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More data on foreign ownership would be a boon for the market - analyst

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Ephraim Vecina | 05 Dec 2016, 08:15 AM Agree 0
Data gaps need to be addressed to help Canadian governments devise more effective solutions to the affordability crisis, says an analyst
  • Curious Onlooker | 05 Dec 2016, 11:18 AM Agree 0
    IS CMHC tracking where investor money is coming from? Even if Canadian Nationals are buying property, are they using money that has been given to them on a directive from foreign investors?
    If investors are buying homes at $800,000 and renting them out for $2000/month, as they are in Newmarket, Ontario, by my calculation, they would need to have at least a 50% down payment to keep the monthly mortgage payment below $1800/month (Property Taxes + maintenance need to be factored in)...
    There is very little cash on cash return with downpayments as large as they are.... are they investing for price increases?
    I am having a hard time understanding why there are so many houses bought for rentals when the fundamentals of investing just don't seem to make sense, and I am wondering if there is a flood of cash coming in to remain safe in the Canadian Real Estate market, rather than in volatile international markets.

    Thoughts?
  • Scott | 07 Dec 2016, 09:00 AM Agree 0
    @ Curious Onlooker:

    "I am having a hard time understanding why there are so many houses bought for rentals when the fundamentals don't make sense"

    Think of the house as a bank account. If you have $500,000 or whatever sum, and you don't trust the stock market and the bank's pay .0001% interest or none, where else should you put your money? The house might actually increase in value. It could lose some value but I doubt a $500,000 house will plummet more than $50,000 to $100,000.

    Plus some people come from countries where the government just helps itself to their bank accounts. A little harder for the government to seize property that's in a foreign country.
  • Kris Kooblall | 14 Dec 2016, 02:50 PM Agree 0
    Canada's Housing Crisis here in Toronto & Vancouver

    Respectfully, the Federal Government of Canada has mandated CMHC, Canada Mortgage and Housing Corporation to understudy the effect of foreign buyers on Canada's residential real estate market and this is their finding.

    This finding is completely invalidated by the significant and quantifiable effect of what transpired in the Vancouver residential real estate market with the introduction of the 15% tax and the automatic and consequential "migration" of these foreign buyers on markets like Toronto.

    The evidence hits you like a ton of bricks here in Toronto and talk to realtors who understands the real estate market and one may understand how CMHC arrived at this estranged conclusion.

    How, in heaven's name, can one look forward to the CMHC 2017 Spring Report?

    This conclusion simply defies a rational look at this housing crisis.

    https://www.cmhc-schl.gc.ca/odpub/esub/68469/68469_2016_M11.pdf?fr=1481594056746

  • eacomposer | 01 Jan 2017, 06:47 AM Agree 0
    Foreign investment is the good thing in term to improve the final crisis of a country but it can ruin small businesses.
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