I spoke to Riel (TMG mortgage guy) about the exchange we had regarding April 19 and the possibility of pre-approvals extending beyond that date to avoid the new rules. He called a contact at CMHC and this is what we learned. No! CMHC will insure deals that are officially approved by the close of business on 4/19. A specific property must be associated with those applications. Anything approved after 4/19 including files that are re-opened due to a change in circumstances (income, job change, etc.) will have to qualify based on the new rules.

Doug,

Looks like an interested report. I know what I’m doing this weekend! Thanks very much.

Jason,

Thanks for the comment. If there is a major slow down in construction it will likely be the city that ends up holding the most serviced land. Builders usually have their ducks lined up so they can give unused lots back (with a deposit lost). It costs Jack & Jill PrivateHomeBuilder a pretty big chunk of change to resell without building. I believe the penalty is $50,000. They’re not likely to commit to a lot unless their certain they can get a house up.

http://www.scribd.com/doc/28454918/Canadian-Housing-Bubble

I’m not sure about this but it’s a good question for my mortgage broker. CMHC doesn’t do “pre-qualifications.” I had assumed that come 4/19 the new rules would be in place.

“some of the facts presented in the article were just flat-out false!”

I don’t believe much of what I see or hear in the news anymore. You only have to be involved in the whole process a few times to realize that you can’t count on the truth.

“Congrats on the swank new site design!”

Thank you.

It looks like listings and sales are tracking each other pretty well so far this year. It’ll be interesting to see what happens in the next month or so with the new mortgage qualification rules pending. I’m assuming that those that have locked in a rate will be able to shop around for some time after April 19th, so I suppose we’ll know in the few months after that just how many people have bee qualifying with sub-5-year term and variable rates. As good old Mr. Buffett once said (Warren, not Jimmy, mind you), “You only find out who is swimming naked when the tide goes out.”

I had to laugh to myself when I read the New York Times article that you posted above (In Canada, real estate is booming). It’s interesting to get the perspective of a journalist from another country, but some of the facts presented in the article were just flat-out false! A case in point is the following quote:

“Mindful of government oversight, Canadian banks by and large avoided the structured debt products that imperiled many of their American counterparts. They also maintained comparatively tight controls on mortgage lending to consumers. When zero percent down payments on mortgages were widely available in the United States, Canadians were typically required to put down at least 10 percent. American-style amortization periods stretching beyond 25 years were also relatively unknown in Canada.”

Ahem… I don’t think so. Both zero downs and longer amortizations have had their day here, and continue to in the latter case. I’m not sure what percentage of current purchasers are taking out amortizations longer than 25 years, but I’m certain it’s *way* beyond “relatively unknown”.

Congrats on the swank new site design!

Yes, there are more condos for sale than what you see in the MLS stats. Of course, there are also more sales.

Are these numbers indicative of more condos for sale that what is listed in the MLS stats?