Bleak

When Tom showed up to tell me an ice dam was causing the leak, he was not a happy dude.

My soggy drywall was not the cause. “The good news, it’ll go away. The bad news, there’s no fix, not without damaging more.”

He’s a general contractor with a roofing division and a reputation for restoring, rehabilitating and rescuing heritage buildings. His guys do custom millwork, plumbing, electrical, fencing, brickwork and everything else a town of wealthy people in trophy houses could want. At least, they did. When I first needed something done, and reached out, the wait was one year.

No more. He’s about to lay the last guys off.

“It’s been the worst year ever,” he told me. “Nobody is spending. They ask for quotes, then do nothing. Even the people with money are hanging on to it. Never in 25 years have I seen anything like this. My suppliers are dying, too. And I’m hearing about layoffs everywhere, but nothing’s making the news.”

Why?

“The uncertainty. People are just freaked out at what might be coming. Nobody wants to spend that cash.”

Then he said those two words. You know. Trump. Tariffs. “It’s all I hear them talking about.”

So the house on the corner has been for sale now for exactly a year. The owners got an offer the other day for 90% of list price, and signed it back at 100%. The deal fell through. They still think someone’s going to show up and give them $4 million for a place they paid $2.5 million for eighteen months ago. But the new wallpaper’s nice.

The ‘real’ economy – Tom’s in it – is on life support. Linamar is a mega car parts manufacturer whose boss says tariffs will decimate the auto industry. The company just put up for sale a brand new, yet-to-be-opened high-tech EV frame-making facility outside the GTA. Not a good sign.

Investment in Canada started to wane about a hundred days ago after the US presidential election dust settled. It dried up when the 25%-on-everything tariff was announced. That’s now on hold until next week. Meanwhile an equal new tax will hit our steel and aluminum in two weeks. That’s widely expected to cause a recession and increase unemployment. Few people want to risk capital on a place that may soon be whacked. Wait. Get it cheaper.

Same goes for the housing market.

Look at the massive disparity between listings and sales in almost all major markets. Sellers have been rushing to take advantage of what they hoped would be a last-gasp, lower-rate, FOMO-fuelled spring market, only to see now that it’s fizzling. In the GTA, for example, buyers have 20,000 choices. New listings have jumped 48% – the most in 16 years – and active listings have exploded. They’re running ahead of 2024 numbers by 70%, while sales have dropped 8%. Prices? Still going sideways, but trending lower with more “NEW PRICE’ stickers on signs than we’ve seen in ages.

Listings surge in most markets as buyers retreat

Source: RBC Economics

But the resale market looks positively giddy compared to what’s been happening with new builds. “Despite a further Bank of Canada cut, excessive inventory and falling prices… new home buyers are nowhere to be found,” says the industry.

Again, the GTA is ground zero. Last month sales flirted with record-lows, off 40% y/y and 77% below the ten-year average. Barely 100 new condos found buyers, close to a sixty per centdrop from last year and almost 90% lower than the long-term trend.

How bad is it?

Construction projects have shuttered. Workers sent home. There’s enough unsold inventory to last until the autumn of 2026. Over 16,900 new, available condos sit in inventory along with 4,600 single-family homes, for a total of 21,505 units.

Meanwhile Ontario is in the final days of an election campaign in which the premier is being pummeled for not having met goals for new-home construction. But, obviously, we have too many new homes. Just not ones people can afford.

New homes 20% lower than peak, but too high

Source: BILD

Thus, our new reality. The cost of housing has dropped. Choice has exploded. Interest rates have been cut repeatedly. Mortgages are 30% cheaper. Loan insurance is available on far more properties, meaning downpayment costs have crashed 60%. New buyers can now get lower payments with 30-year amortizations. And yet, the confidence is gone. So are investment bucks. And now the jobs.

One man did this.

About the picture: “I met this young puppy on my walk yesterday,” writes Jim. “She has to be one of the cutest dogs I have ever met. Owner tells me she is all of 6 months old and is driving all of the males absolutely crazy. I can see why.”

To be in touch or send a picture of your beast, email to ‘[email protected]’.

Source: https://www.greaterfool.ca/2025/02/23/bleak/