What drove real estate to record highs in 2022, and what is the outlook from here? For answers, clients and friends of Cumberland were recently treated to a fascinating presentation by Steve Tabrizi, Chief Operating Officer and partner at the RE/MAX Hallmark Group of Companies.

Tabrizi has a truly unique perspective on Canadian housing, with nearly three decades of real estate investment experience, and as a driving force behind the largest independent RE/MAX operation in the world, with over 1,800 agents working out of 78 offices. The last time he visited Cumberland, in 2019, he delivered remarks that proved remarkably prescient.

Among those remarks was the idea that, as Toronto becomes the “New York City of Canada,” the affordability picture may change permanently, meaning not everybody will be able to attain home ownership in the city, as is already the case in Manhattan and many European cities too.

However, during the pandemic, a confluence of factors came to bear: interest rates so low that money was essentially “free,” and a window of time when many had more mobility due to working from home and more disposable income from curtailed travel and discretionary spending, plus COVID stimulus.

The result was a burst in real estate activity as younger buyers in particular seized what many saw as a once-in-a-lifetime opportunity to purchase homes – some in the city, many pushed by rising prices to a 100km radius of the city, and a surprising amount even extending themselves to buy cottages.

Where we stand now

Today, on the other side of pandemic lock-downs and with interest rates suddenly much higher, media headlines are crowing about the potential for a “historic real estate correction,” but Tabrizi warns against such hyperbole.

Yes, some prices are down year to date, but most regions are still up versus 2021, and any prudent analysis should consider at least a three-year time window. Tabrizi provided further data demonstrating that the current market favours neither buyers nor sellers, and is balanced in terms of the amount of available inventory and the number of sales versus the number of listings.

Looking forward, Tabrizi touched on a few key trends at play:

Interest rates
“If the Bank of Canada pushes interest rates above the neutral zone (estimated at 3-4% based on given historical levels), it will cause a recession. Housing affordability issues will persist either way, because high prices and high interest rates both reduce affordability.”

Inflation
“Inflation pressure really took off in March, and we will probably go for a 15-month cycle, meaning by next September we will see inflation probably sitting at in and around 4-4.5%. This should set the stage for further engagement of the market.”

Investors
“Investors, defined as Canadians who own more than one property, mostly resident in Canada but not exclusively) own more than a third of homes built after 2016. They own 1-in-5 homes overall, and 1-in-3 new homes. These multi-property owners are growing and are closely monitoring the shift of the market saying that ‘In February I was paying for the downtown detached home in Riverdale $1.5 or $1.7 million and now I can buy it for $1.2 million.’ So a number of them are doubling down and actually increasing their investments. Some expect to do so later.

Tabrizi sees a strong employment picture, growing immigration, and a Canadian economy with significantly less housing units per capita than any G7 country. In other words, despite some short-term uncertainty, the fundamental supply/demand picture remains favorable for real estate over any reasonable period of time.

Over the course of the presentation, Tabrizi shared so many interesting stories and noteworthy data points, it’s difficult to capture them all.

If you’d like to learn more, please contact us so we can share a variety of the information he provided us. Thanks Steve!

Generations of investors have trusted Cumberland Private Wealth for highly individual portfolio advice and investment management. However, there are many situations where our automated Portfolio Advisor Tool (PAT) might be better suited to your needs.

Cumberland PAT gives you access to the same investment expertise as our Private Clients, except in a digital form available at a minimum account size of $50,000 with human support when you need it.

Here are some of the ways our clients are utilizing Cumberland PAT:

Smaller accounts. You may be a Private Wealth client with a smaller account to manage, such as a TFSA, education savings plan or other registered account. PAT brings an efficient solution.

Building wealth. You may be rapidly building your wealth, but not be quite ready for significant Private Wealth advisory services. PAT is a great bridge to get there.

Family ties. You may be the child or grandchild of a Private Wealth client and may be seeking to establish your own relationship with Cumberland. PAT is a perfect starting point.

Digital preference. You may want access to the track record of our investment team and simply prefer a digital investment experience. If so, welcome aboard.

Planners and advisors. You may be a financial professional who wants access to our investment skill for your clients. PAT can be a powerful complement to your practice.

Workplaces. You may run a workplace savings program and want a professional, higher tier of investment expertise for your people. PAT works very well at work!

Cumberland PAT is a digital-first way to access the same investment management expertise that has guided our Private Clients through decades of bubbles, recessions and pandemics. Whatever the future may bring, PAT is a terrific way to position your investments right now.

Simply click here to schedule a 30-minute chat to learn more.

On May 2, Cumberland Private Wealth completed the previously announced merger with Perron & Partners. So, how did two successful independent firms separated by 2,100 miles decide to join forces and Go Far Together? Let me tell you.

Both firms have a lot in common. To start with, both were founded by entrepreneurial industry veterans. Both firms were employee-owned with no affiliations to any financial organizations. Both had strong values and believed deeply in the client experience.

This article appeared in the Spring 2018 issue of our newsletter, “Interest Gained”. To read the full newsletter, please click here.

As many Canadians are aware, the Department of Finance has made major changes to the taxation of shareholders effective for 2018. What used to be known as “kiddie tax” is now referred to as “tax on split income” or “TOSI” and it can potentially apply to almost anyone with residency ties to Canada. The budget also introduced new rules for corporations earning passive income, which will become effective in 2019. As a result, incorporated professionals are more restricted in their tax planning, leading some to ask: “Is it still worth it”? The classic tax-planning answer, of course, is “it depends”. This article explains some of the recent tax law changes, and considers some situations where professional corporations (“PCs”) may still offer tax and financial planning benefits.

This article appeared in the Spring 2018 issue of our newsletter, “Interest Gained”. To read the full newsletter, please click here.

Toronto (ON) – May 2, 2018 Cumberland Partners Limited (CPL, parent company of Cumberland Private Wealth Management Inc. and Cumberland Investment Counsel Inc.), Norrep Investment Management Group Inc. (NCM – Norrep Capital Management), and Perron & Partners Wealth Management Corp. and Perron Asset Management Inc. (Perron & Partners) and their related entities announced today the successful closing of the merger announced on February 5, 2018.

Our new partners at Perron & Partners have been recognized by Advisory HQ for their “independence, combined with expert solutions for retirement, risk management, investments, and family wealth management”. By joining forces with Perron & Partners, we now bring greater resources, more opportunities and investment talent together.

We’re honoured that Advisory HQ has recognized our “Expert Portfolio Construction Process and Experienced Team who act as fiduciaries” and named Cumberland among the Top 11 Best Financial Advisors in Toronto with whom to partner in 2018.

In a recent interview with the Globe and Mail, Cumberland Private Wealth Portfolio Manager and author, John Budd unveils a charitable option for dealing with insurance policies that are no longer necessary. Is this an option for you? Learn more in the article here.

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As part of the National Post’s Money Management Feature, Cumberland’s Global Portfolio Manager, Sukyong Yang sat down to talk about the importance and benefit of diversifying your portfolio to include global investments

Cumberland Partner and Client Portfolio Manager, Barbara Stewart, releases new research: How Women are Getting Started in Investing.

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New Report Unveils How Women are Getting Started in Investing

Canadian portfolio manager and researcher on women and money Barbara Stewart releases original research about women learning to invest

TORONTO, March 8, 2014 /CNW/ – New research has found that women learn to invest in order to gain control over their lives, and they invest in what they personally believe in.  According to a new white paper, part of the Rich Thinking series of global studies, Getting Started: advice, ideas and stories from smart women on learning to invest, by CFA® charterholder Barbara Stewart, women are very good at learning how to invest, but it is often outside traditional equity markets.

These findings, released today to coincide with International Women’s Day, are the result of in-depth interviews that were conducted throughout 2013 with 50 diverse and accomplished women living around the world—from Toronto to Tel Aviv, from Singapore toStockholm, and from Paris to Istanbul.  The study builds on Ms. Stewart’s previous white papers of 2011, 2012 and 2013.

“The most important finding of this year’s Rich Thinking study was that when women think about investing, they refuse to restrict that to equity markets only,” says Barbara Stewart, Portfolio Manager at Cumberland Private Wealth Management Inc. “They are looking to take control and become financially independent, but they prefer to invest in what they understand and are passionate about.”

“Getting more women to invest in equity markets is a sound goal for policymakers, educators, and financial institutions. But that isn’t about putting pink covers on mutual fund reports: this year’s white paper looks at the deeper ways in which women can be encouraged to get started investing. The alternative is not an option: doing nothing with their money is the highest risk behaviour of all.”

For a copy of the full white paper, please go to www.barbarastewart.ca.

Methodology
Throughout 2013, Barbara Stewart conducted 50 in-depth interviews with women around the world. Interviewees varied by age, cultural background and geographic location, although all were relatively successful in their lives, careers, or both.

About Barbara Stewart
Barbara Stewart is a CFA® charterholder specializing in Financial Counseling and Portfolio Management. She has extensive experience in global capital markets and has been advising high net worth individuals and families for 18 years. Barbara is a shareholder of Cumberland Partners Limited – the parent company of Cumberland Private Wealth Management Inc. in Toronto, Canada. She writes a bi-weekly column and is frequently quoted in the media on the topic of women and finance. She speaks internationally (most recently to 3,000 investors in Stockholm) and she creates educational events on the topic she is passionate about – financial literacy. To find out more about Barbara’s research or her work as a portfolio manager, visit www.barbarastewart.ca.

SOURCE: Barbara Stewart

For further information:

Barbara Stewart, Portfolio Manager
Cumberland Private Wealth Management
416-413-4216 or barbaras@cpwm.ca