Toronto Loft Conversions

Toronto Loft Conversions

I know classic brick and beam lofts! From warehouses to factories to churches, Laurin will help you find your perfect new loft.

Modern Toronto Lofts

Modern Toronto Lofts

Not just converted lofts, I can help you find the latest cool and modern space. There are tons of new urban spaces across the city.

Unique Toronto Homes

Unique Toronto Homes

More than just lofts, I can also help you find that perfect house. From the latest architectural marvel to a piece of our Victorian past, the best and most creative spaces abound.

Condos in Toronto

Condos in Toronto

I started off selling mainly condos, helping first time buyers get a foothold in the Toronto real estate market. Now working with investors and helping empty nesters find that perfect luxury suite.

Toronto Real Estate

Toronto Real Estate

For all of your Toronto real estate needs, contact Laurin. I am dedicated to helping you find that perfect and unique new home to call your own.

 

Big banks boost condo financing even as unsold units in Toronto hit 21-year high

Katia Dmitrieva – Bloomberg News

The Bank of Nova Scotia is among lenders boosting loans to condominium developers as regulators become less vocal about housing-market risk, according to Canada’s third-biggest bank.

Comment: I guess everyone has finally settled down and realized that the Toronto condo market is safe and stable. Now, if we could only get the media on board…

Scotiabank is financing as much as 75% of a condo project’s value and others are doing the same, according to Chris Milne, vice-president of real estate lending at the bank. That’s up from about 70% in the past, when banks were concerned “there may be a meltdown” and regulators were more vocal about residential market risk, Mr. Milne said.

Toronto condo financing
“The banks are back out there lending in the condo sector,” Mr. Milne said at a Toronto real estate conference Tuesday. “There is a hole that the banks are looking to fill. The regulators were really pounding them a year and a half ago and now it’s quiet.”

Banks are boosting financing to condo developers even as the number of unsold units in Canada’s largest city reached a 21-year high in January. There are about 1,600 unsold units on the market following a record number of completions in January, according to a report from Sal Guatieri, senior economist at Bank of Montreal.

Comment: It would seem that the banks understand that 1,600 unsold condos is meaningless. Out of 31,000+ condo completions over the past 13-14 months, those 1,600 units represent only 5% or less of recently completed condos. That means than 95% or more are sold – plus another 28,000-odd new condo sales in 2014. The units that sell WAY outweigh those that don’t.

Federal regulators have eased warnings on the real estate market compared with the late Finance Minister Jim Flaherty and former Bank of Canada Governor Mark Carney, Mr. Milne said. Mr. Flaherty backed several mortgage rule changes that tightened scrutiny of the so-called Big Six banks while Mr. Carney often commented on the risk of record consumer debt.

Canada Mortgage & Housing Corp. no longer insures loans to developers to construct condominiums. The federal housing agency said in June it would drop coverage as it seeks to distance taxpayers from the risk of falling home prices.

Comment: But they don’t need to if banks are funding 75% of the project. Insurance is not needed when there is 25% or more put down.

Spokesmen for the Department of Finance, Bank of Canada, and Office of the Superintendent of Financial Institutions, which oversees federally regulated firms including banks, did not immediately respond to requests seeking comment.

Lenders require a building to be 65% sold before making a loan, Mr. Milne said. A developer would need to inject more of their own equity into the project if a bank were to finance a building less than 65% sold, he said.

Comment: I thought it was more in the 70-80% sold range.

“Sales are not where they were in late 2007 where you can sell a high-rise condo in a week,” Mr. Milne said. “Now it takes a while.”

Comment: But they do sell, that is the point. If completed buildings are 95% sold, then there is no issue. And the rate gets up to 98.5% by the time the condo corporation is registered. It may take time, but the condos are selling, there is no doubt about that.

—————————————————————————————————–
Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.

—————————————————————————————————–

Summary
Big banks boost condo financing even as unsold units in Toronto hit 21-year high
Article Name
Big banks boost condo financing even as unsold units in Toronto hit 21-year high
Description
The Bank of Nova Scotia is among lenders boosting loans to condominium developers as regulators become less vocal about housing-market risk, according to Canada's third-biggest bank.

Leave a Reply

Your email address will not be published. Required fields are marked *