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View Full Version : Getting a mortgage while real estate is crashing


trent
01-05-2009, 03:34 PM
Why would anybody get a mortgage to buy a house in Canada now, that real estate prices are crashing across Canada? Please share your thoughts, because I cannot find a single good reason to do that?

Canadian
01-05-2009, 04:21 PM
Why would anybody get a mortgage to buy a house in Canada now, that real estate prices are crashing across Canada? Please share your thoughts, because I cannot find a single good reason to do that?

I think that there is always somebody who thinks that real estate has reached a bottom, and prices will rise. Other people are not so sure if the bottom has been reached, however they are willing to tolerate 10-15% decline in the next years, as long as they believe real estate values will rebound.

Steven
01-06-2009, 03:06 PM
I don't think that the Canadian real estate is crashing, at least not yet. People buy houses for 2 reasons - shelter and investment. I don't think that there are many real estate speculators left out there, however there will always be people that need shelter.

bronto18
01-08-2009, 02:01 PM
The condo prices will go way down. So many units were bought from investors. If you happen to walk around a recently build condominium you cannot miss the FOR SALE and FOR LEASE signs around the building.

trent
01-09-2009, 03:18 PM
Not only condos, but all housing prices will go down big time. I won't be surprised if the median price reach pre-boom 200-2001 levels or even lower. It's foreclosure time!

bullish
01-14-2009, 02:20 PM
Not only condos, but all housing prices will go down big time. I won't be surprised if the median price reach pre-boom 200-2001 levels or even lower. It's foreclosure time!

Again, wishful thinking from somebody who never owned a home and most likely never will.

trent
01-15-2009, 02:36 PM
Again, wishful thinking from somebody who never owned a home and most likely never will.

But I will :). I might even come and buy your overpriced house when the price goes down 50% from here :p

Canadian
01-16-2009, 03:37 PM
But I will :). I might even come and buy your overpriced house when the price goes down 50% from here :p

Just a few months ago I thought that the real estate in Toronto will see a decline of maximum 30%, but now 50% decline seems quite reasonable with the complete lack of credit, buyers and fools to buy into the deflating bubble.

bullish
01-19-2009, 01:24 PM
Keep dreaming guys, in a 6 months the economy will be much better and many people will be sorry that they didn't buy until house/stocks were down.

heyjude
01-22-2009, 01:40 PM
The condo prices will go way down. So many units were bought from investors. If you happen to walk around a recently build condominium you cannot miss the FOR SALE and FOR LEASE signs around the building.

That's true. I see a lot of houses around where I live, are FOR Lease. I wonder if the owners want to sell them but are waiting for the market to recover and want to lease them to cover their mortgage payments in between...

Canadian
02-02-2009, 03:20 PM
That's true. I see a lot of houses around where I live, are FOR Lease. I wonder if the owners want to sell them but are waiting for the market to recover and want to lease them to cover their mortgage payments in between...

Two things. First there won't be a recovery in the housing market for quite a while (few years at least). Second, the rent that you can get in Toronto, would cover about 50% of the expenses the owner has - mortgages, taxes, maintenance, etc. I bet all these speculators are waiting for the spring market, and here is a newsflash for them - there won't be one!

trent
02-04-2009, 04:08 PM
And even after the real estate market bottoms, there will be a few years with flat prices. Don't expect a V shaped recovery.

Canadian
02-05-2009, 12:16 PM
And even after the real estate market bottoms, there will be a few years with flat prices. Don't expect a V shaped recovery.

Yes, that's a good point, as most people expect after the last month of decline (bottom), to get a few % increase the next. This is simply not going to happen.