CMHC has surveyed condo owners in Vancouver and Toronto and found that the number of owners with multiple units is growing.
…the total number of investors in the two regions who say they have purchased at least two condo units in addition to their primary residence has risen nearly 13 per cent over the past two years. Nearly a quarter of condo investors told CMHC that they owned least two units, with close to 10 per cent reporting that they owned three or more condos.
Buyers are looking for both rental income and appreciation, with some interesting math:
Among condo investors in Toronto and Vancouver, half told the federal housing agency that they had bought their investment unit for rental income. Of those, 56 per cent expect the value of their condo to go up, while only 8 per cent thought that it would go down. The share of condo investors in Toronto who expected their unit to increase in value fell to 60 from 64 per cent from a year earlier, while the share in Vancouver who expected their condos to increase in value rose to 50 from 41.5 per cent.
A slightly larger share of investors in Vancouver reported paying higher prices for units than in Toronto, although the survey found that the reverse was true of rents, which were higher in Toronto. Nearly 16 per cent of Vancouver landlords reported charging less than $1,000 in rent for their condos compared with fewer than 5 per cent in Toronto. By contrast, nearly 50 per cent of condo landlords in Toronto said they charged more than $1,500 for their units, compared with 33 per cent in Vancouver.
Read the full article over at the Globe and Mail. So how many condos do you own and how many are you thinking of buying this year?
Most real estate professionals are honest and unless there is a signed offer in place would never use the threat of a competing offer in an effort to drive up a property sales price.
But just to make sure a few bad apples don’t spoil the bunch Ontario plans to crack down on phantom bids.
The scam involves a sales agent hinting to prospective buyers there are other bids as a way to coax them to bid higher.“You say, ‘We’re expecting another offer. I do have another offer. You may want to go back to your client and make sure this is their best offer’,” says said Joseph Richer, registrar of RECO. “You are suggesting there might be competing offers when there may or may not be.”
With the new rules, “You cannot suggest or even imply that you have an offer unless you have one in writing, signed sealed and ready to be delivered,” said Richer, while adding there have been very few formal complaints about phantom bidding over the years.
Read the full article here.
If you’ll recall you’ve been warned many times by a number of government talking heads that rates could go up at any time.
Today the Bank of Canada finally took action and cut rates by a quarter from 1% to 0.75%.
Speaking to reporters, Mr. Poloz said the oil price drop is “unambiguously bad” for the Canadian economy, prompting the bank to take out what he called an “insurance policy” against future risks, such as weak inflation and a household debt squeeze. But he denied the move was calculated to send the Canadian dollar lower.
“Market consequences will be what they are,” he said.
The rate cut sent the loonie plummeting below 81 cents (U.S.).
Mr. Poloz, who acknowledged that oil dominated the bank’s discussions leading up to Wednesday’s rate decision, said he’s ready to cut rates again if prices fall further.
“The world changes fast and if it changes again, we have room to take out more insurance,” he said.
The rate move, which few analysts anticipated, is an attempt by Mr. Poloz to shield highly indebted Canadian households from an oil-induced hit to their jobs and incomes – signs of which are already evident in Alberta.
In the comments section here, Dave asked the question: How much of the BC economy is tied to Oil and Alberta?
I would like to know how much of a hit the damage to Alberta will be to BC. It seems to me that everybody underestimates the economic impact. I think our statistics don’t capture the role of Alberta in our economy. I think I read that Westjet estimated 5,000 people in the Okanagan work in the oil patch. And that’s just them trying to estimate things for their benefit (i.e. people who buy plane tickets). How many work from home on their computers? Or only make a few trips per year and don’t get picked up the radar? How many work in the Okanagan but for companies that service the oil patch? Add it all up and there is a LOT of employment related to Alberta.
Well well well, it’s the end of another work week and that means it’s Friday Free-for-all time!
This is our regular end of the week news round up and open topic discussion thread for the weekend, here are a few recent links to kick off the chat:
–Oil Price Plummet
–We are affordable
–Remove the top 20%
–Check the facts
–Accumulate enough debt
–world class yet?
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
This is probably the first housing editorial in The Province that most readers here can agree on. Well, the headline any ways:
Politicians shouldn’t meddle with the housing market.
Imagine a world where the government didn’t meddle with the housing market. There would be no CMHC insuring close to $600 Billion in mortgages, instead lenders would loan based only on their own assessment of risk. There would be no HBP, no HOG. In 2006 there would not have been the rule change that allowed zero down 40 year mortgages with interest only payments for 10 years. After 2008 the CMHC wouldn’t have purchased $69 billion of mortgages off bank books.
But of course you’ve probably figured out that this Province editorial isn’t about that. No, this editorial is about someone suggesting we should levy a tax on vacant properties, likely the tiniest possible example you could find for ‘meddling’ in the housing market.
Wong is not alone in unfairly blaming foreign investors for Vancouver’s high housing prices. The reality is that real estate is a commodity whose price is set in a free market, appropriately, through the forces of supply and demand. No one has a “right” to own a house in a particular city or neighbourhood, and it’s about time that people like Wong and her COPE and NDP pals stopped promoting such notions, especially when it involves taking money from one group and giving it to another. You want a house? Work hard and buy one — or move somewhere cheaper.
Read the full editorial here.