Daniel Foch on Canada’s housing market

On this week’s episode of Free Lunch by The Peak, we sat down with Daniel Foch, co-host of the Canadian Real Estate Investor podcast, to talk about the future of the housing market.

What do you think is the big story of the housing market heading into 2024?

“The big story is what happens with interest rates. Interest rates alone are what people are following when it comes to determining the health of the market. How does that materialize?”

If the economy achieves a “soft landing,” what will be the impact on real estate?  

“The challenge is that Canada’s household indebtedness is so high. Instead of sobering up after the financial crisis in 2008 like the U.S., we just kept piling on debt. So no matter what the rate is, people need to deleverage before the economy can grow, from my perspective.”

High interest rates have made renting more attractive. What does that mean?

“It points to Canada becoming a renter’s economy, which is something that I have felt was going to happen for a while. You're seeing incentives to build multiplex housing and a huge decline in homeownership: The economics of it don't work, and the economics of rent do.”

As a real estate investor yourself, how do you feel going into 2024?

“I’m pretty careful right now, and I have the luxury of time. Sellers are the ones who have urgency right now, not buyers. So you can shop around, look for good deals, and negotiate. I’m sharpening my own tool set and teaching a lot of investors how to do this stuff right now.”

This interview has been edited for clarity and length. Listen to the full conversation here.