New Mortgage Rules Will Affect the Canadian Housing Market

New Mortgage Rules Will Affect the Canadian Housing Market

I’m not going to write about the new mortgage rules, but you can read about them right here. So Go read them and come back.

Now that you are up to speed here is what will happen in the short and long term.

The market in the next few weeks is going to go crazy, I mean until the rules officially set in, people are going to try to buy something right away that cannot qualify under the new rules.

Like Vancouver the market is also going to drop a little bit. The reason being, the new rules are going to turn investors, foreign investors, and people who live here that invest off for a while until they can figure out the new rules and see what effect it has on the market.

The new rules affect the people who really don’t have 20% down and can afford a higher priced house. So what will this mean. Cheaper houses are going to be more sought after as well as townhouses, condos that are more affordable. Rentals will be going up as well.

The next major rules that will affect the foreign buyers that are using the tax loop holes to get away with not paying capital gains, so this will deter those buyers as well.

The thing about these new rules is that it will not affect the investors who live in Canada, who have money, who do not rely on these rules, and these loop holes. There are a lot of buyers who already have more than 20% or can get the funds necessary. Its a simple phone call to mommy and daddy who have a line of credit on their house and can lend off of that other property. So these rules will not affect those people and will make the world a more secure place in that sense.

So will these rules affect the housing market? Definitely these new rules will have huge ramifications in the market and the prices will even itself out a bit, and in other areas that are hot, they will not. This will also spurn a hot market in the lower echelon of prices for houses. Here is the thing about predictions, just when everybody thinks the market is going to get lower, nothing happens and the prices climb higher the next year. So nobody really knows.

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Will Toronto Prices Get Insane with Vancouver’s 15% Foreign Sales Tax?

Will Toronto Prices Get Insane with Vancouver’s 15% Foreign Sales Tax?

Unless you’ve been under a rock for the past few months, you will know that Vancouver has introduced a 15% Sales Tax to foreign investors buying property. There are so many things I can talk about regarding this development. I see this as another quick money grab for the government and corruption among politicians, but I’m going to save my rant for another day.

The question investors and home owners in Toronto want to know is, what will this do to prices in Toronto?

So here goes my predictions for what will transpire over the next few months in Canada.

1. Prices will drop dramatically for a few months in Vancouver, then finally rebound after a few more months.

2. Toronto Prices will go up significantly more in the coming months that this tax is introduced.

3. Toronto will copy this model of tax to cool the market here after a 6-12 period. First they will wait to see what this experiment will do to the Vancouver market.

4. This is already happening, but investors will drop their deposits and investments because of the tax.

5. Vancouver will drop the tax to a more reasonable rate after a while of stunted growth.

While I believe that the tax will hurt the Vancouver market, investors will start to find loop holes after a while and this tax will not be a big deal, like the Toronto Land Transfer tax.

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No Area Is Safe From Bidding Wars

No Area Is Safe From Bidding Wars

Bidding wars for the past few years have been exclusive to Toronto and some hot neighbourhoods in the GTA. Well if you’ve been looking for a house lately in Ontario, you will know that it is crazy out there.

I personally have been inching further and further away with my clients because prices have been getting higher and higher.

The reasons why we have bidding wars are simple, and is a perfect storm for a sellers market.

1. Interest Rates: Interest rates have been low and steady

2. Demand: There has been a steady demand

3. Low Inventory: There is not enough inventory for the amount of buyers out there

4. Employment: Unemployment has been low.

5. Foreign investment: American & Chinese investment has been high.

After all these factors the main thing that I’m seeing is that a person sells their house on a street, another home owner realizes that for a little bit more they can move up to a bigger house, and now everybody is thinking this, and thus starts the demand.

Since the closer you get to Toronto the prices are astronomical, the prices in and around the GTA are growing due to all these factors and everybody is looking to move up in the world.

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Your Information May Be Public Soon

Your Information May Be Public Soon

It is not clear what or how information will be distributed in the future, but one thing that is going to be true soon, your information is going to be public soon. 

 
A ruling has been passed that the Toronto Real Estate board practices are anti-competitive with regards to information regarding properties. 
 
The most “Valuable Information” that people want is sold information. That is what is going to be public most likely. Whether or not owners names, or more information is going to be released is yet to be seen.
 
Before any of this happens, TREB, will be appealing the decision. TREB’s stance is that your information being released will be a violation of the public trust. 
 
So what does this mean for the future of Real Estate?
 
Well this will dramatically change the landscape of how Real Estate is sold. It will change how the model currently exists, and everybody will have the same information. So will this kill the Real Estate Agent?
 
My answer is no, for some, and yes for others. I have long held the notion since websites and information has become more widely available, that Real Estate agents are not just statistics. I believe those agents were, are and going to be a dying breed. While the information they give is valuable, the job is so much more, that stats, and sold info is an afterthought now. 
 
If you look to our neighbours to the south, the public currently have all the information they want. So what has this done to their market? It hasn’t changed much, and in most cases, the clients are much more informed. 
What it has done has sprung up a lot of data mining companies that gather your information, and sell it to Realtors or to the public to neatly organize everything for you. 
 
There is also a curiosity of CREA only wanting to make available the Toronto Real Estate board information. While this is very curious, I do not understand why one board would be targeted amount thousands across Canada. It may be the competition tribunal does not have the funds to attack every board, and that by attacking the biggest one, it may think that the others would voluntarily submit to the same fate as TREB. 
 
So my predictions are that many people are not going to want their privacy violated and that some rich people will revolt and file lawsuits. The next thing I can see is the MLS system becoming obsolete, and the big real estate companies joining a data sharing among themselves. The next thing I think we will see as long as the market is hot, is a lot of pocket and private exclusive listings. Finally I see a lot of transactions being done by numbered company. 
 
Either way get prepared for your neighbour to know everything and anything regarding the house you just bought and all of the other investments you might have. 

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Buying a House is a Split Second Decision Now

Buying a House is a Split Second Decision Now

If you have been looking for a house in this market, you will certainly know that buying a house now is a split second decision. Long gone are the days of waiting it out, and seeing what else comes up on the market and thinking about putting an offer. Chances are if you do, you already lost the house to the next person looking at the property.

Buying a house is one of the biggest decisions you can make, and while, I do not downplay that fact, the simple truth is that there is just simply not enough inventory out there. Surely in the coming months there might be a lot more houses on the market when the whether heats up but for now, it is go time for buyers.

So what does it mean to buy a house with no time at all to weight the pros and cons for days at a time? It means going to see a property as soon as it comes out, and for me as an agent, having my iPad and paperwork ready to put an offer on this house. In some cases, if they are accepting offers next week, we must try to bully the offer date or make our offer better than waiting for next week for the sellers, and possibly walking away from this house. It means no financing clauses, and no home inspections. It means even with that getting into a bidding war on the first day a house is released. It means putting an offer in, higher than the listing price. (Disclaimer, there are ways around getting a financing clause, and home inspection in, and still removing the clause. Contact me directly for my strategy)

Unfortunately this is the result of too many buyers, low interest rate, and not enough inventory. If you do not jump on the house, then if you delay, the house in most cases will be gone, or you will be in multiple offers right away. Sometimes the early bird gets the worm.

So there are a few things you as a buyer can do to make this decision a bit easier and move the thought process faster.

1. Have a list of criteria that you want for the house.
2. List the possible renovations that need to be done.
3. Price out things that must be renovated now.
4. Find out how much you might get for your house.
5. Get a Walk through home inspection.
6. Get a Pre Approval for your financing.
7. Set up a strategy for each house you enter.
8. Figure out how much you really want this out.
9. Figure out how much you really want to pay for this house you are looking at.
10. As Soon as you go through the house, do you see yourself living in this house for 5-10 years?

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No Land Transfer Tax

No Land Transfer Tax

People outside of Toronto can breath a sigh of relief. There will be no municipal land transfer tax added to the already ridiculous provincial land transfer tax already in effect.

Municipal Affairs Minister Ted McMeekin announced the Liberal government would not allow towns and cities to impose their own land transfer tax on top of the province’s. He said that “No One Was Asking for a Municipal Land transfer tax”.

This is great news for territory outside of Toronto because it has been claimed the municipal land transfer tax has already cost Toronto up to $2.3 billion in lost economic activity and 15,000 jobs, but there are no indications it has cooled down the city’s real estate market.

“We are currently reviewing that feedback and can tell you there has been no call, at all, for a municipal land transfer tax, nor is there any legislation before the house that would allow this,” he said. “Let me be clear: there will be no extension of the ability to have a land transfer tax to any municipality (outside Toronto).”

OREA the Ontario Real Estate Association said that this was a “huge win” for people who dream of buying Real Estate.

Although many sources have said that this is the end, it is hard to say whether or not those millions of easy cash grab dollars will not be up for debate again.

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read more

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read more

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read more

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read more

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