I just finished reading an article discussing Canada Mortgage and Housing Corp, with the question being ….
will these changes increase the risk rating in its overall assessment of the country’s residential market to “strong” from “moderate” when it issues a new report on Oct. 26?
Media hype or real estate reality?
We shall see
Initially, these changes implemented October 17th 2016 did not concern me at all since
A) We always put 20% down and insist the Investors we work with do
B) We always stress test our properties (often as high as 7% ) and once again, insist the Investors we work with do.
However, I did review our current mortgages to see what is coming up for renewal and modified accordingly, simply because that is the responsible thing to do.
I also spent some time reviewing our Investors portfolios , seeing what their future plans were so they can review their existing mortgages as well as their buying power and future financial freedom plans.
Once again, because that’s the responsible thing to do.
The article states
“Property sales last month in Greater Vancouver dropped 32.6 per cent from a year earlier, as the housing market adjusts to the impact from the B.C. tax on home buyers in the Vancouver area who are not Canadian citizens or permanent residents.”
“By contrast, residential sales in the Greater Toronto Area jumped 21.5 per cent in September, compared with the same month last year.”
Will this growth continue or will October 26th arrive with a doomsday drop as predicted by the media who do not buy or sell real estate, but instead newspapers and ad space.
How long has the media been speaking about the housing bubble?
How many times have we held our breathe anticipating an increase in interest rates?
Headline after headline and NOTHING……EVER….. HAPPENS
True, Vancouver experienced a drop , but that was influenced by foreign Investors and buyers.
And if there is a drop in the GTA market, those who have responsibly leveraged and strategically planned their portfolios really are not at risk.
Because we all put 20% down
We already stress tested our mortgages
We already created strong financial and real estate plans which are NOT based around buying an obscene amount of properties , but rather 2-3 properties over time for cash flow and appreciation.
AND, although the areas we invest and advise others to invest in have experienced significant growth, they are not at risk for huge price drops as they are still priced modestly under $375k which is not only affordable for most Canadians but posed for future growth.
And lastly, because we plan responsibly and invest in buy-rent-hold properties, our investors are prepared to ride out any fluctuations in the real estate market as we invest with an eyes wide open approach to the real estate cycle.
If October 26th arrives and prices drop, it will be largely to the scare caused by the media and not the actual changes issued by CMHC.
To which I say Thank-you .
Thank you media for scaring off novice wannabe investors . ’cause us veterans are tired of all these bidding wars.