The current trad spat seems to be diverting the attention of Canadians from a big glitch in the Canadian economy: the sagging real estate market. In this short podcast, Ron Butler details the serious financial trouble that a Toronto condo flipper now finds herself in. The question is: how many more are out there who are just like her? We’ll find out soon enough.
“…at the end of all this figuring out the mortgage solution for these two units her question was then: ‘What am I going to do with the other eight?'”
Condo flipping is for rubes. She should have invested in tulip bulbs. There’s no top to that market.
Oh, wait…
Ontario got what it voted for, namely energy scarcity and economic stagnation.
Of 121 Ontario MPs 80 are Liberal or NDP.
I feel bad for the condo builders, buyers and flippers who are getting burned, but they should have paid more attention to the insane politics of their fellow citizens.
I watched this podcast yesterday afternoon and I do not feel sorry for the individual at all. One of the 7 deadly sins is “Greed”. There have been numerous warnings for the last 4-5 years that the real estate market (especially in British Columbia, Ontario and Quebec) is going to become nasty.
When I was in my 20’s and 30’s and had great difficulty accessing credit because I was “single, female and self-employed”, I watched my friends who were in marital relationships pull ahead of me. Now, I will be 73 in March and have been mortgage free for almost 20 years and I still have nice furniture, artwork and as Cam on “Modern Family” says “I like nice things”. I have investments as well, although not as many as I would like. When my sister was alive, we would take a decent vacation every 1-2 years. My friends on the other hand, have treated their homes as ATM’s and at age 70, still owe $ 600,000 on their mortgages, still owe money on their expensive yacht and have NO income.
I paid two years income for my rather unremarkable house twenty years ago, I have been mortgage free for a decade. At it’s peek my house was worth four to five times my annual income and my annual income had doubled since I bought it. With a top ten percent income I could/would not have bought my house at that time. It was obviously a bubble to anyone paying attention. The economy is going to be horrible for a long time because people are spending so much putting a roof over their head they can’t afford to furnish the home, or buy a new car when their old one dies, or spend money on anything else other than the mortgage, and given that having a roof over your head in Canada is essential to survival, that bill is always going to get paid one way or the other.
My GAF factor for this woman, and people like her, is zero.
Its one thing to buy a place, make it better and then resell it, its another to just use leverage to profit.
And don’t talk to me about her risk because she weighed it as either a non-factor or quite modest.
As JMM writes, she’s greedy.
I wouldn’t be surprised if the flipper thought her shit didn’t stink.
“I wouldn’t be surprised if the flipper ” financed it all on CERB fraud.
Grant Cardone is excited that US$2.7tr mortgages will expire-renew in 2025. It’s a buyers market, due to rise in interest rates.
There are 6 units in the building beside mine that are rotting on MLS, because the owners are unable to take a haircut on the price, the developer even tried to help them out by offering a 0% mortgage for 3 years, and there were no takers.
And because the city of Toronto has a unoccupied housing tax which doubles your tax liability, these people are burning cash
Again, a 7 minute podcast from this guy that could have been over in 2 minutes. Get to the effin point and stop rambling.
This is what happens when housing is viewed as an investment and not as a matter of having lifestyle security with a roof over one’s head. I do not feel any sympathy for this person.
When real estate is grossly expensive, a sagging market is a good thing.
Granted it’s painful to those who have invested under the assumption that prices will forever increase, but it’s a boon to those seeking shelter.
“Real Estate will never fall in value”.
Makes me cringe when people are this stupid.
When do we get to the point that I won’t have to live in a tarpaper shack in the woods when I retire?
I only have pre-Liberal racist Party money, them and the bigots in the NDP took 30% of my bank account and cut my wages by 30%
If I could at least put a decent roof over my head that would be half the battle.
Real estate might be slumping in Toronto, but here in Prince George BC it’s still unrealistically high, and houses are selling. For years now, I haven’t been able to understand the price increase, couldn’t understand why prices didn’t crash, and I’m very glad that my house was paid off years before the current madness.
That woman should have realized that when houses/condos are priced in insanely high, most people can’t afford them.
Offshore money out there!
Well you have to launder your money somewhere…
“Sagging” real estate is not a glitch, it’s fixing the glitch that was the multi-decade run up in housing resulting from NIMBY and bad monetary policy (to unclear degrees).
Down by down payment.