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COVID and the housing market
- Thread starter mimico_polak
- Start date
My mom's getting all upset because she felt it was 'her' little spot in Wasaga that's now being bought up and developed and is no longer 'hers'.
Parents bought this place 25 (plus or minus) years ago for 75k. Now she doesn't want to sell because 'all the tax I'll have to pay'. I didn't want to tell her when they pass it'll have to be paid anyway as I've already discussed this issue of lack of planning in another thread.
Oh boy....
www.thestar.com
Mortgage defaults and forced home sales are now starting to climb in Toronto
Since July, power of sales events have risen by 10% a month on the Toronto Regional Real Estate Board, according to mortgage broker.
www.thestar.com
Sochi
Well-known member
There is a lot of talk that AirBnB is the next area to go bust and flood the market. All major cities in NA seem overcrowded with availability..
Look at Toronto
So Toronto passing the by-law that you could only rent out a room in your primary residence is apparently going well. At least 12,500 listings out of compliance with by-law. Seems like shooting fish in a barrel if they wanted to go for it. Book 1000 rooms and hit them with a vacant home tax at 3% of assessed value. Listings would dry up quick.
I'd say hire 50-100 new inspectors / enforcement officers and you'll make up that cost in no time.
The problem with that is listings would quickly evaporate. You've expanded the workforce drastically. Do you fire them all or expand their scope of work?
That's why MX, TTC, CoT, and every other form of gov't use a ton of contractors / consultants. Or just hire them on 6-12 month contracts, with extension option.
Hire them for a specific scope, and then fire them.
Hell fire up a consulting firm just for that.
I wonder if other cities are doing it in Europe also....half my family bought up units in the same building in Poland to just rent out as AirBNB.
We need a stable housing market but every level of government makes changes that destabilizes the market. Play with interest rates, change density rules, change traffic rules, free up green space, roads to nowhere, transit 30 years behind the times and when present projects are complete transit will be still be 30 years behind.
It's happening everywhere because there are enough people around with money to burn.
We've never owned a cottage but the ones I had fond memories of were simple structures furnished with cast offs. That was great when they were $40,000 on decent waterfront.
Now (Subject to yo-yo economics) starters are a half a million a long drive from the city. With that amount of money going in, people want to upgrade to a house with all the bling that needs to be maintained. Suddenly it's Rosedale-on-the-Lake.
Seventy year old bungalows are being topped or flattened so if you live in one of those cookie cutter areas you're suddenly dwarfed by mega-mansions.
I was invited to a halloween party at one of the AirBNB dwellings a RE agent owns. This one is 9 bedrooms on the water and less than 30 minutes from Barrie. I am sure the neighbours are full of love for this property. Unless they are all AirBNB too?
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Mad Mike
Well-known member
Don’t forget the gov built public housing that cost taxpayers $450k to $1m per low rent unit.
I serviced two buildings in Brampton, across the street from each other with no grade differences. One was a private condo and the other a government public housing project.
The government building parking garage ramp was twice the size of the private building ramp therefore twice the install cost, twice the power cost to run and twice the maintenance cost.
Anyone looking for a discounted cottage?
Cottages are toys, houses in pretty locations.
Not reading the cards right is a quad whammy. Higher interest on the cottage loan. Higher interest on the house mortgage. Drop in value of cottage. Drop in value of house.
Leveraging the house to buy the cottage is like pulling both drain plugs when the boat is still in the water.
Then there are the spin offs. I heard a guy putting off a creditor and then muttering "If someone's going to lose their house it's not going to be me."
Expect tighter credit limits and conditions.
Prudent loaners will keep credit scores more current. Triple A six months ago may not be triple A today.
Edit: A friend on a small non Muskoka lake says it's worse than -30% on his lake.
Cottages are toys, houses in pretty locations.
Not reading the cards right is a quad whammy. Higher interest on the cottage loan. Higher interest on the house mortgage. Drop in value of cottage. Drop in value of house.
Leveraging the house to buy the cottage is like pulling both drain plugs when the boat is still in the water.
Then there are the spin offs. I heard a guy putting off a creditor and then muttering "If someone's going to lose their house it's not going to be me."
Expect tighter credit limits and conditions.
Prudent loaners will keep credit scores more current. Triple A six months ago may not be triple A today.
Edit: A friend on a small non Muskoka lake says it's worse than -30% on his lake.
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Interestingly, for people with decent net worth, credit score may have little to do with ability to pay. My inlaws credit score isn't great as they pay cash for cars, house was paid off long ago, etc. Not much credit to base a score on. If you have low net worth, a credit score is a better representation of your history of making payments (or not). My score is good but I am not in a position to take on additional significant debt. LTI might catch that but historically, what the banks have offered me was well above what I was willing to make payments on.
I'm in the same boat. Credit cards are paid off monthly. No unusual regular expenses.
A friend of my daughter pays everything on CC (Mortgage, insurances, groceries, entertainment) and reaps a free cheapie vacation every year.
2% kickback on $100,000 gets you to Florida.
Mad Mike
Well-known member
That's good on items that are not deemed cash-like transactions. It's common for payments of mortgages, taxes, utility bills, casino chips, insurance, and traffic tickets to be processed as cash-like transactions (which is basically a cash advance) or have a 2.5-3% convenience fee tacked onto the transaction.
A mortgage payment of $2000 would provide $40 in points (2%). Daily interest on $2000 is $1.26, so assuming you paid your credit card when it was due, your would have 22-51 days of interest -- between $30 and $57. If your lender adds a 2.5% 'convenience fee', that's an added cost of $50.
If you carry a balance on your card (i.e don't pay 100% off), it gets worse.
Hey Mike,
I thought there’s no interest on credit cards if paid off within a specific time. I think my Visa Infinite is around 20 days or something. So while I buy a lot on my card, I haven’t paid interest on anything in years because I always pay the purchases off in less than 3 weeks…
Doing so allows me a great trip each year.
Mad Mike
Well-known member
Grace period is only on purchases.
Cash advances and cash-like transactions bear daily interest from the date of transaction.
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