Clearwater condos innisfil . Apartment investors in many districts should be cautious! Nearly half of them are losing money. The real estate market in Greater Toronto seems to have begun to be fairy tale disillusionment recently, and the mainstream English media have begun to warn buyers that the local property market is in a situation that has not happened in the past 30 years, that is, some people are starting to lose money.
Many of these recent apartment investors are losing money. According to the Huffington Post (The Huffington Post), after years of rising prices in the Toronto housing market, many people think that entering the market at any price will be rewarded. But over the past year, home sales in the greater Toronto area have fallen by nearly 40 per cent, while house prices have fallen by 14 per cent, and the market is experiencing a “manufacturing loser” phenomenon not seen in 30 years.
A group of pre-sale buyers in Oakville recently reported that they paid a deposit at the peak of prices in Toronto in 2017, but now they are struggling to afford prices.
It is because their present housing cannot be sold at the price expected last year. And the new mortgage stress tests make it impossible for them to get mortgages to pay the full amount. If the transaction cannot be completed, it may also be sued by the developer.
They are not the only ones facing financial pressure from a slowdown in the market. Condo investors in many cities are now losing money, according to a report released on Friday by (CIBC) and Urbanation, a real estate consultancy.
The study found that nearly half of condominiums delivered in 2017 (48 per cent) were bought by investors. Nearly half (44%) of them have “negative cash flow”, which means that rental income cannot cover “ownership” costs, such as mortgages and apartment management fees. A loss of more than 1 / 3 points will result in a loss of more than 1000 yuan per month.
But this is not the time to panic, because for those who bought units before last year’s peak, it is still a good deal.
If the house could be sold now, most owners would not be in debt. Over the past few years, resale prices for most apartment investors have risen sharply, even though many rents do not cover costs. The report estimates that even if investors who lose more than 500 yuan a month put their houses on the market, it will only increase the housing supply by 3.4%, hardly enough to drown the market and bring down house prices.
But the newspaper cautioned that lessons should be learned that things have changed. The progress of the real estate market will not be as it has been in recent years. If there is no other reason, the government is now actively preventing house prices from rising, and it is unlikely that house prices will rise rapidly. The report estimates that investors who buy ordinary apartments today need a rent growth of 17 per cent to make money when they own the apartment in 2021. If the interest rate rises by 1%, it will require a rent increase of 28%. For those who buy pre-sold homes, consider the difficulty of selling houses and getting loans. In short, the buyer should be careful.
