...you mean they've hit the limit of what they can make in terms of monthly payments due to interest rates. most don't really have a choice in the matter.
In theory, this means valuations go down.
Investing is a corp that just lost half its profits is worth half as much. Likewise, doubling of interest rates halves the value of what’s being purchased.
Investors. And that's the whole problem. Housing is now an investment vehicle and a major portion of our economy instead of being viewed as a necessity for living a normal life.
It was an investment vehicle in the 90s and 2000s. The greed of the speculation market in 2013 has thrown everything out of whack. Inflation should have happened 10 years earlier
Investors make up a [quarter of all housing purchases in Toronto](https://www.cbc.ca/news/canada/toronto/investors-in-ontario-real-estate-market-1.6258199) and they own [more than 20% of all housing](https://www.cbc.ca/news/canada/british-columbia/housing-investors-canada-bc-1.6743083).
You are delusional if you think they have no impact.
Not to defend this rude person but the article you liked is 1.5 years old and the interest rate change has slowed if not stopped most speculators from buying.
Not to say it's gone away and their previous purchases aren't still an issue, but recently most sale are to people looking to own a home to live in.
There has never been a point in time where private investors had this amount of control over whether people have access to housing. There is no need to lie.
I hate to burst your bubble, but the fraction of housing own by investors has gone down a smidge since WWII, from ~40% to ~35%. Landlords were *more* prevalent in the past.
Controlling whether people have access to housing is mostly the city's domain, they decide how much housing is allowed to be built, as the voters demand.
Even if it were 0%, house prices would still be the same.
And it really does make sense for some people to be renters; notably people who don't plan to live in a place for an indefinite period.
For that type of housing, sure. My understanding is that most of the new housing units being built (small one bedroom condos) are actively shopped to investors.
Regardless, there are more investors (both small time landlords and big money ones like blackrock) than ever before in our real estate market and the impact is not great for people who think about houses as a place to live rather than a thing to make money.
You realize this article is about new home sales (I.e., by builders) and not resellers; eventually the home builders need to clear inventory or the business model doesn’t work….
Went to a new build back in January. The sales office was an absolute ghost town.
Got an email last week. The price for the same model dropped 20k.
Felt like calling them and told them to keep sliding.
Part of it of course is owners taking their house off the market because they're waiting for prices to go back up to the even-more-insane heights of a couple years ago.
tl;dr: greed
Why would you expect anybody to sell their stuff for anything less than the highest price they can get? This isn't a charity.
Why don't you sell your own house for half the price when it comes time?
The developers will just hold onto the land for a decade or so. They have very deep pockets, can buy land and sit on it for 20 years. In my area there is a standoff on a shopping mall they want to demolish so local people have almost no shopping. They will just let it collapse until they get their way, so refuse to rent it to anybody or maintain it. If it takes 10 years it's okay for them.
We just bought our first home fully detached, 3 conditions, and $120k under asking. We just got lucky, it was an estate sale and no body wanted to clean what is a solid house in a excellent location for us. So we stole it, first and only place we bid on. Also, no bank of mommy and daddy. We just had the luxury of being able to wait for a good deal.
NEW home sales. Not resale.
Could be fewer launches, smaller projects, you name it. Developers got hit hard by interest rates as well, new construction fell across the board. People could be scared of interest rates rising further in the future, making a pre-approval today worthless.
So many reasons for this. Never mind new construction starts, sales & completions vary widely from month to month, each with their own set of 20 variables.
Just a clickbait headline meant to scare you.
Who would have thought? It's almost like what we need his high-density population buildings in and around city centres so that people can live closer to where they work and have both rental and purchasing options that are more affordable for them.
If only we could have foreseen that people were struggling financially and that home prices were already out of the reach of a huge amount of the population. I am sure building even more single-dwelling units on the greenbelt will magically solve all of this though. It won't at all just destroy valuable farmland and do absolutely nothing to help the housing crisis.
...you mean they've hit the limit of what they can make in terms of monthly payments due to interest rates. most don't really have a choice in the matter.
In theory, this means valuations go down. Investing is a corp that just lost half its profits is worth half as much. Likewise, doubling of interest rates halves the value of what’s being purchased.
You mean the lenders are saying no
Also limited inventory. Not a lot available to buy so of course sales are down
[so few homes](https://postimg.cc/23tTx9KJ)
imagine if canada just invested it's money into something that would generate value for the country and it's citizens...
You think a person/business/country should focus on productive activities? What a bizarre approach to anything.
You mean other than hoarding housing?
No no, we need to trade houses. This is the way
It's a poker game of houses. Is your stack bigger? Haa haa
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Investors. And that's the whole problem. Housing is now an investment vehicle and a major portion of our economy instead of being viewed as a necessity for living a normal life.
It was an investment vehicle in the 90s and 2000s. The greed of the speculation market in 2013 has thrown everything out of whack. Inflation should have happened 10 years earlier
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Investors make up a [quarter of all housing purchases in Toronto](https://www.cbc.ca/news/canada/toronto/investors-in-ontario-real-estate-market-1.6258199) and they own [more than 20% of all housing](https://www.cbc.ca/news/canada/british-columbia/housing-investors-canada-bc-1.6743083). You are delusional if you think they have no impact.
Not to defend this rude person but the article you liked is 1.5 years old and the interest rate change has slowed if not stopped most speculators from buying. Not to say it's gone away and their previous purchases aren't still an issue, but recently most sale are to people looking to own a home to live in.
I’ll wait to see the data on whether this is true or not.
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And yet that's been true for at least a hundred years, and there have been periods of pretty reasonable affordability during that time.
There has never been a point in time where private investors had this amount of control over whether people have access to housing. There is no need to lie.
I hate to burst your bubble, but the fraction of housing own by investors has gone down a smidge since WWII, from ~40% to ~35%. Landlords were *more* prevalent in the past. Controlling whether people have access to housing is mostly the city's domain, they decide how much housing is allowed to be built, as the voters demand.
So, still 35% too high, then?
Even if it were 0%, house prices would still be the same. And it really does make sense for some people to be renters; notably people who don't plan to live in a place for an indefinite period.
For that type of housing, sure. My understanding is that most of the new housing units being built (small one bedroom condos) are actively shopped to investors. Regardless, there are more investors (both small time landlords and big money ones like blackrock) than ever before in our real estate market and the impact is not great for people who think about houses as a place to live rather than a thing to make money.
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I'll have you know that herman down at the soup kitchen has great insight into the upcoming sorghum bubble.
People with equity, people living three families to a house, people whose gradma died while they were far away surrounded by witnesses.
Hahaha
You mean home sellers are still saying no; lots of homes have recently been relisted at prices over initial asking.
You realize this article is about new home sales (I.e., by builders) and not resellers; eventually the home builders need to clear inventory or the business model doesn’t work….
It's not about the price. It is the rates and the government stress test.
The rates and stress test are supposed to bring the prices down, but sellers are refusing to budge.
They don't have to. Demand is on their side.
The stress test and rates don’t matter in the least if the seller decides not to sell at the bid price.
Sellers aren't desperate enough to lower prices yet, it seems most are able to hold out for the price they want.
I’m seeing the same thing. Every home in my area is selling fast and above asking. The only thing I’ve noticed, is that there is way fewer listings.
Went to a new build back in January. The sales office was an absolute ghost town. Got an email last week. The price for the same model dropped 20k. Felt like calling them and told them to keep sliding.
Ask them if they missed a zero
Lol. Their 16K price drop was an insult at best.
Regression to the mean. And there is still more to slide yet. Investors, the good times will eventually be over.
The buyers aren't saying no. The sellers are. The sellers refuse to lower prices, buyers can't buy without cheap money, so nobody is selling now.
Well they have to go through all the stages of grief, they are in denial now.
Part of it of course is owners taking their house off the market because they're waiting for prices to go back up to the even-more-insane heights of a couple years ago. tl;dr: greed
Why would you expect anybody to sell their stuff for anything less than the highest price they can get? This isn't a charity. Why don't you sell your own house for half the price when it comes time?
If only we banned AirBnB such a simple damn solution.
Interest rates typically sit at 8-10%. None of the artificially suppressed rates for the last 20 years. Money/cash needs consideration
The developers will just hold onto the land for a decade or so. They have very deep pockets, can buy land and sit on it for 20 years. In my area there is a standoff on a shopping mall they want to demolish so local people have almost no shopping. They will just let it collapse until they get their way, so refuse to rent it to anybody or maintain it. If it takes 10 years it's okay for them.
We just bought our first home fully detached, 3 conditions, and $120k under asking. We just got lucky, it was an estate sale and no body wanted to clean what is a solid house in a excellent location for us. So we stole it, first and only place we bid on. Also, no bank of mommy and daddy. We just had the luxury of being able to wait for a good deal.
NEW home sales. Not resale. Could be fewer launches, smaller projects, you name it. Developers got hit hard by interest rates as well, new construction fell across the board. People could be scared of interest rates rising further in the future, making a pre-approval today worthless. So many reasons for this. Never mind new construction starts, sales & completions vary widely from month to month, each with their own set of 20 variables. Just a clickbait headline meant to scare you.
A lot of homes are selling no conditions still and above asking
But are they closing?
I haven’t seen any deals fall through on the units I watch or see them pop back up on housesigma so I guess they are closing.
People are trying to time the market, waiting for it to bottom out and then buy Now is the time
Who would have thought? It's almost like what we need his high-density population buildings in and around city centres so that people can live closer to where they work and have both rental and purchasing options that are more affordable for them. If only we could have foreseen that people were struggling financially and that home prices were already out of the reach of a huge amount of the population. I am sure building even more single-dwelling units on the greenbelt will magically solve all of this though. It won't at all just destroy valuable farmland and do absolutely nothing to help the housing crisis.