I interviewed four mortgage brokers in the Greater Toronto Area about their housing market. Each of these brokers have been in the industry for nearly a decade or more, and all four earned recognition in 2016 as one of Canada’s “Top 75 Brokers” awarded by CMP Magazine. Here’s what they are saying about the Toronto Housing Market.

Note the comments from the brokers are for the large part verbatim

Many people in the media all over the world are waving red flags over the Toronto Housing Market, as someone who’s immersed in the business, is there anything people are missing?

Shawn Stillman, Mortgage Outlet Inc.

“So I definitely think the market has gone down in the last few months, there’s stuff that’s sitting on the market that wasn’t sitting before and in the past it was multiple offers, and in this case there’s not. So, definitely the supply has increased and the demand has dropped off since the government rule changes in April. Do I think it’s a bubble? No, I think the market definitely got overheated over the past twelve months and I think it’s going to slow down probably in the 10-20% range which we’ve already kind of seen happen, but I expect it to remain pretty consistent from here on out.”

Toronto Housing Market
ASTemplates / Pixabay

 

Irina Antipova, Assured Mortgage Services

“The market value of the houses went up three times and the sale value is still the same in adjustment to the CPI. So the problem we are facing is with the increase in foreign immigration of up to 400,000 and at the same time we have inter-province immigration. So with this double load coming to the GTA, it’s hard to find rental property. Whenever you put a condo on the market, especially in the downtown area, we have like 5-7 offers. So people coming to Toronto, sometimes they don’t have jobs because they change their province or they’re just new immigrants and they need a place to rent and the problem is not enough supply. Supply is not there and demand is still high, so the price will go up, the sky’s the limit you know?”

Jason Georgopoulos, Dominion Lending

“Well I think one thing important to note is our underrating guidelines are still pretty strict, and people aren’t getting loans that don’t qualify for loans – for the most part – I’m saying that as of course there’s always private lenders and B lenders, but for the big banks and 95% of the loans being done in the Toronto Housing Market, the qualifications are pretty strict. There’s a lot of pressure on buyers right now, and there’s definitely a lot of help coming from the bank of mom and dad in terms of first time homebuyers. But I don’t see any real reason for panic based on how the lenders have been pretty prudent on who they’re giving money to, and everybody is paying their loans – there’s not a lot of arrears on everybody’s balance sheets right now, that includes big banks and even the B lenders.”

Anne Brill, Centum Metrocapp Wealth Solutions Inc.

“I don’t personally believe there is a bubble, I do believe things will come down to more reasonable prices. Things went up, obviously for no other reason than supply and demand, and everyone got into a frenzy the last few months. Even though they do say some areas have gone down say 60%, a home that was worth $1 million six months ago is still worth the $1 million today, it’s just in the last six months in went up to $1.6 million for stupid reasons. So, I don’t believe in a bubble, I don’t believe that home that was worth $1 million six months ago is going to be worth $600,000 tomorrow. So I do not believe in a bubble, I just think things will stabilize a bit more.”

A big problem in America’s housing bubble was a lack of financial stability from homebuyers. What kind of FICO scores have you been seeing in the Toronto Housing Market? Is there any difference in these scores from five years ago?

Shawn Stillman, Mortgage Outlet Inc.

“There’s really no difference in credit scores from the past few years, what Canada’s market didn’t do is the same level of no income loans – one thing that was really popular in the US was mortgages that would balloon payments, you know, teaser rates for the first year or two years and then they would explode in years five onward. In Canada that doesn’t happen, so I don’t expect people are all of a sudden going to have problems making their mortgage payments, simply because there’s not going to be a huge increase in their payment going forward. Of course if the market and rates do go up, people could always re-finance their house and stretch out their amortization to keep their payments lower so I don’t think that there’s going to be a huge crash like what happened in the US.”

Irina Antipova, Assured Mortgage Services

“All my clients – I have seven thousand existing clients, mostly doctors, dentists, IT practitioners, truck drivers – all of them are paying their mortgages, but the problem right now is they want to change their house to let’s say a bigger house, with two-car garage, or three-car garage and they cannot afford it you know – so they strengthen their existing house. What they can do is they can afford to get some equity and maybe buy some rental property or investment property because they are still qualified for their condo. So that’s the problem on the condo market right now with the condo prices going up, myself I have only condo rentals.”

Jason Georgopoulos, Dominion Lending

“My clientele are mostly middle to upper class in terms of financial stability so the scores I have seen have not been reduced, everyone has pretty well qualified that I’m dealing with – but that might just be anecdotally in my area of Toronto and the clients I choose to work with.”

Anne Brill, Centum Metrocapp Wealth Solutions Inc.

“FICO scores, I’m going to say are probably very similar to what they were before, consumers are a lot more educated today than they were, so people are very conscious of their score, and a lot of these people pay systems to keep a very close look at their scores, so because consumers are more educated today, scores today are probably higher than they were five years ago, but at the same time I’m sure bankruptcy proposals went up, so because of that other people’s scores went down. But for the most part people are really educating themselves and are really conscious of their credit scores.”

Home prices in the GTA surged 33% YoY in March. Can you explain this change? Are Toronto Housing Market prices sustainable? 

Shawn Stillman, Mortgage Outlet Inc.

“It has definitely gone down since then and if you look at May’s numbers year-over-year they were around 17%, so it’s already slowing down.”

Irina Antipova, Assured Mortgage Services

“Purchases of these higher priced houses, a

1, 23  - View Full Page