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Money Housing markets set for another summer of discontent — and mortgage rules are to blame

22:41  16 may  2018
22:41  16 may  2018 Source:   financialpost.com

High-end home sales hit by news rules: report

  High-end home sales hit by news rules: report High-end home sales hit by news rules: reportIt shows that the median house price at the top end of the market has dropped only about $6,000 to $3.52 million year over year in the first quarter of 2018. But that’s about where it’s expected to stay through the first quarter of 2019.

“The impact on the market is going to be recognizable,” said Ure R. Kretowicz, chief executive of Cornerstone Communities, a homebuilder in San Diego. To be sure, the tax proposal has a lot of variables that make it hard to determine exactly how it would affect any particular family’s tax bill.

Most of the blame is on at the mortgage originators (lenders) for creating these problems. When the central banks flooded the markets with capital liquidity, it not only lowered interest rates, it also In defense of the lenders, there was an increased demand for mortgages , and housing prices were

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Editor’s note: The opinions in this article are the author’s, as published by our content partner, and do not necessarily represent the views of MSN.ca or Microsoft.

Housing markets continue to struggle in Canada.

The April sales numbers are in and they are not pretty. Housing markets across Canada are still struggling to ward off the stresses induced by tightening regulations by federal and provincial authorities.

Mortgage rules hit Calgary housing market with 'collateral damage': CREA

  Mortgage rules hit Calgary housing market with 'collateral damage': CREA Housing sales in Canada were down significantly this year, and Calgary was one of the cities leading the drop, according to a new report from the Canadian Real Estate Association (CREA). "This year's new stress test has lowered sales activity and destabilized market balance for housing markets in Alberta, Saskatchewan and Newfoundland and Labrador," said Gregory Klump, CREA's chief economist, in a release Tuesday."This is exactly the type of collateral damage that CREA warned the government about.

The United States subprime mortgage crisis was a nationwide financial crisis, occurring between 2007 and 2010, that contributed to the U.S. recession of December 2007 – June 2009. It was triggered by a large decline in home prices after the collapse of a housing bubble

A mortgage loan, or simply mortgage , is used either by purchasers of real property to raise funds to buy real estate, or alternatively by existing property owners to raise funds for any purpose, while putting a lien on the property being mortgaged .

The spring thaw many had expected in housing markets didn’t realize. The sluggish trends observed in April suggest that when it comes to housing markets, it is likely to be another summer of our discontent.

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April usually marks the beginning of intense housing activity in Canada. As the temperatures climb and snow melts away, homebuyers emerge from the winter slumber in search of deals.

Another reason for the intense sales activity in April is because unlike other products, searching for a house takes much longer. Often, families spend two to five months searching for a home, arranging finances, and finalizing the move. Furthermore, families with children are further constrained as they would rather relocate when schools are closed for summer vacations.

Average house price in Canada fell 11% in past year, CREA says

  Average house price in Canada fell 11% in past year, CREA says The average price of a Canadian home declined by more than 11 per cent in the 12 months up to April, the Canadian Real Estate Association said Tuesday. The realtor group said the number of sales plunged by 13.9 per cent compared with the previous year's level, and fell to the lowest April showing since 2011.April is typically a booming month for home sales, as warmer weather spurs sales. But listings slowed from March's level during the month, coming in 4.8 per cent lower. It was the slowest April for new listings in nine years, CREA said.

With ownership plummeting, rents unaffordable and homelessness on the rise, action is needed to stave off a crash.

Another plus: Housing prices are 33 percent lower than the surrounding county. Stay on top of what is going on the market by using price alerts, checking listings every day and engaging a local real estate agent who knows the market .

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For families to relocate in July or August requires them to make a purchase in April or May giving them enough time to manage the logistics, which often includes the sale of the existing home.

Thus, housing markets are usually up in April and May, registering a greater share of sales and experiencing modest to high increases in housing prices.

However, housing market statistics reported by Canadian Real Estate Association (CREA) for last month are devoid of such exuberance. Across Canada, housing prices were down 11.3 per cent when compared with April 2017. At the same time, housing transactions were also down by 13.9 per cent.

Toronto New Home Listings Vanish Because Sellers Don't Like What They See In The Market

  Toronto New Home Listings Vanish Because Sellers Don't Like What They See In The Market Toronto New Home Listings Vanish Because Sellers Don't Like What They See In The MarketThat decrease in supply could actually help the market bounce back faster than it would have otherwise.

Another summer of discontent . Share On. JUST IN. Millions of Nepalis voted believing that it would be a step forward to being recognised as Indian and not Nepali. Sitting in a sprawling apartment on Hailey Road in Delhi, Mr. Gurung, who heads the main party, the Gorkha Janmukti Morcha (GJM) in

The steady rise in home prices is so far showing no boundaries, and that is turning up the heat on some already overheated housing markets . Home prices rose 7 percent nationally in September, compared with September 2016, a higher annual increase than was seen in August

Even when one excludes housing market activity in the greater Toronto and Vancouver areas, where housing price fluctuations have been more extreme, housing markets in other parts of the country still reported a 4 per cent decline.

Some would argue that April 2017 may not be a good benchmark given the rapid escalation of housing prices in the greater Toronto area. Thus, a comparison with sales and prices in March  maybe more suitable. A month-over-month comparison also reveals that housing markets have been struggling across Canada as CREA reported a 3 per cent decline in sales from March to April of this year.

Where as aggregate housing prices experienced a decline, the same is not true for condominiums, which continued to register an increase in prices. CREA reported that apartments experienced a 14.7 per cent increase in prices while single-family housing experienced a decline.

The resilience observed in condominium prices might be surprising to those who had warned against an oversupply of high-rise dwellings, especially in Toronto and Vancouver. It appears that changes in mortgage regulations are benefiting condominium sales because households under new regulations could qualify for lower prices that are more commonly found for condominiums.

Victoria has world's hottest luxury housing market: Christie's

  Victoria has world's hottest luxury housing market: Christie's Victoria, B.C. has landed the top spot on Christie's global list of hottest luxury housing markets. The real estate arm of the famed auction company says strong year-over-year sales growth and high domestic demand for housing catapulted the Vancouver Island community to lead a list of cities around the world on the annual list.Trailing Victoria on last year's list are San Diego and Orange County, Calif., followed by Washington D.C. and Paris.

Definition of mortgage : A loan to finance the purchase of real estate, usually with specified payment periods and interest rates. “ Most homebuyers must apply for a home mortgage with a bank in order to afford the large up front cost of the purchase necessitating repayment over a period of years plus

Low Mortgage Rates, High Demand Fueled 2016 Housing Market . The year 2016 proved to be a hot one “It’s probably not the best time if you are counting on your home value going up by another 20 or 30 Sharga warns that trying to time the housing market can be as frustrating as trying to time the

Industry insiders hold the stress test, which requires borrowers to qualify for a higher mortgage rate than the contractual rate, and provincial taxes to discourage foreign homebuyers, responsible for the uncertainty and decline in housing markets. The stress test became effective on Jan. 1 and was expanded to cover uninsured mortgages issued by lenders regulated by the Office of the Superintendent of Financial Institutions (OSFI).

Industry observers were of the view that some mortgage business might flow to lenders not regulated by OSFI, such as provincially regulated credit unions and alternative lenders including Home Capital. Initial response to the stress test suggests that not much lending has transferred to the others. The stock market performance and valuation of alternative lenders is indicative of a lack of heightened market activity.

Listings present another riddle in housing markets. While the sales have been down in almost 60 per cent of the local markets, so are the listings. Some argue that the homeowners are unwilling to list homes when prices are down from their historic highs. This might be true. But what is equally interesting is that listings were also low in 2016 and early 2017 when housing markets recorded steep price escalations.

It was then argued that homeowners were waiting for the market to peak and hence hesitated to list their homes. The constrained supply, as a result, in the resale market further fuelled housing price escalation. And when the markets peaked in April 2017, especially in the Greater Toronto Area, homeowners responded, albeit a little too late, a month later by listing homes in large numbers. It appears that when it comes to market timing, many owners are out of step with the markets.

Murtaza Haider is an associate professor at Ryerson University. Stephen Moranis is a real estate industry veteran. They can be reached at www.hmbulletin.com.

Here’s why real estate stocks are a bad investment in 2018 .
Here’s why real estate stocks are a bad investment in 2018Steps taken by federal and provincial governments and the Office of the Superintendent of Financial Institutions, Canada’s banking regulator, are curbing new demand and forcing sellers to remove their listings. The end result of these interventions may be more significant than what the government had originally intended, but these moves have slowed down the pace of price growth and the rampant speculation considerably.

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