The five- and 10-year averages for price growth in newer downtown Toronto condos is 15% and 8%, respectively. GTA-wide, the 10-year average is also 8%.
The proposed change to the federal mortgage guidelines that would reduce the stress test requirement for borrowers could adversely affect the credit risk of Canada’s big banks.
That’s according to Fitch Ratings which says that the lower threshold for lending along with the potential for further interest rate cuts amid concerns of economic slowdown, could spark activity in the housing market and raise the overall risk for lenders.
Currently, the stress tests require that home buyers demonstrate their ability to afford a mortgage at a benchmark rate based on the "posted" median of 5-year fixed rates at large banks, which is roughly 5.19%, or 250bps (basis points) higher than current market rates.
The proposed stress test would replace this posted rate with a more market-based benchmark, plus a buffer of 200bps, or approximately 4.8% based on current rates.
Fitch warns that if borrowers take on larger mortgages and, while the change to the B-20 mortgage guideline alone will not “significantly increase borrower purchasing power” it could ignite the market – especially in Toronto – supporting the current surge in prices.
Along with other household debt levels, the risk to the banks’ credit losses would come from an escalating of household debt coupled with an economic downturn.
News of a fixed rate increase might inspire consumers driven by fear of being priced out of the market in Canada.
Even before COVID-19 moved us all to work from home, reevaluations of office space were already underway, but not nearly to the extent they are now.
This consultant and real estate investor said that a third of new construction properties built every year in Ontario have legitimate claims for reimbursement, but they aren't taken advantage of.
New condos going up on King St. E. and Berkeley St. by Lamb Development Corp will be 32-storeys and the new Ontario Line subway route station.
Condominium sales in the City of Toronto surged by 63.2% year-over-year in February to 2,167, according to the latest data from the Toronto Regional Real Estate Board.
According to GTA-based Seth Ferguson, CEO of Multifamily Real Estate Investments Inc., Texas has arguably the most propitious horizon in the Sun Belt.
In 2020 alone, this commercial real estate team did over $60 million in commercial sales in Toronto.
Craig Proctor, top Canadian real estate agent and coach, offers advice on how to dominate during these crazy real estate times. Join his Millionaire Agent-Maker SuperConference March 19-21.
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