The new first time buyer teaser loan program announced by the BC government has met a suprisingly negative reaction in the media, but some online polls show voters approve.
This move seems designed to undo some of the federal ramp back of housing market fuel. Bearvancouverite points out this might help developers who are seeing people backing out of presales agreements.
This might be exactly why Christy did it. Developers were panicking that presales won’t close because mortgage qualifications would be so different in the next few years, they need to dangle a carrot to make sure speculators don’t just walk away and first time buyers can be convinced to take over presales from flippers.
Scoop points out why this program should be referred to as a “teaser loan” as made popular in the US housing bubble:
Definition of “teaser loan” from investopedia: An adjustable-rate mortgage loan in which the borrower pays a very low initial interest rate, which increases after a few years. Teaser loans try to entice borrowers by offering an artificially low rate and small down payments, claiming that borrowers should be able to refinance before the increases occur.
Let’s all call start calling this new program what it is: Christy’s Teaser Loan Program.
We know the readership of this site has a deep and abiding love of all things real estate so we figure you might need this public service announcement. Don’t lend money to your real estate agent.
Rita Fulciniti put a down payment on a new west-end condo, thinking that home ownership would bring her a little comfort and financial security in her retirement years. Instead, the 66-year-old is living in a homeless shelter, broke, and still chasing the Toronto real estate agent who borrowed her life savings.
In March 2014, Fulciniti’s $42,000 down payment was for a second-floor unit in the Vivid Condos on Michael Power Place near Bloor Street West and Islington Avenue. A year later, while the condo was still under construction, Fulciniti learned her potential roommate wouldn’t be moving into the building.
Fulciniti approached Chaim Smilovici — who also goes by the name Howard Smilovici, and was a real estate agent with Adenat Realty at the time — to find a tenant who would help cover the costs of carrying the condo. It was the beginning of her nightmare, she says.
The real estate agent did find her a room mate (that’s good!) but borrowed $95k (that’s bad!) with an agreement to pay in full plus a $5k bonus and a 12% annual interest rate (that’s good!). He then lost all her money investing in a nightclub (that’s bad!).
Read the full article at the CBC.
Real Estate Developers are upset about the foreign buyer tax, arguing that the only real way to make homes more affordable is to increase supply.
Also it would be great if we could increase real estate affordability without lowering the price of anyones real estate.
A month before the tax was announced, Anne McMullin, president and CEO of UDI, e-mailed the Premier warning that any taxes aimed at curbing demand would not make Metro Vancouver more affordable without the stimulation of more supply. And, she added, increasing taxes might severely undermine the value of people’s homes “perhaps even destabilizing our industry, which represents 25 per cent of British Columbia’s economy,” she wrote.
Some experts point out that the foreign buyer market was already showing signs of ‘fatigue’ so the tax was completely unnecessary.
Experts cannot say whether this downturn in foreign owners will remain a long-term trend, but immediately after the Premier announced the tax on the morning of July 25, industry insiders were warning it could badly hurt one of the province’s most important economic drivers.
Read the full article in the Globe and Mail.
Some people wonder how people make ends meet in a very expensive city with very low wages, but there’s plenty of economic opportunity beyond grow-ops, you just need take advantage of one our exceptional local specialties.
Of course you could go to the source of the money fountain and flip condos or become a realtor, but if you don’t have the time for a 6 week course here’s another opportunity: Condo Lineups.
If you can be the manikin who pretends to be very excited about a new local development you can earn $1800 in less than a week, that works out to about $15 an hour less expenses!
This tiny job posting speaks volumes about the Vancouver real estate market. Developers have convinced speculators that demand is so high, there’s enough room for the average person to make an extra few dollars flipping condos to regular folks. Now that regular folks aren’t fighting to buy pre-construction, this may be the first sign that speculative capital is drying up.
Read the full article over at better dwelling.com
Village Whisperer has been following the MAC-gate ‘fake foreign buyer’ story for a while and recently reported the Real Estate Council of BC decision in that case: a temporary suspension and small fine for one Realtor.
But what about the other MAC employees who played rolls in this story, why no repercussions for that deceit?
Here’s the loophole: condo salespeople who are not realtors are not ruled by the Real Estate Council and can apparently make any claim they want before passing a potential buyer off to a realtor to sign the legal documents.
Read all about it over at Whisperers blog.