Four major changes to Canadian housing rules

Vancouver home sales have plunged by about a third in the last month or so, this been largely blamed on the foreign buyer tax.

But that tax focused on the city of Vancouver isn’t the only change to the real estate market, new rules and changes have the potential to affect the wider region and the nation as a whole.  Southseacompany posted this summary from a Globe and Mail article  in the comments:

“Four major changes to Canada’s housing rules”, Globe & Mail
http://www.theglobeandmail.com/real-estate/four-major-changes-to-canadas-housing-rules/article32223470/

1. Expanding a mortgage rate stress test to all insured mortgages.

2. As of Nov. 30, the government will impose new restrictions on when it will provide insurance for low-ratio mortgages.

3. New reporting rules for the primary residence capital gains exemption.

4. The government is launching consultations on lender risk sharing.

As Canadian Mortgage Trends puts it, is this the last nail in the coffin?


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Etremely Rich Chinese houses owner.
Guest
Etremely Rich Chinese houses owner.

It will just be a hiccup and Vancouver RE will back on its upward trend so every minor correct would be a chance of getting in . There 500 million of wealthy Chinese are willing to resettle here and enrich this once barren city to be a vibrant Beijing type mega international city.

trackback

[…] –Vancouver down for the count –Sales plunge 33% –AirBnb registration system –Government wants your opinion –IMF lowers canadian economic outlook –Foreign buyers almost disappeared –2 years from retirement, buy a house? –Why would anyone get into the market right now? –West Van vacancy tax – […]

bullwhip29
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bullwhip29
bullwhip29
Guest
bullwhip29
FULL TEXT: Well, that was fun while it lasted Vancouver is now down for the count. The question is what happens in Toronto. Canada’s housing and mortgage markets are in the midst of wrenching change as policy makers scramble to ensure a bubble doesn’t burst, that homes are more affordable and that the risks to the financial system are limited. The federal government’s new tax and other measures, unveiled this week, follow heightened angst over the state of the Vancouver and Toronto markets, and a Globe and Mail investigation into the flipping of properties in the Vancouver area. Among other things, as The Globe and Mail’s Tamsin McMahon reports, the measures are aimed at curbing speculation by foreign investors and at blocking home buyers from trying to swallow too much debt. The Vancouver market, which had been cooling regardless, has… Read more »
bullwhip29
Guest
bullwhip29

another rumor floating around that new stricter rules could apply to conventional mortgages in not too distant future.

speaking of rumors, what is supposed to be happening with the foreign tax in Toronto?

bullwhip29
Guest
bullwhip29

Tent city site to become 100% social housing building — maybe
http://www.metronews.ca/news/vancouver/2016/10/06/vancouver-tent-city-site-to-become-social-housing-building.html

>>> as mentioned, those down on their luck get this prime location on skid row complete with an “unlucky” 5-8 address HAM does not want

bullwhip29
Guest
bullwhip29

1 In 5 Canadian Real Estate Agents May Be Dumber Than A 5th Grader
https://betterdwelling.com/1-5-canadian-real-estate-agents-may-dumber-5th-grader/

YVR
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YVR

Looks like those Airbnb rules coming will be pretty easy for Vancouver to enforce. I suspect other Metro Vancouver cities will follow Vancouver’s lead now. Bye bye Airbnb.

Airbnb says it supports the idea of a registration system for short-term home rentals, one week after the City of Vancouver revealed its plan to regulate them.

http://www.theglobeandmail.com/news/british-columbia/airbnb-says-its-on-board-with-proposed-rules-for-short-term-rentals/article32269215/

bullwhip29
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bullwhip29

so will operators follow suit or list on an alternate site?

YVR
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YVR

If alternate sites do not comply then it will be easy for the city to target those few listings. Airbnb is the dominant site by far. Switching sites you lose all your positive reviews. Easier to just sell your place or rent it month to month.

YVR
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YVR

Auction house sells for $1.35M in September when it had an offer for $1.5 in June. LOL. Anyone still denying prices are crashing?

The excitement level dropped, however, when it was announced that all of the bidders had opted to participate online. Bidding started at $2.5-million and then dropped to $2-million, before a bid of $1.5-million was confirmed.

But despite the auctioneer’s repeated calls of “1.5 looking for 1.6,” a higher bid did not materialize. “As with any real estate transaction, the seller had a price that they did not want to sell it below. And, unfortunately, we didn’t reach that price today,” Mr. Dodd said, adding that the list of people who were interested in the property will now be turned over to Mr. Klemke.

http://www.theglobeandmail.com/news/british-columbia/burnaby-bc-house-up-for-auction-fails-to-sell/article30697974/

Hyper-mega-Bull
Member
Hyper-mega-Bull

HOM (hot oil money) in the news again with a Saudi international student attempting to choke and stab a UBC student.

Just me
Guest
Just me

Are we like Hong Kong or Singapore? This might be the answer to those wondering if prices will ever become reasonable again in Vancouver.

http://www.bloomberg.com/news/articles/2016-10-06/singapore-crushing-hong-kong-in-race-to-bring-down-home-prices

Have a guess. It boils down to wether the government really holds tight and enforces policies that keep prices down.

YVR
Guest
YVR

The government actually just needs to do less intervention. The most recent change was just that. Putting restrictions on government subsidised CMHC insurance is less intervention in the housing market. The next step where they share the risk with the banks is the same thing. Less intervention not more. If government got completely out of housing prices would be down by 70% in 12 months.

patriotz
Member

“Are we like Hong Kong or Singapore?”

Nothing like either of them. In HK most households rent in government owned apartments. In Singapore on the other hand almost all households are virtually coerced to buy from the housing authority. In both of them virtually all developable land is owned by the government and land leases are a major source of revenue.

However all countries have one thing in common – government has the power to bring down RE prices at any time at will. If governments don’t, it’s because they don’t want to.

Combat roach
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Combat roach

Many factors but somehow locusts ended up being a common denominator, like global virus.

YVR
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YVR

Sherry Cooper yells “fire”

“The feds clearly wanted to puncture the housing market and they have certainly done so,” Sherry Cooper, chief economist at Port Coquitlam, B.C.-based mortgage broker Dominion Lending Centers, said in a note to clients. “These measures will provide a tipping point, encouraging those who have been waiting to sell to put their properties on the market post haste. The combination of increased supply and significantly reduced demand will weaken prices everywhere.”

https://www.thestar.com/business/real_estate/2016/10/06/new-mortgage-rules-ripple-through-canadas-housing-market.html

patriotz
Member

“encouraging those who have been waiting to sell to put their properties on the market post haste. ”

Well I have to credit Sherry with understanding what supply and demand actually are in RE markets – they can turn on a dime without any change in housing stock or population.

Its_the_ALR_stupid
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Its_the_ALR_stupid

“The combination of increased supply and significantly reduced demand will weaken prices everywhere.”

Funny, she says that like it’s a bad thing.

YVR
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YVR

It is if you are a mortgage broker paid by commission.

would-be buyer
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would-be buyer

I equate this current market to a pregnant women in her first trimester- you don’t want to announce your pregnancy too soon because it might end in miscarriage. I feel the same way about the current VA RE market correction. I want to be giddy and hope this is the end of the fucking absurdity, but you never know – we’ve seen this show before only to rebound to higher highs… But, how can this Ponzi scheme continue? I am optimistic that this is the end, but we have also seen this scenario before and Vancouverites are exceptionally stupid and have shown their love of paying $1M for East-side shacks… Finger’s crossed this time is different. OMG, can I finally be rewarded for hanging in there for 8 FUCKING years.

Combat roach
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Combat roach

You never know with all kind of idiots who could suddenly decide on some crazy alliance with China and create some sort of. Pacific Brotherhood Zone or some other shit in that sense.

bullwhip29
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bullwhip29

even without that prices are not going back to where they were simply because much of the hot money that has wound up on our shores over the decades isnt leaving. at the end of the day, it will be the little guy with barely enough to cover his DP that gets squashed and falls even further behind

Newcomer-can\'t-post
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Newcomer-can\'t-post

Wait! You can get an east side shack for a million bucks?

Tcg
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Tcg

Well I don’t think we’ve seen THIS show before. Some big changes in the past year politically.

Boombust
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Boombust

I must say, there is certainly a lot more “buzz” out there about the bubble like never before. It is finally dawning on the public that this ship is goin’ down…

I\'m With Stupid V
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I\'m With Stupid V

http://vancouver.ca/people-programs/empty-homes.aspx

Psst everyone fill in this government survey!

Also I remember last time prices started dropping and we all made fun of the listing price drops and thought this was it! Well look where it took us. Wake me up when we are back to 2012 prices.

Boombust
Guest
Boombust

We didn’t have 170% debt to income and 70% home ownership in 2012 and no 15\% foreign tax OR mortgage stress tests. Big differences this time around.

Newcomer
Member
Newcomer

True, but at the time, we still had a then-record debt to income ratio, and the highest home ownership rate ever. Based on fundamentals, it should have crashed then. It should have crashed in ’08. It should have crashed in ’06. VHB was right at the time. But it did not crash then, and we can’t know if it will crash now.

ostritch
Member
ostritch

This could be a correction that helps Vancouver avoid a big crash. Just sayin’

Combat roach
Guest
Combat roach

Like 60% correction to avoid 90% crash?

ostritch
Member
ostritch

So you’re waiting for 90% off? That’s a plan if ever there was one

Shut It Down Already
Guest
Shut It Down Already

There were big differences last time around too.

TITANIC
Guest
TITANIC

Okanagan and Southern Island have had decent drops in home sales in september as well. No spillover of foreign money in those regions. Collapse being felt across the board.

Bag it and tag it
Member
Bag it and tag it

That’ss because most sales there were from cash out sellers in Van

TITANIC
Guest
TITANIC

No thats actually incorrect.

Its_the_ALR_stupid
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Its_the_ALR_stupid

Foreign buyers just one factor affecting Vancouver home prices: CMHC

http://www.theglobeandmail.com/report-on-business/multiple-forces-fuelling-vancouver-real-estate-market-cmhc-says/article32272604/

“Low interest rates, robust population and employment growth, limited housing supply and the proximity of protected areas collectively known as the Agricultural Land Reserve are among the reasons real estate in the Vancouver region is so expensive, Low interest rates, robust population and employment growth, limited housing supply and the proximity of protected areas collectively known as the Agricultural Land Reserve are among the reasons real estate in the Vancouver region is so expensive, Canada Mortgage and Housing Corp. said in a report on Thursday.”

Newcomer
Member
Newcomer

They forgot stupidity.

TITANIC
Guest
TITANIC

All aboard!!!
88 more tickets sold today.

Deathwish
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Deathwish

I hear it’s unsinkable. I buy three and my husband buy three.

HAMster
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HAMster
paulb
Member

New
165
Price Change
66
Sold
88
TI:9837

http://www.paulboenisch.com

Boombust
Guest
Boombust

Lookin’ good!

paulb
Member

New
165
Price Change
66
Sold
88
TI:9837

http://www.paulboenisch.com

YVR
Guest
YVR

I notice the price changes are very similar to sales (86 price changes yesterday to 88 sales today). Drop your price by 20% and then someone may come along and offer you 10% below asking?

Oh oh
Guest
Oh oh

Lucky 88 sold…..very lucky 88 seller’s

bullwhip29
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bullwhip29

Vancouver social-housing project to be built on lot used for homeless protests
http://www.theglobeandmail.com/news/british-columbia/vancouver-social-housing-project-to-be-built-on-lot-used-for-homeless-protests/article32285762

>>> not surprising that a sketchy location complete with an “unlucky 5-8” address HAM does not want is chosen.

bullwhip29
Guest
bullwhip29
FULL TEXT: Foundation. She said the foundation, which will build both the housing units and the health facility, has just started raising funds but expects to be able to reach its target. Joy MacPhail, a B.C. NDP MLA from 1991 to 2005 and former minister of social services, will lead the project for the foundation. Laura Case, Chief Operating Officer of Vancouver Coastal Health, said the medical facility will be geared specifically to meet the needs of the people in the Downtown Eastside. It will be open 12 hours a day, seven days a week. The lot where the new project will be built has drawn housing protesters for years. A tent city was established there during the 2010 Olympics to draw attention to Vancouver’s homelessness crisis and affordable-housing activists moved onto the site again this summer. Karen Ward, a… Read more »
southseacompany
Member
southseacompany

“CMHC data shows foreign buyers have almost disappeared from Vancouver market”, Financial Post
http://business.financialpost.com/personal-finance/mortgages-real-estate/cmhc-data-shows-foreign-buyers-have-almost-disappeared-from-vancouver-market

“Foreign buyers dropped to one per cent of the Vancouver resale market after being as high as 19 per cent, according to a new report from Canada Mortgage and Housing Corp.”

Combat roach
Guest
Combat roach

This is a distorted view, they are here and they were here through their local proxies. Whoever think that influx of foreign money stopped is just plain wrong, otherwise how to justify all these sales that still go strong if local earner is outpriced long time ago ? Until money gets traced any conclusion of this sort will be totaly useless.

patriotz
Member

Local earners have always been buying. That’s an undisputed fact. Also nobody disputes that there are buyers using money transferred from offshore (whether the buyers are legally foreign or resident). How many come from each category is a valid point of discussion.

Shut It Down Already
Guest
Shut It Down Already

Don’t confuse him with “facts”, whatever they are.

southseacompany
Member
southseacompany

“Vancouver housing sales slowing prior to tax: CMHC”, Maclean’s magazine

http://www.macleans.ca/news/canada/vancouver-housing-sales-slowing-cmhc/

“A report by Canada Mortgage and Housing Corp. says home sales in Vancouver were already slowing before the plunge in recent months in the wake of a new tax on foreign buyers.”

“The housing agency says the drop in sales in August and September continued an already established trend, particularly at the higher end of the price range.”

bullwhip29
Guest
bullwhip29

looks like a world of hurt for the aquilini family going forward…

https://www.easports.com/nhl/news/2016/nhl-17-season-simulation

UBC in Crisis Mode
Guest

Who can estimate the tax loss of this property (assuming it had left empty, claiming primary residence until the last owner)

Sale Date January 17, 2013
Sale Price $5,388,000
Sale Date November 5, 2007
Sale Price $3,950,000
Sale Date September 30, 2003
Sale Price $3,150,000
Sale Date August 25, 2001
Sale Price $1,780,000
Sale Date April 21, 1992
Sale Price $1,880,000

Details:
http://webcache.googleusercontent.com/search?q=cache:2FFyIrpf3K4J:www.jonathanlu.ca/listings/1610-wesbrook-crest-vancouver-v6t-1w1-university-vw/+&cd=3&hl=en&ct=clnk&gl=us#ad-image-0

Best place on meth
Guest
Best place on meth

“Millennials bear brunt of new housing policies”, say’s chief realtor Cameron Muir:

http://www.cknw.com/2016/10/06/millennials-bear-brunt-of-new-housing-policies-b-c-real-estate-assoc/

Translation: Realtors will bear the brunt of new housing policies, says chief realtor Cameron Muir.