Greater Toronto has cooled

There is clear evidence that the Greater Toronto housing market has cooled. While demand for housing remains robust in Toronto, unit sales appear to have reached a plateau in the past few months. At the same time, supply has increased slightly. There have been more new listings on the market and the inventory of unsold new homes was slightly higher in the second quarter versus the beginning of the year. Although starts rose in the second quarter, they were down from a year ago. As a result of these various trends, the Greater Toronto housing market has moved into a balanced position favouring neither sellers nor buyers. This has led to a slower pace of home price growth. After rising by 7.4% in 2005, resale prices moderated to a gain of 5.5% year-over-year in the second quarter of 2006 and down to 4.9% in July.



from a TD economics report: http://www.td.com/economics/special/housing_0806.jsp

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And in the same report....in the very 1st part itself....G13, you missed on mentioning...


In contrast, the other major Canadian real estate markets appear to be in much more balanced shape and housing activity in Central and Atlantic Canada has already cooled without prompting a price correction – supporting the view that a bubble never formed in these regions.

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Rajeev Narula, Broker, REALTOR®
ACE TEAM REALTY INC., Brokerage
10 Kingsbridge Garden Circle, Suite 704
(Opp Square One - HWY10/403)
Mississauga, ON L5R 3K6
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Fax: 1-888-443-3155
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Rajeev is right.
However the problem with bubbles is that they are difficult to recognise till they burst.

http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1157969827047&call_pageid=968350072197&col=969048863851

Housing starts drop

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You know you are a desi when ........ You spew forth the virtues of India, but don't want to live there...............You've never had a tanning salon membership

Dear Members:

Thanks for the tons of wonderful information. I was wondering if you'd be willing to share any insights on the neighbourhoods in East GTA e.g. Pickering, Ajax, Whitby.

Our job locations preclude us from moving to West of Yonge. I don't want to move too far up north aka Newmarket/Aurora/Stoufville.... Richmond Hill seemed quite expensive. Established Markham neighborhoods were on the pricey side too and Unionville- well we wouldn't go there ($$$$ - though not as many as Bayview-York Mills area). Markham - especially the new development around Markham bypass and ninth line had lots to offer but the lot sizes are mostly postge-stamp size as compared to ones in Ajax/Pickering...... There is a lot of new development going on in Ajax and some of the new builder inventory homes seem to be pretty good...... Is there a difference between North/South Ajax or Pickering neighbourhoods in terms of schools, transit, crime............ (I did notice that east GTA has practically next to none private schools.............)

Please do share your opinions/info. Thanks.

Hello CD Home hunters,

I recently came across the below calculations from a mortgage specialist. Here's the gist of our calculations:
If you buy a 200K house with a 5% down payment, the final mortgage amount Comes to 195,225$ including the CMHE fee of 5225$.
Then the monthly mortgage comes to 1,192$ at the current rate of interest of 5.50 for 25years period.

Out of this $1,192 about 885$ goes towards Interest!! and remaining 307$ goes towards reducing the main principal amount.
In other words the 885$ simply vanishes into Thin air into the pockets of the banks/money lenders. Not to mention the other additional expenses like heating, hydro, maintenance fees etc etc.

I currently pay 850$ rent on apt which covers all heating, water, parking etc etc. Bas! Hogaya kaam. Everything else is savings.

It became very clear to me that contributing a maximum down payment amount will ensure that less money is eaten by the banks. I am now working towards getting as much amount as possible. This above information was an real eye opener for me.

1) What do you guys think of the above scenario? Was it an eye opener for you?

2) How much percentage are you planning to putdown for down payment?

3) Any other suggestions to avoid losing your money in this “black hole” (bank)? Real estate experts may kindly provide their inputs.

Fire away…

Seenappa

Some very rough calculations that I have made and come up with results as under:

Down payment 5%

At loan rate

3% Int portion is 50% and principal repayment portion is 50%
3.5% - Int 55%, P 45%
4% - Int 60% - P 40%
4.5% - Int 64% - P 36%
5% - Int 67.7% - P 33.3%
5.5% - Int 70.9 - P 30.1%
6% - Int 73.7% - P 26.3%

That ofcourse is for the first payment. The interest portion reduces and Principal increases with each payment.

Also
For a loan of 190,000 at 5.5% (assuming the rate remains same for all 25 years), the total interest paid over the life of the loan is about 142,000!!!

At 3%, it is only 74K

At 8%, it is about 209k!!!

Chandresh

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Chandresh

Advice is free – lessons I charge for!!