Original Article HERE

With tougher new home-buying and mortgage rules and somewhat higher interest rates in place, Canada's once-hot housing market seems to be losing some of its mojo.

House prices in Canada fell for the third month in a row in November, pulled down by weakness in Toronto and other parts of Ontario, according to data released Wednesday.

The Teranet-National Bank house price index fell by 0.5 per cent in November. It was the largest drop for the month of November recorded outside of a recession, National Bank economist Marc Pinsonneault said in a statement.

Prices in Toronto, Canada's largest real estate market, fell by 1.4 per cent, while nearby Hamilton saw prices fall by 1.6 per cent, suggesting that Toronto's housing cool-down has spread to surrounding areas.

House prices also fell in Ottawa-Gatineau (down 0.8 per cent) and Edmonton (down 0.7 per cent). They were unchanged in the two British Columbia markets covered by the index, Vancouver and Victoria.

Prices rose in all the other cities covered by the index, including Montreal ( up 1.0 per cent), Quebec City (up 0.9 per cent), Halifax (up 0.8 per cent), Calgary (up 0.7 per cent) and Winnipeg (up 0.5 per cent).

Original article HERE

The median net worth of Canadian families rose to $295,100 in 2016, a jump of nearly 15 per cent from four years ago, mostly due to an increasing value of homes, Statistics Canada reports.

Statistics Canada released its Survey of Financial Security Thursday, the first time since 2012 the data agency has offered a comprehensive look at the financial health of Canadians.

The agency defined net worth as the amount of money they would be left with if a family sold all its assets and paid off all its debts. Any family of two or more persons was considered a “family.” Unattached individuals were also included.

The survey found that housing was typically both the largest asset and the largest debt for Canadians.

In 2016, 61.7 per cent of Canadian families reported a principal residence as an asset. Of them, 57.3 per cent still had a mortgage on their principal residence.

The median reported value of principal residences was $349,000, up just over 10 per cent from 2012 and double that of 1999.

Overall, only 29.6 per cent of Canadian families were debt-free in 2016. Among Canadians aged 35 to 44, only 15.4 per cent were debt-free.

The share of those who were debt-free was highest among senior-led families; 58 per cent no longer had debt. However, this was down from 1999 when 72.6 per cent of senior-led families were debt-free.

Families in British Columbia reported the highest median net worth in 2016 -- $429,400. Families in Ontario were next with a median net worth at $365,700. New Brunswick reported the lowest median net worth among the provinces at $158,400.

Differences in the value of homes accounted for most of the provincial differences in net worth. The median value of principal residences in B.C. was $550,000 in 2016 -- the highest value in the country.

Vancouver residents had the highest median net worth in 2016, at $434,400. Toronto families had the second-highest median net worth, at $365,100, followed by:

• Calgary ($339,400)
• Québec ($335,100)
• Winnipeg ($287,800)
• Edmonton ($230,200)
• and Montreal ($170,000).

Private pensions were the second-largest asset category, accounting for 29.2 per cent of assets -- up 17.7 per cent from 2012. The majority of this growth came from employer-sponsored registered pension plans (EPPs.)

Other real estate such as cottages, rental properties and other commercial properties represented 10 per cent of total assets. Just under one-fifth of Canadians owned these types of properties in 2016.

Original article HERE

Canada's two priciest housing markets are both showing signs of recovery following the introduction of foreign buyers' taxes in Toronto and Vancouver. But the markets went off in separate directions in November, data from the cities' real estate boards shows.

In Toronto, home sales were down 13.3 per cent in November, compared to the same month a year earlier. The average house price of $761,757 was 2 per cent lower than the same month a year earlier.

All the same, sales bucked the seasonal trend and rose slightly from October, to 7,374 transactions.

Board president Tim Syrianos suggested the sales bump may have to do with the upcoming new mortgage rules.

"It is ... possible that the upcoming changes to mortgage lending guidelines, which come into effect in January, have prompted some households to speed up their home buying decisions," Syrianos said in a statement.

He added that "similar to the Greater Vancouver experience, the impact of the Ontario Fair Housing Plan and particularly the foreign buyer tax may be starting to wane."

Residential home sales in Greater Vancouver jumped by about 26 per cent in November compared with the same month a year ago.

The Real Estate Board of Greater Vancouver says the number of sales, which saw 2,795 homes sold, is 17 per cent above the 10-year average for the region in November.

Sales dropped by 7.5 per cent in November compared with October, when just over 3,000 homes sold.What's Going On In Housing?

Board president Jill Oudil says there is a steady demand in the market, with the townhome and condominium markets being particularly strong.

The benchmark price for detached properties was about $1.6 million, about a six per cent increase from November 2016.

Oudil says there are more listings entering the market this year compared with the same time last year, but inventories are still below typical levels.

The benchmark price of an apartment property was about $648,000 in November, an almost 24 per cent increase from November 2016.

Many places in and around Toronto and Vancouver have crisis-level vacancy rates.

Original article HERE

High levels of immigration, strong job growth and an aging population are among the reasons why it's becoming increasingly difficult to find an apartment for rent in Canada, a new report says.

Canada Mortgage and Housing Corp.'s latest rental market report found the country's apartment vacancy rate is falling, meaning there are fewer apartments available for rent.

The situation is particularly dire in and around Toronto and Vancouver, where many cities have crisis-level vacancy rates below 1 per cent.

Toronto's vacancy rate fell to 1 per cent in October of this year, from 1.3 per cent the same month a year before. That's the lowest rate the city has seen in 16 years.

"Rising costs of homeownership forced more people to seek and remain in rental accommodation," CMHC said in its report.

"House prices in the Greater Toronto Area reached unprecedented levels during the early part of 2017, making homeownership out of reach for the majority of potential first-time buyers."

That, in turn, led to rental rate increases, with the average rent up 4.2 per cent in Toronto. The average rent in Toronto is now $1,404 for a two-bedroom apartment and $2,301 for a two-bedroom condo. The CMHC report includes rates both for units on the market and already-occupied units.

Origin article HERE

The Canadian government launched its long-awaited national housing strategy Wednesday, but Vancouver advocates say the move is long overdue in a city already that is facing record levels of homelessness and an affordability crisis.

The 10-year plan includes some bold promises such as committing $40 billion to build 100,000 new affordable housing units, repairing 300,000 existing affordable housing units. The initiative also aims to cut chronic homelessness in half and remove 530,000 households from "housing need" by 2027.

Vancouver affordable housing advocates say the move is long overdue. According to Union Gospel Mission spokesperson Jeremy Hunka, it may be too late for some of the 2,100 currently facing homelessness in the city.

"The bottom line is this is a big number, there’s a lot of money coming, help is on the way. A lot of that help is a long way down the road and a lot of people are going to be struggling until that comes," he told CTV Vancouver Wednesday. "A lot of people are going to be suffering and some people might not make it to see some of this help because that’s the reality of the homeless crisis."

The strategy also allocates $4 billion for a national housing benefit intended to provide low-income renters with an annual $2,500-subsidy beginning in 2020.

"There’s a lot of single mothers, a lot of families who are low-income who could really use that subsidy. For it to not come until 2020 means a lot of long, hard years ahead," Hunka said. "We’re glad this funding is coming, but we’ve got a huge mountain to climb a lot of challenge to overcome until that help is there."

Vancouver Mayor Gregor Robertson said the city has struggled to have conversations about housing with provincial and federal governments in the past.

"It’s been an embarrassment to not have a national housing strategy as a country and it’s fantastic to see one delivered that has had rigour and has had input from all levels," he said Wednesday.

"We’ve struggled as a city with provincial and federal governments past who were not at the table with us at the level we needed them and as a result we’ve had record levels of homelessness right across Metro Vancouver, right across our region right now and it’s never been worse."

B.C. Premier John Horgan also echoed the sentiment that governments need to collaborate to address housing affordability and homelessness.

"If we’re going to crack the affordability crisis of housing in British Columbia, we need all levels of government working together," he said at a press conference. "This is a step in the right direction."

Robertson said the housing strategy shows just how important "urgent action" is for the country.

"We have to treat housing as a human right and it’s critical that our federal government recognizes that and follows through in terms of the monitoring and the reporting on that," he said.

However, both Robertson and Hunka pointed out that while having a strategy is a good start, targets need to be set to ensure the plan is implemented.

"It’s fantastic to have a game plan," Robertson said. "We need to take those next steps and take action."

Original article HERE

Are Foreign Buyers Really Ditching Vancouver For Seattle?

"It's like Vancouver, but cheaper."

For those priced out of Vancouver's housing market, a recent story suggesting that foreign buyers are bailing on Vancouver in favour of Seattle may seem like good news.

But that may not translate into more affordable housing in Vancouver, because even as Seattle becomes the hot new alternative to Vancouver, there are still plenty of foreign buyers staking a claim in the Canadian city.

"A lot of people who were looking in Vancouver are automatically looking further south now to Seattle," Matthew Gardner, chief economist at Seattle's Windermere Real Estate, told CBC News.

"It's like Vancouver, but cheaper," Chinese real estate broker Yi Liu told the Seattle Times.

The influx of foreign buyers, which Gardner described as "frenetic," has shot Seattle-area house prices up by 17.6 per cent in the past year, according to the region's multiple listing service.

A detached home in Seattle now costs US$735,000 (C$934,000). But that is still much lower than the C$1.6 million average price for a detached home in Vancouver.

About half of the foreign buyers in Seattle are from Asia, Gardner said. Chris Hu, the vice-president of Beijing-based real estate agency B.A. & 515J Group, told the Times about half the homes bought by foreigners were for investment purposes, and half were bought to live in.

"The no-growth trend in Vancouver is far different than what we see overall, in all locations."Byron Burley, Juwai

So does this mean foreign buyers will leave Vancouver alone now? The data suggests that is not happening.

According to an analysis from Chinese real estate portal Juwai, the number of Chinese buyers in the Vancouver market has been "flat as a pancake" for the past year-and-a-half, following a steep plunge in the wake of the foreign buyers' tax introduced in the summer of 2016.

But Chinese buyer inquiries worldwide jumped 8.7 per cent over the past year year, meaning Vancouver is seeing a shrinking share of overall foreign buyer interest.

"The no-growth trend in Vancouver is far different than what we see overall, in all locations," said Byron Burley, a B.C.-based vice-president of Juwai, in a press statement.

"Vancouver's tax is working by driving a share of buyers to other cities, especially Seattle. It has taken the froth off of the top."

Burley says these days there are more "and-or" buyers — people who look into buying a home in Vancouver and/or Seattle, and/or Toronto, rather than just targeting Vancouver.

"When these uncommitted buyers compare Vancouver prices plus the tax to what they can get somewhere else, sometimes they decide it's not worth it."

Despite the change in foreign buyer habits, Burley doesn't see the city's housing market declining. The market "is more like a pancake than a deflating soufflé. Buyer demand has not collapsed, it's merely flat."

Original article HERE

Vancouver has banned owners of basement suites and laneway houses from listing them on Airbnb after a heated debate in which some city councillors warned that homeowners would not be able to pay their mortgages without the extra income.

City council approved new regulations in a 7-4 vote Tuesday for vacation websites such as Airbnb and Expedia. The rules prohibit hosts from listing homes that are not their principal residence, including any secondary suites on their property.

Mayor Gregor Robertson and members of his Vision Vancouver party defended the rules as necessary because the vacancy rate is just above zero and housing is needed for long-term renters.

"I'm stunned to hear that some councillors don't believe there's a problem here. We have 6,000 illegal short-term rentals in the city," he said.

"I can't imagine doing nothing."

The new regulations will come into effect on April 1, 2018. Hosts must buy a business licence that costs $49 annually, plus spend $54 on a one-time application fee, and display their licence number in online listing. Those who fail to comply will face a $1,000 ticket per violation.

Homeowners will still be allowed to list an individual room inside their principal residence. Tenants who are renting a basement apartment or laneway house will be allowed to list it on Airbnb, as long as it's their principal residence and they have permission from the owner.

Some short-term rental hosts criticized the proposed rules at a public hearing last month, saying the changes will deprive them of much-needed income.

Councillors from the opposing Non-Partisan Association echoed those concerns on Tuesday, with Coun. George Affleck warning that homeowners who depend on the extra income will be forced to leave Vancouver or lead "very challenging lives."

Affleck said the city should instead focus on ensuring more rental housing gets built.

"We're just creating more bureaucracy, more taxation, more sticks and we're not solving the problem. We're making Vancouver more unaffordable and a harder place to live, whether you're a renter or an owner," he said.

But Coun. Andrea Reimer of Vision Vancouver said secondary suites and laneway houses were approved to provide accommodation for local residents, not tourists.

She said she just received an eviction notice at her rental home on Monday night — her second eviction in 16 months due to "speculation and flipping.

If the vacancy rate rises to four per cent or higher, city staff will report back to council on whether to allow owners to list their secondary suites on short-term rental websites.

Council also passed a voluntary transaction fee of three per cent on bookings, which would be remitted to the city.

Alex Dagg, public policy manager for Airbnb Canada, said the company is unable to impose a voluntary fee and instead would like to see the province amend the hotel tax so that it applies to short-term rentals.

Dagg applauded Vancouver for making short-term rentals legal, but she criticized the ban on listing secondary suites. Many people list them on Airbnb because they're in use by family or friends for most of the year and can't be rented to long-term tenants, she said.

"What short-term renting does is allow a homeowner or someone in a primary residence to use their space in a flexible way," she said in an interview.

The city estimates 80 per cent of short-term rentals will become legal under the new rules. Dagg said the estimate lines up with Airbnb's numbers on people who are renting their principal residences.

Vancouver is the latest jurisdiction to crack down on vacation websites. Seattle council voted Monday to impose a levy of $14 per night for short-term rentals of entire homes, and $8 per night for rooms, with the taxes to kick in by 2019.

Sping cleaning, fall edition! 

Original article HERE

#1 Wash Bed Pillows

Image: Laura W.

  

 

You love your trusty, old, perfectly-snugged-to-your-head pillow. But guess what’s also snug against your head? Fungus — 4 to 16 species to be precise. Gross!

With fall being the height of guest season, you’ll want your guest pillows fresh, too. Pop them in the washing machine and dryer for an all-over clean feeling. (But check manufacturer advice, too. Some pillows shouldn’t be washed, but replaced instead.)

#2 Clean the Mattress, Too

Image: Anne Arntson for HouseLogic

   

Sleeping soundly gets even better when you know you’re lying on a clean and fresh mattress. The yuck factor: Skin cells and sweat get into the mattress, then dust mites show up for a dinner party featuring those tasty skin cell morsels.

You’ll want your guest mattress to be at it’s freshest. It’s easy to do: Vacuum it and then wipe it down with a cloth dampened with an upholstery shampoo. But be sure to let it dry; otherwise, you’re inviting mold. Also, be sure to rotate it 180 degrees to help keep it lump-free.

(Another option: if you’ve got a flippable mattress, go ahead and flip it. That, too, can help kill the yucky mites.)

#3 Insulate Windows

Image: Nick Smith, photographer | Clare Gaskin Interiors, designer

Bone-chilling drafts seriously detract from the cozy vibe you want. Keep it cozy by hanging drapes as close to your windows as possible to help you keep the heat inside.

You can even add clear Velcro strips or dots to the back of the drape and attach to fasteners on the wall to help insulate. Be sure to cross one drape over the other when you close up for the night. Insulating shades can do the trick, too.

#4 Stock Up on Snow Supplies

Image: Chiyacat/Getty

    

If snow is a given where you live and you’re lacking supplies, take advantage of seasonal sales now to make sure you’re not the one rushing to the hardware store at the last minute — only to find out they just sold out of ice melt.

If you have a snow blower, be sure to have it serviced and fueled up before the first winter storm arrives — and with it, price hikes on all the snow stuff.

#5 Trim Tree Branches

Image: Michele Constantini/PhotoAlto/Getty

   

The last thing you need is a winter storm loosing the wrath of that mighty tree whose branches are angling over your roof. Long limbs invite pests to explore your roof for excess water to seep into cracks in the roof or siding.

Keep limbs and branches at least 3 feet from the house. Plus it’s easier to trim branches after leaves have fallen. (If it’s an evergreen, well, sorry about that. It’ll be a prickly job, but the bonus is you’ll have greenery for the holidays!)

#6 Get a Chimney Sweep to Inspect the Fireplace

Image: Wellness Through Movement Pilates Studio

  

It’s time to dust off and sweep the chimney! Best to hire someone who knows wood-burning fireplaces. A professional chimney sweep will ensure your wood-burning fireplace burns more efficiently and will help prevent chimney fires and carbon monoxide poisoning during the winter. So yeah, it’s pretty important. 

Tip: If you don’t already have a chimney cap, this is also the time to add one to stop wild outdoor critters from crawling down it — and (yikes!) into your house.

Original article HERE

The traditional way of buying and selling in Canada has its limitations. You are only given one way to buy or sell a house. In a real estate economy that had previously only seen auctions as distressed property sales, it’s an unfamiliar system to many Canadians. But with over 125 years of proven success around the world – and growing popularity in the USA – auctions are evolving in the minds of Vancouverites as a successful, practiced and proven method of sale for all types of homes, from your everyday condo to luxury estates.

The best part about auctions is that they work well in both cold and hot markets, and benefit both buyers and sellers. In a slow or cooling market, the auction gives sellers another competitive way to stand out, and the process sets a clear timeline of sale and ensures the highest true market value of the home.

The same goes for a hot or rising market: you don’t want to sell for too little, so you let the competition bid up the price.

In both cases, buyers have an opportunity to negotiate terms and conditions prior to bidding, and to see how all other interested bidders value the property. It’s transparent, clear and equitable.

Here are some tips for both selling and buying a home via auction.

Selling at Auction

As a seller, the traditional pricing process can sometimes feel like a guessing game. How do you know the right price? What if your list price is too high? What if no one is interested? What if your list price is too low?

At auction, the buyers’ focus is shifted from price to value, as many auction properties are simply listed with no price at all.

The terms, conditions and property information take centre stage and negotiation around this is dealt with in an orderly fashion. The buyer must complete all due diligence before auction day, and the home is readily made available with a generous timeline – not the four or five days that many MLS® listings are exposed to the market for.

Once all interested buyers have individually agreed their terms with the seller, they register to bid at auction, and then it’s only price that remains to be established. Sellers know that all registered bidders are happy with the terms and the home, and all buyers know that whatever terms they have already negotiated with the seller are acceptable and that they are now completely qualified and ready to bid and to buy.

As a seller, the key to successfully using the auction process is to understand that when selling real estate, it’s never you or your agent that sets the selling price of your home; it’s the buying public that sets the true market value. That said, you can set a reserve price; if the bidding doesn’t reach your minimum, you’re under no obligation to sell.

At the end of the day, auctions don’t always result in a sale before auction or on auction day. This doesn’t mean your property or the process has failed; it has taught you exactly how much buyersaren’t willing to pay for your home. Your property’s reputation remains intact because you haven’t advertised your list price, and it’s a win-win situation because you can now go to market as a conventional listing, armed with a tremendous amount of information about the true perceived market value of your home.

Buying at Auction

As buyers, the auction process is a beautifully transparent and equitable process.

Firstly, there is more clarity surrounding the sellers’ desired terms. You will know the deposit, terms of sale, and closing timeline prior to even making an offer or bidding. All reports and disclosures – often reviewed by the buyer during the subject removal period – have been offered in advance by the seller. You can even submit offers on an auction property prior to auction, and the seller may accept your offer then and there. If your offer isn’t enough to “stop the show”, you simply register to bid at auction and see if your budget will allow you to make the purchase.

At auction, bids are called in a transparent environment and you see exactly how much money it will take to be the highest bid instead of wondering why your offer wasn’t accepted. If other bidders surpass the amount you’re willing to pay, you’re under no obligation to keep bidding, and while you may walk away disappointed, you’ll never leave wondering what just happened. You will also never blindly overpay.

In short, an auction is simply another way in which to transact real estate, and both buyers and sellers can benefit from the process. Auctions of all types of homes will see an increase in popularity in Vancouver in the years to come, as more of the public come to appreciate its simple effectiveness as a proven method to buy or sell a home. 

Original Article HERE

In early October, there was an affordable housing event hosted by the Kehilla Residential Program that discussed affordable housing and overall trends in the Canadian residential housing market. Dr. Frank Clayton, a noted housing economist at Ryerson University, proclaimed that the government essentially wants to make building suburban single-detached housing illegal in the Greater Toronto Area.

ACH-DP VIA GETTY IMAGES

Environmentalists are in favour of such a ban, as they want to preserve farmland and reduce commuting. Many municipalities struggle to fund the short- and long-term infrastructure costs required to service many of these new communities. Despite the opposition, buyers continue to flock to inexpensive new low-rise subdivisions far from employment centres.

In our latest Market Manuscript report, we asked urban planners what could be done to keep those buyers local, and prevent them from buying and/or moving elsewhere. Over half of the respondents indicated that governments should provide incentives for developers to build family-size condominiums. Sales of larger three-bedroom condos tend to be much slower than smaller units, and developers offer them less frequently as a result. New apartment units can be very expensive as well, due to high land, construction and financing costs. According to the latest census data, there were approximately 416,250 households in 2016 that own condominium apartments in Canada that are five storeys or taller; just 11 per cent of those units are occupied by families with children.

Many young couples currently living in high-rise buildings that are looking to start a family plan to move to a single-family house once they have children. The question remains as to whether there are enough homes to accommodate them, as the demographic clog that are the Baby Boomers will continue to occupy the most desirable ground-related homes for years to come. In addition, the Canadian population grew by nearly 450,000 people over the past year based on estimates from Statistics Canada, the highest level since the late 1980s. If we continue to add more people, but don't build new suburban housing, young families will have no choice but to live in vertical communities (unless they outbid others for a low-rise home, increasing their debt burden and further driving up house prices).

Should the government make financial incentives available to condominium or rental apartment developers to build larger units and encourage more families in high-rise towers? Is it smart to push families to high-density housing, even though a high percentage of future buyers don't desire it? Would it even help subdue the domestic housing crisis?

GETTY IMAGES/ALL CANADA PHOTOS

If a developer's apartment proposal has a certain percentage of larger units, a municipality could waive the application or building permit fees, they could reduce development charges, they could fast-track zoning approvals or support a much taller building. Perhaps the incentives could target the buyer instead of the builder: no property taxes for families in larger condos for the first five years after completion, or a direct rental subsidy to families that are leasing those suites.

Alternatively, the province could provide low-interest loans to developers for construction financing, or agree in advance to buy the larger units during pre-construction to ensure the developer is not stuck with unsold inventory. The city could buy up space in a new building to provide low-cost daycare to the residents, which is another major financial impediment for families in downtown locations.

If it was guaranteed that these units would be used by local families, would you support your tax dollars being used to boost the supply of family sized condos?

Original Article HERE

The Bank of Canada has decided to keep its benchmark interest rate steady at 1 per cent.

The bank's rate, officially known as the target for the overnight rate, has a large impact on the rates that retail banks offer consumers on savings accounts and loans.

The bank has already hiked its rate twice this year — once in July and then again last month.

Those moves came amid signs that Canada's economy was heating up, but since then economic indicators have been more subdued, which helps to explain the bank's cautious tone.

"The current stance of monetary policy is appropriate," the bank said in announcing its decision. "While less monetary policy stimulus will likely be required over time, [the bank] will be cautious in making future adjustments to the policy rate."

Aubrey Basdeo, the head of fixed income at BlackRock Canada, said that word — "cautious" — could be just the right strategy. "They're trying to have a very measured approach in terms of removing stimulus," he said.

None of the economists polled by Bloomberg were expecting the bank to move its rate. But currency traders were caught a little by surprise — the Canadian dollar lost almost a full cent from where it was before the decision, changing hands at 78.15 cents US after the bank's decision came out.

"The Bank of Canada shifted to a significantly more cautious tone on interest rates Wednesday, prompting a sharp descent by the Canadian dollar," said Don Curren, strategist at Cambridge Global Payments, "and perhaps presaging more weakness in the currency as expectations about … monetary policy evolve."

Along with its rate decision, the bank also released its Monetary Policy Report, which comes out four times a year and provides a deeper dive into the bank's line of thinking. 

The bank said it expects inflation to rise to two per cent by the end of next year — a little later than expected, because of strength in the Canadian dollar.

According to the latest MPR, the bank expects Canada's economy to expand by 3.1 per cent in 2017, 2.1 per cent in 2018 and 1.5 per cent in 2019. The figure for next year is slightly better than the bank was forecasting three months ago, but the 2019 figure is a little worse.

One of the main reasons for that slight downgrade is a "shift toward protectionist trade policies" and "uncertainty around the outcome of the North American Free Trade Agreement (NAFTA) renegotiations," the bank said in its MPR.

The uncertainty around NAFTA  alone could be enough to explain the bank's caution.

"As things stand today," TD Bank economist Brian DePratto said, "it appears that the urgency to increase rates has faded."

While growth of just 1.5 per cent two years from now isn't an optimistic view, forecasting that far into the future always has to come with a grain of salt, Blackrock's Basdeo said.

BlackRock is slightly more optimistic than the bank, forecasting growth of 2.5 per cent in 2018.

"By all accounts the economy does look reasonably healthy," he said. "We think growth of 2.5 per cent is pretty darn good at this stage."

Links: 

• How a central bank rate hike affects you
• Interest rates are about to go up — no, for real this time

Original article HERE

All mortgage applicants will have to pass a “stress test” on their qualifying income – no matter how high their down payment – from January 1, the Office of the Superintendent of Financial Institutions (OFSI) confirmed October 17.

The stress test was introduced last fall to all applicants of insured mortgages (those with less than 20% down), but has now been extended to all mortgage applicants including uninsured borrowers, as that group comprises a larger segment of the mortgage market. The test requires an applicant’s income to qualify them for mortgage repayments at the Bank of Canada’s five-year posted rate – higher than the discounted rate they would pay in reality, and currently 4.89% – to create a buffer against future rate rises and any financial difficulties.

The move is said by mortgage professionals to reduce Canadians’ home-purchasing power by around 20% as the higher interest rate will reduce the maximum mortgage that buyers will be able to borrow.

Mortgage professionals widely criticized the new policy as making it harder for buyers to enter an already challenging market, but opinions seem to differ widely on the reasons behind the new policy.

Michael Lloyd, team leader for Dominion Lending Centres (DLC) Canadian Mortgage Experts, told Mortgage Broker News that he thinks the feds’ true aim is to lower high housing prices in Vancouver and Toronto.

“It certainly seems that way,” Lloyd told Mortgage Broker News. “They don’t have any room to raise rates, so it seems like the only other options they can do is make it tougher for people to qualify for mortgages.”

However, Lloyd’s DLC colleague Dustan Woodhouse, a mortgage broker and coach for Dominion Lending Centres, disagrees with this assessment. When asked whether cooling hot housing markets was one of OFSI’s goals, he told REW.ca, “I don’t think that’s the case, nor do I think that’s the premise [for this policy]. I spent some time in Ottawa talking to senior government members about why. Why, why, why? And OSFI’s mandate is the stability of the Canadian banking system. Period, full stop. They are not worried about the consumer, they are not worried about condo prices in Vancouver. They are looking at the banking system, and finding cause for concern in the stats on household debt numbers (which I think you really have to look hard to find cause for concern in those numbers), but they feel these steps are worth taking to preserve the stability of the banking system.”

Woodhouse added, “This [stress test] will mean a reduction in the amount of mortgage money available to a buyer of about 20%. So if you’re looking at $500K homes, you’re being told, well sorry, now you’re looking at $400,000. That’s a very significant drop... And in this next round of changes… this is for someone with a large down payment, impeccable credit, clearly documented income… And we’re saying all this in the face of rising home prices. So it seems odd that the government is handicapping Canadians in the way that they are.”

Public policy think tank the Fraser Institute last week released a report stating that the new rules will do “more harm than good” and are “unnecessary” for the Canadian banking system.

Original report HERE

As the oldest millennials enter their 30s, more and more are entering the housing market. In fact, according to a 2015 report, peak levels of millennials will be making housing decisions in the next five years, including the decision to buy. Although some of their ‘must haves’ are the same as those of generations past—such as ample storage and updated bathrooms—they also have a few new items on their list. If you’re thinking of selling your home in the next few years, here are five things that today’s homebuyers are looking for.

1. Open Kitchen

As part of an overall trend away from rigidly compartmentalized floor plans, there has been a move in recent years toward the open kitchen. Many homebuyers are now opting for kitchens that flow seamlessly into other spaces, as opposed to formal dining rooms, so that they can cook, socialize and watch television all at the same time. While a modern kitchen has always been on many homebuyers’ wish lists, it now has to have an open concept as well.

2. Office Space

As working from home becomes increasingly common, working from the kitchen table no longer cuts it. Many homebuyers are now seeking a designated office space that allows them to conduct business as usual, away from household distractions. Although an extra room is often sought out by growing families, it is becoming increasingly popular among professional couples that are looking to make a living from home.

3. Low Maintenance

People are busier than ever nowadays, meaning they have less time to spend keeping up with their homes. As a result, more and more buyers are looking for turnkey homes that require little or no maintenance. That’s why low maintenance materials, such as hardwood floors and granite countertops, are an increasingly popular choice. Not only do they look modern, they are easy to wipe up and mop down, which is especially convenient for families with young children.

4. Outdoor Living

Perhaps a side effect of social media platforms like Pinterest and Instagram, more and more homebuyers are seeking functional outdoor living spaces. Long gone are the days of a simple patio set and umbrella—today’s homebuyers want outdoor fireplaces, comfy lounge chairs and a hammock where they can take a Sunday afternoon nap. This is as true for those with mild weather year-round as it is for those who just want to make the most of those few precious summer months.

5. Energy Efficiency

An increasing focus on environmental sustainability, as well as rising energy costs, has many modern homebuyers gravitating toward green homes. Although it is not the most important factor when selecting a home, energy efficient features are certainly a welcome bonus for this environmentally conscious generation. These features don’t have to be elaborate either—they can be as simple as energy efficient appliances or double-paned windows.

If you’re thinking about selling your home in the foreseeable future, it is important to keep in mind what the new generation of homebuyers is looking for. Whether you plan to do some renovations or simply stage your home to fit more modern tastes, keeping these 5 things in mind can help you fetch a higher price when your home finally sells!

Original Articles HERE

After going through a divorce and hearing the struggles of one of his co-workers he decided to finally go through with an idea he had had for a long time. Through this plan he is enabling those unable to come up with a down payment to become home owners. 

See the CTV article below for details. 

A North Vancouver, B.C. developer is offering a rent-to-own program for multimillion-dollar homes as a way to help would-be buyers get in to Canada's most expensive real estate market.

Ray Vesely, CEO of Apex Western Homes, allows those interested to lock into a five-year lease with five per cent down. He explains the deal as similar to a traditional home purchase, but with five years to "close."

A portion of the buyer's rent each month goes toward their future purchase, Vesely said. The buyer has the option to purchase the home between one and five years at the rate locked in on the date the agreement is made. If its value increases, the buyer keeps the market gains.

Rent is higher than a traditional lease, but the money goes to building up a down payment to secure a mortgage in the future. When the renter decides to exercise the "buy" option, they apply for a mortgage and use the equity already built up in the home.

He came up with the idea following his own experience after a divorce, but was also inspired by his staff members' struggles.

"I try to come up with creative ways to help them get a place… I've been thinking about this program for a while," Vesely said Thursday.

The rent-to-own option is meant to help those who want to buy their own place, but are unable to come up with a down payment.

The minimum down payment in Canada is five per cent of the first $500,000, but those buying a home for $1 million or more are required to have 20 per cent. In a market where the benchmark detached home price was $1,617,300 last month, down payments can easily exceed $200,000.

Vesely showed CTV News one of the homes that could be rented to own: a 3,800-sq.-ft. house on MacKay Avenue with four bedrooms, three bathrooms and a legal two-bedroom basement suite. The home was appraised at $2.3 million.

The monthly rent for the MacKay Avenue home is listedat $10,000 online, but those on a rent-to-own contract would be able to live in the basement and rent out the house or vice versa to help with the payments, Vesely said.

Buyers also defer paying GST and property transfer taxes until they exercise the "buy" option.

And the company is marketing the rent-to-own option to foreign buyers as a way to avoid the 15 per cent transfer tax imposed on all foreign nationals or corporations purchasing property in Metro Vancouver.

However, Vesely says the offer is only available to those who are approved for permanent residency status before buying.

B.C.'s finance minister says rent-to-own leases are legal, but that the ministry will be taking a closer look at the tax policy.

"We're very serious about ending tax loopholes and finding those tax loopholes, so I'm very concerned and we'll be investigating," Carole James told CTV.

Vesely said he's already spoken with the ministry and was told what he's offering is permitted.

"Really it's targeting guys like the tech community that are trying to come in. They actually have well-paying jobs, it's just hard to save up for the down payment," he said.

He added that while his program is generating interest, no one has taken him up on his offer so far.

Currently the program is only offered on homes in North Vancouver, but he said he's thinking of expanding into the condo market.

Original article HERE

A recent report from Royal Bank of Canada painted a scary picture of home affordability — it's the worst it's been in 27 years nationwide, and in Toronto, it's the worst on record.

But all this talk about declining affordability masks the reality of today's market: It has rarely, if ever, been cheaper to take out a mortgage.

Even with the Bank of Canada hiking rates twice this past summer, rates remain near historic lows, and many lenders are offering fixed-rate mortgages at around 3 per cent.

What this means is that, despite record-high house prices in many markets, there are actually many places where you can afford a home today on a modest income. (If the Bank of Canada keeps hiking rates, that may not be the case for long.)

Using Ratehub's mortgage affordability calculator, we determined that a household income of $50,000 a year will buy you a house of up $364,360, assuming a 3-per-cent mortgage rate, a 30-year amortization period and a 20-per-cent down payment.

That's enough to buy an average home in numerous markets. Here they are. (Note: This is a list only of major Canadian metro areas. Plenty of smaller cities, including Thunder Bay, Saguenay and Saint John are also affordable for the $50,000 crowd.)

Montreal

PAWEL.GAUL VIA GETTY IMAGES

Average house price (Aug. 2017): $374,333

Montreal's average house price has moved slightly out of range for someone earning $50,000 a year, but given how close it is, we've added the city to the list anyway. Montreal is also enjoying some record-low unemployment rates, so this may be a good time to take a second look at Canada's second-largest city.

Saskatoon

GETTY IMAGES/ISTOCKPHOTO

Average house price (Aug. 2017): $329,654

Saskatoon's economy is struggling in the wake of the oil price crash, and its unemployment rate is above 8 per cent, among the highest in the country. All the same, if you have a job here, odds are good you can afford to own a home.

Regina

BENKRUT

Average house price (Aug. 2017): $328,586

With an unemployment rate around 5 per cent, Regina is faring much better than its cousin Saskatoon. Despite this, house prices are very similar in the two cities, and Regina remains a relatively affordable city for those earning $50,000 or more.

Winnipeg

MYSTICENERGY VIA GETTY IMAGES

Average house price (Aug. 2017): $297,897

Winnipeg's housing market has been famously affordable for a city its size for some time now, and with the city's economy humming along nicely these days, it's a fairly easy place to buy a home.

Halifax

SHAUNL VIA GETTY IMAGES

Average house price (Aug. 2017): $284,037

Halifax has surprisingly expensive rental housing, given the level of house prices in the area. And with an average price below $300,000, the argument for buying a home may be stronger here than anywhere else.

Quebec City

ONFOKUS

Average house price (Aug. 2017): $266,072

Beautiful Quebec City is also beautifully affordable, with an average house price that's roughly one-third of Toronto's. If francophone culture is for you, and if you can handle some fairly sharp winters, this could be the place to buy a home.

BIG CAVEAT: All the above estimates of affordable cities will be instantly wrong if the federal government goes through with plans to tighten mortgage rules this fall.

The country's financial regulator, OSFI, has proposed a new rule that would require borrowers of uninsured mortgages to qualify at a rate two percentage points higher than the one being offered. (OSFI introduced a similar rule for insured mortgages last year.)

According to Ratehub, the new rule would shave 21 per cent off of the purchasing power of homebuyers.

In our scenario, a $50,000 annual income would afford you a house of only $297,915 with the new rules in place. That would move average homes in Montreal, Regina and Saskatoon out of affordable range for those earning $50,000.

So given that you may soon be required to qualify at higher rates, and given that interest rates are on the rise in Canada as it is, this might be a good time to lock in a mortgage rate with your local lender.