109: Looking Through the Crystal Ball of Canadian Real Estate with Avesdo Technologies' Ben Smith

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All right, welcome back to the
Kelowna Real Estate Podcast.

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I'm your mortgage broker host,
Taylor Atkinson.

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Yeah, hot topic kind of back
around Kelowna, short -term

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rentals.

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The city had their council meeting

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November 3rd.

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They're advocating for option two,

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which would be allowing the
previous designated properties

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like Discovery Bay and the ones
that are zoned.

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for short -term rentals.

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They're advocating to the province

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that they should be allowed to
continue to operate as short -term

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rentals as long as our vacancy
rate is up above that threshold,

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which we don't have that data yet
from CMHC, but I think they're

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projecting that it's going to be
like five to 6 % vacancy, which is

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well above.

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I know I feel like there should be

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a mechanism for them to like
continue to allow these to operate

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even if that vacancy drops below
that you know with those specific

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buildings because yeah you're
right you can't just have it going

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back and forth every other year
yeah so they now have to go back

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to the province they now have to
go back to the province advocate

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for Kelowna, tell them, you know,
we would like option two.

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In addition to that, I think, you
know, the legislation doesn't have

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it coming to pass until I think
it's March, 2026.

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So we want them to implement this
immediately.

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Basically like, Hey, it's
November.

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Here are the vacancy rates.

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You know, we want these properties

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back to what they were in 2023.

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So yeah, we'll keep you posted on

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that.

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It is.

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Yeah.

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Good for Kelowna.

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Appreciate what council's doing
there.

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Trying to get it back on track.

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Yeah.

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What are your thoughts on that?
I was kind of thinking like, you

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know, over the next two rate
announcements, we'd probably see

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one cut.

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I was a little bit surprised to

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see it come in so early just with
where inflation is going.

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Inflation is kind of still up
there in terms of that data.

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So I was surprised to see them
make this cut.

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It's obviously positive.

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from a mindset point of view where

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people are at and helps with
budgeting.

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I think we are at that lower end
of the rate cycle for sure though.

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There's not much more they can do
to cut it.

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This is now getting below their
neutral point.

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So this is now getting into a
stimulus style of approach.

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It's a tough one.

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They can't really stimulate the

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economy when inflation's on the
rise, right?

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That's their one lever to pull to
control inflation.

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So, you know, they're back at that
point where they were a few years

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ago that if they keep cutting,
inflation's going to come back in

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and then they're going to have to
rise rates.

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Like you don't want that
volatility.

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A lot of things we cannot predict.

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Yeah, yeah, absolutely.

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Mm -hmm.

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Well... yeah i mean to talk about

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it getting transactions back up
you know like today's guest ben

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smith awesome guy really enjoyed
speaking with him he's kind of got

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like the magic eight ball in the
industry on the pre -sale side

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yeah so he has implemented
technology into real estate

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seamlessly and basically does you
know the majority of pre -sales

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across canada and tapping into you
know north american and global

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markets so really really switched
on guy but he's basically got the

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data in front of him that says
like pre -sales are dead right now

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you know profitability is really
tough for developers like all the

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stuff we know has been happening
over the last couple years but

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he's like interest rate cuts will
not be the catalyst to get this

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going it was super interesting
talking to him i mean the one real

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big takeaway i got from that is
like the wealth transition with

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baby boomers and not just you know
generational wealth being passed

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down but just opening up housing
stock that you know is latent

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Yeah.

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And it feels weird to talk about,

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but as you know, people pass on
like that baby boomer generation,

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which is kind of like over the
next say 10 years, it's weird to

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talk about, but there is going to
be like a, a large transition of

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estate planning.

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So he thinks that could be, you

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know, a real mechanism to maybe
balance out real estate or get

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things going again from a
transaction point of view.

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Yeah.

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But super fascinating show and

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really, really cool guy.

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Yeah.

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All right.

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Ben Smith.

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Welcome to the show, my man.

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Coming from Tofino.

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How's it going over there?
Yeah, it's going great.

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Thanks for having me, guys.

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You know what?

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It's sunny.

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It's not too bad.

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I mean, it's West Coast for sure.

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Got a bit of moisture, but it's

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okay.

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Can you kind of give us an

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elevator pitch, who you are, what
you're doing in the real estate

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industry, or maybe I should say
the tech industry?

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Would that be more accurate for
you?

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Yeah, maybe now.

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So yeah, Ben Smith, President and

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CEO of Avesto Technologies.

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Spent the last 20 plus years in

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real estate development, mostly in
the lower mainland, but in the

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last five years internationally,
actually.

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So kind of grew up on the
developer side in the sales and

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marketing role, moved around.

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I worked for Polygon, who's a

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major developer in Vancouver, and
then moved to Rennie and then kind

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of learned the agency side.

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Then went out on my own and had a

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consulting company.

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And then in that process, I was...

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Pretty big client of Avesdo, which
is a software company.

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I'll get to that in a second.

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They bought my consulting company

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and I joined them to go on the
software side.

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And so Avesdo, we are a contract
management software strictly for

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new home developers.

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Our clients are developers or

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sales and marketing firms and any
other industry you would think of

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us as a point of sale software.

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So we're really the cash register

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for new home sales.

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Awesome.

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And you piqued my interest there.

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Where internationally have you

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been?
So Avesda would be the largest of

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what we do across Canada.

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Avesda would be the largest of

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what we do across Canada.

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But right now we've got products

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in Denver, California, Miami,
Bahamas, Texas as well.

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You know, not every market is the
same as how we do it in Canada.

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I think that's maybe a misnomer.

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In fact, between Vancouver and

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Toronto and the in -betweens,
we're probably one of the leaders

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in the world for selling pre
-sales.

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I'd say maybe Florida is next.

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Texas is up there as well, just

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because there's a lot.

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lot of guys from up here that have

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gone down there.

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That's kind of how it works.

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What solution are you guys
presenting?

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Like, how are you kind of bridging
the gap and evolution here for

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real estate?
I'll give a throwback to our

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founder, who is Richard Bell.

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For those that are in Vancouver

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and know Bell Alliance, Richard
Bell started the company years

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ago.

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It was originally called Yongle.

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To my understanding, his first
intent was he was trying to become

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a paperless law firm.

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And he was doing a lot of closings

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and realized, you know, in the new
dev space, the amount of paper is

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enormous between disclosure
statements and long.

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contracts and all that kind of
stuff so he set out to build an

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app that was going to get rid of
paper and doing that basically

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turned us into a point of sale
software and so over the years we

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moved from essentially what i
would call docusign for contracts

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for new home now we have inventory
in the system so we can start

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doing other things we can start to
do things with that inventory we

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can do stuff with the contract
itself and move forward and

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backwards so we can start to
understand demand by taking in

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selection requests we can start to
manage you know that post sale so

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from what happens after the
contract signs through to closing

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and then last couple of years,
we've even added payments.

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So you can pay your deposits with
credit cards and everything's

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synced.

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So kind of where we've gone to.

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So call us a cash register, but
essentially that's what we are.

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And in every other industry, you'd
have a POS software that's

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managing the transaction itself.

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And it's so different for new

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homes.

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It just happens that we have this

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really long contract and a bunch
of disclosure statements and all

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these different things that have
to happen in certain timeframes.

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But we're essentially doing the
same thing.

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We're a software to manage the
transaction process for this

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specific niche.

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Something really cool is the fact

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that like you guys have a massive
amount of data and Intel.

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you know, kind of where the
market's going.

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And we talked a little bit, super
briefly off air that Shane Stiles

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said, you kind of have the crystal
ball to real estate.

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So I guess that said, can we dive
into that a little bit?

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Like, what are you seeing on new
developments in the past few years

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currently?
And, you know, we can kind of wrap

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up the show with like what's
happening in the future, but

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what's launching for successful
developments now?

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And like, what are the struggles
that our developers see?

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Yeah, great question.

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I mean, the answer is nothing.

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Nothing is launching.

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In the other markets, where you

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get into it, like what about in
the... states are is it slow there

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too like here yeah i mean i would
talk about canada first it's slow

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across the country and it has been
declining for probably four years

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so it hasn't just started we're in
the trough and so just quick stats

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we're seeing that the market's
probably down 50 versus last year

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which was already down of what
happened at the peak we're at

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about 20 of that today it's worse
in toronto than in vancouver and i

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think that's just a function of
product types and what happened So

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Kelowna would be closer to the
Vancouver market, i mean i would

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talk about canada first it's slow
across the country and it has been

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declining for probably four years
so it hasn't just started we're in

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the trough and so just quick stats
we're seeing that the market's

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probably down 50 versus last year
which was already down of what

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happened at the peak we're at
about 20 of that today it's worse

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in toronto than in vancouver and i
think that's just a function of

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product types and what happened So
Kelowna would be closer to the

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Vancouver market, but maybe
pushing a little closer to

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Toronto.

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You know, we don't really have

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single family home on the far west
coast anymore.

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So everything's multi.

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And so even though it's slowed

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down, if anything is going to get
built, it's still going to be

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multi.

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So we're still going to see it

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through our system.

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Whereas in the east coast, in

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Toronto especially, it was very
split.

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So you had like single family,
which was, you know, for owner

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occupiers and everybody.

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And then you had, you know, urban

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high rise.

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And when urban high rise stopped,

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it was just over.

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So just turn on the news and

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you'll see what's going on in
Toronto condo.

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But it's a bad scene.

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And so in between markets,

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Calgary, Kelowna, Calgary is an
interesting one where similar to

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Toronto, it's more like they have
a big single family market.

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So their multifamily is really,
really small.

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And so when it does really well,
the numbers are so small, it

249
00:10:35,410 --> 00:10:36,030
doesn't really swing much.

250
00:10:36,030 --> 00:10:37,410
It could be measured in like a few

251
00:10:37,630 --> 00:10:37,750
thousand.

252
00:10:37,750 --> 00:10:38,490
It's not a lot.

253
00:10:38,490 --> 00:10:41,370
Kelowna, we saw a real boom in
2020, if my memory serves, where

254
00:10:41,370 --> 00:10:43,550
there was a bunch of towers that
all went.

255
00:10:43,550 --> 00:10:46,810
I think there was 12 in the one
summer alone, which is really

256
00:10:47,130 --> 00:10:47,510
abnormal.

257
00:10:47,510 --> 00:10:49,830
i would say a lot of those are

258
00:10:50,050 --> 00:10:52,090
still trying to sell so there's
not really much happening or

259
00:10:52,370 --> 00:10:54,470
launching within your market you
know and then looking into the us

260
00:10:54,470 --> 00:10:57,470
again like really low numbers high
numbers would be like miami you

261
00:10:57,470 --> 00:11:01,630
know you hear about the miami
market was really booming i think

262
00:11:01,630 --> 00:11:04,070
there was 400 cranes in the sky
with projects under construction

263
00:11:04,070 --> 00:11:08,610
so we've seen a huge slowdown in
that market for sure i think

264
00:11:08,610 --> 00:11:11,270
you're seeing a slowdown across
the board is how i'd project it

265
00:11:11,270 --> 00:11:14,450
but the ones where it's really
visible as well there was a lot of

266
00:11:15,050 --> 00:11:17,850
units that were happening so this
contraction is sizable is someone

267
00:11:17,850 --> 00:11:20,650
doing something that's making them
successful in today's market or is

268
00:11:20,650 --> 00:11:23,310
it just kind of like you know what
we're just going to wait until

269
00:11:23,310 --> 00:11:27,690
things get sorted out like we just
have this thing in place for the

270
00:11:27,690 --> 00:11:29,150
foreseeable future someone doing
something that's making them

271
00:11:29,150 --> 00:11:33,590
successful in today's market or is
it just kind of like you know what

272
00:11:33,590 --> 00:11:37,450
we're just going to wait until
things get sorted out like we just

273
00:11:37,450 --> 00:11:40,050
have this thing in place for the
foreseeable Pretty much.

274
00:11:40,050 --> 00:11:44,030
And I mean, I would say that we
have to remember, we talk about

275
00:11:44,030 --> 00:11:45,470
housing and the housing market.

276
00:11:45,470 --> 00:11:47,210
And this makes me really

277
00:11:47,210 --> 00:11:49,990
frustrated with the government,
especially like housing is a

278
00:11:49,990 --> 00:11:50,130
continuum.

279
00:11:50,130 --> 00:11:51,590
There is a lot of different

280
00:11:51,590 --> 00:11:52,890
segments within that continuum.

281
00:11:52,890 --> 00:11:55,010
So to say that housing is over or

282
00:11:55,010 --> 00:11:56,270
housing is stopped, it's not
entirely true.

283
00:11:56,270 --> 00:11:57,330
There's still pockets that work.

284
00:11:57,330 --> 00:12:00,310
So like low density, either a

285
00:12:00,310 --> 00:12:04,330
townhouse or a wood farm apartment
in a suburban area where they can

286
00:12:04,330 --> 00:12:06,070
make the numbers work, that can
still go.

287
00:12:06,070 --> 00:12:08,730
I think what's... unanimous cross
country is like no one's doing a

288
00:12:08,730 --> 00:12:11,030
concrete high rise because it's
almost impossible to hit your

289
00:12:11,030 --> 00:12:11,310
presale.

290
00:12:11,310 --> 00:12:02,430
So if you can really chunk out and

291
00:12:02,430 --> 00:12:04,710
you can, especially with
townhomes, let's say you could do

292
00:12:04,710 --> 00:12:07,530
blocks of eight at a time, you
could sell and just pace yourself,

293
00:12:07,530 --> 00:12:10,030
you know, those still work, those
are still happening.

294
00:12:10,030 --> 00:12:13,680
We do have significant pressures
on the cost side of things to

295
00:12:13,680 --> 00:12:14,380
build these things.

296
00:12:14,380 --> 00:12:15,620
So that's even slowing down that

297
00:12:15,640 --> 00:12:17,100
suburban product as well.

298
00:12:17,100 --> 00:12:18,860
But if you can make the cost work,

299
00:12:18,860 --> 00:12:21,260
that suburban kind of low density
thing can.

300
00:12:21,260 --> 00:12:25,160
still work but yeah anything of
higher density or that's going to

301
00:12:25,160 --> 00:12:29,320
cost you some money it just
doesn't make sense it's in pencil

302
00:12:29,320 --> 00:12:32,780
it's way too expensive to build
anything these days and there's

303
00:12:32,780 --> 00:12:37,360
just a real ceiling on what prices
can get to so i'd say that's the

304
00:12:37,360 --> 00:12:39,820
other thing we're seeing across
the country is let's say you had

305
00:12:39,940 --> 00:12:43,940
like 800 bucks a square foot in
the burbs for some product and

306
00:12:43,940 --> 00:12:47,060
then the spectrum was you know
2500 downtown urban market so say

307
00:12:47,060 --> 00:12:49,920
like vancouver out to the burbs
that was your spectrum and then

308
00:12:49,920 --> 00:12:52,080
chunk out like $100 increments as
you go.

309
00:12:52,080 --> 00:12:55,320
Now it's like, I don't know like
$900 to maybe $1 ,400 if you're

310
00:12:55,320 --> 00:12:55,560
lucky.

311
00:12:55,560 --> 00:12:56,860
It's just so compressed because

312
00:12:56,960 --> 00:13:00,200
there's such a ceiling on what
that purchaser is willing to spend

313
00:13:00,200 --> 00:13:01,740
or can even afford to spend.

314
00:13:01,740 --> 00:13:03,520
On the bottom, the bottoms come up

315
00:13:03,520 --> 00:13:07,200
because the cost is raised so much
that they can't deliver that thing

316
00:13:07,200 --> 00:13:08,000
for $800 a foot.

317
00:13:08,160 --> 00:13:09,580
They just can't do it.

318
00:13:09,580 --> 00:13:12,530
So you've got this real
compression making housing pretty

319
00:13:12,530 --> 00:13:14,230
similar in price wherever you go.

320
00:13:14,230 --> 00:13:15,070
So that's another factor that

321
00:13:15,070 --> 00:13:16,390
we're seeing playing out in the
numbers.

322
00:13:16,390 --> 00:13:17,350
So you mentioned Prescale.

323
00:13:17,350 --> 00:13:19,970
targets so on the show we've had a

324
00:13:19,970 --> 00:13:21,970
few people complaining about
government intervention and

325
00:13:21,970 --> 00:13:25,190
forcing like the pre -sale targets
like is that a canadian thing or

326
00:13:25,190 --> 00:13:27,330
does the u
s have the same targets they need

327
00:13:27,330 --> 00:13:30,190
to get the financing for these
projects had a few people

328
00:13:30,190 --> 00:13:33,010
complaining about government
intervention and forcing like the

329
00:13:33,010 --> 00:13:38,130
pre -sale targets like is that a
canadian thing or does the u

330
00:13:38,130 --> 00:13:41,770
s have the same targets they need
to get the Yeah, I mean,

331
00:13:41,770 --> 00:13:47,820
definitely, I'm no expert on how
you finance a project in the US by

332
00:13:47,820 --> 00:13:49,440
any means.

333
00:13:49,440 --> 00:13:51,140
But just really simply, you think

334
00:13:51,140 --> 00:13:54,920
of, depending on the size of the
project, especially a large high

335
00:13:54,920 --> 00:13:58,060
rise, let's say you got $250
million in costs you got to cover.

336
00:13:58,060 --> 00:14:01,640
The only way you're going to do
that is by reducing some risk.

337
00:14:01,640 --> 00:14:05,220
And the only way to do that is
either to put up some kind of

338
00:14:05,220 --> 00:14:10,080
deposit or guarantee, or you're
going to have to put up equity.

339
00:14:10,080 --> 00:14:13,400
And so I think the capital coming
into the market is really a

340
00:14:13,400 --> 00:14:13,900
problem everywhere.

341
00:14:13,900 --> 00:14:14,820
And the more governments intervene

342
00:14:14,820 --> 00:14:17,570
and make it less likely that
you're going to get a return on

343
00:14:17,570 --> 00:14:18,450
that capital just.

344
00:14:18,450 --> 00:14:22,110
And whether that money's coming in

345
00:14:22,110 --> 00:14:24,190
through kind of a financing
investor or more likely in pre

346
00:14:24,190 --> 00:14:25,770
-sales, it's coming in through
investors by way of deposits,

347
00:14:25,770 --> 00:14:26,930
which is the big conversation, it
stopped.

348
00:14:26,930 --> 00:14:19,970
So we have this huge cost of
delivery issue where it's so

349
00:14:19,970 --> 00:14:22,110
expensive to go.

350
00:14:22,110 --> 00:14:23,590
You need huge amounts of monies to

351
00:14:23,590 --> 00:14:23,990
do projects.

352
00:14:23,990 --> 00:14:25,090
Like, you know, when I started in

353
00:14:25,090 --> 00:14:29,990
this business, like early 2000s,
you could do a project for 20

354
00:14:29,990 --> 00:14:30,530
million bucks.

355
00:14:30,530 --> 00:14:32,430
It'd be a small project, but that

356
00:14:32,430 --> 00:14:33,130
doesn't exist anymore.

357
00:14:33,130 --> 00:14:34,810
Like projects are huge and

358
00:14:34,810 --> 00:14:35,210
expensive.

359
00:14:35,510 --> 00:14:36,850
And so when you've got that much

360
00:14:36,850 --> 00:14:40,070
debt against something, like you
need some kind of mechanism to

361
00:14:40,070 --> 00:14:40,250
fund it.

362
00:14:40,250 --> 00:14:42,170
And, you know, in Canada, it's

363
00:14:42,170 --> 00:14:44,450
laughable, like 13 billion, we're
going to spend to get 4000 homes

364
00:14:44,450 --> 00:14:45,110
or something.

365
00:14:45,110 --> 00:14:46,750
I mean, that's By my math, like $3

366
00:14:46,750 --> 00:14:48,770
.25 million a home, like that
doesn't make any sense.

367
00:14:48,770 --> 00:14:51,630
You know, you see articles of
social housing getting built for a

368
00:14:51,630 --> 00:14:53,230
million dollars a door.

369
00:14:53,230 --> 00:14:54,770
Like, how are you financing that?

370
00:14:54,770 --> 00:14:58,560
Where's this money coming from?
So it's certainly a problem.

371
00:14:58,560 --> 00:15:00,540
It's a massive part of the
equation.

372
00:15:00,540 --> 00:15:02,260
Quite frankly, I don't think it's
going to get solved because

373
00:15:02,260 --> 00:15:05,920
fundamentally there's a problem
right now and it's a PR problem

374
00:15:05,920 --> 00:15:09,620
and no government is going to be
seen to bail out.

375
00:15:09,780 --> 00:15:10,460
a rich developer.

376
00:15:10,460 --> 00:15:13,620
In the US, it's a bit different.

377
00:15:13,620 --> 00:15:16,380
You've got some public companies
that are developers.

378
00:15:16,380 --> 00:15:18,180
We don't have that in Canada.

379
00:15:18,180 --> 00:15:20,980
So most of the developers carry a

380
00:15:20,980 --> 00:15:21,600
family name.

381
00:15:21,600 --> 00:15:23,320
No politician is going to be seen

382
00:15:23,320 --> 00:15:28,240
to give that family a leg up or a
rebate or some kind of thing to

383
00:15:28,240 --> 00:15:29,020
make it go.

384
00:15:29,020 --> 00:15:31,190
So they have to create scenarios

385
00:15:31,190 --> 00:15:33,670
where somebody faceless can be the
one that wins.

386
00:15:33,890 --> 00:15:36,050
I could go on and on.

387
00:15:36,410 --> 00:15:36,810
You started me.

388
00:15:36,810 --> 00:15:37,150
I'm sorry.

389
00:15:37,150 --> 00:15:39,710
It resonates with us for sure.

390
00:15:39,710 --> 00:15:43,150
You've obviously like had a finger
on the pulse here in the last say

391
00:15:43,150 --> 00:15:43,930
five years.

392
00:15:43,930 --> 00:15:46,130
Like when was the writing on the

393
00:15:46,130 --> 00:15:48,810
wall for you guys?
Like when did, you know, you start

394
00:15:49,200 --> 00:15:52,420
seeing the data that's like,
there's some major issues here.

395
00:15:52,580 --> 00:15:56,580
Oh, right away after like the boom
of 21, it sort of wrapped a year,

396
00:15:56,580 --> 00:15:58,220
right?
So it kind of ended in the spring

397
00:15:58,480 --> 00:15:58,760
of 21.

398
00:15:58,760 --> 00:15:59,460
Is that right?

399
00:15:59,460 --> 00:16:01,040
The boom in February, 22, 22.

400
00:16:01,220 --> 00:16:03,360
That's so after that, it was done.

401
00:16:03,360 --> 00:16:04,740
And it never came back.

402
00:16:04,920 --> 00:16:06,380
And so we saw it then.

403
00:16:06,380 --> 00:16:06,660
It was clear.

404
00:16:06,660 --> 00:16:09,300
That was on the pre -sales?

405
00:16:09,300 --> 00:16:12,820
was on the pre -sales?
Like pre -sales, just nothing was

406
00:16:12,820 --> 00:16:13,140
moving anymore?
Yeah.

407
00:16:13,140 --> 00:16:16,030
The whole country, our transaction
volume just went off a cliff and

408
00:16:16,030 --> 00:16:16,830
you could just see it.

409
00:16:16,990 --> 00:16:18,330
And if I looked at like

410
00:16:18,330 --> 00:16:21,030
transaction volumes quarter to
quarter, they fell then and they

411
00:16:21,030 --> 00:16:21,750
never came back.

412
00:16:21,750 --> 00:16:24,610
At that point, we kept, oh, we

413
00:16:24,610 --> 00:16:24,910
need rates.

414
00:16:24,910 --> 00:16:27,630
We need rates and we need this and

415
00:16:27,630 --> 00:16:27,910
that.

416
00:16:27,910 --> 00:16:29,450
But then it was just this

417
00:16:29,450 --> 00:16:31,190
onslaught of a death by a thousand
cuts.

418
00:16:31,550 --> 00:16:36,130
you know the rates got worse and
worse and worse government

419
00:16:36,130 --> 00:16:38,530
intervention was like worse and
worse and worse on the capital

420
00:16:38,530 --> 00:16:43,300
side so what did they do they're
like well they created a bunch of

421
00:16:43,300 --> 00:16:45,660
boogeymen and then they went and
attacked them so they said okay

422
00:16:45,660 --> 00:16:49,580
nightly rentals no more and they
hit that then they said okay long

423
00:16:49,580 --> 00:16:52,360
-term rental well we're gonna have
to protect the tenant and so then

424
00:16:52,360 --> 00:16:55,440
they hurt that so they basically
one by one started taking away any

425
00:16:55,440 --> 00:17:00,520
benefit for an investor to have
money in a deal and so that's how

426
00:17:00,520 --> 00:17:04,140
they killed it and then at the
same time developers just said

427
00:17:04,140 --> 00:17:09,359
well then we're not going to
launch anything so it was really

428
00:17:09,660 --> 00:17:12,400
interesting i think one of the
most surprising things people

429
00:17:12,400 --> 00:17:14,700
don't realize that i get to see is
i get to see supply and i get to

430
00:17:14,700 --> 00:17:17,760
see demand so on the demand side
we see the transactions because we

431
00:17:17,819 --> 00:17:20,520
see the contracts so we can see
across the country what contracts

432
00:17:20,520 --> 00:17:22,780
are happening and where but we
also know supply because nobody's

433
00:17:22,780 --> 00:17:26,940
signing up for us if they don't
have a project and so we had this

434
00:17:26,940 --> 00:17:30,180
huge backlog of projects that were
all slated to launch in you know

435
00:17:30,180 --> 00:17:32,600
the spring of 2022 and immediately
it was held back and then what

436
00:17:32,600 --> 00:17:36,830
happened is those things just
started like a tidal wave to keep

437
00:17:36,830 --> 00:17:40,010
delaying keep delaying and then
they grew so in spring of 2022 the

438
00:17:40,010 --> 00:17:42,830
projects that should have launched
didn't so then summer comes along

439
00:17:42,830 --> 00:17:45,450
well those projects didn't launch
so you add those fall and then it

440
00:17:45,450 --> 00:17:48,350
keeps going so we're four years
now of this rolling thunder of

441
00:17:48,350 --> 00:17:51,970
supply that hasn't gone and it is
uncanny like for an industry

442
00:17:51,970 --> 00:17:54,510
that's essentially mom pause and
we're not public companies so it's

443
00:17:54,510 --> 00:17:57,250
literally just guys talking to
each other their ability to

444
00:17:57,250 --> 00:18:01,530
control supply is unbelievable
like it is crazy when the taps

445
00:18:01,530 --> 00:18:06,500
shut off so fast when the sales
stop and so we don't have this

446
00:18:06,500 --> 00:18:07,260
huge glut of supply.

447
00:18:07,260 --> 00:18:08,820
You know, people are like, oh,

448
00:18:08,820 --> 00:18:10,300
there's 2000 units downtown
wherever that we have.

449
00:18:10,300 --> 00:18:11,160
Okay, like, that's nothing.

450
00:18:11,160 --> 00:18:11,780
Like, it's nothing.

451
00:18:11,780 --> 00:18:13,420
There is a problem specifically
within Toronto, specifically

452
00:18:13,420 --> 00:18:15,680
within a certain unit type,
specifically in the segment right

453
00:18:15,680 --> 00:18:15,820
now.

454
00:18:15,820 --> 00:18:16,700
That's the only part.

455
00:18:16,700 --> 00:18:17,820
And that's a more complicated
problem.

456
00:18:17,820 --> 00:18:21,280
But we don't have huge supply
overruns because that is the one

457
00:18:21,280 --> 00:18:23,900
thing i can see is developers
ability to control it is

458
00:18:23,900 --> 00:18:26,700
unbelievable they just know if
they can't sell it they won't

459
00:18:26,700 --> 00:18:31,960
start so then you know think of
the math on that let's use easy

460
00:18:31,960 --> 00:18:36,250
math because i'm not that smart
you got 100 units you need a 60

461
00:18:36,250 --> 00:18:39,790
pre -sale well now you're dealing
with 40 units but you're not

462
00:18:39,790 --> 00:18:44,830
putting another 100 on top of it
so those 40 units four years ago

463
00:18:44,830 --> 00:18:48,370
have whittled down to maybe
they're 10 units now And maybe

464
00:18:48,370 --> 00:18:50,670
they're getting close to
completing construction, but we

465
00:18:50,670 --> 00:18:53,630
just don't have a huge problem in
that area.

466
00:18:53,630 --> 00:18:56,610
So what's the solution then?
I mean, very tough question, but

467
00:18:56,610 --> 00:19:00,340
like if the problem came out three
years ago and, you know, question,

468
00:19:00,340 --> 00:19:04,500
but like if the problem came out
three years ago and, you know,

469
00:19:04,500 --> 00:19:08,480
kind of maybe it started with
interest rates and then, yeah,

470
00:19:08,480 --> 00:19:12,540
like you said, we have spec tax,
vacancy tax, Airbnb legislation,

471
00:19:12,540 --> 00:19:15,820
anti -flipping, like just death by
a thousand cuts.

472
00:19:15,820 --> 00:19:20,700
What do we do now?
Like what's a lever that, you

473
00:19:20,700 --> 00:19:23,820
know, either the government not
that we want them more

474
00:19:23,820 --> 00:19:27,360
intervention but like from you
seeing it as to support developers

475
00:19:27,360 --> 00:19:32,590
like how do we get them back in
the game yeah and i'll say this

476
00:19:32,590 --> 00:19:37,370
two ways we knew the answer four
years ago i wrote about it in my

477
00:19:37,370 --> 00:19:42,470
column but i don't think it's
going to happen i mean that's the

478
00:19:42,470 --> 00:19:46,370
difference now is i was making a
lot of noise then but based on

479
00:19:46,370 --> 00:19:51,130
what i just told you about how
governments see the development

480
00:19:51,850 --> 00:19:54,070
community they're not going to
make these changes so i'll tell

481
00:19:54,070 --> 00:19:58,010
you what i think they should be
even though i don't believe

482
00:19:58,010 --> 00:20:01,150
they're going to happen so it's
really simple we have a cost

483
00:20:01,150 --> 00:20:03,610
problem so and i'll say this two
ways we knew the answer four years

484
00:20:03,610 --> 00:20:08,170
ago i wrote about it in my column
but i don't think it's going to

485
00:20:08,170 --> 00:20:11,270
happen i mean that's the
difference now is i was making a

486
00:20:11,270 --> 00:20:15,770
lot of noise then but based on
what i just told you about how

487
00:20:15,770 --> 00:20:18,970
governments see the development
community they're not going to

488
00:20:18,970 --> 00:20:22,770
make these changes so i'll tell
you what i think they should be

489
00:20:22,770 --> 00:20:26,130
even though i don't believe
they're going to happen so it's

490
00:20:26,350 --> 00:20:29,670
really simple we have a cost
problem so let's look at where the

491
00:20:29,670 --> 00:20:30,510
costs come from.

492
00:20:30,510 --> 00:20:28,270
Well, we have two building codes

493
00:20:28,270 --> 00:20:31,310
in this country, you have a
federal one and provincial ones,

494
00:20:31,310 --> 00:20:32,970
they got to go look at the codes.

495
00:20:32,970 --> 00:20:34,450
And if you look at all the fluff

496
00:20:34,450 --> 00:20:40,050
that's in there, we're trying to
solve every problem under the sun

497
00:20:40,050 --> 00:20:42,610
with the building code, right?
So, you know, we've got these

498
00:20:42,790 --> 00:20:45,750
things that can have 100 -year
events, and they'll be left

499
00:20:45,750 --> 00:20:45,970
standing.

500
00:20:45,970 --> 00:20:47,270
And, you know, some of that's

501
00:20:47,270 --> 00:20:47,570
great.

502
00:20:47,570 --> 00:20:48,810
We need that for safety.

503
00:20:48,810 --> 00:20:50,350
Some of it's fluff.

504
00:20:50,350 --> 00:20:51,510
And that's how we went from, like,

505
00:20:51,510 --> 00:20:53,990
you know, I remember working at
Polygon in the late 2000s, and we

506
00:20:53,990 --> 00:20:54,850
did a concrete tower.

507
00:20:54,850 --> 00:20:56,330
I think we built it for $150 a

508
00:20:56,330 --> 00:20:56,650
foot.

509
00:20:56,650 --> 00:20:57,610
That same thing today is $500 a

510
00:20:57,610 --> 00:20:57,830
foot.

511
00:20:57,830 --> 00:20:58,710
How does that happen?

512
00:20:58,710 --> 00:20:59,770
And it's all these extra costs.

513
00:20:59,770 --> 00:21:01,730
I mean, the funniest one, I think,

514
00:21:01,730 --> 00:21:05,330
is, you know, you think of in BC,
you have to have flushable toilets

515
00:21:05,330 --> 00:21:06,170
on a construction site now.

516
00:21:06,170 --> 00:21:07,830
flushable toilets like what's the

517
00:21:07,830 --> 00:21:09,430
cost of that really oh there's
ridiculous ridiculous things that

518
00:21:09,430 --> 00:21:13,330
you add and then i mean just go
talk to a trade and ask them all

519
00:21:13,330 --> 00:20:54,630
these extra costs that they have
that they never used to have you

520
00:20:54,630 --> 00:20:56,990
know the wcb costs like all the
safety costs they have to do like

521
00:20:56,990 --> 00:20:59,610
it's insane so i would say we got
to go and attack those and say

522
00:20:59,610 --> 00:21:02,890
let's get rid of the fluff And
let's get rid of it's not just the

523
00:21:02,890 --> 00:21:05,950
fluff within it, but it's all the
regulation associated has to get

524
00:21:05,950 --> 00:21:06,590
paid for.

525
00:21:06,590 --> 00:21:08,070
So WCB is a great example.

526
00:21:08,070 --> 00:21:10,150
Like how big is that organization?
It has to pay its bills.

527
00:21:10,150 --> 00:21:14,800
How is it going to do it?
It has to charge trades to do

528
00:21:14,800 --> 00:21:15,640
things, has to charge developers.

529
00:21:15,640 --> 00:21:16,960
And that's how that happens.

530
00:21:16,960 --> 00:21:18,860
You know, go to the cost.

531
00:21:19,180 --> 00:21:20,960
There's a ton of costs that could

532
00:21:20,960 --> 00:21:22,400
be stripped out of there for one.

533
00:21:22,400 --> 00:21:24,180
Associated with costs, I don't

534
00:21:24,180 --> 00:21:24,980
have to say it.

535
00:21:24,980 --> 00:21:25,840
Everybody knows the development

536
00:21:25,960 --> 00:21:26,140
cost charges.

537
00:21:26,140 --> 00:21:28,160
Like, it's just insane what that

538
00:21:28,160 --> 00:21:28,520
costs.

539
00:21:28,520 --> 00:21:29,740
That's not changing because that's

540
00:21:29,940 --> 00:21:32,320
a structural change where how do
municipalities make their money?

541
00:21:32,320 --> 00:21:34,090
Well, of housing.

542
00:21:34,090 --> 00:21:37,170
And they're going to do it from

543
00:21:37,170 --> 00:21:37,690
your property tax.

544
00:21:37,690 --> 00:21:38,970
So they don't have a lot of

545
00:21:38,970 --> 00:21:39,350
levers.

546
00:21:39,510 --> 00:21:41,670
And they kind of fell in love with

547
00:21:41,670 --> 00:21:45,110
the DCC because they were making
so much money off of it, right?

548
00:21:45,110 --> 00:21:48,330
Like all of a sudden development's
booming, their budgets are

549
00:21:48,330 --> 00:21:50,950
ballooning on the back of
developers, so they can't actually

550
00:21:50,950 --> 00:21:52,110
get rid of it.

551
00:21:52,110 --> 00:21:55,110
And so they need the Fed to come

552
00:21:55,110 --> 00:21:58,570
in and replace that somehow or to
create a new structure to be able

553
00:21:58,650 --> 00:21:58,990
to offset that money.

554
00:21:58,990 --> 00:22:00,390
I don't think visitor parking

555
00:22:00,390 --> 00:22:01,790
downtown is going to do it.

556
00:22:01,790 --> 00:22:04,040
So that's a big challenge.

557
00:22:04,040 --> 00:22:08,940
And I think why we've seen them,
they just haven't touched it,

558
00:22:08,940 --> 00:22:10,760
right?
They just can't do it.

559
00:22:10,760 --> 00:22:13,360
So that would be a huge one that
would release some pressure.

560
00:22:13,360 --> 00:22:15,020
Rates, rates for sure is going to
help.

561
00:22:15,020 --> 00:22:16,360
Rates coming down is helping.

562
00:22:16,360 --> 00:22:18,640
We're seeing a little bit of help

563
00:22:18,640 --> 00:22:18,980
on that level.

564
00:22:18,980 --> 00:22:20,180
But again, it's a thousand cuts.

565
00:22:20,180 --> 00:22:22,800
So they needed to do it all.

566
00:22:22,800 --> 00:22:24,240
And now that they haven't, these

567
00:22:24,240 --> 00:22:25,740
little gestures here and there
just aren't enough.

568
00:22:25,740 --> 00:22:27,800
Like we need to cut way more out
of it.

569
00:22:27,800 --> 00:22:31,880
So how do we get there then is the
question if they're not willing to

570
00:22:31,880 --> 00:22:33,880
do any of those things.

571
00:22:33,880 --> 00:22:35,220
I think it's going to have

572
00:22:35,220 --> 00:22:36,740
something to do with the baby
boomers.

573
00:22:36,740 --> 00:22:38,560
I think the baby boomers are a
huge player in this movie.

574
00:22:38,560 --> 00:22:43,780
And I think they were a huge
player in the pre -sale movie

575
00:22:43,780 --> 00:22:44,060
previously.

576
00:22:44,060 --> 00:22:45,450
We just didn't know it.

577
00:22:45,530 --> 00:22:47,450
And the government talks about the
booby man investor and they blamed

578
00:22:47,450 --> 00:22:48,790
what they called the foreigner and
the spec.

579
00:22:49,430 --> 00:22:52,190
calculator and we had all these
names for them right and then we

580
00:22:52,190 --> 00:22:56,370
shut them down right the reality
is like i mean i worked a lot of

581
00:22:56,370 --> 00:23:00,750
floors as you guys have and you
know the investor is like You

582
00:23:01,010 --> 00:23:03,750
know, Joey and Susie, who have,
you know, maybe a $3 million house

583
00:23:03,930 --> 00:23:06,590
that they've got a $500 ,000
mortgage on that they're levering

584
00:23:06,590 --> 00:23:07,210
the heck out of.

585
00:23:07,210 --> 00:23:08,950
They're giving their kids some

586
00:23:08,950 --> 00:23:11,550
money to get into their first home
or to buy an investment.

587
00:23:11,550 --> 00:23:12,970
That was what pre -sale looked
like.

588
00:23:13,110 --> 00:23:16,410
And there was a few people that
were professionals that had a lot

589
00:23:16,410 --> 00:23:16,970
of homes.

590
00:23:16,970 --> 00:23:19,270
By and large, there was a lot of

591
00:23:19,270 --> 00:23:21,230
people that had one or two extras.

592
00:23:21,230 --> 00:23:22,410
And that was the game, right?

593
00:23:22,410 --> 00:23:23,510
But they were like regular
citizens.

594
00:23:23,510 --> 00:23:26,330
The baby boomers stopped making
sense when they took away all.

595
00:23:26,330 --> 00:23:30,510
the avenues for them to get their
money back or to minimize the

596
00:23:30,510 --> 00:23:30,670
risk.

597
00:23:30,670 --> 00:23:32,210
And so now that baby boomer is

598
00:23:32,210 --> 00:23:34,570
sitting on call it three million
dollars in clear title real estate

599
00:23:34,570 --> 00:23:37,650
they're just not doing anything
with it right they're not levering

600
00:23:37,650 --> 00:23:40,030
it to help their kids they're just
sitting and waiting but that baby

601
00:23:40,030 --> 00:23:43,290
boomer the oldest baby boomer is
now reaching the age of death in

602
00:23:43,290 --> 00:23:46,860
canada and it sounds really morbid
but the reality is over the next

603
00:23:46,860 --> 00:23:50,040
10 years they're gonna be an
enormous part of our population

604
00:23:50,040 --> 00:23:52,520
that's going to pass on and
they're going to transfer that

605
00:23:52,520 --> 00:23:54,360
wealth and they're also going to
leave these homes so the other

606
00:23:54,360 --> 00:23:57,660
thing that we have to watch is
They didn't downsize, you know, a

607
00:23:57,660 --> 00:23:58,300
very small number downsize.

608
00:23:58,300 --> 00:23:59,480
Most of them are still in that

609
00:23:59,480 --> 00:23:59,900
home.

610
00:24:00,140 --> 00:24:01,480
You know, they've got four

611
00:24:01,480 --> 00:24:04,260
bedrooms that are empty and, you
know, they're still in that home

612
00:24:04,260 --> 00:24:05,700
sitting on all that equity.

613
00:24:05,700 --> 00:24:08,520
So once that starts to move and

614
00:24:08,520 --> 00:24:11,240
they're just such a huge
population, like it's going to

615
00:24:11,240 --> 00:24:12,080
shift a lot.

616
00:24:12,080 --> 00:24:13,840
The other thing I talk about that

617
00:24:13,840 --> 00:24:16,430
is you think of their kids.

618
00:24:16,430 --> 00:24:17,550
So who are the two biggest

619
00:24:17,550 --> 00:24:18,850
populations?
Well, baby boomers and then their

620
00:24:18,850 --> 00:24:20,630
kids, which is the millennials,
right?

621
00:24:20,630 --> 00:24:23,150
Those millennials are all sitting
in homes waiting for mom and dad's

622
00:24:23,150 --> 00:24:25,030
money or for mom and dad's home.

623
00:24:25,030 --> 00:24:27,840
So they're leaving that home stuck

624
00:24:27,840 --> 00:24:28,740
as well.

625
00:24:29,020 --> 00:24:30,560
Because if you know you're going

626
00:24:30,560 --> 00:24:32,980
to inherit like 10 grand, it
doesn't matter.

627
00:24:32,980 --> 00:24:34,640
It doesn't change your life.

628
00:24:34,640 --> 00:24:36,000
But if you might inherit.

629
00:24:36,000 --> 00:24:38,980
100 ,000 or 300 ,000 or a million
or whatever that number is coming

630
00:24:38,980 --> 00:24:40,980
out of that house, you're going to
wait.

631
00:24:40,980 --> 00:24:43,760
And so you might be sitting in a
home that you're waiting for that

632
00:24:43,760 --> 00:24:46,080
money before you go do something
and act.

633
00:24:46,280 --> 00:24:48,240
So I don't think we know the
impact of that whole scenario,

634
00:24:48,240 --> 00:24:51,460
that domino effect when that goes,
you know, you're going to have mom

635
00:24:51,460 --> 00:24:53,500
and dad's have come free.

636
00:24:53,500 --> 00:24:55,660
You're going to have, you know,

637
00:24:55,660 --> 00:24:58,120
baby boomer kids house come free,
or you're going to have a lot of

638
00:24:58,120 --> 00:24:58,320
movement.

639
00:24:58,320 --> 00:25:00,480
And so my belief is that's

640
00:25:00,480 --> 00:25:03,470
probably when we're going to see a
big shift.

641
00:25:03,470 --> 00:25:04,230
You know, we'll see.

642
00:25:04,230 --> 00:25:05,730
Do you think it's going to shift

643
00:25:05,730 --> 00:25:08,130
one of two ways?
Like, is it going to open up some

644
00:25:08,130 --> 00:25:11,110
real estate and release some of
that pent up supply and demand

645
00:25:11,110 --> 00:25:14,170
because some of those houses are
freeing up?

646
00:25:14,170 --> 00:25:16,810
Or is it going to like, you know,
fuel spending because now.

647
00:25:16,810 --> 00:25:19,610
You know, those kids have an
inheritance and now they can go

648
00:25:19,610 --> 00:25:20,950
out and buy their house.

649
00:25:20,950 --> 00:25:24,030
Like what's it going to do to that

650
00:25:24,030 --> 00:25:25,550
supply and demand issue?
and demand issue?

651
00:25:25,550 --> 00:25:27,390
It's quite a complex problem.

652
00:25:27,390 --> 00:25:29,070
So I haven't seen anything to know

653
00:25:29,070 --> 00:25:30,430
which way it's going to go.

654
00:25:30,430 --> 00:25:34,200
I think part of it might be like,

655
00:25:34,200 --> 00:25:37,160
is that money real?
Like, let's say you have this huge

656
00:25:37,160 --> 00:25:39,640
flood of these huge homes come on.

657
00:25:39,640 --> 00:25:41,920
I mean, you know what's going to

658
00:25:41,920 --> 00:25:43,100
happen, right?
Those things are worthless now.

659
00:25:43,100 --> 00:25:46,940
So is that money real is a real
question we need to know.

660
00:25:46,940 --> 00:25:49,880
It's like, is there going to be
anyone to buy it?

661
00:25:49,880 --> 00:25:52,340
A big part of that's going to be
what happens with immigration.

662
00:25:52,340 --> 00:25:55,440
So we've decided right now that
immigration is bad and we don't

663
00:25:55,740 --> 00:25:56,580
want it.

664
00:25:56,580 --> 00:25:57,840
But like once this starts

665
00:25:57,840 --> 00:25:58,180
happening.

666
00:25:58,180 --> 00:26:01,420
if we had somebody to buy that

667
00:26:01,420 --> 00:26:03,720
home i
e think back you know mainland

668
00:26:03,720 --> 00:26:07,780
chinese large number of south
asians that used to come in this

669
00:26:07,780 --> 00:26:11,120
country and buy these homes if
that's allowed then now you have a

670
00:26:11,120 --> 00:26:13,800
buyer for these homes so i think
that still needs to be worked out

671
00:26:13,800 --> 00:26:19,060
and seen but I think what is going
to be true is either way, you're

672
00:26:19,060 --> 00:26:20,540
going to have an influx of
capital.

673
00:26:20,540 --> 00:26:22,860
And, you know, one of the big
problems I shared earlier within

674
00:26:22,860 --> 00:26:24,960
our business is we have a capital
problem.

675
00:26:24,960 --> 00:26:28,200
Like we can't do new projects
because there's no capital to fund

676
00:26:28,200 --> 00:26:29,840
it and we don't have a mechanism.

677
00:26:29,840 --> 00:26:33,040
So I think we have to see how that

678
00:26:33,200 --> 00:26:33,340
plays out.

679
00:26:33,440 --> 00:26:34,680
The other thing we're seeing right

680
00:26:34,680 --> 00:26:38,320
now, which is interesting, I think
it's going to be a same problem

681
00:26:38,320 --> 00:26:41,280
later, is I spoke earlier about
the Toronto condo problem.

682
00:26:41,280 --> 00:26:44,400
And why that one's unique is
really what it is, is you've got

683
00:26:44,400 --> 00:26:45,100
an enormous number of studios.

684
00:26:45,100 --> 00:26:47,140
with no one to tend to use them.

685
00:26:47,140 --> 00:26:48,940
So, you know, who used to use
those things?

686
00:26:48,940 --> 00:26:51,160
Well, two people, students and
people new to the country because,

687
00:26:51,160 --> 00:26:54,380
you know, as a condo is ready to
go, they'd move into a tiny studio

688
00:26:54,380 --> 00:26:55,600
and then they'd figure themselves
out.

689
00:26:55,700 --> 00:26:59,020
Oh, the other person, sorry, the
third one would be like the

690
00:26:59,020 --> 00:27:00,900
downtown Strader University doing
the Bay Street shuffle.

691
00:27:00,900 --> 00:27:02,400
I'm going to go get my first
studio.

692
00:27:02,400 --> 00:27:04,560
But that person's not working
downtown, may not even have a job.

693
00:27:04,560 --> 00:27:05,360
So you've kind of cut off.

694
00:27:05,360 --> 00:27:07,710
all of the people who would use

695
00:27:07,730 --> 00:27:08,150
that unit type.

696
00:27:08,150 --> 00:27:10,010
So now it's like, oh, we have too

697
00:27:10,010 --> 00:27:11,170
many of these things.

698
00:27:11,170 --> 00:27:12,330
We have the wrong unit.

699
00:27:12,330 --> 00:27:13,850
Well, that could happen again.

700
00:27:14,090 --> 00:27:16,070
I think we have to see what gets

701
00:27:16,070 --> 00:27:18,570
freed up from these boomers and if
there's a buyer for that thing, if

702
00:27:18,570 --> 00:27:19,270
anybody wants it.

703
00:27:19,270 --> 00:27:21,310
So there's a few bunch of factors

704
00:27:21,310 --> 00:27:22,570
that have to play out.

705
00:27:22,570 --> 00:27:23,970
But either way, you're going to

706
00:27:23,970 --> 00:27:26,430
have like a whole bunch of people
leave the market and leave behind

707
00:27:26,430 --> 00:27:27,190
a bunch of money.

708
00:27:27,190 --> 00:27:29,130
So that's going to do something.

709
00:27:29,190 --> 00:27:30,270
Yeah, that's fascinating.

710
00:27:30,270 --> 00:27:31,850
I haven't really thought of of

711
00:27:31,850 --> 00:27:32,070
that.

712
00:27:32,070 --> 00:27:34,190
before and I guess do you think

713
00:27:34,190 --> 00:27:38,620
when that happens like will our
short -term memory be so bad that

714
00:27:38,620 --> 00:27:42,180
the confidence just comes back in
people have capital to spend these

715
00:27:42,180 --> 00:27:44,360
projects start going like will
everything just go back to normal

716
00:27:44,360 --> 00:27:47,500
and we'll go tough what happened
in 2020 to 25 I don't know we're

717
00:27:47,500 --> 00:27:51,000
back to normal that's tends to be
what happens in our business right

718
00:27:51,000 --> 00:27:54,620
and I think part of it is because
tends to be what happens in our

719
00:27:54,620 --> 00:27:57,760
business right and I think part of
it is because you know we get old

720
00:27:57,760 --> 00:28:00,660
and then it'll be somebody new
it'll be that young guy who's a

721
00:28:00,660 --> 00:28:04,900
young girl who's in freshly new in
the industry and they're like oh

722
00:28:04,900 --> 00:28:08,120
this is the greatest and they have
no memory of what happened because

723
00:28:08,120 --> 00:28:09,960
they weren't alive or they don't
you know they were children you

724
00:28:09,960 --> 00:28:12,580
know that was us right like i
remember when i started in this

725
00:28:12,580 --> 00:28:15,940
business and the old dogs were
like oh well i remember in you

726
00:28:15,940 --> 00:28:19,840
know 80s that this happened and
i'm like oh i heard about that but

727
00:28:19,840 --> 00:28:20,600
i was 13.

728
00:28:20,600 --> 00:28:22,260
So I think that'll happen for

729
00:28:22,260 --> 00:28:22,480
sure.

730
00:28:22,480 --> 00:28:25,000
But let me ask you this, like all

731
00:28:25,000 --> 00:28:29,680
of a sudden, you know, God forbid
your parents die and they hand you

732
00:28:29,680 --> 00:28:31,340
half a million dollars.

733
00:28:31,340 --> 00:28:32,460
Like, what are you doing with that

734
00:28:32,460 --> 00:28:33,520
money?
You're probably going to buy a

735
00:28:33,520 --> 00:28:35,500
house or spend it on something.

736
00:28:35,500 --> 00:28:37,360
So we'll see it'll be part of the

737
00:28:37,360 --> 00:28:38,020
equation for sure.

738
00:28:38,020 --> 00:28:40,940
I'd probably take my through

739
00:28:40,940 --> 00:28:43,080
school to become an estate
settling lawyer.

740
00:28:43,080 --> 00:28:43,220
settling lawyer.

741
00:28:43,220 --> 00:28:45,840
So I was like, yeah, there you go.

742
00:28:45,840 --> 00:28:46,900
Don't be fooled.

743
00:28:47,140 --> 00:28:48,080
The government is going to take

744
00:28:48,080 --> 00:28:48,860
their pound of flex.

745
00:28:48,860 --> 00:28:50,590
They're going to find a way.

746
00:28:50,590 --> 00:28:52,670
They're looking for ways to take
that equity.

747
00:28:52,670 --> 00:28:53,510
They want it themselves.

748
00:28:53,690 --> 00:28:54,510
It's trapped in the homes.

749
00:28:54,510 --> 00:28:54,690
Yeah.

750
00:28:54,690 --> 00:28:54,910
Yeah.

751
00:28:54,930 --> 00:28:55,090
Yeah.

752
00:28:55,090 --> 00:28:56,970
You touched on something with the

753
00:28:56,970 --> 00:28:57,610
Toronto market.

754
00:28:57,610 --> 00:28:57,870
Yeah.

755
00:28:57,870 --> 00:29:00,330
I mean, it sounds like obviously
they have a pretty major issue

756
00:29:00,330 --> 00:29:00,550
there.

757
00:29:00,550 --> 00:29:02,610
Optimistically, like what are you

758
00:29:02,610 --> 00:29:04,770
seeing in projects?
Like what's selling right now for

759
00:29:04,930 --> 00:29:05,830
pre -sales?
What's working?

760
00:29:05,830 --> 00:29:07,950
What size of unit?
Like what are buyers looking for?

761
00:29:08,090 --> 00:29:10,790
I mean, you can talk nationally or
Western Canada, but yeah.

762
00:29:10,790 --> 00:29:13,110
what's working right now yeah i
mean first i'll say it's a tricky

763
00:29:13,110 --> 00:29:15,490
question because what are buyers
buying well they're buying what's

764
00:29:15,490 --> 00:29:18,690
available and remember i said that
developers control supply so it's

765
00:29:18,690 --> 00:29:21,370
a tough thing because what's
available is what's left over so

766
00:29:21,370 --> 00:29:23,310
there's very few projects
launching so there's not really

767
00:29:23,310 --> 00:29:27,110
anyone going okay this is what the
market wants right now let's go

768
00:29:27,110 --> 00:29:29,870
build that i mean first i'll say
it's a tricky question because

769
00:29:29,870 --> 00:29:32,050
what are buyers buying well
they're buying what's available

770
00:29:32,050 --> 00:29:33,870
and remember i said that
developers control supply so it's

771
00:29:33,870 --> 00:29:36,930
a tough thing because what's
available is what's left over so

772
00:29:36,930 --> 00:29:38,530
there's very few projects
launching so there's not really

773
00:29:34,810 --> 00:29:37,430
anyone going okay this is what the
market wants right now let's go

774
00:29:37,430 --> 00:29:41,060
build that If anything, it's like
I got to get rid of these things.

775
00:29:41,060 --> 00:29:43,600
So most of the sales happening now
are existing inventory that guys

776
00:29:43,600 --> 00:29:46,640
are trying to unload other than
like I said, like the kind of low

777
00:29:46,640 --> 00:29:48,760
density towns, which You know,
it's the same products it's always

778
00:29:48,760 --> 00:29:49,080
been.

779
00:29:49,080 --> 00:29:50,260
And townhouses are usually small

780
00:29:50,260 --> 00:29:51,620
families or people who want to
have families.

781
00:29:51,620 --> 00:29:54,500
You need a few bedrooms, like it's
the same kind of product.

782
00:29:54,500 --> 00:29:57,220
So that stuff just moves and it's
whether you can hit the right

783
00:29:57,220 --> 00:29:57,720
price point.

784
00:29:57,720 --> 00:29:59,940
But other than that, it's really

785
00:29:59,940 --> 00:30:01,840
hard to say because, you know,
you're dealing with whatever's

786
00:30:01,840 --> 00:30:02,340
left over.

787
00:30:02,340 --> 00:30:07,500
And so when I look at the system

788
00:30:07,500 --> 00:30:09,380
at what the sales are,
predominantly it's skewed two

789
00:30:09,380 --> 00:30:10,380
bedroom because that's what's
left.

790
00:30:10,780 --> 00:30:12,960
And I mean, that's interesting
topic as well is there's lots of

791
00:30:12,960 --> 00:30:14,840
discussion around like, oh, we've
got way too many one bedrooms.

792
00:30:14,840 --> 00:30:16,500
These, you know, matchbox in the
sky, we shouldn't.

793
00:30:16,500 --> 00:30:18,680
And I think that's what people
sound like, right?

794
00:30:18,680 --> 00:30:19,620
When they get all weird like that.

795
00:30:19,620 --> 00:30:21,380
I sound like that.

796
00:30:21,380 --> 00:30:21,740
Yeah, exactly.

797
00:30:21,740 --> 00:30:23,400
But the reality is like the

798
00:30:23,400 --> 00:30:24,940
majority of the unsold stuff is
not that.

799
00:30:24,940 --> 00:30:27,160
Like that was the stuff they could
sell.

800
00:30:27,160 --> 00:30:29,560
So the stuff that couldn't and,
you know, never mind on resale

801
00:30:29,840 --> 00:30:32,060
what happens once they have to try
to resell that thing.

802
00:30:32,060 --> 00:30:35,140
But from a new home standpoint,
that's inventory is all gone.

803
00:30:35,140 --> 00:30:37,680
The inventory that's left is all
the big stuff.

804
00:30:37,680 --> 00:30:40,060
And it's not flying off the shelf
because everybody wants a two

805
00:30:40,060 --> 00:30:41,180
bedroom or a three bedroom.

806
00:30:41,180 --> 00:30:42,020
No, they don't.

807
00:30:42,020 --> 00:30:43,840
They just don't.

808
00:30:43,840 --> 00:30:44,820
We know that, right?

809
00:30:44,820 --> 00:30:48,500
There's a small number of people
that want to live in a two or

810
00:30:48,500 --> 00:30:50,980
three bedroom condo, right?
Most people in Canada are still

811
00:30:51,180 --> 00:30:51,980
chasing that single family dream.

812
00:30:51,980 --> 00:30:53,780
And so they'll go townhouse or,

813
00:30:53,800 --> 00:30:57,100
you know, further out into the
burps to try to get it.

814
00:30:57,100 --> 00:31:01,660
And so There is that misnomer is
that like most of what's available

815
00:31:01,660 --> 00:31:03,000
is bigger stuff.

816
00:31:03,000 --> 00:31:05,160
It's still hard to sell because

817
00:31:05,160 --> 00:31:10,680
not a ton of people are dying to
live downtown in a condo or live

818
00:31:10,680 --> 00:31:14,280
in the burbs in a condo for that
matter.

819
00:31:14,280 --> 00:31:15,880
So that's kind of the deal.

820
00:31:15,880 --> 00:31:17,520
To piggyback on that before we

821
00:31:17,520 --> 00:30:57,140
jump into some other stuff, other
stuff, what are your predictions

822
00:30:57,140 --> 00:31:01,000
for like 2026, 2027?
Like when do you think the

823
00:31:01,000 --> 00:31:03,700
market's going to start to gain
some momentum again?

824
00:31:03,700 --> 00:31:07,100
Sadly, I wish I had better news.

825
00:31:07,100 --> 00:31:09,920
I think we're going to be more of

826
00:31:09,920 --> 00:31:11,740
the same for a while.

827
00:31:11,740 --> 00:31:15,040
You know, I do think with that

828
00:31:15,040 --> 00:31:19,330
last rate cut, I don't know if you
guys saw on the floor, but I feel

829
00:31:19,570 --> 00:31:20,270
like that helped for sure.

830
00:31:20,270 --> 00:31:21,390
That did change some things for

831
00:31:21,390 --> 00:31:21,970
some people.

832
00:31:21,970 --> 00:31:24,970
I think we're also going to see a

833
00:31:24,970 --> 00:31:27,710
whole bunch of people who were
sitting on mortgages that are

834
00:31:27,850 --> 00:31:30,620
coming up for renewal and that's
going to change their whole game

835
00:31:30,620 --> 00:31:31,700
plan over the next year.

836
00:31:31,700 --> 00:31:34,460
That's going to be a big shift.

837
00:31:34,460 --> 00:31:35,740
So we might see some people like,
well.

838
00:31:35,740 --> 00:31:39,440
Might as well like get out of what
I have because I'm going to have

839
00:31:39,440 --> 00:31:40,440
to start fresh anyhow.

840
00:31:40,440 --> 00:31:41,720
And so you might see some movement

841
00:31:41,720 --> 00:31:43,020
there with some upsizing.

842
00:31:43,020 --> 00:31:44,060
It's actually a really good time

843
00:31:44,060 --> 00:31:47,260
to upsize because that thing
you're moving into is going to be

844
00:31:47,260 --> 00:31:48,800
suppressed more than likely the
thing that you're already in just

845
00:31:48,800 --> 00:31:50,740
by the law of numbers of
percentages.

846
00:31:50,740 --> 00:31:53,660
So I think we might see some of
that.

847
00:31:53,720 --> 00:31:55,980
So I think we'll see a little bit
of health.

848
00:31:55,980 --> 00:31:59,400
But on the presale side, I don't
see anything changing enough that

849
00:31:59,500 --> 00:32:01,820
a developer can start a project.

850
00:32:01,820 --> 00:32:03,380
in the next 12 months any easier

851
00:32:03,380 --> 00:32:04,080
than they can now.

852
00:32:04,180 --> 00:32:04,960
Let's say there's some crystal

853
00:32:04,960 --> 00:32:07,940
ball that somebody's going to make
this maneuver and it's going to

854
00:32:07,940 --> 00:32:08,820
have an impact.

855
00:32:08,820 --> 00:32:11,260
You know, we're still going to

856
00:32:11,260 --> 00:32:14,400
take a bunch of time to work
through the cycles.

857
00:32:14,400 --> 00:32:18,100
And so many of these projects have
been shelled for so long.

858
00:32:18,100 --> 00:32:21,120
Like, let's say tomorrow I can
make it happen.

859
00:32:21,120 --> 00:32:24,420
Well, I'm probably going to go and
review those floor plans and be

860
00:32:25,420 --> 00:32:26,300
like, OK.

861
00:32:26,300 --> 00:32:27,040
what works today?

862
00:32:27,420 --> 00:32:29,180
Is this really what we should be
doing?

863
00:32:29,180 --> 00:32:31,720
And then you're gonna have
changes.

864
00:32:31,720 --> 00:32:35,500
So I don't think over the next 12
months, we're going to see much

865
00:32:35,500 --> 00:32:36,420
change at all.

866
00:32:36,420 --> 00:32:38,720
To be honest, I think what will

867
00:32:38,880 --> 00:32:40,560
happen is we'll create a better
place for maybe 2027.

868
00:32:40,560 --> 00:32:45,640
And a lot of that inventory is
going to get cleaned up.

869
00:32:45,640 --> 00:32:47,400
And we'll be out of the way.

870
00:32:47,400 --> 00:32:50,060
So if the numbers did start to

871
00:32:50,060 --> 00:32:53,340
make sense to launch something and
there was a market to sell it in,

872
00:32:53,340 --> 00:32:56,680
then people might be willing to
launch in 2027.

873
00:32:56,680 --> 00:32:57,380
That's interesting.

874
00:32:57,380 --> 00:33:00,160
Do you think 2026 will be a time

875
00:33:00,160 --> 00:33:02,160
to sell all the buildings that I
just can't sell?

876
00:33:02,160 --> 00:33:02,340
Totally.

877
00:33:02,340 --> 00:33:03,640
I haven't looked at a stat

878
00:33:03,640 --> 00:33:05,800
recently to know exactly when all
these rental buildings are all

879
00:33:05,800 --> 00:33:05,940
finishing.

880
00:33:05,940 --> 00:33:07,900
That's the next problem we're

881
00:33:07,900 --> 00:33:11,280
going to see is, you know, anyone
who's got a rental right now, they

882
00:33:11,280 --> 00:33:13,440
know how hard it is to rent it up.

883
00:33:13,440 --> 00:33:16,000
and so we didn't scratch the

884
00:33:16,000 --> 00:33:18,180
surface of what's coming right
because over the last four years

885
00:33:18,180 --> 00:33:20,760
when everything died the only
stuff that was going was stuff

886
00:33:20,760 --> 00:33:23,320
that was subsidized and was going
to be rental and you know most of

887
00:33:23,400 --> 00:33:26,760
those buildings the rent roll was
way higher than what's real And so

888
00:33:26,760 --> 00:33:28,560
now we're seeing how hard it is to
rent those up.

889
00:33:28,560 --> 00:33:32,660
So if you pour a bunch of supply
on top of that, like we're going

890
00:33:32,660 --> 00:33:35,300
to have a rental supply issue over
the next couple of years before we

891
00:33:35,300 --> 00:33:37,660
get back to a condo scenario
again.

892
00:33:37,660 --> 00:33:41,400
Yeah, I think we're seeing that in
Kelowna right now for sure.

893
00:33:41,400 --> 00:33:43,000
And it's just going to keep going
that direction.

894
00:33:43,000 --> 00:33:44,440
Way a bit more company in Kelowna
too.

895
00:33:44,440 --> 00:33:44,680
Yeah.

896
00:33:44,680 --> 00:33:47,010
Asking for a friend, what would

897
00:33:47,010 --> 00:33:48,950
you... buy right now like it
sounds like the market's flat it's

898
00:33:48,950 --> 00:33:52,330
going to be flat for the next year
and a half but you're you know

899
00:33:52,330 --> 00:33:54,870
potentially optimistic of you know
midterm future especially with

900
00:33:54,870 --> 00:33:56,770
baby boomer kind of transitioning
some wealth.

901
00:33:56,770 --> 00:33:56,990
Yeah.

902
00:33:56,990 --> 00:33:59,250
Where do you see any opportunities

903
00:33:59,250 --> 00:34:02,350
like for either a homeowner?
Like, yeah, you said looking to

904
00:34:02,350 --> 00:34:03,370
upsize or investor geographically
and product.

905
00:34:03,370 --> 00:34:04,230
Great question.

906
00:34:04,630 --> 00:34:05,510
I'd say, again, given the

907
00:34:05,510 --> 00:34:07,170
continuum, there's a bunch of
scenarios that are playing out.

908
00:34:07,170 --> 00:34:08,670
I think right now I'm personally
looking to upsize.

909
00:34:08,670 --> 00:34:12,050
I'm like, this might be a really
good time for most of us.

910
00:34:12,050 --> 00:34:16,760
You know, the value of our home is
maybe down, but it's not too bad.

911
00:34:17,000 --> 00:34:20,020
And versus that thing that we
might step up into, that thing has

912
00:34:20,020 --> 00:34:21,719
come down more than.

913
00:34:21,719 --> 00:34:22,320
of thing we're in.

914
00:34:22,340 --> 00:34:25,159
So with rates as well coming down,
like, you know, you can get a

915
00:34:25,159 --> 00:34:25,900
decent mortgage nowadays.

916
00:34:25,920 --> 00:34:27,699
And I don't think anyone needs it

917
00:34:27,699 --> 00:34:31,199
to get back to, you know, two and
a half or sub 2%.

918
00:34:31,199 --> 00:34:33,920
Like, I think we're getting pretty
close to, you know, a point that's

919
00:34:33,920 --> 00:34:34,460
really nice.

920
00:34:34,460 --> 00:34:37,090
It's like, you know, not a bad

921
00:34:37,090 --> 00:34:37,190
number.

922
00:34:37,190 --> 00:34:38,590
So I think, you know, that kind of

923
00:34:38,590 --> 00:34:40,310
stuff's really great for an owner
-occupier.

924
00:34:40,310 --> 00:34:41,210
I can tell you investors are
circling.

925
00:34:41,210 --> 00:34:44,310
They've been circling for the last
year, you know, and what are they

926
00:34:44,330 --> 00:34:45,949
looking for?
They're looking for really...

927
00:34:45,949 --> 00:34:47,389
distressed assets for sure.

928
00:34:47,389 --> 00:34:50,230
There's a lot of still looking for

929
00:34:50,230 --> 00:34:51,270
blood in the streets and those
things exist.

930
00:34:51,270 --> 00:34:53,540
Again, like I say, Toronto is one
of those.

931
00:34:53,540 --> 00:34:56,380
There's a lot of people like
trying to do bulk sales and bulk

932
00:34:56,380 --> 00:35:00,220
buys in those markets for sure to
try to own a bunch of that and

933
00:35:00,220 --> 00:35:00,920
just rent it out.

934
00:35:00,920 --> 00:35:02,760
So, you know, those are

935
00:35:02,760 --> 00:35:02,860
opportunities.

936
00:35:02,860 --> 00:35:04,920
The other opportunities are

937
00:35:04,920 --> 00:35:06,960
developers getting to the end of
their road.

938
00:35:06,960 --> 00:35:11,900
Some of them might really need to
sell something and really need to

939
00:35:11,900 --> 00:35:13,360
give it away for a really good
deal.

940
00:35:13,360 --> 00:35:16,700
So I believe there are some pre
-sale deals out there for sure.

941
00:35:16,700 --> 00:35:18,920
Anyone who's interested in
something new that's either

942
00:35:18,920 --> 00:35:21,180
finished or close to completion, I
think those are go for sure.

943
00:35:21,180 --> 00:35:25,360
Just based on developers want to
get out and they want those things

944
00:35:25,360 --> 00:35:25,680
gone.

945
00:35:25,680 --> 00:35:27,280
So if you can stomach a bigger

946
00:35:27,280 --> 00:35:31,220
unit, which is probably what it'll
be, then you could do really well.

947
00:35:31,220 --> 00:35:35,140
One thing I should tell you data
-wise, it's surprising how little

948
00:35:35,140 --> 00:35:35,860
prices have fallen.

949
00:35:35,860 --> 00:35:38,120
I don't want to say prices have

950
00:35:38,120 --> 00:35:42,160
fallen across the board because
there's lots of markets where

951
00:35:42,160 --> 00:35:42,860
prices are way up.

952
00:35:42,860 --> 00:35:44,220
And again, it's just a function of

953
00:35:44,220 --> 00:35:44,820
that cost side.

954
00:35:44,820 --> 00:35:46,860
Like the replacement value of a

955
00:35:46,860 --> 00:35:47,220
home is humongous.

956
00:35:47,220 --> 00:35:49,540
So that raised the floor to what

957
00:35:49,540 --> 00:35:50,620
it's going to drop to.

958
00:35:50,620 --> 00:35:53,100
And so I think the places where

959
00:35:53,100 --> 00:35:55,240
things where people are like, oh,
it's way off.

960
00:35:55,240 --> 00:35:57,540
Well, it's way off from some
stupid number that somebody got

961
00:35:57,540 --> 00:35:58,560
during COVID for sure.

962
00:35:58,720 --> 00:35:59,640
But anything like any real number,

963
00:35:59,640 --> 00:36:03,920
prices are really not that far off
for the most part.

964
00:36:03,980 --> 00:36:05,760
And in fact, in a lot of cases,
they're up.

965
00:36:05,760 --> 00:36:06,020
Yeah.

966
00:36:06,020 --> 00:36:07,120
And I mean, I think we spoke to

967
00:36:07,120 --> 00:36:07,400
Brandon Hugginson.

968
00:36:07,400 --> 00:36:09,420
a long time ago about this but

969
00:36:09,420 --> 00:36:12,920
historically like canadians have
so much equity built into their

970
00:36:12,920 --> 00:36:15,850
homes and you know especially with
the appreciation it's had over the

971
00:36:15,850 --> 00:36:19,250
last few years like if you're to
tell someone their home value is

972
00:36:19,250 --> 00:36:23,710
decreased they're going to really
oppose that opinion and you know

973
00:36:23,710 --> 00:36:26,950
they're likely not going to sell
So it's not like people are fire

974
00:36:26,950 --> 00:36:30,190
selling these things because in
our minds we have this, well, this

975
00:36:30,350 --> 00:36:33,570
is, this is what the value is and
I've got a ton of equity and I'm

976
00:36:33,650 --> 00:36:34,930
not willing to just throw it away.

977
00:36:34,930 --> 00:36:36,030
Who owns the most inventory?

978
00:36:36,030 --> 00:36:38,950
What I was saying before, the baby
boomer.

979
00:36:38,950 --> 00:36:43,110
Baby boomers own most of it and
most of its clear title are pretty

980
00:36:43,110 --> 00:36:45,710
darn close and they don't want to
leave.

981
00:36:45,710 --> 00:36:47,370
Like there's some stat, I wish I
had it handy.

982
00:36:47,370 --> 00:36:51,390
I don't, but there is a stat about
the number of seniors who live in

983
00:36:51,390 --> 00:36:54,470
a single family home and it's way
higher than you think.

984
00:36:54,590 --> 00:36:55,590
It's something like.

985
00:36:55,590 --> 00:36:57,630
30 % of seniors actually believe

986
00:36:57,750 --> 00:36:58,770
their single family home.

987
00:36:58,770 --> 00:37:00,110
So most of them aren't leaving.

988
00:37:00,110 --> 00:37:00,650
They're staying there.

989
00:37:00,870 --> 00:37:02,250
And again, that's the other part

990
00:37:02,250 --> 00:37:04,130
is like when your home's
appreciated and it's now, let's

991
00:37:04,250 --> 00:37:07,290
say it's worth 1 .5 million bucks
just for easy numbers.

992
00:37:07,290 --> 00:37:09,970
And you paid a hundred thousand or
something stupid for it.

993
00:37:09,970 --> 00:37:13,850
And you're like, okay, if I sell
this thing, I'm going to lose a

994
00:37:13,850 --> 00:37:16,210
hundred grand in closing costs,
just like between realtors and

995
00:37:16,210 --> 00:37:16,710
moving.

996
00:37:16,710 --> 00:37:18,350
Well, I'll just stay here forever.

997
00:37:18,470 --> 00:37:20,310
Like you just won't make sense of
that.

998
00:37:20,310 --> 00:37:21,970
So I think that's a big part of
it.

999
00:37:21,970 --> 00:37:23,630
Funny too, like there are buyers.

1000
00:37:23,630 --> 00:37:24,730
I know I've experienced that.

1001
00:37:24,730 --> 00:37:28,070
Like if you try to fire yourself
right now, like there's a buyer

1002
00:37:28,330 --> 00:37:30,350
there that's just going to stop it
at some point.

1003
00:37:30,350 --> 00:37:31,290
Yeah, totally.

1004
00:37:31,290 --> 00:37:31,710
That's it.

1005
00:37:31,710 --> 00:37:34,570
There's enough deal shoppers where
if you get sharp on your price,

1006
00:37:34,570 --> 00:37:36,570
enough deal shoppers where if you
get sharp on your price, it's

1007
00:37:36,570 --> 00:37:36,710
gone.

1008
00:37:36,710 --> 00:37:37,890
Like there's still multiple offers

1009
00:37:37,890 --> 00:37:38,110
happening.

1010
00:37:38,110 --> 00:37:39,670
You guys have this, right?

1011
00:37:39,670 --> 00:37:42,700
Yesterday, multiple offer, full
price offer, regular offer lost.

1012
00:37:42,700 --> 00:37:45,020
There wasn't that much buyer sale.

1013
00:37:45,020 --> 00:37:46,920
So like there are enough buyers to

1014
00:37:46,920 --> 00:37:48,900
make sure that doesn't happen.

1015
00:37:48,900 --> 00:37:50,740
The bottom is definitely not

1016
00:37:50,740 --> 00:37:51,300
falling out.

1017
00:37:51,300 --> 00:37:54,220
We're kind of at the sweet spot

1018
00:37:54,220 --> 00:37:56,340
now where there's, you know, there
are enough people on the sidelines

1019
00:37:56,340 --> 00:37:57,660
waiting to buy.

1020
00:37:57,660 --> 00:37:58,480
interest rates have come down

1021
00:37:58,480 --> 00:38:02,260
confidence is kind of back it's
just like you know a lot of the

1022
00:38:02,260 --> 00:38:04,860
subject to sales are still kind of
lingering but it's a fairly

1023
00:38:04,860 --> 00:38:07,240
balanced you know transaction
where we have like hey two week

1024
00:38:07,240 --> 00:38:09,480
for subject removal like
everyone's kind of comfortable

1025
00:38:09,480 --> 00:38:15,290
yeah like you said the next year
is going to be a bit flat but

1026
00:38:15,290 --> 00:38:18,250
after that might be some some
opportunity for growth totally

1027
00:38:18,250 --> 00:38:21,670
well yeah thanks for coming on man
i really appreciate the time and

1028
00:38:21,670 --> 00:38:24,510
like honestly i thought it was
probably going to be a little more

1029
00:38:24,510 --> 00:38:28,430
doom and gloom just like where
stats are coming from especially

1030
00:38:28,430 --> 00:38:32,530
on the pre -sale side but I loved
your take on everything.

1031
00:38:32,530 --> 00:38:33,870
So yeah, I really appreciated your
time.

1032
00:38:33,870 --> 00:38:34,410
Yeah, no worries.

1033
00:38:34,410 --> 00:38:35,510
I mean, it is not good.

1034
00:38:35,690 --> 00:38:36,470
There's not a lot of stuff
happening.

1035
00:38:36,470 --> 00:38:36,930
We need launches.

1036
00:38:36,930 --> 00:38:39,530
We need to get back to the pace of

1037
00:38:39,530 --> 00:38:40,370
launches.

1038
00:38:40,370 --> 00:38:41,830
That's the single biggest thing.

1039
00:38:41,830 --> 00:38:46,070
And we all know we've had a lot of
friends who are changing jobs

1040
00:38:46,070 --> 00:38:46,410
because of it.

1041
00:38:46,410 --> 00:38:48,530
So our industry really could use a

1042
00:38:48,530 --> 00:38:49,390
leg up for sure.

1043
00:38:49,390 --> 00:38:52,030
I don't know if we could get much

1044
00:38:52,030 --> 00:38:55,680
worse, but I just see this kind of
staying around for a while and

1045
00:38:55,680 --> 00:38:57,180
we'll have to figure out how to.

1046
00:38:57,180 --> 00:38:58,920
how to be successful moving

1047
00:38:58,920 --> 00:39:00,080
forward, right?
How to use innovation.

1048
00:39:00,080 --> 00:39:02,280
We've got all the tools and we've
got so many ways in our industry

1049
00:39:02,280 --> 00:39:03,400
to cut costs and be more
efficient.

1050
00:39:03,400 --> 00:39:06,020
One thing I will say just to close
off is, you know, on the

1051
00:39:06,020 --> 00:39:09,300
technology side, somebody said to
me once, I thought it was so

1052
00:39:09,300 --> 00:39:09,760
smart.

1053
00:39:09,760 --> 00:39:11,400
They said, you know, it took 20

1054
00:39:11,400 --> 00:39:14,660
years to go from a hammer to a
nail gun in this business.

1055
00:39:14,660 --> 00:39:16,600
And I see every day on the
technology side, we're using so

1056
00:39:16,600 --> 00:39:18,900
little of the technology that's
out there.

1057
00:39:18,900 --> 00:39:21,840
And, you know, with AI and all
these things, like our industry

1058
00:39:21,840 --> 00:39:22,560
has a huge opportunity.

1059
00:39:22,560 --> 00:39:24,640
to start leveraging technology in

1060
00:39:24,640 --> 00:39:26,620
a meaningful way.

1061
00:39:26,620 --> 00:39:29,000
And you could save so much money

1062
00:39:29,000 --> 00:39:31,620
and efficiency if we could just
change our ways.

1063
00:39:31,740 --> 00:39:33,400
And in the past, the risk was too
great.

1064
00:39:33,400 --> 00:39:36,000
So we just don't adopt technology
like every other industry.

1065
00:39:36,000 --> 00:39:38,960
But if we did, that's a huge
opportunity for sure.

1066
00:39:38,960 --> 00:39:39,700
Good point.

1067
00:39:39,700 --> 00:39:40,000
Okay, Ben.

1068
00:39:40,000 --> 00:39:41,640
Well, yeah, thanks for your time.

1069
00:39:41,680 --> 00:39:43,000
And we'll look forward to having

1070
00:39:43,000 --> 00:39:46,280
you back on soon and enjoy the
storms in Tofino and surfing then.

1071
00:39:46,280 --> 00:39:46,760
Awesome.

1072
00:39:46,880 --> 00:39:47,200
Thanks, guys.