April the Best Month Ever: Toronto Real Estate Board

This totally sucks! This just makes it even more unaffordable to get a house in this city. All of us lower-middle-class earners are going to be destined to living in tiny little shoebox condos with names like Pulse and Rio, raising children without backyards, because that's all we can afford!!!!

I know how you feel Sarah, many of my would-be clients are fearing the same reality.

But cheer up, because this also means that when you do jump into the market you'll have a rapidly appreciating asset under your butt!

I wonder if what happened, or is happening here in America will happen up there. "You want to buy a house but think you can't afford...suuuure, we can lend the money on an ARM".
A few years later.."Honey, why has our mortgage payment tripled?"
"Whaddya mean foreclosure?"

Steve, it can't happen.

US-style ARMs are legislatively prohibited in Canada. Our floating rate mortgages based on Prime (currently 6%), or fixed rate mortgages which are usually adjusted every 5 years from a Prime measure.

Current rates are between 5.25% and a but more than 6%, depending on your preferance.

Cool, thanks Beerad. I did not know that.
I know alot of people here who got some big surprises and their mortgages doubled or tripled.

So, then something like this won't happen up there?
Cathy Busby is unable to meet the repayments on her home of 11 years after interest rates rocketed 40 percent. Up to two million people with so-called subprime or high-risk mortgages have already had their homes repossessed or will default on their loans in the coming months, according to industry estimates.

Steve, you are correct.

The BoC moves interest rates slowly and incrementally, typically .25% at a time. Because mortgages are based off Prime (which is based on the BoC rate), mortgage payments are fairly predictable--interest rates have been between 4% and 8% for the past 15 years.

These friends of yours shouldn't be so shocked that their 1%, no-money-down, interest-only, 35-year-am American mortgages are unsustainable.

With respect to the article, a 40% rise in mortgage rates means a jump from 4.0% to 5.6%, which would change a $1050/mo monthly payment into a $1230/mo monthly payment. That's hardly "double or triple".

Thanks,
I was being fecetious (spelling?), actually, the double or triple is closer to the heating bills lately: - )
But someone budgeted for $1050 may be hard pressed to come up with that extra couple of hundred bucks.

Steve:

This is the free market in me speaking, but someone who has no wiggle room whatsoever in their budget should choose a fixed-rate mortgage instead of a variable rate. Caveat emptor, and give me a variable rate mortgage anyway, thank you.

This is all besides the point, because I want people to default on their mortgages so the Toronto market will be flooded with cheap, foreclosed Condos & Towns! Yeehaw!

The resale numbers for April look impressive. However prices only inched up 3 per cent compared to last April. Not much over inflation and not appreciating anywhere near as rapidly as it used to. If you look at it from that perspective it is kind of disappointing since a savings account (PC Financial) generates a 4% return in comparison.

Cave Spot
http://www.cavespot.com

Does anyone think the condo market will crash? I bought my condo in the late 1990's for $135,000 and rented it out for $1,450. Now it's worth $250,000 and I had to reduce the rent to $1,325 because there are so many new condos on the market renting for this price....It doesn't seem like it's worth buying a condo as an investment now.

Also the housing market in the United States has totally crashed. You can get a condo on the beach in San Diego for $150,000!