This is How Canada's Housing Correction Begins

[masoncgy]

Highly recommended read:

https://www.macleans.ca/economy/real...ection-begins/

Kirk Marsh first noticed the mood start to turn in Vancouver’s housing market a year ago. As a real estate investor who buys homes and condos then fixes them up for resale, Marsh has an excellent vantage point on the market. Since giving up his old job in tech three years ago to flip real estate—“Sitting at a desk was killing me,” he says—Marsh has bought and sold six detached homes and condominiums across the B.C. Lower Mainland. “It’s not like TV shows where you see them making $100,000 or more each time, it’s just not like that,” he says. But he’s done well, always able to find buyers and come out ahead.

Or that’s how it used to be. “Today, everything has stalled,” he says.

*Given how the shit appears to be really hitting the fan in the hottest BC markets, what do you think? Are we in for a sharp correction in the Canadian housing markets?

[Tik-Tok]

I think Vancouver and Toronto are. It's been expected for years now.

[JRSC00LUDE]

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I think Vancouver and Toronto are. It's been expected for years now.

Agreed. I think the AB/SK markets are already corrected.

[Misterman]

With the extent the BoC and the government has gone to make house purchases more expensive and difficult, there really isn't any other option but a correction. The question is how much of a correction?

[Tik-Tok]

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Agreed. I think the AB/SK markets are already corrected.

We've still got a little down to go. At least my mortgage underwriters seem to think so. They wanted a full appraisal of my house and didn't trust the CoC tax assessment.

[rx7boi]

I've always wondered that with Vancouver and Toronto but it was a moot question when the answer is "it's worth whatever someone is willing to pay for it."

[HiTempguy1]

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I think Vancouver and Toronto are. It's been expected for years now.

100% agree. There was little underpinning Toronto and Vancouver market growth besides pure speculation and foreign cash coming in. The difference with the Alberta housing price boom was that Alberta was chronically underpriced IMO relative to the value that was there.

While the Alberta market has certainly dropped from it's peak, for the kind of wealth you can still earn here (if you can get a job), housing is not unreasonable.

The new rules aren't helping either. 5% down minimum to 10% down minimum? That's huge. Making people qualify at almost 5.5% interest rates? Insane. The only thing that keeps the qualifying rate from being too overblown is that doubling the downpayment really helps.

Still, you are looking at basically $20k down to get into even the cheapest of condos nowadays. Good news is, it's helped the bottom of the market for landlords, lots of renters is what I am hearing.

[ExtraSlow]

To most commentators Vancouver and Toronto ARE the Canadian housing market. And by size, in a way that's correct. So even if it really only affects those two markets, it does affect the whole country statistics.

[Xtrema]

When retail banks willing lowers mortgage rate on their own..... you know they see some shit coming on the horizon and they are holding shit load of toxic mortgages.

https://www.mortgagebrokernews.ca/ne...te-253122.aspx

Also

https://www.cbc.ca/news/canada/calga...2019-1.4986586

Vancouver is double screwed. Wonder how much Chinese money is going to leave simply to protest the arrest.

The way I see it, foreigners should never qualify for mortgages in Canada. But a lot of the bubble is created by the banks thinking that willing to underwrite anyone (foreign or Canadian) a mortgage with 20% down.

[Tik-Tok]

The banks are just following behind the smaller lenders, who lowered their 5 year fixed rates a month ago due to the bonds.

I was supposed to sign a new 5-year fixed 2 weeks ago, but read that this was coming so I'm holding off until March when the mortgage term is actually up.

[ercchry]

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We've still got a little down to go. At least my mortgage underwriters seem to think so. They wanted a full appraisal of my house and didn't trust the CoC tax assessment.

That’s not their discretion... but if you’re working with a bank vs monoline it’s a little surprising since they should be able to just do it with their software in house

[ercchry]

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The way I see it, foreigners should never qualify for mortgages in Canada. But a lot of the bubble is created by the banks thinking that willing to underwrite anyone (foreign or Canadian) a mortgage with 20% down.

That’s just not true... if you don’t have at least “new to Canada” status then a couple lenders will do something, like TD... but it’s like 50% down and proof you have the cash for the mortgage and taxes for the entire term

[Xtrema]

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That’s just not true... if you don’t have at least “new to Canada” status then a couple lenders will do something, like TD... but it’s like 50% down and proof you have the cash for the mortgage and taxes for the entire term

Not HSBC. Was surprised how easy it was for someone with 0 status to get mortgage to purchase a place in Calgary. 20% down.

[max_boost]

I thought it was always 50% no questions asked....anyway, 4.5 months my condo has been on the market

[Tik-Tok]

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I thought it was always 50% no questions asked....anyway, 4.5 months my condo has been on the market

I just found out a friend has had hers on/off the market for 2 years.

[ercchry]

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Not HSBC. Was surprised how easy it was for someone with 0 status to get mortgage to purchase a place in Calgary. 20% down.

Well, they are a touch sketchy

Very surprising though if true as they would still have to follow the OSFI rules

[nzwasp]

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When retail banks willing lowers mortgage rate on their own..... you know they see some shit coming on the horizon and they are holding shit load of toxic mortgages.

https://www.mortgagebrokernews.ca/ne...te-253122.aspx

Also

https://www.cbc.ca/news/canada/calga...2019-1.4986586

Vancouver is double screwed. Wonder how much Chinese money is going to leave simply to protest the arrest.

The way I see it, foreigners should never qualify for mortgages in Canada. But a lot of the bubble is created by the banks thinking that willing to underwrite anyone (foreign or Canadian) a mortgage with 20% down.

im so glad that other than my mortgage I have no house hold debt. I cant imagine many beyonders are $200 away from insolvancy? although I would be interested in how much non mortgage debt people have.

[Disoblige]

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im so glad that other than my mortgage I have no house hold debt. I cant imagine many beyonders are $200 away from insolvancy? although I would be interested in how much non mortgage debt people have.

Not saying you're doing this, but it reminds me of when people flex the idea of having no debt, except their mortgage.
I know some people who do that and are so fucking house poor, it's not funny. Yeah, you got no debt, but you also are fucking broke because most of your paycheck is going into property tax, condo fees, and interest.

[Sugarphreak]

...

[SkiBum5.0]

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46% of Canadians are 200$ away from insolvency? Are we including children or something in this poll?

Fuck off CBC, haha

click bait article

Disagree - look at the definition of insolvency (not bankruptcy). It means Canadians are $200 from not paying their debts. It is, however, just a poll right? Might indicate more panic than fact but given the debt/income ratio's being thrown around it's probably pretty close.