There is a real problem in Vancouver and Toronto, and something needs to be done. Places going for 100k over list price, with no conditions, and then appraisals coming in lower than purchase price. Buyers then having to cover the difference as the lender lends on the lesser of PP vs appraisal.
The problem with these two markets is a problem for the rest of the country, as the Government tends to implement real estate policy cross Canada, when they really should have more local policies introduced.
Look at what just happened in New Zealand....minimum 20% down payment to buy a home, and 40% for a rental! I wouldn’t be surprised to see Canadian government step in and do something, though I don’t think it will be this drastic.
Couple other things I noticed when skimming through this thread:
- Stress test rate is currently 4.79%, or contract rate + 2% (whichever is higher). Average 5 year fixed right now is right around 2%
- Those that have rental properties they’re holding onto for a couple more years in hopes values will go up, but are subsidizing on monthly basis should look at converting mortgage to a HELOC. Significantly increase cash flow and no penalties to break a HELOC when you do end up selling. Great for tax purposes too
- I haven’t heard an updated stat, but as of December 2020, government subsidies (ie CERB) were around $1.3 trillion. Total job loss over that same timespan? $1.1 trillion. That means that on average, Canadians were better off during covid. Not to mention how many millions of households took advantage of mortgage deferrals even if they didn’t need it. Unsecured debt loads in many households is way down. Cabin fever way up
Haven’t seen this in Calgary in over 7 years, and that’s just fine with me.
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