Brokers scoff at O’Leary’s housing take

Brokers scoff at O’Leary’s housing take

Brokers scoff at O’Leary’s housing take Brokers were understandably riled up by Kevin O’Leary’s bleak take on home ownership, with many discounting his opinion in light of his brief foray in the mortgage industry.

“Based on O'Leary's track record, everyone should run out right now and buy houses,” Dave Larock, a broker with Integrated Mortgage Planners wrote in the comments section of MortgageBrokerNews.ca. “This is the same guy who told everyone to lock in to a fixed-rate mortgage in 2012 when they were offered at 3.00%, predicting that anyone who didn't would get ‘slammed.’”

Kevin O’Leary once again made headlines this week with his bearish opinion of home ownership.
“What I’m warning against … I’m completely against purchasing a house because I don’t think five years from now it’ll be worth a dime more than it is today,” Kevin O’Leary told Business News Network last week.

Brokers have already questioned O’Leary’s argument, referencing how wrong he has been in the past.

 “That’s precisely why I started O’Leary Mortgages is because we sell fixed rate mortgages, it won’t vary,” O’Leary said during a segment on CBC’s Lang & O’Leary Exchange in November 2012. “There will be thousands of people with variable mortgages that will be slaughtered … with fixed mortgages they’ll have five years of knowing what they’ll exactly pay.”

The statement was made on the eve of launching his own mortgage brokerage, O’Leary Mortgages, a boutique shop that focused solely on fixed-rate mortgages.

Brokers almost universally disagreed with the brash TV personality and venture capitalist at the time, believing variable-rates would continue to favour borrowers. And they were right: The overnight rate target has been held at one per cent since September 2010, and clients with variable rate mortgages have certainly benefited.

Still, some say O’Leary has a point, but that it should be clarified.

“The subheading to Mr. O'leary's … remark should be 'and expect to sell it again at a net profit in 3-5 years,'” Dustan Woodhouse, a broker with Dominion Lending Centres Canadian Mortgage Experts, wrote. “Flipping is increasingly risky as prices hit new peaks.”
5 Comments
  • Chris O'Sullivan 2015-12-07 9:54:25 AM
    O'Leary loves to give his opinion, however his opinion about not buying a property because it won't be worth anymore five years from now is not well thought out. For one, you need to know why people are buying the property to begin with.
    If its for rental purposes and is in a great location, the assets resale worth isbirrelevant since the investor is buying for rental income purposes. If a buyer is buying to live in it for the next 20 years then agsin asset appreciation is irrelevant. Ow if you are buying to.flip...you better know how to get value from it when you sell the property..however if you know what you are doing and are conservative in the time it will take to sell, then this strategy should work.

    The bottom line is to have knowledge of the real estate cycle and to use that knowledge to work it on line with your home purchasing goals. A person can't make a blanket statement, like O'Leary did without knowing the buyers goals for the purchase.
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  • steve kates v.p. northwood 2015-12-07 9:54:28 AM
    where is his mortgage brokerage now?
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  • Joe Durakovic 2015-12-07 10:08:54 AM
    I don't believe there is anyone who has predicted correctly , every real estate cycle. There is one truth, real estate is cyclical, the question is , when will the ride down start. There are many indicator 's , one is affordability, another interest rates. Is there anyone out there disputing the fact that Vancouver is becoming unaffordable?
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