto condo.
But it's a bad scene.
And so in between markets,
Calgary, Kelowna, Calgary is aninteresting one where similar to
(10:26):
Toronto, it's more like they havea big single family market.
So their multifamily is really,really small.
And so when it does really well,the numbers are so small, it
doesn't really swing much.
It could be measured in like a few
thousand.
It's not a lot.
Kelowna, we saw a real boom in2020, if my memory serves, where
there was a bunch of towers thatall went.
I think there was 12 in the onesummer alone, which is really
(10:47):
abnormal.
i would say a lot of those are
still trying to sell so there'snot really much happening or
launching within your market youknow and then looking into the us
again like really low numbers highnumbers would be like miami you
know you hear about the miamimarket was really booming i think
there was 400 cranes in the skywith projects under construction
so we've seen a huge slowdown inthat market for sure i think
(11:08):
you're seeing a slowdown acrossthe board is how i'd project it
but the ones where it's reallyvisible as well there was a lot of
units that were happening so thiscontraction is sizable is someone
doing something that's making themsuccessful in today's market or is
it just kind of like you know whatwe're just going to wait until
things get sorted out like we justhave this thing in place for the
foreseeable future someone doingsomething that's making them
(11:29):
successful in today's market or isit just kind of like you know what
we're just going to wait untilthings get sorted out like we just
have this thing in place for theforeseeable Pretty much.
And I mean, I would say that wehave to remember, we talk about
housing and the housing market.
And this makes me really
frustrated with the government,especially like housing is a
(11:49):
continuum.
There is a lot of different
segments within that continuum.
So to say that housing is over or
housing is stopped, it's notentirely true.
There's still pockets that work.
So like low density, either a
townhouse or a wood farm apartmentin a suburban area where they can
make the numbers work, that canstill go.
I think what's... unanimous crosscountry is like no one's doing a
concrete high rise because it'salmost impossible to hit your
(12:11):
presale.
So if you can really chunk out and
you can, especially withtownhomes, let's say you could do
blocks of eight at a time, youcould sell and just pace yourself,
you know, those still work, thoseare still happening.
We do have significant pressureson the cost side of things to
build these things.
So that's even slowing down that
suburban product as well.
But if you can make the cost work,
that suburban kind of low densitything can.
still work but yeah anything ofhigher density or that's going to
cost you some money it justdoesn't make sense it's in pencil
it's way too expensive to buildanything these days and there's
(12:32):
just a real ceiling on what pricescan get to so i'd say that's the
other thing we're seeing acrossthe country is let's say you had
like 800 bucks a square foot inthe burbs for some product and
then the spectrum was you know2500 downtown urban market so say
like vancouver out to the burbsthat was your spectrum and then
chunk out like $100 increments asyou go.
Now it's like, I don't know like$900 to maybe $1 ,400 if you're
(12:55):
lucky.
It's just so compressed because
there's such a ceiling on whatthat purchaser is willing to spend
or can even afford to spend.
On the bottom, the bottoms come up
because the cost is raised so muchthat they can't deliver that thing
for $800 a foot.
They just can't do it.
So you've got this realcompression making housing pretty
similar in price wherever you go.
So that's another factor that
we're seeing playing out in thenumbers.
(13:16):
So you mentioned Prescale.
targets so on the show we've had a
few people complaining aboutgovernment intervention and
forcing like the pre -sale targetslike is that a canadian thing or
does the u s have the same targets they need
to get the financing for theseprojects had a few people
complaining about governmentintervention and forcing like the
pre -sale targets like is that acanadian thing or does the u
(13:38):
s have the same targets they needto get the Yeah, I mean,
definitely, I'm no expert on howyou finance a project in the US by
any means.
But just really simply, you think
of, depending on the size of theproject, especially a large high
rise, let's say you got $250million in costs you got to cover.
The only way you're going to dothat is by reducing some risk.
(14:01):
And the only way to do that iseither to put up some kind of
deposit or guarantee, or you'regoing to have to put up equity.
And so I think the capital cominginto the market is really a
problem everywhere.
And the more governments intervene
and make it less likely thatyou're going to get a return on
that capital just.
And whether that money's coming in
(14:22):
through kind of a financinginvestor or more likely in pre
-sales, it's coming in throughinvestors by way of deposits,
which is the big conversation, itstopped.
So we have this huge cost ofdelivery issue where it's so
expensive to go.
You need huge amounts of monies to
do projects.
Like, you know, when I started in
this business, like early 2000s,you could do a project for 20
million bucks.
It'd be a small project, but that
doesn't exist anymore.
Like projects are huge and
expensive.
And so when you've got that much
debt against something, like youneed some kind of mechanism to
fund it.
And, you know, in Canada, it's
(14:42):
laughable, like 13 billion, we'regoing to spend to get 4000 homes
or something.
I mean, that's By my math, like $3
.25 million a home, like thatdoesn't make any sense.
You know, you see articles ofsocial housing getting built for a
million dollars a door.
Like, how are you financing that?
Where's this money coming from?So it's certainly a problem.
It's a massive part of theequation.
Quite frankly, I don't think it'sgoing to get solved because
(15:02):
fundamentally there's a problemright now and it's a PR problem
and no government is going to beseen to bail out.
a rich developer.
In the US, it's a bit different.
You've got some public companiesthat are developers.
We don't have that in Canada.
So most of the developers carry a
family name.
No politician is going to be seen
(15:23):
to give that family a leg up or arebate or some kind of thing to
make it go.
So they have to create scenarios
where somebody faceless can be theone that wins.
I could go on and on.
You started me.
I'm sorry.
It resonates with us for sure.
You've obviously like had a fingeron the pulse here in the last say
five years.
(15:43):
Like when was the writing on the
wall for you guys?Like when did, you know, you start
seeing the data that's like,there's some major issues here.
Oh, right away after like the boomof 21, it sort of wrapped a year,
right?So it kind of ended in the spring
of 21.
Is that right?
The boom in February, 22, 22.
That's so after that, it was done.
And it never came back.
(16:04):
And so we saw it then.
It was clear.
That was on the pre -sales?
was on the pre -sales?Like pre -sales, just nothing was
moving anymore?Yeah.
The whole country, our transactionvolume just went off a cliff and
you could just see it.
And if I looked at like
transaction volumes quarter toquarter, they fell then and they
never came back.
At that point, we kept, oh, we
need rates.
We need rates and we need this and
(16:27):
that.
But then it was just this
onslaught of a death by a thousandcuts.
you know the rates got worse andworse and worse government
intervention was like worse andworse and worse on the capital
side so what did they do they'relike well they created a bunch of
boogeymen and then they went andattacked them so they said okay
nightly rentals no more and theyhit that then they said okay long
(16:49):
-term rental well we're gonna haveto protect the tenant and so then
they hurt that so they basicallyone by one started taking away any
benefit for an investor to havemoney in a deal and so that's how
they killed it and then at thesame time developers just said
well then we're not going tolaunch anything so it was really
(17:09):
interesting i think one of themost surprising things people
don't realize that i get to see isi get to see supply and i get to
see demand so on the demand sidewe see the transactions because we
see the contracts so we can seeacross the country what contracts
are happening and where but wealso know supply because nobody's
signing up for us if they don'thave a project and so we had this
huge backlog of projects that wereall slated to launch in you know
(17:30):
the spring of 2022 and immediatelyit was held back and then what
happened is those things juststarted like a tidal wave to keep
delaying keep delaying and thenthey grew so in spring of 2022 the
projects that should have launcheddidn't so then summer comes along
well those projects didn't launchso you add those fall and then it
keeps going so we're four yearsnow of this rolling thunder of
supply that hasn't gone and it isuncanny like for an industry
(17:51):
that's essentially mom pause andwe're not public companies so it's
literally just guys talking toeach other their ability to
control supply is unbelievablelike it is crazy when the taps
shut off so fast when the salesstop and so we don't have this
huge glut of supply.
You know, people are like, oh,
there's 2000 units downtownwherever that we have.
Okay, like, that's nothing.
Like, it's nothing.
There is a problem specificallywithin Toronto, specifically
(18:13):
within a certain unit type,specifically in the segment right
now.
That's the only part.
And that's a more complicatedproblem.
But we don't have huge supplyoverruns because that is the one
thing i can see is developersability to control it is
unbelievable they just know ifthey can't sell it they won't
start so then you know think ofthe math on that let's use easy
math because i'm not that smartyou got 100 units you need a 60
(18:36):
pre -sale well now you're dealingwith 40 units but you're not
putting another 100 on top of itso those 40 units four years ago
have whittled down to maybethey're 10 units now And maybe
they're getting close tocompleting construction, but we
just don't have a huge problem inthat area.
So what's the solution then?I mean, very tough question, but
(18:56):
like if the problem came out threeyears ago and, you know, question,
but like if the problem came outthree years ago and, you know,
kind of maybe it started withinterest rates and then, yeah,
like you said, we have spec tax,vacancy tax, Airbnb legislation,
anti -flipping, like just death bya thousand cuts.
What do we do now?Like what's a lever that, you
(19:20):
know, either the government notthat we want them more
intervention but like from youseeing it as to support developers
like how do we get them back inthe game yeah and i'll say this
two ways we knew the answer fouryears ago i wrote about it in my
column but i don't think it'sgoing to happen i mean that's the
(19:42):
difference now is i was making alot of noise then but based on
what i just told you about howgovernments see the development
community they're not going tomake these changes so i'll tell
you what i think they should beeven though i don't believe
they're going to happen so it'sreally simple we have a cost
problem so and i'll say this twoways we knew the answer four years
(20:03):
ago i wrote about it in my columnbut i don't think it's going to
happen i mean that's thedifference now is i was making a
lot of noise then but based onwhat i just told you about how
governments see the developmentcommunity they're not going to
make these changes so i'll tellyou what i think they should be
even though i don't believethey're going to happen so it's
(20:26):
really simple we have a costproblem so let's look at where the
costs come from.
Well, we have two building codes
in this country, you have afederal one and provincial ones,
they got to go look at the codes.
And if you look at all the fluff
that's in there, we're trying tosolve every problem under the sun
with the building code, right?So, you know, we've got these
things that can have 100 -yearevents, and they'll be left
standing.
And, you know, some of that's
(20:47):
great.
We need that for safety.
Some of it's fluff.
And that's how we went from, like,
you know, I remember working atPolygon in the late 2000s, and we
did a concrete tower.
I think we built it for $150 a
foot.
That same thing today is $500 a
foot.
How does that happen?
And it's all these extra costs.
I mean, the funniest one, I think,
is, you know, you think of in BC,you have to have flushable toilets
on a construction site now.
flushable toilets like what's the
(21:07):
cost of that really oh there'sridiculous ridiculous things that
you add and then i mean just gotalk to a trade and ask them all
these extra costs that they havethat they never used to have you
know the wcb costs like all thesafety costs they have to do like
it's insane so i would say we gotto go and attack those and say
let's get rid of the fluff Andlet's get rid of it's not just the
fluff within it, but it's all theregulation associated has to get
paid for.
So WCB is a great example.
Like how big is that organization?It has to pay its bills.
How is it going to do it?It has to charge trades to do
things, has to charge developers.
And that's how that happens.
You know, go to the cost.
There's a ton of costs that could
be stripped out of there for one.
Associated with costs, I don't
have to say it.
Everybody knows the development
cost charges.
Like, it's just insane what that
(21:28):
costs.
That's not changing because that's
a structural change where how domunicipalities make their money?
Well, of housing.
And they're going to do it from
your property tax.
So they don't have a lot of
levers.
And they kind of fell in love with
the DCC because they were makingso much money off of it, right?
Like all of a sudden development'sbooming, their budgets are
(21:48):
ballooning on the back ofdevelopers, so they can't actually
get rid of it.
And so they need the Fed to come
in and replace that somehow or tocreate a new structure to be able
to offset that money.
I don't think visitor parking
downtown is going to do it.
So that's a big challenge.
And I think why we've seen them,they just haven't touched it,
(22:08):
right?They just can't do it.
So that would be a huge one thatwould release some pressure.
Rates, rates for sure is going tohelp.
Rates coming down is helping.
We're seeing a little bit of help
on that level.
But again, it's a thousand cuts.
So they needed to do it all.
And now that they haven't, these
little gestures here and therejust aren't enough.
Like we need to cut way more outof it.
So how do we get there then is thequestion if they're not willing to
(22:31):
do any of those things.
I think it's going to have
something to do with the babyboomers.
I think the baby boomers are ahuge player in this movie.
And I think they were a hugeplayer in the pre -sale movie
previously.
We just didn't know it.
And the government talks about thebooby man investor and they blamed
what they called the foreigner andthe spec.
calculator and we had all thesenames for them right and then we
(22:52):
shut them down right the realityis like i mean i worked a lot of
floors as you guys have and youknow the investor is like You
know, Joey and Susie, who have,you know, maybe a $3 million house
that they've got a $500 ,000mortgage on that they're levering
the heck out of.
They're giving their kids some
money to get into their first homeor to buy an investment.
That was what pre -sale lookedlike.
(23:13):
And there was a few people thatwere professionals that had a lot
of homes.
By and large, there was a lot of
people that had one or two extras.
And that was the game, right?
But they were like regularcitizens.
The baby boomers stopped makingsense when they took away all.
the avenues for them to get theirmoney back or to minimize the
risk.
And so now that baby boomer is
sitting on call it three milliondollars in clear title real estate
(23:34):
they're just not doing anythingwith it right they're not levering
it to help their kids they're justsitting and waiting but that baby
boomer the oldest baby boomer isnow reaching the age of death in
canada and it sounds really morbidbut the reality is over the next
10 years they're gonna be anenormous part of our population
that's going to pass on andthey're going to transfer that
wealth and they're also going toleave these homes so the other
thing that we have to watch isThey didn't downsize, you know, a
(23:57):
very small number downsize.
Most of them are still in that
home.
You know, they've got four
bedrooms that are empty and, youknow, they're still in that home
sitting on all that equity.
So once that starts to move and
they're just such a hugepopulation, like it's going to
shift a lot.
The other thing I talk about that
is you think of their kids.
So who are the two biggest
populations?Well, baby boomers and then their
(24:18):
kids, which is the millennials,right?
Those millennials are all sittingin homes waiting for mom and dad's
money or for mom and dad's home.
So they're leaving that home stuck
as well.
Because if you know you're going
to inherit like 10 grand, itdoesn't matter.
It doesn't change your life.
But if you might inherit.
100 ,000 or 300 ,000 or a millionor whatever that number is coming
(24:38):
out of that house, you're going towait.
And so you might be sitting in ahome that you're waiting for that
money before you go do somethingand act.
So I don't think we know theimpact of that whole scenario,
that domino effect when that goes,you know, you're going to have mom
and dad's have come free.
You're going to have, you know,
baby boomer kids house come free,or you're going to have a lot of
movement.
And so my belief is that's
(25:00):
probably when we're going to see abig shift.
You know, we'll see.
Do you think it's going to shift
one of two ways?Like, is it going to open up some
real estate and release some ofthat pent up supply and demand
because some of those houses arefreeing up?
Or is it going to like, you know,fuel spending because now.
You know, those kids have aninheritance and now they can go
out and buy their house.
(25:20):
Like what's it going to do to that
supply and demand issue?and demand issue?
It's quite a complex problem.
So I haven't seen anything to know
which way it's going to go.
I think part of it might be like,
is that money real?Like, let's say you have this huge
flood of these huge homes come on.
I mean, you know what's going to
(25:41):
happen, right?Those things are worthless now.
So is that money real is a realquestion we need to know.
It's like, is there going to beanyone to buy it?
A big part of that's going to bewhat happens with immigration.
So we've decided right now thatimmigration is bad and we don't
want it.
But like once this starts
happening.
if we had somebody to buy that
home i e think back you know mainland
(26:03):
chinese large number of southasians that used to come in this
country and buy these homes ifthat's allowed then now you have a
buyer for these homes so i thinkthat still needs to be worked out
and seen but I think what is goingto be true is either way, you're
going to have an influx ofcapital.
And, you know, one of the bigproblems I shared earlier within
our business is we have a capitalproblem.
(26:24):
Like we can't do new projectsbecause there's no capital to fund
it and we don't have a mechanism.
So I think we have to see how that
plays out.
The other thing we're seeing right
now, which is interesting, I thinkit's going to be a same problem
later, is I spoke earlier aboutthe Toronto condo problem.
And why that one's unique isreally what it is, is you've got
an enormous number of studios.
(26:45):
with no one to tend to use them.
So, you know, who used to usethose things?
Well, two people, students andpeople new to the country because,
you know, as a condo is ready togo, they'd move into a tiny studio
and then they'd figure themselvesout.
Oh, the other person, sorry, thethird one would be like the
downtown Strader University doingthe Bay Street shuffle.
I'm going to go get my firststudio.
But that person's not workingdowntown, may not even have a job.
So you've kind of cut off.
(27:05):
all of the people who would use
that unit type.
So now it's like, oh, we have too
many of these things.
We have the wrong unit.
Well, that could happen again.
I think we have to see what gets
freed up from these boomers and ifthere's a buyer for that thing, if
anybody wants it.
So there's a few bunch of factors
that have to play out.
But either way, you're going to
have like a whole bunch of peopleleave the market and leave behind
(27:26):
a bunch of money.
So that's going to do something.
Yeah, that's fascinating.
I haven't really thought of of
that.
before and I guess do you think
when that happens like will ourshort -term memory be so bad that
the confidence just comes back inpeople have capital to spend these
projects start going like willeverything just go back to normal
and we'll go tough what happenedin 2020 to 25 I don't know we're
(27:47):
back to normal that's tends to bewhat happens in our business right
and I think part of it is becausetends to be what happens in our
business right and I think part ofit is because you know we get old
and then it'll be somebody newit'll be that young guy who's a
young girl who's in freshly new inthe industry and they're like oh
this is the greatest and they haveno memory of what happened because
(28:08):
they weren't alive or they don'tyou know they were children you
know that was us right like iremember when i started in this
business and the old dogs werelike oh well i remember in you
know 80s that this happened andi'm like oh i heard about that but
i was 13.
So I think that'll happen for
sure.
But let me ask you this, like all
of a sudden, you know, God forbidyour parents die and they hand you
(28:29):
half a million dollars.
Like, what are you doing with that
money?You're probably going to buy a
house or spend it on something.
So we'll see it'll be part of the
equation for sure.
I'd probably take my through
school to become an estatesettling lawyer.
settling lawyer.
So I was like, yeah, there you go.
Don't be fooled.
The government is going to take
their pound of flex.
They're going to find a way.
(28:50):
They're looking for ways to takethat equity.
They want it themselves.
It's trapped in the homes.
Yeah.
Yeah.
Yeah.
You touched on something with the
Toronto market.
Yeah.
I mean, it sounds like obviouslythey have a pretty major issue
there.
Optimistically, like what are you
seeing in projects?Like what's selling right now for
pre -sales?What's working?
What size of unit?Like what are buyers looking for?
I mean, you can talk nationally orWestern Canada, but yeah.
(29:10):
what's working right now yeah imean first i'll say it's a tricky
question because what are buyersbuying well they're buying what's
available and remember i said thatdevelopers control supply so it's
a tough thing because what'savailable is what's left over so
there's very few projectslaunching so there's not really
anyone going okay this is what themarket wants right now let's go
build that i mean first i'll sayit's a tricky question because
what are buyers buying wellthey're buying what's available
(29:32):
and remember i said thatdevelopers control supply so it's
a tough thing because what'savailable is what's left over so
there's very few projectslaunching so there's not really
anyone going okay this is what themarket wants right now let's go
build that If anything, it's likeI got to get rid of these things.
So most of the sales happening noware existing inventory that guys
are trying to unload other thanlike I said, like the kind of low
density towns, which You know,it's the same products it's always
been.
And townhouses are usually small
families or people who want tohave families.
You need a few bedrooms, like it'sthe same kind of product.
(29:54):
So that stuff just moves and it'swhether you can hit the right
price point.
But other than that, it's really
hard to say because, you know,you're dealing with whatever's
left over.
And so when I look at the system
at what the sales are,predominantly it's skewed two
bedroom because that's what'sleft.
And I mean, that's interestingtopic as well is there's lots of
discussion around like, oh, we'vegot way too many one bedrooms.
(30:14):
These, you know, matchbox in thesky, we shouldn't.
And I think that's what peoplesound like, right?
When they get all weird like that.
I sound like that.
Yeah, exactly.
But the reality is like the
majority of the unsold stuff isnot that.
Like that was the stuff they couldsell.
So the stuff that couldn't and,you know, never mind on resale
what happens once they have to tryto resell that thing.
But from a new home standpoint,that's inventory is all gone.
(30:35):
The inventory that's left is allthe big stuff.
And it's not flying off the shelfbecause everybody wants a two
bedroom or a three bedroom.
No, they don't.
They just don't.
We know that, right?
There's a small number of peoplethat want to live in a two or
three bedroom condo, right?Most people in Canada are still
chasing that single family dream.
And so they'll go townhouse or,
you know, further out into theburps to try to get it.
(30:57):
And so There is that misnomer isthat like most of what's available
is bigger stuff.
It's still hard to sell because
not a ton of people are dying tolive downtown in a condo or live
in the burbs in a condo for thatmatter.
So that's kind of the deal.
To piggyback on that before we
(31:17):
jump into some other stuff, otherstuff, what are your predictions
for like 2026, 2027?Like when do you think the
market's going to start to gainsome momentum again?
Sadly, I wish I had better news.
I think we're going to be more of
the same for a while.
You know, I do think with that
last rate cut, I don't know if youguys saw on the floor, but I feel
like that helped for sure.
That did change some things for
some people.
I think we're also going to see a
whole bunch of people who weresitting on mortgages that are
coming up for renewal and that'sgoing to change their whole game
plan over the next year.
That's going to be a big shift.
So we might see some people like,well.
Might as well like get out of whatI have because I'm going to have
(31:39):
to start fresh anyhow.
And so you might see some movement
there with some upsizing.
It's actually a really good time
to upsize because that thingyou're moving into is going to be
suppressed more than likely thething that you're already in just
by the law of numbers ofpercentages.
So I think we might see some ofthat.
So I think we'll see a little bitof health.
But on the presale side, I don'tsee anything changing enough that
(31:59):
a developer can start a project.
in the next 12 months any easier
than they can now.
Let's say there's some crystal
ball that somebody's going to makethis maneuver and it's going to
have an impact.
You know, we're still going to
take a bunch of time to workthrough the cycles.
And so many of these projects havebeen shelled for so long.
Like, let's say tomorrow I canmake it happen.
(32:21):
Well, I'm probably going to go andreview those floor plans and be
like, OK.
what works today?
Is this really what we should bedoing?
And then you're gonna havechanges.
So I don't think over the next 12months, we're going to see much
change at all.
To be honest, I think what will
happen is we'll create a betterplace for maybe 2027.
And a lot of that inventory isgoing to get cleaned up.
(32:45):
And we'll be out of the way.
So if the numbers did start to
make sense to launch something andthere was a market to sell it in,
then people might be willing tolaunch in 2027.
That's interesting.
Do you think 2026 will be a time
to sell all the buildings that Ijust can't sell?
Totally.
I haven't looked at a stat
recently to know exactly when allthese rental buildings are all
(33:05):
finishing.
That's the next problem we're
going to see is, you know, anyonewho's got a rental right now, they
know how hard it is to rent it up.
and so we didn't scratch the
surface of what's coming rightbecause over the last four years
when everything died the onlystuff that was going was stuff
that was subsidized and was goingto be rental and you know most of
those buildings the rent roll wasway higher than what's real And so
(33:26):
now we're seeing how hard it is torent those up.
So if you pour a bunch of supplyon top of that, like we're going
to have a rental supply issue overthe next couple of years before we
get back to a condo scenarioagain.
Yeah, I think we're seeing that inKelowna right now for sure.
And it's just going to keep goingthat direction.
Way a bit more company in Kelownatoo.
Yeah.
Asking for a friend, what would
(33:47):
you... buy right now like itsounds like the market's flat it's
going to be flat for the next yearand a half but you're you know
potentially optimistic of you knowmidterm future especially with
baby boomer kind of transitioningsome wealth.
Yeah.
Where do you see any opportunities
like for either a homeowner?Like, yeah, you said looking to
upsize or investor geographicallyand product.
Great question.
I'd say, again, given the
continuum, there's a bunch ofscenarios that are playing out.
(34:07):
I think right now I'm personallylooking to upsize.
I'm like, this might be a reallygood time for most of us.
You know, the value of our home ismaybe down, but it's not too bad.
And versus that thing that wemight step up into, that thing has
come down more than.
of thing we're in.
So with rates as well coming down,like, you know, you can get a
decent mortgage nowadays.
And I don't think anyone needs it
(34:27):
to get back to, you know, two anda half or sub 2%.
Like, I think we're getting prettyclose to, you know, a point that's
really nice.
It's like, you know, not a bad
number.
So I think, you know, that kind of
stuff's really great for an owner-occupier.
I can tell you investors arecircling.
They've been circling for the lastyear, you know, and what are they
looking for?They're looking for really...
distressed assets for sure.
There's a lot of still looking for
(34:50):
blood in the streets and thosethings exist.
Again, like I say, Toronto is oneof those.
There's a lot of people liketrying to do bulk sales and bulk
buys in those markets for sure totry to own a bunch of that and
just rent it out.
So, you know, those are
opportunities.
The other opportunities are
developers getting to the end oftheir road.
Some of them might really need tosell something and really need to
(35:11):
give it away for a really gooddeal.
So I believe there are some pre-sale deals out there for sure.
Anyone who's interested insomething new that's either
finished or close to completion, Ithink those are go for sure.
Just based on developers want toget out and they want those things
gone.
So if you can stomach a bigger
unit, which is probably what it'llbe, then you could do really well.
One thing I should tell you data-wise, it's surprising how little
(35:35):
prices have fallen.
I don't want to say prices have
fallen across the board becausethere's lots of markets where
prices are way up.
And again, it's just a function of
that cost side.
Like the replacement value of a
home is humongous.
So that raised the floor to what
it's going to drop to.
And so I think the places where
things where people are like, oh,it's way off.
(35:55):
Well, it's way off from somestupid number that somebody got
during COVID for sure.
But anything like any real number,
prices are really not that far offfor the most part.
And in fact, in a lot of cases,they're up.
Yeah.
And I mean, I think we spoke to
Brandon Hugginson.
a long time ago about this but
historically like canadians haveso much equity built into their
homes and you know especially withthe appreciation it's had over the
(36:15):
last few years like if you're totell someone their home value is
decreased they're going to reallyoppose that opinion and you know
they're likely not going to sellSo it's not like people are fire
selling these things because inour minds we have this, well, this
is, this is what the value is andI've got a ton of equity and I'm
not willing to just throw it away.
Who owns the most inventory?
(36:36):
What I was saying before, the babyboomer.
Baby boomers own most of it andmost of its clear title are pretty
darn close and they don't want toleave.
Like there's some stat, I wish Ihad it handy.
I don't, but there is a stat aboutthe number of seniors who live in
a single family home and it's wayhigher than you think.
It's something like.
30 % of seniors actually believe
(36:57):
their single family home.
So most of them aren't leaving.
They're staying there.
And again, that's the other part
is like when your home'sappreciated and it's now, let's
say it's worth 1 .5 million bucksjust for easy numbers.
And you paid a hundred thousand orsomething stupid for it.
And you're like, okay, if I sellthis thing, I'm going to lose a
hundred grand in closing costs,just like between realtors and
moving.
Well, I'll just stay here forever.
(37:18):
Like you just won't make sense ofthat.
So I think that's a big part ofit.
Funny too, like there are buyers.
I know I've experienced that.
Like if you try to fire yourselfright now, like there's a buyer
there that's just going to stop itat some point.
Yeah, totally.
That's it.
There's enough deal shoppers whereif you get sharp on your price,
enough deal shoppers where if youget sharp on your price, it's
gone.
Like there's still multiple offers
happening.
You guys have this, right?
(37:39):
Yesterday, multiple offer, fullprice offer, regular offer lost.
There wasn't that much buyer sale.
So like there are enough buyers to
make sure that doesn't happen.
The bottom is definitely not
falling out.
We're kind of at the sweet spot
now where there's, you know, thereare enough people on the sidelines
waiting to buy.
interest rates have come down
confidence is kind of back it'sjust like you know a lot of the
(38:02):
subject to sales are still kind oflingering but it's a fairly
balanced you know transactionwhere we have like hey two week
for subject removal likeeveryone's kind of comfortable
yeah like you said the next yearis going to be a bit flat but
after that might be some someopportunity for growth totally
well yeah thanks for coming on mani really appreciate the time and
like honestly i thought it wasprobably going to be a little more
(38:24):
doom and gloom just like wherestats are coming from especially
on the pre -sale side but I lovedyour take on everything.
So yeah, I really appreciated yourtime.
Yeah, no worries.
I mean, it is not good.
There's not a lot of stuffhappening.
We need launches.
We need to get back to the pace of
launches.
That's the single biggest thing.
And we all know we've had a lot offriends who are changing jobs
(38:46):
because of it.
So our industry really could use a
leg up for sure.
I don't know if we could get much
worse, but I just see this kind ofstaying around for a while and
we'll have to figure out how to.
how to be successful moving
forward, right?How to use innovation.
We've got all the tools and we'vegot so many ways in our industry
to cut costs and be moreefficient.
One thing I will say just to closeoff is, you know, on the
technology side, somebody said tome once, I thought it was so
(39:09):
smart.
They said, you know, it took 20
years to go from a hammer to anail gun in this business.
And I see every day on thetechnology side, we're using so
little of the technology that'sout there.
And, you know, with AI and allthese things, like our industry
has a huge opportunity.
to start leveraging technology in
a meaningful way.
And you could save so much money
and efficiency if we could justchange our ways.
(39:31):
And in the past, the risk was toogreat.
So we just don't adopt technologylike every other industry.
But if we did, that's a hugeopportunity for sure.
Good point.
Okay, Ben.
Well, yeah, thanks for your time.
And we'll look forward to having
you back on soon and enjoy thestorms in Tofino and surfing then.
Awesome.
Thanks, guys.
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