real estate..... is it true??
- Thread starter parisbeautiful222
- Start date
............it is dead for now, if you own property it will be worth something in the future.
True. I can't see values dropping by more than 30-40% and then recovery could be within 3-5 years if we go by the model during the financial crisis. This time U.S. prices will recover more quickly and Canadian values will take longer to recover. Canadians this time were caught further stretched and leveraged.
imo, house prices will remain stagnate (no change) in the '6' , if this bug recedes, we may see another increase this year
Is the opinion based on anything? If incomes are drastically reduced, and mortgages increasing with deferred payments. Many businesses are closing for good. Airbnb is decimated. Why would home prices in Toronto increase? Keep in mind prices dropped 2 years ago with just a small increase in mortgage rates.imo, house prices will remain stagnate (no change) in the '6' , if this bug recedes, we may see another increase this year
you're referring to two different things. i'm specifically referring to detached houses and not condos or airbnb rentals. supply is still tight and the gta is a world class city with plenty of buyers with money to absorb the market. mortgage rates have dropped since this pandemic and though house prices have decreased slightly the last 2 years, it has gone up slightly to almost break even
There a tons of detached houses being used as Airbnb rentals? I've stayed in a few myself that are no longer available today. How do you separate the two? Detached homes are owned by thousands of people who are being hurt by the shut down. Incomes are down. Hundreds of businesses are shutting down permanently. A good number of job losses will be permanent. Lower interest rates haven' changed fixed rate mortgages. Hence the name fixed rate. People have to make up deferred utility payments and property taxes later this year. Savings are being wiped out. Lease payments need to be made up. Sure there are people who can survive all of this, but expecting a bull market and higher prices in Toronto with 4-5 headwinds is pretty optimistic when all it took was 3 interest rate hikes 3 years ago and the market stalled completely and prices dropped.
All you say is true and bodes well for the long term, but markets go up and down, and with 4-5 pretty tough head wind in the face of all Real Estate markets make it hard to be bullish...very hard. Recency bias is one of the toughest things in to overcome with analysis, especially when things have indeed gone so well for so long and we fared so well during the financial crisis. I have no problem with my stocks going down and I don't have a problem with my property dropping in value temporarily. In fact I don't know why people want the cost of living to rise all the time????
All you say is true and bodes well for the long term, but markets go up and down, and with 4-5 pretty tough head wind in the face of all Real Estate markets make it hard to be bullish...very hard. Recency bias is one of the toughest things in to overcome with analysis, especially when things have indeed gone so well for so long and we fared so well during the financial crisis. I have no problem with my stocks going down and I don't have a problem with my property dropping in value temporarily. In fact I don't know why people want the cost of living to rise all the time????
house ownership is a true reflection of supply and new house builds is a true reflection for demand
i was making a point that fixed mortgage rates are at a historical lows. We had fixed 5yr rates as high as 21% in 1981, mid-range at 10.75% in ’95, and started dipping in ’02 from 8.75% to 3-4% today. Lower rates can drive up demand
the slight dip in 2018 with house prices, was due to the mortgage stress test to slow the increases in housing price
though I agree with you with the hard times ahead, real estate is about location, location and the supply-demand curve. technically, we are not doing bad under these conditions. imo
but who the fuck knows. shit could hit the fan and things can go south
The good news is that Canada’s second largest mortgage insurer, Genworth, is not changing their lending policy so this should provide some relief to those requiring high ratio mortgage insurance as previously announced by CMHC.
Previous CMHC announcement:
CMHC, Canada’s largest mortgage insurer for high ratio applications, is tightening their guidelines which will affect what individuals will be able to borrow. Currently if the main borrower has a beacon score of 680 and above, the GDS and TDS ratio maximums were 39% and 44%. As of July 1/2020, no matter what the beacon score is, the maximums are decreasing to 35% and 42%. As well, they previously had a minimum beacon score requirement of 600 for one of the borrowers, that had been increased to 680. Finally, down payment obtained through debt can no longer be used.
The good news is that they are keeping their 5% down payment product. In 2019, two out of three first time homebuyers required mortgage insurance. These changes may force buyers to come up with at least 20% down payment. This will definitely affect the housing market as those wanting to get into the housing market will find it more difficult. The other two mortgage insurers in Canada have not followed suit, yet.
Previous CMHC announcement:
CMHC, Canada’s largest mortgage insurer for high ratio applications, is tightening their guidelines which will affect what individuals will be able to borrow. Currently if the main borrower has a beacon score of 680 and above, the GDS and TDS ratio maximums were 39% and 44%. As of July 1/2020, no matter what the beacon score is, the maximums are decreasing to 35% and 42%. As well, they previously had a minimum beacon score requirement of 600 for one of the borrowers, that had been increased to 680. Finally, down payment obtained through debt can no longer be used.
The good news is that they are keeping their 5% down payment product. In 2019, two out of three first time homebuyers required mortgage insurance. These changes may force buyers to come up with at least 20% down payment. This will definitely affect the housing market as those wanting to get into the housing market will find it more difficult. The other two mortgage insurers in Canada have not followed suit, yet.
I'm kicking myself now for not investing in real estate earlier in my life. A couple of years ago my parents didn't have very good retirement funds so they were selling their house to use it's equity. I bought a house that they now rent from me. I renovated the house top to bottom... everything is new. I used half of their equity for a down payment. I only make like $75 dollars profit per month from the deal (which I put in a separate account to pay for future expenses that may occur) We've almost paid $25,000 off from the principle of the mortgage but the bigger bonus is the value of the house. We could easily sell it for $100,000 more than we purchased it for. 
This graph is so fucking scary considering wages haven't really increased the last 20 yearsyou're referring to two different things. i'm specifically referring to detached houses and not condos or airbnb rentals. supply is still tight and the gta is a world class city with plenty of buyers with money to absorb the market. mortgage rates have dropped since this pandemic and though house prices have decreased slightly the last 2 years, it has gone up slightly to almost break even
as long as there are drakes and beibs willing to pay the price, it will double again in the six
i say it s far more overvaled like detroit - however Canada is a lifeboat and everyone wants in - we are one of the last good coutries -europe is over india a terror china is over etc
Yup in total income my peak in the first decade of the 2000s was 189K and in the second decade I hit about 210K. Very marginal change in a space of about 18 years. 189K was a shitload then. While 210K is pretty good it is way less then 189K was back then. When I bought my house in 1997 it was 189K and I made 120K. Yes I kick myself for not buying a multiplex but at the time I did not know shit.
