August 28, 2015
Stock Markets & Interests Rates
In their most recent commentary, Mortgage Lender First National, discusses why world stocks markets have been on a wild ride lately at what that might mean for interest rates moving forward:
"The U.S. Federal Reserve has triggered the latest round of speculation about interest rates with the release of the minutes of its July meeting. Those notes seemed to indicate a bias toward an interest rate hike.
At the time that might have been true but since then there have been some changes, in particular China's devaluation of its currency and the growing strength of the U.S. dollar. American exports are hindered by a strong greenback and a rate hike would only add to that problem. There are also concerns U.S. employment is still not as robust as the Fed would like.
There are concerns the Fed needs to worry about its "credibility" if it does not implement a rate increase during its September 16 – 17 meeting. But, all but a handful of analysts expect the Fed to leave its policy rate unchanged.
In Canada the central bank announces its next interest rate decision on September 9th. Between now and then both unemployment and GDP stats will be updated.
The GDP numbers are widely expected to show Canada has dropped into a technical recession and the unemployment figures are expected to show, continued, uneven job growth."
August 28, 2015
Vancouver Building Permits Hit New Heights
The first six months of last year saw record levels for building permits being issued in Vancouver, but this year’s total has eclipsed that by almost 20 per cent.
Last year, the value of building permits issued until July 1 was a record setting $1.12 billion. This year’s total to July 1 is $1.34 billion.
Much of the building activity is in the development of new office space in the downtown core, but there are also seven major projects underway elsewhere in the city. Among those being built are: The Exchange at 819 West Pender (305,000 square feet); the Renfrew Business Centre at 2665 Renfrew Street (480,000 square feet with the 170,000-square-foot first phase under construction); and Marine Gateway at 400 Southwest Marine Drive (269,000 square feet).
Another 14 projects have been approved with a total of 3,592,400 square feet of office space for development.
A total of 4.5 million square feet of new office space is presently under development in the city.
Brian Jackson, the city’s general manager of planning and development said it wasn’t just commercial development fuelling the record levels of building activity.
“This is Vancouver firing on all cylinders. It’s everything from laneway houses to mid-rise development, to rental housing that are getting under construction now, to highrise residential projects. It’s office development like we haven’t seen in decades, it’s industrial development such as at the Renfrew industrial park — it’s in all sectors of the economy,” said Jackson.
Asked if he was concerned about the amount of new office space being built and the likelihood of the market being saturated, Jackson said the city leaves that concern to the private sector.
“We don’t restrict the amount of office development — it’s entirely up to the market. It does tend to happen in cycles and they usually overbuild for a year or so and nothing happens for a while and then it gets filled. It’s usually on a seven-year cycle and we are at the tail-end of a cycle and likely the projects under construction now will be the last for a few years until the market takes up the capacity.”
Jackson said it wasn’t too long ago that there was a two or three per cent vacancy rate in office rentals in the downtown which “was absolutely remarkable.”
“Now we are up at around nine per cent in the core area which means you can get slightly better office deals for leasing. But of the projects under construction, the major one is The Exchange and they are continuing to try to find tenants and continuing to build,” said Jackson.
Mayor Gregor Robertson said it was clear the city’s economic strategy was working “with 2015 on pace to see records surpassed for the value of new construction activity, for new office space completed and for growth in our city’s tourism sector.”
“Together we are demonstrating that a strong economy and our Greenest City progress go hand in hand and city hall will continue to use every available resource to support job creation, investment and innovation in Vancouver,” said Robertson.
August 21, 2015
Fall Décor Is All About The Mix
If you're looking to update your home décor this fall, you'll find new furniture profiles, accents and textures galore, in everything from rugs to wall coverings to ceramics and bedding.
The trend toward mixing things up continues, from rustic to contemporary with a dash of traditional.
"What's interesting is the warm breath of traditional style that infuses the season's midcentury influence: Furniture, textiles and accessories, no matter how sleek-lined, are warm, inviting and touchable," said New York designer Elaine Griffin.
Also coming on is the handmade or "collected" vibe.
"Our desire for authenticity, as well as for finely crafted and small production design, is resonating," said Jackie Jordan, color marketing director for the paint manufacturer Sherwin-Williams. "We want to know whose hands actually created the object we're purchasing, and how and where the materials were sourced."
Griffin concurs: "This season, the handmade look reigns supreme, with highly-textured fabric weaves, wallpapers (faux bois, faux hand-painted murals, and multicolored and metallic-layered geometric prints) and appliquéd effects on upholstery."
Expect more tabletop accent pieces and furniture labeled with place of origin and/or maker's information, whether they were crafted in Indiana or India.
One new kid in town is Scandinavian style. Simple, clean lines, gentle colors and charming motifs make for a look that's contemporary and accessible.
And the dark horse? With the popularity of midcentury modern, some designers are ready to move forward to a 1980s redux. Decorators have welcomed ‘60s- and ‘70s-era macramé, flame stitch, classic furniture and retro fabric prints. Will they also embrace Memphis style — the ‘80s design movement characterized by disparate geometric shapes and contrasting colors? Griffin thinks there'll be more to this trend come spring.
Jordan sees a shift "to soft monochromatic palettes," citing creamy whites and mineral tones — gray, khaki, earth tones, and nature-inspired hues like spruce, smoke, pond and shell pink.
"The serenity of these colors provides a sense of calm to balance our hectic lifestyles, and celebrates natural materials, honed, soft and sheer finishes," she said.
Stronger hues are in play, too. Griffin sees last spring's pale pastels evolving into deeper, Southwestern hues like terra-cotta, pale pumpkin, deep salmon, dusty rose citron, and smoky French and teal blues.
Look too for boozy, midcentury modern hues: brandy, burgundy, whiskey and merlot, as well as navy and olive.
Again, it's all about the mix. "For both furniture and accessories, when it comes to finishes this fall, one is a lonely number," Griffin said. "The freshest looks combine at least two colors and materials, like black lacquer with metallic accents (especially brass and copper); white enamel with gleaming metallic, acrylic pieces in harvest hues; and industrial iron paired with chrome."
Patinated and polished brass, marble, copper, steel and mirror clad everything from accent pieces to furniture. See West Elm, Wisteria and CB2 for examples.
While silver and chrome are big players, Michael Murphy, design and trends producer for Lamps Plus, said brass and gold will be especially strong, especially in softer, burnished tones.
"These metals can be easily introduced in the home with a table lamp, chandelier or distinct accessory like a large vase or unique table sculpture," he said.
Jordan said the handmade look extends to metals: "We're seeing materials hand-carved, forged and assembled. Imperfections and flaws in materials like iron, wood, concrete and hand-woven wool only add to the character of the piece."
One interesting place to see this trend is the bathroom: vintage-style, weathered-bronze and cast-iron fixtures. Stone Forest introduced the Ore vessel sink, inspired by an antique steel pipe cap. The Industrial series, with a cast-iron sink, towel bar and paper holder, has an old-school factory quality.
Interesting woods continue to make inroads in furniture, flooring and doors. Watch for acacia, walnut, birch, maple and beech, and finishes ranging from weatherworn to highly lacquered.
Pottery Barn's new Bowry collection of tables and storage units uses reclaimed acacia, teak and mango hardwoods. The Warren pulley lamp's rustic-finished iron and functioning pulleys make for a steampunk-style fixture.
Konekt designer Helena Sultan's Pause chaise lounge perches a comfy upholstered seat on brass or chrome legs, in several finishes.
And saddle and butter-soft leathers are strong players in ottomans, director's and club chairs, and benches.
The flip side is the proliferation of translucents like acrylic and glass, often combined with other materials.
"These materials are being combined with unique fabrics like fur to create a clearly contemporary trend," Murphy said. "We see this where the tops of settees, benches and stools are covered with a luxe fur and fabrics, and the legs are made from clear materials."
Jonathan Adler has a Lucite étagère with polished brass joinery, and a burled wood desk on Lucite legs. Gus Modern's acrylic end table is etched with a white grain pattern to look like a piece of timber.
PATTERN AND TEXTURE
Channel quilting, in which stitching runs in one continuous line, is another trend to watch for. The straight lines, even spacing, design detail and comfort all add to its appeal. "This is part of the continued resurgence of Art Deco, which is synonymous with fluid lines, bold shapes, lavish ornamentation and metallic finishes," Murphy said.
Look for rattan and other woven fibers in items beyond basketry, like wall art, bowls and ottomans.
Shags, nubby wools, Southwest-patterned flat weaves and Impressionist-patterned Indian silks will be on the floor of rug departments this fall. West Elm has some graphic kilim rugs and pillows.
Geometrics and facets cover textiles, vases and mirror frames. Some have an organic quality — think beehives or reptile skin. But rendered in iron or wood, they can have an industrial vibe.
In wallpaper, look to Tempaper, Wolfum and Timorous Beasties for intriguing patterns ranging from ‘80s Southwest to Japanese archival prints to nature themes.
August 21, 2015
It's hard to believe summer is almost over and we will be back to more normal routines soon. Generally, fall is one of the best times to purchase a home and this year it might be even busier with interest rates still very low and more selection of homes than in the spring.
While the weather will begin to cool soon, the mortgage market with more lenders competing for your mortgage remains hot. Mortgage brokers have access to many specialized lenders, giving you many more options than we've seen in a long while. All this is great news for you. This is the best time to review an existing mortgage and determine if now is the time to renew early or refinance to take advantage of all the options.
The Globe and Mail recently quoted Bank of Nova Scotia senior economist Adrienne Warren, stating: The persistence of exceptionally low borrowing costs will likely maintain a healthy level of sales in the coming months.
I can let you know if it makes sense to renew or refinance your mortgage and perhaps save thousands. In many cases it makes sense to refinance if you consolidate higher interest debt at the same time. With my expertise we can together determine if there is an opportunity to reduce your monthly payment, save you thousands in unnecessary interest cost and have your mortgage paid off years sooner.
Whether it's buying this fall or simply having a Mortgage Checkup, call me today and let's get started.
August 14, 2015
RRSP Home Buyer's Withdrawal Proposed to Increase
The current Federal Government (and I say current as they may or may not be the government in about 2 months as we're currently in an election campaign) has proposed increasing the current limit on how much a person can withdraw out of their RRSP (Registered Retirement Savings Plan) under the Home Buyer's Withdrawal Plan. They have proposed increasing it from 25K to 35K. I personally think this is a great idea and every little bit counts. As a reminder, under the HBW Plan you can take out without any tax implications as long as you pay back within a 15 year period. Note: you're also given a 2 year grace period before having to start repaying to your RRSP. This allows one to get used to their new mortgage payment plus property taxes & condo fees for strata properties.
See the full article by Canadian Mortgage Trends for full details as well as some other interesting stats:
First-time buyers with $35,000 in RRSPs may soon find it easier to buy a home. The Conservatives are proposing to increase the maximum RRSP Home Buyers Plan (HBP) withdrawal.
Today, I am announcing a re-elected Harper Government will raise this limit once again from $25,000 to $35,000, said Prime Minister Harper today. With this increase, we will continue to help families know the pride and stability of having a place to call their own.
Access to another $10,000 of down payment would let an otherwise qualified borrower purchase a home at a $200,000 higher price point, given the minimum required 5% down payment. Of course, one would still need to prove he/she can afford that much more, by meeting income, debt ratio and credit score requirements, etc.
It would be only the second hike in the limit since the HBP launched in 1992. Since then, home prices have soared 205%, but the HBP maximum has only been raised 25%.
According to CAAMP data:
- First-time buyers account for 45% of home purchases
- Most are between 25 and 34 years old
- Their average purchase price is about $308,000
- Their average down payment is $67,000 (21% equity)
Just a fraction of first-timers will benefit from this change, as the average RRSP contribution is only about $3,500 a year, and only 10% of FTBs use RRSPs to pad their down payment.
Home buyers who do take advantage of this measure and put down another $10,000 on their mortgage, would save over $1,000 of interest over five years at current rates. The trade-off, of course, is lost tax-deferred investment growth, among other risks.
August 14, 2015
"Living Platforms" - MICRO LOFTS
Vancouver is a city of development and some of the recent gab surrounds micro-lofts. This innovation allows a whole generation to afford owning in a city that is so unaffordable. The real challange is how to make efficent use of such a small space.
It’s really hard to make 425 square feet look spacious but Specht Harpman Architects managed to do just that in this once awkward New York City apartment that’s set at the top of a six-story building.
By creating “living platforms,” they were able to accommodate all the necessities an apartment might need while keeping the space open and bright. Helping with that was the fact that they were working with over 24 feet of vertical space, making it possible to create the multiple layers of “rooms.”
The compact bathroom is hidden away on the bottom floor beneath the staircase.
While the kitchen is small, it remains open to the living room.
They kept the cabinets and countertops white which helps keep it bright and airy. Every detail was kept simple as not to overwhelm the tight quarters and it really appears larger than the actual square footage.
The space under the stairs doesn’t go to waste…
It’s packed full of storage spaces!
Up the first set of stairs you have the bedroom layer which seems to almost float above the living room below.
More storage is found under this staircase which leads to the roof garden.
That’s the view when you go out to the garden.
I love the simplicity of the staircases – no chunky balusters here!
August 6, 2015
Summer Heat Doesn’t Slow Home Buyer Activity
Metro Vancouver home sales were more than a third above the 10-year average in July, while the number of homes listed for sale continues to trend below recent years.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Metro Vancouver* reached 3,978 on the Multiple Listing Service® (MLS®) in July 2015. This represents a 30 per cent increase compared to the 3,061 sales recorded in July 2014, and a decrease of 9.1 per cent compared to the 4,375 sales in June 2015.
Last month’s sales were 33.5 per cent above the 10-year sales average for the month.
“Today’s activity continues to benefit sellers as home buyers compete for the homes available for sale,” Darcy McLeod, REBGV president said.
New listings for detached, attached and apartment properties in Metro Vancouver totalled 5,112 in July. This represents a 3.8 per cent increase compared to the 4,925 new listings reported in July 2014.
The total number of properties currently listed for sale on the region’s MLS® is 11,505, a 26.3 per cent decline compared to July 2014 and a 5.5 per cent decline compared to June 2015.
"Much of today’s activity can be traced to strong consumer confidence, low interest rates, and a reduced supply of homes for sale.” McLeod said. “We have about 5,000 to 6,000 fewer homes for sale today than we've seen at this time of year over the last five to six years,"
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $700,500. This represents an 11.2 per cent increase compared to July 2014.
With the sales-to-active-listings ratio at 34.6 per cent, the region remains in seller's market territory.
“Although there aren’t as many homes for sale today compared to recent years, home buyers continue to have a range of housing options, at different price points, to choose from across Metro Vancouver,” McLeod said. “The diversity of housing options is part of what’s driving today’s demand.”
Sales of detached properties in July 2015 reached 1,559, an increase of 17.9 per cent from the 1,322 detached sales recorded in July 2014, and a 24.8 per cent increase from the 1,249 units sold in July 2013. The benchmark price for a detached property in Metro Vancouver increased 16.2 per cent from July 2014 to $1,141,800.
Sales of apartment properties reached 1,729 in July 2015, an increase of 42.7 per cent compared to the 1,212 sales in July 2014, and an increase of 42.9 per cent compared to the 1,210 sales in July 2013. The benchmark price of an apartment property increased 5.9 per cent from July 2014 to $400,900.
Attached property sales in July 2015 totalled 690, an increase of 30.9 per cent compared to the 527 sales in July 2014, and a 41.7 per cent increase from the 487 attached properties sold in July 2013. The benchmark price of an attached unit increased 7.8 per cent between July 2014 and 2015 to $511,500.
August 6, 2015
Decoding Mortgages: Collateral VS. Conventional
In a recent Expose by CBC, called "Decoding Mortgages", they discussed, once again, the positives and the negatives of a collateral mortgage when comparing it to a regular conventional mortgage.
Working in the banking industry and now the broker one I know these differences first hand. Sometimes this type of mortgage works well for people but a lot of times it does not. This is why a good, in depth discussion with someone requiring financing is the best way to determine what type of mortgage would possibly benefit them most.
Take a read in the full article below:
When shopping for a mortgage, it's easy to get lost in the fine print. And not all mortgages are created equal. There's a major distinction that you should be aware of: collateral mortgages vs. conventional mortgages.
With a conventional mortgage, the amount registered is the amount you need to borrow, so, for example, the value of your house minus the amount of your down payment. However, with collateral mortgages, the amount that's registered is the full value of the house, and can, in some cases be up to 125% of the value of your property.
Collateral mortgages are becoming more popular. In 2010, TD made a major shift: the bank was no longer offering conventional mortgages; all its mortgages would be collateral. ING made a similar move in 2011.
According to TD, collateral mortgages allow homeowners to more easily access credit, allowing them to borrow more without additional charges. In an e-mail, TD wrote:
"A collateral charge registration will allow a customer to borrow in the future without requiring a new registration. In contrast, a conventional mortgage would require a new registration if there are changes or increases in the amount of the mortgage."
However, many experts are concerned that collateral mortgages mean less choice and flexibility for consumers.
One concern is that while it can be relatively easy to transfer your conventional mortgage at the end of your term to another lender, a collateral mortgage can be more complicated, and expensive, to move, says mortgage broker Steve Garganis.
Shopping your mortgage around at the end of your term, experts advise, can save you a lot of money. While most homeowners renew their mortgages with their current lender, shopping around can save you 0.5% to 1% on your interest rate - which can mean a huge difference in how much you have to pay.
July 31, 2015
Industry Welcomes CMHC Change
The crown corporation announced its most recent mortgage rule change Monday and it’s one, for a change, that will likely be welcomed by brokers.
“In an environment where there has been nothing but tightening of rules, any positive change is welcome,” Ron Butler of Verico Butler Mortgage told MortgageBrokerNews.ca. “The average salaried person who wants to invest in rental properties will benefit.”
CMHC announced Monday that it will now consider 100 per cent of gross rental income from a two-unit owner-occupied property when an owner applies for insurance. The crown corporation will consider annual principal, interest, tax and heat on the second unit when calculating debt servicing ratios.
And according to Butler, both buyers and renters will benefit.
“Any improvement that makes the formula more liberal is good; it allows more people to buy rental properties and there is a distinct need for rental properties in the GTA so it’s all positive,” he said. “I think that may even be the CMHC’s whole point – there is a need for rental property inventory in the GTA.”
It’s a decision that will positively impact housing affordability – especially in the red-hot Toronto and Vancouver markets.
“Secondary rental suites are recognized as a source of affordable housing offered at a cost that is often lower than those for apartments in purpose built rental buildings,” CMHC said in a notice on its website.
Source < MortgageBrokerNews
July 30, 2015
Heritage Plan Will Hit Property Values
Residents in one Vancouver neighbourhood are concerned that the city council’s plan to protect heritage homes will lead to lower property values.
The council wants to make the neighbourhood of Shaughnessy a Heritage Conservation Area to stop pre-1940s homes from being torn down. Realtors and residents say that the plan will adversely affect home values.
Realtor Peter Saito told the Vancouver Sun: “The last four sales in Shaughnessy have priced demolish-able lots at $642 per square foot. I truly believe that in order to sell a rundown pre-1940 house today, we would have to sell it for $400 per square foot.”
The plan would mean that homeowners are compensated with permission to add density to homes but that is likely to impact prices.
Advocates of the scheme include Robert McNutt, who says that the heritage properties are built to high standards and are not teardowns.
Source < CanadianRealEstateMagazine
July 24, 2015
Vancouver's Booming Stadium District Gets Landscaped With Buildings
When Alvin Narod, the master builder of BC Place Stadium, wrapped up his presentation at the unveiling of plans for the project in 1981, a person in the audience spoke up that the “building looked okay, but needed landscaping.”
Narod, who would die just 21 days after accepting the role of BC Place Chair and before the roof could be raised, responded that they were going to “landscape it with buildings.”
“That, of course, is exactly what is happening today,” said Vancouver developer and architect Michael Geller, who was at the unveiling 34 years ago. “They are finally landscaping around BC Place Stadium with buildings.”
After 3½ decades as a sports-and-entertainment district, the area around BC Place and Rogers Arena is now transforming into something more amid a flurry of residential and commercial builds that could eventually keep more people spending their time and money in the stadium district, whether events are happening or not.
In June, Aquilini Development and Construction opened the first stage of a three-tower project at Rogers Arena. Aquilini Centre West is a 26-storey mixed-use commercial-residential building with 114,000 square feet of office space and 187 market rental apartments. The building, which threads into the Rogers Arena concourse, also has 50,000 sq. ft. of retail space.
Leasing is now underway for the homes and commercial space in the West building, said Kevin Hoffman, senior vice-president of Aquilini Group.
He said they’ve also broken ground on the South tower, which will have nearly 166,000 of residential space and will stand separate from Rogers Arena.
“We’ll look for that tower [to be done] in about a year’s time,” he said in an interview last week. “And then we have East Tower. We’ll probably start that tower in about a year.” The East tower will also tie into the stadium with a mix of office and residential space.
Concord Pacific is also amid a massive $1-billion development plan to eventually add 1,400 condominiums in eight buildings near BC Place at the northern end of Cambie Bridge. That series of projects includes non-market housing and adds about 90,000 sq. ft. of commercial space to the neighbourhood, which the developer is billing as False Creek Central.
A new $600-million casino, hotel and entertainment complex called Parq Vancouver is also being built in the neighbourhood.
The 775,000-sq.-ft. resort will have two hotels, Vancouver’s largest ballroom, a casino (relocated from the Edgewater Casino site), restaurants, a spa, gym and retail space. The resort will operate under Paragon Gaming Corporation, Dundee Corporation, and PBC VUR Limited Partnership. Construction is expected to be complete by the end of 2016.
The outbreak of new buildings is filling a void in the area, Hoffman said. “We think it’s going to be a vibrant atmosphere around the arena, trying to get people there during the day and during the evening so that the whole neighbourhood works.”
He said more opportunities could arise if the nearby Georgia and Dunsmuir viaducts eventually are removed.
“If they do come down, that will open up and let the light in beneath,” he said. “There’s some dark spaces down below.”
July 23, 2015
Stop Struggling To Save For A Down Payment!
Want to buy a property but finding it a bit of a struggle to save for the down payment. Here are 3 great ideas for saving for one:
Note: One thing that hasn't changed over the past few years for mortgage financing is the down payment. It is still only 5% of the purchase price.
Scale down Your Lifestyle
Finding less expensive ways to do the things you enjoy, or foregoing them for a period of time could save you thousands over the course of a year.
Dial down your vacations: Try a stay-cation in your own city or go somewhere close by.
Eat out less: This could mean halving the number of times you eat out over the course of a month or eating at less expensive restaurants. If you bring your own lunch to work every day you could save yourself upwards of a $1,000 a year.
Spend less on hobbies and entertainment: Do you read a lot? Instead of buying books start using the library more often. Do you go to see a lot of movies? Try subscribing to an on-demand video streaming service and watch more movies at home. Do you spend a lot on your hobbies? Spend less this year, or try finding a different hobby for a period of time. Look for small day-to-day ‘luxury’ expenses that you can cut down on – at least until the down payment is saved.
Save More From Work: Make up a spread sheet with all your monthly expenses. Try to set aside a fixed amount from your pay cheque for savings. Even if it’s a small percentage, every dollar will count. If you get a raise at work, allot the difference between your previous salary and your raise for savings.
Pay off your credit card debt: It is difficult to save money when paying substantial interest to someone else. Begin by paying down the smallest high interest loan. Once that has been paid off, take the minimum payment from that debt and use it towards another. This will snowball until all debts have been paid off. If you have numerous outstanding debts you could always inquire about a debt consolidation loan. These loans typically offer a lower interest rate and mean you only have one monthly payment to worry about.
Use a Tax Free Savings Account
Tax Free Savings Accounts are a fantastic way to save money. The money in a TFSA can grow tax free, meaning any income you earn in this account is entirely yours.
Borrow from your RRSP
If you already have some RRSPs you can withdraw up to $25,000 to buy your first home. Though you should be cautious with this method, if the money you took from your RRSP is not repaid with 15 years it will be treated as income. You will thereby have to pay tax on the money you withdrew as if it where income.
At the end of the day saving for something like a home is all about priorities,” says Hankinson. “If saving for a home is a priority then find some areas that you can cut expenses back on. This best way to do this is draft yourself a budget and identity key areas where you think you can save.
July 17, 2015
Are Lower Interest Rates Good News?
The Bank of Canada has cut its key interest rate by a quarter of a percentage point. This is the second rate reduction this year after a quarter point rate reduction in January. The rate now stands at .5%.
The big banks will likely resist lowering their prime rates by the same amount. In January, when the Bank of Canada reduced its rate by .25%, the big banks lowered their prime rates by only .15%. Moves in the bank prime rate affect variable rate mortgages as well as lines of credit. The bank prime rate is now at 2.85%.
This isn't necessarily great news for the Canadian economy. The damage done due to falling oil prices, the slow growth in the manufacturing sector, and the current lower Canadian dollar, were the primary factors in the rate reduction. The Canadian dollar is expected to decline further after this announcement.
The lower interest rate is great news however for Canadian homeowners and homebuyers. They can use these lower rates to pay down their mortgage faster and save in interest costs. All it takes is some simple yet powerful strategies that will save you thousands over the life of your mortgage. I have the expertise to help sort through the options and opportunities that exist regarding your current mortgage or your new one. If you or someone you know could benefit from my guidance, please contact me.
Mortgage Alliance Meridian Pacific Mortgages
July 16, 2015
Presale VS. Resale
In the past three years, the Rize Alliance tower proposed at Kingsway and Main Street was embroiled in a controversial battle over the building’s height.
A neighbourhood group opposed the 21-storey tower because it was far higher than anything in the area. It would cast shadows, create traffic problems and ruin the character of the Mount Pleasant neighbourhood, they argued. Last year, the group, called Residents Association Mount Pleasant, filed a B.C. Supreme Court petition against the City of Vancouver and the developer, alleging that plans for the multibuilding, 258-unit project at 285 E. 10th Ave. would look nothing like what the city had approved in 2012. It was one of two lawsuits filed by the non-profit group. Both cases were tossed out of court.
It turns out, none of the negative publicity affected presales of units at the Independent, as the project is known today. The site has been cleared to prepare for construction. The building that housed the presentation centre has been dismantled. Presales for the tower are 95-per-cent sold. Of those, 85 per cent were sold in the first month, according to the developer. In about two years, the tower will stand and the controversy will be a distant memory.
Developer Will Lin states his satisfaction plainly: “Well, we’re not in the news,” he says. “It’s good to finally get under way with what we intended to do on the project.”
Mr. Lin, whose previous developments include Metropolis in Yaletown, the Rolston and the revitalization of the Yale Pub, says he has tested the waters for the rest of the development community. But once sales got under way, he expected units to go quickly.
“I wasn’t surprised at all, because it’s a pretty pioneering location. It’s where east Vancouver meets the west side of Vancouver.”
Of the 235 units sold, he says more than 90 per cent were purchased by people with local addresses. He saw a lot of buyers from Vancouver, Burnaby, Richmond and the Fraser Valley.
“Out of them, I’d say 60 per cent were from the area, meaning within five to 10 blocks of the site.”
Investors purchased about 35 to 40 per cent of the units. None of them purchased units in bulk for short-term rental use, such as through Airbnb. Mr. Lin says the units sold before that kind of investor could get in.
About one-quarter of the units are two bedrooms or more, intended for families. Those larger units with the better views, priced at $500,000 and up, went before the cheaper ones. The townhouses also sold quickly. A 583-square-foot one-bedroom loft was priced at $392,900. The 1,581-square-foot penthouse two-bedroom is priced at $1,399,900. At the other end, studios started at $179,000.
The sale of condos in Vancouver is brisk business. There’s been a 40-per-cent increase in sales of apartment properties in the past two years, according to the Real Estate Board of Greater Vancouver. New units are an especially hot commodity. There have been a total of 1,134 one- to five-year-old units sold since the start of the year. That doesn’t count the all-important presales. There are about 80 presale condo developments in Vancouver proper, both currently listed and up-and-coming. If those developments average 100 units apiece, that could potentially add another 8,000 new units into the market. (That’s a rough number because the data isn’t readily available on presales.) By comparison, 3,142 condos older than five years have sold this year.
With the constant launch of new condos, how are the resale condos to compete? These days, it’s common for a condo resale to break even, if not sell for less than what the owner originally paid.
I asked Mr. Lin if all the new condos are hurting resale prices.
“Because they bought lower, they can afford to sell for lower,” Mr. Lin says.
He adds that the new condos are helpful to the resale market, not a hindrance.
“Having a new building come by at higher pricing makes your unit look good in comparison. It has a ripple effect.”
But a presale studio suite at the Independent is priced lower than a 42-year-old studio suite in a three-storey walk-up that is currently listed in the same neighbourhood, for $220,000. No wonder Vancouverites love their spanking new condos.
Real estate agent Bryan Yan, who sells houses and condos, says the market is much stronger for new condos.
“Most buyers like the hassle-free new or newer condos with warranties,” he says. “In Vancouver, Richmond and Burnaby, they’ve changed zoning on big streets to allow for condos and more density, so there’s a lot of supply coming up.
“I tend to stay away from older strata buildings because you’re competing against newer places now and more that are coming in the future, which is difficult. It’s hard for them to appreciate in price. And one must thoroughly go through the depreciation report, or it can be a money-pit nightmare.”
However, a condo owner who has owned for several years can still see a return.
Mr. Yan sold an 848-square-foot Kitsilano condo recently at 2555 W. 4th Ave. for $505,500. The asking was $528,000. It was 19 years old and in original condition. The owner had paid $280,000 in 2003.
“So, there is some return, but it’s lower and slower than the detached. A house on the east side bought at that time for, let’s say, $400,000 to $450,000, is now worth well over $1.2-million,” he said.
“One could have rented out the basement and could have financed the $120,000 to $170,000 difference [to buy the house instead of the condo]. It’s about the same down payment, but a $1-million return, compared to about $220,000. It’s a numbers game.”
When it comes to older condos, he advises clients to steer clear in most cases.
The exception is an older condo with a water view, in Kitsilano, downtown or Coal Harbour, he says.
“But basically, I don’t recommend buying the older apartments unless one is renting and can’t afford anything else.”
But agent Ian Watt argues that buyers are so obsessed with new builds that they’re missing out.
“In downtown Vancouver, there are tons of amazing units being overlooked because Vancouverites have been brainwashed that a presale is the way to go,” he says. “A prime example is Vancouver House, wedged between two bridges. This overhyped and overpriced development is selling for well over what it should be, by about $200 per square foot more, and it’s certainly way pricier than its marina-side equivalents.
“Another area that’s completely overlooked is west of Denman,” adds Mr. Watt. “There are some amazing units, with amazing views. But they lack the newness factor of Yaletown.”
Buyers shouldn’t be too quick to dismiss the old buildings, however. The older condos have a lot going for them, which is why they’re currently in big demand in that other Canadian hot market – Toronto. They’re often much bigger than new condos, they are usually centrally located, they’ve often had maintenance upgrades to last several more years and the long-time strata councils have built up a hefty contingency fund for future maintenance. As well, because they’re overlooked for the new units, they offer decent value. Once you update the kitchen and bathroom, you could be sitting with a spacious, central and more affordable home.
As for an investment, it’s probably only a matter of time until Vancouver catches up to Toronto’s current love affair with the old condo.
July 10, 2015
Will The Bank of Canada Drop Their Prime Lending Rate?
Last week it was talk of fixed rates going up soon; now there's talk of variable rates going down!
Last week we talked about how fixed or long term rates may start going up in the fall. This week there's talk of the Bank of Canada dropping their prime lending rate at next week's meeting. This would directly affect variable rate mortgages, not fixed ones.
See recent market commentary from lender, First National, for whose forecasting this drop and why:
"It did not take long but the "contrary" appears to be gaining credence.
Late last month about 70% of the economists surveyed by Bloomberg were betting the Bank of Canada would stand pat on interest rates for the rest of the year. One notable exception was long-time bear David Madani who said there would likely be two cuts and the overnight rate would move into 2016 at 0.25%.
Over the past 7 days several prominent economists with Canada's big financial institutions have come to embrace, at least in part, some of Madani's thinking. The key element that now has the big names looking to a 25 bps point cut – likely this month – is word that the Canadian economy shrank, again, in April.
The fourth consecutive month of contraction has the country flirting with a technical recession.
Low oil prices continue to get the blame but the Greek rejection of the conditions for further bailout money from Europe is a wildcard play that no one knows how to call. It remains to be seen what it will mean for bond yields, the euro and the dollar."
July 3, 2015
Could A 1 Or 2 Year Fixed Mortgage Term Benefit You?
A recent article in the Globe&Mail written by Rob McLister of Canadian Mortgage Trends discussed the benefits of going with a shorter mortgage term considering that many economists as well as the Bank of Canada have been predicting that rates are going to start going up for 5 years now. They haven't and they're actually lower than they were 5 years ago. It might be a good idea to take advantage of a lower rate for 1 or 2 years of interest savings and than weigh your options again at the end of that term. This strategy isn't for everyone but for financially secure borrowers who can handle the possibility of mortgage rates possibly being a bit higher in a year, or the same or even lower it's definitely an option to consider.
"People haven’t been lining up for short-term mortgages, given the mesmerizingly low rates on 5- and 10-year terms.
But if you’re a financially secure borrower and you believe that rate direction is random (it is), then 1-year rates shouldn’t be written off. That was my topic in this week’s G&M Column.
By way of example, suppose you need to borrow for at least five years. If you’re not risk averse, you might consider options like a:
- 5-year fixed
- 1-year fixed …which lets you renew into a 4-year fixed at maturity (or any term for that matter)
- 5-year variable …at a rate that’s ~20 basis points or .20% higher than a 1-year fixed
The total borrowing timeframe is the same in each case, five years. But the 1-year mortgage gives you an option to:
(a) capture the maximum upfront interest savings and then keep enjoying low rates if borrowing costs stay low, or
(b) switch to a longer term after 12 months if rising rates start stressing you out.
When to lock in is always the hard part. Most folks who try to time the market find it to be a losing proposition.
But some people take the guesswork out of it by using pre-set rate levels to determine when to convert. For instance, they might ask their mortgage planner to lock them in if the lowest 4-year fixed rate has risen above 3.25% (an arbitrary example).
This approach is similar in principal to a stop-loss order in trading.
A “stop-loss” gets you out of a trade at a pre-set loss. That lets you determine your risk in advance and prevent emotional and costly market timing.
The challenge with most 1-year terms, compared to variable rates, is that you usually have to wait until three to six months before maturity to secure (hold) your renewal rate. By contrast, most variable-rate mortgages let you lock in at any time. That makes them preferable to 1-years in certain situations.
Other variable and 1-year differences:
A variable rate drops when prime drops.
A 1-year mortgage fluctuates less, potentially letting you hold low rates for longer than a variable.
A 1-year is currently cheaper up front (because the rate is lower than a variable).
A 1-year lets you switch terms at maturity at the best available rates. (You’ll rarely get the best rates when converting a variable mortgage to a fixed rate during your term.)
One unique case is the 1-year “convertible” mortgage. It lets you lock into a longer fixed mortgage at any time. In other words, you don’t have to wait until six to nine months into your 1-year term. Convertibles are harder to find but quite flexible if you can locate one that’s cheaper than a variable rate.
All-in-all, are 1-year terms right for most people? The answer is no. But they’re definitely right for more people than the 6% of borrowers who actually choose them."
July 3, 2015
Metro Vancouver Home Sales Set Record Pace In June
Last month was the highest selling June, and the second highest overall monthly total, on record for the Real Estate Board of Greater Vancouver (REBGV).
The REBGV reports that residential property sales in Metro Vancouver* reached 4,375 on the Multiple Listing Service® (MLS®) in June 2015. This represents a 28.4 per cent increase compared to the 3,406 sales recorded in June 2014, and an increase of 7.9 per cent compared to the 4,056 sales in May 2015.
Last month’s sales were 29.1 per cent above the 10-year sales average for the month. It’s the fourth straight month with over 4,000 sales, which is a first in the REBGV’s history. The previous highest number of residential home sales was 4,434, recorded in May 2005.
“Demand in our detached home market continues to drive activity across Metro Vancouver,” Darcy McLeod, REBGV president said. “There were more detached home sales in the region last month than we’ve seen during the month of June in more than 10 years.”
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $694,000. This represents a 10.3 per cent increase compared to June 2014.
“Housing market activity comes in cycles; we're in an up cycle right now that looks similar to the mid-2000s,” McLeod said. “It would be easy to point to one factor that's causing this cycle, but the truth is that it's a number of different factors.
"Conditions today are being driven by low interest rates, a declining supply of detached homes, a growing population, a provincial economy that's outperforming the rest of Canada, pent-up demand from previous years and, perhaps most importantly, the fact that we live in a highly desirable region," McLeod said.
New listings for detached, attached and apartment properties in Metro Vancouver totalled 5,803 in June. This represents an 8.7 per cent increase compared to the 5,339 new listings reported in June 2014.
"We’re seeing a steady stream of new listings entering the market, but the overall number of homes for sale is not keeping up with buyer demand," McLeod said.
The total number of properties currently listed for sale on the region’s MLS® is 12,181, a 23.9 per cent decline compared to June 2014 and a 1.3 per cent decline compared to May 2015. This is the lowest active listing total for June since 2006.
The sales-to-active-listings ratio in June was 35.9 per cent. This is the highest that this ratio has been in Metro Vancouver since June 2006. A seller’s market typically occurs when this ratio exceeds 20 per cent for a sustained period of time.
“The competition in today’s market means that buyers have less time to make decisions,” McLeod said. “Given this, it’s important to work with your REALTOR® to gain insight into the local market, to get quick access to new MLS® listings, to develop a buying strategy that meets your needs and risk appetite, and to receive other services and protections that come from having professional representation.”
Sales of detached properties in June 2015 reached 1,920, an increase of 31.3 per cent from the 1,462 detached sales recorded in June 2014, and a 74.2 per cent increase from the 1,102 units sold in June 2013. The benchmark price for a detached property in Metro Vancouver increased 14.8 per cent from June 2014 to $1,123,900.
Sales of apartment properties reached 1,774 in June 2015, an increase of 35.6 per cent compared to the 1,308 sales in June 2014, and an increase of 66.1 per cent compared to the 1,068 sales in June 2013. The benchmark price of an apartment property increased 5.3 per cent from June 2014 to $400,200.
Attached property sales in June 2015 totalled 681, an increase of 7.1 per cent compared to the 636 sales in June 2014, and a 44.3 per cent increase from the 472 attached properties sold in June 2013. The benchmark price of an attached unit increased 7.1 per cent between June 2014 and 2015 to $506,900.
July 2, 2015
Design Lessons with Michelle Cook
Taking on the role of ‘interior designer’, within your own home doesn’t have to be overwhelming. It can be a great opportunity to stretch your creative capabilities and with a few design lessons, you’ll be creating signature spaces in no time.
THE CAMERA DOES NOT LIE A smart way to begin is to take a photo of your space to help evaluate what’s currently working and what’s not. In a well-styled room, accessories are usually grouped together in clusters for visual impact. Consider that void space is a grouping, in and of itself. Not every shelf or landing surface needs to be accessorized. A good proportional relationship between the scale, colour and the quantity of items, provides interest and visual relief at the same time.
LAYERING RUGS Most homes have transitioned to hardwood, tile or other hard surfaces as the main flooring product, however, the majority of rooms can still benefit from the softness of carpets. A great solution for large spaces is to install wall-to-wall carpet. Now, splurge on a big punch of colour and interest, by layering a high quality area rug (at least two feet smaller than the room size) on top, to anchor the vignette or conversation area in your space. This combination also provides great versatility for future design changes.
MY LITTLE FRIEND, THE BAR CART The bar cart is your new best friend. It’s one of the most versatile and classic pieces of furniture, always in style, whether it’s retro or new. Equally as appealing in a living room, office, bathroom, bedroom or patio, it’s fabulous as a side table, a stand alone display unit, towel and toiletry storage, office supplies or, the obvious, alcohol and barware. In a category all its own, it can truly look fabulous in any room. Be sure not to overcrowd the cart so it maintains its classic simplicity.
BALANCING THE ELEMENTS If you’re uncertain why your space feels cold or sparse, despite your best design efforts, evaluate its ratio of hard goods to soft goods. Large expanses of hard surfaces, such as floors, walls, high ceilings, counters, fireplaces, glass and geometric shapes can be toned down by implementing soft goods and organic shapes in upholstery, area rugs, accessories and greenery. Combining these elements and layering textures provides relief to the senses, creating a cosy atmosphere. This is another great time to take a picture of your space to see if you’ve struck the right balance.
COME HERE, COLOUR! If you’re colour-shy, force yourself to embrace it. Although you may have heard this many times, you may not have confidence in properly applying the design principle. The easiest way to incorporate colour, with minimal risk, is to choose one or two bold colours to sprinkle throughout a room with a neutral backdrop. A lamp base, toss cushion and vase, all in the same colour or varying shades of the same colour family, may be enough to bring a room to life and easily swapped out to create a different look. For a greater colour infusion, paint the ceiling a bold colour, while adding a few accent pieces in similar tones to the space. The result is a dramatic yet intimately personalized look.
Try applying these lessons to transform every space in your home and you’ll begin to see how the rooms flow together beautifully.
Source - canadianhometrends
June 26, 2015
Will Rates Go Up In The Fall?
Rates going up in the fall? Well probably…maybe…depends…
The U.S. Federal Reserve gave it's clearest indication that rates will start to go up in September. What happens in the U.S. usually trickles over to Canada but with that being said they also stressed that rates will "probably" or "maybe" start to go up and that it "depends" on a number of things. Will this be the time when rates do start going up? Only time will tell. We've had plenty of false alarms over the past few years.
Check out lender, First National's, market commentary for more details on this subject:
"Given the close ties between the Canadian and American economies it is little wonder market watchers were paying very close attention to the latest musings from the U.S. Federal Reserve. It is also little wonder that what they heard created quite a flutter, even though nothing actually happened.
Fed chair Janet Yellen has given the clearest signal yet that interest rates will be going up and the clearest projection is that it will happen in September … probably … maybe … depends. It could be December or even next March. From the U.S. perspective employment growth is a key concern.
For Canadian mortgage holders when is not critical. How much and how many – "the entire path of rates", as Yellen put it – are what matter. On that point Yellen says the Fed is projecting increases of 100 basis points a year until rates normalize (likely in 25 bps increments).
Canadians contemplating long-term mortgages need to be aware that the U.S. increases, whenever they start, will likely move across the border."
June 26, 2015
Real Estate Rivalry: Seven Ways Vancouver Triumphs Over Toronto
It's no secret that Canada's two top real estate markets of Vancouver and Toronto have a long standing rivalry. As both head into a white-hot and likely record setting sales season, real estate brokerage, TheRedPin, analysed the merits of each market. Their fact finding mission concluded that there are seven clear market advantages for homebuyers in Vancouver:
1) First Time Friendly
The conventional belief is that Vancouver prices have skyrocketed and there is a huge financial barrier to entering the local housing market. However, Research shows that although Vancouver housing prices are significantly higher on average, first time buyers in Vancouver spend an average of $420K, compared with $425K in Toronto - making first time home purchases actually lower than Toronto prices.
2) Land Transfer Tax Factor
Vancouverites come out way ahead on land transfer taxes by only paying provincial dues. Unless you're a first time buyer in Toronto, you get a double hit of both municipal and provincial land transfer taxes. This can add up to serious money on a market priced home.
E.g. For a $500,000 home
Vancouver = $8,000
Toronto = $12,200
3) Constant, Consistent Curb Appeal
In Vancouver, mild temperatures keep lawns green, flowers blooming and buyers/sellers active year round. Though the best months to buy and sell match Toronto's (January and May respectively), the Vancouver sales season never really winds down, allowing significantly more viewings and potential buyers.
4) Parkland Proud
Vancouver decimates Toronto in available parkland:
Vancouver's largest urban park, Stanley Park, is 400 hectares vs Toronto's High Park which is a mere 161 hectares. Enjoying nature in Toronto is a two hour drive from downtown. In contrast, mountains are only 30 minutes from downtown Vancouver and the beach is only five minutes away.
5) International Bragging Rights
Vancouver consistently tops liveability and best city studies. When compared against international and North American cities as recently as this year, Vancouver ranked fifth, decimating Toronto (ranked 15th). The study analysed factors related to safety, healthcare, educational resources, infrastructure and environment in 230 international cities.
6) Condo Crazy
Greater Vancouver condo resales soar over condo resales in Greater Toronto. In March, 40% of all homes sold in the Greater Vancouver Area were condos, compared with on 22% in the GTA.
7) In Vancouver, Over-Ask and You Shall Receive
Two recent Vancouver transactions show that the sky really is the limit when it comes to real estate prices:
Two recent Vancouver transactions show that the sky really is the limit when it comes to real estate prices:
A home that was listed at $5.99 Million sold in 12 days for $2 Million over asking in May.
Mere weeks ago, a home listed at just under $3 million sold for $1.1 Million over asking, in just hours.
"The GTA is an important market for us, but it only represents 25% of Canada's real estate market," said Rokham Fard, CMO and Co-Founder of TheRedPin.com. "Now that we've perfected our streamlined buying model we're ready to extend our unique real estate services to Vancouver, the next major real estate hub of Canada."
TheRedPin.Com is the first online real estate brokerage to combine both resale and new homes under one umbrella for the Greater Vancouver Area. The company is now servicing home buyers in Vancouver and will be adding selling services in the coming months. They will also be rolling out in Calgary and other major Canadian real estate hubs throughout 2015.
TheRedPin connects people, data and technology. Our platform carries the largest database of active residential listings in the Greater Toronto Area, with plans to expand nationally. We are a challenger brand, with a unique business model that streamlines the real estate journey, and provides exceptional end-to-end services and benefits, not found at other traditional brokerages.
Founded in 2010, four friends recognized that the real estate industry might be the only sector not influenced by technology. The four saw this as an opportunity to reinvent the way people bought and sold properties, more specifically the way homes were searched. Today, TheRedPin is much more than that.
We are a tech startup that doesn't answer to the industry, we answer to our clients and ourselves.