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Two questions that seem to be answered but aren’t quite: 1. So was the theory that the housing price spike was driven by foreign buyers who didn’t occupy their
by projectramo 8y ago
Two questions that seem to be answered but aren’t quite:
1. So was the theory that the housing price spike was driven by foreign buyers who didn’t occupy their homes accurate?
2. So did the speculation tax work?
- Tiktaalik 8y agoSpeculation tax hasn't even been implemented yet. We're seeing a 20% drop due a basket of measures such as CoV empty homes tax, airbnb regulations, provincial increased school tax on homes over $5M and a fear of the upcoming speculation tax.
- refurb 8y agoDon’t forget the “stress test” required to get a mortgage since last year. New buyer now have to qualify for a mortgage at the Bank of Canada rate plus 2%, which is close to to 6% now. Even though mortgages can be had for a little over 4%. That shutdown a lot of buyers very quickly.
- projectramo 8y agoI am sure I am missing some nuance since this is the first I have heard of this but, on first blush, that seems like a great idea.
- refurb 8y agoIt was an effort by an independent govt body (OFSI) that is charged with managing risk with canadian banks. Basically the number of uninsured mortgages had been climbing rapidly, so this instituted so that even with a fall in housing prices, loans are less likely to default. Good I think from a banking risk mentality, but not so good for homeowners looking to buy. I remember reading that a couple making $100k and 20% down could have bought an $850k home before the stress test. Now it’s my more like $650k.
- projectramo 8y agoThe second one sounds like what they ought to be able to buy to my ears. $100k after taxes is $65? Maybe less? $650 after 20% does is $520 to pay off? I know there is no magical answer but that feels right to me if I were a homeowner.