Federal Gov't Tightens Mortgage Rules

Housing Market

The Honourable Jim Flaherty, Minister of Finance, and the Honourable Christian Paradis, Minister of Natural Resources, today announced prudent adjustments to the rules for government-backed insured mortgages to support the long-term stability of Canada’s housing market and support hard-working Canadian families saving through home ownership.

“Canada’s well-regulated housing sector has been an important strength that allowed us to avoid the mistakes of other countries and helped protect us from the worst of the recent global recession,” said Minister Flaherty. “The prudent measures announced today build on that advantage by encouraging hard-working Canadian families to save by investing in their homes and future.”

“The economy continues to be our Government’s top priority,” continued Minister Paradis. “Our Government will continue to take the necessary actions to ensure stability and economic certainty in Canada’s housing market.”

The new measures:

• Reduce the maximum amortization period to 30 years from 35 years for new government-backed insured mortgages with loan-to-value ratios of more than 80 per cent. This will significantly reduce the total interest payments Canadian families make on their mortgages, allow Canadian families to build up equity in their homes more quickly, and help Canadians pay off their mortgages before they retire.
• Lower the maximum amount Canadians can borrow in refinancing their mortgages to 85 per cent from 90 per cent of the value of their homes. This will promote saving through home ownership and limit the repackaging of consumer debt into mortgages guaranteed by taxpayers.
• Withdraw government insurance backing on lines of credit secured by homes, such as home equity lines of credit, or HELOCs. This will ensure that risks associated with consumer debt products used to borrow funds unrelated to house purchases are managed by the financial institutions and not borne by taxpayers.

Our Government’s ongoing monitoring and sound underlying supervisory regime, along with the traditionally cautious approach taken by Canadian financial institutions to mortgage lending, have allowed Canada to maintain strong and secure housing and mortgage markets.

The adjustments to the mortgage insurance guarantee framework will come into force on March 18, 2011. The withdrawal of government insurance backing on lines of credit secured by homes will come into force on April 18, 2011.

January Market Update

January Stats

Stability and regional ‘hot spots’ characterize January housing market

The Greater Vancouver housing market remained in balanced market conditions in January, although higher levels of buyer demand were seen in some of the region’s largest communities.

The number of properties listed for sale and those sold on the Multiple Listing Service® (MLS®) last month outpaced the 10-year average in both categories for January.

“There was a healthy balance between the number of home buyers and sellers in our market in January, but there’s always variation in activity from region to region,” said Jake Moldowan, president of the Real Estate Board of Greater Vancouver (REBGV). "We’re seeing strong sellers’ market conditions in areas like Richmond and the west side of Vancouver.”

Over the last 12 months, the MLSLink® Housing Price Index (HPI) benchmark price of detached homes increased 22.6 per cent in Richmond and 12.2 per cent in Vancouver West. In comparison, detached home prices across the region increased 2.7 per cent over the same period.

“When you’re looking to buy or sell a home, it’s important to familiarize yourself with the wider trends in the market. It’s equally important to seek out knowledge of your local area so you understand current market conditions in your neighbourhood,” Moldowan said

Looking across the region, the REBGV reports that residential property sales in Greater Vancouver reached 1,819 on the MLS® in January 2011. This represents a 4.2 per cent decline compared to the 1,899 sales recorded in December 2010, a decrease of 5.4 per cent compared to the 1,923 sales in January 2010 and a 138.7 per cent increase from the 762 home sales in January 2009.

From a historical perspective, January’s 1,819 homes sales slightly surpassed the 1,790 home sale average recorded in the region over the last ten years.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 4,801 in January 2011. This represents a 6.7 per cent decrease compared to January 2010 when 5,147 properties were listed, and a 182 per cent increase compared to December 2010 when 1,699 homes were added to the MLS® in Greater Vancouver.

At 10,438, the total number of residential property listings on the MLS® increased 5.8 per cent in January compared to last month and increased 2.2 per cent from this time last year.

Sales of detached properties on the MLS® in January 2011 reached 793, an increase of 12.5 per cent from the 705 detached sales recorded in January 2010, and a 171.6 per cent increase from the 292 units sold in January 2009. The benchmark price for detached properties increased 2.7 per cent from January 2010 to $810,045.

Sales of apartment properties reached 713 in January 2011, a decline of 20.8 per cent compared to the 891 sales in January 2010, and an increase of 97.5 per cent compared to the 361 sales in January 2009.The benchmark price of an apartment property increased 1.4 per cent from January 2010 to $390,935.

Attached property sales in January 2011 totalled 313, a decline of 4.3 per cent compared to the 327 sales in January 2010, and a 187.2 per cent increase from the 109 attached properties sold in January 2009. The benchmark price of an attached unit increased 2.6 per cent between January 2010 and 2011 to $495,140.

Where's Vancouver's Market Heading?

Buyers now have more opportunities...

What you get in Vancouver for $1,000,000

From The Globe and Mail: Real estate: What you get in Vancouver for $1 million in 2011 - http://www.theglobeandmail.com/life/home-and-garden/real-estate/done-deals/real-estate-what-you-got-in-vancouver-for-1-million-in-2011/article2272166/?utm_source=Shared+Article+Sent+to+User&utm_medium=E-mail:+Newsletters+/+E-Blasts+/+etc.&utm_campaign=Shared+Web+Article+Links

Canadian Real Estate Forecast for 2012

What does the Canadian Real Estate Market have in store for us for 2012?

Check it out -

http://www.businessreviewcanada.ca/money_matters/canadian-real-estate-forecast-for-2012

2 Top Economists vs The Bubble

Check This Out - Interesting Article

http://www.rew.ca/articles/2-top-economists-vs-the-bubble-247

Who is to blame for the housing bubble?

http://fullcomment.nationalpost.com/2012/04/23/jesse-kline-government-is-to-blame-for-canadas-housing-bubble/

Is Vancouver housing market starting to steady?

http://www.vancouversun.com/business/Metro+Vancouver+housing+starts+steady+April+CMHC+says/6588563/story.html

Knowing When to Buy Your New Home

For many, home ownership is considered to be a rite of passage. Whether it's a house or a condo, people of all stages of life want to own their own home. Currently, 2 out of every 3 Canadian households own the home they live in and real estate is still considered to be one of the best long-term investments to have in your portfolio.

However, with housing prices the highest in all of Canada, the challenge that many Vancouverites face is not what to buy but when to buy. Some prospective homebuyers feel pressured to "get in" before they are priced out of the market in order to take advantage of historically low interest rates. Others prefer to sit on the sidelines and wait the market out.

So, say that you're in a position to buy, should you buy a home now and take advantage of ultra low interest rates, or should you wait until housing prices ease from their current levels? Here are some key facts to consider:

1. The home you want now may not be available in the future. If you have found the perfect home, in the perfect location and are planning on keeping it as your principal residence for a number of years, the benefits of buying now may outweigh market fluctuations. For example, if you are a family looking to get your children into a great school for the fall, your motivation to buy will be location and immediate availability. To avoid disappointment or undue stress, it would be prudent to start the home buying process now, as the demand is always high for homes near great schools and neighbourhoods, you may have a property that needs to be sold, and you would want to leave enough time to get your family settled before the school semester begins.
2. The current economic climate favours buying now. Economists have been warning Canadians since 2009 that these record low interest rates won't last much longer. Recent signals from the Bank of Canada point to interest rates rising later this year and into 2013. What this means is that today Canadians have never had more borrowing power. This is a compelling reason to buy now in order to take advantage of the low cost of borrowing that may not be available in a year or two as you will ultimately get more home for your money.
3. Sitting on the sidelines means that you aren't building equity. And besides helping to build equity, homeownership also allows you to hedge this equity against inflation as housing prices float with the current market. Getting into a home also means moving up. The best way to climb the real estate ladder towards your ultimate dream home is by using your accumulated home equity and trading up into a newer or larger space over time.

Assessing the right time to buy can appear to be a daunting task, but by understanding your individual real estate investing goals and timelines you can let your homeownership needs today drive your buying decision tomorrow.

Compliments of Cameron McNeill- Mac Marketing Solutions

Headlines Shouldn't Create Fear

"Vancouver sales hit 10-year low.." Imagine being at the point in your life where you're ready to purchase a home - and then you read this. Immediately you second guess your buying decision and are filled with fear. The media certainly communicates information to the public. Unfortunately, the headlines are often negative and do not paint an accurate picture of the story.

Take for example the headline above. When you read it, one must think that Vancouver's yearly real estate market has hit an all-time low for the first time in 10 years. However, you realize after reading the story that only sales in June were the lowest total for the month in the region since 2000 and not at catastrophic levels - just lower. You also learn that although June 2012 didn't perform as well as the month of June in the past, detached house prices still showed an average increase of 3.3%. The article goes on to talk about how we are now in a buyer's market as there is now more supply in product than in recent months with a 22% increase in listings from the year before. An alternate headline could have been, "Metro Vancouver considered a Buyer's Market", which could have then been followed up by the very same stats. Instead of paralyzing people with fear, the headline could have just as easily presented the opportunity in the market. Unfortunately, this happens all too often and negative headlines are filling our papers which in turn are often the quotes at dinner parties and around water coolers spreading the fear. The public relies heavily on the media to provide accurate, relevant and timely information. We, the public, need to spend a bit more time reading through the articles to get the true story while our newspapers could use a headline to better describe the content rather than sensationalize the negative to sell a few extra papers.

Compliments of Mac Marketing Solutions

A Hot Potato No One Wants To Touch

It's the hot potato nobody wants to pick up - in fact nobody wants to even admit that they have an opinion on it.

You won't find Premier Christy Clark sending out a statement on it, or Adrian Dix. We don't even think that John Cummins is making it a plank in the B.C. Conservatives' platform.

The hot potato? Foreign real estate investors.

The folks who have enough money to buy two or three units in a new condo tower, a small B.C. island, a couple of houses around the Fraser Valley. They may be living in the U.S., Germany or China - but they all see a future in buying residential real state in B.C.

The average person believes that foreign investors are driving up the price of real estate in the Lower Mainland.

The thinking goes that foreign investors have a whole lot more money than the average B.C. resident, and we simply can't compete with folks who can buy three or four million dollars worth of property for investment.

Some countries have strict rules on how much, if any, properties non-citizens can buy. Canada is not one of those countries.

Some countries charge higher tax rates on real estate purchased by foreigners for investment purposes. B.C. does not.

And then there are the Canadian sellers who, naturally, don't want to be limited if it means reducing their earning potential.

There are powerful arguments on both sides of this debate - but, so far, B.C. politicians are taking a hands-off approach.

It's a no-win debate. The real estate industry has a lot of connections in the political world, and there's the looming charge of racism as soon as one mentions Asian real estate investors.

Compliments of Abbotsford Times