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  #7601  
Old Posted Sep 29, 2017, 7:42 PM
whatnext whatnext is online now
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Originally Posted by wave46 View Post
I think global events (i.e. a severe Chinese recession) will cause new and unexpected things to happen in the housing markets of Toronto and Vancouver. I think the next recession in Canada will be quite severe - we've had it pretty good since the late 1990s.

The amount of debt households have in this country is alarming. I'd be in favor of limits on amount of consumer debt people could take on - for instance maximum 4-5 year loan on a vehicle, ban on 'payday loans' places (legalized loansharking IMO), credit card limit of 10% of annual income, stuff like that.

If it wouldn't absolutely destroy the housing market right now, I'd say 20% down payment on a home would also be reasonable. However, we've gone way too far down that road to go back now.
The new OSFI stress test will knock a lot of buyers out of the market. The danger is that just opens up the field for foreign buyers if prices drop. We need to manage demand as much as supply.
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  #7602  
Old Posted Sep 30, 2017, 12:03 AM
ssiguy ssiguy is offline
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This is the last day for the 43 storey iconic Landmark Hotel on Robson. Know for it's incredible views and evolving restaurant and built in 1972 it was indeed a landmark.

Being torn down for, what else, luxury condos to be sold to foreigners so they can launder more money and then rent them out as Airbnb. This is why Vancouver has no sole, it tears down all pieces of history.
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  #7603  
Old Posted Sep 30, 2017, 6:20 PM
cornholio cornholio is offline
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Interesting read on large scale Chinese money laundering through BC casinos. In short drug money (money from black market basically) goes to underground bank, they take cut, give money to wealthy Chinese person here as a loan, Chinese person repays it in China, underground bank there takes second cut, Chinese person goes to casino and buys chips, then cashes out (launders the money basically but as a wealthy Chinese person does not set off alarm bells) and the money is used to buy property to store it. Rinse repeat.
http://vancouversun.com/news/local-n...-c-real-estate

Interestingly out of all this something totally else caught my attention...

Quote:
Jin, in 2015, claimed he was owed $2.3 million against Gao’s West Vancouver home. The home was valued at about $8 million at that time.

But a foreclosure petition filed by another mortgage lender Gao used to buy the home, Accountable Mortgage Investment Corp., said that as of June 2017, the property had over $28.8 million in mortgage loans secured against it from eight different lenders. Jin, who was eighth lender in line, claimed he was now owed $8 million on the property, according to the petition.
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  #7604  
Old Posted Sep 30, 2017, 6:27 PM
whatnext whatnext is online now
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Originally Posted by cornholio View Post
Interesting read on large scale Chinese money laundering through BC casinos. In short drug money goes to underground bank, they take cut, give money to Chinese person here as a loan, Chinese person repays it in China, underground bank there takes second cut, Chinese person goes to casino and buys chips, then cashed out and the money is used to buy property to store it. Rinse repeat.
http://vancouversun.com/news/local-n...-c-real-estate

Interestingly out of all this something totally else caught my attention...
Accountable Mortgage Investment Corp? Who the hell are they? $28 million against an $8 million property. Seriously you have to wonder how many of these kind of lenders are out there and what's the economy's exposure if things start to go bad? I bet these places aren't even on the radar of government watchdogs.
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  #7605  
Old Posted Sep 30, 2017, 6:50 PM
cornholio cornholio is offline
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Originally Posted by whatnext View Post
Accountable Mortgage Investment Corp? Who the hell are they? $28 million against an $8 million property. Seriously you have to wonder how many of these kind of lenders are out there and what's the economy's exposure if things start to go bad? I bet these places aren't even on the radar of government watchdogs.
Exactly...This is the real story in this entire article.

Laundering is laundering and it links the black local economy with wealthy Chinese people trying to get money out of China. That is bad of course to some degree but a non big story. We have police to deal with this. But the underground banking sector that is formed because of this and fueled because of this...That is something police cant deal with and that is something that can bring down a entire economy. And the thing is no one knows the size of it but oh my it looks like it could be quite big and organized. And obviously un regulated...

28.8 mill against 8 mill...via by the sounds of it mostly unregulated underground lenders. Did the writer really just gloss over this?
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  #7606  
Old Posted Oct 2, 2017, 3:56 PM
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Originally Posted by whatnext View Post
The new OSFI stress test will knock a lot of buyers out of the market. The danger is that just opens up the field for foreign buyers if prices drop. We need to manage demand as much as supply.
Good point.

I really think owning residential property should be limited to Canadian citizens. It's completely irresponsible to allow a necessity of life for our population to be at the mercy of the global economy.
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  #7607  
Old Posted Oct 7, 2017, 12:36 AM
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From today's Vancouver Sun:

Is China bursting Vancouver’s housing bubble?

The author of Millionaire Migrants was one the first to provide evidence that the foreign real-estate dreams of China’s wealthy have arguably had more impact than anything on Metro Vancouver’s housing unaffordability.

UBC geographer David Ley, along with SFU’s Wu Qiyan, told me early this year the city’s real-estate bubble would be punctured when leaders of the People’s Republic of China further restrict money leaving their country.

Now strong signs are appearing that Metro Vancouver’s real-estate balloon has indeed been pricked by China’s heightened capital controls...

...Ley is also convinced low and medium-wealthy Chinese investors are being “bitten” by China’s new controls.

However, Ley cautions that many of China’s super-wealthy “have already moved a lot of capital outside the P.R.C.” into trust funds, offshore tax havens and secret bank accounts.

Even though Chinese and other foreign capital will continue to flow into Metro Vancouver and Toronto — with unpredictably destructive effect for locals — the phenomenally high volume of detached-home sales of the past few years is seriously easing...

...Josh Gordon, of Simon Fraser University, said National Bank of Canada economists estimate “almost $13 billion Cdn was spent by Chinese investors in Vancouver in 2015 alone. This represents roughly one-third of all home sales volume in that year.”..

http://vancouversun.com/opinion/colu...housing-bubble
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  #7608  
Old Posted Oct 12, 2017, 6:21 PM
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Housing starts slide as Toronto real-estate market continues to cool

The slowdown in Toronto's real estate market is spilling into the market for newly constructed homes as builders face weaker demand, especially for more expensive detached houses.

Since the Ontario government announced a package of measures in late April to cool the overheated housing market in Toronto, builders of ground-level homes – including detached and semi-detached houses as well as townhouses – have seen sales slow significantly as many buyers have remained on the sidelines or have turned to the less expensive condominium market....

...But while the condo sector remains on course to be at or near a record sales year, Mr. Tuckey said the low-rise home market has seen sales fall owing to both lower demand and low inventory available for sale after a strong first half of the year. For new low-rise homes, 2017 is well below the 10-year average for sales, even despite a strong start to the year, he said.

"It has cooled from July to August and I think a lot of that is the fact that there is a little more inventory there," he said...


https://beta.theglobeandmail.com/rea...ticle36551268/
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  #7609  
Old Posted Oct 12, 2017, 6:45 PM
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MolsonExport MolsonExport is offline
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Can I Afford a Million Dollar Home?


Quote:
our down payment will be the first factor that’ll disqualify most buyers from purchasing a $1-million home. This is difficult to meet because all homes with a purchase price above $1 million require a down payment of 20% or more.

Typically, if you’re buying a home with less than a 20% down payment, your mortgage is considered a high-ratio mortgage and you’re required to purchase mortgage default insurance. Mortgage default insurance protects the lender in the event you default on your mortgage.

Usually, you can buy mortgage default insurance from the Canada Mortgage and Housing Corporation (CMHC), but it won’t provide insurance for homes valued at more than $1 million.

Since a high-ratio mortgage is out of the question, you’ll need at least 20% for a down payment or at least $200,000. But that’s not all. You’ll also need to pay closing costs. Closing costs usually amount to 1.5% to 4% of a home’s value and include expenses like a home inspection fee, legal fees, title insurance, and the land transfer tax (LTT).

The LTT is by far the most expensive closing cost and in Toronto you have to pay LTT twice: once to the province and once to the municipality. Use the land transfer tax calculator to determine how much you’ll owe at closing.

Depending on your location, you should expect to pay between $15,000 and $40,000 in closing costs. To be on the safe side, you should have your down payment of $200,000 plus an additional $40,000 for closing costs to buy a $1 million home.

It’s easy to see why I called this factor the one that will disqualify the most homebuyers: Not many homebuyers have nearly $250,000 sitting around for a purchase like this!
Indeed, my first mortgage was less than $250K (current mortgage was at the closing date, about $500K). In other words, my original (first) mortgage principal debt WAS LESS than the down payment currently required for a million dollar home.

Quote:
our gross debt service ratio determines whether you can afford the monthly carrying costs associated with your home. The ratio is calculated using the following formula:

Mortgage payments + property taxes + heating costs ÷ annual income

This ratio must be less than 32%. To calculate your gross debt service ratio, let’s use the following housing costs for your $1-million home.

If you put 20% down on a $1-million home, you’ll have an $800,000 mortgage. Using Ratehub.ca’s mortgage payment calculator and today’s best five-year fixed mortgage rate of 2.64%, we can determine that this mortgage rate would leave you with a monthly mortgage payment of $3,640.
Expenses Monthly expenses Yearly expenses
Mortgage amount $3,640 $43,680
Property tax $1,017 $12,204
Heating costs $392 $4,704
Total $5,049 $60,588

Your gross debt service ratio needs to be less than 32% for you afford this home. That means you (or your and your partner) will need an income of at least $189,337 per year to qualify: $60,588 ÷ $189,337 = 32%

Now let’s look at the next debt service ratio: your total debt service ratio. This ratio takes the factors above into account but also adds in any debt obligations you may have. Let’s add in a car loan at $600 a month and student loans at $600 a month. The formula will then be (assuming a lower monthly expense for mortgage amount):

Mortgage payments + property taxes + heating costs + car payments + student loan payments ÷ annual income
Expenses Monthly expenses Yearly expenses
Mortgage amount $3,640 $43,680
Property tax $1,017 $12,204
Heating costs $392 $4,704
Car loan $600 $7,200
Student loan $600 $7,200
Total $6,249 $74,988

In this case, your ratio cannot be more than 40%. That means you’ll need an income of at least $187,470 to afford your mortgage and your other debt obligations: $74,988 ÷ $187,470 = 40%

To satisfy both debt service ratios, you’ll need an annual income of at least $189,337 to afford a home worth $1 million.
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  #7610  
Old Posted Oct 13, 2017, 5:56 PM
ssiguy ssiguy is offline
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Best of luck finding any house in Vancouver for $1 million and even within 25km of downtown in any direction, $1 million will only buy you a dump in a lousy , crime ridden area.
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  #7611  
Old Posted Oct 13, 2017, 6:51 PM
whatnext whatnext is online now
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Originally Posted by MolsonExport View Post

Can I Afford a Million Dollar Home?




Indeed, my first mortgage was less than $250K (current mortgage was at the closing date, about $500K). In other words, my original (first) mortgage principal debt WAS LESS than the down payment currently required for a million dollar home.
Yeah, I don't get how people qualify for these huge mortgages. When I bought my house in 2000 for $333k, the bank nickled and dimed over every penny. And we had over 10% down!

That leads to me to believe either a) banks are looking the other way when to comes to offshore income or even verifying local income b) alternative lenders are capturing a big chunk of the market and nobody is really regulating them.
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  #7612  
Old Posted Oct 13, 2017, 6:56 PM
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GreaterMontréal GreaterMontréal is offline
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Originally Posted by ssiguy View Post
Best of luck finding any house in Vancouver for $1 million and even within 25km of downtown in any direction, $1 million will only buy you a dump in a lousy , crime ridden area.
completely crazy. No chance of that happening here in Montréal.
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