The real estate market in Canada has been on a meteoric rise over the past few years, with many properties seeing huge appreciation in value. However, as with any boom, there are concerns about irrational exuberance and a bubble forming. A recent post on Reddit explores some of the potential issues in the market, including private lenders and fake sales listings.
According to the post, there are many overpaying for properties in the GTA, and some are resorting to fraudulent measures to keep their heads above water. One tactic involves faking a sold price to bring down the loan-to-value ratio, allowing homeowners to go to private lenders for a loan until a deal falls through.
The post also highlights the fact that private lenders are not regulated, making them high-risk investments for those who put their money in. The fear is that if a private lender goes bankrupt, it will be a domino effect with multiple power-of-sale notices going up within a few months. With so many people resorting to these tactics, it is likely that many will be left with no way to recover their losses.
The author of the post points out that the inflation rate is below the borrowing rate, meaning there is no incentive to save money. Instead, people are pouring their funds into real estate in the belief that prices will continue to rise. This may lead to some people being underwater on their mortgages if prices do not increase.
Another issue raised in the post is the living conditions of students in Brampton, where some are renting mattresses and sharing rooms for as little as $500 per month. The post suggests that the government needs to build safe, affordable housing to address this problem, as many landlords are taking advantage of the situation.
Overall, the post on Reddit raises some significant concerns about the real estate market in Canada. While many are benefiting from the boom, there are risks involved that could lead to financial ruin for some. As always, it’s important to do your research and proceed with caution before making any investment decisions.
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Author Eliza Ng