According to reports from various housing market specialists, both Toronto and Vancouver have incredibly pricey housing markets. However, Vancouver has been deemed to be worse. As Toronto housing market somewhat stabilizes, Vancouver deflates even further. This is likely due to the fact that Vancouver is constantly being hit with fraudulent money, rich immigrants, and a lot more speculation in regards to property.
It’s important to note that Toronto and Vancouver have both enabled systems that will likely calm their respective housing markets, and already has to a certain extent. According to John Pasalis, Realosophy Realty Incorporated’s founder, these systems need to stay in place or we’ll likely revert back to step one. That is, more unaffordability, and a very unstable housing market in each city.
“I think both Toronto housing market and Vancouver’s are really fueled and driven by immigrants. But I think Vancouver has more non-resident purchases and just a lot of foreign capital. In Vancouver, you have a lot more residents who are getting their money from overseas.”
All in all, British Columbia suffered from over 7 billion dollars in laundered and fraudulent money as of 2018. This fact made buying a home even more expensive, that is, by hiking the prices up nearly 6% higher.
According to the Provincial Minister of Finance, Carole James, “Our housing market should be used for housing people, not for laundering the proceeds of crime. The amount of money being laundered in B.C. and through real estate is much more than anyone predicted…”
Should the illegal activity in B.C. continue, it’s only reasonable to assume that the price hikes and instability in regards to the housing market shall remain in an ever increasing rampage. Toronto on the other hand seems to have stabled.
According to homeowners in Australia, they’re mortgage rates are increasing at ridiculous rates. At this point, they’re seeing a rise of $400, per month. This has been deemed historic, and is breaking the bank accounts of a lot of people.
The spikes in mortgage fees are considered to be the fault of interest only mortgages. The concept essentially means that someone who borrowed money on an interest only mortgage deal would only have to pay interest for a preset amount of time. The concept is one that is fairly unfamiliar in the eyes of Canadians, however, the situation many Australians have been left in is not.
It’s important to note that the interest only concept is only unfamiliar to Canadians, as the UK uses it, the US uses it, and it’s even been seen across South America.
At first the preset interest rates seem like a good idea. Until you figure out that your payments will jump following the end of the interest rate period, simply to cover the repayment of principle.
In 2010, the interest only system was eradicated from Canada. Unfortunately for us, it’s back. Merix Financial, a popular Canadian lender, has decided to once again introduce the concept.
According to Robert McLister, “Unlike the irresponsible U.S. variety, pre-housing crash, Canadian (interest-only mortgages) do not increase your buying power…”
According to Stephen Poloz, the governor of the Bank of Canada, “To be clear, the system is not broken – it has served Canadians and financial institutions well. But we should not stop looking for improvements…”
It’s no surprise that Canadians are largely unfamiliar with the system Australia is currently using. One heavy hit was enough for us.