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Posted Mortgage News

Canadians bought more U.S. real estate than almost anyone else!

From April 2016 to March 2017 Canadians spent $19billion buying U.S. properties, according to the U.S. National Association of Realtors.

Put another way, Canada was only behind China for all foreign purchases of U.S. real estate in 2016.   That’s an incredible stat that deserves more attention.

And what’s not been talked about is where Canadians are getting the money to buy these U.S. properties.  It isn’t so easy for a Canadian to borrow money from US Bank.  So, instead, Canadians are borrowing in Canada by refinancing the mortgage on their house, or getting a secured line of credit.  This is called leveraging.  Borrowing to invest isn’t a bad thing.  Most Financial Planners and advisor promote this.

THE STATS SHOW WE CANADIANS ARE SAVVY INVESTORS

Yet, all we keep hearing about is how Canadians are borrowing and spending like foolish children. And that’s just not true.  Here’s some numbers from 2016 …

Continue reading “Canadians bought more U.S. real estate than almost anyone else!”

Posted 1 Comment on Housing market is active but will slow in summer as it ALWAYS does.. Mortgage News

Housing market is active but will slow in summer as it ALWAYS does..

Much has been written about the Canadian housing market.  Even more about greater Toronto and Vancouver.  The pessimists are waiting for a collapse.  The optimists are hoping the prices keep going up.  Then there’s the realists.  They would like to see the market slow and maybe even for prices to go down, so that we don’t have a housing bubble. Which one are you?

When it comes to the housing market, I’m a realist.

Every Spring, for the last 10+ years, the real estate market in Canada heats up.  Prices increase, they sell faster, and supply can’t keep up with demand. It’s become the norm.  In June, July and August, the market gets very quiet and prices go down.  That’s right, they actually go down.

This year was no different except for 2 things..  Supply was very low in January, February and March, causing selling prices to jump as much as 20% over last year in some markets.   Now, let’s look more closely.. Continue reading “Housing market is active but will slow in summer as it ALWAYS does..”

Posted 1 Comment on Toronto 15% Foreign tax, new Rent controls… it changes nothing! Mortgage News

Toronto 15% Foreign tax, new Rent controls… it changes nothing!

15% Foreign home buyers tax, not a big deal

Last year, Vancouver introduced a 15% foreign homebuyers tax.  I predicted it would come to Toronto after 6 months.

Today, Ontario’s govt has copied Vancouver by introducing a 15% foreign homebuyers tax.   The hope is this will discourage foreign investors from buying and speculating on the Toronto housing market (by the way, there is no data to prove that foreign investors are a factor or contributing to the red hot housing market).

Vancouver tried this last year. But what happened?  The amount of sales slowed, but just temporarily. And house prices didn’t really drop.  This year, Vancouver house values are up over 3% and climbing.   Continue reading “Toronto 15% Foreign tax, new Rent controls… it changes nothing!”

Posted 2 Comments on Housing bubble is coming… again? Mortgage News

Housing bubble is coming… again?

You’ve seen them before.. but they went silent for a few years.  I’m talking about the housing bears.  The pessimists that say house prices are too high and will crash.  A housing bubble.

Are they right?  Maybe.  But here’s the thing.  We’ve been hearing that house prices are too high for over a decade.  One of the more vocal pessimists is David Madani, Economist for Capital Economics.

HOUSING BUBBLE?

Madani was on BNN this past week saying we are in a ‘Full blown housing bubble’.   Hmmm, that sounds familiar.  Let me think… when did I hear that before?  Oh, that’s right, 2011.   He said, we could see house prices drop by 25% in 2011.  And he was completely wrong. (hope you didn’t listen to him). Continue reading “Housing bubble is coming… again?”

Posted 4 Comments on Panic buying? When will the housing market slow down? Rate forecast

Panic buying? When will the housing market slow down?

 

hot-housing-marketHouses selling over asking price is becoming the norm, these days.  Kinda crazy.  Sometimes a house is just listed under market value to attract a frenzy of buyers. An old tactic that has worked well in larger urban markets.  Today, that tactic is being used in smaller communities, too.

What’s unclear is if this selling tactic is contributing to houses selling for more than they’re worth.  And what is a home worth, anyway?   I always thought a house was worth what someone was willing to pay in the open market.  That’s still true in most cases, today.

When I see reports of houses selling for $100k, $200k and $300k over asking, it makes me wonder.  How long will this market last?  Will it crash?  And if so, when?   It’s hard to make forecasts and I can’t see into the future, but let’s examine this a little.

WHEN WILL THE HOUSING MARKET CRASH? Continue reading “Panic buying? When will the housing market slow down?”