Market Watch Summary Videos – AVAILABLE NOW
These videos will be posted, along with the Market Watch Report, on a monthly basis highlighting key resale housing statistics. TREB Members are encouraged to share and/or embed these videos on their websites.
http://www.youtube.com/trebchannel#p/u/7/s2hQRC7xz8g
Ejaz Waraich
Re/max 2000 realty inc., brokerage
off# 416-743-2000
Cell# 416-371-EJAZ(3529)
http://www.homebuyersinfo.ca/
Thursday, January 20, 2011
Monday, January 17, 2011
"In 2008 and again in 2010, our government acted to protect and strengthen the Canadian housing market," Flaherty told a news conference in Ottawa. "We continue to do so today."
Flaherty unveiled three main changes:
- The maximum amortization period for a government-insured mortgage was lowered from 35 to 30 years.
- The upper limit that Canadians can borrow against their home equity was lowered from 90 per cent to 85 per cent.
- Government insurance backing on home equity lines of credit, or HELOCs, has been removed.
The first change is likely to have the largest impact. Buyers who purchase a home with a down payment less than 20 per cent of the value of the home are required to purchase government-backed mortgage insurance through Canada Mortgage and Housing Corporation.
Under the new rules, mortgages amortized over longer than 30 years will no longer qualify for that insurance, making it effectively impossible to get a highly leveraged mortgage of more than 30 years in Canada.
After companies began insuring mortgages of 40 years or more, Ottawa set the limit at 35 years in 2008 before Monday's move lowered it to 30.
Aims to stem tide on consumer debt
"This measure will significantly reduce the total interest payments for Canadian homeowners," Flaherty said.
He was referring to the fact that anyone taking a longer amortization on a mortgage would pay much more in interest over time.
Flaherty pitched the lowering of the amount that can be borrowed against home equity to 85 per cent as a move to ensure Canadians retain more equity in their homes.
"This will promote saving through home ownership and limit repackaging consumer debt into mortgages," he said.
The final change, to remove government insurance on HELOCs, came as a result of Ottawa's concern that certain financial institutions were allowing homeowners to roll too many consumer purchases into CMHC-insured mortgages.
"I think that's particularly risky because some of those loans are not used to create housing. They're used to buys boats, and cars and big-screen televisions," Flaherty said. "That's not the business that home insurance was designed for."
While Flaherty called the changes "moderate," they did not include an increase to the five per cent minimum down payment Ottawa requires for a home purchase. They also stopped short of a proposal that surfaced last week which would have required 100 per cent of condo fees to be included in the list of expenses that are measured against income when financial firms consider a mortgage candidate. Currently, only 50 per cent must be included.
The changes also come following recent warnings from the Bank of Canada on household debt levels.
In December, bank governor Mark Carney cautioned Canadian households and businesses not to be lulled by current low interest rates, because repercussions from a hike could be swift.
Rates 'will rise'
"While rates are low by historical standards, they eventually will rise," Flaherty said Monday. He dismissed the notion that the announcement was timed to precede the bank's next decision on interest rates, which are set to be revealed Tuesday.
"The particular timing today is not related to the interest rate announcement," Flaherty said. "The governor and I speak regularly, and we discuss these types of issues [and] we make an effort to make sure government policy complements the Bank of Canada's monetary policy."
Last week, Agathe Côté, a deputy governor at the bank, told a Kingston, Ont., audience that a sudden weakening in the Canadian housing sector could affect other areas of the economy given the high debt loads of some households.
If that shock hits, Canadians would be expected to cut back on their spending, she said.
Flaherty's announcement is the second time in three years that the government has clamped down on mortgage rules. In 2008, the government brought in several alterations, including:
- Cutting the maximum amortization period to 35 years from 40.
- Requiring a minimum down payment of five per cent.
- Establishing a requirement for a consistent minimum credit score.
- Introducing new loan-documentation standards.
Ejaz Waraich
Re/max 2000 Realty Inc., Brokerage
Off# 416-743-2000
Dir# 416-371-3529
http://www.gtastoprenting.com/
Sunday, January 9, 2011
EVALUATION* | |
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TORONTO, January 6, 2011 – The average price of a home in Canada increased between 3.9 and 4.6 per cent in the fourth quarter of 2010, compared to the previous year, as markets shrugged off a lacklustre third quarter and returned to a post-recession growth profile. Home values are forecast to continue a moderate and steady climb in many of the country’s key housing markets through 2011 with sales activity skewed to the first half of the year, according to the Royal LePage House Price Survey and Market Survey Forecast released today.
The low cost of borrowing stimulated the housing market in 2010, and this trend is predicted to continue in the first half of 2011. The widely held consumer belief that rates will rise in the latter part of 2011 may prompt an increase in buying activity early in the year.
“Trends in the housing market continue to be driven by the lingering after-effects of the recession,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services. “Canadians realize that interest rates are unsustainably low and that homes will become effectively more expensive when mortgage rates return to normal levels. We will likely see more price appreciation early in 2011 as some buyers complete transactions in advance of anticipated higher borrowing costs.”
Soper added, “2011 is expected to unfold much like 2010, when close to 60 per cent of sales volume occurred in the first half of the year in anticipation of interest rate increases that never materialized. However, housing market activity in the first half of 2011 will be modestly closer to the norm, as last year’s phenomenon was exacerbated by mid-year tightening of mortgage accessibility and the introduction of HST in Ontario and British Columbia.”
Regionally, the strongest price appreciation of the cities studied is expected in mid-sized urban centers where affordability is better than the national average. For example, in Winnipeg, St. John’s and Fredericton, two-storey homes below $300,000 are still widely available. Demand in these cities is expected to be strong, putting upward pressure on home values.
Cities in Alberta are expected to be among Canada’s strongest performing markets in 2011. Woes in the historically volatile region’s housing market stretch approximately five years, when the Alberta housing market suffered a sharp correction following several years of double-digit price increases. The province’s energy-driven economy staged a comeback in 2010, recovering from the recession-led plunge in oil and gas prices. Major employers are expected to steadily increase hiring in 2011 which should attract new residents to the province and put upward pressure on the limited supply of housing. Royal LePage forecasts the average price of a home in Calgary will increase 5.4 per cent through 2011 while Edmonton home prices will increase 3.3 per cent. Home sale transactions are predicted to rise 6.7 per cent in Calgary and 9.1 per cent in Edmonton over the same period.
Across Canada, the average price of a home is forecast to rise 3 per cent over the coming year to $348,600 while the number of transactions is expected to drop 2 per cent.
During the fourth quarter of 2010, average home prices either increased or stabilized year-over-year, with Winnipeg, Ottawa, Montreal and St. John’s seeing the biggest gains. Nationally, the average price of detached bungalows rose to $324,531 (up 4.6 per cent), the price of standard two-storey homes rose to $360,329 (up 4.4 per cent), and the price of standard condominiums rose to $226,746 (up 3.9 per cent), compared to the fourth quarter of 2009.
Mr. Soper continued, “Like many Canadians, we anticipated an end to the ultra-low interest rate era before year-end 2010. Paradoxically, global economic weakness, particularly in the United States, allowed policy makers and financial institutions to keep borrowing costs low, resulting in a stronger Canadian housing market and a better than forecast fourth quarter.”
Regards,
Ejaz Waraich
http://www.onlycondos.info/
The low cost of borrowing stimulated the housing market in 2010, and this trend is predicted to continue in the first half of 2011. The widely held consumer belief that rates will rise in the latter part of 2011 may prompt an increase in buying activity early in the year.
“Trends in the housing market continue to be driven by the lingering after-effects of the recession,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services. “Canadians realize that interest rates are unsustainably low and that homes will become effectively more expensive when mortgage rates return to normal levels. We will likely see more price appreciation early in 2011 as some buyers complete transactions in advance of anticipated higher borrowing costs.”
Soper added, “2011 is expected to unfold much like 2010, when close to 60 per cent of sales volume occurred in the first half of the year in anticipation of interest rate increases that never materialized. However, housing market activity in the first half of 2011 will be modestly closer to the norm, as last year’s phenomenon was exacerbated by mid-year tightening of mortgage accessibility and the introduction of HST in Ontario and British Columbia.”
Regionally, the strongest price appreciation of the cities studied is expected in mid-sized urban centers where affordability is better than the national average. For example, in Winnipeg, St. John’s and Fredericton, two-storey homes below $300,000 are still widely available. Demand in these cities is expected to be strong, putting upward pressure on home values.
Cities in Alberta are expected to be among Canada’s strongest performing markets in 2011. Woes in the historically volatile region’s housing market stretch approximately five years, when the Alberta housing market suffered a sharp correction following several years of double-digit price increases. The province’s energy-driven economy staged a comeback in 2010, recovering from the recession-led plunge in oil and gas prices. Major employers are expected to steadily increase hiring in 2011 which should attract new residents to the province and put upward pressure on the limited supply of housing. Royal LePage forecasts the average price of a home in Calgary will increase 5.4 per cent through 2011 while Edmonton home prices will increase 3.3 per cent. Home sale transactions are predicted to rise 6.7 per cent in Calgary and 9.1 per cent in Edmonton over the same period.
Across Canada, the average price of a home is forecast to rise 3 per cent over the coming year to $348,600 while the number of transactions is expected to drop 2 per cent.
During the fourth quarter of 2010, average home prices either increased or stabilized year-over-year, with Winnipeg, Ottawa, Montreal and St. John’s seeing the biggest gains. Nationally, the average price of detached bungalows rose to $324,531 (up 4.6 per cent), the price of standard two-storey homes rose to $360,329 (up 4.4 per cent), and the price of standard condominiums rose to $226,746 (up 3.9 per cent), compared to the fourth quarter of 2009.
Mr. Soper continued, “Like many Canadians, we anticipated an end to the ultra-low interest rate era before year-end 2010. Paradoxically, global economic weakness, particularly in the United States, allowed policy makers and financial institutions to keep borrowing costs low, resulting in a stronger Canadian housing market and a better than forecast fourth quarter.”
Regards,
Ejaz Waraich
http://www.onlycondos.info/
Higher Down Payments and/or Shorter Amortization Periods
There is strong speculation that the federal government may further tighten mortgage financing rules; in particular, raise down payment requirements and shorten amortization periods. This would make it more difficult for some Canadian families to realize the dream of homeownership and could have a detrimental impact on existing homeowners and the economy. Finance Minister Jim Flaherty said he is monitoring the situation, and will take action if needed.
In a December letter to the Minister of Finance, CREA’s CEO Pierre Beauchamp raised concerns about additional changes to mortgage financing rules.
How You Can Help
It is important for individual REALTORS® and public to respectfully write their Member of Parliament (MP) and explain the negative impacts additional mortgage financing rule changes would have on homebuyers, homeowners and the economy.
Click here for a draft letter that you can print. You should fill in your MP’s name and personally sign and send the letter. No postage is required if sending to your MP’s Ottawa office.
Contact information for your MP can be found here (enter your postal code and your MPs contact information will be given).
There is strong speculation that the federal government may further tighten mortgage financing rules; in particular, raise down payment requirements and shorten amortization periods. This would make it more difficult for some Canadian families to realize the dream of homeownership and could have a detrimental impact on existing homeowners and the economy. Finance Minister Jim Flaherty said he is monitoring the situation, and will take action if needed.
In a December letter to the Minister of Finance, CREA’s CEO Pierre Beauchamp raised concerns about additional changes to mortgage financing rules.
How You Can Help
It is important for individual REALTORS® and public to respectfully write their Member of Parliament (MP) and explain the negative impacts additional mortgage financing rule changes would have on homebuyers, homeowners and the economy.
Click here for a draft letter that you can print. You should fill in your MP’s name and personally sign and send the letter. No postage is required if sending to your MP’s Ottawa office.
Contact information for your MP can be found here (enter your postal code and your MPs contact information will be given).
Tuesday, January 4, 2011
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