Canadian Realestate Magazine forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Ontario will outline plans next week to deal with rising home prices

Notify me of new replies via email
Canadian Realestate Magazine | 09 Nov 2016, 09:43 AM Agree 0
Ontario will take steps next week to deal with rising house prices in the Toronto area, but it will not follow British Columbia's lead and impose a tax on foreign buyers
  • Ian Hocking | 09 Nov 2016, 12:12 PM Agree 0
    Although I fully appreciate the difficulties of the first time buyer (I have two children who will soon be looking to purchase homes for the first time) it seems to be counterintuitive to just make it easier for first time buyers to buy, when you have the govt. imposing rules requiring people with less than 20% down to qualify for a five-year posted rate. One would offset the other to some degree. The issue of rising house prices is not a first-time buyer only problem. The overriding issue is that credit is too cheap and interest rates make saving money in a traditional sense a total waste of time. The world as a whole is chasing yield, and when you can't get yield and you see real estate increasing 5, 10 or 20% a year it's easy to see why it's perceived as being a better investment. In the true sense of the word, 'Investment' is not buying something and hoping that it goes up in value with no cash flow to support the purchase, that would be called speculation. In our local City (Barrie) we are seeing people purchase homes, leave them vacant and try to re-sell them 6-9 months later, and I hate to say it but this year that strategy has paid off very well indeed. However, an investment is something that pays you, not something that creates an outflow of cash. Buying a house, any house, creates negative cashflow, (Land transfer tax, repairs, taxes, heat,hydro, etc) so it's important to understand that what is happening is simply two main subjects. 1. The World population (Not just Canadians) are seeking some form of 'safe' place to put money in a relatively stable political environment. Canada benefits from being a relatively stable political country and hence not just foreign investment but large amount of immigration creating a demand for housing in the two main immigration drop off points (Toronto and Vancouver) 2. The world is looking for yield. It's time to use the big stick, raise interest rates, even by 50 bp, send a message. By raising interest rates you make savings accounts slightly more attractive and you make mortgages more expensive, thus discouraging speculation. Having one facet of govt helping first-time buyers while another disadvantages buyers with less than 20% down by making them qualify at a higher rate is just a merry go round. You can fine tune the symantics of what is happening but until you raise interest rates all you may do is delay or slightly change what is happening, but you won't stop it.
    • Philip Hollett | 12 Nov 2016, 11:34 AM Agree 0
      Love your overview Ian, I guess the issue with raising the interest rate is it affects our entire economy which isn't growing at a high enough rate without raising interest rates. I am a realtor and like the policy of at least stress testing at a higher rate for when it does happen and forces people that should probably save a little more to do so.
  • Nagesh | 10 Nov 2016, 08:33 PM Agree 0

    Dear Sir/Ma

    We have direct providers of Fresh Cut BG, SBLC and MTN which are specifically for lease. Our bank instrument can be engaged in PPP Trading, Discounting, Signature Project(s) such as Aviation, Agriculture, Petroleum, Telecommunication, Construction of Dams, Bridges, Real Estate and all kind of projects.

    Nagesh Sudar Raj Belur
    For further inquiries:
    Name: Nagesh Sudar Raj Belur
    Skype ID: naraj.bgmandate

    All inquires to Mr. Nagesh Sudar Raj Belur should include the following minimum information so I can quickly address your needs:

    Complete contact information:
    What exactly do you need?
    How long do you need it for?
    Are you a principal borrower or a broker?
Post a reply