October 20, 2016
Bank of Canada Rate Decision Made This Week
The Bank of Canada has, once again, decided to leave the target overnight lending rate at .50%. They have noted that the economy is still facing headwinds but that they expect it to move back into full capacity by mid 2018. This is a big change since the last forecast was for it to be back to full capacity by summer 2016.
"The Central Bank announced its overnight rate target Wednesday.
The Bank of Canada is maintaining its target for the overnight rate at 0.5%.
Economic growth is now projected to be lower than previously forecast in July’s Monetary Policy Report.
“This is due in large part to slower near-term housing resale activity and a lower trajectory for exports. The federal government’s new measures to promote stability in Canada’s housing market are likely to restrain residential investment while dampening household vulnerabilities,” the Bank said.
Export data is improving, according to the Bank, but growth will be slower over the next two years than previously forecasted, due in part to lower global demand.
“After incorporating these weaker elements, Canada’s economy is still expected to grow at a rate above potential starting in the second half of 2016, supported by accommodative monetary and financial conditions and federal fiscal measures,” the BoC said. “As the economy continues to adjust to the oil price shock, investment in the energy sector appears to be bottoming out.”
Household spending is on the rise, as well as employment and incomes outside energy-reliant regions.
The Bank forecasts real GDP growth of 1.1% this year and “about” 2% in 2017 and 2018.
It now projects the economy will return to full capacity by mid-2018, which is much later than the original forecast of July 2016.
“Given the downward revision to the growth profile and the later closing of the output gap, the Bank considers the risks around its updated inflation outlook to be roughly balanced, albeit in a context of heightened uncertainty,” the BoC said. “Meanwhile, the new housing measures should mitigate risks to the financial system over time.
“At present, the Bank’s Governing Council judges that the overall balance of risks is still in the zone for which the current stance of monetary policy is appropriate, and the target for the overnight rate remains at 1/2 per cent.”
October 20, 2016
Metro Vancouver real estate sales cool, but prices remain stable
The number of homes sold in Metro Vancouver continued to drop last month, but the benchmark price remained stable, according to new numbers from the Real Estate Board of Greater Vancouver.
In total, 2,253 homes were sold in September, a decrease of 9.5 per cent compared to August 2016, and a drop of 32.6 per cent compared to September 2015.
But the benchmark price for all residential properties in Metro Vancouver remained stable at $931,900 — a 0.1 per cent decline compared to August 2016, but a 28.9 per cent increase compared to September 2015.
The sales drop follows the introduction of a 15 per cent tax on foreign buyers by the provincial government in early August.
"There's uncertainty in the market at the moment and homebuyers and sellers are having difficulty establishing price as a result," said board president Dan Morrison in a statement Tuesday morning.
He notes the slowdown in sales was most significant for detached homes, but benchmark prices remain flat for all types of homes.
"Supply and demand conditions differ today depending on property type. We're seeing more demand for condominiums and townhomes today than in the detached home market."
Breaking down the numbers
Sales of detached properties decreased 47.6 per cent last month from September 2015.
The benchmark price for detached properties is $1,579,400 — a 0.1 per cent increase from August 2016, and a 33.7 per cent rise from September 2015.
Also in September, sales of apartment properties decreased 20.3 per cent compared to September 2015.
The benchmark price of an apartment property is $511,800 — down 0.5 per cent from to August 2016, but up 23.5 per cent from September 2015.
Sales of attached property decreased 32.2 per cent compared to September 2015.
The benchmark price of an attached unit is $677,000 — down 0.1 per cent from August 2016, but up 29.1 per cent from September 2015.
Last month, the real estate board released statistics showing the number of sales in the region dropped 26 per cent in August compared to the same month in 2015.
In July, sales were down 18 per cent compared to the same month in 2015.
October 6, 2016
REBGV October 2016 STATS
Metro Vancouver* home sales dipped below the 10-year monthly sales average last month.
Metro Vancouver home sales totalled 2,253 in September 2016, a decrease of 32.6 per cent from the 3,345 sales recorded in September 2015 and a decrease of 9.5 per cent compared to August 2016 when 2,489 homes sold.
Last month’s sales were 9.6 per cent below the 10-year sales average for the month.
“Supply and demand conditions differ today depending on property type,” Dan Morrison, REBGV president said. “We’re seeing more demand for condominiums and townhomes today than in the detached home market.”
New listings for detached, attached and apartment properties in Metro Vancouver totalled 4,799 in September 2016. This represents a decrease of one per cent compared to the 4,846 units listed in September 2015 and an 11.8 per cent increase compared to August 2016 when 4,293 properties were listed.
The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 9,354, a 13.4 per cent decline compared to September 2015 (10,805) and a 10 per cent increase compared to August 2016 (8,506).
The sales-to-active listings ratio for September 2016 is 24.1 per cent. This is the lowest this ratio has been since February 2015. Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.
“Changing market conditions are easing upward pressure on home prices in our region,” Morrison said. “There’s uncertainty in the market at the moment and home buyers and sellers are having difficulty establishing price as a result. To help you understand the factors affecting prices, it’s important to talk with a REALTOR®.”
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $931,900. This represents a 28.9 per cent increase compared to September 2015 and a 0.1 per cent decline compared to August 2016.
Sales of detached properties in September 2016 reached 666, a decrease of 47.6 per cent from the 1,272 detached sales recorded in September 2015. The benchmark price for detached properties is $1,579,400. This represents a 33.7 per cent increase compared to September 2015 and a 0.1 per cent increase compared to August 2016.
Sales of apartment properties reached 1,218 in September 2016, a decrease of 20.3 per cent compared to the 1,529 sales in September 2015.The benchmark price of an apartment property is $511,800. This represents a 23.5 per cent increase compared to September 2015 and a 0.5 per cent decline compared to August 2016.
Attached property sales in September 2016 totalled 369, a decrease of 32.2 per cent compared to the 544 sales in September 2015. The benchmark price of an attached unit is $677,000. This represents a 29.1 per cent increase compared to September 2015 and a 0.1 per cent decline compared to August 2016.
October 6, 2016
Ottawa Tightens Mortgage Requirements
Anticipated changes have been announced and released by the Ministry of Finance office.
Starting October 17th, 2016, borrowers who take out insured mortgages that are fixed-rate loans of five years or longer will be subject to a more stringent “stress test”. Currently borrowers who take a five year insured mortgage (less than 20 percent down payment) qualify for their mortgage based on the actual rate they receive. Now under the new rule the mortgage amount that a borrower qualifies for will be based on the Bank of Canada’s posted 5 year rate which is currently 4.64%. Your actual payment of course will still be based on the rate you actually receive from the lender. This would result in most Canadians qualifying for a far less mortgage amount then they had anticipated.
As Mr. Morneau states “This would create a “buffer” to ensure that Canadians will continue to be able to easily service the mortgage payments in the event interest rates rise.” The impact is that you simply might not qualify for the mortgage and house you want after October 17th, 2016 due to using the higher interest rate to qualify.
What really matters is what this means to you and your family. As your mortgage professional I understand the new changes and how they can impact your home purchase and mortgage. You still have until October 17th, 2016 to get a mortgage approved based on the old rules given that the home closes prior to March 1st, 2017. Call or email me today and let’s discuss your own situation.
Mortgage Alliance Meridian Pacific Mortgages
September 30, 2016
Which Big Bank Is Predicting The Key Lending Rate Will Stay The Same Until 2019?
TD is forecasting that the Bank of Canada will keep it's key lending rate the same until 2019. What's the reason for this? This latest article from Canadian Real Estate Wealth tells us why. And they're not the only ones; I've read numerous other articles with economists forecasting similar things. Will it come true, only time will tell.
Read the full article for all the details below:
"TD Bank forecasts the Bank of Canada overnight target rate will remain unchanged until 2019.
In its latest long-term economic forecast, the big bank predicts the Bank of Canada will hold its target at 0.5% until sometime in 2019, when it will be hiked to 1%. That will eventually give way to another interest rate increase in 2020, according to TD, when it will settle in at 1.25% to close out the year.
“Slower trend economic growth will also restrain the level of interest rates. With excess capacity expected to be absorbed slowly over the next several years, the Bank of Canada is likely to leave rates at their current 1.00% level until early 2019,” TD said in its forecast. “Even as rates move higher, they are likely to rise to just 1.25% by the end of the forecast horizon in 2020.”
Variable mortgage rates are closely tied to the overnight rate; fixed mortgage rates, on the other hand, are impacted by bond yields.
TD Predicts the five-year government bond yield will steadily increase starting next year. The five year yield closed out 2015 at 0.73% and it is expected to end 2016 at 0.7%. However, it will eventually see slight upticks each year.
The bank forecasts the five-year bond yield percentage will be 0.95% at the end of 2017, 1.30% at the end of 2018, 1.55% in 2019, and 1.80% in 2020.
Rates are dependent on a number of economic factors. This year, the economy is expected to grow by a mere 1.1% this year. However, it is expected to grow to 1.8% next year, driven, in large part, by rebuilding efforts due to the Alberta wildfires this year."
310-328 West Hastings Street
Mortgage Broker Vancouver, BC
cell: 604 505 7109
fax: 604 909 4666
September 30, 2016
Landmark West End Hotel Likely To Be Demolished To Make Way For Condo Development
The Empire Landmark hotel has been a West End icon since it went up in 1973. It’s tall (42 storeys, 120 metres), thin, and has a nifty revolving restaurant/bar on top that offers breathtaking views.
But it also sits on a full block in the 1400-block Robson, in the middle of a neighbourhood that’s being transformed into a forest of luxury highrises. And it looks like the 43-year-old structure will be coming down for a new condo development.
Plans went up on the city of Vancouver’s website Friday for two towers in the 1400-block — one 28 storeys high, the other 30.
The towers would be around 100 metres high, which is almost 25 per cent shorter than the existing building. But with high-end condos going for up to $1,800 per square foot in the neighbourhood, the redevelopment would probably be far more lucrative than running the current 357-room hotel.
The plan by Musson Cattel Mackey architects would see a mixed-use project with 223 market condos, 57 social housing units, two floors of offices and retail on the main floor. The overall project would have 393,850 square feet of floor area.
The site is owned by 1488 Robson Holdings Ltd., whose directors have the same address as the Hong Kong-based Asia Standard Hotel Group. Property records showed it sold in April for $46,528,000. It has had Hong Kong owners since 1997.
Heritage expert Don Luxton isn’t surprised the Landmark may be redeveloped.
“We’re watching this happen all over the city,” he said.
“The new frontier for developers is stratas and 1970s buildings. They’re buying them up all over the place and looking to tear then down, because they’re often underbuilt for their zoning potential.”
The Empire Landmark may be tall, said Luxton, but it isn’t really all that big.
“It’s actually a very slender floor plate,” said Luxton.
“It’s tall, but there’s not that much square footage. And seismically (1970s buildings) are not anywhere near what they need to be. So you look at upgrading these buildings and it costs a fortune — it’s easier to tear them down.”
There has been a lot of speculation about what effect the provincial government’s new 15 per cent tax on foreign ownership will have on the condo market. But Luxton doesn’t think it will be much of a deterrent to rich foreign buyers willing to spend $2 million for a pied-a-terre.
“At those prices, pffff, a 15 per cent tax is nothing,” Luxton said. “It’s lunch money.”
Kirk Kuester of Colliers International notes that Bosa recently sold out a luxury condo development at Cardero and Georgia, with prices in the $1,700-$1,800-per-square-foot range.
“Demand seems to be holding for ultra-high end, really rare, unique type product, based on some recent sales,” said Kuester.
Green councillor Adriane Carr laments the way the redevelopment along Georgia, Alberni and Robson seems to be high-end.
“Do we really need a ton more high-end condos in this city?” she said.
“The building of them is turning Vancouver into a resort city, where we don’t have affordable housing for people who work here, who’ve grown up here, who have brought their families here and want to live here, but can’t afford to.
“It’s a crisis. Everyone knows it’s a crisis in this city.”
The redevelopment has come in the wake of the city’s new West End Community Plan, which raised the heights in certain areas.
“It’s rather tragic that the West End plan has pointed development along the Robson corridor and over towards Burrard, with very tall buildings, (up to) 60 storeys,” said Carr.
Luxton said there may be many more ’70s and ’80s buildings downtown coming down in the current real estate boom.
“1090 West Pender is up for demolition, it’s part of a rezoning and will be replaced by a much larger office tower,” he said.
“Anchor Point (at Burrard and Pacific), there’s rumblings about that one. Pretty much everything in the city is up for grabs. We’re into a new stage in Vancouver, I would say.”
The Empire Landmark was originally known as the Sheraton Landmark. It is an example of the brutalist style of architecture popular in the early 1970s, with an exposed cement exterior. The proposed buildings that will replace it are light, airy glass towers.
SOURCE < VancouverSun
September 22, 2016
Managing Debt The Smart Way
TransUnion, a credit-monitoring firm, reported that 26 million Canadians have some form of debt, including mortgages, lines of credit, and credit card debt. Overall, most Canadians can easily manage their mortgage and other outside debt in the current environment.
One should always be on the lookout for ways to save on interest paid on all current debts including mortgages, lines of credit and credit cards while finding the opportunities to pay down the overall debt as quickly as possible to decrease vulnerability when interest rates are higher.
As a mortgage professional, I understand how interest rates actually work and the negative impact rising rates can have on financial plans and security. If you or someone you know is thinking of buying a home, now would be the time to take advantage of low rates but also borrow smartly with a long term strategy in place.
Contact me today and see why dealing with a mortgage professional, like me, can help with achieving financial security.
Mortgage Alliance Meridian Pacific Mortgages
September 21, 2016
Snitch-and-Audit Enforcement Part of Vancouver's Proposed Empty-Homes Tax
Vancouver will have a levy on empty homes in time for the 2017 tax season, and neighbours will be leaned on to help enforce it, Mayor Gregor Robertson and city staff told reporters today.
The annual tax will apply to anyone who self-declares an empty home on their tax bill and it will likely be 0.5 to two per cent of the home’s assessed value, according to a staff report prepared in advance of a council vote on the matter next week.
The empty homes tax would be a first in Canada and comes amid a near-zero rental vacancy rate in the city and on the heels of a city-commissioned study that claimed to have found 10,800 homes sitting empty year-round.
“This empty homes tax is first and foremost about bringing rental homes back onto the market,” Robertson said.
Staff plan to rely on a snitch-and-audit system to make sure homeowners comply with the tax. With Vancouver homes selling at an average of $1.1 million apiece, a two per cent amounts to $22,000, or $1,835 per month. That’s far less than such a home would generate in monthly rent, but the levy is hefty enough that some homeowners may try to dodge it.
Kathleen Llewellyn-Thomas, the city’s general manager of community services, explained how the city plans to catch those that do.
The city would require homeowners to declare whether their Vancouver home was their “principal residence” using a definition similar to that in the B.C. Home Owner Grant. Such residences that are regularly occupied, or secondary homes lived in by tenants or family members would be exempt from the tax.
Staff would then perform random and snitch-driven audits to sniff out homeowners who had not been truthful. Auditors would request things like drivers’ licences, health cards and documents from the Canada Revenue Agency for proof of principal residency — proof that the city can now legally demand given recent changes to the Vancouver Charter, Llewellyn-Thomas noted.
When asked if she really thought people would self-declare an empty home, Llewellyn-Thomas said: “It’s the same as the income tax process. That’s the basis of our tax system here in Canada and so the audit process and the complaints process will keep people honest.”
When people are found not to have been honest, they will be hit with a penalty. What that penalty will be is yet to be decided.
Also yet to be determined is who, precisely, will be exempted from the tax. It’s one of the biggest questions residents who find themselves away from their homes for months at a time will have about the tax, and it’s one that staff don’t have the answer to. Robertson was quick to say very few Vancouver residents would be subject to the tax, but staff plan to consult residents this fall on how far reaching it should be.
“We understand that there are lots of different reasons why people have left their homes empty,” Llewellyn-Thomas said.
“We will be testing various scenarios and asking the public to bring us scenarios as well.”
Among the exemptions staff have proposed for discussion so far include homes that are:
• In probate or whose owner or tenant is in care;
• Subject to rental restrictions;
• Undergoing major renovations.
Empty laneway houses or basement suites would not be taxed as long as at least one unit on the same parcel of land is occupied, according to the report. But as to whether a home that is empty for six months a year should be treated like one that’s empty for nine? Staff don’t know that yet either.
The most obvious homes that city staff want to tax are those that are empty year-round, year after year. When asked whether Vancouver residents could afford to rent the kinds of houses and condos whose owners can afford to keep them perpetually empty, Llewellyn-Thomas said staff expect “when the supply of rental accommodation increases, the price and the supply and demand will find an equilibrium.”
At least $2 million in revenue would be generated from the tax annually and that would be enough to cover the costs of administering it, Robertson estimated. Any revenue earned above expenses would go to affordable housing, he said.
Robertson was quick to caution that the tax “is not a silver bullet” that would lift the vacancy rate on its own, but “an important tool to start the shift.” He expected many to rent their homes rather than pay the tax.
“Some people who can afford it will not want to rent out their property, and therefore, they’re going to make a generous contribution to affordable housing in Vancouver,” he said.
SOURCE < VancouverSun
September 16, 2016
When And What Taxes Are Due For The Purchase Of A Property In BC?
I'm sure most have heard by now but in case you didn't the BC Government announced at the end of July that
Non Residents will now be subject to a 15% PTT(Property Transfer Tax) when they purchase homes here in the Lower Mainland.
That same PTT has not changed for us BC Residents; that is 1% of the 1st 200K of the purchase price & 2% of everything thereafter. Unless you're a 1st time HB making a purchase under 475K. Or, and this is new as of this spring, you purchase a brand new property; then any BC Resident is exempt from the PTT up to 750K Purchase Price. Keep in my though on a purchase of a brand new place you still have to pay GST; existing properties you do not.
Clear as mud? Hopefully a little more clear than that. If you have any tax related questions with regards to buying a home please don't hesitate to contact me anytime.
310-328 West Hastings Street
September 15, 2016
Master Planned West Vancouver Developement
West Vancouver developer British Pacific Properties (BPP) has launched a public consultation drive to help to bring to life a master-planned community above the Upper Levels Highway that they’re calling their most ambitious development since Park Royal shopping mall in 1950.
BPP is asking the community to help shape the 350-acre master plan for Cypress Village, the first significant mixed-use development above the Upper Levels Highway in West Vancouver.
The idea for a village near the first switchback of Cypress Bowl Road emerged in 2004 and focuses on a tract of land between the Rodgers Creek neighbourhood to the east and the future Cypress West neighbourhood to the west, and bound by Westmount and Cypress creeks.
The company is working on “one of the most comprehensive” community engagements ever undertaken by a single private property owner in Metro Vancouver, BPP president Geoff Croll told the Sun last week.
Croll said they’ve enlisted the public’s help to shape three different master plans with varying levels of density that would eventually be brought formally to council. Cypress Village would include houses, townhouses, apartments, as well as rental and seniors’ housing. Croll said the project could also include a community centre, civic plaza and several shops, services and restaurants.
Croll described the first of three possible plans as having a compact, commercial area similar to Dundarave, divided by a main street and surrounded by housing. A second option suggests a “mini Whistler”, with a pedestrian-only commercial area surrounded by four-to-six storey buildings; and a third plan — similar to Vancouver’s Olympic Village — would have a concentration of taller, mixed-use buildings with lower density buildings surrounding the core.
“A key part of the process included inviting high-profile speakers to talk to the community about urbanism and smart growth to broaden the discussion about how built environments can influence our quality of life,” Croll said.
The speakers included Richard Florida, an urbanist and author of The Rise of the Creative Class; Charles Montgomery, author of Happy City, and demographer David Foot, who wrote Boom, Bust & Echo.
“It’s a great way of sparking dialogue, of sparking rational debate,” Croll said. “It’s people just talking about what community means to them.”
He said Cypress Village would be more varied than a neighbourhood of single-family homes so common in West Van. “There’s an opportunity there to put everything on the table. What does the community need? What does the community want? And how can we accommodate that?”
West Vancouver’s manager of community planning David Hawkins declined an interview, saying in an email that the updated Cypress Village plan won’t be presented to council until later this fall. But he told the CBC in April, 2015, that the centralized village concept aims to preserve much of the mountainside for environmental reasons, including protecting 500-year-old trees in the area.
A volunteer citizens’ working group completed a report of the Upper Lands — including the Cypress Village plot — in June, 2015, which listed 29 recommendations including that residential development should not go above 365 metres elevation, or the 1,200-foot contour line. The group also recommended the prevention of housing sprawl in the area.
Croll said BPP has no plans to develop any residential properties above the contour line, but is considering alternative community uses.
“What doesn’t the community have? They don’t have a hospital, they don’t have a post-secondary institution,” he said. “They don’t have a hotel, and so those are the uses you could do above 1,200 feet that are consistent with the recommendations from the Upper Land Working Group, and the zoning would also meet the needs of the community.”
West Vancouver city councillor Nora Gambioli lauded BPP’s public engagement drive. “They’re doing something very creative,” she said last week. “They’re doing their best to bring in these progressive speakers, who are talking about all these great things like demographics and urban planning.”
Gambioli said she attended two of the three speaking events. “They’ve had a big attendance, which is great, but a lot of the people I see there are the people who are already involved.”
She said she supports the Cypress Village idea, but not the timing. “It’s a wonderful concept,” she said. “But the district needs to balance their duties to all other projects and ideas … BPP is pushing this because this is their business.”
She said the district has many other priorities that require attention from staff and council. “We have a lot of other locations for development, which are much closer to transportation, which are much closer to schools that already exist, and much closer to fire halls that already exist.”
Croll said BPP hopes to wrap up the creation of the framework plans imminently. “Then we’ll go away and fine-tune these framework plans, and then we’ll present those to the municipality later in the fall,” he said. “Then the municipality would consider whether they want to move forward with committing resources to taking that work that we’ve done and then start phase two,” he said.
SOURCE < TheVancouverSun
September 8, 2016
Freedom From Your Mortgage? You'll Pay For That...
You'll pay for the privilege of paying of your mortgage. How much and what are the fees and costs for is explained very well by a fellow mortgage professional, Rob McLister, in a recent Globe & Mail article. He'll explain all the do's and dont's for when that happy day does come where you're in a position to pay that sucker off!
See below for the full article and details:
"Expect a goodbye kiss from your lender when you finally pay off your mortgage.
An example of inappropriate contact? You bet. A goodbye kiss is the euphemism in the mortgage biz for the fees that clients are typically charged when they finish paying their mortgages and reach a zero balance.
Paying your mortgage off is a highlight personal finance moment in life – an opportunity to shift major amounts of household cash flow from debt repayment to something else. May I suggest retirement savings if you’re stuck for ideas.
There are costs to mortgage freedom that suggest two rules for approaching your final payment. One is to have as much as a few hundred bucks available to pay your discharge fees, and another is not to get so over-amped about mortgage freedom that you pay your balance owing early. Do this and you will likely increase the costs of ending the relationship with your mortgage lender.
Discharging a mortgage is more complicated than simply making a final payment on a debt. When you arranged your mortgage, your lender registered a lien against the title of your home as security in case you don’t pay what you owe. The discharge removes this lien, with administrative charges potentially coming from both your bank and the province.
All-in costs are typically in the area of $250, but vary from province to province. For example, Toronto-Dominion Bank said it charges $260 in Ontario and $75 in British Columbia.
A way to potentially make this money back over time is to inform your home insurer that there is no longer a mortgage on your home. The mortgage-free discount at some insurers can run as high as 10 to 20 per cent, but don’t get your hopes up. Some firms reserve the discount for people who are mortgage-free and don’t have a line of credit secured by their home.
Don’t shut down your home equity lines of credit just to get this home insurance discount. HELOCs, as they’re known in the banking biz, are the lowest-cost and most flexible way for financially disciplined people to borrow. They are also a good alternative to reverse mortgages for seniors who need cash.
Online banking gives you the opportunity to watch your outstanding mortgage balance wind down over time as you make your payments. When you get within a few months of the end, you may be tempted to speed things along by paying off the remaining balance in one lump sum.
Resist the impulse. Though you’re close to the natural end of your mortgage, a prepayment penalty will likely apply in this situation. “If you’re, like, a month away from your last payment and you break your mortgage, you can still be charged three months’ interest,” said Robert McLister, a mortgage planner and founder of RateSpy.com. “Some lenders will only charge the interest balance due until maturity.”
Generally speaking, the penalty for breaking a fixed-rate mortgage is the greater of three months’ interest on your mortgage or a calculation called the interest rate differential, or IRD. The IRD compensates your lender for interest you would have paid if you’d stuck to your scheduled payments. Variable-rate mortgages typically use the three months’ interest penalty.
If you break a mortgage well before it’s paid off, you’ll typically pay the IRD. Three months’ interest will apply to a mortgage on the brink of being paid off because it would deliver the higher penalty fee to your lender.
Depending on your lender, breaking a mortgage in the early years can also generate what’s called a reinvestment fee. For example, TD charges a $300 reinvestment fee for variable and fixed-rate mortgages that are paid off early during the first term. TD says the fee helps offset the costs of acquiring and funding a mortgage.
Mr. McLister describes the reinvestment fee as “one of those ‘what the hell is this’ charges.” But the discharge fee charged to people who have dutifully paid their mortgage to the end will also grate. Maybe your lender will waive the fee – it never hurts to ask, especially if you’re been a long-time loyal client. Otherwise, consider the payment one last toll to be paid on the way to mortgage freedom and a big bump in your monthly retirement savings."
cell: 604 505 7109
September 2, 2016
Does the U.S. Federal Bank Plan on Raising Interest Rates? If so, when? And how would that affect Canada?
A recent article from Canadian mortgage lender, First National, discusses the fact that conventional wisdom is what happens in the States happens here in Canada; but is this still the case?
See the full article below:
"It is conventional wisdom that if you want to know what is going to happen in Canada you watch what is happening in the United States.
Lately all the talk in the U.S. has been about interest rates. Both the Federal Reserve and the Bank of Canada have wanted to raise rates for some time and the Chair of the Fed says the case in favour of a hike is stronger. However, during her speech at the annual central bankers’ gathering in Jackson Hole, Wyoming, Janet Yellen offered no notion about when that might happen.
The U.S. Fed has three more policy meetings scheduled before the end of the year, in September, November and December and there are those who speculate there could even be two increases in that time. It seems unlikely though. With the presidential election, sluggish growth, sub-optimal employment and inflation below its 2.0% target, the Fed is not under a lot of pressure to move as fast as some of the hawks might like."
September 2, 2016
Metro Vancouver Home Sales Return To Typical August Levels
For the second straight month, home buyer demand in Metro Vancouver* moved off of the record-breaking pace seen earlier this year and returned to more typical levels.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Metro Vancouver totalled 2,489 in August 2016, a decline of 26 per cent compared to the 3,362 sales in August 2015; 10.2 per cent less than the 2,771 sales in August 2014; and one per cent less than the 2,514 sales in August 2013. August 2016 sales also represent a 22.8 per cent decline compared to last month’s sales.
From a historical perspective, last month’s sales were 3.5 per cent below the 10-year sales average for the month.
“The record-breaking sales we saw earlier this year were replaced by more historically normal activity throughout July and August,” Dan Morrison, REBGV president said. "Sales have been trending downward in Metro Vancouver for a few months. The new foreign buyer tax appears to have added to this trend by reducing foreign buyer activity and causing some uncertainty amongst local home buyers and sellers.
“It’ll take some months before we can really understand the impact of the new tax. We'll be interested to see the government's next round of foreign buyer data."
New listings for detached, attached and apartment properties in Metro Vancouver totalled 4,293 in August 2016. This represents an increase of 0.3 per cent compared to the 4,281 units listed in August 2015 and an 18.1 per cent decrease compared to July 2016 when 5,241 properties were listed.
The total number of properties currently listed for sale on the MLS® in Metro Vancouver is 8,506, a 21.9 per cent decline compared to August 2015 (10,897) and a 1.9 per cent increase from July 2016 (8,351).
The sales-to-active listings ratio for August 2016 is 29.3 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.
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $933,100. This represents a 31.4 per cent increase compared to August 2015 and a 4.9 per cent increase over the last three months.
“In aggregate, we continue to see an imbalance between supply and demand in most communities. However, we’re also seeing fewer detached sales in the highest price points and fewer detached home sales relative to all residential sales,” Morrison said. “This is causing average sale prices to show a decline in recent months, while benchmark home prices remain virtually unchanged from July.”
The average price is the simplest home price measure to explain but is not the most accurate since it may be skewed by the mix of properties. More high-end or low-end sales will skew the number up or down. Based on the Consumer Price Index, MLS HPI® benchmark prices are a more reliable and stable indicator of typical home prices across regions over time.
Sales of detached properties in August 2016 reached 715, a decrease of 44.6 per cent from the 1,290 detached sales recorded in August 2015. The benchmark price for detached properties increased 35.8 per cent from August 2015 to $1,577,300. This represents a 4.2 per cent increase over the last three months.
Sales of apartment properties reached 1,343 in August 2016, a decrease of 10.1 per cent compared to the 1,494 sales in August 2015.The benchmark price of an apartment property increased 26.9 per cent from August 2015 to $514,300. This represents a 6.1 per cent increase over the last three months.
Attached property sales in August 2016 totalled 431, a decrease of 25.4 per cent compared to the 578 sales in August 2015. The benchmark price of an attached home increased 31.1 per cent from August 2015 to $677,600. This represents a 7.1 per cent increase over the last three months.
September 1, 2016
Expect To See More Purpose-Built Rental In Canadian Real Estate
Whether or not you are familiar with the term "purpose-built rental stock," chances are that you will be hearing more about it soon.
The Canadian real estate market is a major driving factor for the economy right now, and the rental market segment is a contributing force. Purpose-built rental units are making a comeback and in coming years they will play a larger role in the Canadian rental real estate market.
The Canada Mortgage And Housing Corporation (CMHC) defines purpose-built rental stock as "privately initiated, purpose-built rental structures of three units or more."
If you can't picture what that looks like, a quick drive down the Gardiner Expressway will make it very clear. Interest rates are low, renter demand is high and investors are looking for alternate income streams. These combined factors create the perfect condition for purpose-built housing projects to thrive.
Buying a home is far less attainable than it used to be for young couples and home ownership isn't the holy grail of retirement that it was for previous generations of Canadians.
Primary vs. Secondary Rental Market
Properties within the rental real estate market are categorized into two sub-groups. The primary rental market consists of purpose-built rental stock, which are large structures with multiple units that were built with the intent of each unit being rented. Most of these structures are apartment buildings, as the primary rental market (made of purpose-built rental stock) consists of rental units that exist within privately owned structures in groups of three or more, including both apartment buildings and row housing divisions.
On the other side, the secondary rental market consists of renter-occupied rental units that do no fall into the above category. This includes buildings with fewer than three units, condominiums (often which have a mix of owners and renters) single detached homes and various other structures. This market is steadily growing along with sprawling urban developments, but this has been the case for several years.
On The Rise Since 2000
During the mid 90s, construction of new purpose-built rental projects took a major nose dive. After Canadian interest rates hit an all-time high of 16 per cent in February of 1991, to little surprise, people weren't buying properties. Since 2000, interest rates have been below five per cent and real estate has been sky rocketing, including construction projects in both the primary and secondary rental markets.
Furthermore, when borrowing money is cheap, both builders and buyers of apartments and condos reap the benefits. Lowered interest rates mean less debt for builders, and low mortgage rates makes buying more affordable, especially for first-time property owners. Both factors fuel the need for new developments, and the added jobs created from all these projects has certainly helped the Canadian economy that is experiencing tough times in other sectors like manufacturing and energy.
Fresh Investment Opportunity
As investors and stock holders deal with a stormy economic situation, new investment streams are needed, and real estate is booming. Builders are hammering out buildings in record numbers, and investors like the steady and reliable income that the purpose-built units provide. Since the 1990s, the percentage of apartment construction projects that are purpose-built has never been higher. While there is debate of how much of that can be accounted for by foreign investment, there is no shortage of articles talking about the effect of Chinese investors on housing prices.
Renting is Back!
The idea of working for your whole life, making sacrifices and being "house broke" to pay your mortgage is becoming an antiquated train of thought, especially when prices are this high. Buying a home is far less attainable than it used to be for young couples and home ownership isn't the holy grail of retirement that it was for previous generations of Canadians.
There are a host of social factors that also contribute to the increase demand for rental units. The consumeristic, modern mentality of making life count and living in the moment means short-term life enjoyment (travel, fine dining) can supersede long-term financial goals.
You'll find it can be a good time to be a renter while housing prices continue to stay at multi-year highs.
Whether you attribute that to the generation of Millennials or simply acknowledge that many people now prefer to have liquid assets and enjoy themselves, Canadians are living a more nomadic lifestyle than previous generations. This includes life changes like switching careers (let alone jobs) and living in the proverbial "now."
The future of Canada looks extremely bright, and there are new Canadians every year looking for places to live in high-demand markets, thereby also driving up the need for rental units.
The vacancy rates for the primary rental market in Canada was 3.5 per cent as of October 2015, which is a 0.5 per cent increase from the previous year. Rental markets in cities like Calgary (that have a high number of temporary energy sector workers) are soft, contributing to the overall high vacancy rate which is much lower in the blazing hot Toronto and Vancouver markets. Overall, there are lots of options out there and new developments are transforming Canadian neighbourhoods into world renowned cities.
This means that smart renters know there are deals to be had, which is why it's so important to use the resources at your disposal to find the best place to live. Apartment and real estate finders like RentSeeker.ca have helped thousands of renters across Canada find apartments to rent using intuitive search features which allow users to sort through thousands of apartment listings which match the criteria searched.
There are more options in the rental market than ever before, and there are no signs of it slowing down, so use the resources available online and you'll find it can be a good time to be a renter while housing prices continue to stay at multi-year highs.
SOURCE > TheHuffingtonPost
August 25, 2016
Vancouver's West Broadway Is In The Midst Of A "Land Rush"
The building at 950 West Broadway in Vancouver is unremarkable, a two-storey concrete structure that is home to an IHOP, a Japanese restaurant and an insurance broker, among other things.
But it sold last May for a phenomenal $46-million, according to B.C. Assessment Authority records, even though it had been assessed at just $18-million. It was the latest record-breaking sale in what has been a year of high-water marks for commercial properties along Broadway.
Why so high? As Colliers, the agency listing the property, put it: “Without question, the highly anticipated UBC-Broadway Rapid Transit Line has placed a spotlight on West Broadway and amplified demand for land and investment assets.”
That sale and others demonstrate the impact that a future transit line – even one that has no confirmed funding or firm completion date – can have on an area.
“There’s been a land rush on Broadway,” says Jon Stovell, the chair of the region’s Urban Development Institute. “Developers have been purchasing with an expectation it will be one of the densest areas in the region.”
That’s all in anticipation of the extension of the Broadway SkyTrain line from Commercial Drive in the east to Arbutus Street in the west, a plan that has been talked about for a couple of decades.
If built, the line would serve a corridor that has been called Vancouver’s third downtown, a long strip that is already packed with medical offices, restaurants and stores. Some parts of it have office towers already, especially near Vancouver General Hospital, but much of it is unprepossessing and low-rise.
But hopes are high that the new transit line will actually happen this time, after Prime Minister Justin Trudeau made specific promises about transit funding for Broadway during his campaign last fall.
So far, only initial planning money has been committed. Everyone is now waiting for what’s called the second-phase funding, which is supposed to be negotiated this fall in anticipation of a much bigger commitment to transit projects across the country by the Liberals in their second budget next February.
Even when that comes through, though, it could be as much as a decade before the Broadway extension opens.
As well, it’s unclear at this point whether the city will rezone the area for more density. At the moment, much of the central corridor is zoned to allow for buildings that are equivalent to just three times the lot size.
“Once we have confirmed funding and an annual project, we’ll engage in a planning process,” says Jane Pickering, Vancouver’s acting general manager of planning. “Around transit stations, it’s pretty clear there will be some densification.”
One area that does have the green light for greater density is around the existing Commercial-Broadway station, the second-busiest in the transit system. Increased density around that station was recently approved as part of the Grandview-Woodlands community plan, which is mapping out what services are needed as the neighbourhood grows by 10,000 people over the next 25 years.
There is a Safeway grocery store with a large parking lot next to it, where developer Ian Gillespie of Westbank Corp., who has worked with Safeway on other projects in the past, is in the midst of designing a new complex of towers with residential and office space.
Mr. Stovell says he’s certain the province, which has to commit to millions of dollars in funding, along with the federal money, for the project to proceed, will be pushing the city to allow more density.
“Clearly, the province is convinced the Broadway line has to go along with densification. They’re not going to allow what happened on the Expo line again,” he says.
The city’s first transit line opened in 1986 – the Expo line ran from downtown Vancouver to Surrey – and is remarkable for the low density of development that still exists around its stations 30 years later.
But there are no firm guarantees on exactly what density will be allowed.
That’s not stopping property buyers, though.
Mr. Stovell’s company, Reliance Holdings, acquired a large site eight blocks east of the IHOP restaurant, the current Mountain Equipment Co-op store that is due to move in a couple of years.
The property, currently valued at $47-million, was acquired by his company last June for a price that doesn’t appear in B.C. land records.
Another noted land deal along the corridor was the purchase by the long-established Vancouver family, the Pappajohns, of the Denny’s restaurant site on Broadway three blocks west of the IHOP site.
That was purchased for $26-million, double the 2015 assessed value, in February this year.
Besides those purchases, the City of Vancouver and TransLink, the transportation agency that will be building and operating the Broadway line, have bought pieces of land at key locations, several sources say.
But one problem with the early buying at high prices is that it may actually hinder development, at a time when Vancouver is suffering from a severe squeeze on housing. Both house prices and rents have been soaring in the past year, as existing and new residents, along with investors, have competed hard for the slow-growing supply of housing.
Some of the current speculation is “stripping more supply out of the market,” says Avison Young principal Mehdi Shokri. “Transit is supposed to be helping spur development, but we’re going to find we’re adding more pressure to the supply problem,” he says.
As a result, he says, sites west of where the new line is supposed to stop are seeing more development activity because builders there know there is likely to be no change, so they’re proceeding on the basis of the current zoning.
But in the hot new transit-line area, people are holding off.
For example, the buyer of 950 West Broadway is a company called Hometop Enterprises that was created just last February.
The company’s incorporator is Bao Meng Wen, with an address in the city’s upscale Kerrisdale neighbourhood. The company does not appear to have any development experience.
New purchasers like that feel that they can only get a return on the high prices they paid if they get considerably more density – and will wait however many years it takes to get that, says Mr. Shokri.
Mr. Stovell adds, “We won’t see a lot of projects breaking ground until there is clarity on the zoning.”
But he expects it will go quickly after that. He is hoping to build a large rental project on the MEC site and anticipates that others might do the same.
“One of the things I think you’ll see out of the gate is a lot of rental. Rental works in the current market.”
SOURCE > TheGlobeAndMail
August 16, 2016
Why Canada Is A Great Place To Own Real Estate
Canadian real estate prices remain strong. This is in large part due to a low interest rate environment that not only affects borrowers but investors as well. With low deposit interest rates in Canada, US and Europe, investors are looking for appreciating assets to invest in.
Canada with its diverse stable economy is a desirable place for all sorts of investments and real estate has been the choice for many looking to acquire assets that appreciate.
Meanwhile, the Federal and Provincial governments have been trying to slow down the pace at which home prices have been increasing without any noticeable success and with some unintended consequences. The demand just seems to outweigh the supply which could be for years to come in this low interest rate environment.
Now, maybe more than ever, houses are considered more than a place to live but a true financial investment and having the right financing in place is crucial to the long term performance of your investment. As your Mortgage Professional, I can provide strategies that can help you save thousands in interest costs as well as show you how to use the equity in your home to further your financial goals.
Call or email me today.
Mortgage Alliance Meridian Pacific Mortgages
August 12, 2016
Several Grandview-Woodland Areas Ripe For Redevelopment
Broadway station, Commercial Drive and Hastings Street all see significant bumps to density limits.
Several pockets of East Vancouver are now ripe for redevelopment, thanks to Vancouver city council’s July 28 approval of the Grandview- Woodland Community Plan (GWCP), which provides direction for future rezonings in the area bounded by East Broadway, Clark Drive, Nanaimo Street and Burrard Inlet.
The plan significantly increases development potential for several areas, including:
•near the corner of Commercial Drive and Venables Street;
•around the Broadway and Commercial Drive SkyTrain station; and
•the strip of East Hastings Street east of Clark Drive.
The plan has drawn strong opposition from many residents, who created the No Tower Coalition and protested against the 12-storey tower that the Kettle Society and Boffo Properties are proposing to build at the corner of Commercial Drive and Venables Street.
The coalition posted an open letter, castigating council for using what it called a “bait and switch” tactic.
That is because, in addition to approving the GWCP, council separately voted to leave open the possibility that, at a future rezoning, it could vote to allow the Kettle Boffo building to rise 12 storeys, instead of the nine-storey limit that the coalition had wanted and had believed council had agreed to. Current zoning on the site is for up to four storeys.
The tallest tower in the neighbourhood, however, is likely to be twice the height of the 12-storey Kettle Boffo tower.
The GWCP raised the maximum height limit to 24 storeys for sites around the East Broadway and Commercial Drive SkyTrain station.
That includes Crombie REIT’s 2.4-acre property, which has a single-level Safeway grocery store and a large single-level parking lot.
“There were higher buildings proposed a few years ago for that [Safeway] site – up to 36 storeys,” Kent Munro, who is the city planning department’s assistant director for midtown, told Business in Vancouver. “That caused a big backlash in the neighbourhood and was part of the reason that we spent another two years on the community plan.”
Munro believes the widespread consensus in the neighbourhood was that the land around the transit hub should be significantly denser than the four-to-five storey limit for redevelopment in the area.
“We had surprisingly little pushback or negative response to it,” he said.
When Crombie REIT representatives spoke to council, they hinted at a possible desire for redevelopment and to assure everyone that the intent would be to keep a grocery store on the site, Munro said.
No one from the company has yet filed an application to rezone the site to be what the GWCP now allows.
A final area that has significantly increased redevelopment potential is the stretch of East Hastings Street that moves up a hill east of Clark Drive.
The GWCP sets out that the tallest towers in that stretch will be 18 storeys. That matches height limits on East Hastings Street west of Clark Drive that were set out in the Downtown Eastside Community Plan that council approved in 2014.
“As you go eastward and up the hill, the towers will step down until, eventually, when you get up near Victoria Drive, it’s back down to six storeys and it will merge back into the Hastings Sunrise shopping area,” Munro said.
Heightened density potential for that strip could spark property sales in a way similar to what happened after council approved the West End Community Plan (WECP) in 2013.
SOURCE > BusinessInVancouver
August 11, 2016
What Is Canadians Top Financial Priority?
According to a recent survey by Bank of Montreal Canadians top financial priority is debt reduction. 30% of Canadians say it's their #1 priority. A mortgage is definitely your highest debt but usually has the best rate so if you have any other debts like credit card, line of credit or auto loan you would, most likely, want to pay those off first. When it comes to your mortgage, depending on your mortgage lender/bank, you should have several different options to pay that sucker off sooner rather than later. As a mortgage advisor I can also help you determine what you need to do in order to pay off your mortgage by a certain date or year. I can also produce several scenarios along with amortization charts in order to help you. Feel free to reach out to me anytime for advice around this or any other kind of home financing questions you may have.
Here's the full article by MortgageBrokerNews.ca on Canadians top priority; paying down debt!:
"The top priority of 1 in 3 Canadians is to reduce or eliminate debt according to a new poll by BMO.
The lenders wealth management division also revealed that investing and tax efficiency (24 per cent); saving more (23 per cent); budgeting (14 per cent); and spending on personal needs or goals (4 per cent) were the other main priorities.
Priorities change depending on life stages though with Boomers more likely to want to tackle their debt than Millennials (who want to save more).
A number of events were identified among respondents as barriers to saving more or invest. These include stock market losses, failed business ventures, divorce/separation and financial loss on a property sale."
Tony Marchigiano 310-328 West Hastings Street
Mortgage Broker Vancouver, BC
cell: 604 505 7109
fax: 604 909 4666
SOURCE > MortgageBrokerNews
August 5, 2016
Renewing Your Mortgage
Renewing Your Mortgage - How it Works
Renewing your mortgage, especially if it's your first time, can be a little confusing. Your mortgage advisor should be giving you the advice you need in order to make the best decision for your current and future needs. To start this process consider the following steps to make a smooth and educated decision that is right for you:
Step 1 : Start thinking about your needs and goals.
If you're close to renewal, now is a great time to review your financial goals and your plans for the future. You might want to consider the following types of questions:
Has your financial situation changed since your last renewal?
Are you planning any home renovations or will you need additional funds?
Will you be moving within the next year?
Do you prefer fixed or variable rates, or are you unsure?
Your Mortgage Advisor should be asking you all of the above questions. If they're not or you want to determine some of this on your own try the following RBC tool for help choosing the right options:
Which Type of Mortgage is Right for Me
Step 2 : Consider renewing early!
Some lending institutions will give you the ability to renew earlier than the maturity date. RBC allows you to do this up to 120 days out from your renewal/maturity date so you have ample time to discuss your current mortgage needs. If you renew early, you'll be able to lock in at current interest rates even sooner - which could save you thousands of dollars in interest if rates rise before your renewal date.
Step 3 : Review your mortgage renewal document!
Most lending institutions will send you a renewal letter in the mail. Review this document in detail. Ensure you are being offered competitive rates and home flexible home financing solutions then book an appointment with your advisor to discuss your current needs and future plans to ensure you are going into the right mortgage term and financing solution for your individual needs.
It can be that simple!
Tony Marchigiano310-328 West Hastings Street
Mortgage BrokerVancouver, BC
cell: 604 505 7109
fax: 604 909 4666
August 3, 2016
REBGV July STATS
Metro Vancouver* homes sales resembled more typical levels in July.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in the region totalled 3,226 in July 2016, a decrease of 18.9 per cent from the 3,978 sales recorded in July 2015 and a decrease of 26.7 per cent compared to June 2016 when 4,400 homes sold.
This is the first time since January that home sales in the region have registered below 4,000 in a month.
“After several months of record-breaking sales activity, home buyer demand returned to more historically normal levels in July,” Dan Morrison, REBGV president said.
Last month’s sales were 6.5 per cent above the 10-year sales average for the month.
“Home sale activity showed some moderating signs in late June and this carried into July,” Morrison said. “We’ll wait and watch over the next few months to see if this marks the return of more normal market trends.”
New listings for detached, attached and apartment properties in Metro Vancouver totalled 5,241 in July 2016. This represents a 2.5 per cent increase compared to the 5,112 units listed in July 2015 and a 10.8 per cent decrease compared to June 2016 when 5,875 properties were listed.
The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 8,351, a 27.4 per cent decline compared to July 2015 (11,505) and a 6.9 per cent increase compared to June 2016 (7,812).
The sales-to-active listings ratio for July 2016 is 38.6 per cent. Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark, while home prices 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 $930,400. This represents a 32.6 per cent increase compared to July 2015.
Sales of detached properties in July 2016 reached 1,077, a decrease of 30.9 per cent from the 1,559 detached sales recorded in July 2015. The benchmark price for detached properties increased 38 per cent from July 2015 to $1,578,300.
Sales of apartment properties reached 1,602 in July 2016, a decrease of 7.3 per cent compared to the 1,729 sales in July 2015.The benchmark price of an apartment property increased 27.4 per cent from July 2015 to $510,600.
Attached property sales in July 2016 totalled 547, a decrease of 20.7 per cent compared to the 690 sales in July 2015. The benchmark price of an attached unit increased 29.4 per cent from July 2015 to $669,000.