Banking Regulator Tightens Credit On Canadian Real Estate Investors

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  • Опубликовано: 25 дек 2024

Комментарии • 159

  • @Dertrend
    @Dertrend Год назад +5

    Credit is very restrictive in a lot of other countries to restrain how much money goes into housing. In my country of origin which is part of the UK you cannot get HELOCs or refinance mortgages. The only credit they will issue is a mortgage for a purchase. Canada has experienced wild unrestrained credit expansion over the last 20 years.

  • @LC-hv1qn
    @LC-hv1qn Год назад +13

    Housing is not the same price when we were at 2%.
    Remember when you laughed at me when i said we will see 7% rates? Well here we are Steve.

    • @amosashurst7463
      @amosashurst7463 Год назад

      GVRD prices are basically back to where they were when rates were 2%

    • @penrose2942
      @penrose2942 Год назад

      In some markets we are higher then we were this time last year. Shoot me your email and I'll forward the data. Stop being obtuse :)

  • @Observer168
    @Observer168 Год назад +10

    The situation might not be as bad as you think since mortgages defaults are still well under 1%. We made a huge deal during the start of the pandemic when we had 30% mortgage deferrals and even named it “the mortgage deferral cliff”. That turned out to be a big nothing and now we are making a huge deal about the extended amortizations.
    I feel they are just gifts to investors because the main point of investing is to put in the least amount of money and get the biggest returns when you sell after 5-10 years of appreciation. The banks were basically giving out free candy and the investors took it. People took mortgage deferrals and extended amortizations as a sign of trouble but it just makes business sense to take it. The point of real estate investing isn’t always to pay off the mortgage. It’s to maximize returns!
    You can argue that real estate doesn’t always go up but I can argue the value of money always goes down. The value of money keeps going down as more money gets printed and the amount of money printed during the pandemic was astronomical! Good luck!

    • @m.b5777
      @m.b5777 Год назад +4

      If you bought real estate in Vancouver in 1989 and sold in 2000. Your real estate appreciation after 11 years was zero. And you paid for maintenance, taxes , insurance on top of that.

    • @Observer168
      @Observer168 Год назад +1

      Not true at all.. show me the numbers. How much money would have gone towards rent if you rented a 2-3 bedroom for that long?

    • @m.b5777
      @m.b5777 Год назад +3

      @@Observer168 all public information. You can look at all real estate prices from 1989 to 2000. Rent was at least 80% cheaper. You can look it up. I can't spoon feed you

    • @Observer168
      @Observer168 Год назад

      @@m.b5777 well the ones that held on since 1989 are mortgage free and don’t need to worry about the current housing crisis.

    • @DummMoney-rr1fi
      @DummMoney-rr1fi Год назад

      @@Observer168 my parents paid 27k in 1969 in Richmond and now are mortgage free with you guessed it 2M in tax free equity. Tough to argue that's the best option for any Canadian to spend their housing budget on. My parents lived in the same house thru 1989-2000

  • @donm2067
    @donm2067 Год назад +25

    How will Realtors survive this?! Oh dear, they may have to get tangible skills that require effort.

    • @jeffotoole4509
      @jeffotoole4509 Год назад +4

      Real skills come on. Let’s hope they go and sell cars for a living. Those guys actually earn their money. Car salesman make anywhere form $150-$1000 per car. These guys do about as much work to sell one car as a realtor does for one house. Let that set in.

    • @JK-qn9qr
      @JK-qn9qr Год назад +5

      @@jeffotoole4509 can't wait. squeeze these realtors.

    • @DJRS2178
      @DJRS2178 Год назад +1

      Sales skills are needed in all walks of life.

    • @donm2067
      @donm2067 Год назад +6

      ​@@DJRS2178I'm a small electric contractor. I've been studying human nature, leadership, marketing, dealing with various types of people.
      Selling houses has been the equivalent of selling crack, all you need is to be there with the product in your name, the product sells itself.
      Mind you they have done a fantastic job of convincing people to pay exponentially more for a clapped out product.

    • @NewYork0110J
      @NewYork0110J Год назад +1

      Easy people keep buying as majority of Canadian are still bullish because of controlled inventory high demand and low supply.

  • @bhupinderkalra5188
    @bhupinderkalra5188 Год назад +4

    Expect higher rates for prolonger periods and real estate prices to stay higher as the impact of unlimited money printing or borrowing is not gone yet.

  • @briaf3370
    @briaf3370 Год назад +2

    Home resale prices feed into the CPI is the reason why recent qtr point increase. Why then did the rate not increase for 1/5th of a century while home prices ascended to over a million canadian pesos? Banks need to be held liable and rhe executives thrown in jail.

  • @brianponcelet3529
    @brianponcelet3529 Год назад +5

    The return on real estate is gone. You can pick up a corporate bond for 7-8%. Best case scenario is real estate is flat….returns for the next number of years. Expect another rate increase in July and August.

    • @donm2067
      @donm2067 Год назад

      The Realtors have been booking in future profits for years.
      The numbers make no sense, these people have trashed the market.

    • @NestleSnipes2040
      @NestleSnipes2040 Год назад

      Where are getting corporate bonds for 7-8% and how long is the term?

  • @DougLogan-e7q
    @DougLogan-e7q Год назад +4

    I was very young but I remember 22 percent interest. My first mortgage was 11.25. this isn't going to end well

    • @mattslowikowski3530
      @mattslowikowski3530 Год назад

      Depends on what you consider the end

    • @bonniejohnson1518
      @bonniejohnson1518 Год назад

      they could only raise to 5.5% in the 07/08 fiasco....the national debt is way too high for any real interest rate hikes.......Willie

  • @geoffc8760
    @geoffc8760 Год назад +2

    I think limiting personal mortgages for investment properties to 5 a good idea. They could limit it to 1 or 2. Some investors will state a new home purchase is a primiart residence for a lower mortgage rate. Some will never move in the home. Forcing people to get commerical mortages for invesment properties could slow the demand down from small mom and pop investors.

  • @paulsandhu7313
    @paulsandhu7313 Год назад +2

    How does data matter if the rules of the game keep changing? 30, 40, 50 year amortizations, less than interest only payments and so on to keep the banks afloat (no one gives a damn about the people). The crash will come when unemployment skyrockets, especially if as a result of some unforeseen black swan event or events later this year or next.

  • @anythingwewant604
    @anythingwewant604 Год назад +1

    If you want to know the strength of the Canadian consumer. Look at the knee car market. It’s a forward indicator 6-12 months where the economy is going. New car sales are down. Now wait for q3-q4

  • @gregr6638
    @gregr6638 Год назад

    Thanks Steve. Always informative content! Saw you driving today an hour ago. Cheers

  • @proshare99
    @proshare99 Год назад +1

    Seems call loan to be happening…who had uninsured mortgage before stress test announced are about renewal are going see their payment skyrocket and banks know they cant requalify elsewhere

  • @mikechung7316
    @mikechung7316 Год назад

    Love your analysis Steve, in a world where the there is no nuance

  • @living-in-quebec1554
    @living-in-quebec1554 Год назад +1

    Will Canada follow suit with UK Re new mortgage rules for stressed mortgage holders? Wondering what Steve & viewers think?

  • @rustamsoltoev
    @rustamsoltoev Год назад

    100 years mortgage with 18% interest rates, that is what coming, people just gonna walk away dropping the keys to the banks

  • @central3425
    @central3425 Год назад

    Credit unions are going to be federally regulated soon. How will that affect getting a mortgage for a rental at a credit union?

  • @proshare99
    @proshare99 Год назад +4

    Let’s see if BoC going hike 50 bps on July like BoE did 😅

    • @baseline6786
      @baseline6786 Год назад

      They will base there rate decision on next week's inflation data.

    • @baseline6786
      @baseline6786 Год назад

      @@Ronin317 by September inflation should be coming down quicker as people are not spending as much. They r focused on back to school?

    • @bonniejohnson1518
      @bonniejohnson1518 Год назад

      they can only raise in accordance to what the US does, nothing more nothing less........willie

    • @bonniejohnson1518
      @bonniejohnson1518 Год назад

      @@Ronin317 how is .25% rate hikes going to tame 20% inflation? its like hunting Moose with a BB gun.....Willie

  • @bathtubrenew
    @bathtubrenew Год назад +3

    Buddy have been as right with his predictions as Jim Cramer.
    You might want to consider doing a channel together.
    Once the inventory goes up the prices will slide in relation to the inventory and peoples availability to funds.

    • @tylerjodeblock1224
      @tylerjodeblock1224 Год назад

      To be fair.... every "expert" including yourself in the RUclips comments are just as accurate as Jim Cramer. You are gambling at the end of the day whether it's with real money, or none at all and just talking trash on the sidelines. The only investors that have a great track record are politicians and insiders, hence why Nancy Pelosi out performed every hedge fund in wall street

  • @kerrytoby7041
    @kerrytoby7041 Год назад +1

    If I was looking to buy a first time home in Vancouver I would seriously try to adjust my work so I could buy away from the City. Buying first home in the City unless it's a small unit would be enslaving oneself.

    • @Observer168
      @Observer168 Год назад

      Being able to get to work in 30 minutes is also a luxury living in Vancouver. Losing 2-3 hours of your life being stuck in traffic really sucks. This is one of the main reasons people will change jobs if they can’t work from home.

    • @kerrytoby7041
      @kerrytoby7041 Год назад

      I would find work in a smaller center or be self employed where I could buy. Basically one would have to reinvent their work life balance to make it possible.

    • @Observer168
      @Observer168 Год назад

      Good idea but thousands of people travel to Vancouver for work every single day because that’s where the work is. They could find work closer to home but it isn’t always a option.

    • @donm2067
      @donm2067 Год назад

      ​@@kerrytoby7041where you going? Kamloops or Kelowna? Bring a million dollars with you

  • @mth469
    @mth469 Год назад

    What is so complicated about making banks that issue sub-prime mortgages eat their own loss when the mortgage defaults.
    That is the fastest way for real estate prices to reflect real supply and demand.
    it is basic economics.
    Instead the banks gets to dump that mortgage default on the rest of society and govt obliges this by money printing, bailouts, "stimulus" and other scams.

  • @mrwarbucks9717
    @mrwarbucks9717 Год назад +1

    Commercial R.E will be the beginning of the end for REALESTATE . The house of cards must fall, and then a new round of players start a new game with the same cards. Currently, just at the beginning of a ROYAL FLUSH

  • @Rachelschneider03
    @Rachelschneider03 Год назад +31

    In spite of how everyone is frightened and calling the crash, there is already an excessive amount of demand waiting to absorb it, which is another reason it's less likely to happen that way. This forecast was not made in 2008, at least not by the general public, as I will explain below. The ownership rate peaked in 2004, according to the other comment. We reached a peak in the second quarter of 2020 and are currently at the median level. From 2008 to 2012, it fell by 3%, and in the second quarter of 2020, it dropped from 68 to 65.

    • @ReidCoffman1
      @ReidCoffman1 Год назад +5

      Because they are used to bull markets, most people find it difficult to handle a decline, but if you know where to search and how to get around, you can make a sizable profit. It depends on how you plan to enter and leave.

    • @AshtonGrace
      @AshtonGrace Год назад +2

      Given that we are not accustomed to such uncertain markets, the fact that the US stock market has been on its longest bull run ever makes the widespread anxiety and excitement comprehensible. There are opportunities if you know where to go, as you noted that it wasn't difficult for me to earn more than $780k in the previous 10 months. Since I was aware that I would need a reliable and strong plan to get through these tough times, I engaged a F.A

    • @MariusNatt
      @MariusNatt Год назад +3

      @@AshtonGrace My portfolio has been in the gutter for the entire year, so I started researching new ways to profit in the market, but everything I tried just seemed to miss the mark. Please let us know the name of your F.A

    • @MariusNatt
      @MariusNatt Год назад +1

      @@AshtonGrace I just copied and pasted Maria’s whole name into my browser, and her website appeared right away. You've saved me several hours of arduous research, therefore I appreciate it.

    • @m.b5777
      @m.b5777 Год назад

      There are still people buying believing that they can double their money in a few years. That is the only reason they are buying. Once the recession hits, demand will evaporate.

  • @spyderativ2438
    @spyderativ2438 Год назад +2

    Ban corporate ownership of residential properties except purpose built rental apartments.

  • @tylerjodeblock1224
    @tylerjodeblock1224 Год назад

    So people that bought in 2020, 2021, perhaps even last year are already feeling the pain, and people need to extend mortgage amortizations, build zero equity, and have all thier wealth tied up on a highly leveraged asset that they cannot afford essentially. That is the new fundamental fact in the market that has yet to fully burn into the market sentiment.
    The buyers in the market today either have lots of cash and don't care about market sentiment or they are uneducated retail investors that don't understand how to detect the start of a bear market and not know the pain that comes with being overleveraged just yet.

  • @Observer168
    @Observer168 Год назад +2

    The buying and selling of homes need more government intervention. I rather see the government collect the commission and put it towards affordable housing. Realtors typically have open houses from 2pm-4pm on a Saturday or Sunday and they just stand in a corner on their phones while you look around. The buyers agent just shows you around and spends a few hours of his time during the buying process going over the terms with you and chatting with the sellers agent on how much money is required to close the deal.
    All this could replaced with a government online bidding process and a government regulated home inspection prior to selling. A government employee could easily handle the open houses and the notary or lawyers could get more involved in the paperwork. The realtors would complain about their livelihoods but they could easily find work if their skills were real that valuable. I have seen kids do more work showing off the prize home at the PNE instead of standing in a corner texting on the phone trying to look important. An notary could handle that if they were paid a open house showing fee.

    • @kentA205
      @kentA205 Год назад

      This sounds like an interesting proposition

    • @Observer168
      @Observer168 Год назад

      @@kentA205 could be a solution to finance tons of government housing. Realtors would need to change careers but we would have thousands of government homes built every year. Most people would vote for it.

  • @kerrytoby7041
    @kerrytoby7041 Год назад +2

    There will be an end to these increases and there will be an eventual levelling of prices. The big centers will remain unaffordable to first time buyers.

    • @donm2067
      @donm2067 Год назад

      Dunster and McBride are out of most people's reach lol

  • @Relaxlifeisshort2
    @Relaxlifeisshort2 Год назад +4

    Supply and demand my friend.
    Commercial realestate down. Where do you think residential will go up.
    Credit tightening yes but as soon as we hit a recession rates will come down.
    Canada realize heavy on realestate like it or not.
    Lets see

    • @NavyMoo5e
      @NavyMoo5e Год назад +1

      I can’t wait for the supply and demand theory to get squashed.
      It’s not about supply and demand. We have supply.
      It’s about speculation, which is what is about to get crushed.

    • @Relaxlifeisshort2
      @Relaxlifeisshort2 Год назад

      ⁠@@NavyMoo5e
      Wrong we dont in places that count. Toronto Vancouver. Affordable places needed true going to a renters market.
      Has it gotten cheaper in NY no and weather you like it or not those 2 places are Canada.
      Ever look at a map of the country have a look.
      It wont get squashed
      People that over paid for houses in places that are not valued yes.
      Good luck

    • @Lifeisapartydresslikeit
      @Lifeisapartydresslikeit Год назад

      What?? Then how do you explain 1M immigrants? Don’t they have to buy or rent a home?? Sometimes I think most people on these forums/platforms don’t live on earth! Seriously… I have renters in my properties and they want homes - same with plenty of my colleagues at work! Demand is out there… do your research

    • @NavyMoo5e
      @NavyMoo5e Год назад

      @@Relaxlifeisshort2 how long do you think until we can’t ignore the fact there’s 20 thousand vacant short term rentals in Toronto at the moment?
      Using the BOC appreciation calculator even shows that the average house in Toronto would be less than $300k if housing market followed proper inflation growth. What makes it higher in value? Speculation on investing. Investing in houses is our problem.
      This video he’s even explaining regulations coming 😂 good luck

    • @jamesj2212
      @jamesj2212 Год назад

      @@Lifeisapartydresslikeit Right and the reason they don't have a home, is they can't get approved... Which is getting even harder with higher rates. You need 250K income to get approved for 800K mortgage, with absolutely no other debts, no car payments, student loans, credit card debt etc, just not that many people in that situation. So something has to give, and it will likely be prices.

  • @cocacola7845
    @cocacola7845 Год назад

    Careful with all that Copium. Heard it’s addictive

  • @Matt.k864
    @Matt.k864 Год назад

    5% Commission 50k to Realtor for your million dollar home purchase Thank you

    • @Observer168
      @Observer168 Год назад +1

      The buying and selling of homes need more government intervention. I rather see the government collect the commission and put it towards affordable housing.

    • @DummMoney-rr1fi
      @DummMoney-rr1fi Год назад

      @@Observer168 my realtor got me at least 100k more on my last sale, thank you for your help. I wouldn't have had a clue how to sell my place for what she got.

    • @DummMoney-rr1fi
      @DummMoney-rr1fi Год назад

      best $50k in commission I've ever spent, and I only spent less than 5 minutes signing a Docusign at the beginning lol

    • @Observer168
      @Observer168 Год назад

      @@DummMoney-rr1fi you could have done the same with a notary for 2k but you need to do it in person to prevent identity fraud even though fake IDs have gotten very authentic looking.

    • @Observer168
      @Observer168 Год назад

      @@DummMoney-rr1fi your realtor must have been really hot to make you think dumping 50k in commission was a good deal. Hope you had a good time because I prefer spending 2k at a notary or real estate lawyer and pocketing the rest.

  • @geraldbrowne
    @geraldbrowne Год назад +2

    I want the investors and carpet baggers to go bankrupt. Along with realtors that don’t give a shit about their clients well being when they sell them over priced properties and it turns into a turd

  • @justinaldrich1719
    @justinaldrich1719 Год назад +2

    .50 hike in july

  • @briaf3370
    @briaf3370 Год назад

    I'd fix these stratospheric home prices from increasing. 17.5% interest rates. Done! Next topic

    • @DummMoney-rr1fi
      @DummMoney-rr1fi Год назад

      my parents had a mortgage from 1969 til they paid it off in 1990. house cost 27k now its worth north of 2M

    • @amosashurst7463
      @amosashurst7463 Год назад

      Prices would a fall for sure but affordability may not improve (could even get worse)

    • @jamesj2212
      @jamesj2212 Год назад

      Hmmmm renewing a 500K mortgage at 17.5% would be just under $8k per month, I think that would do more than bring down home prices, it would likely bankrupt the whole country. Heck it costs the government 44 billion to service the debt at under 1%, imagine the cost at 15%

  • @WilliamChrisanthus
    @WilliamChrisanthus Год назад +2

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    • @WilliamChrisanthus
      @WilliamChrisanthus Год назад

      The crypto market can be highly profitable, especially when working with an expert broker like Eddie Sota. I was fortunate enough to receive a recommendation to him, and ever since, my financial life has been a tremendous success.

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      @DonaldReims Год назад

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      @MichaelBaldwin027 Год назад

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      @MilfordDahlberg Год назад

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      @SorianoPeters Год назад

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  • @DummMoney-rr1fi
    @DummMoney-rr1fi Год назад

    It's a circus, banks just keep kicking it down the road. My rent rolls have gone up 50% I. Last 12 months and my fixed variable rate payments are only up 20%. Interest only now lol, but the extra cash flow is sweet $$. I could care less more cashflow less equity gain and more write offs.....gotta love real estate. Buy buy buy!

    • @Observer168
      @Observer168 Год назад

      Yes, put in the least amount of money for max profits when you sell. Investors don’t care about paying off the mortgage. It’s something the renters don’t understand.

    • @DummMoney-rr1fi
      @DummMoney-rr1fi Год назад

      @@Observer168 Selling one of our units, so one of my tenants currently has options of dealing with the new owner on under market rents, taking a health buyout from me to leave or agreeing to market rents with a big check upon selling. The word from them is they are taking the cash for keys and moving to Alberta. Trend? or ?

    • @Observer168
      @Observer168 Год назад

      @@DummMoney-rr1fi many people that bought early in West Vancouver sold their homes to rich Chinese in 2016 and bought multiple homes in White Rock or Fraser Valley with cash.

  • @costing3606
    @costing3606 Год назад

    From an affordability perspective this doesnt make a whole lot of sense; sure house prices will go down probably but affordability will not improve. If you pay less on the house but way more on interest, the lower prices only benefit cash purchases. You can argue that investors might not be as tempted to invest in realeastate if prices stagnate or fall when they can just buy bonds which are now paying very well, but for the long term, real-estate will continue to be a solid investment avenue while supply cannot even come close to covering demand.
    Can't really create more land in the desirable cities which most people coming into the country want to go live in. While Toronto/Vancouver are hot spots to live in, and people want to live there, supply will be constrained which will put upwards pressure on land prices..

    • @Observer168
      @Observer168 Год назад

      @@ootoobin Doomers just want everyone to crash and burn because they missed out.

    • @m.b5777
      @m.b5777 Год назад

      High prices are forever, high rates are temporary. You can refinance when rates drop.

    • @m.b5777
      @m.b5777 Год назад

      There is more than enough land. The Lower Mainland is bigger than many countries. BC is bigger than Germany, France and England combined. Who told you that we are running out of land? 😂

    • @Observer168
      @Observer168 Год назад

      @@m.b5777 you never heard of crown land and zoning restrictions? How about all those people that are against building condos in their neighbourhood? How crazy delays in getting building permits? What about the 500,000 immigrants arriving each year?

    • @m.b5777
      @m.b5777 Год назад

      @@Observer168 Crown land doesn't mean that land is locked up in a vault 😂. Land will be transferred to municipalities as needed. The lower mainland was Crown land too at one point. 500k immigrants across canada is not net immigration. You are not counting the people who are leaving. And immigration targets are not set in stone. A conservative government can change it without any parliamentary approval. The government can change it tomorrow if they want to. No new legislation is needed to do that.

  • @NavyMoo5e
    @NavyMoo5e Год назад +1

    I have a 3 unit home that i bought for $227k in 2016. Can’t wait for this house of cards to come crashing down. Houses are staying on the market longer because it’s over priced sh!t.
    This regulation is hammering on speculation which Tiff himself said needed to be dealt with. I’d much rather buy my house for what I did than pay 400k for it today.

    • @DummMoney-rr1fi
      @DummMoney-rr1fi Год назад

      What are rents for the same units today vs 2016?

    • @NavyMoo5e
      @NavyMoo5e Год назад

      @@DummMoney-rr1fi one rent went from under $700 for a 1.5 bed one bath to $1300