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18 Jun

First-time homebuyers can soon get help with their mortgage costs

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Posted by: Frederic Pichette

Jordan Press, The Canadian Press
Published Monday, June 17, 2019 10:05AM EDT 
Last Updated Monday, June 17, 2019 1:49PM EDT

OTTAWA — A new federal program aiming to give homebuyers some help covering their mortgage costs will kick in on Labour Day — weeks before a federal election — with the first payments flowing in early November, just days after voters across Canada go to the polls.

The Liberals unveiled details Monday of the $1.25-billion plan, which will see the government take an equity stake in thousands of homes to ease mortgage costs for qualified buyers.

The rules of the program would allow previous homeowners to qualify under certain conditions, permit the purchase of a building with up to four units, and help with a maximum purchase price of $565,000, based on government calculations.

The program will begin taking applications on Sept. 2, days before what is expected to be the official start of a federal election campaign where the cost of living — including housing affordability — is shaping up as a central issue.

The first payments would flow on Nov. 1, two weeks after election day on Oct. 21.

Government officials said Sept. 2 was the earliest possible start date, while the minister in charge brushed off the suggestion that the governing Liberals hope to use the launch date for partisan gains.

“If we look at what we’ve done since Day 1, housing investments have been key in all four federal budgets since 2016,” Social Development Minister Jean-Yves Duclos said in an interview.

“Every one of the federal budgets in those four years has included significant measures around housing affordability and, look, we’ll continue to do so. We’re not going to be stopped because there is an election coming.”

The first-come, first-served program will see federal funds pick up five per cent of a mortgage on existing homes for households that earn under $120,000 a year, on a mortgage of no more than $480,000. The value increases to up to 10 per cent for new homes to spur construction and expand supply to avoid heating housing prices.

There isn’t any interest on the money, but a buyer would have to repay it in full when they sell their house or after 25 years of living in the home. An early repayment carries no penalties.

If the value of the home goes up, so too does the amount of money owed to federal coffers. The opposite will be the case if the value of a home goes down.

Federal officials said there isn’t a specific policy on what to do with any profits — some organizations that already provide these “shared-equity mortgages” use windfalls to expand their offerings — so the extra cash will for now flow back into the government’s general revenue pool.

The officials provided the information during a briefing for reporters on the condition that they not be identified by name.

The government estimates that some 100,000 new buyers could be helped by the program. Depending on the interest for it, the next government could be forced into a decision: increase spending at risk of boosting demand and heating prices, or stand pat and exclude buyers.

Liberal efforts to make housing more affordable will be back in the spotlight on Tuesday when the parliamentary budget officer releases a report scrutinizing federal spending in the area.

13 Apr

Buying a home? CMHC could soon kick in 10% of the cost — for a price

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Posted by: Frederic Pichette

The government is earmarking $1.25B over 3 years for something it’s calling a ‘shared equity mortgage’

The 2019 federal budget includes a tantalizing pitch for prospective first-time homebuyers — one that could see Canada’s housing agency contribute up to 10 per cent of the purchase price of a home and bring down the mortgage load for borrowers.

The budget offers the program, known as the First Time Home Buyer Incentive, as a way to help with housing affordability. The government is earmarking $1.25 billion over three years for something its “shared equity mortgage.”

Functionally, it’s more like an almost interest-free loan — one where the repayment plan doesn’t require any payback until years in the future. In order to qualify, an applicant must have a household income of less than $120,000 per year and be able to come up with a five per cent down payment — the minimum requirement for an insured mortgage with the Canada Mortgage and Housing Corporation (CMHC).

CMHC is the Crown corporation that backstops the vast majority of Canada’s housing market by insuring the loans that finance it. This new program will make its role in the market even larger than it already is.

In addition to those stipulations, the program caps out at four times the applicant’s annual income, which means it can only help homeowners looking to buy properties where the mortgage value plus the CMHC loan don’t exceed $480,000.

But if a would-be buyer meets the conditions described above, under the program, the CMHC would kick in up to 10 per cent of the value of a newly built home, or five per cent of the value of a resale.

The CMHC would contribute that much to the home purchase in exchange for a corresponding equity stake in the home. That has the effect of bringing down the size of the homeowner’s mortgage — but comes with a bill to be paid down the line.

Precise details of how the program works won’t come out until later in the fall, but today the government provided a rough breakdown of how it might work for a prospective buyer. If a first-time buyer wants to get a home that costs $400,000, they’d have to come up with a $20,000 down payment, under both the new rules and the old ones.

Normally, they’d have to take out a loan for $380,000 to cover the rest of the purchase price — but under the new program (if it’s a newly constructed home), CMHC could kick in $40,000 toward the purchase price, in exchange for a 10 per cent stake in the home.

That brings the buyer’s mortgage down to just $340,000 for the home, instead of $380,000. On a standard mortgage at 3.5 per cent interest, that translates into a monthly mortgage payment more than $200 lower than it would have been for the 25-year life of the loan. That’s more than $2,700 a year in potential savings.

The catch is that the homeowner eventually has to pay back the CMHC’s stake in the property — but not until they sell (or sooner, but only if they want to).

The budget is far from clear on how much the buyer would owe; is it the same dollar amount the CMHC provided up front, or does the bill go up based on how much the house has appreciated in value?

Government officials say details of the plan will be hashed out in the coming months. Craig Alexander, chief economist with accounting consultancy Deloitte, calls the program a “clever idea” and says the benefits should outweigh the downsides.

Economist Craig Alexander says the shared equity mortgage plan has the potential to help with affordability issues. (CBC)

“You want to be mindful that the government doesn’t put in policies that end up bidding up prices,” he said, adding that, on the whole, the plan could help more Canadians start climbing the housing ladder.

The government is estimating the plan could create about 100,000 new first-time buyers over the next three years.

But not everyone agrees there’s nothing but upside. Craig Wright, chief economist with the Royal Bank of Canada, calls the program “a solution looking for a problem.”

He cites research from the most recent government census in 2016: roughly 67.8 per cent of Canadians owned their own homes that year.

That’s higher than ownership rates in other countries — including the U.S., where the rate is 63.4 per cent and falling swiftly. Other world capitals such as Paris (33 per cent home ownership rate), Berlin (37 per cent) and London (47 per cent) stand in stark contrast to Canadian cities like Calgary (73 per cent) and Toronto (66 per cent).

Even rent-happy Montreal has an ownership rate of 55 per cent, which is why Wright said he’s not convinced Canada has a home ownership problem.

Which is why he thinks the program “is more about politics than policy.”

Worse still, he says if it’s done poorly Wright said the program has the potential to undo some of the sensible market cooling measures Ottawa has implemented in recent years: capping loan terms, setting minimum down payment levels and introducing mortgage ‘stress tests’ last year.

“Demand will show up now, while supply will show up later,” he said. “And in the near term prices could move higher so … you may make it less affordable to own a home.”

Economist David MacDonald, with the Canadian Centre for Policy Alternatives, also says the plan doesn’t really do much to help people buy a home more affordably.

“Taking out new loans from CMHC or retirement savings doesn’t make housing more affordable,” he said. “It just allows for another source of debt financing that must be repaid.”

By incentivizing new builds over resale homes, the government hopes its new shared equity mortgage plan can help stimulate more construction in Canada’s housing stock. (Ben Nelms/Bloomberg)

The government says program details will be hashed out later but, for buyers, the repayment terms are the real wild card. Exactly how much will they have to repay CMHC? And will that sum be affected by changes in the home’s value?

“If your house goes up 20 per cent, does what you pay them go up?” Wright asks. “On the flip side, what if it goes down — do you have to make them whole?”

Wright says he suspects the CMHC will have a stake both on the upside and the down, but that’s the million-dollar question for home owners that federal officials weren’t answering today.

Other housing measures

On top of the CMHC program, the budget pledges $100 million per year, for five years, to help fund non-profit groups that are already offering this type of shared equity mortgage product.

That could include Toronto-based non-profit developer Options For Homes, which is working on more than 600 units in the Greater Toronto Area on a similar funding model. The company works with would-be buyers to fill the gap in the purchase price by kicking in up to 15 per cent, for a stake in the equity, CEO Heather Tremain said in an interview.

It’s not free money. Any prospective buyer has to get approved for a mortgage just as they normally would, and has to come up with the minimum down payment level that the CMHC requires. And of course, buyers pay back what they owe, plus a corresponding share in any gains, down the line.

But Tremain says shared equity mortgages are a winning formula that can work for all sides without driving up prices or increasing risk.

“It’s a new idea for a lot of people today … but we’ve been doing it for 25 years,” she said, adding that the company has funded 3,000 units over the years and only experiencing five defaults in that time. “Any bank would love that stat,” she said.

The new mortgage money wasn’t the only housing-related announcement in the budget.

The government also is increasing the amount that a first-time buyer can withdraw from an RRSP, without penalty — $35,000, up from the current level of $25,000 where it has been for the last decade. And Ottawa also will amend the RRSP withdrawal rules to help people who have been through family crises.

Starting this year, Canadians who have seen their marriages or common law partnerships break down will be able to participate in the Home Buyer’s Plan, even if they don’t meet the technical requirement of being a first-time buyer.

There’s something in the budget for renters, too.

The government says it will expand a program it launched in 2017 to fund construction of rental units with low-cost loans. Last year, it beefed up the Rental Construction Financing Initiative to add 14,000 more units to the program, and this year’s budget will add nine years of funding to the program.

For an added cost of $10 billion on the existing program, the government says 42,500 new rental units will be added to Canada’s housing stock by 2028.

And the government also is cracking down on what it calls financial crime in the housing sector.

Recent increases to the budgets of tax and other regulatory agencies have uncovered $100 million worth of addition taxes assessed due to increasingly complicated home sales — something that has convinced the government to keep digging for more.

Ottawa will give the Canada Revenue Agency another $50 million over five years to root out tax avoidance in matters such as:

  • Reporting the sale of a primary residence.
  • Ensuring proper taxes are paid on the sale of a second property.
  • Reporting gains from real estate “flipping.”
  • Reporting commissions on home sales as taxable income.
  • Builders charging and remitting GST or HST on new home sales.

The government says those crackdowns are expected to pay for themselves and then some, bringing in $68 million worth of revenue over the next half decade.

16 Mar

Canada’s housing market headed for weakest year in almost decade, warns CREA in updated outlook

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Posted by: Frederic Pichette

Sales down 4.4% in February, prices down 5.2%

The average price for homes sold last month was down 5.2 per cent from last year as the number of sales dropped to a 10-year low for the seasonally weak month of February, the Canadian Real Estate Association reported Friday.

The national association highlighted the impact of a mortgage stress test that affects federally regulated lenders, including the big banks, but some analysts said February’s drop may be due in part to severe winter weather.

“February home sales declined across a broad swath of large and smaller Canadian cities,” CREA chief economist Gregory Klump said Friday in a statement.

In its updated outlook for the year, the association said it expects home sales in Canada to pull back by 1.6 per cent to 450,400 in 2019, a change that would mark the weakest annual sales since 2010. The association expected British Columbia to account for much of that projected decrease, as well as continued decline in Alberta.

Its forecast projects sales will rise to 459,400 in 2020, up two per cent from the 2019 forecast.

The national average price is expected to stabilize in 2019 at around $487,000. In B.C., Alberta, Saskatchewan, and Newfoundland and Labrador it forecasts the average home price will retreat, while it will continue to rise in Eastern Ontario, Quebec, New Brunswick, Nova Scotia and P.E.I.

The association expects the national average price to move up 0.8 per cent to $490,800 in 2020.

CREA said February sales by its members fell 4.4 per cent compared with the same month last year. That is the lowest level for the month of February since 2009 and almost 12 per cent below the 10-year average for the month.

On a month-over-month basis, national home sales in February were down 9.1 per cent compared with January for the lowest level since November 2012. It’s the biggest month-over-month drop since the mortgage stress test came into effect in January 2018.

The new stress test requires borrowers to prove that they can service their uninsured mortgage if lending rates go above a certain threshold.

The national average price for homes sold in February was $468,350, down 5.2 per cent from the same month in 2018. Excluding the Greater Vancouver and the Greater Toronto Area, two of the country’s most active and expensive markets, the national average price was just under $371,000.

“Only time will tell whether successive changes to mortgage regulations went too far, since the impact of policy decisions becomes apparent only well after the fact,” said Klump.

“Hopefully policy makers are thinking about how to fine tune regulations to better keep housing affordability within reach while keeping lending risks in check.”

Some analysts however focused on the weather as a key factor.

Doug Porter, chief economist at BMO Financial Group, wrote in a note Friday that February is normally a seasonally slow month even during a tame winter.

“This was most patently not a tame winter month, further bludgeoning a sluggish market,” Porter said.

He added that the year-over-year drop in sales was heavily concentrated in British Columbia and Alberta, while the other eight provinces saw a 2.8 per cent year-over-year rise.

Porter said he won’t delve into great detail on the housing figures as they’re more of a weather report than an economic one at this time of year.

TD Economics senior economist Brian DePratto agreed that severe winter weather in Toronto and Vancouver may have sidelined potential buyers and sellers.

“The true test of market health will come with the warmer spring weather,” DePratto wrote in a note.

Source

27 Dec

Canada’s housing market correction isn’t over, analysts warn

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Posted by: Frederic Pichette

Higher interest rates and mortgage stress tests are expected to further dampen the real estate market. Here’s what to expect in four markets

Canada’s real estate market will likely see further correction in 2019, as fears of higher interest rates and stress tests continue to weigh on the sector, according to analysts.

After a period of double-digit growth in key markets over the past few years, Canada’s real estate sector came back down to earth in 2018, broadsided by tighter rules. Home sales activity was down 12.6 per cent year-on-year in November, below the 10-year average for the month, according to the Canadian Real Estate Association.

CREA expects home sales across the country to decline to the lowest point in nine years in 2019.

“We are in a broad-based real estate correction in 2018, and we think that it will take the year to work its way free of the overshooting that occurred in 2014 through 2017,” said Phil Soper, president of Royal LePage.

A key factor driving activity next year would be interest rates, which, until recently, were expected to edge higher as Bank of Canada looked to “normalize rates.”

The bank raised the benchmark interest rate to 1.5 per cent in July, but since then appears to have reined in its enthusiasm amid a slowing economic environment.

The bank has also argued the worst in the housing market is over and markets are stabilizing.

“But, from our vantage point, it’s difficult to agree,” wrote CIBC Capital Markets analysts Benjamin Tal and Royce Mendes in a note to clients. “The central bank’s own workhorse model says it takes six quarters before the full impact of any rate hike is felt in the economy. So it’s concerning for the outlook then, that only five quarters since the first move of this cycle, let alone subsequent rate increases, we’re already seeing a slowdown in housing-related indicators.”

A rate pause would come as a relief to mortgage buyers at a time when Canadians’ household debt to disposable income is at a record level of 170 per cent, Canada Mortgage and Housing Corporation’s estimates show.

“In the most expensive cities — Vancouver and Toronto — a quarter of one percentage point on an average house does become pretty significant,” said Soper.

Another key driver in 2019 will be the looming shadow of Bill B-20, imposed in early 2018 by the Office of the Superintendent of Financial Institutions. The “stress test” required banks to assess people’s ability to pay assuming interests were either two per cent higher, or greater than the five-year benchmark rate published by the Bank of Canada. Royal LePage and PricewaterhouseCoopers predict the stress test will continue to weigh on the markets in 2019.

“The days of everyone being able to have a white picket fence and a detached house of their own are rapidly receding,” said Don McClintock, president of the Vancouver Island Real Estate Board. “Young people have to be prepared to live in townhouses and duplexes, and maybe even condominiums. We’re going to have to change our expectations to meet the new budget.”

The days of everyone being able to have a white picket fence and a detached house of their own are rapidly receding

Don McClintock, president of the Vancouver Island Real Estate Board

The squeeze on millennials comes as a large demographic in the age group look to buy their first house. This will likely strain already-saturated markets in Toronto and Vancouver. In the Greater Toronto Area alone, 700,000 millennials will be in the market for a home in the next decade, according to a study sponsored by the Ontario Real Estate Association.

But cutting off young buyers could have sequential effects next year, says Elton Ash, RE/MAX Regional EVP for Western Canada.

“When you affect these first-time home buyers, they are the initial dominos of what drives the market. Because as an existing home owner, if you don’t have anyone buying your house, you can’t move up or move over.”

Here’s how Canada’s four real estate markets are expected to perform in 2019:

TORONTO

Royal LePage expects the GTA market to make modest gains, with home prices rising 1.3 per cent, while RE/MAX is forecasting a two per cent gain.

Between 2017 and 2018, home sales dropped by 16 per cent, from around 80,000 to less than 68,000. With prices still at elevated levels, RE/MAX estimates this number will continue to drop next year. However, Alexander says there is no shortage of demand — immigration to the GTA will continue to have an impact on the market.

A house for sale in Toronto. Analysts expect the Toronto housing market to make modest gains in 2019.ERNEST DOROSZUK/TORONTO SUN/POSTMEDIA NETWORK

“Toronto is not only a big destination for Canadians, but also globally,” said Alexander. “The average amount of people moving into the GTA is about 100,000 a year – we don’t expect that number to decrease.”

Indeed, PwC is reporting a 15-year high in net immigration to the GTA. The management consultancy ranks Toronto as Canada’s top market to watch next year, with land costs expected to reach Vancouver levels by next year.

VANCOUVER

Analysts are divided over the prospects for the Vancouver real estate market. While Royal LePage forecasts Vancouver properties to stay relatively flat on average, PwC estimates a 2.9 per cent gain, and RE/MAX estimates a three per cent drop in average residential sale prices in 2019.

While the economic outlook is good, foreign buyer activity is expected to slow down. Vancouver’s empty home tax, where properties deemed vacant are subject to a one per cent tax on the property’s 2018 value, will continue to deter overseas buyers.

But RE/MAX’s Ash said the foreign buyer tax is not felt by all investors equally. While the 20-per-cent tax is off-putting to many, Chinese buyers look at the tax as “a cost to do business.” He anticipates the trend will continue in 2019.

Even with reduced foreign ownership, McClintock says low affordability rates will continue to be a problem next year.

“When the houses in Vancouver are averaging about one million (dollars), there are some real problems of affordability.”

MONTREAL

The Greater Montreal Area is expected to see the largest gains among key markets, with home prices expected to rise three per cent, predicts Royal LePage. The real estate agent attributes the surge to a historically low unemployment rate and an influx of foreign buyers. While Toronto and Vancouver were galloping ahead with 20 per cent increases, says LePage’s Soper, the Montreal market was relatively flat, but now “it’s been discovered.”

Yet Soper said he doesn’t see Quebec’s most populous city surpassing Vancouver or Toronto in foreign investment in 2019, given that inventory is tight in Montreal and building hasn’t kept up with demand. He also notes Montreal doesn’t have the same communities of immigrants as the other two Canadian cities.

CALGARY

Median home prices in Calgary are expected to decrease 2.3 per cent in 2019, according to Royal LePage, citing persistently weak oil prices and the resulting low buyer confidence. RE/MAX estimates the average residential sales price will remain flat but could shift dramatically in 2020 because of the province’s dependency on oil.

Alexander notes that in 2014 a similar oil market in Alberta and Newfoundland moved the real estate scales.

“Prices did come down more than five per cent, so I think it could have an impact. Just how big will be determined by how big the oil crisis is.”

Calgary’s housing market remains oversupplied, with vacancy rates around 6 per cent, according to the Canadian Mortgage Housing Corp. However, new residents could fill up empty properties in the years to come, with the city’s population estimated to grow by 26,300 annually, according to an October 2018 report by the City of Calgary.

11 Dec

Montreal-area housing starts expected to drop in 2019

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Posted by: Frederic Pichette

After rising in 2017 and 2018, residential construction starts are expected to decline by 12 per cent in 2019.

While housing starts in the Montreal region are on-track to rise this year, the Association des professionnels de la construction et de l’habitation du Québec is forecasting a 12-per-cent decline in 2019.

Housing starts are forecast to rise eight per cent this year, to 26,277, after rising by 38 per cent from 2016 to 2017.

Even with the 12-per-cent drop expected next year, the forecasted 23,229 starts will be still be higher than 2016 levels.

The construction of condos is expected to decline in 2019, as is construction of purpose-built rental properties.

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28 Nov

Montreal real estate: Radon testing now recommended when buying a home

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Posted by: Frederic Pichette

It’s simple and inexpensive to find out whether your home — or a home you hope to buy — has a radon problem.

The leading cause of lung cancer in non-smokers is an invisible, odourless and tasteless radioactive gas present at dangerously high levels in as many as one in 10 homes in Quebec.

Radon is a common, naturally occurring gas released by the breakdown of uranium in soil. It enters homes through cracks in the foundation, gaps around service points, and other places where there are openings near to the ground.

At low levels, radon gas is not harmful, but in higher concentrations, it can be harmful to lung health over time.

According to Health Canada, radon exposure is responsible for about 16 per cent of lung cancers and more than 3,200 deaths each year, or about eight deaths per day.

Radon is a known risk. But the good news is, it’s simple and inexpensive to find out whether your home — or a home you hope to buy — has a radon problem. It’s also not as expensive as you might think to remediate the problem.

The only way to tell if a home has high levels of radon is to test, which is why Health Canada and the Canadian Association of Radon Technologists (CARST) recommend that all home owners should either purchase a do-it-yourself test kit or hire a professional to measure radon levels within their homes.

According to CARST spokesperson Erin Curry, radon exposure kills more people every year than motor vehicle collisions, drownings, house fires and carbon monoxide combined.

“We wear our seatbelts and change our batteries in our smoke detectors, but very few of us — only six per cent of Canadians — have tested their homes for radon,” Curry said.

The test can be done for less than $50 using an inexpensive home test kit available online or in home improvement stores (there is a list of reputable suppliers at takeactiononradon.ca, a website created by CARST and the Canadian Cancer Society).

The kit measures radon levels within a home over three months, ideally during the winter season. At the end of the test period, the device is mailed to a lab, and the homeowner is given a report that indicates whether radon remediation is required.

If the test comes back indicating that there may be high levels of radon in a home, it doesn’t mean the home’s a lemon. In Canada, radon remediation costs about $3,000 on average, and the good news is, once you do ante up for radon remediation, it’s typically a one-time fix.

“I think that a lot of people are scared to test,” Curry said. “They think if the test comes back high it’ll be super expensive and super complicated. But it is nice for people to know there is a solution to the problem. It is proven, and it is relatively inexpensive.”

On Nov. 15, CARST released new guidelines for realtors and homeowners urging sellers to have their homes tested and buyers to add radon levels to the list of things to ask about when making an offer on a home.

Realizing a three-month testing period may be impractical to complete within the normal process of clearing subjects on a promise to purchase, CARST has come up with new recommendations for a quicker, albeit less accurate, test that can be completed within four days and indicates whether a home is likely to have annual radon levels above the safe threshold of 200 Bq/m3.

If the quick test shows a home may have high levels of radon, it doesn’t mean the buyer needs to walk away from the deal. Instead, CARST recommends buyers make an offer at a price that reflects the likely cost of radon remediation, just as they would for another major repair, and plan on conducting the full three-month test after moving in to determine the actual level of risk.

Curry said remediation usually takes no more than a day, and should be done by an accredited professional. The fix can be as simple as sealing cracks around the base of a home to prevent the gas from seeping in, but often requires installing an active soil depressurization system, which has been shown to reduce home radon levels by as much as 91 per cent.

For more information on radon, visit canada.ca/radon

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6 Mar

Fourth-quarter real-estate sales up 9% in Montreal

General

Posted by: Frederic Pichette

The residential real estate market in the Montreal region grew by nine per cent between the fourth quarter of 2016 and the fourth quarter of 2017, according to the Quebec Federation of Real Estate Boards.

The number of residential real-estate sales in the Montreal region during the fourth quarter was up nine per cent when compared with the equivalent period in 2016, according to the Quebec Federation of Real Estate Boards.

But it wasn’t the fastest-growing market in the province.

Trois-Rivières saw sales rise by 20 per cent during the same period.

In both markets, median prices rose by five per cent.

The number of active listings in the Montreal region was down 12 per cent from the fourth quarter of 2016.

Across the province, fourth-quarter sales rose by eight per cent, while median prices for single-family homes rose by an average of three per cent.

In the Montreal region, the island of Montreal saw the biggest increase in sales. Fourth-quarter sales were up 12 per cent from the equivalent period the year before. It was followed by the South Shore, where sales were up 11 per cent.

The island of Montreal also saw the biggest price increases in the region. On average, median prices for single-family houses were nine per cent higher in the fourth quarter of 2017 than in the equivalent period in 2016, reaching $467,500.

The median price of a condo was up by eight per cent on Montreal Island, to $312,000, while prices rose by seven per cent in Laval, to $230,750. In both Vaudreuil-Soulanges and St-Jean-sur-Richelieu, condo prices remained flat during the period.

Among neighbourhoods, Côte-des-Neiges/Côte St-Luc, which are measured together by the QFREB, saw the biggest increase in sales between the fourth quarter of 2016 and the fourth quarter of 2017: 38 per cent.

Notre-Dame-de-Grâce/Montreal-West saw the largest percentage increase in median prices during that period, up 23 per cent to $740,000.

Ahuntsic-Cartierville saw the largest percentage increase in condo prices, up 16 per cent during that period to $270,000.

Across the Montreal region, there were 44,448 property sales during 2017, the second highest on record and an increase of eight per cent from the year before. Condominium sales were up 17 per cent from 2016 to 2017. Across the region, the median price of a single-family home was $310,000, while the median price of a condo was $247,000.

On a year-over-year basis, the number of active listings was down 13 per cent. Demand for single family homes on Montreal Island continues to outstrip supply, the QFREB said.

14 May

Royal LePage reports sharp rise in American interest in Canadian real estate

General

Posted by: Frederic Pichette

TORONTO – A new report from Royal LePage suggests many Americans who oppose incoming president Donald Trump continue showing a desire to purchase property in Canada.

In a report released early Friday, the company says American web traffic on its website surged 329 per cent the day after the U.S. election on Nov. 8 and has climbed 210.1 per cent year-over-year the week after Trump’s victory.

For all of November, says Royal LePage, U.S. traffic to its site grew 73.7 per cent year-over-year compared to the same period in 2015 and rose 40.9 per cent annually in the fourth quarter.

During that three-month period, the report says American interest in real estate was primarily focused on Canada’s largest markets, with Ontario, B.C. and Quebec receiving 72.7 per cent of all U.S. regional page views on royallepage.ca.

Three-quarters of the American inquiries concerned residential properties.

Royal Lepage also says that in a survey of 1,226 of its real estate advisers between Jan. 12-17, 39.5 per cent say they expect U.S. interest in Canadian real estate to keep climbing under a Trump presidency.

“The United States was already a top source for immigration into Canada, and now in the period following the recent U.S. election, we are witnessing a material bump in American interest in Canadian real estate,” said Royal LePage president and CEO Phil Soper.

“With our country’s ever-growing global reputation as a financially sound, happy and culturally tolerant place to raise a family, it is not surprising that interest has moved from a place to play, to a potential place to live and work.”

Many Americans began looking north last year as Trump inched closer to the White House, as illustrated by a huge spike in web traffic on Canada’s citizenship and immigration website. The site crashed on Nov. 8 as results from the presidential election rolled in.

Immigration, Refugees and Citizenship Canada said there were more than 200,000 users accessing its website around 11 p.m. on election night and American IP addresses accounted for about half of that figure. At the same time the previous week, the website saw just over 17,000 users.

25 Apr

Buy now or risk saying bye-bye to affordable Montreal home ownership

General

Posted by: Frederic Pichette

Bert Archer, Special to the Montreal Gazette Bert Archer, Special to the Montreal Gazette

28 Feb

What you need to consider before buying a home with family or friends

General

Posted by: Frederic Pichette

As Canadians adjust to hot housing markets and stagnating wages, there’s been increasing buzz around teaming up with friends or family to buy a home.

About a third of Canadians would consider co-buying a home, according to a recent ReMax survey; Capital One research found that nearly half of millennials (46 per cent) would be open to buying a home with family or friends.

READ MORE: Vancouver lawyer says more families joining forces to buy homes

“With the cost of housing going steadily up, it’s become out of reach for many,” said Bill Whyte,  senior vice-president and chief member experience officer at Meridian Credit Union.”I think there are new generations that are coming in, looking at it differently.”

Maridian has created a family or friends mortgage guide to help people through the process. Up to four names can be on the mortgage’s title, meaning four owners.

“Here’s an opportunity to pool your resources together, pool your income and still potentially look at home ownership.”

While combining funds with family or friends can result in more square footage, that bigger house comes with unique challenges said James Laird, president of CanWise financial and co-founder of RateHub.ca.

 

“Economically speaking, more income makes homes easier to afford,” said Laird.

“But you need to be careful that anyone you’re getting a mortgage with are people you think in the long term will be good financial partners for you.”

Before signing on the dotted line along with three of your closest friends, here are some things to consider.

Know all the costs

Home ownership is more than just a mortgage payment.

“It’s important to know all the costs of home ownership … go in with your eyes wide open because it’s much more than just principal and interest,” said Whyte. “Make sure you understand all the moving parts of home ownership.”

You need to consider property tax, bills, repairs, upkeep, one-off expenses — the list goes on.

READ MORE: Real estate trends 2017: Will Toronto prices catch up to Vancouver’s?

“Determine how you will share the home,” said Whyte. “Is everybody equal partners in it, is everyone putting the same amount of money into it?”

Be on the same page as your home-buying pals for household costs and emergencies. Will you all contribute to a contingency fund? Try DIY options or immediately call in an expert? These discussions should happen before the basement floods or furnace craps out.

You’re on the hook 100%

“Everyone’s on the hook for the mortgage in its entirety,” said Laird.

If you buy a house with two friends and one can’t pay their share, it falls on the other title holders.

“The remaining people are on the hook for that loan 100 per cent,” said Laird.

READ MORE: CMHC issues ‘red’ warning for Canada’s housing market

Make sure you’re partnering up with people who are dependable — before you’re left with a larger share of the loan.

“This involves a fair amount of trust … if it is [with] friends, you should be thinking of them more as family because this is a very close relationship you’re entering into and it’s a long-term one as well.

Get everything in writing

Get an agreement in writing that includes everything from dealing with disagreements to plans for eventually selling the property, said Whyte.

“What happens when you want to sell the house? Is there first right of refusal?”

READ MORE: Numbers show it’s harder for millennials to buy a home than it was for their parents

Should relationships fall apart or one person wants to get out of the mortgage, what are you going to do?

“Even with the best intentions, sometimes things don’t work out and it could be for unforeseen circumstances so you’ve got to protect all parties as fairly and equitable as possible,” said Whyte.

Be prepared for things to get messy, said Laird.

“Whatever the nature of the relationship was entering, when you mix business and money with friendships and family then you’re risking those relationships for sure.”

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