May 27, 2016
To Get A Mortgage, You'll Need A Stellar Credit Score.
What Makes A Good Credit Score And How Important Is It In Getting A Mortgage?
A recent article featured in the Globe and Mail discussed the importance of having a “stellar” credit rating when wanting approval for mortgage financing. Well your credit history is very important in the approval process it’s not everything and there are definitely lenders with specific mortgage programs to help people who might not have “stellar” credit ratings.
Here’s the link to the article below which details, among other things, the breakdown of the importance of such things as making payments on time and balances owing on existing credit.
See the full article by Globe & Mail below…
When you begin shopping around for a mortgage the importance of your credit history and score becomes evident.
Your credit score is an important item that will determine what interest your mortgage agent will be able to offer you. It should be a priority because it can save you thousands of dollars. If you take care of your credit, your credit will take care of you! Whether you have had credit for a long time or are completely new and just beginning, the reality is that you will have to at some time or another prove that you are a low enough risk for lenders to lend to.
If you are just beginning to build credit a good way is by using a credit card.
What is a credit report?
A credit report is a quick look into your credit history. If you have taken a loan or used a credit card you will have a credit history. Financial institutions, trust companies, credit companies and grantors that give you credit may send information about whether or not you make your payments on time to a credit-reporting agency/bureau.
Credit bureaus collect information about you and how long it takes you to pay back money you have borrowed. This is is called your credit history.
Credit lenders rely on a credit bureau to analyze an applicant’s current and past credit history in order to determine the likelihood of future repayment. This provides a fairly accurate indication of future repayment trends.
The two most popular credit bureau agencies operating in Canada are Equifax and Transunion. You can request your credit report by mail for free but your score is not included. If you request your credit report online a fee is charged and your credit score is included.
You are the only person who can see your credit report. No one else can access the information in your report unless you allow it. Generally you would allow credit checks to organizations you are applying to for credit. Usually you sign documentation allowing them to do so.
What’s in your credit report?
Personal information such as:
• your name
• current and previous addresses
• S.I.N., phone number
• date of birth
• previous employer/s
Financial information such as:
• credit cards
• lines of credit
• loans and mortgages
• bankruptcies, court judgements and backed secured loans which are considered public records and debt that was referred to a collection agency for payment.
A list of credit report inquiries: You, your lender, or any other authorized agent is also included which is usually used to determine if you are a credit seeker: someone who applies for a lot of credit.
How are you rated?
The credit agency describes your credit history by rating it. A scale of 1 to 9 is used with 1 meaning that you pay your bills within 30 days and 9 meaning you have bad debt, never pay your bills, have been placed for collection or claimed bankruptcy.
In front of the number there is a letter. The letter stands for the type of credit you are using. R means you have revolving credit such as a credit card, O means you have open credit such as a line of credit and I means you credit has been given on an instalment basis.
Your credit score is a numerical representation of the your current and past credit. It can range between 300 representing the lowest and 900 representing the best rating.
The breakdown that is used to determine your credit score is the following:
35 per cent – Payment history
30 per cent – Amounts owed
15 per cent – Length of credit history
10 per cent – New credit
10 per cent – Types of credit
If you contact Equifax or Transunion and find that the information on your credit report is incorrect, you may request that a correction be made. You will have to contact the institution that reported the activity and submit documentation proving financial resolution has been made to the credit bureau and they will remove it. Good luck! Equifax Canada Credit Bureau, Tel: 1-800-465-7166, Fax: 514-355-8502. TransUnion Canada Credit Bureau, Tel: 1-866-525-0262 (except in Quebec), Tel: 1-877-713-3393 (Quebec residents)
TOP TIPS ON KEEPING A GOOD CREDIT SCORE
1.) Make your payments in the correct amount on or before the due date! This will have a positive effect on your credit score. Missing or late payments and judgements, bankruptcies, collections or other public records will have an unfavourable impact on a credit score.
2.) Keep your balance considerably lower than the available credit limit provided. If you have several accounts with high balances relative to your available credit, this may indicate that you are relying greatly on credit to meet your daily needs.
3.) Multiple credit inquiries can lower your credit score, so reduce the number of credit applications you make.
4.) Always maintain a credit history. You can use a credit card to build a good history.
5.) The best mix of credit is a combination of a store credit card and a major credit card such as a VISA or MasterCard. It is important not to have too many credit cards or store cards as that may negatively impact a credit score.
From Canadian Real Estate Wealth Magazine, a monthly publication focused on building value through property investment, covering topics such as values and trends, mortgages, investment strategies, surveys of regional markets and general tips for buyers and sellers."
Tony Marchigiano 310-328 West Hastings Street
Mortgage Broker Vancouver, BC
cell: 604 505 7109
fax: 604 909 4666
May 26, 2016
Exemptions for New B.C. Assignment Rules
New B.C. legislation meant to restrict the sale of contract assignments doesn't apply to a housing sector that appears prime for flipping
A housing sector that appears prime for flipping – pre-sale condominiums – is exempt from new B.C. legislation meant to restrict the sale of contract assignments and track foreign buyers in Metro Vancouver’s white-hot housing market.
Assigning one’s right to a contract is a legitimate practice. But, due to media reports that some realtors were flipping assignments secretly, the B.C. government now requires contracts prepared by real estate licensees to include clauses stating that the contract can’t be assigned without the written consent of the seller and that any profit from an assignment goes to the initial seller. The new rule came into affect May 16.
But the legislationexempts new developments, including pre-sale condos, even if a licensed realtor sells the assignment, according to the Real Estate Council of BC and the Ministry of Finance.
Section 8.2(2) of the new regulations states: “This section does not apply in relation to a contract for the sale of a development unit by a developer, as those terms are defined in section 1 of the Real Estate Development Marketing Act.”
Finance Ministry spokesman James Edwardson said the regulations contain an exemption for developers “because they generally do not need the same kinds of protections as consumers, especially since developments are often pre-sold and some form of assignment term is standard.”
Under the 2008 Real Estate Development Marketing Act, which was instituted during the last real estate boom, the onus is on developers to police assignments. Some have done this by charging a fee, usually 1% to 2% of the sale price, and outlawing the advertising and sale of assignments until the building is sold out.
“The processes already in place with respect to assignments in new developments seem to have better protected the public than the processes that were in place for resale,” said Scott Brown, president and CEO of Fifth Avenue Real Estate Marketing Ltd., one of Metro Vancouver’s largest condo marketing firms.
But Metro Vancouver developers report that there is vague enforcement and only modest concern about assignment sales.
Jason Turcotte, Cressey Development’s vice-president of development, said Cressey allows pre-sale assignments because, with the two- to three-year delay between pre-sales and completion, some condo buyers couldn’t close on their units and therefore should be allowed to assign the sale.
As for advertising restrictions, about three dozen condo assignments were listed on Craigslist last week, including units in luxury Concord Pacific projects and WestbankCorp.’s landmark Vancouver House that is scheduled to be completed in 2019. The ads are from realtors and owners holding pre-sale contracts.
Assignments can be a “win-win” for developers, because the developer gets the original price for the condo, a 1% to 2% commission on any assignments and, as Vancouver real estate agent Mike Stewart pointed out, “if the buyer doesn’t close, they get to keep the deposits and get the condo back.”
Condo assignments could also be lucrative for investors. There are 17,311 new condominiums under construction in Metro Vancouver and there are only 790 units completed and unoccupied, a six-year low, according to Canada Mortgage and Housing Corp.
As well, the benchmark price of a Metro Vancouver resale condo has increased 20.6% from April 2015 to $475,000. New condos are fetching even higher prices and seeing similar price appreciation.
The 6,227 new condo sales in 2016’s first quarter in Metro Vancouver represented a 53% increase from the same quarter last year and a new six-year high, according to Brown.
“Feverish sales activity has resulted in inventory levels reaching six-year lows, which will put further upwards pressure on prices as demand seems to continue to outweigh supply,” Brown said.
There is another aspect that some offshore investors might consider, according to real estate consultant Ozzie Jurock. He noted that, under separate legislation that also came into force this month, the B.C. government will require the buyer of a property to list his or her citizenship.
However, the requirement is only on transfer of title. Therefore, under the new rules, Jurock said, a foreign buyer could buy a pre-sale condo assignment, flip it to a buyer and never appear either as a buyer of an assignment or as property owner on any government documentation.
SOURCE < BusinessInVancouver
May 20, 2016
How High Can It Go?
Realtor Rick Stonehouse recently listed a 1907 heritage home at 640 Union St. in downtown Vancouver’s Strathcona neighbourhood for $1.649 million.
It attracted three offers and sold in a week for $1.85 million — $200,000 over asking.
But that’s hardly rare in today’s hot Vancouver housing market.
Stonehouse recently wrote an offer for a client on a 1910 heritage house at 1605 Salsbury in Grandview that was listed for $1.25 million.
It received 12 offers, and sold for $1.755 million — $530,000 over asking.
Both homes are in east Vancouver, which until recently was the poor cousin of the west side. It still is, if you compare it to the prices in Point Grey.
Realtor Tom Gradecak set a new benchmark for a 33-foot lot in Point Grey when he sold a teardown for $2.88 million in February. But another one just sold for $3.1 million, and that house will likely be torn down as well.
“The new houses on (33-foot lots) are now over $4 million,” said Gradecak.
“Four million dollars for a 2,900 sq. ft house. The 50-foot lots, same thing, they’ve gone up. We did an appraisal for someone at the beginning of the year, and it was in the $4.6/$4.7 million range. We sold it yesterday with competing offers for $5.4 million.
“While (the owners) were getting their power washing done, their windows washed, what people do to get their house ready for sale, they probably made 600 grand.”
The high prices have spread across the Lower Mainland. The benchmark price for a single family detached home in greater Vancouver was $1.403 million in April — 30 per cent higher than it was a year earlier.
The world has taken notice.
The British property firm Knight Frank has a “prime global cities index” that tracks the rise in residential real estate worldwide. Vancouver was added to the list of “prime global cities” in 2013, and has topped the index for the last four quarters.
Knight Frank said there was a 26.3-per-cent surge in Vancouver between March 2015 and March 2016. The only other “prime global cities” with double-digit price increases were Shanghai (20.3 per cent), and Sydney (12.3 per cent) and Melbourne (12.1 per cent) in Australia.
All of which raises the question: How high can Vancouver real estate prices go?
Gradecak hears that question every time he does an appraisal, and lately he’s been doing two per day.
“Everyone asks where is this market going?” said Gradecak. “And honestly, no one knows.”
He likens the rise in real estate to a baseball game.
“One opinion is (the price rise has) just begun, we’re in the first or second inning,” he said.
“There’s so much wealth being created worldwide, and we’re supposedly the second or third best city in the world to live in, why would it stop?
“Then there’s the people who say this can’t continue, something’s going to happen — China’s going to implode, or the government’s going to do something. It may not be the bottom of the ninth, but we’re in the top of the ninth. Something’s going to happen, because you can’t have 30-per-cent increases every year.
“And there’s people in the middle who say long term, (that with) the number of people that are moving here yearly, it’s just supply and demand. (If) there’s 100,000 houses in Vancouver, right, and 1.3 billion people in China … you could argue this is going to keep going on for a long, long time.”
Gradecak thinks the explosion in real estate prices over the last year was partly due to the drop in the Canadian dollar, which made Vancouver real estate more attractive to international investors.
“If the dollar goes down 20 or 30 per cent, the people who are holding U.S. dollars, the Chinese buyers, it doesn’t matter if they pay $3 million today or $2.3 last year, it’s the same thing,” he said.
“I don’t see a dollar dropping 30 per cent again, so maybe the rise won’t be as rapid. But I think we will see a slow and steady type of growth.”
By world standards, Vancouver is still something of a bargain. The price per square foot in Manhattan, for example, rose to $1,497 US in 2015, or $1,921 per sq. ft. Canadian. New luxury condos in downtown Vancouver average $1,100 per sq. ft.
“I think it can go up another 25 per cent,” said Gradecak.
“I don’t think it’s going to happen in a calendar year, but I think over the next five to 10 years it could. Like, why not?
“It has nothing to do with what kind of money you’re making or I’m making. It’s completely irrelevant as to what’s happening locally.”
Property broker Eugen Klein agrees Vancouver is now an international market, not a Canadian one.
“Twenty years ago Vancouver was always compared to Calgary and Toronto,” said Klein.
“Vancouver doesn’t get compared to those anymore — very little to Toronto, if at all. Now it’s all about what’s going on in Shanghai, in Hong Kong, in Sydney, in London and New York.”
The amount of offshore money, especially from China, being poured into the local market has been the matter of debate.
“It’s all Asian driven, come on,” said Gradecak.
“But it’s not necessarily offshore Asian driven, most of these buyers are local, local Asians. People that have been here for awhile, and they’re upgrading or looking for specific neighbourhoods, in particular anything that’s lot-value type property. A holding property is the hottest commodity.”
Zoning makes a big difference to many west side buyers, because the city has brought in some restrictions to try to slow the demolition of pre-1940 heritage homes.
“Houses that are built pre-1940 don’t have the same attraction because people are afraid the city is going to impose even stricter guidelines,” said Gradecak.
“People look at the age. If you have a post-1940 house, something you can tear down — well, you can tear anything down — but something that’s easier to take down, that’s a huge win for the seller, because they’ll get more activity.
“People will literally say, ‘How old is the house, how much can I build and when are you looking at offers?’ The UEL (University Endowment Lands) doesn’t have those restrictions, so it’s a hugely popular area.
“Point Grey, RS1 (zoning), hugely popular. (But) we sold a house in Kerrisdale about three weeks ago, which is RS6, fairly punitive zoning when it comes to pre-1940 houses, and we got $3.8 (million).
“That house should have gotten a lot more than 3.8. (But it sold for less) because you can only build a relatively small house on that lot.”
Older character houses used to be the most coveted homes on the west side. But no more — the new buyers want to tear down and build new.
“It’s funny how people used to pay premium for character,” said Gradecak.
“Now it’s a discount. It’s just dumb luck for the sellers. At the time they wanted a character house, and guess what? Twenty years later, it’s come back to bite them. If that was a Vancouver Special, we would have that thing sold.”
Character homes are still in demand in some areas, such as Strathcona, which has a special zoning to protect its stock of pre-1920 homes.
The two-storey house at 640 Union is a good example of how the market has evolved in the neighbourhood, because it has been sold several times since 1975, when it went for $38,500.
In 1977, it sold for $40,000, in 1980 the price went up to $55,750, and in 1992, it jumped to $196,000. It sold for $825,000 in 2006 and in 2013 went for $1.1 million, which means it went up $750,000 in the last three years.
“What happened with that one, which I think is happening with a lot of these places, is that people are not getting two or three places (they bid on) and by the time they get to the fourth or fifth one, they just put more money in the bank,” Stonehouse said.
“They say, ‘I guess I have to pay this much more.’ Because that one on Union sold for a lot more than what most people would think that’s worth.”
Stonehouse thinks there are a variety of reasons for the dramatic rise in east Vancouver house prices. Prices on the west side are so high many people have been priced out of the market, and the east side has also become a desirable place to live.
“I think the people who bought that house on Union Street are moving from the west side,” he said.
“They’re selling their home on the west side for $4 million and coming and buying a house on the east side for under $2 (million). Putting money in the bank, and being in a place they think is a nicer spot.”
There are also very few houses for sale, which drives prices up.
“There’s more people looking in the market than there is product on the market,” Stonehouse said.
“So for every house, there’s 10 people that want it.”
“It’s not just in the houses, it’s in apartments, too. Shaun who works with me sold his apartment downtown last year, right on Smithe Street behind Robson, for $500,000.
“He bought a pre-sale over on First and Commercial and he didn’t want to have both. So he sold his place and moved with his wife into a rental. (His old condo) just resold again for $600,000 a year later. That’s a little two-bedroom apartment downtown.
“But the place he bought for $900,000 is now worth $1.2 million, so it was a good move for him. All these places are going up. When the top end goes up, it pulls everything else up under it.”
Asked how long prices will keep going up, he replies “I don’t know.”
“I said that when I bought my house in Kits Point for $195,000 30 years ago. People thought I was out of my mind. ‘Are you crazy buying that house for $195,000?’
“I just resold it for $4,130,000 a month ago, 1849 Creelman. Almost $4 million more than I paid for it in 1980, 36 years ago.”
Unfortunately for Stonehouse, he gave up his interest in the Creelman house when he was divorced.
“My ex-wife has been in it for the last 30 years,” he said.
“She just retired.” He laughs. “She at least gave me the listing.”
SOURCE < TimesColonist
May 20, 2016
45 Billion Dollars!
That’s what Canadians are spending in renovations this year, which is double from just a decade ago. According to an Ipso-Reid survey, two-thirds of homeowners intend to undertake renovations this year. With prices continuing to rise in most markets combined with the costs associated with moving, many are choosing to stay put and create their dream home by renovating. Home renovations are also a great way to increase the value of your existing real estate.
You can use your own resources and do most of the work yourself if you want to keep the cost down. Or a personal loan which can be done relatively quickly could be the solution or even access a line of credit.
Refinancing your existing mortgage has made sense for many as interest rates are still at historical lows. This is a great way to take advantage of the equity that’s been realized by rising home values and decreasing mortgage balances. Another option that can be a quick and short-term solution is using a credit card.
Mortgage Alliance has recently launched a credit card that is perfect for home renovation. This card will reward you with 5% cash back on home improvements for the first 3 months, ongoing it gives you 2% back on groceries & 1% on every other purchase.
There are as many financing options in renovating as in buying so if you know someone who wants to understand their options, send me a message.
May 13, 2016
Banks No Longer Lend To Foreigners For Home Purchase
An Australian Bank no longer lends to foreigners to purchase homes. Could a Canadian lender follow suit? Maybe but according to the author, also a fellow mortgage broker, it would be un-canadian to do so.
See the full article below pulled form MortgageBrokerNews.ca
"An Australian bank has said it will no longer finance foreign-purchased homes, but such an initiative here would be un-Canadian, according to one leading broker.
“I would say it’s not true to Canadian values to exclude anybody. We tend to welcome people to our country. This is more a case of welcoming their money and not them,” Dustan Woodhouse, a broker with Dominion Lending Centres Canadian Mortgage Experts, told MortgageBrokerNews.ca. “And that’s a finer distinction to make. It’s a slippery slope: You start excluding one group, what’s the next step?”
Australian-based bank Westpac announced it will no longer loan money to foreigners purchasing residential property.
As of April 26, the bank and its subsidiaries no longer lends to non-residents and temporary visa holders. Westpac is the third major Aussie bank to make the move, following announcements from competitors ANZ and Commonwealth Bank earlier this month.
Much has been made about the influence foreign money is having on Canadian real estate prices, and many may argue a similar ploy would help to naturally cool the red-hot market.
However, Woodhouse argues a similar clampdown would have very little impact.
“The bottom line … in my professional experience is the majority of foreign buyers don’t require financing,” Woodhouse said. “Much like the Canadians who bought up a massive part of Arizona. Any Canadian who thinks foreign buyers should be cut out hopefully (haven't) bought a property in the U.S.”
The Canada Mortgage and Housing Corporation recently released a report on foreign ownership that estimated the influence of foreign money on two of the country’s hottest housing markets.
The report found that foreign ownership is most prevalent in new condo buildings in Toronto and Vancouver.
In Toronto about 10% of newer buildings (built after 2010), compared to 2% of those buildings built in the 1990s.
A similar trend was found in Vancouver, where 6% of units in newer buildings are believed to be foreign-owned."
As always if you have any home financing related questions feel free to call, email or text me anytime.
May 12, 2016
New Rules On Flipping Introduced By BC As Of Next Week
The government in British Columbia has introduced new rules that will apply to residential real estate contracts from next week. Premier Clark had promised in March to introduce new rules to prevent investors turning a fast buck by flipping.
As of May 16, 2016 contracts must include a clause stating that if the contract is assigned without the seller’s written consent, then any profit made from the assignments goes to the original seller. Sellers can instruct realtors to amend or remove the clause.
"Real estate consumers now have a tool to help them decide whether they want their contracts to be assignable," says BC Real Estate Association (BCREA) President Deanna Horn. "Like many other provisions in the contract, buyers and sellers have the option of keeping the new paragraph, changing it or striking it out completely—but at least the conversation is more likely to happen now."
BCREA says it supports the new rules and the government’s announcement that it will begin collecting data on citizenship of buyers through the Property Tax form from next month.
Meanwhile the province’s regulator says it will help real estate agents to implement the new rules.
“These new regulations are designed to empower real estate consumers to make informed decisions in their own best interests” says BC Real Estate Council Chair Marylou Leslie. “As the regulatory body responsible for administering the Real Estate Services Act, we will be working on many fronts to make sure the requirements are well understood, that licensees comply with their new obligations, and that comprehensive monitoring and enforcement programs are put into place.”
SOURCE < RealEstateProfessional
May 6, 2016
Which Mortgage Term Will Save You Money Over The Next Five Years
A recent article by Globe & Mail looks at the two most likely scenarios for what rates will do over the next few years; that is stay the same or go up slightly. It includes some good advice on the length of term to pick for both scenarios.
See the full article below:
A significant “negative shock” to the economy: That’s what it’s going to take to lower interest rates again, says Canada’s most powerful banker.
And Bank of Canada head Stephen Poloz isn’t betting on that happening any time soon. Neither are bond traders, the big guns that bet billions of dollars every day on the direction of interest rates.
So let’s suppose – just for fun – that they’re right (since we all know how often markets and economists aren’t right). If we are actually near a bottom in rates for a few years, what’s the best way to play your mortgage?
Well, it just so happens that there’s an app for that. It’s called a spreadsheet and I’ve taken the liberty of putting mine through its paces and model out which mortgage term (or combination of terms) yields the lowest hypothetical cost of borrowing over the next five years.
Keep in mind that what I’m about to tell you doesn’t apply to everyone. It presupposes that you:
- Are a borrower who qualifies for the best advertised rates in the market;
- Can handle higher interest rates and rising payments;
- Are comfortable with making a five-year fixed mortgage payment.
That last point helps us compare apples to apples, by assuming you’ll make the same exact payment (equivalent to a five-year fixed payment) regardless of which term you pick. Assuming “equal cash flows,” as it’s called in finance parlance, gets us around sticky questions such as what you’ll do with the payment savings of a shorter mortgage term.
Remember that the following results are based on interest and renewal costs alone. There are so many other factors to consider when choosing a mortgage, such as the cost of breaking the mortgage early, so consider this only as a starting point in your mortgage research.
Now that we’ve got the disclaimers out of the way, here are the findings. These results are based on two scenarios out of an infinite list of scenarios, albeit two highly plausible scenarios. They are:
1) Rates stay roughly flat for the next five years;
2) Rates increase modestly in the next five years.
If you think the Bank of Canada is either going to slash rates to zero or take them to the moon, then your choices are simple: Snatch the cheapest rate you can find in the former case and lock into the best five-year fixed you can find in the latter case.
But those are arguably lower probability scenarios than the two I’ve mentioned, due to the extreme inflation risk that would have to materialize in order to justify them. For the sake of conversation, let’s assume rates are on a flat or modestly higher path.
Scenario 1: A flat-rate market
Low growth and low inflation rule the day in Canada. It’s been that way since the financial crisis and there’s little to suggest we’ll break out of this cycle in the next few years.
In such an environment, shorter terms make the most sense, for three reasons:
- They come with guaranteed upfront interest savings;
- In this environment, there’s less risk of rates rising before you renew into your next mortgage;
- You can switch mortgages earlier with no penalty.
That latter point is key if you need to refinance or decide to lock in and want the best rate in the market.
Given these points, the answer is clear. A one-year fixed outperforms all other terms. The early year’s interest cost is lowest, it’s a highly flexible term that avoids penalties and renewal risk isn’t a big factor (based on the assumption that rates stay flat).
Now, if you happen to find a two-year fixed for about the same price, you’ll save almost as much and avoid renewing in 12 months.
Scenario 2: Modestly rising rates
If you’re betting on a big rebound in Canadian exports and oil (up 75 per cent already since the January bottom) then you’re likely in the rate-hike camp. For our purposes, that means a 1.5-percentage-point rise in the Bank of Canada’s key interest rate over the next three years, and related increases to all other mortgage rates.
In that case, the trusty crusty five-year fixed wins the race. It’s less than a half point above most one-year fixed rates and it entails the lowest interest cost over five years, given the assumptions. At today’s rates, the “five-fixed” easily offers the best combination of rate-hike protection and interest cost savings. It also requires the least renewal cost and effort.
Now, this is where the limitations of this article become apparent, because mortgages aren’t vanilla ice cream. They come in all kinds of flavours with all kinds of penalties, refinance rules, prepayment options and so on. Because of that, the overall borrowing cost between two different five-year fixed mortgages can differ by several thousand dollars, or even tens of thousands of dollars.
But when it comes to term selection, the news is better. Whether you choose a one-year fixed, a five-year fixed or some other term, your chances of making a bad decision have probably never been less.
Rates can’t drop much further and Canada’s lacklustre leveraged economy doesn’t support high inflation near-term (or soaring rates). So if you end up being wrong and pay more interest than the theoretical “best term,” it won’t send you to the poor house.
Tony Marchigiano310-328 West Hastings Street
Mortgage BrokerVancouver, BC
cell: 604 505 7109
fax: 604 909 4666
May 3, 2016
Home Sales Remain at Record Levels Across Metro Vancouver
Last month was the highest selling April on record for Metro Vancouver.
Residential property sales in the region totalled 4,781 in April 2016, an increase of 14.4 per cent from the 4,179 sales recorded in April 2015 and a decrease of 7.6 per cent compared to March 2016 when 5,173 homes sold.
April sales were 41.7 per cent above the 10-year sales average for the month.
“Home buyer competition remains intense across the region,” Dan Morrison, REBGV president said. “Whether you’re a home buyer or seller, it’s important to work with your local Realtor to get the information you need and to develop a strategy that will help you navigate today’s market.”
New listings for detached, attached and apartment properties in Metro Vancouver totalled 6,172 in April 2016. This represents an increase of 3.9 per cent compared to the 5,897 units listed in April 2015 and a 2.4 per cent decline compared to March 2016 when 6,278 properties were listed.
"While we’re seeing more homes listed for sale in recent months, supply is still chasing this unprecedented surge of demand in our marketplace," Morrison said.
The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 7,550, a 38.3 per cent decline compared to April 2015 (12,436) and a 2.6 per cent increase compared to March 2016 (7,358).
The sales-to-active listings ratio for April 2016 is 78 per cent. This is indicative of a seller’s market.
Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark, while home prices often experience upward pressure when it reaches the 20 to 22 per cent range in a particular community for a sustained period of time.
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $844,800. This represents a 25.3 per cent increase compared to April 2015.
Sales of detached properties in April 2016 reached 1,979, an increase of 9 per cent from the 1,815 detached sales recorded in April 2015. The benchmark price for detached properties increased 30.1 per cent from April 2015 to $1,403,200.
Sales of apartment properties reached 2,107 in April 2016, an increase of 33.4 per cent compared to the 1,579 sales in April 2015.The benchmark price of an apartment property increased 20.6 per cent from April 2015 to $475,000.
Attached property sales in April 2016 totalled 695, a decrease of 11.5 per cent compared to the 785 sales in April 2015. The benchmark price of an attached unit increased 22.1 per cent from April 2015 to $608,600.
April 29, 2016
Gender Bias With Down Payments
One in four British Columbia parents have bankrolled part of their child’s home purchase, and they’ve done it through down payment assistance.
In fact, down payment gifts and loans are the second-most common way that parents financially support their adult children. That’s according to a recent Vancity poll. (“Resolving debts” for their kids is the #1 way parents help out with money.)
But parental support has an interesting bias. Depending on your gender, you can expect significantly more down payment support from the folks.
Specifically, males were twice as likely as females to have received down payment money from mom and dad. The survey found that 39% of males aged 18-34 acknowledged receiving down payment money from their parents—compared to just 19% of females.
“We cannot explain the reason for this difference in numbers,” said Vancity spokesperson Lorraine Wilson. “…It requires further research on why there is a difference in inheritance expectations and realities for females.”
We’re no social scientists, so we can only speculate here:
- Is there a cultural gender bias? In some parts of the world, men commonly receive double the inheritance of women. It’s baked into their religion.
- Is it like the wage gap? When it comes to pay, men make more than women on average. But that gender gap doesn’t carry over to inheritances, at least not in North America (according to this research).
- Do men more often “take care” of their damsels by coughing up most or all of the down payment?
- Do men buy homes earlier than women?
- Are women better savers than men?
In truth, we can only guess at why women don’t (or can’t) tap their parental ATM as often for down payment funds. It might make a good university thesis for those so inclined.
April 29, 2016
Considering Transparency and Opacity in Decor
We often talk about color and pattern in design, but one thing we don't always talk about is the value of transparency and opacity in the materials we choose. Depth of color often has to do with opacity as certain fabrics allow more light in, and transparent materials can allow rooms to feel lighter and larger. Here are some ways to consider how these properties can factor into your decor decisions.
Use fabrics to create a mood. One of the most obvious places to start thinking about transparency and opacity is in regards to your curtains. When choosing curtains, don't only consider how much light you want to allow in, but also think about how intense you want the colors of the curtains to be and whether you want the play of pattern and light that can come from sheer, colorful curtains like those featured above.
Control privacy. By thinking about how transparency and opacity work, you will be more able to control the way that light moves around a space, and how to balance shared and private spaces. In this room, the fretwork gives a sense of openness, whereas the solidity of the door helps create an atmosphere of privacy. Obviously, the dark color of the door adds to this effect, but even if it were white, the contrast between the solid and perforated materials would still create a more cordoned-off effect.
Create visual space. In small spaces, consider using furniture with designs that incorporate a great deal of openness. Here, the thin metal supports and glass top make the table interesting but also allow the eye to move past it. Light, transparent materials help create a sense of visual space.
Create a sense of openness—or a sense of separation. Think about using transparent materials to cultivate a feeling of openness in your home. Thanks to the glass railing, the stairs feel like a cohesive part of the living space—the whole area is connected. Had the partition been a solid material, the space would have felt choppier, and the stairs would have felt more separated from the rest of the living area. Consider using transparent and solid materials to give your home the open—or cozy—feel that you desire.
Break it up. Often, when we focus on why monochromatic rooms work, we talk about variations in tone and texture. Those are certainly important, but as this room shows, differing levels of transparency also help give a room interest. The semi-sheer bedskirt adds a sense of floating, gauzy lightness, while the more solid color of the walls and duvet give the eye somewhere concrete to rest.
SOURCE > ApartmentTherapy
April 22, 2016
Top 3 Mortgage Complaints
According to the banking Ombudsman annual report mortgages are the second biggest complaint about banking products. The top 3 complaints are mortgage penalties, the option and feature to port the rate & term to a new property and pre approvals.
Mortgage penalty calculations, in particular the IRD (Interest Rate Differential) can be complicated and sometimes not explained properly. Since moving from the banking world to becoming a mortgage broker I now know, and educate my clients to the fact, that banks charge mortgage penalties that, on average, are 3 to 4 times higher than some of the other great, smaller mortgage lenders on the market.
Portability, or the option to take your rate and term to a new property, is another complaint. When you port you have to be completely approved all over again, even on the same mortgage as you're moving it to another property. This benefits you in many ways including keeping the same rate and qualifying to get all or a portion of your penalty back.
And Pre Approvals; they are just that, a pre-approval, nothing is guaranteed by getting pre-approved but there are things your mortgage advisor can do to ensure as much as possible that the financing will go thru.
See the full article from Canadian Mortgage Trends below for more details:
"When it comes to complaints about banking products, mortgages are second only to credit cards.
That’s according to the banking Ombudsman’s (OBSI’s) recently released annual report, which lists three of the most common grievances from mortgage customers.
“We are seeing a lot of complaints related to mortgages…” Brigitte Boutin, Deputy Ombudsman, Banking Services said in the report. Those complaints revolve mainly around mortgages prepayment penalties and pre-approvals, but it seems that mortgage portability has also “become a bigger issue.”
The Big One: Penalties
The Ombudsman sees a constant stream of borrowers protesting their bank’s prepayment charges. Those complaints are usually dismissed after an appropriate investigation, with a finding that the bank did nothing wrong.
“When investigating mortgage prepayment penalty cases, we examine the signed agreements between the client and the bank and review the accuracy of the penalty calculation.
We also look at the manner in which the client was informed of the penalty before they proceeded with the mortgage transfer.”
A common claim by customers is that they were not told how the bank calculates its mortgage prepayment charges. Frequently the problem stems from the comparison rate changing before the borrower can pay off the mortgage.
The comparison rate is the rate the bank compares to your rate, to judge the interest rate differential, or IRD (i.e., determine the difference between your rate and the rate the bank can supposedly lend at today, for your remaining term).
Timing is key. If you’re 2.5 years from maturity, for example, the comparison rate might be the three-year fixed rate (say 3.04%). If you’re 2.49 years from maturity—one day closer—the comparison rate might be the two-year fixed rate (say 2.59%). The actual comparison rate used can increase the IRD and lead to unexpectedly high penalties.
In any case, with all the prepayment regulations nowadays, lack of disclosure is getting harder to argue. In one case on its website, OBSI found that “the fact that the client was not told all the specifics of the calculation did not change the fact that he had the necessary information to make an informed decision.” OBSI ruled in favour of the bank in that instance.
“People sometimes take for granted that their mortgage is portable before selling their home,” Boutin said in the report. “It’s interesting – we’ve seen cases where the bank refused portability because the borrower’s financial situation no longer met the bank’s lending criteria. However, the client was able to get approved somewhere else right away.”
She raises a key point that all borrowers should be aware of. Given that the property is the lender’s security, you can’t move your mortgage to a different home without the lender’s consent.
Porting requires a whole new application process, documentation and approval. Failing that approval, people with closed mortgages have little choice. They can either not move or they can pay the lender’s penalty (potentially thousands of dollars) to discharge the mortgage and find other financing.
Boutin adds: “A bank can refuse to transfer a mortgage from one property to another because the client’s situation has changed and we can’t force a bank to lend money when its lending criteria is not met.”
She advises: “…Read the terms in your mortgage agreement carefully. Check if there are certain criteria related to portability and check if you meet your lender’s criteria before deciding what to do.”
Common portability considerations include:
- the amount of time the lender gives you to port
- the rate the lender gives you if you “port and increase” (add more money to the mortgage)
- the lender’s policy on bridge loans (commonly needed when your new purchase closes before your sale)
- the type and location of property the lender will lend on, and
- the types of income the lender allows (e.g., key, for example, if you become self-employed and can’t prove income in the traditional manner)
“…We’ve seen an increased number of files relating to mortgage pre-approval,” Boutin notes. “Banks may not verify everything in detail when they pre-approve a mortgage. Then, when people go to finalize a mortgage, the bank will ask for more information and for supporting evidence of what was previously disclosed.”
“Sometimes that new information will lead the bank to change financing terms or refuse financing altogether. People can then get caught, especially if they removed the condition for financing on their offer to purchase a home.”
I’ve written about pre-approvals many times and continually hear cases where people thought they were unconditionally approved, but hadn’t even provided income and down payment documentation. Often it’s a matter of the mortgage adviser not clearly explaining that pre-approvals are rarely fully underwritten (including by the default insurer, when the down payment is less than 20%).
“A pre-approval document indicates certain conditions that need to be met,” adds Boutin. “Be careful that you’ve given the right information to your bank and that your documents match (emphasis ours) what you provided at the beginning of the mortgage process.”
April 21, 2016
Affordable Housing Ownership Pilot Program
The City of Vancouver wants to help moderate income earners buy 300 homes in the city.
It's called the Affordable Housing Ownership pilot program and it will go before the city's finance committee on Wednesday.
"We're going to create an opportunity for people to enter into the housing market who have previously been able to rent but not been able to buy," said councillor Raymond Louie.
Under the program, the city would strike a deal with developers to acquire 20 per cent ownership of 300 new units. It would then turn around and sell those units to buyers for a discounted price — a price that would take into consideration the city's share in ownership.
"The city will have a stake in it and the city's stake will be held by the city, will continue to be held by the city in order to maintain that level of affordability," said Louie.
Louie says he hopes the pilot program will help the city learn how to make shared-ownership housing work in Vancouver.
Still the city will need help from the province to amend the Vancouver Charter — the city's provincial statute — in order to allow for the program.
"What I'm hoping is that they'll understand what we're trying to accomplish here," he said.
"That we do need the province to make an amendment to the Vancouver Charter, which will authorize council to implement this new program and if their thinking is that this isn't necessary then I'd like hear what the province is proposing, because obviously there's a growing challenge for people in our city to live in it and own any property."
According to the report an amendment to the Vancouver Charter would take at least eight months.
B.C. Community Development Minister Peter Fassbender said he has yet to see the report city staff presented to council on the issue, but he welcomes it.
However, he didn't seem as open to the idea of changing the charter.
"I'm not going to jump to opening the Vancouver Charter on one issue," Fassbender said. "I know the city has some perspectives. I appreciate that and I look forward to hearing them."
These are some preliminary criteria for prospective buyers:
- Be a resident of Vancouver for the past five years.
- At least one buyer must be employed.
- Maximum household income for studio and 1-bedroom units for singles and couples with no dependent children living at home, $67,540/year.
- Maximum household income for two and three of more bedroom units for single/dual parent families with dependent children living at home, $96,170/year.
- Buyer must be the sole occupant, no renting allowed.
April 15, 2016
BEFORE + AFTER: An Outdated Duplex Gets A Sleek New Makeover
A young couple turns to Décor Aid to transform their Soho apartment from the ground up.
With its soaring ceilings, ample natural light and spacious loft layout, Andrew McLaughlin's Soho duplex is the envy of most New Yorkers. But for the art-collecting financier and his girlfriend, Larissa, it was in desperate need of a facelift. The upstairs bedroom was dark and cave-like, and the kitchen and bathrooms were outdated and cramped. The couple's newly purchased apartment was not at all representative of their stylish, jet-setting lifestyle.
Enter Décor Aid, the affordable interior design service that Andrew enlisted to oversee the gut renovation and interior design. Since he works from home, he needed the space to be both comfortable and functional. And though they're not big cooks, he and Larissa love casual gatherings and wanted an open flow between the kitchen, dining and living room areas. But Andrew's biggest stipulation was that the design accommodate his most prized possession: Harper, his beloved 10-year-old bulldog.
Over the course of eight months, the Décor Aid team set out to create a contemporary space that was both sleek and pet-friendly. The kitchen and bathrooms were completely gutted, replaced with clean, streamlined designs guided by a black and white palette for drama and contrast. Cement tiles were a budget buy that added a graphic punch to the floors, while the rest of the floors were redone in wood. They added a large internal window to the bedroom to introduce natural light into the dreary space. The floor-to-ceiling fireplace in the great room was refinished with cement and iron, and iron railings were added to the staircase to lend an industrial feel.
As the couple was starting from scratch, Décor Aid brought in all new furnishings to outfit the space. They splurged on a custom-made walnut bar to provide storage, as well as a stylish buffet and bar for guests. A chandelier from Lindsey Adelman, Vitra's Panton Dining Chairs, and rugs from Tom Dixon's collection for The Rug Company add a sophisticated, urban edge to the design. And perhaps the most important investment was the sectional, which was custom made and upholstered in a heavy duty Kravet fabric for Netflix binge-watching with Harper.
"We love watching TV and relaxing with Harper in front of the fireplace," says McLaughlin. "The whole space now is inviting and livable."
April 14, 2016
Government's Increase In Down Payment Requirements
House prices and market activity continue to increase especially in Vancouver and Toronto even after measures taken by Finance Minister Bill Morneau which took effect in February. Increasing the required down payments for home purchases valued above $500,000 was intended to stabilize a hot real estate market but the fact is that home prices in some areas have increased more than expected. Maybe it's too early to tell if the recent rule changes will have a real effect. As mentioned by Mr. Morneau "we are only one month into that change and we want to make sure that our housing market stays one that is working effectively. As we see challenges, we will of course think about ways that we can respond that ensure that our market remains stable".
One real possibility causing the Canadian real estate prices to continue to move at an accelerated pace could be foreign ownership. Mortgage and Housing Corporation (CMHC) is looking for new methods of tracking and measuring foreign buyers, and the impact this could have in overall home prices. As quoted recently by CMHC Chief Economist Bob Dugan "It remains a top priority for CMHC to continue to get more information on foreign investment in Canada's housing market".
On another note,
The Bank of Canada has decided to keep its benchmark lender rate unchanged at 0.5 percent which indicates that the Bank of Canada feels that there is no need for any further cuts to stimulate the economy. "it does appear that the positive forces at work in the economy are starting to outweigh those that are negative" said a Bank spokesperson. This is good news for everyone looking to buy or refinance today.
As your mortgage professional it is my responsibility to keep you up-to-date on information that matters to you and your family. If you or someone you know could benefit from some timely professional advice and guidance please contact me today.
Mortgage Alliance Meridian Pacific Mortgages
April 8, 2016
Latest CMHC Report Shows Condominium Investors Are in It for the Long Haul
The latest report from CMHC (Canadian Mortgage & Housing Corp.) dispels a lot of housing bears (economists/people negative towards the housing market) as it has determined that only 8% of investors plan to flip their property or properties within the next 2 years.
See the entire report for other interesting stats on term, type of rate (fixed or variable) and lengths of amortization investors are taking as well.
Condominium investors in Vancouver and Toronto display stable characteristics over time. Most are small-scale investors that own only one secondary unit, nearly one-half purchased their last secondary unit for rental income and most expect to own their investment property for more than five years, according to Canada Mortgage and Housing Corporation (CMHC) 2015 Condominium Owners Survey (COS) released today.
The annual report, focused on the Vancouver and Toronto Census Metropolitan Areas (CMAs), includes survey insights on what motivates condo purchases, how long owners hold onto their units, and the mortgage-financing profile of condominium owners whose primary dwelling is a freehold or condominium unit but who also own at least one secondary condominium unit. These households are referred to in the report as COS investors.
Results are very stable over surveys.
Nearly one-half of COS investors purchased their last secondary unit for rental income.
About 60% plan to hold onto their last purchases unit for more than 5 years versus 8% planning to sell their unit in less than 2 years.
Nearly three quarters have only one unit and roughly 90% do not plan on buying new units in year following the survey.
56% expect their units to appreciate, 35% do not expect a significant change and 5% anticipate a decrease in value.
The share of COS investors with a mortgage on their last purchased unit (at the time of the survey) stood at 53 per cent. This is slightly below the share reported for all home owners (59 per cent) in Statistics Canada’s 2011 National Household Survey.
The surveys of Toronto and Vancouver produced similar results. However, a larger share of respondents in Toronto expect the value of their units to increase than in Vancouver, but the gap is closing.
COS investors, as defined by CMHC, exclude households that own only one condominium unit in which they reside, as well as households that own a secondary unit but rent their primary residence.
SOURCE < CMHC
April 7, 2016
March sales set an all-time record
Metro Vancouver home sales eclipsed 5,000 in March for the first time on record.
Residential property sales in the region totalled 5,173 in March 2016, an increase of 27.4 per cent from the 4,060 sales recorded in March 2015 and an increase of 24 per cent compared to February 2016 when 4,172 homes sold.
Last month’s sales were 56 per cent above the 10-year sales average for the month.
"March was the highest selling month the REBGV has ever recorded,” Dan Morrison, REBGV president said. “Today's demand is broad based. Home buyers are active in neighbourhoods across our region."
New listings for detached, attached and apartment properties in Metro Vancouver totalled 6,278 in March 2016. This represents an increase of 5.2 per cent compared to the 5,968 units listed in March 2015 and an 8 per cent increase compared to February 2016 when 5,812 properties were listed.
The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 7,358, a 40.5 per cent decline compared to March 2015 (12,376) and a 0.8 per cent increase compared to February 2016 (7,299).
“Strong job and economic growth in our province, positive net migration and low interest rates are helping to drive this activity," Morrison said.
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $815,000. This represents a 23.2 per cent increase compared to March 2015.
Sales of detached properties in March 2016 reached 2,135, an increase of 24.8 per cent from the 1,711 detached sales recorded in March 2015. The benchmark price for detached properties increased 27.4 per cent from March 2015 to $1,342,500.
Sales of apartment properties reached 2,252 in March 2016, an increase of 38.4 per cent compared to the 1,627 sales in March 2015.The benchmark price of an apartment property increased 18.8 per cent from March 2015 to $462,800.
Attached property sales in March 2016 totalled 786, an increase of 8.9 per cent compared to the 722 sales in March 2015. The benchmark price of an attached unit increased 20.1 per cent from March 2015 to $589,100.
April 1, 2016
Mess With Nature: Décor that Evokes Organic Processes
This Spring, nature-inspired housewares designers have turned over a new leaf and stood it on its head.
Instead of incorporating flora or fauna patterns that literally reference the natural world, many have taken a more figurative tack, creating pieces that reflect such processes as erosion, charring, melting and oxidation. These haunting objects say “Mother Nature was here,” rather than “There are birds flying across my dessert plate.”
Jan Kath’s “Erased Heritage” wool carpets, for instance, appear organically eroded, their precise Oriental patterns disrupted by irregular patches of Chinese silk. Savage winds seem to have distorted the porcelain “Blow Away Vase,” by Front for Moooi, a trick of computer design; the vase looks like a piece of Royal Delft caught in a twister. And lava has apparently encroached on metalworker Franck Chartrain’s “Phoenix” pedestal, a piece of charred oak cut 150 years ago and clotted with cast bronze.
Much like the Japanese aesthetic of wabi-sabi, which celebrates the imperfection of objects, this new design ethos finds beauty in the unorchestrated and unplanned. Of his new fabric, Oxydation, made with the French company Lelievre and distributed in the U.S. by Stark, designer Jean Paul Gaultier said, “Seeing an oxidized surface inspired me to do this print and show the beauty that can be found in something we do not consider perfect.” The suede-like cotton fabric virtually fizzes with verdigris and iron oxide, effects inspired by rusting nails and oxidizing copper scraps that Mr. Gaultier found years ago.
“People are more into finding out how a product was created, what was used,” said Adam Comiskey, founder of luxury textile company Zig Zag Zurich. And pieces that interpret forces of nature often come with built-in stories: For a Zig Zag Zurich sheet set called “Made by Rain,” an artist captured the impressions of raindrops by laying photographic film on a roof, then digitized the images and printed them on satin cotton. The black-and-white splatter pattern evokes the randomness of a summer shower.
In our era of rapid change, objects that convey the sort of organic processes that unfold over decades or millennia particularly appeal. “It slows your soul down a little bit and allows you to come back to a more natural timing or rhythm,” said New York interior designer Kathleen Walsh. In a Martha’s Vineyard project, she installed a marble bathroom sink so aged and marred with rust it seems to have come straight from the quarry.
Such tortured pieces can look their best amid relatively slick décor. Ms. Walsh juxtaposed the sink with linear, modern elements such as a polished-nickel drain pipe and wall-mounted tap. The aforementioned Oxydation fabric also pairs well with polished metal, said Ingrid Lager, Lelievre’s creative designer.
Other, more-obviously simpatico matches, noted Ms. Lager and Ms. Walsh, include matte materials such as wood, well-worn antiques and anything that shows the maker’s hand (strong-weave fabrics, handblown glass). But don’t go overboard, said New York textile designer Catherine Stowell, who designed a vinyl wall covering called “Burnish” for Designtex, which suggests oxidation and weathering. She recommended using these natural-process elements judiciously, to add layers and depth to a room.
Small doses of this style may be just what the eye doctor ordered. Anna Rabinowicz, creative director of Anna New York by RabLabs, sees her raw-edged, sliced-agate pieces as a sensory antidote to the smartphones and computers that surround us. “The visual monotony of so many things in people’s lives is attracting them to natural elements,” she said. And objects formed by nature are inevitably unique.
SOURCE < TheWallStreetJournal
April 1, 2016
Do Millennials Still See Value in Purchasing a Home?
According to a recent survey by CIBC the majority of Millennials, 86%, still see value in home ownership. They, like generations before, look at it as a good way to build equity and also part of plan for retirement.
"A recent survey conducted by CIBC revealed that a clear majority of Canadian millennials look at home ownership with the same level of esteem as did earlier generations, with fully 86 per cent dispelling the common misconception that youngsters don’t want to have their own homes.
The results came amid seemingly non-stop growth in real estate value in Canada’s most dynamic markets, even as the study found that 21 per cent of millennials still live with parents and 42 per cent are currently renting. Meanwhile, 59 per cent of the 18- to 34-year-old bracket said that having their own homes would attest to their personal freedom.
CIBC officials said that the survey, which randomly polled 1,517 adults on March 14 and 15, showed that Canadians still see home ownership as fulfillment despite weakened purchasing power across the board.
“In fact, our poll suggests that millennials place as much importance on being a home owner as Canadians in other age groups,” vice president of mortgages and lending Barry Gollom told CBC News.
“Home ownership is an important milestone to many, and that hasn't changed even though it has become increasingly difficult to get into the market,” Gollom explained, alluding to the 85 per cent of Canadians (all ages) who see purchasing and owning as crucial concerns.
The CIBC survey further revealed that 63 per cent of those who want to own homes said that building equity and saving for retirement is the best strategy to stay afloat in the long run.
In contrast, 15 per cent of the respondents dismissed home ownership as unimportant, pointing at the issue of affordability as the most important factor that makes buying property in these times unrealistic."
SOURCE < MortgageBrokerNews
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March 25, 2016
Development Reshaping Burnaby
Burnaby out paces Vancouver in tower development.
Burnaby is putting up a forest of highrise residential towers over the next 25 years, far outstripping anything contemplated by Vancouver.
Targeting land around rapid transit nodes and four malls — Metrotown, Brentwood, Lougheed and Edmonds, developers have at least 106 highrise residential buildings with more than 30,000 units proposed or under construction. Of those, 47 are 40 storeys or more in height, according to data collected by a real estate expert with Colliers International. By comparison, there are 68 highrises under development in Vancouver, of which only 13 are 40 storeys or taller.
The scale of the development is dramatically reshaping Burnaby, which has long been content to be a bedroom community to Vancouver and its job-centric downtown core. Burnaby’s town centres developed as local or regional malls surrounded by low-density rental housing or single-family neighbourhoods, but they are now transforming into dense urban communities with towers rivalling those in Vancouver.
Around Brentwood and Gilmore no less than 46 towers, ranging from 25 to 65 storeys, are planned. And at Lougheed Town Centre, on the eastern edge bordering Coquitlam, at least 23 towers up to 65 storeys are planned around the soon-to-be finished Evergreen SkyTrain line. The expansive former Dairyland and Safeway industrial complex near Edmonds will have 19 towers up to 44 storeys tall.
But this pace of development also highlights a disparity between how developers are treated in Burnaby and Vancouver and what the cities expect from them. Many proponents of Burnaby’s biggest projects are developers like Shape Properties, Concord Pacific, Onni, Ledingham McAllister, Polygon, Beedie Industrial and Anthem Properties.
David Taylor, a specialist with Colliers International, said Vancouver’s restrictive building policies and the lack of developable land are largely why developers now target Burnaby with such dramatic results.
“In Vancouver, outside of downtown there are effectively less than a handful of projects where you can do towers. You are not going to find a site in Vancouver to build a highrise, so where are you going to build it? You are going to find it in Burnaby or Coquitlam,” he said.
Taylor pointed to problems the Kettle Society is having building a relatively simple 12-storey building at Venables and Commercial Drive and the recent backlash in Grandview-Woodland over the Vancouver planning department’s plans for towers at Commercial and Broadway.
“You’ve got neighbourhoods that don’t want any development. If you could build towers anywhere in Vancouver, you would see hundreds of them. There is that much demand for that. But the reality is that to build a 40-plus storey tower in the city of Vancouver, even downtown, is extremely difficult.”
Anne McMullin, the CEO of the Urban Development Institute, said Burnaby’s planned development closely aligns with its regional growth strategy. What makes the difference, she said, is that a lot of the land being redeveloped is non-controversial and doesn’t pit neighbourhoods against the developers.
“It’s a lot easier than in Vancouver. These are malls or industrial areas like the Safeway lands,” she said. “It is a lot less controversial and it involves higher densities around transit hubs.”
March 24, 2016
Making Sense of The Federal Government's New Budget
The Liberal government is spending big and aiming high with its first budget. Finance Minister Bill Morneau delivered a budget which is aimed at creating some stimulus for what appears to be a slowing economy. Unemployment has risen recently to 7.3% and this new budget, which includes billions in new infrastructure spending, is anticipated to create 100,000 new jobs.
There was very little mention of housing matters in the budget. While some people still question the existence of a “housing bubble”, it’s apparent that the growth in housing values is based on fundamentals. The two provinces, BC and Ontario, which have seen the strongest values in real estate, are also the ones that have seen unemployment decrease.
The housing market continues to be a key driver in the Canadian economy. New home construction has increased above the 200,000 mark in February and 30% of buyers are first time buyers. There is no doubt that Canadians greatly value homeownership.
Interest rates remain very low and the Bank of Canada Governor stated at the most recent rate-setting on March 9th that “The near-term outlook remains broadly the same as it did in January”. This low rate stance is great news as The Bank of Canada rate plays a significant factor in the interest rate you pay on your mortgage. With interest rates this low, the question is always whether it’s better to lock in for a fixed term or go with a variable rate mortgage, especially now when there isn’t a big difference in the two rates. Choosing between a fixed or variable rate is a personal decision based on your individual circumstances, needs and risk tolerance.
With the expectation that the economy will bounce back with this new budget and the housing market strong as ever, now could be a great time to buy that first home, move up or refinance your existing mortgage.
As your mortgage professional, I am happy to assist you in getting the right mortgage that fits your needs.
Call or email me today.
Mortgage Alliance Meridian Pacific Mortgages