real estate
Posts about purchasing, selling and investing in real estate.
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Is There A Hidden Real Estate Bubble in Canada?
Is there a “hidden” real estate bubble in Canada? This is a question I asked myself since last week when I started receiving panicked phone calls from people that purchased real estate during the height of the Toronto real estate market. Specifically, they purchased properties prior to April 21 2017 before the Non-Resident Speculation Tax came into force. There are two phone conversations that stand out in my mind which I’ll discuss… Investment Property Purchase Last week I received a call from a real estate investor who also happens to be a mortgage broker. He purchased a rental property just north of Toronto on Steeles Avenue in early 2017. It was financed…
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Wall Street Bailouts Caused the Canadian Housing Crisis
The consequences of the 2008 Financial Crisis and the remedies initiated by the Federal Reserve to deal with it have reverberated throughout the global housing markets during these past 10 years. Readers may recall that in late 2008, the U.S. Federal Reserve implemented a money-printing program euphemistically referred to as Quantitative Easing (“QE”) in order to prevent a total collapse of the global financial system. In colloquial terms, the Fed, the White House and the United States Congress co-operated to bail out Wall Street after they screwed up. Money-printing causes price inflation in that more dollars are chasing a fixed quantity of assets. This has been particularly true for real…
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Transferring a Home Before Bankruptcy
A reader asks: My father fell critically ill earlier this year. As a result, he is unable to pay his credit cards as he is not working. The bills are very large. He has no financial assets other than his a commercial property (owned outright). What options does he have? In relation, can the property be sold to my brother and/or proceeds transferred to him (inheritance), then my father proceed to file bankruptcy without repercussions? Here is a breakdown of his finances: $1.2m – commercial property – owned outright Approx 60-80k in credit card debt only Zero income stream from any source, sadly. My father is not a future planner.…
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Should I Rent or Buy a Home in Toronto?
Introduction When you first move to Toronto, you’ll likely be renting your living space. But after renting for a few years, you’re going to ask yourself this question: is it better to rent or buy a home in Toronto? Maybe you want to purchase your own place for emotional reasons (“my very own place!”), financial reasons (“I want to build equity”), or maybe a bit of both. Why Rent When You Can Own? A major influence on your decision to rent or to buy may be the marketing you see from the real estate industry asking you the perpetual question: “Why rent when you can own?”. Makes sense, right? After…
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What is the Cost of a Middle Class Lifestyle in Toronto?
This post has been updated as of July 2020. TL;DR A traditional middle class lifestyle assumes: (1) two spouses and a child and the ability to finance that child’s education; (2) home and vehicle ownership; (3) the ability to save for retirement. In Toronto, the aforementioned lifestyle would require an after-tax income of $123,388 per year. This middle class lifestyle was common and available to many people 30 years ago. Today it’s only available to the top 10% economic class. INTRODUCTION What are the hallmarks of a middle class lifestyle? And how much does a household residing in Toronto have to earn to be considered middle class? First, let’s define…
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Take Caution When Selling or Purchasing a Condo Assignment – GST/HST issues
There are significant financial risks in purchasing or selling a condominium assignment. We discuss the implications for the Assignor and Assignee.
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Consumer Proposal or Home Equity Loan – Which is Better?
Introduction If you are struggling with high interest credit card debt or balancing multiple loan payments every month you may be looking for a way to consolidate your debt into your home mortgage, a second mortgage or a home equity loan. This assumes that the equity in your home is greater than what you owe. But you need to ask yourself, is this the best option or are there other options that are better? Before going to your bank, mortgage broker or a credit counsellor, you should consider seeing a Licensed Insolvency Trustee (“LIT”) to talk about a consumer proposal. A consumer proposal is a way to combine your unsecured…
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So you bought Toronto real estate at the market peak. NOW what?
So you’ve just realized the mistake you made purchasing your Toronto property in 2017 during the market’s peak (which appears to have been in the Fall of 2017 according to this chart at www.toronto.listing.ca). In reference to that chart, the average price for a detached home on October 14, 2017 was $1,114,203 . As of March 2, 2018, the average price was $1,065,361 — a decline of $48,842 in just over 4 months and 2 weeks. I’m not going to indulge in the schadenfreude I’ve been reading in newspaper editorials and internet discussion forums about families facing financial ruin for buying at the wrong time. I don’t believe in kicking people when they’re down. Rather, I’m going to put on my financial professional thinking cap…
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Home Capital Group: What to do if you have a mortgage
Home Capital Group has been having a lot of problems over the past few months. Here is a perspective from Rachelle Berube, who is the Toronto-based writer and property manager of the blog LandlordRescue.ca. We have reposted her blog post, the original post can be found here. You may have read a lot of stuff recently in the news about Home Capital Group. You have a mortgage with them. What does it mean? What can you do? Don’t believe the bullshitters like Stephen Poloz who say that it’s fine. Maybe it’s fine for him, but it isn’t fine for you. You may be in deep trouble. Home Capital Group will not be…
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Millennials Woes – Ontario’s housing crisis is delaying adulthood
Millennials, it appears that you’re being economically squeezed out of the transition to adulthood. An excerpt from the news article by CBC News’ Kate McGillivray, April 5, 2017: A new report out from Vancouver-based campaign Generation Squeeze says Ontario has the second-worst economy for young people in the country, eclipsed only by British Columbia. “No province reports a decline in full-time earnings [for the typical 25-34 year old] since 2003 except Ontario. That wouldn’t be so bad if Ontarians’ primary cost of living — housing — was also not going up in price,” said the lobby group’s founder and University of British Columbia professor Paul Kershaw. The report, part of the…
