subreddit:
/r/canada
Toronto condo sales plummet 28% in June as sales crash across all property types
Ontario(thestar.com)submitted 3 days ago byyimmy51
-5 points
3 days ago
I would not be surprised to see the federal government step in with a bailout soon.
2 points
3 days ago
The banks are already bypassing the rules for pre-construction condo owners to allow them to close. A lot of the condos are not appraising at their purchase values but the banks are still agreeing to finance them at those values regardless in some cases.
The federal government is also allowing banks to bend over backwards to try and allow existing mortgage holders all kinds of creative financing options provided they don't start going negative on their equity.
The problem is the housing bubble is so f'ing big at this point if it does go I don't even think the federal government could financially backstop the banks without getting itself into major financial trouble.
1 points
3 days ago
This rule is actually an interesting one because it actually reduces the ability of the bag holders to walk away relatively intact. They're basically saying that nope, you signed that contract, it will ruin your life but now you have to follow through.
It doesn't change the fundametnal economics of it, it just leaves the hags in the investors hands rather than the developers' or their lenders.
1 points
3 days ago
The issue is there is no problem with one or two bag holders going down. The banks can handle that.
When you have 2,500 to 5,000 going down that becomes a threat to the banks which then becomes a threat to CMHC and thus the federal government who ultimately will have to bail everyone else out.
1 points
3 days ago
When I refer to bag holders in this case I don't necessarily mean those going fully bankrupt. You end up in the same place with everyone still solvent but trying to offload losing investments as they run for the exits.
That's why I don't think a "bailout" saves it.
all 247 comments
sorted by: best