I couldn’t let this article go without posting it. Its funny how many people I meet who have no real estate experience but think its super easy to flip a home or they think homes just always go up in value and use their house as a HUGE part of their retirement plans. Can’t we learn from the Americans? 10s of Trillions of dollars of equity was wiped off peoples retirement plans and balance sheets because they thought their house would always go up in value. I spend a great deal of time in Michigan, trust me when I tell you that very few people believe that anymore in that area of the country. Anyways, here in Canada we are heading to a huge correction in the market, I know many people who are literally buying high right now and think that they are gonna make huge money off their house continuing to go up in value. Instead I fear the market is literally starting to adjust now and I think it will be quite a violent adjustment, maybe even more violent then the US, especially in certain markets like Toronto and Vancouver. Here in Halifax, our housing market is going bonkers. Homes for sale are in bidding wars and people feel that they have 25 years of prosperity locked in because the government just awarded a huge shipbuilding contract. I was part of the military when PM Chretien ran on the pledge to cancel the expensive helicopter program, and with his win he did!! Spending billions to cancel the contract and get nothing for it. What’s to stop the next person who runs from cancelling the jet or ship purchases? I know many will say its a signed contract or give me some other “for sure” reason that the shipbuilding contract will survive 25 years of changing government priorities………as they purchase their bigger newer home as part of their retirement plan!!!!
Home Capital Group Inc. said it’s capturing mortgage business from Canadian lenders including Toronto-Dominion Bank and Canadian Imperial Bank of Commerce that are retreating from the $200 billion nonprime market amid signs of a housing downturn.
“The big banks are sort of juggling around their mortgage strategy and as part of that, they’re tightening up in certain areas,” Home Capital President Martin Reid said in an interview. “We’re seeing some of the fallout.”
Canada’s banks have been exercising more caution on higher- risk mortgages after Bank of Canada Governor Mark Carney warned that record household debt remains the biggest domestic risk to the economy. Carney this week signalled the potential for interest rate increases that would cool off a housing market that has seen prices almost triple in some Canadian cities over the past decade.
“While interest rates have been at historic lows recently, the inevitable climb looks to…
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