The biggest challenge Canada faces in creating affordable housing is getting people to and from home and work.
"If you think housing prices are high now - just wait." - Heino Molls, REMonline
"Census Canada figures show that Canada’s population has rocketed past 35 million. In fact, that number is going to be 36 million before the ink is dry on this most recent report and it will, without a doubt, be going at light speed past 40 million way before 2020. That means a huge boost in housing demand. It means that the privilege of living in a home in Canada, not to mention an actual house in Canada is going to come with a high cost. You think the cost of a house in Toronto, Vancouver or Ottawa is high now, just wait.
Do the math on your own. Not the math of the naysayers, the doom and gloom crowd, the people who will show you diagrams and charts with circles and arrows that pinpoint the exact time and date of the collapse of the real estate market. Rather look around, see what is going on and add it up for yourself.
We are facing many problems in our country. There is not enough time and space here to discuss all the challenges of health care, especially mental health care, as well as housing for the poor and marginalized people in our society. Another major challenge that should be mentioned in the same conversation as housing and property value is public transit.
Our governments are scrambling to build new transit ways and highways to accommodate all the people who will be travelling to and from our inner cities for business, health care, restaurants and entertainment.
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Our biggest problem is going to be building transit, not just within our cities but also from the towns and satellite communities that will have even higher population growth in the coming years. Communities like Chilliwack and Abbotsford in B.C. and cities like Kitchener-Waterloo not far from Toronto. The same for all other cities in the country. Transit is going to be our biggest problem.
Canada Mortgage and Housing Corp., has updated its free guide to the process of buying a home, with an emphasis on encouraging Canadians to think long term about what kind of home they should buy — or whether they would be better off renting.
The national housing agency first released the guide, called Homebuying Step by Step, in 1998, but has updated it over the years. The latest version streamlines the document, splitting off workbook content and making it available online as a series of interactive printable checklists and questionnaires.
The previous iteration of the guide received almost eight million unique page views in 2016 alone, according to CMHC.
The guide is meant for any prospective homebuyer, but first-time buyers could particularly benefit from reading it, said Ina Wielinga, a consultant at CMHC who updated the guide. She said the new version puts a greater focus on calculating the true cost of owning a home over time, emphasizing costs like taxes, utilities and repairs.
"This used to be peppered through the document, but we're bringing it up front because people often get focused on acquisition," said Wielinga.
The new guide also encourages readers to reflect on what kind of home suits their lifestyle, and whether or not homeownership is a better financial choice than renting.
"It's not just buying that house that's brick and mortar," said Wielinga. "There's a lifestyle that goes with it also."
By asking would-be homeowners to consider how a home will fit into their lives over the long term, Wielinga said, the guide could help users feel more confident about their purchase.
Key concepts to consider
The most confusing concept in the guide is also one of the most important ideas to understand before buying a home, according to Wielinga: calculating your gross debt service ratio (also known as the gross debt-to-income ratio) and total debt service ratio (also known as the total debt-to-income ratio).
Click on image below for your copy:
The CMHC guide for homebuyers is available for free online. (CMHC)
The gross debt service ratio includes total monthly housing costs, which CMHC says should be no more than 32 per cent of average gross monthly income. The total debt service ratio covers all monthly debt payments, including housing costs. CMHC recommends that ratio not exceed 40 per cent of average gross monthly income.
"You have to understand that, even if you're the best person in the world and you know you can afford it, you have to follow that kind of guideline," said Wielinga.
Financial axioms like these are often left unexplained to potential homebuyers, said Wielinga.
"Honestly, it's not talked about enough," she said. "I think when we do explain it to people, then they do get it."
The rules for Canadian homebuyers have been changing quickly, especially as the government tries different policies to mitigate risk in the real estate market.
For that reason, the guide avoids getting into the details of certain aspects of homebuying, like calculating mortgage loan insurance. Instead, it refers readers to the CMHC website, where the details of mortgage rules can be quickly updated as the government changes them.
Lauren Haw, CEO of an online real estate brokerage, lauded CMHC for its interactive workbook for prospective homebuyers, although she's skeptical that many people will actually take the time to sit down and read the guide in full.
"People like to have it and hold it, but most first-time homebuyers don't seem to ingest the information in this format very well," said Haw. "Because even if you give them these documents, very few people are the personality type that will read it and really truly understand it."
Haw said real estate brokers often end up explaining these concepts to their clients as they go through the buying process.
"If everybody would sit down and read one of these things, I think we'd have much more informed buyers," she said.
When it comes to buying and selling homes, most contracts include a contingency that will allow buyers to back out or re-negotiate the sale based on issues found during a home inspection.
Selling a home can be stressful, to feel confident in the sale of your home check out these common home issues before listing.
We recommend a pre-sale home inspection – which may even sweeten your home sale by adding an element of transparency when you share the report with the buyers agent.
Regardless if your basement is beautifully finished or could have been the location for the latest big screen thriller, a major issue found in home inspections is moisture or seepage.
If your basement shows signs of moisture, leakage or has an air of dampness you may have an issue. Call a trusted home inspector to get the lay of the land, or a contractor who specializes in basement repair.
The possibility of basement flooding will not appeal to even the savviest of ‘fixer upper’ home buyers.
The hat for your home. Maybe not today, maybe not tomorrow, but if your roof is old you run the risk of facing major leaks during the next rainy season.
If left unattended, an old roof may lead to major damage of other existing home systems and property. If your shingles are peeling and look old, you likely need a new roof – get on the phone and start calling local roofing companies.
DIYers take heed! There are (for example) building codes for things like your deck, car port, garage, retaining walls, plumbing, electrical and other home projects and systems.
If you are going to tackle these projects yourself, make sure to do your research and learn what building code requirements exist in your city. Better yet, have a professional come double check your work before you pat yourself on the back – it could save you from property damage, personal injury, costly lawsuits, or the sale of your home.
All major components of your home do require maintenance. Just as you get an oil change, replace brake pads, and rotate tires on your vehicle, your home needs regular attention and cleaning.
Be sure to pay attention to things like furnace and central air maintenance, cleaning dryer vents, water heaters, exhaust fan filers for your stove, check caulking in places like tubs and shower surrounds yearly. Prevention is better than a cure – and it costs less!
In all the excitement and packing, buying & selling, many people forget to take care of some essential items before they move. Don’t look past these 5 things you need to take care of, or it could cost you $$$.
1. Take care of all subscriptions: Magazines, memberships, recurring orders, gym memberships. Get a head start on updating your address or cancelling memberships before charges mount on your credit card. We suggest you take care of this at least 30 days prior to your move, as many gyms, clubs, and mail subscriptions require this much time for cancellation or updates.
2. Change your address at the post office: For a small fee Canada Post will allow you to register your new address to ensure all your mail finds its way to your new home. Leaving bills or an outstanding balance behind, may impact your credit score, as well as lead to accumulated interest charges -–neither of which you are likely o want.
3. Call utility providers: Cable, internet, electricity, gas, etc…These are all services that you should be making contact BEFORE you move. Many of these services can pivot on a dime so not much notice is required, but we do recommend making contact at least 1 week prior to your move date. Make a list of required utility providers & check it twice! Or, you could wind up paying for someone else’s electric bill!
4. Manage your motor vehicle insurance: If you are new to British Columbia here is what you need to know; ICBC allows up to 90 days to switch over your license, and 30 days to register, license and insure your vehicle.
If you are moving within the Province, you must update your address within 30 days of moving. Your auto-insurance policy must always show your current home address and vehicle use, so do not forget to update this information!
5. Get a ‘To-Go’ box ready: Whether you are moving across the country, province, or just down the street, make sure that you have a go-to box ready. This should contain items you will need as soon as you get to your new home; cleaning products, toilet paper, garbage bags, paper towels, clean sheets, fresh towels, paper plates and eating utensils and maybe even a bottle of bubbly to celebrate.
It turns out homebuyers are really into barn doors.
When Zillow looked at design features that sell homes at the best price and with the shortest listing time, that feature topped the list.
Anything craftsman-style, like rectangular farmhouse sinks, also got homes off the market at a premium.
Zillow Digs screened over 2 million listings for homes sold between January 2014 and March 2016 and looked for the keywords that had the best effect on how much more than the expected price and how much faster they sold.
Here are the top 15 design features:
Percent of homes that sell for above expected values: 3.7%
How many days faster than expected the home sells: 19
Tankless water heater
Percent of homes that sell for above expected values: 4%
How many days faster than expected the home sells: 43
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Percent of homes that sell for above expected values: 4.1%
How many days faster than expected the home sells: 46
Percent of homes that sell for above expected values: 4.1%
How many days faster than expected the home sells: 38
Percent of homes that sell for above expected values: 4.2%
How many days faster than expected the home sells: 42
Percent of homes that sell for above expected values: 4.3%
How many days faster than expected the home sells: 28
Percent of homes that sell for above expected values: 4.6%
How many days faster than expected the home sells: 38
Percent of homes that sell for above expected values: 4.6%
How many days faster than expected the home sells: 48
Percent of homes that sell for above expected values: 4.9%
How many days faster than expected the home sells: 36
Percent of homes that sell for above expected values: 5.4%
How many days faster than expected the home sells: 14
Percent of homes that sell for above expected values: 6.0%
How many days faster than expected the home sells: 50
Percent of homes that sell for above expected values: 6.9%
How many days faster than expected the home sells: 63
Percent of homes that sell for above expected values: 7.9%
How many days faster than expected the home sells: 58
Percent of homes that sell for above expected values: 9.6%
How many days faster than expected the home sells: 45
Percent of homes that sell for above expected values: 13.4%
How many days faster than expected the home sells: 57
Renting out property to get easier as CMHC changes rules
by Steve Randall28 Jul 2015
The rules around the income from rental units considered in home loan applications submitted to the CMHC are changing. The agency announced Monday that, from September 28, it will allow 100 per cent of the rental income from a unit to be considered for new loan applications submitted to it for mortgage insurance.
That means that a secondary rentals suite’s income, minus costs including property taxes, will boost the size of the loan that buyers can secure. Qualifying units must have sustainable income, proven by two years of rental rent payments. These payments will be averaged to assess the unit’s income. Applicants will also need a credit rating of at least 680. Properties with more than a single rental unit will have slightly different rules and this change is most positive for homeowners with one rental unit.
This article is designed for home owners with 3 years or less on their mortgage term. If this does not apply to you today, feel free to pass it on to friends and family.
It's the holiday season and thinking about your mortgage is likely that last thing on your mind. However, if you're sitting with a lot of equity in your home yet can't seem to manage your debt payments, perhaps thinking about your mortgage is the best thing you can do. With credit card interest rates often pushing the 20% range, five-year fixed-rate mortgages at 2.69% to 2.89% range and variable rates even lower, you may want to consider paying off high-interest debts. Like many financial decisions, you need to look at the big picture. Here's what you need to know.
A refinance alters the terms and conditions of your mortgage; specifically you are increasing the amount of your mortgage to pay off debt. Your mortgage payment may or may not increase, depending on a number of factors, and you may incur a penalty to break your existing mortgage if you are refinancing mid term, but you will be paying off the refinanced debt at a much lower interest rate, which could save you thousands of dollars in interest in the long run. Here are some reasons to refinance:
- Decrease your overall monthly debt payments by using your equity to pay off those high-interest credit cards or unsecured loans, which can help you better manage your budget. - You can refinance to purchase another property. Using the existing equity in your home can be a great way to buy a rental property which, if done right, can also make the interest you pay tax deductible. - You could also take out some of the equity for investment purposes -- an option that many homeowners consider this time of year as they look ahead to the new year - And there are more uses for your equity such as helping putting your kids through school.
Repayment Remember that borrowing against your property is not free money. You still own the home so the mortgage loan has to be repaid. Spending Habits While using the equity in your home to pay off debt certainly eases financial stress, there may still be challenges. However, some people have experienced a job lay-off or an illness that contributed to their unmanageable debt loads. Make sure you understand what got you into your current situation.
Real Estate Market
Equity measures the fair market value of your property against the balance owing on your mortgage. If you borrow against your property, you may worry that the market will drop and your home value with it. However, the government added a few safeguards over the last few years with respect to refinancing: where once you could refinance up to 95% of the value of your home, that percentage has dropped to 80% of the value of your home. By making that change, the government is basically saying it is somewhat confident that house prices will not likely fall far enough for you to lose equity. Speak to a Professional to Understand Your Options As you can see there are many factors to consider before deciding to refinance. Each individual's financial situation is different. Let's talk about your unique situation and the options available to you.
Contact us today to put you in touch with John Charbonneau, one of our best Mortgage Specialists
The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.