The Wealthy Barber Podcast - #49: Ron Butler (Returns): Mortgages & Real Estate in 2026

Episode Date: March 24, 2026

Our guest this episode is Ron Butler — owner of Butler Mortgage and a 30-year veteran of the Canadian mortgage brokerage industry. Ron returns as a repeat guest after being a fan favourite when he first joined us back in episode #8. He’s widely known for his blunt takes on the housing market through social media and the Angry Mortgage Podcast. In this conversation, Dave and Ron tackle the current state of Canada’s housing and mortgage markets — from what Ron calls “the Ontario real estate disaster” to his outlook for real estate in 2026. They discuss the looming shortage of new single-family construction, whether municipalities will have to cut development fees and why housing prices remain so high relative to incomes. Ron also explains mortgage basics, why using a mortgage broker can matter, the hidden risks of co-signing a mortgage and the growing issue of homeowners sitting on mortgages with little or no equity. They also explore several major trends shaping the market right now, including the huge wave of mortgage renewals coming in 2026, the rise of extended amortizations, questionable behaviour in the private mortgage market and why moving homes is often far more expensive than people realize. Along the way, Ron and Dave discuss their thoughts on inflation, job security, the future of real estate investors and even how AI could begin affecting white-collar employment. If you want a candid, big-picture look at where Canada’s housing market might be headed, this episode is packed with insight, strong opinions and practical perspective.   Show Notes (00:00) Intro & Disclaimer (00:55) Intro to Ron Butler (02:32) Real Estate Market Update: The Ontario Disaster (03:36) Is a Real Estate Crash Good for Young Canadians? (04:42) 2026 Real Estate Forecast (05:36) The Looming Crisis of No New Single-Family Construction (09:03) Do Municipalities Have to Cut Their Development Fees? (11:45) Mortgage Basics (13:17) The Impact of the War in the Middle East on Mortgage Rates (15:51) Housing is Still Expensive Relative to Incomes (18:25) Inflation and Its Impact on the Bottom 50% of Income Earners (23:55) The Hidden Dangers of Co-Signing a Mortgage (25:23) Underwater Mortgages With No Equity (26:22) Why Should Someone Use a Mortgage Broker? (28:40) 2026 Will Be the Biggest Year for Mortgage Renewals in Canadian History (30:04) Are Many Canadians Extending Their Amortization (31:24) The Vanishing Starter Home: Why We Only Build Big (33:47) Private Mortgage Misbehaviour (35:20) Moving is Way More Expensive Than People Realize (37:03)  The Collapse of Rural Real Estate as Offices Call People Back (38:47) Are Lenders Concerned About Job Security? (39:52) Are Real Estate Investors Going to Come Back to the Market? (42:37) How AI Is Already Cutting White Collar Hiring (44:03) Conclusion

Hey, it's Dave Chilton, the wealthy barber and former Dragon on Dragon Stand. Welcome to the Wealthy Barber podcast. Well, we'll be hosting some of the top minds in the world of personal finance. Yes, that's to balance me out. The podcast is about making this subject not just easy to understand, but dare I say, even fun, honest. Whether you're trying to fund your retirement, figure out how to build a down payment, save for your kids' education, manage debts, whatever, will be here to help you. You do it. Before we jump in, a quick but important note, nothing we discuss here should be taken as

investment advice. We don't know you and your personal financial situation, so we're not here to tell you we're specifically to put your investment dollars. We're here to educate, get you thinking, and we hope entertain. But please do your own research and or consult with your financial advisor before taking any action. Hello, it's Dave Chilton, the wealthy barber, with the Wealthy Barber podcast. Once again, I want to thank all of the viewers, our follow The podcast continues to boom. We're usually top two, top three in the country among all business podcasts. The word of mouth has been great.

And we love hearing from all of you. It really has helped us to bring back certain guests, including today's, the legendary Ron Butler, Butler mortgage, the Angry Mortgage podcast. Ron, you are one of the more unlikely social media stars. You know, you're older like me. You've come out of nowhere. And you are a legend. You and I went out for lunch.

down by your office, everybody knows you. It's like you're like a celebrity for heaven's sakes. I'm only a mortgage celebrity, a podcast celebrity, which is a low-lying celebrity compared with you, Dave. Like I'm way down the totem pole compared with you. But you must be amazed. We talked about this a little bit before, how this is all taken off. What do you think you've connected so well with the industry participants

and you've got this amazing following? First of all, I've got to say it's highly accidental. This is like members of my staff actually had to talk me. into some of it. So it really is an accident. Look, I think that it's the same thing that you bring with less swearing. And that is there's an authenticity and there's a diligently pursuing the truth about what you're telling people. And I think that's maybe the thing that's most needed today is people who tell the truth and people who are not afraid if it offends others. It's just very necessary today. Yeah, I think your bluntness has been a big asset for you, no doubt about it.

Of course, Canadians love real estate. They love real estate and anything that ties into it, including what you do, obviously. So to that end, lots to talk about today. Let's start with your current look at the market. It's tough with real estate in general. It's obviously changes region to region. So let's focus a little bit on Ontario and you can spread your wings from there. What are you seeing?

What are you hearing right now? Well, Ontario continues to be a complete disaster on price decline with no end in sight. And this is not just the famous 416 condo crash. This is spread all the way through the province. Ottawa has avoided it a bit, although there are still price reductions in Ottawa, but right through southern Ontario, everywhere you go, prices are down. Some places are down really substantially. I would tell you that probably in parts of the Niagara region, they're down 45%.

That's incredible. Yeah. Well, it was the most overbought. During 2021, I would tell you that the prices in Fort Erie probably went up 35 percent and one year. So that's a very dangerous scenario for real estate. No, it really is. And we're still seeing it spread out too. Vancouver, Calgary has really softened. Lots of other markets are scuffing. Now, do you view this like some people do as good news? Because the affordability challenge is lessening for those who still want to come into the marketplace. Look, I think you and I are on the same page

with this as well. The most critical good we can do for young people under the age of 35 in Canada is to deliver a way for them to own their own home, which has effectively been denied them for the last 10 years in British Columbia, in Ontario, certainly in those two provinces. And that's half the population of Canada right there in those two provinces. And they just, it's effectively hopeless, except for the very top wagerers in that under 35 category. And if this brings back the chance of those young people to own their own home, I got to say it's a good thing. Yeah, I tend to to agree with you. Certainly the already existing owners are suffering a little bit, but I think for society at large, this is a better way to have it, where you've got affordability more in line

with incomes, et cetera. What's your forecast, always a dangerous thing to do? I personally don't see it, at least in Southwestern, Terry, where I am taking a quick turn. A lot of people always fall back at spring. Spring is always a great time, but I still think the prices are going to soften up. Yeah, I think we're definitely going to see continued price decline in southern Ontario, probably also in British Columbia, most likely to some continued milder price decline in Southern Alberta. I think that's a given. What we might see, though, we might see increased sales activity. In other words, more houses sold than these dismal numbers for the last couple of years. 2025 was just off the hook, terrible for houses being purchased. We might see some slight improvement

there, mostly because as in the world of statistics, if the base number is incredibly low, you have a chance for it to improve. So that's why I think we might have a few more sales. Are we not sowing the seeds for future challenges again on the pricing front, though? We have no new bills coming in. And when we have regained population growth in Ontario, especially on the detached home market, are we not going to have the same problems we ran into a few years ago? Absolutely. I don't think there's really too much concern on the multifamily market. I think the condo and purpose-built rental markets are still delivering new product every day. I think that, and the great news for that is that rents are down.

Thank God, rents are down in Canada. That's a tremendous thing. 17 straight months of rental decline, so important for people to be able to live, just plain live. You don't want 50% of your income going to rent. So there is a genuine, deep concern in Ontario, which, interestingly, almost every level of government it completely ignores, that there has been no low rise, that single family townhouse construction in Ontario for two years, a little bit in Thunder Bay, a little bit in Ottawa, but otherwise, zero. So we're going into year three of building absolutely no new houses.

No, I've never seen anything like it. I mean, it really is quite stunning. And obviously, it's affected the construction industry. Some suppliers have really been hit by it, et cetera. and what changes that? I mean, are we still dealing with the high taxes that are being charged on the development front? Does the government need to step in and make some changes there? Because right now, if you talk to some of the bigger builders, what they're saying is because prices have retreated on the resales, they're really in a tough spot because their input prices haven't gone down much

and therefore they can't offer a competitive price. And they can't build until there's some changes to taxes or land prices. one of those major inputs has to have a downturn. That's 100% correct. There is when you can't build in any way a new home at anywhere close to the same price as a resale home, you can't build it. It's just that simple.

The math prevents you from building it. So who are the bad actors? Bad actors are municipal governments. One municipal government in Ontario actually is proposing to continue to increase development fees this year. I saw that. A couple of them have not. knock them down, but they're still ferociously high. And when we also couple that with the

incredible difficulty of getting a new subdivision, even a small subdivision going, the number of reports required, the back and forth between the planning department. It's just, you're committed to two and a half to three years if you're a developer just to get to the point where you can put a backhoe in the ground. So you've got to pay your development costs. You've got to pay your development alone all the way through that three years. It just layers on cost after cost. Yeah, it's almost insurmountable right now for a builder. I'll tell you something else. I've talked to a couple builders who said that AI is playing a role in their worries because they don't know what it's going to do, the unemployment rate over the next year to two to three. You just mentioned the

extended time frame that they have to deal with to get all the approvals in place to put shovels and ground, they're worried all the uncertainty around AI's impact makes that too dangerous a move. So you couple that with the points we brought up a few moments ago, the costs on all of these different areas, and they're going, I got to back off for now. But again, what changes that? That's my concern. I don't see any catalyst coming in to make anything different happen. Well, the provincial government would have to do something that they're just completely afraid of doing. They would have to step in and say, look, you municipalities, you need to cut your development fees by 90%. If you don't cut your development fees by 90%, we'll find ways to punish

you because you have stopped the ability for new construction to occur in your towns and cities. It's just that simple. Now, we just don't have that kind of provincial government. They're not interested in that kind of confrontation. But this will build. And hey, we also got to think about just how many construction workers will be unemployed when the last crane comes down from these condo towers, which will be about mid-20207, sometime by the end of 27, the last crane will come down and the level of unemployment in the construction industry will just escalate to a devastating point. Agree.

And I think the purpose-built rental building, if you'll pardon the expression, will also slow somewhat. It won't collapse. And you add that to the mix and we could have a major employment problem in the construction industry. You know, it's interesting. I'm not sure you're right there. I think the Ontario government may get more aggressive than they typically have.

and may be open-minded to dealing with some of that confrontation because otherwise we're facing a very significant issue over the next two, three, and four years. And I think you may see some changes to mentality there. Hopefully some of the municipalities will start seeing things differently as well. Right now, the problem with the high charges is they're not getting any revenue anyway because nobody's coming in and doing it. It's bizarre.

These municipalities, and the biggest is Toronto, let's face it, and then it follows after that. Some municipalities have given some relief like Mississauga, Vaughn have suggested that they would give either deferrals or they'd give reductions. But hey, the biggest offenders are not. And what's their thinking? Are they, that they enjoy the fact that they're getting 100% of nothing? It doesn't make any sense.

Get something. And here's the wild part, Dave. When you and I were young, not suggesting you're old. I'm old. Yeah, I'll say it. I'm old. I'll tell you straight up, you look a lot better than me. But the reality of life is when we were in the home buying game ourselves, the city's

decided if you're going to build a home, we're going to get a lifetime annuity of property tax. That's right. So we don't have to hose you down for the development. They didn't even have development fees. They, it was like $3,500 to get a permit. That was it. Because the cities understood that if they had a massive increase in eternal property tax, that was a benefit to their city.

Apparently, that's gone now. No, I agree. That whole thinking pattern has changed dramatically. It's going to be fascinating watching this play out. All right, I want to go a little different direction than we have so far today and we did the first time. I want to go to some of the mortgage basics. So somebody comes in to get a mortgage, walk us through. What is the technical definition of mortgage number one?

And number two, what are the three or four things they have to be thinking about? The fixed versus variable, the term, the amortization period, etc. What is that first basic conversation all about? The first basic conversation always has to be about qualifying for the mortgage. So it's analysis of their credit score. an analysis of their incomes, how to prove their income, to make sure we've got it nailed down perfectly, where's the down payment coming from, how much down payment, and then what kind of property? Those are the four top questions you have to get out of the way, just to know if you have

a starting point. After that, the new home buyer has to think about, okay, do I want variable? Do I want fixed? Is it better to have a shorter payment term or a longer payment term? What are the advantages, disadvantages? And today, most really important thing that wasn't very much thought of in the past, is how much can I pay extra into this mortgage? Can I increase my payments? Can I just throw in random cash if I've got a bit of an inheritance comes my way or a bit of a windfall? Can I throw just random cash at my mortgage to reduce it? So those are the key elements that we deal with in terms of describing the product for the new home buyer. And the answer is obviously very dramatically depending on the individual involved,

but also the situation at the time. If rates are at X, you may want to go fixed. over variable and if they're why it may change things dramatically. What are you seeing right now? What's the general thinking of the industry and of the people taking out the mortgages? Well, we've sort of had the whole thing turn on its head just in the last 10 days. The war in the Middle East has pumped up the price of oil. Obviously, we all see it. There's a lot of fluctuations. It was over $100 a barrel. Now it's down in the 80s. But let's face it, two months ago, it was in the $50 a barrel world. So that is still a substantial increase. And that, that percolates through, the price of energy percolates through to inflation every single time.

I'm not even touching on the fact that 30% of the fertilizer comes out of the Middle East. Right. We've got that consideration. But when you look at this, it's a possibility of inflation. And the basis of all fixed rates is government of Canada bond yields. That's where all fixed rates come from. Is that dynamic? So if you're a bond trader, you say, whoa, if there's a chance of inflation, I can,

got to change my position and bond yields will go up and they have gone up. They've gone up significantly. They've gone up 35 basis points in just the last few days. So that's when you have to look at fixed versus variable with the added concern that the Bank of Canada, they were right out of the gate, just really on the third, fourth day of the war, they came out and said, hey, listen, if inflation does take off, we don't care how bad the Canadian economy is. We will not concern ourselves about how bad things are going for Canadians. We will raise rates to prevent inflation. We're just putting it on the table, not necessarily doing it. For instance, on the 18th, coming up on the 18th, there will be no change from the Bank of Canada. But they put everybody on notice on the fourth day of the war.

They just put it right out there. So what have you seen the five-year fix do in the last week to 10 days? Well, we had as low as four, sorry, 379, 374. It's really started to creep up. up right up to about 4%. It's just a little under today. So yeah, that is definitely a 25, 30 basis points increase, depending what type of mortgage you're taking. But the worry is that it will continue. And I'm not an expert on the Middle East. I'm not an expert on war. I'm not an expert on any of this stuff. But I am an expert on rates. And I will tell you, if the price of energy keeps floating up, we will continue to see higher rates. Yeah, it'll be interesting to see. Nobody can guess at the timeframes of all of this and it could end up normalizing relatively quickly and we could see

the rates back down where they were. It's so difficult to say on all these fronts. What are you seeing on the amortization front? Obviously, it varies dramatically from customer to customer. Are you seeing a fair number of people stretch out to 30 for affordability reasons? I think we'll probably see 30 year amortization and become the norm in about, and probably in over 80% of the cases moving forward for purchase. That high. I didn't know that. That high. It's inevitable that. And, And let's face it, even though the house prices are down, they're still very expensive. They are. Very, very expensive Ontario and British Columbia.

They are still, they're not 11 times income anymore. The average price isn't 11 times family income anymore. But it's still nine, eight and a half nine. And that is not reason. It should be four. It should be four times incomes. When you and I were young, it was two to three. Yeah, it was two to three.

That's exactly what it was. And so when you start getting up to 10 to 11, which is where we peaked, it's over three times more expensive relative to incomes. This is what a lot of boomers do not understand. And even though the softer interest rates relative to when you and I were young helps alleviate some of the pain, doesn't take away all of it. When you're talking that dramatic a switch, but also putting together the down payment,

something you and I discussed last time. Holy smoker, does that become difficult? And how about this one? How about coming off a period of time when rents have been at their highest level in Canada? So how does a young person save when 50% of their income is going to rent? It's insurmountable. So to your point, not just the incredibly high prices, but the difficulty in raising the down payment,

it has put a tremendous burden on young people in their attempts to own a home. To the extent where some of them just given up, you and I have commented before on how we've, I don't think we've ever seen as many young Canadians actively talking about leaving Canada. And that to us, to me, to my mind, that's extremely meaningful and not good.

Yeah, unfortunately, I see a lot out here in Waterloo because we have so many of the tech students and they're looking at some of the U.S. pay, but also the U.S. real estate prices in places like Texas and parts of Florida, parts of Arizona. And interestingly, I mentioned this on a previous podcast, the weather. A lot of them have looked at the weather the last two years and said, I don't want to deal with that either. And so they're looking at other options. Now, the funny thing is, most of the ones I speak to very much love Canada. So even though they see flaws and even though they see some of the things I just brought up, they're still very much loyal to the country. but at some point the math becomes so compelling for them with some of these offers they're getting and the difference in real estate prices, they can't avoid the temptation and off they go. And so we're

losing some of the best and the brightest in the technology sector in particular, unfortunately, to the states. And that's not a good thing at all, obviously. You know, I look at all of this. And again, you made a good point. Prices have softened, but they're still very, very expensive. But so is the cost at everything else. I cannot believe how expensive it is just to leave your front door now, whether you're going to a restaurant or you're going to a grocery store, it doesn't matter what you're doing. You're constantly stunned by the overall price. Do you know, I'd agree that it's probably gone up faster than the CPI says it has? Particularly when it comes to ordinary working people. So, you know, if you're doing well and you're well, let's face it old, you can probably

handle an 8% increase in your car insurance. But an 8% increase in your car insurance for a 30-year-old on top of everything else that's going on, 8% is not inflation. It's not even close to what the CBI tells us, but you've got to pay it in Ontario. They'll take your license away if you don't have insurance. So the reality of life is many things that affect lower income, middle income people. It affects them far more than people who are in the upper income group. Groceries, hey, I look at the prices in groceries and they're high, but obviously I haven't

cut back on eating at all. Okay, that's obvious. So what I would say is for people who are not as well off, these things are so much more impactful. Your car insurance, your home insurance, your property taxes, crazy. Okay. So, yeah, for the average income earner in Canada, particularly in Ontario and British Columbia, It's a really tough time and that's why we're hearing and what we're hearing. I've said this in a lot of interviews and it's a really sad and negative comment.

When I started out as the wealthy Barbara, 88, 89 when the book came out and I would sit down with people, the bottom 15 to 20% of income earners, yeah, they would definitely have trouble getting at the kinds of things I taught. It's now the bottom 50% of income earners has trouble getting at the things I'm trying to teach because of exactly what you brought up. such a high percentage of their after-tax income is swallowed in the fixed costs that have gone up so dramatically. This case-shaped economy that is described, it's actually a pretty good analogy, perhaps more appropriate stateside than Canada, but still very relevant up here that a lot of us, older people have had reasonably good incomes and still do, but we've also had the money to set aside and save and the assets have done so well. That's carried us. The younger people haven't had the time, nor the excess income to save. The assets rising in value haven't helped them.

And that gap is getting bigger and bigger. I think a lot of the young people have a legitimate beef that things aren't as fair now. They have a 100% legitimate beef, maybe less so in Brandon Matatoba or Munkta, New Brunswick. But in major cities in Canada, they have a big beef. Look, if you want to actually own a car in Canada, it's becoming an incredibly expensive proposition. So if you think back to when we were kids, young people, teenagers, getting our driver's license, it wasn't too hard to get a car. Like I think it was pretty darn easy. I think I had one the same day I got a license. Now, those days are passed. It's just so expensive. And that's when you've got to question the general fairness of what's happened to our society. You mentioned property taxes

in some areas. It's been quite stunning what's happened over the last four, five, six years. You've had certain areas where it's gone up seven percent, then eight, then seven, then seven. again, then nine. It's absolutely crazy. And we're talking about a pretty big expense that's rising at those clips. Most costs associated with home ownership, property tax, home insurance, upkeep, all of them seem to be rising at a greater than CPI rate. Very expensive to own a home. Very expensive. Look, it's even more expensive to own a condo. When we look at condominium fees for new construction condominiums, we will guarantee everyone that in the first, five years, by the end of five years, that their monthly condominium maintenance fees will go

up at minimum 50% and an average of about 55. So, yeah, minimum, because we're talking some 60s and 70s as well, that is a big number. That's going from 400 to 650 in just a few short years. Yeah, $250 a month after tax money. That's real dough when you're already spending a lot on everything else. This is the difficulty for us in our society today is that the basics of living, how are accelerating in price far more than some other things in the CPI basket. And certainly, it is geographical. There are some centers that have generally lower costs, but they're not the big centers and they're not where the majority of Canadians live. No, I agree. I think that's one of the biggest challenges, if not the biggest we're facing right now, is affordability of the basics for

people of a normal income or lower. I look a lot of times at the money, the spending summary is part of me that sent me of single people. So you've got, let's say, a teacher in Toronto and he or she is single. Holy smokers. Is that ever difficult to get through with when you're not sharing costs with anybody? You have the whole car expense. You have the whole rent expense or home expense usually read almost impossible mathematically. When we wonder why so many young Canadians still live at home, you don't really have to wonder too hard. Just what you described, to be single and to try to maintain your own home,

even if it's a rental, it's a budget breaker. There's just no question about it. You know, you and I talked when we had that lunch about co-signing and you put a video out several days ago about the dangers of co-signing and how it can come back and bite you. Can you expand upon that a little?

I really enjoyed that video. We are discovering now, we knew co-signing was off the charts in 2020, 2021, part of 22, co-signing a mortgage, because not only were young people desperate to buy a home because they were being told by people in the industry that, hey, if you don't buy it a day, you'll never buy. It's going to keep going up 10% a year forever. That was out there. You and I both heard it. We heard that talk. So when parents heard that, the parents too have had a tremendous upside to their real estate purchase. They saw it as just, yeah, it was the best decision I ever made.

So I should help my kids. I should co-sign to help them get into this house. Now we fast forward to 2026. The house has gone down and value 25%. The kid's income has not risen sufficiently necessarily for them to take the parents off. And how are they going to take the parents off anyway? Because the value of the house has declined to where it's almost just equal to the mortgage. That's right. We haven't even talked about the fact, what if there's been a little bit of falling out between the parents and the kids? We haven't even talked about a marriage breakdown there.

So it's becoming a trap for parents. And look, I was never a believer in co-signers, but the evidence today is making it look worse and worse. Yeah, I'm hearing about it all the time. You know, you and I talked again before about, use the word trap there. The people who bought it that time frame put down 10, 15%, they're now underwater.

The mortgage value is higher than the value of their home. They can't get on the ladder and move up. They're frozen in place. I think that's affecting the entire real estate market, not just those people, but there's a ripple effect on the buy, sell, and every other price rate. That's 100% true. If you can't, if you can't get any proceeds out of your home, it's automatically impossible for you to buy the next home.

And that's what we're looking at five years later, I would tell you that virtually every single person who bought in the 905 or in the areas where you live or in Eastern Ontario, there's no equity in those homes now. or barely any. So when you look at that, how in the world are you going to be able to be a move-up buyer? You're going to be in that house for a long time. This is going to take a good number of years to kind of settle out over time. All right, changing horses a little bit. You are very biased with this question, but why should a listener go to a mortgage broker? I'm biased, but I'm not utterly biased. We're in the business of providing some of the lowest rates in Canada at Butler

mortgage, and we get beat by the banks. There are moments in time when R.B.E. is running a pretty hot rate and C IBC is running a pretty hot rate and we can be beat. I'm not saying a mortgage broker is absolutely in every situation, the very best option for the very best rate. But I know that mortgage brokers have a tendency to be more thorough, particularly on pre-approval. We have encountered people who thought they had a pre-approval from a bank and when they finally signed on the dotted line to buy a house, the bank said, well, maybe we missed something here. There is a clear tendency amongst mortgage brokers to just take a really close look, pull in income documents, do a thorough review, make sure they understand everything about the mortgage applicant and it gives a much more solid pre-approval. So in those areas in particular, and also, if there's like a problem, if there is a problem, so there's a marriage breakdown or there is some sort of a credit issue that comes up, that's where a mortgage broker can find a lot more.

options than a big bank could. Now, in Canada, we don't use mortgage brokers as much as they're seen used in other countries, the U.S., Australia, etc. Is that changing? Is it a growing number of people using mortgage brokers over the last decade, or is it flattened out a little bit? Amongst first-time buyers, it is grown. It's over half of all first-time buyers reach out to mortgage brokers.

That's just a fact. One interesting point about Australia, in Australia, those quote-unquote mortgage brokers are really just a kind of an employee. of the four big banks of the bank. No, that's absolutely right. But look, here's what I'll tell you. The five big banks in Canada, okay, six, national bank you're in, they do a pretty darn good job of marketing mortgages.

They all have independent sales forces. They all put a lot of money into advertising. They are very sensitive to rate. They are interested in giving, having their sales force beyond the cutting edge. Yeah, I'd say it's really more of a case of the. Canadian big banks doing an excellent job about marketing mortgages. Yeah, I completely agree with you on that front. Now, renewals are a little bit different matter.

In Canada, most Canadians have just kept dealing with whatever institution they initially went with on renewal. Is that shifting at all where people are going to the broker and starting to shop the market on renewal more? There's no question because we're in a unique situation. A large number, this is the biggest year for renewals in the history of Canada. There are more renewals taking place in 2026. By the way, 2025 was very big. But 2026 is the most renewals that have ever been processed in the history of this country. There's a big feature to that. For a big chunk of those people, they're going from a 1.79, 1.89 mortgage to a 399. And I'll tell you what, that kind of an increase in rate will get everybody's attention. Like, for sure. Bigly, they're paying attention. So we are seeing more. shopping today by mortgage clients we've ever seen. There is a sensitivity to this increase

and people's awareness has grown that there are other options, that there are options and that they should shop. It's probably taken 30 years, but I would say the idea of shopping your renewal has finally reached a point where it's way over half of all mortgage renures. That's it. I didn't realize it was that higher percentage. Oh yeah. When your interest rate doubles, you will become very interested. Are we seeing people get on this perpetual movement of their amortization period? So they took a 25. They paid it down for five years. Now they go to renewal and they've got sticker shock with the new mortgage rate and they go, oh my gosh, I better up my amortization rate from where it would have been all the way back to say 25 or 30. Are you seeing that a lot? So I would tell you it's a great question,

but it is also ultra specific. There are a great many people. You know, we talked about the K-shaped recovery. there are a lot of homeowners that are in pretty good shape. They're not in bad shape. And for those people, they have a tendency just to stick with the amortization they had. They like the idea of paying their mortgage off eventually. But for a sizable minority, they've got to think of an answer. They've got to, with all the other things that are going up in price in Canada today, doubling of interest rate, it doesn't produce a doubling in payment.

It produces an average increase of about 26%, which is sizable. It's real. But it was stress tested. We have a thing called the stress test in Canada. Yeah, for sure. When you got a mortgage, we pretend you're getting it at a significantly higher rate when we do our analysis of what you can afford, which is benefited. And we would be in big trouble today if we didn't do that. But I would tell you that it's actually a minority.

It's a big minority, but it's a minority of renewing people who are interested in expanding their amortization. Do you think people are still spending too much when they go to buy the home? they're reaching so much that they're extending themselves, they're unable to do other savings, they should settle for a somewhat less expensive or smaller home? I think that is absolutely a great idea, but I would tell you one of the difficulties we've had in Canada for the last number of years is apart from not building enough low-rise homes

in Ontario, British Columbia. The other problem we've had is the homes we've built are too big, and a lot of the homes that we have today are big homes, 3,000 square foot homes with two old people running around in them. And they don't want to let go of that home because they don't like any of their options. They don't want to move into a condo with huge maintenance fees and they don't like, they just want to stay. They want to stay.

That's a problem because we don't really, we haven't made what you would call a starter home, other than a townhouse. We haven't built a starter single family home in Canada since about 1960 something. They're all fairly decent sized homes. And that makes it a little bit harder for, people to find what you'd call a starter home. A starter home today for most people, if it's not a condo, is a townhouse because the ability to buy a single family home is just out of reach. Yeah, I mean, the builders would argue that with land prices where they are,

they need a more expensive home, a larger home to amortize the cost of land and hit their profit targets, et cetera. And that's why we've moved off the smaller homes. As you know, I love small houses. I live in a small house now. I've always lived in pretty small houses, maybe one exception. I really like them. They're easier to take care of and lowers all your bills. I find them cozier. Like some of my friends have six and seven thousand square foot houses. I do not get that. Like they're just gigundice homes. You're just overwhelmed by them. I don't get it. But I mean teach their own obviously if they can afford them. It's none of my business. It is becoming a drastic expense though. When you think about heating a huge 5,000 square foot home in the last, in the winter

we've just gone through in Canada, I'll tell you what. It's a proposition all right. It's expensive for sure. But look, we need that starter home. That's the, and that starter home, your point about the land is so valid, then we have to ask the question. In Ontario, does the green belt prevent us from having lower cost land? I mean, we've got to start to ask that question. No, I agree. And it's going to draw more scrutiny for sure. That's a tough one.

Going back over to mortgages, I'm jumping all over the place here. Private mortgages, we see a lot of craziness in that space over the years. I'm from Kitchener, Waterloo. I don't know if you knew this, but this was kind of the capital of private mortgages, second mortgages for years. A lot of the German money that came and set up here believed in the real estate market more than the stock market. The Mennonite community has tended to be involved in the second mortgage business, etc. What are your thoughts on the craziness we see? We see a lot of scams, a lot of frankly misbehavior.

We've seen an egregious amount of misbehavior that has been uncovered by the fall. all of the pricing in the real estate market. And also concurrently with the end of development, like when you're a mortgage person selling investments, mortgage investments, private mortgages, to an investor saying, hey, we're going to make a ton of money on this. They're going to buy these 12 lots. They're going to develop these homes.

It's going to be a moneymaker. You'll see. And none of the homes have gotten built because that new development market is just dissolved. So what's going to happen? those people who lent that money in all likelihood, they're going to lose all their money. They are. There's been a lot of bad behavior. What I've got to tell anybody considering an investment in private mortgages today is that you've got to be far more concerned about where your money's going than you ever had to in the last 15 years. Last 15 years, the rising tide puts up,

but that's not true anymore. So it's a real problem. People need to be ultra-careful about investing any money into private mortgages. You know, you talked about how the rising market bailed those people out, and it just psychologically impacted so many aspects of the real estate arena. I think people now that the returns have normalized are going to move less. I think that it was easy to justify a move. Oh, I'll deal with the cost, the commissions land transfer tax, and moving to a bigger home, it'll go up even more in absolute dollars, et cetera.

But again, now that things have flattened out a little bit, in fact, gone down, I'm seeing a different psychology out there. People are saying, you know what, I don't want to move as much. I might get a starter home and one more. Or I might try to even get in straight to the home I'm going to stay with forever. That's music as the wealthy barber's to my ears because I've always said the moving is way more expensive than people recognize. Your thoughts?

Real estate is a very high friction endeavor. Very. Lawyers. You're going to throw three grand on a lawyer. You're going to have, there's land transfer tax. It's all over. There's so many hands in your pocket in the real estate transaction. It's nothing like paying a $1.25 to sell a block of stock today.

It is as radically different from that as you could imagine. So to your point, people have got to be much more concerned about what is this cost to do this transaction going to be? And where am I going to end up in the end? Because, hey, if you might think you're going to fall in love with the acreage way out in the country, But you might find out three years later that you are tired of driving for an hour to do anything. And then if you want to sell, you've got a whole bunch of other issues on your hands. To your point, people must be much more careful, much more thoughtful about where they're going to land up, where they're going to make that purchase. You know, you mentioned the country homes.

John Flynn and I talked about this. In my area, they are really getting hit. Like, a lot of them just aren't selling. They can't really get a reasonable bid at all. people did move out and of course at that point they were working from home now a lot of people have been called back into the office but even just going in for their daughters hockey etc it was more of a burden than they realized it would be i've had two or three people say to me know our challenge the grandparents don't want to come out all the time to help we need them helping but they don't

feel like a 45 minute drive out here and back in they're on the far side of kitchener we're out north of waterloo etc but a lot of those houses were expensive they bought an acre of land or a little bit more in some instances. They built lovely homes. They're having trouble finding the next buyer for that property. With the collapse of work from home as a standard, that's just to be expected. My friend Jeremiah Ashamus pointed out that they've had an incredible, although we've got a dog crate condo crash in the city of Toronto, we've also had an enormous absorption of individual rentals. Now, it'll level off eventually because this is the experience of banks and big companies calling their employees back to work four days a week at least. But it is true. Like, they have filled a lot of

leases up because, hey, for sure. I can't afford, I can't afford to buy downtown. I'm, and I can't afford to commute. So I'm just going to rent the lowest price dog great condo I can find to work at my office four and a half days a week. And then I'm going to go back home to the other side once a week. So we have encountered that with a lot of people that they are stuck renting a unit, another to work at their offices during the course of the week. Okay, a few more questions, and I'll let you go. Are you having a lot of people having trouble qualifying now because the lenders are concerned about job security?

That is one thing that I would tell you is a benefit of the big banks of Canada. They stick with a template of qualification on income that they really haven't varied from. Now, there's a lot, look, it's a lot different world if you're self-employed. They're going to ask a lot more questions. They're going to look a lot more deeply. into your file. But the big banks today, if you're on the job and your job letter says your permanent employee and your pay stubs match up, we don't see any real discrimination. The banks themselves haven't started to analyze who's going to be replaced by AI.

And that doesn't enter into their lending decision. So there's a lot of other tightening that's going on, but it's mainly focused on people who are self-employed and also people who are still, you know, have to complete a rental property purchase. They're under the gun. They're under a lot of pressure. But for the average Canadian, if you've got a job with a steady income, the banks don't, the banks just look at you as a standard borrower. Do you think the investors are going to start coming back in now? I mean, I know the rents have dipped quite a bit, but sold prices. They're down 25 and 30 and 35 percent. Rates have stayed at a relatively competitive level, if not a good level. Do you think we're going to see more investors come back in the next 12 to 24

months? Not retail investors, not mom and pop investors. Where we've seen investors come into the market is groups of family offices, private money, and they're going to these condominium owners who are stuck with 40 or 50 units because there are a bunch of people who couldn't close and various reasons. And they're coming in and they're buying them wholesale. And they're buying them for less than the resale price across the street. So in some cases, that's a discount of 50% from the original purchase price. But that's a wholesale situation. That is not an individual situation.

I can tell you in our mortgage practice, we see virtually no interest of any kind in any individual rental property. That's very interesting. You know, it's funny when you go back to that peak market of late 21, 22, you know, a lot of us were saying this is not going to last. And you're right. There were a lot of people out there saying was going on indefinitely. But the reason I knew that it was going to turn soon was because the investors couldn't make their math work. Anything short of a gigundous down payment, they had significant negative cash flow. And then families, of course, couldn't afford them. families because of the multiple of income, there weren't going to be enough buyers to sustain it at that price. There was going to be something that popped. And, of course, rates went up not long after to boot. Were you thinking the same thing? I mean, at some point it reaches a price of ridiculousness that just can't be sustained. Well, it was demonstrated. You know, at the very end, at the absolute peak at the end of 21 and 22, that's where you saw a combination of multiple cosigners, sometimes even reaching past parents into both sets of parents and also mass.

Massive gifts, your reference to the huge down payment. Just to try to make the math work at the absolute peak of real estate foolishness, there was a tremendous amount of manipulation going on. Not in terms of necessarily, there's no fraudulent documents, but when you've got five people on a mortgage to make the income work and you've got gifts of $400,000, $600,000 to get the down payment to work, you know something's wrong. No, you said that very well.

It's interesting. You mentioned both sets of parents. And a lot of listeners are going to say, why? Why isn't one parent enough? But I think people forget, a lot of these parents were in retirement. And they were drawing just pension income. And the lender wanted more than even just that second signature, that third signature, they wanted as many people as they could to protect themselves.

When the price of houses is that high as it was in late 2021, you needed a lot of pensions, plus a normal income. Absolutely. You needed all kinds of pensions to make that work. No, very true. Okay, let's go back to AI to wrap up. What are your general thoughts? Do you think it really could affect employment in the next 12 to 36 months,

especially at the entry level end, and that will spin into a higher number and could affect real estate? I talk to accountants who have simply not hired any new graduates. I talk to lawyers, law firms, not the biggest ones because they keep it quiet, but it's well known that the hiring into law firms from recent top graduates is down at least 50%. So that's this year. That's the effect of AI this year on white collar businesses, because if they can use AI to replace a junior person, they'll do so.

So it's not necessarily layoffs, Dave, but it's the inability of people who are just joining the workforce to get a job. Yeah, no, I think that's exactly right. And that could have a spinoff effect on all aspects of the economy. And I think you can tell. I mean, I'm generally a very optimistic upbeat guy. I think I've been that way on stage my entire career, but I'm concerned now. I think the speed that AI is coming at is going to overwhelm our institutions, our policies, our government approaches, et cetera.

And that really does worry me. You add that to the affordability challenges. And for younger people, it is very tough right now. I certainly wouldn't want to be graduating with a degree in business analysis this year. I think that's possibly an extinct profession moving forward. When will you be using AI avatars and just not even showing up in the videos? Or is this even you right now? We're having a big discussion because I am no longer young and I may have an eating disorder that forces me to see it looking like this.

We're talking about the idea of just a completely private funeral and we'll download 50,000 videos into AI and we'll just keep giving it new topics and this Ron will just run out and keep talking. I think you're going to live forever. I really do because you're so excited and passionate about. things. I mentioned to you that I get fed by the algorithm your videos first. So when I wake up at 5.30 the morning and I grab my phone, the first thing I see every morning is your face telling me about something in real estate. That's how I start my day. I don't know what to think about that, Dave. I peek early. I peek early. It goes downhill from there. Anyway, it's always a pleasure. I enjoy our time together. Thanks again for coming back on. I know our audience really enjoyed your last visit,

and I'm sure they will this one again. Thank you so much for having me, Dave. Anytime.