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Ron Butler Profile picture
@ronmortgageguy
Dec 2, 2024 • 6 tweets • 2 min read • Read on X
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The Great Toronto Condo Crash Gathers Momentum

The stories of losses on Pre-construction sub 500 sqft Dog Crate Condos & even on slightly larger 600+ sqft units just keep on coming

The same themes but different problems & really bad outcomes

More details are emerging

2/
A new twist is the difficulty in securing normal mortgages to close on these wildly overpriced units

In a great G&M piece this morning #rachelleyounglai describes an 8.3% mortgage rate on a $410K mortgage producing a $4200 payment including mortgage, condo fees & taxes

3/
The Buyers were turned down by their bank and were forced to take a huge mortgage rate

Rent on the unit is $2400 they lose $1800 every month

Or they could sell for a $75K loss, this Pre-Con unit was bought in 2018 & closed last January

A true financial disaster

4/
To make matters worse another Pre-Con unit closed in May & they lose $3050 per month on that one

Absolutely devastating losses that are hard to escape

@JohnPasalis had a great post this weekend

Toronto Pre-Con Condos became wildly miss priced 6 years ago

And no one cared

5/
People just kept on buying with a ridiculously false belief rents would increase massively & mortgage rates would be 2.49% forever

Buyers would snap up Pre-Con Condos at $1250 per sqft when Re-Sale Condos across the street were offered at $825 per sqft

WTF? It made no sense

6/
But here's a common feature: most of them minted money on previous transactions

The couple taking nearly $6K a month losses made a $500K profit on a 2013 unit they sold in 2022

They were Rental Condo Investors who really BELIEVED

Not anymore

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More from @ronmortgageguy

Ron Butler Profile picture
May 4
When Will Canadians Tell The Prime Minister: TIMES UP!

It's been over a year since Prime Minister Carney's election & at what point do Canadians question his promise of: Build Bigger & FASTER than ever before

When will Canada become the Energy Superpower he told us?

2/
Look, I get it, things take a bit of time

But so far it's:

- MOUs
- Open Agencies & Crown Corps
- Start some things already approved

Where is the New Oil Pipeline to the North Coast of BC?

Where are the NEW Mines?

Where are NEW Natural Gas Liquification Plants?

3/
We're not even asking for Construction to start

Just where are the Signed AGREEMENTS

Because that's not even hard

Organize the Meetings
Attend the Meetings
If First Nations refuse OVERRIDE them

That's actually how FASTER works

Decisive, Aggressive Actions

4/
Read 6 tweets
Ron Butler Profile picture
Apr 28
Prime Minister Carney Operates A Government For The Elites: It's Becoming Obvious Now

It's just out there now, it's become clearer

The 80% of Canadians who ARE NOT in the top income or top wealth brackets are being left behind

This is a Government for top tier Canadians

2/
People can say: Oh No, look at the Essentials Benefit to help lower income people hurt by inflation. Look at the reduced taxes for lower income people

None of that really helps Working Poor or Middle Class Families because Inflation still runs HOT & is about to get hotter

3/
And Wages in Canada have been suppressed for a decade

No one argues about Wage Stagnation anymore it's just accepted fact

There 2 things Middle Class Canadians need:

- Lower Taxes
- Higher Paying Jobs

And despite some bandaid policies those 2 things ain't happening

4/
Read 6 tweets
Ron Butler Profile picture
Apr 17
Peak Fuckery: Parents Who Took Out HELOCS & Mortgages To Provide Down Payments For Kids To Buy Homes In 2021 Now In Power Of Sale

Sounds crazy right? And it's not thousands of parents but it is happening right now in Ontario to some Seniors

It's tragedy & it's not fixable

2/
Think back to 2021: Real Estate was going crazy

Many RE Agents actually suggested if people didn't buy homes at sky high prices that they would be shut out of ever owning a home

Many Realtors suggested 10% or higher price increases FOREVER

Because Immigration, Blah Blah

3/
During this time of peak FOMO (Fear Of Missing Out) some parents of adult children believed the hype

After all, the parents own homes had increased in value astronomically in 20 years

They wanted their kids to have the same benefits

A few parents didn't have cash to give

4/
Read 6 tweets
Ron Butler Profile picture
Apr 10
Canadian Rents Have Gone Down 18 STRAIGHT MONTHS & More New Construction Rental Supply Is Coming Than Ever Before In History

Yeah, Mom & Pop Landlords who bought units in the last 6 years knew things were bad

But in some Canadian cities we're headed for Landlord HELL

2/
Not even kidding

If you bought a Pre-Con Condo in 2020 - 2022 in Toronto or Vancouver you were already in big trouble on Price

You paid way too much

But if you managed to close you were faced with big Negative Cash Flow

Which is bad: but it's going to get WORSE

3/
It's a Perfect Storm of Landlord destruction in some big Canadian Metro Areas

- Every Year Expenses RISE: Condo / Strata Maintenance Fees & Property Tax increase every year

- With CMHC support there has NEVER been as many new Multi-family Purpose Built Rentals coming

4/
Read 6 tweets
Ron Butler Profile picture
Apr 9
Conservatives Members Of Parliament Crossing The Floor To Become Liberals: Those MPs Were BOUGHT

I don't think we can end Floor Crossings because it's just too hard, it's almost a Constitutional change

But look at WHY people elected to represent one party switch parties

2/
It's because they're BRIBED to do it

Not bribed with money, bribed with Perks, bribed with quiet promises of future higher paying positions in Parliament, bribed with assurance of Party Support in the next election, bribed with Polling numbers that favor the Liberals

3/
And the reason these very small time bribes work is twofold

1) Loyalty to a Party is dying in Canadian politics
2) Some Back Bench MPs are pretty small, shitty people, total opportunitists

Real Party loyalty started dying in the 90's

Too many people became transactional

4/
Read 6 tweets
Ron Butler Profile picture
Mar 31
How Bad Is It That Canada's Economy Is Completely Dependent On Tax Policy?

Canada has gone down such a wrong road

Yesterday an announcement changing a Tax Policy was done to save the Residential Construction Industry

From a Tax Policy that killed the Construction Industry

2/
Which is fucking nuts!

We taxed the Housing Industry literally to DEATH: taxes, fees & levies were 30% of the price of a new home compared with 2% 30 years ago

Then the Government announces a TEMPORARY waiver of the taxes

1 Year for HST
3 Years for 50% off Development Fees

3/
And the Residential Construction Industry comes out of a Coma

But lets stop & realize just how incredibly BAD the whole thing really is

Tax Policy now rules Industry

In Manitoba Taxes were removed from Fast Food sold in Grocery Stores but remains on Restaurant Food

4/
Read 5 tweets

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