Toronto's Short-Term Rental Registry

Toronto’s Short-Term Rental Registry

Leasing/Renting

9 minute read

August 31, 2020

This was only a matter of time, was it not?

Ever since “Chair Girl” gave people the utmost reason to despise AirBnB, it ceased to be “if” the City of Toronto would look to license and regulate all short-term rentals, but rather “when.”

The when isn’t that far off.  In fact, many of you have September 10th, 2020, circled in your calendars, not because that’s the day after the NFL regular season opener and thus you’ll be calling in sick from work, but rather because it’s when the City of Toronto’s registration system for short-term rental facilitators and operators will be launched.

The City of Toronto’s website is a wealth of knowledge on this, so I’m going to copy-and-paste much of that here today.  But eventually, I want to discuss whether or not this system is necessary and whether or not it’s going to work.

From the website:

 

A short-term rental is all or part of a dwelling unit rented out for less than 28 consecutive days in exchange for payment. This includes bed and breakfasts (B&Bs) but excludes hotels and motels. It also excludes other accommodations where there is no payment.

A short-term rental company is any company facilitating or brokering short-term rental reservations online and receiving payment for this service (for example, Airbnb, Expedia, Booking.com). All short-term rental companies will be required to obtain a licence to operate in the City of Toronto.

Short-term rental operators are people renting their homes or rooms on a short-term basis, for a period of less than 28 consecutive days. These operators need to be registered with the City of Toronto. The registration system for short-term rental operators will launch on September 10, 2020. Please return to this page to register short-term rentals in Toronto.

Residents can contact 311 to report issues related to short-term rentals, such as noise, waste and concerns that people are renting homes that are not their principal residence.

 

If you’re like me, you read “it also excludes other accommodations where there is no payment,” and sarcastically said, “THANK YOU!”  Good to know that when my buddy crashes at my place overnight, the City of Toronto doesn’t expect me to register myself as a short-term operator.  But what if he buys us groceries the next morning and cooks us all a meal?  Hmmm.  Thankfully, you can narc on us by calling 311…

The city’s website says that after registering, you will be contacted within five days.  Given the pandemic, and dare I say, the regular level of service and response from government which we’ve grown accustomed to, I wonder how in the world they’re going to pull this off.

 

The Regulations

Now, what are the regulations?

Mainly, these…

 

You are only allowed to short-term rent your principal residence.

  • This is the residence where you live and the address you use for bills, identification, taxes and insurance.
  • You can only have one principal residence at a time, therefore you cannot legally run more than one short-term rental.

You can be a homeowner or a renter in any housing type, for example house, apartment or condominium, etc.

  • You should ensure that you are allowed, by your condominium or landlord, to short-term rent your residence.

You can rent up to three bedrooms in your principal residence for an unlimited number of nights per year or the entire home for a maximum of 180 nights per year.

Your home must be in a residential area in the city.

  • If you are a Bed and Breakfast (B&B) operator, you can continue to operate under existing zoning permissions for “tourist homes”.

You can host a short-term rental in a secondary suite or laneway suite, as long as the suite is your principal residence.

  • A secondary suite is separate living accommodation with its own kitchen and washroom, located within a larger house (for example, a basement apartment).
  • A laneway suite is a self-contained residential unit located on the same lot as a larger house, and generally located in the rear yard.  A laneway suite must be next to a public laneway.
  • If you reside in the main portion of house, you are not permitted to separately short-term rent the secondary suite or laneway suite.

 

Oh, restrictions, restrictions, restrictions!

As somebody who doesn’t believe in big government, the words “You can’t” strike a chord with me each and every time I see them.  Again, I don’t want to sound like our cousins south of the border who feel that “You can’t…” should never be followed by “….bring an assault rifle to the Astros game,” but there’s just so much “you can’t” and “you can” in all of this, that I can’t help but wonder: when were we asked about this?

Topic for another day, I know.  The role of government to represent people rather than dictate to them in all areas of life.  But this legislation is going to have major implications in our lives, our finances, and in the real estate market, which is the economic engine that has kept the city going for the last decade.  I don’t remember being consulted, as a Torontonian or a real estate broker, which makes sense, since absolutely nobody was.

 

Short-Term Rental Eligibility

Now as for eligibility, much of this is common sense, and yet there’s a big discussion point to be had at the end of this:

 

You can short-term rent in any housing type, for example house, apartment or condominium, as long as it is your principal residence.

Apartment

  • Apartment units are usually rented by individuals and are in a multi-unit residential building or a mixed-use building. The buildings are usually operated by property management companies.
  • You should be aware of your responsibilities under the Residential Tenancies Act and your lease agreement with your property management company.

Duplex, triplex or fourplex

  • A duplex, triplex or fourplex is a house with two, three or four self-contained units over multiple floors. They may share walls or outdoor areas with other houses.
  • If you reside in one of the units of a duplex, triplex or fourplex, then you are permitted to only short-term the portion of the house that is your principal residence. You are not permitted to short-term rent the other units.

Secondary suite

  • A secondary suite is separate living accommodation with its own kitchen and washroom, located within a larger house (for example, a basement apartment).
  • You can short-term rent a secondary suite only if you are the principal resident of the suite.
  • Your secondary suite must be permitted by zoning bylaws and comply with Building Code and Fire Code requirements. For more information, contact Toronto Buildings.

Laneway suite

  • A laneway suite is a self-contained residential unit located on the same lot as a larger house, and generally located in the rear yard.  A laneway suite must be next to a public laneway.
  • You can short-term rent a laneway suite only if you are the principal resident of the suite.

Condominium

  • If you live in a condominium, you can short-term your home as long as it is your principal residence.
  • Note that some condominium corporations have their own bylaws regarding short-term rentals, including prohibiting short-term rentals. It is your responsibility to understand and follow the rules set out by your condominium.

Bed and Breakfast (B&B)

  • Bed and Breakfasts (B&Bs) continue to operate under existing zoning permissions for Tourist Homes.
  • B&Bs will be subject to the rules for short-term rentals and must register with the City.

Investment property

  • Only your principal residence can be rented out short-term.
  • Secondary or investment properties can be rented out long-term.

 

This is where things get very interesting.

Note that these regulations effectively ban people from buying condominiums and renting them out short-term.  This is made clear via two points:
1) Under the “Condominium” section, short-term rentals are only permitted if the property is a primary residence.
2) The “Investment Property” section, it’s reiterated that “only your principal residence can be rented out short-term.”

I’m not necessarily disagreeing with the ability of a property-owner to rent out his or her property as he or she sees fit, ie. short-term, but I do think that the effective “ban” on renting condos on a short-term basis was done so very swiftly and in an extremely authoritarian manner.  This wasn’t really ever up for discussion, and while I recognize that the government doesn’t consult its constituents on every single decision and policy matter, this is a really, really big one.

Ultimately, it seems that the government believes by eliminating short-term rentals in condominiums, more long-term rentals would be freed-up, and this would help address the housing shortage in our city.

One of the most insightful comments I’ve read on my blog in the last little while, which I can’t seem to find, made note of government policies that shift the burden and cost from the public sector to the private sector.

Can we not agree that this policy decision, to ban short-term rentals in condominiums, is exactly that?

Money isn’t free (except at the federal level…), and the city of Toronto has a housing shortage on its hands, which, at times, has been labelled a “crisis.”  It seems to reason that shifting at least part of the burden from the public sector to the shoulders of individual property owners is win for the government, no?

The irony in all of this is – as we discuss and debate, we find ourselves in one of the poorest rental markets I’ve seen in the last decade.  Rental listings are taking longer to lease, they’re getting lower prices, and it’s not uncommon to see six or seven similar units for lease in the same building at the same time.

As I’ve often mused with the ban on foreign buyers, if and when the resale market turns, some sellers might wish they’d be able to sell to foreign buyers.  Hey, it’s a double-edged sword!  So with a ban on short-term rentals in condos, in an extreme lessee’s market, we might lament the inability to find alternate ways of filling vacancies.

Either way, the ban on short-term rentals in condominiums is significant, and the outright mention of “Investment Properties” above is a shot across the bow to people who want to use real estate as an investment.  All the points were covered in the previous sections, and the inclusion of “Investment Properties” at the bottom was redundant.  But maybe it was by design?

Also of interest from the “eligibility” section above pertains to multi-unit dwellings.

The theme here seems to be that only a primary residence may be rented out short-term, but how is that applied to multi-unit dwellings?  Say, a four-plex, for example?

The guidelines prohibit renting out a unit in a fourplex on a short-term basis, even if the owner resides in one of the other units.  So an owner of four-plex, living in one unit, renting out two units long term, is not permitted to rent the fourth unit short-term.

Really?  Why not?

He or she is already prohibited from renting out two of those units short-term, so why not compromise and allow one to be short-term?  No?  Screw that?  Down with capitalist pigs?  Gotcha.

Now as it pertains to “secondary suites,” ie. basement apartments, I’m shocked by this:

  • You can short-term rent a secondary suite only if you are the principal resident of the suite.

First of all, grey area.  Hello?

What’s to stop somebody from saying that they are the “principal resident” of the 3-bed, 1-bath “suite” on the main and second levels of a house, but that they are also using the 1-bed, 1-bath basement apartment?  This is confusing, even as I write this.

What’s the intent here?

Is the intent from the regulations to prohibit the short-term renting of a basement apartment, or am I reading this incorrectly?

Second of all, if the above is correct, then why?

Imagine owning a 3-bed, 2-bath, semi-detached house that happens to have a basement apartment.  Now imagine you really don’t want to lease it out for one year, for a myriad of logical and acceptable reasons, not limited to, of course, the overwhelming amount of rights that tenants have, and the impossibility of removing a problem tenant in Ontario in 2020.  So imagine you simply want to allow somebody to live in your home, which is your primary residence for three weeks?

Gasp!

I understand the spirit of this legislation, but it’s a massive over-reach, and one that I don’t think the public asked for.

As a result, I don’t know how well these regulations will be followed, but that’s not unlike driving 103 KM/H or higher on the 400-series highways, which everybody does, all the time.

I’ll spare you the lengthy list, but “Penalties for Operators” can be read HERE.

Now how much does this cost?

Yeah, really.  Let’s find out why the government is actually implementing this.

For facilitators/companies, it’s a $5,000 fee.

For operators, it’s a mere $50 per year.

However, and this is a big however, don’t forget the Municipal Accommodation Tax:

 

As a registered short-term rental operator, you will be required to start collecting and remitting the four per cent Municipal Accommodation Tax (MAT) on a quarterly basis from January 1, 2021. You must submit your payment within 30 days of the end of the previous quarter.

If your short-term rental is booked on a short-term rental company platform, the company may remit the MAT on your behalf. It is your responsibility to ensure that you, or the company platform(s) you use, have remitted the proper amount of MAT for your short-term rental activity. The City will revoke your registration if you fail to remit the MAT.

Interest and penalties apply on any overdue payment at a monthly rate of 1.25 per cent from the first day after the payment is due. After that interest will apply each month on the principal amount that remains due at a rate of 15 per cent per year.

 

I love how the government charges a monthly interest rate of 1.25%.  Compounded, right?

Now if you really want to immerse yourself in short-term rentals in Toronto, here’s a solid read:

TORONTO MUNICIPAL CODE 547, LICENSING & REGISTRATION OF SHORT TERM RENTALS

A girthy fifteen pages which you can download in PDF format and read to your heart’s content.

I sure did!

For those of you who want the Coles Notes:

City of Toronto: Short-Term Rentals

Personally, I’m looking forward to the announcement of 300-400 “enforcement officers,” all paid handsomely and with benefits, each one driving a new Prius.  Say what you want about these folks, they won’t be stuck with nothing to do.  Because a LOT of people in this city are going to skate past September 10th, 2020, like nothing ever happened…

Written By David Fleming

David Fleming is the author of Toronto Realty Blog, founded in 2007. He combined his passion for writing and real estate to create a space for honest information and two-way communication in a complex and dynamic market. David is a licensed Broker and the Broker of Record for Bosley – Toronto Realty Group

Find Out More About David Read More Posts

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41 Comments

  1. Jimbo

    at 7:05 am

    Wow, I don’t know what to say other than wow. Talk about changing the rules of the game overnight.

    I don’t believe Airbnb should exist for a myriad of reasons but a more appropriate way to handle this would have been a grace period and phase out over a year or so. They will get their money and as the charges start to rack up the online complaint boards will be full…….

    1. Chris

      at 9:23 am

      These rules were approved by city council three years ago. Then AirBnB fought them with legal challenges, finally losing the last of the battles in November 2019. Then the city took a further 10 months to announce enforcement.

      https://www.blogto.com/real-estate-toronto/2020/08/toronto-enforce-short-term-rental-rules/

      You can disagree with the rules, but there’s little doubt that AirBnB hosts have had ample time to prepare for their implementation.

      1. Jimbo

        at 10:08 am

        If I was investing into condo for Airbnb use I would like to think that would be part of the research.

        A little less wow there….

        1. Chris

          at 10:16 am

          Yep. I don’t think anyone can say that these rules have blindsided them. They’ve had years of warning.

  2. Sirgruper

    at 8:46 am

    It simply is government saying, how do we ban Airbnb without the legal right to do so. Guess you can play the same game. If you want to rent your investment condo for a week, rent it month to month at the 7 day rate and give the tenant the option to terminate on 7 days notice. Same result but you exempt yourself from the system. If the “tenant” stays, oh well, you rented your 500 sq ft condo for $6000 a month. All good.

    1. Peggy

      at 11:43 am

      Good advice but I hope the government doesn’t see that!

  3. London Agent

    at 9:15 am

    First and foremost David, I want to correct you in that the first game of the NFL season is taking place on September 10th, not the 9th.

    Secondly, very curious to see how this is implemented and enforced and what kind of revenue the municipality can generate through penalties and fees. I’m even more curious to see how far this type of legislation will spread throughout Ontario.
    I’m expecting (and hoping) to see some sort of anti-competitive law suit from AirBNB et all. Freehold ownership just ain’t so.

    1. Chris

      at 10:05 am

      I was wondering about that. I thought I recalled there being a fair bit of consultation back in 2017 when they crafted these rules and voted on them. Sure enough:

      “Public and Stakeholder Consultation

      During March and April 2017, staff sought input from the general public and key stakeholders, including hotel, motel, and bed & breakfast (B&B) representatives; short-term rental companies and providers; housing and neighbourhood advocates and ratepayer associations; condominium representatives; and corporate housing providers. Staff also sought input from provincial staff, policy experts, and other jurisdictions regulating short-term rentals.

      City staff sought input from these groups through the following methods:

      •Two public meetings with facilitated group discussions (320 attendees).
      •Public meeting online streamed on YouTube with interactions with staff on Twitter (700 views of the online videos posted on Twitter).
      •Online public survey (4,000 responses). Details in Attachment 4.
      •Five targeted stakeholder meetings (80 attendees). Details in Attachment 4.
      •Focus groups with users and operators. Details in Attachment 5.
      •Representative survey by Ipsos (1,009 responses). Details in Attachment 5.
      •Stakeholder workshop by MaRS Solutions Lab (50 attendees). Details in Attachment 6.
      •Regulator workshop by MaRS Solutions Lab (45 attendees from City and Province).
      •Submissions, letters and emails to staff (52 emails from residents and submissions from 15 companies or organizations).”

      https://www.toronto.ca/legdocs/mmis/2017/ex/bgrd/backgroundfile-104802.pdf

    2. RPG

      at 1:16 pm

      Bullshit. Kristin Wong-Tam is the biggest leftie at City Hall. Makes Joe Cresey look like a conservative. So you really think they wanted feedback from the public? This was simply a checkbox on the way to ramming legislation through.

      1. Verbal Kint

        at 1:43 pm

        I just googled something like toronto airbnb consultation to find some proof, and that was the first link that came up.

        I don’t really follow municipal politics much, but doesn’t KWT own something like 25 condos? And represent a downtown ward full of tens of thousands more? She keeps getting reelected, right? Doesn’t usually happen if you’re on the wrong side of the big, high profile issues, and Airbnb is certainly one of those. I could be wrong.

        But David certainly had an opportunity to comment — as thousands actually did.

      2. Heather

        at 1:57 pm

        This wasn’t a KWT consultation, it was a consultation run by the City of Toronto. And from the numbers above, it was actually one of the better attended ones. KWT and other councillors simply posted about it on their websites to inform their constituents.

        I have to disagree with David because I remember this consultation being talked about regularly back in 2017 and I even participated in the online survey. At the time, I recall that the secondary suite STA ban (unless it’s your primary residence) was one of the more controversial parts of the proposal. I agree with David that I think that part is a massive over-reach. In my personal view, I don’t agree that owners with basement apartments that were using them as Airbnbs will rush to list them as long term rentals, but I guess time will tell.

  4. Libertarian

    at 11:07 am

    The good old debate between individual rights vs. community wishes.

    In the spirit of “Be a good neighbour”, I have no problem banning AirBnB. If someone wants to be in the hotel business, then set up a hotel.

  5. Marty

    at 3:59 pm

    You saved the best for last:

    Say what you want about these folks, they won’t be stuck with nothing to do. Because a LOT of people in this city are going to skate past September 10th, 2020, like nothing ever happened…

    Yup!

  6. Dan

    at 6:20 pm

    Whether or not there was sufficient consultation with the public is besides the point. This is just a red herring to undermine the fact that the government is Implementing public policy in what should be a private market.

    I also would agree that most consultations are merely for show. The response to this blog post seem to be based on political views and opinion on the role of government.

  7. IanC

    at 1:20 am

    Just echoing what others have said.

    Huh?

    These pending format regulations have been discussed for years: in the local papers, on social media, including twitter, on the popular Toronto blogs, at every AGM meeting I’ve been to. And in the absence of the regulations, short term leases were not legal in the first place.

    I think people have as much right to turn their condos into short term daily, or even hourly hotels as much as they have the same right to turn their units into public restaurants. To me, it’s not what condos were zoned for and it’s unfair to the other residents to pay for the wear and tear. And there’s security issues. You can’t rent your parking spot to someone who is not an owner, but people can rent their airbnb units with parking seven times in a week to different people each night?

    I urge everyone looking to buy or invest into a condo who may have a strong preference or resistance to short term rentals, to at minimum check the condo declaration rules for short term rentals references, and also sniff out if there are any problems by researching social media or word of mouth or other sources.

  8. Appraiser

    at 7:42 am

    “Quick look at 416 August sales to date: Courtesy Scott Ingram CPA, CA
    Freeholds +69% YoY
    Condos +12%
    Total +33%

    Freeholds lot more seasonal than condos but didn’t slow this summer. 2020 will be Aug record, and come close to July’s 1595 total.”

    https://twitter.com/areacode416/status/1300479506252169219

    1. Chris

      at 8:44 am

      “Condos will fall short of July and be 2nd highest ever (2016). Less sales than July but inventory still rising means months of inventory is up (as reported weekly on Tuesdays).”

      https://twitter.com/areacode416/status/1300479507254718464

      Something something behind the curve.

      1. Appraiser

        at 9:57 am

        Something, something…ignore big picture – get lost in the weeds…

        1. Chris

          at 10:03 am

          “Downtown condo sales-to-new listings in August to date are 33%. Now a buyers market. Can u say condo prices will soften, starting next month.”

          – Jamie Johnston, Remax Condo Plus

          https://twitter.com/remaxcondosplus/status/1299063484865536002

          Meanwhile, LGJP reporting the hottest GTA market is Durham.

          1. Chris

            at 5:09 pm

            Just like the stock market, then.

            https://ca.finance.yahoo.com/news/stock-market-news-live-september-1-2020-221842898.html

            Something something bull trap, Dow Jones, right?

            By the way:

            “The Dow has little relevance to financial markets these days. Almost all modern stock funds are instead benchmarked to the S&P 500”

            – Out with the old: The Dow reshuffles, The Economist Espresso

            But hey, keep railing on about an irrelevant 30-company index. Maybe we should also start discussing the performance of Halifax townhouses and Hanoi’s HNX 30?

  9. Chris

    at 9:00 am

    In other news:

    “Banking watchdog winding down special treatment for COVID-19 mortgage deferrals: Will no longer let lenders treat deferred loans as if they are still being paid back

    …Dechaine added that “the true test of Canadian borrower resilience will come during Q4/20, as we estimate that approximately 85-90 per cent of deferral programs expire and as Government support programs are also adjusted.”

    https://financialpost.com/news/fp-street/banking-watchdog-winding-down-special-treatment-for-covid-19-mortgage-deferrals

    1. Appraiser

      at 9:50 am

      Unlike most knee-jerk “analysts” and headline-junkies regarding yesterday’s report from OSFI, I actually read it – and I would pronounce it as good news, just as OSFI did:

      “The gradual phase out of this special capital treatment supports the ongoing stability of Canada’s financial system by ensuring a smooth transition back to pre-existing requirements. Institutions will continue to have the flexibility to address clients’ needs on a case-by-case basis using the support measures they have in place for borrowers.”

      https://www.osfi-bsif.gc.ca/Eng/osfi-bsif/med/Pages/20200828_nr.aspx

      1. Chris

        at 10:15 am

        Oh, wow, you read the entire 700-odd word news release? How daunting a task. I’m sure you stand alone in accomplishing that feat.

        Obviously lenders can continue to defer whatever loans they wish. However, now they will be classified as non-performing loans, and will not be eligible for special capital treatment.

        Stands to reason we’ll see mortgages deferred fall from the current 12-18%, as the big banks assess far more carefully who they provide this payment relief to.

        1. Kyle

          at 7:37 pm

          “BNS and BMO, saying at least 90% of clients whose deferrals expired are making normal payments again. BMO’s chief risk officer, estimates 1 to 5% of deferred loans may become delinquent as grace periods expire.”

          https://twitter.com/areacode416/status/1300851689428312064

          1. Chris

            at 8:01 pm

            You missed a couple pertinent parts of the G&M article:

            “Among loan deferrals already ended at Royal Bank of Canada, normal payments resumed on 80 per cent, deferrals were extended on 19 per cent and 1 per cent are delinquent.”

            In addition:

            “As of July 30, outstanding residential mortgage deferrals in Canada totalled about $170-billion. More than 760,000 Canadians – holding about 16 per cent of the number of mortgages in bank portfolios – had deferred or skipped a mortgage payment by June 30, according to the Canadian Bankers Association.”

            https://www.theglobeandmail.com/business/article-canadas-bank-regulator-rolling-back-loan-deferral-programs-for-banks

            1 to 5% of 16% is 0.16% to 0.80%. Bank of Canada forecasts peak arrears of 0.5% in Q2 21. Although, Bank of Montreal’s Chief Risk Officer expects delinquencies of between 1% and 5% of total loans as deferrals end, but that includes loans beyond just mortgages.

            As I said above, “we’ll see mortgages deferred fall from the current 12-18%”. Obviously, defaulting will be the last option for most, after others like refinancing, extending amortization, seeking additional deferral, or selling the property are exhausted.

          2. Chris

            at 8:04 pm

            “BMO’s chief risk officer, estimates 1 to 5% of deferred loans may become delinquent as grace periods expire.”

            “Although, Bank of Montreal’s Chief Risk Officer expects delinquencies of between 1% and 5% of total loans as deferrals end, but that includes loans beyond just mortgages.”

            I realize these sound very similar. So I should source my quote:

            “Bank of Montreal’s Chief Risk Officer Patrick Cronin said on an analyst call he expects delinquencies of between 1% and 5% of total loans as deferrals end.”

            https://ca.finance.yahoo.com/news/pandemic-relief-winds-down-canadian-102114337.html

          3. Kyle

            at 8:14 pm

            I’m not Scott Ingram, but thanks for providing the relevant info

            “1 to 5% of 16% is 0.16%”

            The 0.16 is the number of mortgagees that are expected to go into arrears. That’s not a “cliff”, i’ve seen sidewalk curbs scary than that. And when you think about the distribution of which households make up that 0.16% households in Alberta are going to be much more likely than households in Toronto.

          4. Chris

            at 8:37 pm

            I didn’t think you were Scott, but you’re welcome nonetheless.

            1% of 16% would be the low end of the estimate. 5% of the 16% would be a bit more impactful than a sidewalk cliff. And all this says nothing of those utilizing options other than going into arrears.

            Guess we’ll see how it all plays out as deferrals end, government support programs wind down, and we face a potential second wave (cue the Pom Pom comments).

          5. Kyle

            at 8:50 pm

            Even if we go on the high side of the estimate and say 0.80% of mortgages will go into arrears, Let’s put some context around that number

            There are 1,112,930 dwellings in Toronto CMA (let’s forget about the fact that number overstates the number of properties, because some properties will have multi-dwellings).

            Then if we take away the 43% of home owners who are mortgage free it leaves us with 57% that still have mortgages

            1,112,930 x 0.57 x 0.008 = 5,075 potential properties that could go into arrears and hit the market.

            That is less than half a month of inventory.

          6. Chris

            at 8:59 pm

            “ And all this says nothing of those utilizing options other than going into arrears.”

            Have a nice night buddy.

          7. Kyle

            at 9:08 pm

            Options such as?

          8. Chris

            at 9:12 pm

            From above:

            “Obviously, defaulting will be the last option for most, after others like refinancing, extending amortization, seeking additional deferral, or selling the property are exhausted.”

            Ron Butler articulates it better than I do.

            https://twitter.com/ronmortgageguy/status/1300612958846947331

            Enjoy.

          9. Kyle

            at 9:18 pm

            And all those options, mean even LESS properties potentially hitting the market.

          10. Chris

            at 9:41 pm

            Selling the property means fewer properties hitting the market? That’s news to me.

          11. Kyle

            at 9:49 pm

            The concept of the deferral cliff, is that the banks have to sell all these properties at the same time, flooding the market. So if someone can sell before the cliff, than yes it means even less properties hitting the market at once.

            Maybe you should have continued to “Say nothing” about those other options. Cause you certainly aren’t helping your own argument.

          12. Chris

            at 10:28 pm

            Not really a material difference in timing between the bank selling a delinquent home and a distressed owner selling before it gets to that point, especially because deferrals are staggered in their expiry.

            Maybe you should re-read what argument you think I’m making. The deferrals don’t change the situation if someone has lost their job and can’t pay their mortgage; it just bought them time. With those ending, we’ll now see who needed the deferrals, and who took them opportunistically.

          13. Kyle

            at 8:03 pm

            “That cliff is looking more like a “slope,” according to Equitable Bank President and CEO Andrew Moor, who reported a decline in mortgage deferrals from 20% of the bank’s portfolio to just 6% as of mid-July.”

            https://www.canadianmortgagetrends.com/2020/08/q2-lender-earnings-mortgage-deferral-situation-easing/

            Lots of lenders only have single digit percentage of their loan portfolios remaining in deferral and most expect deferrals to continue to shrink.

            It’ll soon be time for the bears to abandon yet another in a countless string of failed empty theories and start looking for the next one to pour all their hopes into.

          14. Chris

            at 9:04 pm

            Yes, Kyle, as I said above, I expect deferral numbers to shrink as well. Maybe read more closely, rather than having such a myopic focus on “Bears!!”.

            Not quite down to single digit percentages yet:

            “Six months into the pandemic, the countrywide average is still roughly 13 to 14 per cent.”

            From the same article by Rob McLister in the G&M:

            “What we do know: Mortgage deferrals and income support programs are keeping housing buoyant. Without them, we wouldn’t be seeing record home prices this summer.

            “If you assume 90 per cent of the borrowers deferring payments go back to normal and 10 per cent become impaired [i.e., likely won’t ever pay], you could see the arrears rate get close to 2 per cent,” National Bank Financial banking analyst Gabriel Dechaine said in an e-mail.

            More likely, the slow recovery will result in closer to 5 per cent of mortgage deferrers defaulting, he suspects. That could lift the 90-day arrears rate from 0.24 per cent to 0.9 per cent or 0.95 per cent. That’s not far off the Bank of Canada’s “pessimistic” scenario projection of 0.8 per cent for the second half of next year.

            A good chunk of unemployed mortgage deferrers will sell before their lender or default insurer forces their hand. Most have ample equity and they won’t want to lose it.

            If national housing inventory stays tight, forced sellers will be liquidating into strong demand, cushioning the price impact. If listings surge, it’s a whole other story.”

            https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-how-will-the-end-of-covid-19-relief-affect-canadas-housing-market/

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