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CategoryReal Estate Trends

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?”

Mortgage Brief.. Mortgages rules explained… and why didn’t the govt consult experts?

Bill Morneautrudeau

They say we don’t read emails or articles anymore.. we just skim through them.   But some things can’t be understood with a quick glance.  The new mortgage rules will impact EVERYONE!

If you want to understand how they impact you, continue reading… If you don’t care or want to be oblivious, take the blue pill and move on.

I’ve put together a list of the mortgage rules so that you can understand what they mean and how they will impact you.   Hey, let’s give The Federal govt some credit… they’ve been transparent about a few things, right?:

  • They want house prices to drop.
  • They don’t want anyone to have a mortgage if their home is worth more than $1,000,000.
  • They don’t want you to ever refinance your mortgage.  You should only require a mortgage when you buy a house.
  • They don’t want you to buy a house and rent it out.  You should only buy a rental property if it has 2 or more units.
  • Mortgages should not be amortized for longer than 25 years.
  • They want rates to go way up.

Here’s the official update from our Department of Finance.

Here we go.. Forget the data and stats being reported today.  Those stats don’t matter!  We want to see the stats after March 30th, 2017.

Remember the mortgage rule changes of October 17th?  How about the ones on November 30th?  Get ready, we won’t see the full effect of these changes until after March 30th 2017.

That’s when the last of the mortgage approvals will have closed, that were done under the old rules. And all the new mortgage closings beyond this date, will have had to been qualified with the new rules.  This is when we’ll begin to see the impact of these rules… And we’ll begin to see just how many Canadians will be have been impacted.

If you think I’m wrong, read the rule changes below and tell me what other conclusions you can come up with. Continue reading “Mortgage Brief.. Mortgages rules explained… and why didn’t the govt consult experts?”

Mortgage brief.. CMHC ‘red warning’.. what’s it mean?

red-warningMuch has been made about CMHC’s Economists ‘Red Warning’ that was put out for the 4th quarter of 2016.  Let’s take a look at what the report actually says.

CMHC’s economists have 3 categories of measurement that are of concern.  Overheating, Price acceleration and Overvaluation.

VANCOUVER AND TORONTO

The Vancouver market had already been identified by CMHC as having moderate Overheating and Price Acceleration and Strong Overvaluation.    Toronto now has the same issues with the same Overall Assessment of Strong evidence of problematic conditions.

Put another way, CMHC believes the Toronto and Vancouver housing markets are vulnerable.   While this is cause for concern, there was also some other info in the report that we should be probably not overlook… Continue reading “Mortgage brief.. CMHC ‘red warning’.. what’s it mean?”

Mortgage Brief…BC’s 15% Foreign property tax coming to Toronto?

BC waterfrontAnd it begins in Vancouver… the long-awaited, little debated foreign property tax is about to begin.

Foreigners wanting to buy in Vancouver will need to add 15% to the purchase price..  Put another way, this adds $150,000 to the purchase price of a $1,000,000 property.

The new tax begins August 2nd.   The provincial BC govt says they want to ensure that home ownership remains within the reach of the middle class.  And if it doesn’t then, they say, it has created a new revenue stream.

MY THOUGHTS… Continue reading “Mortgage Brief…BC’s 15% Foreign property tax coming to Toronto?”

Today is your last chance to stop DOUBLING of Land Transfer Tax.

kathleen wynneAs this is such an important issue, I’m gonna repeat my last article.  Today is the last day to voice your opinion to our Provincial govt and tell them how you feel about the possibility of DOUBLING your Land Transfer Tax.     The govt is accepting all opinions until today.

The Minister of Municipal Affairs and Housing is Ted McMeekin… You can email his office through Mark Cripps at  Mark.Cripps@ontario.ca and by phone at 416 585 6842.

In case you don’t know what Land Transfer Tax is… the province charges a tax to the purchaser, every time a home is sold.  Yup, another cash grab.  It’s kinda like when you buy a new car… when you buy it, you are charged sales tax (today, that’s 13%… remember when it was 7% and 8%?  seeing a pattern here anyone?).   And when you sell that car, the sales tax is levied once again to the new purchaser…when they sell it, the new purchaser must pay this sales tax again… and so on, and so on.    But why?  Why should a sales tax be charged over and over again?   Can anyone explain this?

If you buy a house, and sell in 2 or 3 or 10 yrs, the govt charges this Land Transfer Tax.  It’s ridiculous and it’s not a fair system of levying a charge..   Yet, it’s something that has been accepted as the norm.

In Toronto, the mayor couldn’t balance the budget so he seeked special powers from the Province to introduce a Toronto Land Transfer Tax in 2008.  Yup, they just created a new tax out of thin air and slammed all property buyers with a double tax..   Nice, eh?

Look, if you are as upset with this as I am, then take 2 mins and send an email to the govt.   It’s one thing to bring into a major city like Toronto, but to bring into all communities across the province would be disastrous.   Not all of Ontario is experiencing prosperity.  This is shameful.  I don’t like making strong statements like that.  But I can’t help myself.

Stand up Ontarians!  Have your say.

Your best interest is my only interest.   I reply to all questions and I welcome your comments.  Like this article?  Share with a friend.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

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