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What It Is Like to Get Caught in Toronto's Housing Slump

By Patrick following x   2018 Apr 17, 3:22pm 670 views   15 comments   watch   sfw   quote     share    


https://www.bloomberg.com/news/articles/2018-04-12/what-it-was-like-to-get-caught-in-toronto-s-record-housing-slump

Toronto’s housing market has seen a stunning slowdown in the past year. Now one brokerage has cataloged the damage for 988 homeowners who got caught in the eye of the hurricane.

In the space of four months last year, the homeowners lost a collective C$135 million ($107 million) as the median house price slid 18 percent, a faster decline than any major market during the U.S. market crash, according to Realosophy Reality Inc.

The story goes like this: The median house price surged 30 percent from January to peak at C$765,000 in March, largely driven by investors who were pouring money into the market for quick returns, Realosophy said in a report. To tame the beast, the government instituted a series of regulations, including a foreign buyers tax, starting in April.


1   Hassan_Rouhani   ignore (2)   2018 Apr 17, 6:47pm   ↑ like (3)   ↓ dislike (0)   quote        

Now dirty Chinese money has nowhere to go but SFBA! Can't wait to finally get my hands on $3M I deserve for my shack!
2   APOCALYPSEFUCKisShostikovitch   ignore (30)   2018 Apr 18, 12:42am   ↑ like (4)   ↓ dislike (0)   quote        

Fake news.

Every house is worth 10x what the last buyer paid because law of physics.
3   Feux Follets   ignore (1)   2018 May 3, 2:46pm   ↑ like (0)   ↓ dislike (0)   quote        

Market freezes up at the top. Average price of detached house plunges C$175,000 in 12 months.

Home sales in the Greater Toronto Area (GTA), Canada’s largest housing market, and among the most inflated in the world, plunged 32% in April, compared to a year ago, to 7,792 homes, according to the Toronto Real Estate Board (TREB), a real estate lobbying group. The sales plunge affected all types of homes, even the once red-hot condos:

•Detached houses -38.4%

•Semi-detached houses -29.3%

•Townhouses -22.1%

•Condos -26.0%.

The sales slowdown was particularly harsh at the higher end: Sales of homes costing C$2 million or more collapsed by 64%. The market is freezing up at the top.

Prices follow volume. Both types of prices the TREB publishes – the average price and its proprietary MLS Home Price Index based on a “composite benchmark home” – fell from April last year. This is a confusing experience for the real estate industry, sellers, and buyers, since prices have ballooned for 18 years, interrupted by only one brief dip during the Financial Crisis, and the rule has been that prices will always go up and that you cannot lose money in real estate.

The average price in April for the Greater Toronto Area (GTA) plunged 12.3% year-over-year to C$804,584. A drop of C$113,600.

By market:

•In Toronto itself: -8.2% (-C$76,860) to C$865,817.

•In the rest of the GTA without Toronto: -15.2% (-C$137,070) to C$767,359.

Detached houses – which are generally more expensive than other home types – got hit the hardest:

•Detached houses -14.4% to C$1,030,103 (down by C$175,000)

•Semi-detached houses -6.4% to C$792,385

•Townhouses -7.8% to C$645,172

•Condos +3.2% to C$559,343

While Condo prices still gained 3.2%, that gain was down from a 6.1% gain in March, and down from double-digit gains earlier.

The average price was impacted by two factors, the TREB said: by “changes in market conditions,” and by the sales collapse at the higher end of the market, which changed the mix of sales, and therefore affected the average price.

The TREB’s proprietary Home Price Index, which is based on a “composite benchmark home,” and which “strips out” the impact of these changes in mix, “was down by only 5.2%” year-over-year.

The inventory of homes for sale surged 41% from a year ago, to 18,206 active listings.

At the rate of sales in April, this worked out to a supply of 2.3 months, up from 2.1 months in March.

The average days-on-the-market before the home is sold or before the listing is pulled without sale more than doubled to 20 days, up from 9 days in April last year.

More: https://wolfstreet.com/2018/05/03/toronto-house-price-bubble-bust-april-sales-prices/
4   mell   ignore (1)   2018 May 3, 7:58pm   ↑ like (0)   ↓ dislike (0)   quote        

Feux Follets says
Market freezes up at the top. Average price of detached house plunges C$175,000 in 12 months.

Home sales in the Greater Toronto Area (GTA), Canada’s largest housing market, and among the most inflated in the world, plunged 32% in April, compared to a year ago, to 7,792 homes, according to the Toronto Real Estate Board (TREB), a real estate lobbying group. The sales plunge affected all types of homes, even the once red-hot condos:

•Detached houses -38.4%

•Semi-detached houses -29.3%

•Townhouses -22.1%

•Condos -26.0%.

The sales slowdown was particularly harsh at the higher end: Sales of homes costing C$2 million or more collapsed by 64%. The market is freezing up at the top.

Prices follow volume. Both types of prices the TREB publishes – the average price and its proprietary MLS Home Price Index based on a “composite benchmark home” – fell from April last year. This is a confusing experience for the real estate industry, sellers, and buyer...


Yeah but that's because Canada does NOT possess a giant (taxpayer-funded) money bazooka like the US Fed.
5   APOCALYPSEFUCKisShostikovitch   ignore (30)   2018 May 3, 8:48pm   ↑ like (3)   ↓ dislike (0)   quote        

Canada is completely besides the point, because it is a COMMUNIST! country that hates wealth and, anyway, all the Canadians died because of national medical insurance.
6   Ceffer   ignore (1)   2018 May 3, 11:16pm   ↑ like (1)   ↓ dislike (0)   quote        

APOCALYPSEFUCKisShostikovitch says
Canada is completely besides the point, because it is a COMMUNIST! country that hates wealth and, anyway, all the Canadians died because of national medical insurance.



Chindian Billionaires are impervious to all manner of pestilence, and can survive the Canadian health care system and continue to invest. The outlook is good after this temporary little downturn.
7   APOCALYPSEFUCKisShostikovitch   ignore (30)   2018 May 4, 12:59am   ↑ like (3)   ↓ dislike (0)   quote        

They breed by the score and can survive on the bones and grissle of dead Canadians
8   rootvg   ignore (0)   2018 May 4, 1:37am   ↑ like (3)   ↓ dislike (0)   quote        

mell says
Feux Follets says
Market freezes up at the top. Average price of detached house plunges C$175,000 in 12 months.

Home sales in the Greater Toronto Area (GTA), Canada’s largest housing market, and among the most inflated in the world, plunged 32% in April, compared to a year ago, to 7,792 homes, according to the Toronto Real Estate Board (TREB), a real estate lobbying group. The sales plunge affected all types of homes, even the once red-hot condos:

•Detached houses -38.4%

•Semi-detached houses -29.3%

•Townhouses -22.1%

•Condos -26.0%.

The sales slowdown was particularly harsh at the higher end: Sales of homes costing C$2 million or more collapsed by 64%. The market is freezing up at the top.

Prices follow volume. Both types of prices the TREB publishes – the average price and its proprietary MLS Home Price Index based on a “composite benchmark home” – fell from April l...

No, it's because the Loonie isn't the world's reserve currency. That's what got the Canucks in trouble in the nineties when they had a currency event.

I was there earlier this year and can tell you there are many things they don't have that we take for granted. I ordered a hamburger one night and was served what looked like communion on a bun. It was twenty bucks. Paying for that welfare state has a way of burrowing itself into everything they do. I felt like a criminal going through customs at Pearson. I'm told the civil servants are under orders to rough up the Americans when they come through. They seem to despise us for having the lifestyle we have without so much taxation. I felt it right away.

I don't think it's the most stable place right now. The client I was visiting just let go all of the operations staff, replacing them with TCS. They're under pressure.
9   Feux Follets   ignore (1)   2018 May 6, 9:36am   ↑ like (0)   ↓ dislike (0)   quote        

Not sure if this got posted on here. This concerns the Canadian Housing Market.

Mortgage lenders sidestep rules with 'bundled' loans. Deals pair regulated lenders with unregulated partners to let borrowers assume more debt.

Canada's subprime mortgage providers are increasingly teaming up with unregulated rivals to sidestep rules designed to clamp down on risky lending.

The result of these partnerships are so-called bundled loans, which pair a primary mortgage with a second loan from unregulated groups called Mortgage Investment Corporations (MICs).

The arrangements have proliferated, mortgage brokers told Reuters, as regulators have tightened lending standards to shield borrowers in case a decade-long housing boom goes bust.

The practice has grown fast because it allows borrowers to make down payments of just 10 per cent, dodging federal rules that require either 20 or 35 per cent down on mortgages not backed by government insurance, according to industry experts. Packaging two loans together allows the regulated lender to skirt those rules.

The rise of bundling reflects declining affordability after a long run-up in home prices, and could present a danger of defaults should prices fall. Such high loan-to-value mortgages are common when housing markets are about to implode, said David Madani, an economist with Capital Economics who has long forecast a housing crash.

"This is what happens at the late stage of a housing bubble — the quality of lending goes down," he said.

Bundled loans, however, do not violate any laws, a spokeswoman for the Office of the Superintendent of Financial Institutions (OSFI) said in a statement. Primary lenders are expected to take the extra debt from a second loan into consideration when evaluating the borrower's ability to afford the primary mortgage.

In a statement, the Department of Finance said it was monitoring co-lending activity, which it said represented a small portion of the mortgage market. It declined to comment on whether the practice had increased as an unintended consequence of tighter lending rules introduced last year.

OSFI said bundled mortgages have existed for years and that it would revise its guidance as the market evolves.

More: http://www.cbc.ca/news/business/mortgage-lenders-bundled-debt-1.3930774
10   Hassan_Rouhani   ignore (2)   2018 May 6, 9:41am   ↑ like (2)   ↓ dislike (0)   quote        

rootvg says
I felt like a criminal going through customs at Pearson. I'm told the civil servants are under orders to rough up the Americans when they come through. They seem to despise us for having the lifestyle we have without so much taxation. I felt it right away.


Why didn't you tell them that you are from California and taxed as much as them?
11   HowdyThere   ignore (0)   2018 May 6, 7:05pm   ↑ like (1)   ↓ dislike (0)   quote        

The infestor class is strong in Canada. After Toronto got too expensive,they moved to the burbs (aka the GTA). When the GTA got too expensive, they moved throughout Southern Ontario. Now that Southern Ontario is peaking, they're moving to other parts of the country. They gotta flip, because they got nothing else.
12   TwoScoopsOfDragonEnergy   ignore (1)   2018 May 6, 7:23pm   ↑ like (1)   ↓ dislike (0)   quote        

Holy shit is Toronto expensive. I went to buy some snacks and it was like $12 for a tiny bag of Chips and a little box of Cough Drops. This was about 10 years ago.

You can't blame military spending for the taxes there.
13   Booger   ignore (0)   2018 May 6, 7:38pm   ↑ like (0)   ↓ dislike (0)   quote        

How is low end housing doing in Toronto?
14   Feux Follets   ignore (1)   2018 May 7, 6:38am   ↑ like (0)   ↓ dislike (0)   quote        

Bank of Canada: 8% of Canadian Households Owe More Than 20% of the $2.1 Trillion in Debt

Canadian real estate debt hit a new high, and the news gets worse as they explain it further. The Bank of Canada (BoC) updated household debt numbers for March. In a speech this week, BoC’s Governor Stephen Poloz also gave further insights on the numbers. The record debt levels are concentrated in a smaller segment of Canadians. These Canadians are now in a “highly vulnerable” position, and they’re f**ked if they don’t start preparing for higher rates now.

8% of Canadians Have Mortgage Debt Over 3.5x What They Make

In a speech this week, the BoC gave us further insights on the Canadian debt problem, and it’s worse than we thought. It turns out 8% of households have mortgage debt that’s more than 350% of their gross income.

This segment of borrower represents “a bit more than 20 percent of total household debt.” BoC Governor Poloz stressed that these households need to understand how “personally vulnerable” they are, as rates rise.

Rising rates are already putting the pinch on households, and it should get worse. The BoC reiterated the “neutral rate,” which is the rate where policy is no longer expansionary, is between 2.5% and 3.5%. Assuming no “shock” to the economy, rates will get there. Currently we’re at 1.25%, so that would mean rates will double over the next few years. You know, if we don’t face a major recession. Then you’re in the clear on rates, but a whole other bag of issues will crop up. On that note, onto those climbing debt numbers.

Canadian Households Owe More Than $2.1 Trillion Dollars

Total household debt hit a new record, but the annual pace of growth continued to decline. The total balance at the end of March stood at a whopping $2.129 trillion, up $3.4 billion from the month before. The annual rate of growth is now 5.25%. While it’s a new all-time high, it’s also the slowest pace of growth since November 2015. Let’s break this down into the two major components – mortgages, and consumer credit.

Canadians Owe Over $1.52 trillion Worth of Mortgage Debt

Outstanding residential mortgage credit is also at a new high. The total outstanding balance of residential mortgages hit $1.52 trillion, up $1.88 billion from the month before. That brings the annual rate of growth to 5.27%, the lowest since March 2015. The slowing rate of growth is being attributed to B-20 stress tests, and isn’t the good news people think it is.



More: https://wolfstreet.com/2018/05/05/bank-of-canada-8-of-canadian-households-owe-more-than-20-of-the-2-1-trillion-in-debt/
15   HEYYOU   ignore (13)   2018 May 7, 7:31am   ↑ like (0)   ↓ dislike (0)   quote        

Ceffer says
Chindian Billionaires are impervious to all manner of pestilence, and can survive the Canadian health care system and continue to invest. The outlook is good after this temporary little downturn.


I would like to thank all the Communist Americans that have made China a power house by buying their outsourced crap.




The Housing Trap
You're being set up to spend your life paying off a debt you don't need to take on, for a house that costs far more than it should. The conspirators are all around you, smiling to lure you in, carefully choosing their words and watching your reactions as they push your buttons, anxiously waiting for the moment when you sign the papers that will trap you and guarantee their payoff. Don't be just another victim of the housing market. Use this book to defend your freedom and defeat their schemes. You can win the game, but first you have to learn how to play it.
115 pages, $12.50

Kindle version available


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