Canada among 12 most overpriced housing markets in the world

Financial Post- The U.S. housing market may have crashed, but bubbles around the world keep blowing.

Prices in some of the world’s major real estate markets continue to be inflated by real reasons, like scarcity, and by less savory realities, like easy credit and speculation.

The Economist has broken down which markets are most over-inflated, by comparing rental prices to sale prices of properties.

This reflects what the cash flow is on a potential investment property versus the underlying asset value. If you don’t get much cash out of the rental, the property purchase makes less and less sense…

Canada among 12 most overpriced housing markets in the world

CMHC Mortgage Regulations to Restrict Real Estate Investment

Kitchener Waterloo Real Estate Investment Properties- Currently when you buy a rental property, CMHC will allow you to use a 80% rental offset, which means that they used to take 80% of the gross rental income that the income property generated, and subtract that from the borrowers total debt, to establish the total debt service (TDS) ratio. 

What that means is that you don’t have to have the household income to cover 100% of the value of the rental property, like you do with a home you live in, because the bank will let you offset the debt using 80% of the revenue the rental produces (does that make sense?).

They’re changing this amount to 50%, which makes it much tougher for people to qualify for investment properties, but the real kicker is that…

CMHC Mortgage Regulations to Restrict Real Estate Investment | Invest in Kitchener Waterloo Real Estate Investment Properties