This Week’s Top Stories: Nearly Half of Toronto Condo Investors Have Negative Cash Flow, and Canadian Prices Are Making Recession Like Moves

This Week’s Top Stories - Nearly Half of Toronto Condo Investors Have Negative Cash Flow, and Canadian Prices Are Making Recession Like Moves

Time for your weekly cheat sheet on this week’s top stories.

Canadian Real Estate

Teranet: Canadian Real Estate Prices Stalled For The First Time Outside Of A Recession

The Teranet-National Bank HPI made some unusual moves in March. The composite index was virtually flat, when compared to the month before. Additionally, only 4 out of the 11 major markets in the national index saw a monthly increase in March. Both moves have not been seen outside of a recession.

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Experts Predicted A Mortgage Boom At Canadian Credit Unions. That Isn’t Happening

When mortgage stress tests became mandatory at banks, experts said Canadians would go to credit unions to skip the test. Looking at the mortgage dollar volumes, that’s probably not the case. Credit unions held $197.6 billion of outstanding mortgages in February, a 0.07% increase compared to last year. This represented a 6.29% increase compared to the same time last year. That’s exactly the same rate of monthly growth observed last year, pre-stress testing. The annual pace of growth is also below the median rate of growth observed over the past 10 years. That’s unmistakably not a boom.

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Toronto Real Estate

Here’s How Much Toronto Real Estate Needs To Rise For Investors To Break Even

Toronto condo investors are making some big bets, but how likely are they to make money? Investors that bought at a 2% interest rate, would need prices to rise at least 7% to make a quick one year flip. The problem is, over 32.3% of investors are paying over 6% in interest. Click through to find out how likely these buyers are to break even.

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CIBC: Over 44% Of Toronto Condo Investors Don’t Get Enough Rent To Cover The Mortgage

Toronto real estate isn’t a great investment if you’re looking to make money on rent. CIBC economics published a report on rent being collected by condo investors that took possession of new units in 2017. While 55.7% are making a little more than the cost of payments, the rest don’t collect enough rent to cover the bills. Of those with negative cash flow, an estimated 34.5% lose more than $1,000 per month. Ouch!

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Toronto Real Estate Is Seeing Detached Prices Climb, But Still In Correction Territory

Toronto’s detached real estate prices continue to fall. The benchmark detached home is now $924,900, a 6.69% decline from last year. Detached sales have declined by 46.3%, while listings have spike by 122%. The widening gap between sales and listings, is releasing a lot of pricing pressure.

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