Real Estate

More bad press for Mattamy and new homes

  • Last Updated:
  • Feb 7th, 2018 1:01 pm
Deal Fanatic
Jan 15, 2017
5751 posts
6124 upvotes
Ottawa
Common myths that people actually believe about pre-construction homes:

1. House prices always increase.
2. Always buy in Phase 1 as there are always price increases in every subsequent phase.
3. Builders cannot lower their home prices cause it reduces the value of every other house that they have sold.
4. Everyone wants a new house.

Common actual risks that people who buy pre-construction face:

1. You are buying a house that doesn't exist. You have no idea of the build quality of the house that you are buying.
2. Interest rates can go up before you close meaning that house can cost you more.
3. Property taxes can go up before you close meaning that house can cost you more.
4. Gov't changes to mortgage rules mean you may need to bring more money to the table to buy that house when it closes.
5. Personal life changes like a job loss or a change in your family means you may no longer even want the house when it is built.
6. A market correction means that your house can be worth less when it is built. When determining value, your new home is compared to resale homes and not other new homes.
7. Pre-construction homes always cost you more than the list price. Upgrades, appliances, landscaping, fencing, window coverings....all add up.
8. Builders do go bankrupt and projects can be cancelled leaving you without a future house and you deposit money tied up.
Deal Expert
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Aug 2, 2010
15196 posts
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Here 'n There
starbucksguy wrote: Why can't mattamy lower their prices by 100k to match phase 2? I know why! Greedy developers! They are trying to make an extra 100k over market price.
Look up capitalism in the dictionary. You'd be 'greedy' too if it was your business!
Deal Expert
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Aug 2, 2010
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Here 'n There
skeet50 wrote: Common myths that people actually believe about pre-construction homes:

1. House prices always increase.
2. Always buy in Phase 1 as there are always price increases in every subsequent phase.
3. Builders cannot lower their home prices cause it reduces the value of every other house that they have sold.
4. Everyone wants a new house.

Common actual risks that people who buy pre-construction face:

1. You are buying a house that doesn't exist. You have no idea of the build quality of the house that you are buying.
2. Interest rates can go up before you close meaning that house can cost you more.
3. Property taxes can go up before you close meaning that house can cost you more.
4. Gov't changes to mortgage rules mean you may need to bring more money to the table to buy that house when it closes.
5. Personal life changes like a job loss or a change in your family means you may no longer even want the house when it is built.
6. A market correction means that your house can be worth less when it is built. When determining value, your new home is compared to resale homes and not other new homes.
7. Pre-construction homes always cost you more than the list price. Upgrades, appliances, landscaping, fencing, window coverings....all add up.
8. Builders do go bankrupt and projects can be cancelled leaving you without a future house and you deposit money tied up.
+1. People are victims of their own laziness in not spending any time to research what they are buying and are authors of their own misfortune. I have absolutely zero sympathy or empahty for them. In fact the stories make me laugh. People spend more time figuring out which ass wipe to buy than their home or investments. There is no excuse for such stupidity in this day and age when all it takes is a few hours on the internet to understand the risks.

Very similar to all the cryptowhiners out there upset about why their bitcoin didn't keep going up 1,000%/yr but crashed instead. Hilarious!
Deal Guru
Feb 9, 2009
12381 posts
11307 upvotes
digger314 wrote: definitely a nice gesture. too bad these people couldn't come up with even 30k, when they bought a 955k house... smh
Who says most can’t? Hundreds bought into the development, not just one person. It’s one person they interviewed, most may have provided the extra deposit — but maybe doesn’t fit the tone of the story so was never mentioned.
Deal Addict
Jul 3, 2007
4153 posts
4626 upvotes
Toronto
pkrash wrote: RE Bull math...
She has a house sell at $900K and it doesn't close.
She sells it for $200K less.
That's 22% less...not 10%.
She's not doing "fine". She's in over her head and can't afford the house.
she also blew away her "budget" of $500k - 600k...

"When she went back, there were only two lots still available and Boni ended up spending $899,000, plus additional money for upgrades, exceeding her target price of $500,000 to $600,000."
Deal Addict
Jan 23, 2006
3097 posts
2399 upvotes
skeet50 wrote: Common myths that people actually believe about pre-construction homes:

1. House prices always increase.
2. Always buy in Phase 1 as there are always price increases in every subsequent phase.
3. Builders cannot lower their home prices cause it reduces the value of every other house that they have sold.
4. Everyone wants a new house.

Common actual risks that people who buy pre-construction face:

1. You are buying a house that doesn't exist. You have no idea of the build quality of the house that you are buying.
2. Interest rates can go up before you close meaning that house can cost you more.
3. Property taxes can go up before you close meaning that house can cost you more.
4. Gov't changes to mortgage rules mean you may need to bring more money to the table to buy that house when it closes.
5. Personal life changes like a job loss or a change in your family means you may no longer even want the house when it is built.
6. A market correction means that your house can be worth less when it is built. When determining value, your new home is compared to resale homes and not other new homes.
7. Pre-construction homes always cost you more than the list price. Upgrades, appliances, landscaping, fencing, window coverings....all add up.
8. Builders do go bankrupt and projects can be cancelled leaving you without a future house and you deposit money tied up.
Topic exhausted, mods can close the comments ;)

Seriously, greedy people buy stuff at all time highs on FOMO and they expect it go up all the time and then they go and complain in the media. Everybody knew that GTA housing was a bubble, yet they chose to ignore the warnings from the govt and pretty much anyone with at least 1% functional grey matter in their heads.

I guess the media is equaly to blame for paying attention to these morons .
iamalittlepepper wrote: Non of the Royal Purple is BMW qualified which voids your drivetrain warranty.. especially for those who owns the 3.0L N54 engine
tcjsqls wrote: you have no ideas how a report of stolen credit card (...) affect your credit. Happened twice in your history, that bank won't issue a credit card for you
Member
Jan 15, 2017
353 posts
229 upvotes
Vancouver
Sanyo wrote: Who says most can’t? Hundreds bought into the development, not just one person. It’s one person they interviewed, most may have provided the extra deposit — but maybe doesn’t fit the tone of the story so was never mentioned.
Umm no one? I was just talking about this couple.
Banned
Feb 23, 2009
1670 posts
1496 upvotes
Oshawa
Sanyo wrote: Who says most can’t? Hundreds bought into the development, not just one person. It’s one person they interviewed, most may have provided the extra deposit — but maybe doesn’t fit the tone of the story so was never mentioned.
The tone of the story is that the builders have dropped prices and people that paid more are pissed.
Some can't afford what they bought and may default.
The builders are trying to lock people in by offering a small discount so they don't bail.
For every one example like this there are many more that won't come forward and are borrowing more just to hang on.
Do you think the builders want to advertise that people are under water, unable to close or defaulting?
Member
Dec 23, 2008
353 posts
84 upvotes
Toronto
LOL, i feel like there are some people on this forum that actually get offended when a bear (or normal person) makes a comment about lower RE prices. Who gives a cr@p? its not like they're insulting you...
Deal Guru
User avatar
Sep 8, 2007
10978 posts
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Way Out of GTA
skeet50 wrote: Common myths that people actually believe about pre-construction homes:

1. House prices always increase.
2. Always buy in Phase 1 as there are always price increases in every subsequent phase.
3. Builders cannot lower their home prices cause it reduces the value of every other house that they have sold.
4. Everyone wants a new house.

Common actual risks that people who buy pre-construction face:

1. You are buying a house that doesn't exist. You have no idea of the build quality of the house that you are buying.
2. Interest rates can go up before you close meaning that house can cost you more.
3. Property taxes can go up before you close meaning that house can cost you more.
4. Gov't changes to mortgage rules mean you may need to bring more money to the table to buy that house when it closes.
5. Personal life changes like a job loss or a change in your family means you may no longer even want the house when it is built.
6. A market correction means that your house can be worth less when it is built. When determining value, your new home is compared to resale homes and not other new homes.
7. Pre-construction homes always cost you more than the list price. Upgrades, appliances, landscaping, fencing, window coverings....all add up.
8. Builders do go bankrupt and projects can be cancelled leaving you without a future house and you deposit money tied up.
Well said. The sad truth is these people were warned warned warned hundreds of times by friends family and even cautionary articles in the media. But the greed overwhelmed them.. FOMO, flippers, etc all wanted a piece of the pie. These people are disgusting and the media that pander to them just as bad. Why not in these articles reference back to the numerous articles and people who were publicly cautious before this? Because it wouldn't fit their growing narrative that it's all the builders fault.

How about the families that couldn't buy last year due to prices that these idiots buyers were paying. How about the flippers that lined up? Aren't they primarily to blame for the mania?
Deal Addict
User avatar
Mar 23, 2003
4676 posts
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Hamilton
Crypto crashed?
Hmm. How much was it 6 months ago? I forget....

eonibm wrote: +1. People are victims of their own laziness in not spending any time to research what they are buying and are authors of their own misfortune. I have absolutely zero sympathy or empahty for them. In fact the stories make me laugh. People spend more time figuring out which ass wipe to buy than their home or investments. There is no excuse for such stupidity in this day and age when all it takes is a few hours on the internet to understand the risks.

Very similar to all the cryptowhiners out there upset about why their bitcoin didn't keep going up 1,000%/yr but crashed instead. Hilarious!
Deal Guru
User avatar
Sep 8, 2007
10978 posts
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Way Out of GTA
sidshock wrote: Crypto crashed?
Hmm. How much was it 6 months ago? I forget....

The price gain from 6 months ago is irrelevant.

A fall in price rapidly of 50% in 1 month is a crash.
Banned
Aug 18, 2017
48 posts
14 upvotes
Greedy developers can give phase 1 buyers a 100k discount.

If they can build phase 2 at 100k less, then they can still make a profit by selling phase 1 at a lower price.

We need the wynne government to stand up to these greedy builders and regulate their a$$ so they dont pull this stunt again.
Deal Guru
Feb 9, 2009
12381 posts
11307 upvotes
Townhouses in Milton on sale today and big lineup
again. Whether it sells out I don’t know but like the 120 detaches that sold last week, this should have a good chance of doing very well.
Banned
Oct 12, 2017
239 posts
179 upvotes
Rothesay wrote: I just can't see how. Housing is simply too integrated with the economy where the government or the Bank of Canada will want to see it crash. It will bring the entire economy down with it. What they are trying to do now with the monetary policy and the lending policy is to engineer a soft lending. If house prices slip too much, it is going to affect consumer spending, employment and ultimately the GDP growth. If that happens, BoC will be dropping rates to prop up the economy, which probably means a lower Canadian dollar and could translated into additional foreign investment.

Besides, Government of Canada owns CMHC, imagine the deficit that they have to run if they have to bail out CMHC. It will be very difficult to see the government not intervene if a crash happens.
The government cannot control where interest rates go . It is entirely based on bond yields which have been rising every month.

The government does not want an economy that is heavily affected by real estate and consumer debt. That is a recipe for disaster.
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Jan 23, 2006
3097 posts
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Sanyo wrote: Townhouses in Milton on sale today and big lineup
again. Whether it sells out I don’t know but like the 120 detaches that sold last week, this should have a good chance of doing very well.
... and year later we will see these same people lining up today on TV crying out loud and blaming everyone else but themselves...
iamalittlepepper wrote: Non of the Royal Purple is BMW qualified which voids your drivetrain warranty.. especially for those who owns the 3.0L N54 engine
tcjsqls wrote: you have no ideas how a report of stolen credit card (...) affect your credit. Happened twice in your history, that bank won't issue a credit card for you
Sr. Member
Oct 13, 2011
853 posts
715 upvotes
serious8 wrote: The government cannot control where interest rates go . It is entirely based on bond yields which have been rising every month.

The government does not want an economy that is heavily affected by real estate and consumer debt. That is a recipe for disaster.
Too late. They have already let the horses out of the barn, real estate and consumer debt is already very integrated in the economy.

Yes, government can not dirctly affect interest rate. But they can influence the variable intereat rate via the central bank. Yes, fix rate mortgage is linked to the bond market. But if 5 years rate is 5% but variable rate is only at 2.25% guess which rates will people renew or take out? And if it is really bad, they can always flood the market with cash as we saw with QE.
Deal Expert
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Jan 27, 2004
52937 posts
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ONTARIO
joepipe wrote: A bit of both... A lot of buyers from 2017 are about to learn a hard lesson in real estate bubbles and how ugly it can get when they burst....

The buyer in this article is down 100k and I'll bet its even worse by the closing date... If she can actually close that is... The appraisal will be a lot lower than what she bought for..
If she lives in it until retirement she'll be okay.
People forget... you need a house (or condo) to live in too :)

It sucks if its her 2nd or investment property... she'll have to hold onto it forever and ever to have. Chance at making back the monies.
Member
Dec 28, 2017
404 posts
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Burlington
starbucksguy wrote: Greedy developers can give phase 1 buyers a 100k discount.

If they can build phase 2 at 100k less, then they can still make a profit by selling phase 1 at a lower price.

We need the wynne government to stand up to these greedy builders and regulate their a$$ so they dont pull this stunt again.
That's what a contract is for, when a person bought a house agreeing to a price they wish to purchase, They sign a contract with the developer promising that's what they will pay.
The Market decides that they do not wish to pay for those prices anymore.

Developer believes their second phase will sell better at a lower price point.

What i don't understand is .. why are people crying about phase one price?
I bought a house in 2016 for primary residence.. if the current market price for my house is lower than my purchase price, can I ask the seller to reimburse the difference?

People who bought Phase one should understand that the house is within their budget .. this is what personal finance is about. By buying something that you can't afford with expectation that housing market ALWAYS goes up.. that's speculation.... speculation have risk .. even for primary residence.

Losing money is a lesson ... not government's responsibility.

If government comes in to help with housing speculator.. i need the government to refund all my losses in the stock market .. because many stocks I bought went down in value a year later and i'm not happy about it... surely if people can buy the stock cheaper now.. then I shouldn't be held responsible holding it at a higher cost isn't it?

Grow up people.. housing market is not risk-free when you speculate.. learn and grow
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Jan 27, 2004
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mojojojo911 wrote: LOL, i feel like there are some people on this forum that actually get offended when a bear (or normal person) makes a comment about lower RE prices. Who gives a cr@p? its not like they're insulting you...

Sigh... another priced out renter.
I'm a morally superior home owner!!! 20% yoy i'm a trillionaire! Muwahahahah

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