Page 10 - ROSEDALE Lifestyle Magazine December 2022

CHANGES IN HOME EQUITY
Daniel Vyner is principal broker at DV Capital, a mortgage brokerage based in Toronto.
DV Capital FSRA Lic. 13186 Local: 416-839-5874 Toll Free: 1-866-839-5874 Email: info@dvcapitalcorp.com
Undoubtedly, Canadian real estate has recently
been a hot topic of discussion not only for those in the real estate industry but also often as the centre of conversation between family, friends and associates.
Most interestingly, there is rarely one constant stance on the matter. Seemingly, it depends on whether you’re speaking to someone planning to purchase real estate or to an existing homeowner – either one who has owned for some time or has just recently purchased.
By Merriam-Websters’ definition, a house is a “building that serves as a living quarter.” e reality is that real estate, for a segment of homeowners, represents far more than a roof over one’s head. Today, the value of one’s property and equity or lack thereof are representative of one’s livelihood.
Over recent years, facing relatively low interest rates and with a strong desire to own real estate, many pursued real estate purchases; homeowners have often been rewarded with considerable equity appreciation, net of transactional and carrying costs.
at equity accumulation has allowed homeowners to access low- cost capital for many purposes, including consolidation of high-interest debt; making down payments on other real estate acquisitions; or simply as cash on hand for living expenses. Many homeowners saw real estate values continue to rise year over year and had little reason or desire to believe the music would stop.
There were certainly homeowners who began to question the sustainability of refinancing over the long term or challenged the old folktale that real estate values only go up, and took the opportunity to sell their homes, pocket their gains, and downsize to lower-priced homes, with smaller mortgages or no mortgages at all. Others may have shared the same feelings but, depending on their situation, pursued homeownership by all means necessary.
Fast-forward to today: real estate values are softening in certain markets, and trans-action-related nightmares include the inability or unwillingness to close on purchases, in some cases jeopardizing a series of related transactions. ere has also been a reduction in purchasing sentiment and an increase in borrowing costs and
qualifying hurdles, meaning it is now unfortunately judgment day
10 ROSEDALE Lifestyle DECEMBER 2022
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