- namaste friends
- Sep 18, 2004
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by Smythe
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Yes
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Oct 26, 2017 20:24
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- Adbot
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ADBOT LOVES YOU
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May 27, 2024 18:21
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- namaste friends
- Sep 18, 2004
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by Smythe
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Double post
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Oct 26, 2017 20:25
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- DariusLikewise
- Oct 4, 2008
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You wore that on Halloween?
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How much influence does the PMs office/Parliament have in changing interest rates?
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Oct 26, 2017 20:31
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- namaste friends
- Sep 18, 2004
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by Smythe
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How much influence does the PMs office/Parliament have in changing interest rates?
If everything is working like it's supposed to and this country isn't a banana republic, absolutely none.
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Oct 26, 2017 20:37
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- HookShot
- Dec 26, 2005
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I'm dumb and don't understand the significance of this, someone please tell me why this is bad?
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Oct 27, 2017 00:31
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- quaint bucket
- Nov 29, 2007
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How much influence does the PMs office/Parliament have in changing interest rates?
None. The party in power can ruffle their own feathers and crow about a couple of things with no meaningful impact.
It's a sword fight with flaccid penises.
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Oct 27, 2017 00:37
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- cowofwar
- Jul 30, 2002
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by Athanatos
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I'm dumb and don't understand the significance of this, someone please tell me why this is bad?
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Oct 27, 2017 00:40
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- namaste friends
- Sep 18, 2004
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by Smythe
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I'm dumb and don't understand the significance of this, someone please tell me why this is bad?
The completions are starting to pile up. That purple line is the amount of units under construction. That means we're going to see a wave of supply hit the market.
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Oct 27, 2017 01:46
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- HookShot
- Dec 26, 2005
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Real estate booms always end with a glut of supply. The question is at what point does condo supply exceed speculator interest, when that happens it will all fall apart because the boom is fueled by people buying second or third properties to rent or airbnb.
The completions are starting to pile up. That purple line is the amount of units under construction. That means we're going to see a wave of supply hit the market.
Ah cool, thanks!
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Oct 27, 2017 02:48
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- ocrumsprug
- Sep 23, 2010
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by LITERALLY AN ADMIN
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I'm dumb and don't understand the significance of this, someone please tell me why this is bad?
The city that has only gained 30K in population between 2011 and 2016, built 20K homes for them just last year.
loving supply am I right. (To be fair, it probably torn down 19K of those homes first.)
e: I guess that is metro, nevermind we are desperately short of housing.
ocrumsprug fucked around with this message at 04:24 on Oct 27, 2017
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Oct 27, 2017 04:19
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- Ceciltron
- Jan 11, 2007
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Text BEEP to 43527 for the dancing robot!
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Pillbug
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Are those taxes? Are they talking about taxes?
We should increase these "taxes"! Think of all the green schools for local animals we could have!
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Oct 27, 2017 05:34
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- Arivia
- Mar 17, 2011
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We should increase these "taxes"! Think of all the green schools for local animals we could have!
No but that’s theft. Green schools for local animals should wait for people to donate if they so choose.
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Oct 27, 2017 14:58
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- namaste friends
- Sep 18, 2004
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by Smythe
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http://business.financialpost.com/p...ud-2018-outlook
quote:
One last gasp for the Canadian residential market as rule changes cloud 2018 outlook
Veteran mortgage broker Vince Gaetano figures the residential housing market this Christmas might be the busiest holiday season ever as people make one last push to squeeze into the housing market before tighter mortgage restrictions come into effect.
But it could also be the last gasp for the resale market. Changes coming from the federal banking regulator on Jan. 1, 2018, take dead aim at a section of the market that until now has been mostly exempt from government regulation: low-ratio buyers, or people with down payments of 20 per cent or more.
Starting next year, the Office of the Superintendent of Financial Institutions will require those prospective homebuyers to qualify based on either the Bank of Canada posted rate for the five-year fixed rate product or two percentage points above their contracted mortgage rate, whichever is higher.
“We are going to see people trying to get the maximum available,” said Gaetano, a principal at monstermortgage.ca, which is one of the largest independent mortgage brokers still in the market. “If my wife has anything to do with it, I will be taking off Christmas, but I have this feeling we are going to be busy.”
The rule change by OSFI is just the latest attempt to slow down the housing market. Previous attempts include a 15-per-cent tax on foreign buyers in Vancouver and Toronto, the country’s two most expensive cities for housing, a year-old move to reign in buyers with less than 20 per cent down and tougher stress tests required for everyone.
The question for the real estate industry in 2018 might be: Who will be left to buy homes?
“The only people unaffected are people who don’t need mortgage financing, because now you have captured the entire market,” said Gregory Klump, chief economist at the Canadian Real Estate Association.
In other words, people buying with “cash,” as realtors like to describe no debt transactions, are the only ones unscathed.
CREA’s next forecast is due out in December and Klump won’t say what it will predict, but there is little doubt what direction he thinks the market is pointed in now.
“I’d be very surprised if 2018 is not materially lowered,” he said, referring to the forecast for housing prices and sales.
Until then, however, he sees a major bounce in activity as consumers rush to beat the deadline for OFSI’s latest rule change, which could end up costing homebuyers about 20 per cent of their purchasing power.
“There will be some pull forward of sales,” says the economist, adding that by January sales will have dried up and then it will take some months for the market to stabilize.
How strong the last-minute buying push is will also depend on how OSFI’s wording of the deadline is interpreted.
In a conference call with journalists this month, Jeremy Rudin, the regulator’s superintendent, said the deadline was Jan. 1, 2018, but lenders say it’s not exactly crystal clear what the regulator means in its briefings on the subject.
“Loan applications occurring between October 17, 2017, and January 1, 2018, might be subject to the new rules, depending on the institution, because as mentioned in the annex to our letter, where possible, institutions are encouraged to comply with the new rules as soon as they can,” a spokesperson from OSFI, explained in an email.
One thing that is clear is that OFSI’s deadline is tied to when a financial institution extends the mortgage loan, not when the transaction takes place. As a result, some brokers are expecting a wave of consumers seeking pre-approvals in the final quarter of this year.
Another factor that might also affect the market in 2018 is a loophole that OSFI seems to have purposely left intact that allows consumers to qualify based on a longer amortization, which could be extended to 35 years.
In the high-ratio market, where consumers have smaller down payments, amortizations are limited to 25 years.
In the low-ratio market, there is nothing to say consumers cannot amortize a loan over 35 years, a move that effectively wipes out the higher qualification rate and gives those buyers the same level of buying power — and debt — they currently enjoy.
It’s unclear if financial institutions will take advantage of this loophole, because they risk upsetting the regulator if they do.
But Klump said the effect could be exactly the opposite of what Ottawa policymakers want, which is to rein in an average household debt that is at an all-time high of 167.8 per cent of disposable income.
“It will mitigate the impact (of the latest OSFI changes), but it will keep people in debt longer unless they prepay or accelerate payments,” Klump said.
Craig Alexander, chief economist at the Conference Board of Canada, said all the recent rule changes now cover all borrowers getting mortgages from OFSI-regulated institutions, but added that it is key that the changes happened over time.
“We’ve had a steady adjustment in the regulatory environment to lean against imbalances and we’ve reached a point where the regulatory effects are impacting the market as a whole,” Alexander said. “The reason why it is not having a greater impact on the market is it has been delivered in an incremental fashion over many years.”
If the government had implemented all the changes at once, he said, “we would have had a very severe housing correction on our hands.”
Alexander said the housing market is a bit like driving on a highway where the road suddenly becomes icy: everybody knows “you don’t slam your foot on brakes” or it ends up causing an accident. Instead, you take your foot off the gas.
His prediction is that homebuyers will lower their price point.
“People who want to buy real estate are not about to stop buying, but they will move down to what they can afford,” Alexander said. “This is all prudent, because you are insulating the market from interest rates and when they return to more normal levels.”
The rising rate environment certainly has some in the market scared of what might happen.
The Bank of Canada may be focused on slowing the overall economy, but two interest rate hikes since the summer have already made credit more expensive for variable rate mortgages tied to the prime rate, which tracks the central bank’s overnight lending rate. At the same time, long-term rates also continue to rise.
Despite the breadth and depth of the recent homebuying rule changes, Doug Porter, chief economist at Bank of Montreal, said move-up buyers are still out there to give the housing market a boost since most of them have already established equity.
“But even at the entry level, Canada is still a huge magnet for international immigration,” he said. “You may not have non-resident speculators, but you still have a lot of people moving into the country. And that’s the single most important source of new buyers.”
In the interim, real estate agents are moving into high gear.
“I’m trying to get my clients pre-approved now,” said David Batori, the broker of record at Toronto-based Re/Max Hallmark Batori Group Inc.
He said a lot of first-time buyers who can get together a 20-per-cent down payment now will be affected, but in some parts of Toronto, at least, there’s still a lack of inventory, which makes it hard to find affordable housing in any case.
“There will be a rush to beat this deadline,” Batori added. “If there is the product to sell at the end of the year, I will be working. It will be slow in January, but people will adapt.”
if this isn't proof canadians are dumb fucks i don't know what is
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Oct 27, 2017 15:17
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- Playstation 4
- Apr 25, 2014
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Unlockable Ben
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Jesus Christ they're all walking buck loving naked into the bear trap.
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Oct 27, 2017 15:25
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- Wasting
- Apr 25, 2013
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The next to go
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Anecdotally, three of my friends have either bought or are rushing to buy in the GTA in order to "beat the new mortgage rules." I've long since given up on talking with friends or family about real estate: there's too many voices preaching recklessness as prudence.
These are otherwise intelligent people, by my estimate, when it comes to money.
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Oct 27, 2017 16:59
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- namaste friends
- Sep 18, 2004
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by Smythe
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lol san jose. what a loving shithole.
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Oct 27, 2017 19:23
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- HookShot
- Dec 26, 2005
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Jesus loving Christ.
edit: it's actually 30%. So, still super poo poo, but not fifty.
HookShot fucked around with this message at 21:10 on Oct 27, 2017
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Oct 27, 2017 21:08
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- EvilJoven
- Mar 18, 2005
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NOBODY,IN THE HISTORY OF EVER, HAS ASKED OR CARED WHAT CANADA THINKS. YOU ARE NOT A COUNTRY. YOUR MONEY HAS THE QUEEN OF ENGLAND ON IT. IF YOU DIG AROUND IN YOUR BACKYARD, NATIVE SKELETONS WOULD EXPLODE OUT OF YOUR LAWN LIKE THE END OF POLTERGEIST. CANADA IS SO POLITE, EH?
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Fun Shoe
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"How can you live in [not Vancouver or Toronto] it's such a shithole!" *spends way too loving much on housing*
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Oct 27, 2017 21:11
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- namaste friends
- Sep 18, 2004
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by Smythe
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http://www.macleans.ca/economy/has-fixing-canadas-mortgage-market-made-it-riskier/
quote:
Has 'fixing' Canada's mortgage market made it riskier?
https://www.macleans.caview OriginalOctober 27th, 2017
THE CANADIAN PRESS IMAGES/Sean Kilpatrick
Adam Farber has a practical, if slightly gory, view of his place in Canada’s mortgage mortgage. “You come to me with an open wound,” he says. “You’ve been beaten up. I’m your last option.” Farber, the vice-president of Corwin Mortgage Capital in Toronto, is a private mortgage lender. Borrowers who can’t get a loan elsewhere will sometimes seek private funds that bear higher interest rates. It’s a business that’s mostly unregulated—and set to grow. Ironically, one of the unintended—and potentially dangerous—consequences of regulators’ recent attempts to stabilize the mortgage market may be to push people toward riskier products. “My business is going to explode at this point,” Farber predicts. “With me, people are going to qualify because there’s no stress-test.”
Earlier this month, the Office of the Superintendent of Financial Institutions, the country’s banking regulator, introduced a new stress-test for banks to apply to borrowers. Those taking out uninsured mortgages have to be qualified at whichever rate is higher: the rate offered by the bank plus two per cent, or the five-year benchmark rate published by the Bank of Canada. The rules follow similar changes last year that apply to borrowers of insured mortgages. OSFI wants to ensure that banks are not making loans to people who won’t be able to afford them when interest rates rise, a scenario that would put the country’s financial system at risk.
The change will have a big impact on the housing market. Typically, borrowers who can’t qualify for a mortgage at a traditional bank might try to get one from an alternative lender, such as Home Capital Group or Equitable Bank. These companies specialize in lending to self-employed and new Canadians who might not have the income or credit history required by banks. Large alt lenders are regulated by OSFI and have to implement the new stress-tests, too (credit unions are provincially regulated are not subject to OSFI’s rules, though some expect them to fall in-line) meaning some borrowers will no longer qualify here either. Most will opt for a smaller mortgage or delay purchasing a home.
But some will try their luck at unregulated or less regulated lenders outside of OSFI’s purview, which generally provide short-term, interest-only loans at high rates, starting north of seven per cent. Typically, a borrower might take a private loan for a short period of time to build better credit, and later move to an alt lender to secure a lower rate. Private lenders also do a robust business in second (even third) mortgages; ads make sure to note bad credit is not an issue. The high interest rates in the sector might not be a deterrent for borrowers, depending on how badly they want to own a home.
“Home ownership is a dream for many,” says Paul Taylor, CEO of Mortgage Professionals Canada, the industry lobby group. “Even if you are comparatively paying higher interest rates than the rest of the market, if there’s still an opportunity for you to own a piece of property, you will take it.” OSFI acknowledged the risk, as well. “That would not be an intended consequence, nor would it would be a completely unanticipated consequence,” OSFI head Jeremy Rudin told reporters last week.
Data on the sector are hard to find. In 2015, CIBC estimated that non-bank lenders account for less than five per cent of the market—a very small portion. Indeed, lenders in the sector are far too small to pose any kind of systemic risk to the economy. Still, the sector as a whole is growing rapidly. Between 2012 and 2015, non-bank lenders doubled their market share.
It’s a diverse space, too. There are tiny mom-and-pop outfits, pools of capital backed by high-net worth individuals and mortgage investment corporations (MICs) that can solicit funds from the public. A patchwork of provincial organizations provide some form of regulation, but there’s little (or zero) scrutiny of underwriting criteria or the riskiness of a lender’s mortgage portfolio. “There’s an awful lot of people that might find themselves in loans that would not be prudent,” Taylor says.
For Farber, so long as the borrower has a healthy down payment and the property is likely to increase in value, he’ll lend the money more often than not. If a borrower defaults, private lenders are not averse to using the court process to take ownership of the property—especially if it can be sold at a profit. In this way, lending to marginal borrowers can be lucrative even if a deal goes south. That’s not Farber’s approach. “I don’t want to be kicking people out of their houses,” he says. His clients tend to be foreign buyers, real estate speculators or people looking to refinance. But there are plenty of less scrupulous lenders out there. “These are people that don’t take the best interests of the borrower in mind,” he says. “They just want to suffocate the borrower.”
Loans from mom-and-pop outfits can be sloppily arranged, too. One dispute that recently landed before an Ontario court involved a typo. The defendant asserted the interest rate was not eight per cent, but 0.8 per cent. “It appears to be a sad commentary on their competency and attention to detail,” the judge wrote of those involved. (The judge didn’t buy the defendant’s argument.)
Even more sophisticated MICs make questionable loans. Ron Alphonso, a mortgage broker and private lender in Toronto, comes across deals that he simply considers to be too risky—maybe the borrower’s down payment is too small, or Alphonso has concerns about their income or credit history. He’ll pass the lead to other MICs, and the deals get done. “We make less money than some of these guys, but if the market ever turns, we won’t lose like the others,” he says. “Lenders have leant into increasingly higher property values and not lost money. But these corporations aren’t built to manage a market with flat or declining property values.”
That leads to another concern about MICs. Many of them raise money from the general public, and returns have been generous because of the country’s booming real estate market. That could charge if home prices stagnate. “It’s flighty capital,” says Ben Rabidoux, president of North Cove Advisors, a research firm that provides analysis on the Canadian economy and housing market. “People invested in MICs and private mortgages have not seen a downturn in real estate.” If the market ever turns and returns drop, investors could ask for redemptions, leaving some MICs insolvent or hampering their ability to issue new loans. Lenders could use power-of-sale to recoup their money. “They’ll sacrifice someone’s equity to get their own capital back,” Rabidoux says. “You could see a scenario where you have these distressed sales at the leading edge of a downturn, and it would exacerbate the price declines.”
The risk is hypothetical, he concedes, but not unthinkable. Even Taylor with Mortgage Professionals highlights the concern posed by the funding structure of MICs. “When people feel like they’ve been burned in these types of arrangements, then capital dries up and that has significant shockwaves through economy.” His worry is not about the stability of existing MICs, but less experienced players that could emerge to take advantage of the opportunity created by the new stress-test.
Still, there is one big factor that could limit the growth of private lending in Canada: funding. Because the industry has already grown so much in recent years, private lenders are not exactly flush with cash to lend out. Raising money to meet any increased demand could be challenging. Private lenders are not banks, obviously, and can’t simply take deposits. They could raise funds by bundling and selling mortgages to financial institutions or securitize loans through the Canada Mortgage and Housing Corp., but doing so would subject these loans to OSFI’s provisions. That leaves them to solicit funds from investors, a more onerous process.
The private market might actually experience more demand than it can realistically meet, putting some kind of cap on the sector. That creates its own set of problems—if lenders-of-last-resort have to turn away business, then some Canadians simply won’t be able to get a loan anywhere, further weighing down the housing market. Given the alternative of unchecked growth in the unregulated market, that might not be such a bad thing.
tl;dr mortgage lending industry Professionals think that the new OSFI stress tests are going to drive marginal borrowers to marginal lenders, such as mortgage investment corporations who aren't regulated by the OSFI
so who wants to start a MIC with me 
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Oct 27, 2017 21:48
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- Rime
- Nov 2, 2011
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by Games Forum
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Jesus loving Christ.
edit: it's actually 30%. So, still super poo poo, but not fifty.
I got the wrong percentage wrong, actually.
quote:
... Data crunched by the B.C. Non-Profit Housing Association (BCNPHA) shows that 22 per cent of renters were spending at least half of their before-tax income on shelter.
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Oct 27, 2017 21:58
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- HookShot
- Dec 26, 2005
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Yeah, that's still a ridiculous percentage. Over 1/5 people in the entire GVA are spending more than 50% of their pre-tax income on housing. What the actual gently caress.
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Oct 27, 2017 22:57
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- James Baud
- May 24, 2015
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by LITERALLY AN ADMIN
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Students and retirees are probably at least half that total, but the upside for the rest is that their income is mostly low enough that they pay practically no tax so saying "pre-tax" isn't that big a deal.
Edit: Also that's of the renter subclass, not everyone.
James Baud fucked around with this message at 02:21 on Oct 28, 2017
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Oct 28, 2017 02:19
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- rgocs
- Nov 9, 2011
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Students and retirees are probably at least half that total, but the upside for the rest is that their income is mostly low enough that they pay practically no tax so saying "pre-tax" isn't that big a deal.
Edit: Also that's of the renter subclass, not everyone.
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Oct 28, 2017 03:13
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- namaste friends
- Sep 18, 2004
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by Smythe
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Students and retirees are probably at least half that total, but the upside for the rest is that their income is mostly low enough that they pay practically no tax so saying "pre-tax" isn't that big a deal.
Edit: Also that's of the renter subclass, not everyone.
Ladies and gentlemen this post is brought to you by the colour brown and the number zero
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Oct 28, 2017 03:15
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- James Baud
- May 24, 2015
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by LITERALLY AN ADMIN
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Yes, the upside of being poor is not paying taxes. Lucky them.
Well, the point of emphasizing "pre-tax" is to make it sound that much more extreme to people who think "and the government already takes the other half!" (more like under 20% even for 100k earners), so I'm just saying that emphasis is meaningless.
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Oct 28, 2017 03:32
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- RBC
- Nov 23, 2007
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IM STILL SPENDING MONEY FROM 1888
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are you stupid or something
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Oct 28, 2017 17:37
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- HookShot
- Dec 26, 2005
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are you stupid or something
If you go through his post history the answer to that question isn't hard to find.
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Oct 28, 2017 20:02
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- Adbot
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ADBOT LOVES YOU
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May 27, 2024 18:21
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- namaste friends
- Sep 18, 2004
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by Smythe
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all young socreds are stupid
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Oct 28, 2017 21:18
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Oct 26, 2017 20:24
