In September 2005 there were 7,326 sales in Toronto, but in 2006 that number fell to 6,622, a drop of almost 11%, indicating perhaps an even steeper decline than many experts expected.
As interest rates increase, monthly mortgage payments increase, making it more difficult for homeowners to make their monthly payments. If incomes also start to decline as the economy slows, some homeowners and real estate investors get caught in the squeeze, and are forced to sell their homes. With more sellers, prices drop further, squeezing even more people.
I have seen many people over the last few years who have re-financed their houses as interest rates dropped and house prices increased, and they have used the money to pay off other debts, but many of those people find themselves in debt again as prices and incomes decrease, and that can ultimately lead to a higher rate of bankruptcy in Toronto.
If you have more debt than you can handle, and you are worried it may get worse, please e-mail us or call us at 310-PLAN (no area code required) to discuss your options. Be sure to ask us about a consumer proposal, which is a great option for dealing with your debts and allowing you to keep your house in Toronto.
posted by J. Douglas Hoyes, CA, Trustee @ 7:25 PM
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