Big bank calls for real estate policy action

CEO calls on entire industry, as well as government officials, to come together to determine solutions.

“Longer term, I believe all parties need to come together — governments, developers, realtors, banks, community groups and others — to accelerate our progress in finding policies and solutions for this issue,” said RBC CEO Dave McKay.

McKay spoke Thursday at a shareholder meeting about his “increasing” concern about Toronto and Vancouver’s housing markets.

He is in favour of government intervention, saying increased housing prices are the result of an unhealthy combination of factors and that “all of these factors are mixing to push prices up to unsustainable levels, stressing household balance sheets and locking many people out of the housing market.”

The comments follow the latest housing stats releases from Toronto and Vancouver.

The average home price in Toronto jumped 33.2% year-over-year to $916,567. Vancouver’s prices, despite prices dampening over the past few months, still sit at an average of $919,000.

While it would be admirable to see all interested parties mentioned by McKay work together to find a solution, chances of that happening are likely slim.

Government officials seem intent on implementing taxes to curb real estate speculation and foreign investment; real estate boards, meanwhile, have vehemently opposed those ideas, instead arguing in favour of increasing housing demand.

It remains to be see what, if anything, the government will do to further address affordability in Vancouver and Toronto.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Read more

Veteran estimates foreign investment as much as 70%, argues for regulation

One Toronto brokerage owner is calling for foreign buyer regulation, despite some blowback from his own brokers.

Carl Langschmidt, president of Condos.ca, recently penned a blog entitled Foreign Investor Tax and Regulation Please! – a polite, yet assertive call to action.

In the piece, Langschmidt argues foreign ownership stats are much higher than the CMHC’s estimate of 2.3% of sales in Toronto. He went so far as to call that figure “laughable.”

“Our talks with sales reps in the trenches indicate it is much higher; some reported as high as 70% foreign ownership at developments like CityPlace,” Langschmidt wrote.

Anecdotal evidence, to be sure. But how about this other piece of sobering hearsay?

“Personally, this week alone, one of the agents in my brokerage who was meant to be listing a 50 unit condo building was just informed today the developer sold the entire building to a Chinese consortium and that we’re not getting any of the listings,” Langschmidt told Canadian Real Estate Wealth. “That’s how hot the market is.”

Vancouver had success with its own foreign real estate regulation when it implemented a 15% sales tax. That helped contribute to double-digit cooling in what was once Canada’s hottest market.

And Toronto may soon have its own measures introduced, with Ontario’s budget expected in the coming weeks. Ontario Finance Minister Charles Sousa said the budget will contain policy aimed at addressing housing affordability.

“Demand is high for a number of factors,” he said, per the Canadian Press. “Could be speculators, could be people from outside the country, it could very well be the many who are now moving into Ontario creating that demand.”

While many have argued in favour of a similar approach in Toronto, Langschmidt suggests a multipronged strategy that could also include special regulations for prebuild home sales.

“Preconstruction sales has morphed into a totally separate specialization in real estate; it’s almost as if agents who specialize in that are so different from traditional real estate where you’re showing properties,” he said. “Preconstruction sales is all about pitching investors and often agents and groups go overseas to pitch. I’ve seen their presentations. I cringe at their presentations. It induces the speculation; half of them use numbers are (off). A lot of them don’t calculate ROIs correctly. This is where I think some regulation is required.

“Anyone selling a stock or investment vehicle, there’s regulations in the securities business about what you can say. Whereas with (real estate sales) it’s the wild west.”

Many believe foreign ownership is having a major impact on Toronto home prices and will likely applaud Langschmidt’s comments. However, that may not include a portion of real estate agents, his own included.

“The reason why I’m saying it is I don’t mind saying what I think is true,” Langschmidt said. “It will upset people who deal with foreign investors; even in my own brokerage I had someone call me up and say ‘we have a lot of foreign investors and they’re not going to be happy with our opinion on us.’”

Related stories:
Ontario hints at measures to cool real estate market in the budget
Don’t tax foreign buyers says real estate board

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Read more

Why we shouldn’t worry about debt-to-income record

One big bank is arguing the debt-to-income ratio is the most “useless economic indicator out there.”

167.3%.

You’ll read a lot about these two numbers in the coming days. That’s the debt to income ratio for all Canadians and it just hit a new high in Q4 of last year.

It’ll be whipped out when arguing against mortgage debt and for policies aimed at safeguarding Canadians from taking on even more debt.

But it isn’t that simple, according to Benjamin Tal, chief economist with CIBC. And the ratio isn’t even that useful.

“The attractiveness of the ratio is that it’s simple —one number catches all. But as we all know, the cost of simplicity is, at times, very high. The ratio compares the stock of debt to the flow of income,” Tal wrote in response to the release of the figure. “You are not required to pay off your mortgage in one year, so on that ground, that approach is faulty.

“It’s also the debt of people with debt, relative to the income of people with and without debt. Again a suboptimal comparison. And if foreign income plays a role in the housing market (and it does) that income is not part of the calculation.”

Still, news organizations jumped on it.

“Canadian households owed $2 trillion at the end of 2016,” the CBC proclaimed.

“Debt-to-income hits fresh record,” Reuters said.

But while debt-to-income levels seem frightening, CIBC argues it’s anything but.

“In many ways this ratio is designed to rise. In the past 25 years, the debt-to-income ratio fell only twice,” Tal wrote. “In a normally functioning economy, debt will rise faster than income.

“For the ratio to fall notably you need a significant shock such as the US financial crisis which led to the US debt-to-income ratio falling from over 160% to 140%,” he continued. “Is the ratio rising too fast? Not really. Total real household debt is now rising by just over 4% (year-over-year)—a rate that is in line with the performance seen during the jobless recovery of the 1990s.”

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Read more

Happy International Women’s Day

Today marks the annual event where people across the world aim to #BeBoldForChange – have you done anything to celebrate in your office? Let us know!

This year’s International Women’s Day theme is Women in the Changing World of Work: Planet 50-50 by 2030.

UN Secretary-General António Guterres is calling for change “by empowering women at all levels, enabling their voices to be heard and giving them control over their own lives and over the future of our world.”

Is your company taking great strides to ensure an equal work culture? We want to know – and to share your story.

Let us know in the comments below how you and your company are recognizing the special event.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
Newcastle Creek, Tribune, Wile Settlement, La Doré, Boileau

Read more

Should investors target this market again?

According to one recent report, rents have bottomed out and are on the upswing.

“Private landlords in Alberta have endured a rough ride over the past 24 months, rental rates dropped while vacancy rates climbed rapidly,” Shamon Kureshi, president and CEO of Hope Street Management Corporation said. “Leading indicators suggest that there is cause for optimism in 2017 as rental rates appear to have bottomed out, and can only go in one direction from this point forward – up.”

According to Hope Street, rental markets across Alberta have been struggling mightily; the number of available listings peaked at 8,200 in Calgary and 5,200 in Edmonton at the end of last year.

However, Hope Street claims rental prices have stabilized, according to a six month price review.

“The feedback from our renters seems to suggest that there are several factors at play to cause a market shift, including: an improved outlook on oil and gas in the province, less new rental properties coming online, and a slowing of outward migration away from the province.”

“Edmonton’s current average rental rate of $1161 per month appears to have been largely stable in the past 90 days, and Calgary current average rental rate of $1469 per month shows a slight trend upwards,” Hope Street said.

Alberta-based investors have been hard-hit as a result of the oil downturn; and while this report is certainly the first good news current and would-be homeowners have heard, many will likely hold off on jumping into the market until further evidence comes to light.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
Saint-Éloi, Roberta, Winnipeg Beach, Frasers Mountain, East LaHave

Read more

CREA spotlights challenges

The Canadian Real Estate Association has released its first report of 2017, highlighting the challenges homebuyers are poised to face this year.

“Canadian homebuyers face some challenges this year, including new mortgage rules that make it harder to qualify for a mortgage and regulatory changes that will push up mortgage financing costs,” CREA President Cliff Iverson said. “It will take some time to gauge the extent to which these challenges will weigh on home buyers in different housing markets across Canada.”

Home sales fell 1.3% in January from December’s total. Sales activity was down in half of all local markets, led by the GTA, Greater Vancouver and Montreal markets.

Inventory continues to be an issue.

“The shortage of homes available for sale has become more severe in some cities, particularly in and around Toronto and in parts of BC,” said Gregory Klump, CREA’s Chief Economist. “Unless sales activity drops dramatically, the outlook for home prices remains strong in places that face a continuing supply shortage.”

The number of newly listed homes fell 6.7% in January – that’s the second consecutive monthly decline. New listings, meanwhile, were down in two-thirds of all markets.

“With the monthly decline in new listings surpassing the decline in sales, the national sales-to-new listings ratio jumped to 67.7% in January compared to 64.0% in December and 60.2% in November,” CREA said in a release. “A sales-to-new listings ratio between 40 and 60 is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers’ and sellers’ markets respectively.”

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
North Port, Saint-Philippe-de-Néri, Casey, Blewett, Fenwick

Read more

Industry weighs in on foreign buyer stats

Ontario-based associations discuss the recent released foreign buyer stats and whether or not any action is needed to control its influence.

Should Toronto implement a similar foreign buyer tax?

The Ontario Real Estate Association (OREA) doesn’t think so.

“A foreign buyer tax penalizes the international MBA student who will one day start her own business in our province, or the pediatric nurse aspiring to work at Sick Kids,” Tim Hudak, OREA CEO said in a release. “The lesson here is that we need sustainable, long-term solutions that get to the root of the affordability problem, and it starts with increasing housing supply.”

OREA referenced a study by the Toronto Real Estate Board, released Tuesday, that found a mere 4.9% of GTA transactions in 2016 involved foreign purchasers.

“As the foreign buyer conversation unfolded, TREB held steadfast to the view that the provincial and municipal governments should comprehensively and patiently review the issue of foreign purchasers of real estate in Ontario before making any policy decisions and should seek out actual empirical evidence on the level of foreign buying activity in the GTA,” the board said in its Market Year in Review. “In this regard, TREB decided to take the lead on data collection and commission its own study.”

TREB commissioned Ipsos, a third party research firm, to survey agents about the level of foreign purchasing activity throughout the GTA.

The survey collected over 3,500 responses.

As previously mentioned, the survey found an estimated 4.9% of foreign transactions in the GTA – with levels as high as 6% in York and Halton regions and as low as 1% in Durham.

In Toronto, the share of foreign buyers was 5%.

According to the survey responses, 40% of foreign buyers purchased a home as a principal residence; 15% purchased for a family member; 25% purchased as a rental investment; 4% purchased as a non-primary residence; and 3% purchased with the intent of keeping it vacant.

“These results were in line with recent CMHC findings related to the condominium apartment market. In the fall of 2016, CMHC estimated that 2.3 per cent of condominium apartments in the GTA were foreign-owned. In newer condominium apartment buildings, the share of foreign ownership was slightly higher at 3.9 per cent,” TREB said.

The results suggest the influence of foreign buyers on the GTA market is minimal and that a similar foreign buyer tax to Vancouver’s is not necessary.

Click here to read the entire study.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
Beaconia, Medonte, Notre-Dame-de-la-Merci, Country Harbour Mines, East Walton

Read more

The next hottest spot for investors?

An ambitious development plan aims to redefine a skyline and strengthen an already popular market

A $1.5 billion community called M City is set for development in Mississauga, Ontario, starting with a flagship building that aims to be iconic.

Rogers Real Estate Development has announced the ambitious plan, which has been underway for approximately six years.

A total of 15 acres, which has been owned by the Rogers family since the 1960s, will soon be home to 10 towers in Mississauga’s downtown core, which will include 5-6,000 units. The first project will be a tower designed by CORE architects.

The 60 story tower will be the largest building in the city.

“We wanted a design that would be iconic, that would establish the development in the location, that would act as the western gateway to Mississauga’s downtown and we think we achieved that,” Mark Reeve, partner at Urban Capital, the lead developer of the project’s first phase. “We think what we have come up with is an excellent response to the iconic design of the Absolute Tower on the east side. In ways we’re trying to be bookend. This project is equally as striking on the skyline.”

The Absolute Tower, architecture enthusiasts know, is the hard-to-miss curved condo building that has colloquially referred to as the Marilyn Monroe.

And Urban Capital is confident its building will become just as iconic.


A rendering M City’s planned flagship tower, slated to be built at Burnhamthorpe Road and Confederation Parkway

The entire community is expected to be completed within the next 10-15 years.

It’s expected to provide a serious boost to the already popular housing market.

“Mississauga has reached an inflection point and we recognize that we have a significant role to play in how this city continues to evolve,” said Edward Rogers, whose family’s private holding company, Rogers Real Estate Development Limited, is the owner of the project. “This is a once-in-a-lifetime opportunity to play an active role in shaping the future of a city.”

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
Kuskonook, Bamfield, Princeton, Alton, Otonabee-South Monaghan

Read more

Mortgage insurance premiums hiked once again

CMHC announced early Tuesday it is increasing its loan insurance premiums effective March 17.

“We do not expect the higher premiums to have a significant impact on the ability of Canadians to buy a home,” said Steven Mennill, Senior Vice-President, Insurance. “Overall, the changes will preserve competition in the mortgage loan insurance industry and contribute to financial stability.”

According to the Crown Corporation, the average homebuyer will see a $5 increase to their monthly mortgage payment as a result. That $5 certainly adds up, however, to a total of $1,500 over the course of a 25 year mortgage.

The increase is the result of last year’s mortgage rule changes, CMHC claims.

“Capital requirements are an important factor in determining mortgage insurance premiums. The changes reflect OSFI’s new capital requirements that came into effect on January 1st of this year that require mortgage insurers to hold additional capital,” it said in a release.

“Capital holdings create a buffer against potential losses, helping to ensure the long term stability of the financial system.”


This latest hike comes less than two years after the most previous one, which was announced in April 2015.

See below for standard premium changes.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
North Buxton, Carmacks, Lavaltrie, Metcalfe, Brudenell

Read more

A look-ahead: Trends that could impact the industry this year

These are the major storylines brokers will want to keep an eye on in 2017, according to one mortgage lender.

All eyes on Trump
Those sick of seeing the President-elect’s shenanigans pop up in their news feeds won’t be treated to a reprieve anytime soon — and that includes mortgage brokers.

“It could be just the overall economy; what Trump does with NAFTA – is he going to intimidate companies that have dealt in Canada extensively and may want to set up additional operations in Canada to repatriate and come back to the US? He’s certainly showing that already with Mexico,” Robert Goodall, president and CEO of Atrium Mortgage Investment Corporation said when asked what the biggest industry story will be this year.

“We lenders with diverse portfolios in commercial and residential, the thing we worry about more is a macro event more than a micro event.”

Relief to Alberta
At least that’s the hope. Lenders have been scaling back their offerings in the hard-hit province, making it more difficult for brokers to find mortgage solutions for clients.

“In Alberta, we want to see the price of oil continue to strengthen,” Goodall said. “We haven’t been active there in the last 18 months but we’re hoping to dip our toe in (again) in 2017 but it will depend on whether … oil prices get to a point where the economy starts to recover.”

Interest rates
Many have predicted higher mortgage rates in the coming months and Goodall is no different.

“I think a small increase is likely in the stakes. That means bond yields will probably increase here even though the Bank of Canada has strongly indicated they’re not going to increase short-term rates, they can’t control long-term rates,” he said. “That will depend, in part, on what the US does. They’ve been clear they’re going to be raising rates. That means mortgage rates will move up a bit.

“I’m not expecting they will move up much. I’m expecting a half-point or something like that.”

An end to regulation (at least for now)?
Mortgage regulation was undoubtedly the hottest topic in 2016, with British Columbia’s government bid to crack down on foreign buyers and the federal government placing higher barriers in front of insured mortgage holders.

The worst, however, may be behind us.

“My guess is they’ve finished. I think BC is still trying to figure out the impact that the 15% (foreign sales tax) will have. I think the federal changes have been so late in the year that they’re going to wait and see the effect they will have,” Goodall said. “Most economists think it will have a material impact.”

What stories do you think will define the mortgage industry in 2017? Have your say below.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
Pierceland, North Dundas, Harwood Island 2, Pomquet, Duncans Cove

Read more
Page 3 of 4212345...102030...Last »