Trouble in Real Estate Paradise?

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According to a new study there is trouble brewing in some of the hottest real estate markets in the world. Equifax Canada reported a 52% increase in fraudulent activity in mortgage applications. “We’re certainly seeing more mortgage applications being flagged as suspicious by our reporting institutions,” said vice-president Equifax Canada. One possible explanation for this is unevaluated house prices. While there is no real punishment for this, individuals who file inaccurate claims on a loan based on overvaluations face serious consequences.

Two-thirds of all flagged mortgage applications came from Canada; this does not bode well for the Toronto real estate market. Another layer of trouble blankets most of Canada’s major cities. Problematic conditions such as falsified account statements and falsified documents have been found in Vancouver, Victoria, Saskatoon, Regina, and Hamilton.

Rapid economic growth in the real estate industry may very well stem from overvaluations leading to accelerated prices. It is clear that home price speculations are outpacing economic fundamentals like migration, employment and income level. As a result, analyses are advising buyers to ensure their purchases fall in line with their needs and long-term market forecasts.  

Taken from an article written by Lombardi Letter Editorial Desk
https://www.lombardiletter.com/toronto-real-estate-market-this-indicator-is-flashing-red/6522/


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