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Mortgage Broker News | 03 May 2015, 07:00 AM Agree 0
Brokers outside Canada’s two largest markets may have scoffed at the soaring prices, but players in two other cities may soon have to deal with the same sort of criticism.
  • Joanne Bedard | 04 May 2015, 10:04 AM Agree 0
    Everyone has been discussing the continuous increase in the housing market. But lets face it is for a period of time if it does happen. When you look back in time there is no way that we will ever pay what our parents paid for their house and the housing market continues to increase and will continue to increase until we stop reproducing and allowing immigrants to come to Canada. Everyone seams to want there own home and can utilize it as collateral for loans, and continues to be a great investment and is still recognized as an asset in people's financial portfolio. Bad new sells news print...focus on the long term not the short term.
  • Ross Kay | 07 May 2015, 09:51 AM Agree 0
    Home Prices are tied exclusively to inflation and housing bubbles are a natural outcome of the Canadian real estate selling infrastructure where Mortgage debt is obtained via simple Market Valuation Appraisals.

    100 home are for sale and only one sells. Of course it the best one for the money that was bought. With that home gone the 2nd best home sells but it gets the same price. Over time this happens 38 times meaning after 3 months when the 38th best home sold, it is sold for a least what the very best home sold for 3 months earlier. Of course there were 62 homes that failed to sell and were removed from the market.

    Those failed sellers need money so they get a HELOC which uses the selling price of the very best home 3 months ago as the Market Value Appraisal.

    This is how housing bubbles form in Canada. What is misunderstood is that 99% of the gains seen from 1998 forward are caused by inflation and selling infrastructure fees only. Provincially it is 98.6 and in the GTA it's over 99%.

    This is what happens when the basics of real estate are not understood by those lending money.

    Housing Bubbles are needed to allow the housing stock to grow ( new home sales) other than first time buyer homes. That means 1 million dollar new builds cannot be sold if a housing bubble does not happen.

    Corrections are needed to deflate the bubble to allow it all to start all over again.

    Mortgage Brokers should be encouraging all their clients to mitigate risk exposure from the pending correction, ( and it's been underway folks for 8 months already) by securing the largest HELOC they possibly can. Don't access the funds just be able to do so if needed.

    This is how you make money with non-rental real estate in a risk free manner.
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