Real Estate

Locked: When will we know that TO/GTA real estate has bottomed?

  • Last Updated:
  • Mar 16th, 2018 10:50 am
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Jul 19, 2003
8137 posts
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licenced wrote: Whether pricing whether at or above market value, it won't change the sales prices. As my chart clearly shows you were incorrect in the post to which I replied. It's quite a stretch for you to see any alignment.

And so what if places are selling for under list? It is not uncommon during a balanced or buyers' market to list properties at or slightly above market value. That's how it was done before the market went berzerk as the underpricing is ironically the product of an overheated sellers market.

Maybe your real estate experience or knowledge does not go back beyond 2006 to know this.

Bungol? lol
Your chart actually shows that I was correct.

Smart buyers, and the real estate market is very smart, would lock in under the old rules back in November and December and then buy now while they had hoped there would be a crash. Your chart shows this. A dip pre-Jan, then spike.

We'll see who's right when the pre-approvals expire. Spring will always be better than Winter, but how will it be vs last Spring?
hi!
Banned
Feb 23, 2009
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Oshawa
GalvToronto wrote: Trolls always take phase from context. All I said is that banks keep 68+% of income in families, and families are free to spend it on anything but debt payments.
Try to convince me that 68% of income puts majority of people into foodbank queue.
Holy out of context...I never said anything about people have no money or are going to a food bank.
I posted YOUR quote. Read what YOU post.

"Banks don't allow to people to borrow money with monthly payments that exceed 32-35% now, before it was 40%. For most of them they take 32% not from actual income, but from kinda "income adjusted to risks". It can be income for last two years, while current year has a bigger income, or they count 50% of rental income, or dont count any contract income at all."

"kinda" income???!?!?
Wow.
All I can say is...Fake News.
Deal Addict
Jan 15, 2010
1629 posts
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Toronto
most pre-approvals have expired and the sub 750k market is still bonkers.
Deal Addict
Jan 17, 2006
2496 posts
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Toronto
masterhapposai wrote: Your chart actually shows that I was correct.

Smart buyers, and the real estate market is very smart, would lock in under the old rules back in November and December and then buy now while they had hoped there would be a crash. Your chart shows this. A dip pre-Jan, then spike.

We'll see who's right when the pre-approvals expire. Spring will always be better than Winter, but how will it be vs last Spring?
Yeah, there is always next month, don't be depressed. And if it does delight you to compare it MOM, compare it to last spring or compare to some arbitrary number that much higher than number of sales or prices, that will cheer you up.
Deal Addict
Mar 20, 2017
1370 posts
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pkrash wrote: Holy out of context...I never said anything about people have no money or are going to a food bank.
I posted YOUR quote. Read what YOU post.

"Banks don't allow to people to borrow money with monthly payments that exceed 32-35% now, before it was 40%. For most of them they take 32% not from actual income, but from kinda "income adjusted to risks". It can be income for last two years, while current year has a bigger income, or they count 50% of rental income, or dont count any contract income at all."

"kinda" income???!?!?
Wow.
All I can say is...Fake News.
If you never saw how lenders assess your income and say "I won't consider this part of your income at all", its your problem and lack of life experience.
So many things in this world that you haven't seen, all of them are fake news for u, poor kid:)

Ironically, "fake news" is the term from the right glossary. Welcome Doug Ford. Make Ontario Great Again! Kathleen for prison! muhahaha!
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Feb 23, 2009
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Oshawa
GalvToronto wrote: If you never saw how lenders assess your income and say "I won't consider this part of your income at all", its your problem and lack of life experience.
So many things in this world that you haven't seen, all of them are fake news for u, poor kid:)
I'm pretty old and have plenty of "life experience".
Own lots of RE and rentals.
Never had a bank say I have "kinda income".
Never had them "count 50% of rental income".
Never had them not count contract income.
Maybe for people with very bad credit and risk cases... They probably shouldn't be borrowing money then.
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Jan 17, 2006
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Toronto
pkrash wrote: I'm pretty old and have plenty of "life experience".
Own lots of RE and rentals.
Never had a bank say I have "kinda income".
Never had them "count 50% of rental income".
Never had them not count contract income.
Maybe for people with very bad credit and risk cases... They probably shouldn't be borrowing money then.
I remember when you modestly mentioned that you have rental in Durham.
Then later you called your RE income as making money off people who can't buy.
And look at you now ..
Own lots of RE and rentals.
. New Trump was born in Durham region, you even adopted his favorite fake news phrase.
But what about going to fill your car during the night and buy only with flyers, did owning lots of RE and rentals make you do that?
Deal Addict
Mar 20, 2017
1370 posts
1165 upvotes
pkrash wrote: I'm pretty old and have plenty of "life experience".
Own lots of RE and rentals.
Never had a bank say I have "kinda income".
Never had them "count 50% of rental income".
Never had them not count contract income.
Maybe for people with very bad credit and risk cases... They probably shouldn't be borrowing money then.
Fake news, kid. You've just confirmed that you are a liar.
http://www.moneysense.ca/spend/real-est ... roperties/
Rental offset rules

The lender will use 50% to 70% of the rental income
to offset the principle, interest and tax mortgage payments (PIT) you make on the property. So if your property earns you $2,000 per month, the lender will only account for $1,000 to $1,400 in income to offset the PIT payment. To see how this works, let’s assume PIT payments equal $1,425. Since you earn $2,000 in income, and the lender uses a 70% rental offset rule, you deduct $1,400 from the $1,425 PIT payment. The remaining $25 shortfall will be added to your debt—thereby increasing the debt portion of your total debt service ratio.
https://www.whichmortgage.ca/article/wh ... 23254.aspx
Rental income

If you have a secondary rental suite that nets – or could net? – you income, then a percentage of that income is allowed to be added and considered when qualifying you for a mortgage. This is only the case if the property is owner-occupied, there is only one rental unit, and if the unit is legal and conforms to local municipal standards. The annual principal, interest, property tax and heat for the property including the secondary suite may or may not have to be used when calculating the debt service ratios. Once again, it’s most beneficial if you have two years of rental history with the suite, so the lenders can see how much income to add. If that isn’t available for whatever reason, you can get an appraisal to estimate the market rent for the unit.

What’s interesting to note is that CMHC will use 100 per cent of rental income to be added and considered then looking at your mortgage applications, but most lenders will not.
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Mar 8, 2018
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pkrash wrote:
Never had them "count 50% of rental income".
I did.
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May 31, 2007
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GalvToronto wrote: You use old data and it causes wrong conclusions.
First of all, market was expecting 3 rate hikes when we had ridiculously high GDP growth up to 3.7-4.5% mid last year and all time low unemployment.
Things changed very fast. We now have miserable GDP growth and unexpectedly record high unemployment increase in january 2018.
Add here NAFTA concerns, housing cooling, bad foreign investment numbers and you can understand why everyone expected to get another rate hike last month, but then expectations changed. They are also in the process of changing for remaining of the year.
My guess, BoC already started to realize that more hikes are simply not possible, but general public hasn't yet discovered it yet. Will see.

Secondly, debt to income remained same in last quarter, even decreased slightly. It is a big warning sign for financial regulators and it is very different picture from fast HELOC borrowings throughout 2017. HELOC borrowings by the way was not caused by regular people who count each dime and struggle to pay their monthly payments. IT was caused by RE investors who got ridiculous equity growth and acquired more properties with huge discount.

People, by definition cannot struggle to pay monthly payments. Despite what they tell on polls, its far from truth. Banks don't allow to people to borrow money with monthly payments that exceed 32-35% now, before it was 40%. For most of them they take 32% not from actual income, but from kinda "income adjusted to risks". It can be income for last two years, while current year has a bigger income, or they count 50% of rental income, or dont count any contract income at all. All people have plenty of money available each month. But renewal under price decrease terms is definitely a risk, as you said. The only thing you forgot to mention is that on negative equity we have less than 1% of homeowners and all of them have full 4 years to get back into positive zone.
Data is not old and conclusion is not wrong. POLOZ never has given map of future rate hike. Overnight index swap, loonie and economist still expecting 1-2 hike this year, so long as a disaster doesn't happen. (this is down from say 2-3)

GDP still expected at 2% but I would say that is not miserable. Could be worse, at least its not recession and far from it.

Can you explain "unexpectedly record high unemployment increase in january 2018?"

Feb saw small recovery and unemployment and caused rate dropped down to 5.8% from 5.9%- I believe this is lowest in 40 years.
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Feb 23, 2009
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Oshawa
ilim wrote: I remember when you modestly mentioned that you have rental in Durham.
Then later you called your RE income as making money off people who can't buy.
And look at you now .. . New Trump was born in Durham region, you even adopted his favorite fake news phrase.
But what about going to fill your car during the night and buy only with flyers, did owning lots of RE and rentals make you do that?

Go back and read...you will find that I also have rentals in Hamilton.
I was not born in Durham.
I am old, rather cheap, know the value of a dollar and like to shop to find a lower price.
Your post offers nothing to the topic and is another personal attack.
For someone that is supposedly a bull and owns lots of RE that keeps increasing in value you seem very angry and insulting.
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Mar 20, 2017
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pkrash wrote: How am I a liar if it was MY experience?
I put a disclaimer on the post.
When YOU go to a bank to borrow money YOUR results may vary.
Its not about varying experience, it is a common practice among lenders that is known to any mortgage broker and used by any large bank.
What you said earlier simply incompatible with "huge life experience" and claiming it "fake news" only shows that your judgement worth nothing.
You were also wrong that it is caused bad credit score or something like that.
Chances that you mysteriously lucky found with first attempt a lender that counts 100% of rental income and counts contract income with less than 2 years of consistent history are near zero, chances that you lied trying to state your self-importance are close to 100%.
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Mar 20, 2017
1370 posts
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Jungle wrote: Data is not old and conclusion is not wrong. POLOZ never has given map of future rate hike. Overnight index swap, loonie and economist still expecting 1-2 hike this year, so long as a disaster doesn't happen. (this is down from say 2-3)

GDP still expected at 2% but I would say that is not miserable. Could be worse, at least its not recession and far from it.

Can you explain "unexpectedly record high unemployment increase in january 2018?"

Feb saw small recovery and unemployment and caused rate dropped down to 5.8% from 5.9%- I believe this is lowest in 40 years.
Thats correct, after January disaster, February unemployment numbers are much better and promising. Future is undefined yet, will see how it goes next.
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Jul 3, 2007
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Toronto
GalvToronto wrote: You bears are interesting guys....When gov introduced FBT, you said that its super cool and that majority of buyers are chinese.
Now when Ford is revoking FBT, you are saying there are no foreigners on the market, lol....
The truth is - noone ever cared how many foreigners we have on the market.
It was always a game to scare buyers, to brake their expectations for rising prices and to force them to wait and see.
Cancelling FBT is a first sign that that policy of scaring is now considered as overkill and over.

Regarding rates, B20 etc - all of it is not playing against homeowners. The truth is - it will be softened or cancelled exactly at that moment when homeowners will need it most. And now is not that moment. I don't think its bad news.

What is really super cool is that lots of people are not capable to identify real market trends and fair price. When governments says "its a bubble" - you guys repost it everywhere. However, in less than a year governments throws a knife in the back of such easy manipulated guys by saying its no longer a bubble and we cancel FBT.
no one ever said the majority were chinese... lol

you talk about the bears but the bulls have a special way of talking on here as well.....trust me

"The truth is - it will be softened or cancelled exactly at that moment when homeowners will need it"

when? if the market is down 50% from here?
Last edited by joepipe on Mar 16th, 2018 10:17 am, edited 1 time in total.
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Feb 23, 2009
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GalvToronto wrote: Its not about varying experience, it is a common practice among lenders that is known to any mortgage broker and used by any large bank.
What you said earlier simply incompatible with "huge life experience" and claiming it "fake news" only shows that your judgement worth nothing.
You were also wrong that it is caused bad credit score or something like that.
Chances that you mysteriously lucky found with first attempt a lender that counts 100% of rental income and counts contract income with less than 2 years of consistent history are near zero, chances that you lied trying to state your self-importance are close to 100%.
Sorry, but you continue to post false information.
Everyone's credit score is different and their ability to borrow money varies. That's an undeniable fact.
Yes, there are basic rules that banks follow and those rules change.
You may not know this but when you become an old person with a history of good credit rating, lots of assets and income banks like to loan you money. They also give you discounts. They also waive fees.
Stop spreading fake news.
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Aug 28, 2017
301 posts
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pkrash wrote: I'm pretty old and have plenty of "life experience".
Own lots of RE and rentals.
Never had a bank say I have "kinda income".
Never had them "count 50% of rental income".
Never had them not count contract income.
Maybe for people with very bad credit and risk cases... They probably shouldn't be borrowing money then.
pretty common actually....why you lying?
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Sep 30, 2001
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if everyone is spreading fake news is the thread real?

another reminder: there is absolutely nothing that will be posted here that will have any kind of material impact on the housing market so I really don't get why you guys go hammer and tong trying to beat down and insult the opposing side. There are no medals here if you 'win' your squabble.
Be kind and civil with one another

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