“I’m a busy renovator in the lower mainland. Cheap money has been a key factor influencing clients’ decisions to start a project. 70% of the construction projects we completed in the past year were financed via LOC.”

Chipper at vancouvercondo.info April 10th, 2011 at 12:22 pm“I’m a busy renovator in the lower mainland. Cheap money has without question been a key factor (and last year’s reno tax credit scheme) behind influencing my clients’ decisions as to whether to start a project or not. I know that 70% of the projects we completed in the past year were financed via construction loans thru a LOC.
Rising rates will no doubt choke off much of the RE-based exuberance we’re seeing and make things more competitive in my world. Don’t think that would be such a bad thing though. Quality of work would improve, people who aren’t serious about a career in trades would get their chance to bail, and home sellers would figure out that they need to do more than “just wait 18 months to beat the capital gains tax” in order to justify the high asking prices that they seem to feel entitiled to.”

3 responses to ““I’m a busy renovator in the lower mainland. Cheap money has been a key factor influencing clients’ decisions to start a project. 70% of the construction projects we completed in the past year were financed via LOC.”

  1. Timely anecdote: less than 8 days until CMHC pulls MI on non-amortizing loans.

    I’m nailing my shutters closed just as a precaution.

  2. I really am very curious how the April 18th rule change will affect banks issuing of HELOCs. REALLY curious.

    In the U.S. as the crisis unfolded the banks started shifting HELOCs to pay down only (no more withdrawals) and/or they lowered the borrowing cap to just pennies above the current balance. The Canadian banks must be seriously reassessing their risk right now.

  3. Anecdotes from long-time (i.e. since before the bubble) construction contractors are very valuable. They feel the wind blowing before almost anyone else.

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