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Baby, we got a bubble!?

Casa Condos is a real good example. Firenze model at 495sqft sells from anywhere between $325000-$345000. Rent on average for this unit is $1550-$1600. Property taxes are $1690/yr assessed in 2011, and maintenance fees are $255 a month.

Your right my property tax equation was off. It should be closer to $1800-$2000 a year......long day!

I think going forward unless there is a correction downwards of prices this year as pointed out property taxes will be assessed this year for 2013 to 2016. The property taxes were last based on 2008 valuation. There has been quite a price increase so while $1800-2000 may be correct (though I think it is 2100 approximately), once the 2012 valuation is completed, for downtown TO condos which have gone up more than other areas in the province on average, the valuations will be higher here and depending on the mill rate, I think you will see a jump up when 2012 assessments come up. If the mill rate were to stay the same, the Casa Condo example of say $325K above would now have a tax rate of $325K x $0.0085/1K or $2762. I am not trying to be a stickler here, just suggesting that and additional $900 approximately will add $75/month. I think people need to be aware of this. Perhaps it won't go up as much but I think in calculating one should plan.
 
Cdr, Bank of Montreal is currently advertising 2.99% 5 fixed year rate. www.ratehub.ca is a great site to search the latest mortgage rates from all banks, and private lenders.


That is an amazing rate. How does this correlate with all the talk of the Bank presidents that markets are overheated and especially the condo market. Perhaps BMO's people don't share the same view or they are "buying the business" with a loss leader rate. I would lock in a 2.99% rate today for 5 years if I needed mortgage money. That is a superb rate.
 
Cdr, Bank of Montreal is currently advertising 2.99% 5 fixed year rate. www.ratehub.ca is a great site to search the latest mortgage rates from all banks, and private lenders.

Casa Condos is a real good example. Firenze model at 495sqft sells from anywhere between $325000-$345000. Rent on average for this unit is $1550-$1600. Property taxes are $1690/yr assessed in 2011, and maintenance fees are $255 a month.

Your right my property tax equation was off. It should be closer to $1800-$2000 a year......long day!



thanks for the update ... that rate is amazing ! is it available to everyone or are there alot of terms and conditions ?

the casa unit is pushing close to $700 psf but i'll give it to you :p
the only locations i know of that are getting close to $36 psf/yr are yorkville and MLS (some with parking and locker) .
 
3-3.5% of $ 50,000 is one thing and 3-3.5% of $ 100,000 is another.

No, right now, I do not see any reasonable deals but there were a few in the past -- FIVE and Pace. There will be deals again in a few year's time.

Thank you. So we agree that in the current market there are no deals that make financial sense.

With that said, it is hard to criticize people for sitting on the sidelines in the current market.
 
thanks for the update ... that rate is amazing ! is it available to everyone or are there alot of terms and conditions ?

the casa unit is pushing close to $700 psf but i'll give it to you :p
the only locations i know of that are getting close to $36 psf/yr are yorkville and MLS (some with parking and locker) .

That is an amazing rate. I understand why people are buying and locking in. I just hope those that are not over stretching themselves.
 
Property taxes will be assessed this year for the 2013-2016 period.
:( I'm gonna get hit hard. After my reno, the city assessors were very, very interested in my place. They decided my finishes in my house were higher end than they were listed in the previous assessment. So, not only am I getting an upped assessment because of my reno, they're also upping things because they're rejigging the assessment for the rest of the house too.
 
That is an amazing rate. I understand why people are buying and locking in. I just hope those that are not over stretching themselves.

it looks like this rate is a promo for the next 2 weeks by BMO and other banks have joined the bandwagon with their version.

http://www.theglobeandmail.com/glob...rivals-to-drop-mortgage-rates/article2302191/

BMO move spurs rivals to drop mortgage rates


A gimmick by Bank of Montreal (BMO-T58.25-0.41-0.70%) to attract new mortgage customers in a traditionally sluggish month for sales has sparked a mini price war among rival banks.

A day after BMO announced it had dropped the rate on a five-year fixed-rate mortgage to a historic low of 2.99 per cent as part of a two-week promotion, Toronto-Dominion Bank (TD-T77.750.050.06%) and Royal Bank of Canada (RY-T52.09-0.68-1.29%) followed suit with limited-time-offers of their own.

TD said Friday it was lowering its four-year fixed-rate mortgage to 2.99 per cent, down from 4.79 per cent. Soon after, RBC dropped its four-year fixed rate mortgage to 2.99 per cent, and 3.99 per cent on a seven-year fixed-rate mortgage.

Both RBC and TD said the offer is open until Feb. 29, extending the promotion beyond the initial two-week period BMO introduced. BMO’s mortgage offer is good until Jan. 25 and represents a drop of 50 basis points.

Marcia Moffat, head of home equity financing at RBC said the bank is offering the rate on 30-year amortizations, while a spokesman for BMO said the bank is offering its lower rates on 25-year amortizations.

BMO said it would not likely be extending its promotion beyond the two-week promotional period in response to its competitors. At each bank, customers can lock in the rates for a period of up to 90 days by getting pre-approval.

Katie Archdekin, head of mortgage products at BMO, said though the rates are similar on each offer, they differ depending on whether customers want the locked-in rate for four or five years.

“We know some other guys are coming in with similar rates, they look to be coming in on shorter terms, so slightly different products,” Ms. Archdekin said in an interview.

The banks find themselves in a low-interest rate environment, which is causing them to compete fiercely for new customers as they try to compensate for slimmer margins by expanding their loan volumes.

“We really think this is an appropriate product for a lot of the market right now,” Ms. Archdekin said. “The rates are at historic lows, they have been here for quite some time now. We do expect at some point that they are going to rise.”

Such low rates also come at a time when the Bank of Canada and federal government are trying to caution Canadians against borrowing too much. The average Canadian household debt climbed to a record 153 per cent of disposable income in late 2011. Bank of Canada Governor Mark Carney has warned that could be problem if interest rates rise.
 
When one reads this one has to wonder about the hypocrisy of the banks. Surely if the bank presidents are suggesting that real estate is overvalued, and they believe that part of the over evaluation is due to unrealistically cheap credit, their organization offering that cheap credit at the same time is surely irresponsible or even questionably immoral. When the interest rates go up, I am sure they will be lining up to foreclose on those poor individuals who overextended themselves.

Now please understand, I believe people have to make responsible business decisions, but I fear a lot of people (not on this forum of course) have limited business understanding and do not understand or appreciate the effect of a 1 or 2 % rise in interest rates on a mortgage and I am quite sure no one giving the mortgage is going out of their way to explain the risks. That is certainly what happened in the US with the low teaser rates.

Furthermore, this type of low interest rate money is just encouraging speculators to invest for the short term, frankly to the detriment of all those real end users who are trying to get into an already expensive market, at least as far as the downtown core is concerned.
 
Hi CG:
10 years at 3.99!!!
Do you think banks are becoming desperate for more business or do you think they are trying to prop up real estate prices?
If so, isn't this just kicking the can down further the road with more of a correction.
Curious CG: what do you think will happen with downtown TO condos pricing during 2012 and 2013. I appreciate it will be difficult for you as a real estate broker to come out and say you see downside risk but in candor can you give us your best
guess. Also, you are on the ground. How have sales in downtown TO been the past 3 months and is there any trend developing?
 
Hi CG:
10 years at 3.99!!!
Do you think banks are becoming desperate for more business or do you think they are trying to prop up real estate prices?
If so, isn't this just kicking the can down further the road with more of a correction.
Curious CG: what do you think will happen with downtown TO condos pricing during 2012 and 2013. I appreciate it will be difficult for you as a real estate broker to come out and say you see downside risk but in candor can you give us your best
guess. Also, you are on the ground. How have sales in downtown TO been the past 3 months and is there any trend developing?

I am very curious to hear your thoughts on the above as well CG.
 
Now both TD and RBC have 2.99% rates. It's a 4-year for TD and RBC though, vs. the 5-year for BOM.

All I can say is holy crap, and I just hope these things appear in spring 2013. The term on my current mortgage ends May 2013. If can get 5-year rates like this, I'd probably lock into a 5 year term.

It should be noted that similar rates already existed before the rates cuts at the big banks, but it's still nice to see the big banks feeling the heat from the smaller competition. The internet really has changed the way the banks have to respond to its customers.

These low rates have been so great. I've been able to pay things down way faster and do my reno way earlier than I had originally planned. Thanks you, US subprime mortgage disaster! ;)
 
I believe there are conditions on the mortgage. For example, I don't believe you are allowed to pay down earlier on these. Not that the rate still isn't great but they make sure they get their interest for the whole term of the loan. At least, that is what they suggested on the National yesterday.
 
Hi CG:
10 years at 3.99!!!
Do you think banks are becoming desperate for more business or do you think they are trying to prop up real estate prices?
If so, isn't this just kicking the can down further the road with more of a correction.
Curious CG: what do you think will happen with downtown TO condos pricing during 2012 and 2013. I appreciate it will be difficult for you as a real estate broker to come out and say you see downside risk but in candor can you give us your best
guess. Also, you are on the ground. How have sales in downtown TO been the past 3 months and is there any trend developing?

I am concerned about the pre con market for 2012, there is too much of a price gap from pre con to resale, the value is in resale and assignments. I am hoping this changes in spring and we see a surge on resale prices to be closer in line with the padded pre con prices maybe $50 psf diff, we will see if this materializes. Therefore I am not promoting sites that are launching over $675 psf in 2012, rather selling resale and assignments that I believe offer value to the investor. There also seems to be a trend towards value in pre con, Picasso Condos launched at $575 psf to Platinum brokers, we will see what the prices are for the VIP agents on Jan 19. imo stay cheap.

Banks are reducing because of demand, will this translate into a correction, no.

Hope this helps
 

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