Mortgage Rules Revisited With Good News

Last Updated: October 4, 2010 6:04pm

OTTAWA – The federal government has no plans to clamp down on the housing market with new, tougher rules for mortgages, the finance minister says.

But Finance Minister Jim Flaherty said he’s not against the idea if the market changes.

“Our concern is always ensuring that the housing market does not overheat, and in particular that the mortgage market does not overheat,” Flaherty said Monday.

Concerns have been raised by economists in the last few weeks about the possibility of a housing bubble getting ready to burst and about the level of debt Canadian households are carrying. The average Canadian household is carrying a debt equal to 146% of their income, a level that has caused Bank of Canada Governor Mark Carney to raise alarm bells.

“Canadian household balance sheets are becoming increasingly stretched,” Carney said in a speech last week.

Flaherty said the government is concerned about keeping a lid on the speculative real estate market.

The Conservatives boosted the requirements to get a government-insured mortgage earlier this year to include that all buyers must qualify for a five-year, fixed rate mortgage, even if they chose a variable rate. The move came as interest rates sat at historic lows.

As for the overall health of the economy, Flaherty said the global economy is in a state of high uncertainty.

“The good news is there’s less uncertainty today than there was two years ago this month,” Flaherty said.

He pointed to small growth in the American and European economies, and modest growth in developing countries, as positive signs compared to the collapsing banks that marked the financial meltdown of 2008.

Flaherty also said he had no plans to put off corporate tax cuts planned for the new year saying the cuts, which have already been passed by parliament, would help create jobs.
By BRIAN LILLEY, Parliamentary Bureau

Last Updated: October 4, 2010 6:04pm

OTTAWA – The federal government has no plans to clamp down on the housing market with new, tougher rules for mortgages, the finance minister says.

But Finance Minister Jim Flaherty said he’s not against the idea if the market changes.

“Our concern is always ensuring that the housing market does not overheat, and in particular that the mortgage market does not overheat,” Flaherty said Monday.

Concerns have been raised by economists in the last few weeks about the possibility of a housing bubble getting ready to burst and about the level of debt Canadian households are carrying. The average Canadian household is carrying a debt equal to 146% of their income, a level that has caused Bank of Canada Governor Mark Carney to raise alarm bells.

“Canadian household balance sheets are becoming increasingly stretched,” Carney said in a speech last week.

Flaherty said the government is concerned about keeping a lid on the speculative real estate market.

The Conservatives boosted the requirements to get a government-insured mortgage earlier this year to include that all buyers must qualify for a five-year, fixed rate mortgage, even if they chose a variable rate. The move came as interest rates sat at historic lows.

As for the overall health of the economy, Flaherty said the global economy is in a state of high uncertainty.

“The good news is there’s less uncertainty today than there was two years ago this month,” Flaherty said.

He pointed to small growth in the American and European economies, and modest growth in developing countries, as positive signs compared to the collapsing banks that marked the financial meltdown of 2008.

Flaherty also said he had no plans to put off corporate tax cuts planned for the new year saying the cuts, which have already been passed by parliament, would help create jobs.

New Home Construction VS. Resale Homes in Vaughan Real Estate

Here are just a few ideas when considering a New Home Construction as opposed to a resale property.

Whether you decide to design and construct a brand new home, or purchase a resale property is a big decision when purchasing a home. The only one who can determine what best is you. You should look at the pros and cons  and compare. I going to give you a few ideas in this blog.

 

What is appealing to home buyers when considering a New home construction is the fact that one can choose their own design and decor. Also, everything is new, and that can be appealing to the majority of Buyers.    New homes have modern layouts that support modern life-styles and technology.

 

In Vaughan Ontario there are also a some disadvantages in Buying a New Vaughan Home.  The H.S.T, oh yes the dreaded Harmonized Sales Tax, applies to New Home Construction.  Its tough to come up with a down payment and if Buyers put most of their down payment towards a The H.S.T, this could be very unappealing. The new home doesn’t come with trees, shrubs, Fences, appliances, window coverings and other finishing’s. Buyers could also expect very small lots.  Having dust on your vehicles for a couple of years while the subdivision is being completed can also be a deterrent. Oh and don’t forget about the levies and service hook-ups. The builders don’t mention these costs, but believe me they are not going to take on the expense.

 

There are several advantages to finding a resale. If a Buyer has their heart set on moving to an urban neighbourhood in a specific area, your only choice might be to purchase a resale property. Resale homes are frequently in long established neighbourhoods with mature landscape designs and lots of charm. They usually come with bigger lots. Many resale homebuyers also find that they can put off purchasing house decor items and appliances, because most resale’s come with appliances and window covering and also electrical light fixtures. Frequently, homebuyers modernize their resale purchase, which will raise the value of a resale property far more quickly than is possible with a new home construction. Yes the H.S.T does not apply to Resale Homes in Vaughan Real Estate.

 

There are some cons as well. Floor plans are outdated as well as Kitchens, Bathrooms, Floors etc.Buyers sometimes need to update common needs for a home such as Roof, Furnace, driveway, windows, Landscape, etc.

 

In the end, choosing a new home construction or a resale home is a tough choice. Most times it comes down to Fianancing and Location.. If the homebuyer knows what they are looking for, then this list of advantages and disadvantages should assist in making decisions easier..
If you are considering a move to Vaughan Ontario, consider speaking to John Rossi, an expert in Vaughan Real Estate. http://www.VaughanHomeSales.com , http://www.RossiDuo.com

 

First Time Buyers

2009 for me as a Real Estate Agent has been a year of Multi multiple offers. I can’t remember a year like that, and I have been in Real Estate for quite some time. Almost every offer I have been involved with in 2009 have involved multiple offers. This means that Buyers are competing against each other for a particular home. In each case the homes were sold for between 30,000 to 200,000 dollars more than the listing price.
2010 the inventory of homes for sale in Vaughan has come down drastically. Its seemed to me that buyers have been hesitant. With lower than usual interest rates. This is fascinating to me that buyers choose to be hesitant. When things were booming it seem buyers jump on the bandwagon, and get involved with multiple offers. In 2010 when there is a lower inventory they seem to think price are going to drop drastically. Well we’re nearing the end of 2010 and no such thing has happened. Interest rate are fantastic. As much as you try and tell people that they shouldn’t wait for bad economic news and for Interest rates to go up, and we all know that they will go up. They seem to feel comfort in following the crowd.

First Time Home Buyers Interest Rates

First time homebuyers beware of the benefits of buying in this market as opposed to waiting another few years.

Interest rate are at emergency levels now. There is only one thing that can happen with interest rates the way they are now, and that is they will go up. First time buyers pay attention to these examples of how much they could save in interest if they bought in the current low interest rate environment versus predicted rates over the next couple of years.
If interest rate are not enough of an incentive to think about buying now, here are some questions buyers have and possible answers to their querries.

Down payment:
This is always an issue when it comes to buying a home for first time buyers. What they should know though is lthat there are many solutions available today that can help them with their down payments.
A great deal of Lenders today
will allow for a gifted or borrowed down payment. And of those lenders that will not provide this alternative, could offer cash-back options that can be used as a down payment.
Some lenders offer a “free down payment” or “flex down” , this of course client will end up costing 1% more in their interest rate, but the program will help them get in the homeownership door and start accumulating equity earlier. The first time homebuyer must, however, stay with the original lender for the full initial five-year term or else they’ll have to pay the down payment back
First time homebuyers should know that last year there was a $5000 increase in the RRSP Home Buyers Plan. This means first time homebuyers can now withdraw up to $25000 each from their RRSP’s for a down payment which is free of Tax and is also interest free. Can you imagine how many people still don’t know this?”>

As a First time home buyer, i empathize with you. I know you are getting information – through the Internet, friends, family members and anyone willing to voice their opinion on a given subject. Often times this information is not what you would say is accurate. What you need, therefore, is education and coaching as opposed to being bombarded with more information.
Once you have gotten pre-approved and before you head out home shopping. You should try and speak to a trusted Realtor. This will help set their minds at ease, because many first-time buyers are overwhelmed by the financing and buying processes, and often don’t know what it truly costs to purchase a home. Providing real examples can go a long way in showing them what it costs to buy a home in their area versus what they’re currently paying in rent.
Did you know that If a renter is currently paying $800 per month, for example, with that same payment (including taxes) they could afford to buy a $120,000 home. And assuming real estate values increase 2% per year over the next five years, the new homeowner would have accumulated $27,000 in equity in their home. If they continue renting, however, this $27,000 has generated equity in someone else’s home.
Often times this whole process comes down to trust. Remember that a good Realtor can answer all you questions and usually a realtor has team members that will make your buying process easier. Members such as lawyers, Mortgage Brokers(this is perhaps the most important factor and team member) inspectors, etc, etc.

Vaughan Ontario Home Sales

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Condominiums first step to homeownership

in most major centres, says RE/MAX

 
Given serious escalation in detached housing values, condominium apartments and towns have now emerged as the first step to homeownership, says RE/MAX Ontario-Atlantic Canada.

Affordability has fuelled buying activity across the board, according to the 2010 RE/MAX Condominium Report, highlighting trends and developments in eight Ontario markets and one in Nova Scotia. Condominiums now represent one in every three homes sold in the Greater Toronto Area; close to one in every four homes sold in Ottawa and Hamilton-Burlington; and almost one in every five homes sold in London, Kitchener-Waterloo, and Collingwood.  The trend has translated into a solid upswing in unit sales activity, with 78 per cent of markets posting an increase in year-to-date sales (January – September 2010 vs. 2009)—with percentage gains outperforming overall residential sales in most markets examined. 

As one of few affordable housing options available to first-time buyers, the concept is poised for dramatic growth in years to come.  The lifestyle has also gained a foothold with younger, hipper audiences, as the definition of homeownership evolves with the changing demographic.  Dreams of the small home with a white picket fence are being replaced by the funky loft apartment in close proximity to shops, restaurants, and entertainment.

  Other factors that support an escalation in condominium sales include an expanding population base, especially in areas like Barrie which saw a 21 per cent increase in the 2006 census.  Immigration and in-migration will also play a role, with at least half of new immigrants settling in Ontario—and more specifically, the Golden Horseshoe.  Urban renewal and intensification also add to the mix, drawing younger purchasers to the downtown core of major urban centres.

While the greatest activity continues to occur in the lower price points—under $200,000 in areas like Ottawa, Barrie, and London and under $300,000 in Toronto and Collingwood—luxury product is also attracting more affluent empty-nesters and retirees to the maintenance-free lifestyle.  Condominium sales in the GTA over the $1,000,000 price point have seen a 49 per cent increase year-over-year, while condos priced in excess of $450,000 in Ottawa have seen sales jump 72 per cent compared to the same period in 2009. 

-more-

RE/MAX Condominium Report 2010…..2

Investors are also an active part of the equation, spurring demand for entry-level resale product in college and university towns like London, Kitchener-Waterloo, and Barrie—in the hopes of cashing in on student housing.  New construction in major centers has also experienced an increase in investment activity—with the vast majority of units in Toronto’s downtown core purchased by Asian and Middle Eastern investors as a long-term hold.

Unlike 1989, when a flood of new condominium listings wreaked havoc on the market, these purchasers are in for the long haul.  Leverage is not a factor, with most paying cash for their units.  If they can’t sell their apartments, they’re more than prepared to rent them out

Can You believe That The Majority Of Ontarians….?????

(56%) of Ontarians Believe Harmonized Sales Tax Applies to Resale Home. The introduction of the Harmonized Sales Tax in both Ontario and British Columbia on July 1st 2010 has been widely cited by real estate professionals and analysts as one of the major factors affecting a slowdown in housing sales.

This theory seems to be supported by a recent survey commissioned by the Ontario Real Estate Association (OREA) and conducted by Ipsos Reid, which shows that 56% of people in Ontario believe that the new HST applies to the cost of resale homes.

Read More With the average resale home price sitting at $333,000 in Ontario, this means that many would expect to pay an additional $40,000 in sales tax if they bought a home at that value. The reality is that there is no HST collected on th full purchase price of a resale home. In fact the HST is only levied on the various transaction fees associated with the purchase of a home that has been previously occupied (i.e. not a newly-built home).

“Clearly, Ontarians still don’t know what the HST covers and what is exempt,” said OREA president Dorothy Mason. “This is not helping the housing market, and it’s not helping the Ontario economy. This confusion means that many buyers think the cost of a resale home is tens of thousands of dollars higher than it actually is.”

She added: “We’re doing our part to inform our clients, but we shouldn’t have to do it alone. We’re calling on the Ontario government to launch an immediate public awareness campaign to educate taxpayers and end the HST confusion. For average homebuyers, learning that the HST does not apply to the full purchase price means a $40,000 saving they weren’t expecting.”

Although there have been signs of improvements in the Canadian housing market recently, with the Canadian Real Estate Association reporting sales gains in both September and August, Real estate agents in Ontario are concerned that their business is being damaged by the fear their business is being hurt largely by the mistaken belief that the HST applies to previously owned homes.

Give me your feedback, as to your knowledge of the H.S.T.. Did you know that re-sale homes were not charged the H.S.T.?

John Rossi
Sales Representative
RE/MAX WEST REALTY INC.
http://www.rossiduo.com
http://www.vaughanhomesales.com
grossi@trebnet.com
416-578-7675

Related Articles

• Most Ontarians wrongly believe HST applies to home resales: Survey (canada.com)
• Premier says he had no time to consult (theglobeandmail.com)
• UPDATE 2-Canada existing home sales fall, sales tax blamed (reuters.com)

Canadians Personal finance Looking Up

Canadians upbeat on personal finances

John Morrissy, Financial Post •

Canadians’ improving personal finances have snapped a four-month slide in consumer confidence, the Conference Board of Canada reported Thursday.

The board’s confidence index rose 1.5% in October to a reading of 79.7%, despite weakness in three of the four measures that make up the survey. An even reading for the index is 100.

The gain was apparent across the country, with the exception of the Atlantic region.“The share of respondents expressing a positive view of their current finances increased dramatically in October,” the report said.

When asked if their financial situation had improved over the past six months, 17.5% responded positively, a gain of 4.3 percentage points from September and the highest reading of the year.

The advance comes on the heels of a fall stock market surge that has lifted the TSX composite index by more than 13% since early July.

Those saying their finances had worsened fell by 1.5 percentage points to a reading of 21.7%.

But the weakness in other areas of the poll, based on 2,000 telephone interviews conducted in early October, suggested this months’ gains could be elusiveOn the employment front, for instance, “consumers are showing little faith in the recovery in Canada’s labour markets,”the report said.

Only 17.8% of respondents said they expect employment in their communities to rise over the next six months. The number who expect fewer jobs rose to 20.5%, up from 20.1% in September.

Weakness in the labour market cuts into consumer spending, another area where the survey showed potential weakness ahead.

Asked if they thought it was a good time to make a major purchase, only 41% said it was. Those saying it was a bad time to do so rose to 47.9%.

“The balance of opinion on this question has completely reversed since the beginning of the year, when positive responses outweighed negative ones by a significant margin,”the report said.

Consumers’ outlook for future finances could also suggest weaker spending ahead, as only 22.9% said they expect their financial situation to improve in the coming six months. The figure is 1.6 percentage points lower than one month ago and 10.6 percentage points lower than at the start of the year.

Regionally, the Prairies remained the region with the highest level of consumer confidence, rising 3.1 percentage points to a reading of 99.3. Ontario continues to lag “well behind” other regions, with a gain of 1.4 points to 68.7, the report said. Quebec rose 1.7 points to 80.8, while British Columbia rose 3.5 points to 83.

John Rossi
Sales Representative
RE/MAX WEST REALTY INC.
http://www.rossiduo.com
http://www.vaughanhomesales.com
grossi@trebnet.com
416-578-7675

Vaughan Home Sales-Detached With Pool(Video)

Nice no non-sense house for sale in Vaughan. Good sized house for someone who is looking for a low priced Detached
with a one bedroom apartment, with a separate entrance. This house also has a pool with good components and landscaping
professionally done. A must see.

John Rossi
Remax West Realty Inc.,Brokerage
416-578-7675
grossi@trebnet.com
http://www.VaughanHomeSales.com

Huge Semi-Detached with Video

A wonderful semi-detached ready to move in.Approx 1900.Square Feet. Bigger & Bolder Semi Has All Features: Gas Fireplace In Fam Rm, Dir Access To Garage, Full&Large Bathroom Ensuite In Master Bdrm, Attractive Double-Door Enrty. Spacious Foyer. Oakstairs. All Parquet Flooring. Modern Kitchen,Ceramic Bckspsh, Microwave-Shelf. Open Window Over/Looking Family Rm. Drivevway Can Park 3 Cars, Large Backyard Fully Fenced. Fin. Basement W/Bdrm & 3Pc Bath. Rec-Rm. Cold Rm. Laundry.

John Rossi
Remax West Realty Inc.,Brokerage
416-578-7675
grossi@trebnet.com
http://www.VaughanHomeSales.com