 And here we go again, guys. The housing bubble is even bigger than a stock market bubble. I made a video about this a couple of days ago just talking about this. I don't know how many times I have to say this, but the whole notion that you can do exactly what your parents did by buying property back in the day is exactly what you should be doing today is ridiculous. Absolutely ridiculous. All data points to the opposite of your thesis that you shouldn't be buying a home. Listen, I'm not here to tell you don't buy real estate. There's a difference between being a real estate investor as an owning multifamily homes to generate cash flow versus you going in debt into a shoebox condo that doesn't generate cash, that you're on the hook for everything, that, oh, you pray to the real estate gods or the market that somehow your $600,000, 650 square foot condo will magically go 10x as your retirement basket in the future. I mean, it's not gonna go 10x. And why are you spending $600,000 and $600,000? This is ridiculous. Anyways, this is interesting. Stocks may be expensive based on historical measures, but it's nothing compared to the skyrocketing home values as Robert Schiller. So considering the case, Schiller National Home Price Index gained an excess of 6% per year on average since January 2012. While net rental incomes barely kept up with inflation, keep that in mind, increasing just 2% per year. The result is that home prices seem as overvalued as they did in spring 2005. One way to measure home valuation is with a cyclical adjusted price, so it's called Cape Ratio, developed by Yale University professor Robert Schiller. For stocks, a concept can be applied to a broad swath of assets by dividing the current price of an asset by the average annual inflation adjusted earnings prior 10 years, okay? The bad news is all previous history came at higher mortgage rates. The average 30-year fixed mortgage rate just fell below 3% for the first time in August 2020. See, this is the thing. We are in a situation now where the Fed can't even move mortgage rates, where we're talking about negative interest rates. Back in the day, even in Canada, 1989, 1990, 1991, we had double-rate mortgage rates and a lot of people lost their homes because they're over leveraged. And we're in a situation where you can't even move a couple of bips. They're talking about going backwards, negative interest rates. And so the economy's so delicate, what's happening with COVID and small businesses being decimated and people losing their earning potential that even if you move a couple of bips, you're gonna have full closures everywhere. And this is gonna start with commercial and go down to residential because everything's connected because we have a very fragile ecosystem where I would say fragile economy. And so here is the real estate fucking industry saying, ah, don't worry about it, don't worry about it. Just the other day I saw an ad on Twitter talking about the Toronto markets and saying I'll be getting to that in a second. You too can own a beautiful Queen Street West condo that's 650 square feet for only $600,000. What the fuck, man? You gotta be insane to buy that. Insane, like absolutely insane to buy that. I want you to take a look at this. This is from the Swiss Bank. They say, Toronto has the third biggest housing bubble in the world, no surprise over here. You can look at the hotspots on the East Coast, Toronto, Chicago, New York, West Coast, Vancouver, San Francisco, Los Angeles, around the world, obviously London's there, Hong Kong's number one. This is not a surprise to us, but what's more concerning, if you look at this chart, how many years it takes to pay off 650 square foot? In Hong Kong, it's 20 years based on their household income. In Toronto, it is roughly seven, I would say, I would even put it higher. I think that's being very generous here. I would say even up to 10 years to pay off 600 square foot home. That's insane. Think about it, 10 years of your life, all you're doing is paying off something that statistically is gonna decrease, statistically. Like, if you look at what's happening with household incomes, so this is some great data from Pew Society, so Pew Research, basically showing that middle income is decreasing, upper income is increasing, not a surprise. But even like, let's say even if middle income was increasing. Ever since 1971, if you guys haven't gone here, go to what the fuck happened in 1971. Your compensation has been going down. The value of your dollars been going down. This is crazy. Shares of gross domestic income compensation of employees paid wages and salaries. But basically what happened in 1971, it was the last straw of decoupling from gold into the petrol dollar. So nothing connecting the physical gold asset towards your dollar. And inflation hit very hard. The Fed has been printing inflation. Inflation is the worst form of tax because every year that little dollar you have, a little piece of it decreases by a couple of percentage. Next year, couple of percentage. And now with COVID and with the Fed printing trillions of dollars, it's not 2% anymore. We're talking about, because I had a video the other day talking about the CPI, Consumer Price Index, right? So it's not just the inflation of the dollar, it's inflation of the most important products increasing too. And in the CPI, if you look at Mazzo Hyker needs, it went into food and shelter, which was roughly around 2% to 3%. They had it per year, coupled out with 2% for your dollar, I would say even more. So every year, 4% to 5% of your dollar is disappearing. But yet they tell you, hey, hey, hey, hey, don't worry, don't worry at all. You take that money and you can put it in RRSP or 401K or you can be a schmuck and put it in a 650 square foot condo for 600K. I don't know about you, but in Toronto they have first home buyer rules. They're kind of loosening up, but in general it's 20%. So let's say it's like $600,000, two times six is 12. That means you need $120,000 down on that property. I don't know who's walking around with $120,000 liquid cash, not too many people. Anyways, let's say you get that, you put that down. Most people don't have that, so put 5% so they need mortgage insurance top of that. And so the minimum, you need a burn rate of like $4,500 a month to keep this little fucking shoebox. But if you look at the household income in Toronto, it's only about 65K, like you can do the math. Like you'd be crazy. And this is the thing people are sold to Schem just because our parents bought property. And remember, I made a video a couple of weeks ago showing that if you look at the real estate chart, real estate really didn't start taking off in value accruing until the dot com or after the dot com crash. Real estate for the longest time was flatline and couple of years was negative losing in value, but it's pretty much status quo for a very, very long time until the 90s when property value started increasing for many, many, many reasons. I won't get into this video. I made a video about that before. And so our parents, when you look at the ecosystem, dollar was much stronger specifically if your parents are older or great-grandparents like before 1971 where we at least had some pegging to the gold standard. So they had a much stronger dollar. Real estate market wasn't inflated. So you could, for example, in Toronto, 1970s, buy yourself a 3,000 square foot property on half an acre for 100K. You could. And you can definitely afford that on one person salary, 100%. We're not in the same environment as our parents. What's happening around the world with our economy, with the war on the fee at dollar? What's happening with attack on small businesses with COVID? Commercial properties or commercial rents are being decimated, malls are being decimated, bars are being decimated, restaurants are being decimated. You think this won't affect you? This affects everything. It's a cascading domino effect for the rest of the economy. And here, the real estate play, oh, yeah, yeah, yeah. Don't worry, don't worry. Go into debt 600,000 for your little fucking shoebox and be a slave for the rest of your life. Listen, guys, don't be sold a scam into that. If you really do want to invest in real estate, you got two options. One, you can be smart about and leave fucking major city. I've been saying for the last five years, leave the cities, especially if you can work remote. What benefits do they offer? Especially what benefits? There's no more restaurants, no more gyms. People are crazy, traffic's insane. What fucking benefit do you have you don't? Leave the city. You can find property three times, four times cheaper outside the city. In fact, a huge trend is happening called staycations because of COVID. So imagine you leave, for example, Toronto, where a shipbox houses a million dollars. You can go somewhere up like Polt Corburn or closer up to Muskoka or the Golden Horseshoe area if you guys are familiar with that. You can buy a house up there for $400,000. You put that $100,000 on the house, already one-third of it paid off. Your mortgage rate is really cheap and people are, like I mentioned, people are looking for staycation. You make a nice guest house or a nice bedroom in there and people are looking to escape during the winter for skiing, snowboarding, et cetera, or in the summertime to hit the lake to go to the beach. And it's cheaper for them than leaving the country and people are afraid to travel right now because of COVID. So now, you're not just getting a property for cheaper that has more value and a lot of space and much better lifestyle living as opposed to being stressed out in the city. You're also creating opportunity to create a cash-generating property seasonally depending to kind of pay into your mortgage to pay it off faster. So you guys got to really, you know, if you're in this position right now and you're thinking of buying a house and you're relying on your salary and you're spread this thing, you got to be insane to buy a house, especially in these markets. Like if you live in any of these cities, Toronto, Boston, New York, Los Angeles, Vancouver, this is insane. Like the data's here, guys. The bubble will happen and I'm waiting for it. If the market drops by 50% in Toronto and there's some good multi-family homes in there, oh, fuck, I'm waiting. I can't wait for that. Like, I'll leave it at that, guys. Don't be a schmuck. Don't go and get $600,000 for a fucking shoebox. Common sense. Peace out.