Canada's Big Mortgage Moves - How Will They Impact the Housing Market?
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- Опубликовано: 28 сен 2024
- As the federal Liberal government makes some major mortgage rule changes this week to help first-time buyers and and others being left behind in Canada’s housing affordability crisis, my colleague and co-host, John Pasalis and I discuss the impact of these moves in an occasional series we call “Move Smartly Ideas” - our chance to take a deeper dive into housing economic and policy issues.
Today's show links:
Finance Canada - Official Announcement - The Boldest Mortgage Reforms in Decades: www.canada.ca/...
Contact Us
John Pasalis, President and Broker, Realosophy Realty, Toronto | Email: askjohn@movesmartly.com | X-Twitter: @JohnPasalis
Urmi Desai, Editor, Move Smartly | Email: editor@movesmartly.com | X-Twitter: @MoveSmartly
About This Show
The Move Smartly show is co-hosted by Urmi Desai, Editor of Move Smartly, and John Pasalis, President and Broker of Realosophy Realty. MoveSmartly.com and its media channels on RUclips and various podcast platforms are powered by Realosophy Realty in Toronto, Canada.
You can also listen to this and every episode on our Move Smartly podcast here: link.chtbl.com...
If you enjoy our show and find it useful, please subscribe and leave us a positive rating on whatever platform you are watching or listening to us from - thank you!
John Pasalis and Steve Saretsky are the most honest real estate professionals out there. Also, excellent questions asked by Urmi. Keep up the great work folks!
@richboy3860 - Thank you for watching us and for your kind words! ~ Urmi
Jon Flynn too. All three are great and tell us the truth about the housing market.
Fxxk JT, stupid mortgage policy, stupid immigration policy!
I know what I'm going to do after this announcement: Leave Canada for good in a couple of years, with all my money.
People here can have fun falling over one another to buy properties.
Excellent discussion. I mean this as a compliment, this was much better than other times I have heard you John in a long format: more coherent, more logical, less repetitive and more strategic. Thank you for putting yourself out there.
The whole thing is a joke. The government knows exactly what they are doing. Be in debt until you past away.
Chrystia Freeland was literally recruited by JT from her book called "The Rise of the New Global Super-Rich and the Fall of Everyone Else". You cannot make this shit up.
Young people are better off with lower prices and amortizations. Don’t buy.
Scrimp and save to leave Kanada.
Excellent episode!
Introduction of the subprime mortgage shows how big of a problem it is. Soon a large number of idiots (mostly new bees) will sign up for the subprime mortgages without knowing the consequences.
Haha, of course. It is greed that makes people buy even when they are over valued. They think they can buy even when they cannot afford and rent out the basement.
Thanks for speaking truth!
We need housing to stay at inflation for the next 10 years.
Instead of 8-10% growth
Enjoyed the good questions and the speakers sincere and factual answers. Subbed! Thanks
@sojourneroftheland - Thank you for the kind words and sub! ~ Urmi
But the fact that we have to renew every 5 years to a different rate on a 25-30 year loan, is like playing Russian roulette every 5 years
Best video ever posted on this channel
The actual problem is everyone wants to live in the same 50 sqkms, Hawaii has always been and will always be expensive............. you can go buy a house in Saskatchewan for 50k to 100k easily... guess what, people would rather complain about Toronto or Vancouver. 99% of Canada's land mass is cheap, ultra cheap.
Toronto is no Hawaii though.
@@hv3115 it actually is, everyone wants to live in the same 3 blocks just like Hawaii.... which is the problem.
why is that.... because that is where all the jobs are.
Most jobs are in Toronto and so unless people find remote jobs they cannot live anywhere else.
Yeah, what kind of jobs do you find in Saskatchewan??
@@hansanaik3835 the feds can do tax incentives for biz to create jobs out in rural areas (digital work from home too)
You forgot to mention a very important point. As the house price goes up and up, the property tax goes up according to the appraisal price. Please talk about that as well
House value up, property tax may not go up much if there is more ppl own properties and share the cost of the city .
I wouldn't be surprised if this is part of the reason why the Gov't wants to stimulate house prices. Higher prices, more taxes they can collect.
Not sure if its been addressed in the video, but is there a chance that the new mortgage rules will do nothing and not drive up prices? Because how many people actually have 150k to put put down and have the requisite household income.
It’ll keep things steady for now until unemployment explodes.
Yield curve inverted recently in Canada. 6 months or less.
What can we do, still we can buy a house, better than not able to buy and push rent higher
Pasalis getting fired up in thsi one. Love it. We need to get more angry to get motivated to change things.
What is adorable housing?
Having housing stay flat for 15 years while wages catch up is not insane. Its exactly what happened fron the ealy 80s to late 90s.
We did it because we expanded our oil and LNG sector and created hundreds of thousands of good high paying jobs. We did not have to count on real estate to carry the economy.
We could very easily do the same with a federal govt that is interested in the future of Canadians and not just buying votes on our path to poverty.
Its absolutely insane because there is NO SIGN Canadians producing more as GDP per capita has been down for 2+ years. That is also NOT what happened in the 80s and 90s by intent. They had nowhere close to the same level of housing affordability crisis as today.
@@JustinChong-w9y
Different situation, but will still be the same result.
The peak of the market was in 2022, but do you realize that the average price of a home in February of 2021 is the same as August 2024.
That's a 3.5 year span.
It happens slowly before your eyes.
@@Stormshfter The Price-to-Income Ratio in 1980-1990 was 3.2. In 2020 it was 6.7.
What economic boost do you feel is going to DOUBLE our average income? The problem is not wages, its the artificially bloated home prices
@@JustinChong-w9y
In 1981 the interest rate was 20%, it tapered down to 13% a few years later.
By 1990 i bought my first starter house in 1982 (it was 3x my income) I had 6 children( which most people had at least 3 or 4) on a SINGLE income (since the wife was busy changing diapers, followed by driving to hockey).
It was a different world, you can't cherry pick a stat and say we had it better.
I will give you this though,
Some of Vancouver, Burnaby and certain parts of the Greater Toronto area are worse, but not by as much as you think.
Wages were also stagnant all through the 80s.
The problem today is our current govt isn't doing anything to expand our GDP. Without an influx of high paying jobs we're screwed. At least once they are gone next year the new govt will expand oil, LNG, and mining.
@@Stormshfter You bought a home and had 6 children on a single income, and youre calling it "cherry picking" when the generation today cannot afford to house themselves, letalone have children. Are you for real? The average price to income ratio in the GTA is almost 10x the average income. You HUNDRED PERCENT had it easier lmfao.
Great content "Oormi"
Great insights. Why can't we have people like this in the government? 😢
Longer amortization means more money is being spent on a house.
People need to just consider that after 20 years of soaring prices, and an income to home ratio of 13 is just unaffordable. The whole sector is bloated. Big fat developers, big fat gov't taxes and development fees and land transfer taxes and GST charges.... when do endusers start saying no. Or demanding their gov't to drop taxes, or force developers to become more lean?
so many homes i am seeing people are renting out rooms and the basement making it into a slum
Government keeps increasing taxes and then even come up with new taxes every few months, so how do you expect them to lower the building / builders charges?!🤨
if enough young people agitated for it the same way boomers agitate to keep property taxes low, it could happen. the problem is young Canadians have been too passive sheep for too long or distracted by various other things.
I have great admiration in your directness and honesty regarding the issues of surging home prices, government interventions, affordability issues. I have just started watching your utube channel and I totally respect your opinions!
Great job! Thank you for your sincerity.
How are these people going to make the payments? On $1.5 property with low down payment. Am I missing something?
You're missing the mindset of a moron that CHRISTYA FREELAND have.. that's not a bad thing it's a good thing that we don't have that mindset lol😂
govt jobs
Pathetic?
This guy has no filter and put it all out there. No bs.
Bang on! Fiat monetary policy is based on debt increasing. Canada's only economic growth is in housing. This is all about the Banks having a liquidity problem. We saw this recently with the Banks having to complete for mortgages by offering discounted interest rates.
Thus is an absolute nightmare
The government wants to pump the housing bubble no matter how much damage it causes.
Great show guys!!!
This guy makes sense every single times
Honestly the best possible thing that could happen would be to completely abolish CMHC and all mortgage insurance companies, and max 25 year amortization. This new change will only allow people to WAAAAY over leverage. The solution to lack of sales isn't to let people borrow more money, the solution is to reduce speculation and drastically reduce the price of existing homes..
It's interesting how they always seem to find more money to LEND to consumers (thereby creating more debt slaves) but they can't seem to find more money to PAY as wages so people with jobs could actually afford to buy the things they need and achieve financial freedom down the road.
the solution is to get govt
and all the lobbyists banks and construction companies
out of the market.
the free market protects the consumer.
these guys are lobbying to profit themselves
by getting govt to pick winners and losers in the market.
the winners being them.
@@mth469 the problem is that the public has been thoroughly indoctrinated to see the free market as the bad guy and government as the good guy. That's why people keep voting for bigger and bigger government because they think they need to protected from free market forces.
It might relieve some pressure on the sub-$1 million segment since high-ratio borrowers can stretch above the $1 million limit now. We'll see...
The Vancouver new system is you pay 60%, the remainder 40% is subsidized and owner pays either after 25 years or at time of sale. Honk Kong has the exact same system. Maybe this is a good way to circumvent the reality that prices will NOT go down.
Young Canadian homebuyers should not fall for this bagholder musical chairs ponzi and hold off on buying overvalued homes at the $1.5mm limit, would just bail out developers and "investors". Let the market collapse play out, and buy at sane income:price ratios, while pushing your local politicians to stop the mass immigration and cut new home development taxes. or find a remote job and leave Canada if you can, don't become a debt slave.
Canadian real estate is a massive Ponzi scheme...every time a house is sold, another sucker is born. The actual true real world value of most Canadian homes is 50-100% less than their market price. The "Canadian way" is to pay for WAAAY overvalued real estate and become debt slaves, have no disposal income for recreation, travel, etc., have zero quality of life, and spend your life working to the bone to pay a ridiculous mortgage. The cost of living in Canada, anchored largely by housing, has driven the average person's quality of life into the ground. Why anyone would want to immigrate to Canada is beyond me.
housing is a short of way of tax, it's estimated that 50% of housing value is charged by government. Also like any human beings, a government could become greedy if they made a lot of money from there, and they start to lie to their people, to try to keep their source of income.
Should be ashamed
Would love to liberate a distressed condo flipper of their wonderful shoebox if they’d only lower the price by 50% ;) I’m not becoming a debt slave, I’d rather rent and invest the rest or live in a van.
Rent slave or debt slave. At least one has appreciation
People should opt out of the housing bubble at some point. Too many people think they have to buy, and that's simply not true. You can move somewhere cheaper, become a digital nomad and go abroad, live in a fancy camper-van, there's tons of options other than a $1.5 million debt-slavery agreement.
@@ElectronicWasteland-p2x Exactly. People also don’t factor in property taxes, repairs, appliances and the fees. Don’t get me wrong if I could get the house I want 45 minutes out of the city I’d for under 500k I’d take it in a heartbeat with 20% down. People just gotta use common sense.
@@TimBer-y3y there a difference between renting a one bedroom condo and owning your dream home. Eventually I’d like to own simply because there are things on the land I’d like to do like farming.
Excellent discussion!!
Glorified renters. Canada is going closer to a second world country where the greater polarity between rich and poor is apparent
Until there is sufficient gdi(gross domestic income) derivable from within Canada's already stagnant 10+ years gdp that was being maintained by no more than low rate fueled speculative based Debt expansion injecting false demand into elevating valuations..... there is insufficient servicing oncome available at ANY BoC rate to maintain current Real Estate valuations.
Recession/demand destruction and a very painful deleveraging cycle is imminent with significant Banking/Financial system attenuations to lower Real Estate valuations.
100% false, as always you are wrong.............. the people that buy real estate (the top 25% of income earners), their wages are up 12% and increasing rapidly.
@@GreenBeanGreenBean
Bwahahahahahahaha..... Thx for the chuckle!! I'm not sure here.... but I believe you might be referring to some "special" attempt at an EBITDA descriptive ? ..... "special" intending in the "Olympics" sense of the word..... no matter, rents are currently falling dork ? the DEBT not so much yet huh !
@@dirtlump you definitely wear a helmet outside at all times 👍
Rents are at all time highs, lay off the drugs.
Dear real estate agents... Don't celebrate too early 😂😂🎉
If you decrease builder cost, they will just "advertise" more with their fellow billionaires and write off cost of advertisement and sell faster and make more profit. The government has to get back into building homes. That is the only way home prices will go down. The govenrment owns 90% of land in Canada. Start giving Canadians lots and let us solve the housing problem.
That will not happen, because government is not efficient. By the time they found the land, get the funding, 4 years had already passed, and someone else will take the credit.
Will never happen.
Government can't do it. Demand is too big
the reason the gov stopped building back in the 70s was because low income housing is a permanent money loser (you lose money every year into foreverness)...... you are basically implementing a lottery of a few people get the benefit of paying nothing, off the backs of taxpayers................which is why this was stopped long ago
Unless you own 2 home , you can only cash out where you sold.
Or you cash out and gtfo of Canada lol
Don't worry, the prices won't rise after that policy. Unless you want to try to induce fomo in that case you can say that..
The one thing I hate is how Trudeau makes this about helping buyers and first time buyers afford to buy a home. Home values are coming down and ultimately that’s what helps make homes more affordable. Stepping in now is just reckless on their part and shows their priority is not helping buyers but helping banks and developers to keep the Ponzi scheme going.
the gov subsidizes the oil industry a hundred times more to keep them producing oil even as it is more expensive than foreign cheaper sources..... why not cry about that.
New rules only benefit lenders and builders. If one cannot put down 25% deposits, then u have no business in buying a home.
Income income income. That is the only major factor in the long run.
Add stress test to that
Good to see an honest Q & A. Canadian politicians lie through their teeth. It is outrageous gaslighting.
Yay...stimulate demand in a debt economy. Smart move 🙄
The economy shows weakness, Canada needs housing to bring growth. In the last week or so, they are adding measures to improve the market. Wait to see the housing kicks up
also, how can home owners sell their homes in the future if they are so imflated that no one can afford it. who then buys your home?
money printing to (further) destroy the value of the currency.
modern day economic theories are total idiocy.
The new government employee justin will hire for the new made up unless position he made up.
It’s just a rush to sell before the whole thing bursts. Kicking the can down the road.
Why? Canada’s economy is 1) Housing 2) Government spending
@@musicbygoldenj if there is a burst I wonder by how much will home prices fall, and if it will really impact housing affordability. only time will tell!
@@Iykyk003 prices are already down but nobody has really noticed because the asset prices were so high to begin with.
Unemployment + yield curve inversion = more pain to come Canada
this guy is reasonable and smart. higher house prices helps No One
really, this is to help the builders to keep the price up and big banks with higher recovery on forclosures. The guest is absolutly right, if they really want to help, they could lower taxes in federal, provincial, and municipal level, remember the taxes were added on back in 2008. Instead, they just want Canadians to take on more debt. I hope you can see now this Libral government doesn't care about the average canadians. I find librals always has the most righteous speech, but does the ugly deeds, fake and phony.
Spring 2025 up goes home price gradually
If unemployment goes up home prices won’t go up
Thanks.
Governments shouldn't be charging development fees on the air above a property, they should be charging for the ground, and any upward building benefits the developers.
But only in a highly dense metropolis, that houses are still beneficial to build in suburbs.
Generational fairness is right. Costs must be reduced especially the utterly bloated taxes, fees and levies on new housing. They did a partial move cutting HST on PBRs. It should be extended to buyers who are otherwise penalized. And then there is the bloated red tape and delays. Today’s first time buyers are facing the massive associated costs their parents did not have to face. It’s terrible.
Why would one would buy a more expensive pre con?
Quite the alarming news for Canada. It's clear many employers aren't going to increase wages by over 3% YoY. Wages aren't in lockstep with Cost of Living / Housing / Rentals... this policy might help those already knocking at the door of a home purchase or are Investors. GREAT EPISODE!
The housing issue is more income than price - Nobody can afford rising prices with non-rising income - Focus on latter or productivity -
Do you think a buyer who can only afford a 10% down can afford a monthly payment for mortgage of 90%? Nonsense -
The government and banks need debt slaves for life and unfortunately this move will only help the banks as they are facing tough time. Most number of delinquencies for RBC in 3rd quarter was in news last week. Less than 20% down payment and the increased value to 1.5 mil is only beneficial for the gov (more taxes) and banks (more interest).
The housing builders lobby at work and not for buyers -
It is about balance. And to smooth the fluctuation. Easy to barf out your opinions when you arnt a policy maker.
I heard that another mortgage change was that you don’t need to qualify with a new mortgage lender if you are looking to switch your lender at renewal. Is this true?
Urmi you look amazing! 🤩
Spot on analysis.
Excellent discussion! I agree.
Now Indian and Chinese families can pool their 5 percent downpayment together faster for that 1.5 million dollar home. This hardly helps the average Canadian.
Chinese and Indian families have more sense than to pay 1.5 mil for a sugar shack.
It's not worth it.
What is an average Canadian? Lol
@@SW-li7gd people who aren't massive families of Indian and Chinese immigrants
The average Canadian is on fentanyl.
@@SW-li7gd bought a home 26 years ago and have 14 more years to pay off mortgage. People don't realize to refinance for more money every 5 years and reset amortizion back to 25 years each time. Do that 3 times and bam you are paying for 40 years.
Home owners have kids and if they want to their kids to own a home, they have to sell their existing home to fund home purchasing for their kids.
No they don't, we bought our own home and our kids bought their own homes. It's called go to school get a good job to pay for your own home. NO hand outs, that's not helping your kids it's teaching them that they can get something they didn't earn and financial strain their parents to do it.
@@kater8730 That is a privlage statement. Home prices are 9 times average salary so when not many people make the same salary your children make.
@@fatimaalzahra2644 No they have to save longer and work harder, we didn't buy our first home until our kids were teenagers, we saved and didn't have VK's or fancy cars or go out to dinner...we saved. It's called priorities.
If you do the research you will realize that a married couple of combined salary of 94k annually can never buy a 800k condo in Toronto. People have very little saving with average annual salary of 94k.
@@fatimaalzahra2644The average salary in the GTA is around 60k, with combined salary of 120k, the entry level condo is only 5x the average household salary which isn’t as bad compared to most other major cities.
lots of mortgage fraud gonna happen doesnt help the rest of us who can afford a 7000 month mortgage?? they are so out of touch
My mortgage is $7000 but I live in the lowermainland. There aren’t really houses under $1mil anymore.
It’s been happening for a decade, no other way to afford homes
Zero-sum game is no fun.
Open up the Greenbelt and build family appropriate housing.
Extend and pretend.
Ninja loans.
Very weak analysis , I don't know why this guy is invited to all the RE shows. Always accentuating the negatives and leaving out the positives. The changes allow people more freedom, like all freedoms it can be misused, but there can be big benefits also. One can buy a better home, suited for their needs and not need to waste equity by having to move up later. When insuring the mortgage, the 4% premium will be offset in time by the lower rate you qualify for. There's also the fact that there is some pricing anomalies around the 1 million limit. That will move up to 1.5 mil, where it will impact far fewer buyers. You can expect some homes that appreciated to just below 1 mil to drop in price because there will be less competition among buyers at that level. At the same time, significantly better homes that were priced slightly above 1 mil, might go up a bit. That will make the price differentials more fair. As well, it might lead to lower prices for those 'drive till you qualify' homes, as buyers will have more flexibility closer to the city center.
Another thing - he complains that "they can't build without prices rising", but when asked what to do - his only answer was to lower building fees, which is sure nice thing to do, but will just stop this cycle for a bit. After market will adjust - investors will need an expectation of further growth to keep building.
😂 freedumb
Beneficiaries of these new policies are mortgage brokers and realtors...
Your "high income low - down payment" scenario is not a common issue. Most high income households simply borrow more money for their down payments and lie to their banks about source of funds.. Massive mortgage fraud has been going on for years... That is why we have an over leveraged problem now.. Tens of thousands of home buyers over the last 5 years started with 100% LTV and are now underwater....
also that is why banks insists the govt get the taxpayer (via CMHC)
to insure the sub-prime mortgage garbage
that banks profit from creating.
there is no private insurer participation in the market
which means the risk to taxpayers is deliberately mispriced. (under priced)
say no to drugs, which you are clearly on.
mortgage default rate is still at 0.2%....... people are paying their mortgage.
@@GreenBeanGreenBean
Power up your brain and put it in Gear 1.
Mortgage default rates were at a historic low in 2006 in the US, until it was at a historic high in 2008 bankrupting 17 out of 20 major banks.
16.5 trillion in bailouts and money printing later, we have yet to see the aftermath which has been put on pause as a result.
Except the pause button is beginning to wear out.
Also if all this sub-prime mortgage junk is so "safe", why are banks getting govt to buy it from them at 100 cents on the dollar by the tens of billions. To offload it on to the backs of the taxpayers -- thats why.
Banks make good money creating these garbage loans on the way up. Now they want govt to offload the loss on the taxpayer on the way down.
@@GreenBeanGreenBean Where in my post, did I say Canadians were defaulting on their mortgages, on masse.... I said they are over-leveraged... stop your insults and read posts before you fire off unrelated replies... 1000's of homeowners being underwater on their homes is a major problem as consumer spending in the economy drops and defaults on credit cards and car loans/leases rise. Consumer insolvencies are at a 5 year high.... and rising.
As a suggestion, debate the arguments posted here, don't insult the posters...its called abusive ad hominems... it just shows the weakness in your own arguments...
@@rdefacendis the only people getting words are the ones posting often and blatantly wrong info.... like you.... because we all know you won't learn a thing and will keep posting garbo.
Fraud is not actually a problem if the default rate is 0.2%, which is 10x below the USA problem..... and it is most definitely not the reason prices are so high, and people are NOT underwater.... literally everything you said was wrong.... like usual.
If you say 2 plus 2 is negative 157, you deserve bad words.....because you definitely never used any logic, you are just on drugs. Literally impossible for buyers to start at 100% LTV.... banks want to see money on the downpayment coming from a savings account that isn't another credit card, that is the highest way they decline people.
Great analysis, thank you!
Unfortunately I didn't watch stuff like this before immigrating 10 years ago.
What would happen if the amortization term would be limited to 15 or 20 yrs and only insure up to 800k? Try to keep a cap on this stuff.
you think because you cap car insurance at 5 grand max payout that you think prices of cars will come down........... it don't work that way.
If house prices fall and the baby boomers don't have enough to retire on the government will have to borrow or pay for them to live. This way the government as you put it has that retirement for boomers being paid for by younger buyers
Heard of the RAP program, Seniors are the ones suffering while immigrants are getting thousands of free taxpayer $ monthly.