Archive for the ‘Canada Real Estate News’ Category

Better than expected growth Bank of Canada increases Interest Rates

Posted on: July 20th,2018 By Rod Friesen

No matter what your viewpoint today many of the worlds economies are bouncing. Leaders are focused on trade imbalances and that uncertainty seems to affected economic activity and outlooks on a global scale.

Despite slower growth, recently released economic numbers were better than originally forecast. While manufacturing saw a slight pull back, the bulk of the sub-sectors monitored by Stats Canada grew, leading to a 0.8% increase. Retails sales experience a slight pull back but overall output in the sector was enough for it to reach the 25th consecutive month of expansion.

The Canadian dollar lost some ground against the US greenback. The upside – a falling loonie is good for exporters and the tourism industry across Canada. A softer Canadian dollar against the Euro should also benefit exporters taking advantage of the Canadian-European Union Comprehensive Economic Trade Agreement (CETA). CETA opens up a market of over 510 million people representing roughly 22% of Global GDP.

At the beginning of June, many economists were on the fence with regard to a July BoC rate hike. But with the better than expected data, it was not surprise that on July 11th the BoC bumped the Key Rate up a quarter point to 1.5% in a continued plan to head towards more ‘normal’ interest rates.

What lies ahead? With a decade of super low interest rates, the World Bankers seem to be trying to figure out what the new normal on interest rates should be. Could lead to another bump in the coming months.

Ottawa unveils changes to Canadian housing rules

Posted on: October 3rd,2016 By Rod Friesen

Finance Minister Bill Morneau unveiled sweeping changes on Monday that will affect all pockets of the housing market, including rules aimed at slowing the flood of foreign money and strengthening a mortgage rate stress test.

The new measures come at a time of heightened anxiety about overheated housing markets in Vancouver and Toronto but also as prices soften in much of the rest of the country. As well, banks are already facing stricter regulatory requirements for their mortgage business.

“Overall, I believe the housing market is sound but as Minister of Finance I want to make sure we are proactive in assessing and addressing the factors that could lead to excess risk,” Mr. Morneau told reporters in Toronto.

The changes include:

closure of loopholes relating to the capital gains tax exemption on sales of principal residences.
standardized eligibility criteria for high- and low-ratio insured mortgages, including a “more robust” mortgage rate stress test.
a consultation aimed at better protecting taxpayers “by ensuring that the distribution of risk in the housing finance system is balanced.”
The government’s most anticipated measure involves cracking down on foreign buyers who used loopholes to avoid paying taxes on real estate speculation.

Under the new rules, taxpayers will be required to report on their income tax returns the sale of a property for which they claim the so-called principal residence exemption. Under Canadian tax rules, homeowners do not pay taxes on the increased value – or capital gains – of the sale of their principal residences. In order to make that designation, a homeowner, their current or former spouse or any of their children must have lived in the home at some time during the year for which the designation is claimed.

The federal government said the change will ensure that the principal residence exemption is used only by Canadian residents and that families designate just one property as their principal residence in a given year.

Previously, homeowners did not have to report the sale of properties they designated as their principal residences. There had been widespread abuse of the principal residence exemption by foreign buyers who claimed residency either for themselves or their spouses or children simply in order to avoid paying taxes on real estate sales.

In addition, Mr. Morneau announced a new round of sweeping changes to mortgage insurance.

Starting Oct. 17, borrowers who take out insured mortgages that are fixed-rate loans of five years or longer will be subjected to a more stringent “stress test,” ending the current two-tier system. Existing rules require home buyers who take out short-term or variable-rate mortgages with down payments of 20 per cent or less to prove they can afford payments at a much higher interest rate than they will actually pay. Borrowers who take out fixed-rate insured mortgages of five years or longer have their income tested against the interest rate that they will actually be paying. The end result is that borrowers can now typically qualify for much larger mortgages if they opt for a longer-term, fixed rate mortgage.

Under the new rules, all borrowers who have insured mortgages will have to qualify at the Bank of Canada posted rate, which is now significantly higher than the discounted mortgage rates offered by most lenders. The rules apply only to new mortgages, but they are significant given that a majority of homeowners are thought to take out the types of fixed-rate mortgages that will be affected by the stricter qualification requirements.

Ottawa also unveiled new measures aimed at portfolio insurance, a type of bulk insurance that banks use for mortgages with down payments above 20 per cent. Starting Nov. 30, the federal government will now require portfolio-insured mortgages to qualify under the same criteria used for traditional mortgage insurance used by homeowners with small down payments. Portfolio-insured mortgages will now be limited to a maximum amortization period of 25 years and a maximum purchase price of less than $1-million and excludes all properties that will not be owner-occupied, such as rental homes and investment properties.

Mr. Morneau also said he planned to release a consultation paper on “risk-sharing” for lenders who use mortgage insurance, thought to be in the form of a deductible payable by the banks on mortgage insurance provided by Canada Mortgage and Housing Corp. and other private sector insurers.

Soaring housing prices, especially in the red-hot markets of Vancouver and Toronto, have triggered a debate about the role of foreign money in Canadian real estate markets.

Ottawa has been preoccupied with the issue, with Mr. Morneau creating a working group to conduct a “deep dive” into the state of the housing market and make recommendations on policy.

Mr. Morneau’s announcement follows a Globe and Mail investigation that revealed a network of speculators flipping homes for profit and avoiding taxes by classifying them as principal residences.

In a bid to cool its hot housing market, British Columbia introduced a 15-per-cent foreign-buyers tax this summer which applies to the sale of all residential properties within 22 communities of metro Vancouver. The levy applies to buyers who are not Canadian citizens or permanent residents, and corporations that are either not registered in Canada or are controlled by foreigners, and adds $300,000 to the purchase of a $2-million home.

In the seven weeks leading up to the levy, foreign buyers accounted for 13.2 per cent of sales in Metro Vancouver. By contrast, just 0.9 per cent of all transactions that closed in the region involved foreign buyers in August, the first month in which the tax has been in effect. However, experts caution that the decline is skewed because many deals were rushed to avoid the tax.

The Canada Revenue Agency says it completed nearly 2,500 audits related to related to real estate in B.C. and Ontario between April, 2015, and June, 2016, and that the agency plans to do as many or more next year.

– credit to Shawn McCarthy and Kathy Tomlinson

Surrey Real Estate agent attacked during open house

Posted on: May 4th,2016 By Rod Friesen

Police have released a sketch of the suspect they believe attacked a real estate agent during an open house in North Surrey last weekend.

The female agent was showing a property when she was sexually assaulted, police say. The agent didn’t know the alleged attacker and she wasn’t injured.

Surrey RCMP investigating after Realtor sexually assaulted during open house
Police are asking for the public’s help in identifying the suspect.

He is described as a South Asian male in his late 20s to mid 40s who spoke with an accent and is between five feet eight and five feet ten inches tall with brown eyes and a dark well-groomed beard.

He was wearing dark coloured pants and a light coloured shirt with a white turban.

Anyone with information is asked to contact the Surrey RCMP at 604-599-0502 or Crime Stoppers, if they wish to remain anonymous, at 1-800-222-TIPS or go to www.solvecrime.ca.

source

A microcosm of the current real estate market

Posted on: January 8th,2016 By Rod Friesen

To give you an idea of how the market is behaving today. I was representing a lender/bank for a home foreclosure in Abbotsford. The home was priced at $299,000. We had an accepted offer of $288,000 that went to court for the judges approval. At court, there were EIGHTEEN additional offers with multiple being over $350,000. It sold for $356,100 or 124% of the list price. The assessed and appraised values of the home were both at $300,000.

I think it might be a sellers market…maybe.

Here is the MLS of that listing:

[pdf-embedder url=”http://www.rodfriesen.com/wp-content/uploads/2016/01/3010-Foreclosure-Sale.pdf”]

Housing Market in Fraser Valley Cools Off for November

Posted on: December 3rd,2013 By Rod Friesen

The Fraser Valley Real Estate Board’s Multiple Listing Service® (MLS®) recorded 986 property sales in November, an increase of 9 per cent compared to the 905 sales during the same month last year, however a decrease of 21 per cent compared to October’s 1,249 sales.

Month-over-month, the Board also received 24 per cent fewer new listings – 1,774 compared to 2,336 in October – but still an improvement over the 1,723 new listings received during November of 2012.

Ron Todson, president of the Board says, “We typically see a slowdown just before the holidays and this year it started a little sooner reflecting what we’re seeing in our overall economy.

“Similar to last November, sales are hovering at about 14 per cent off normal levels, but so are new listings. They’re down about 7 per cent compared to the 10-year average, so what we’re seeing is a slower but steady market keeping home prices in check and the average number of days to sale stable.”

For a detached home in the Fraser Valley, the average number of days to sell in November was 57, compared to last year’s 59 days. For townhomes, it was 58 days and apartments 78 compared to 70 and 74 in November 2012.

Prices for benchmark homes also remain steady showing nominal year-over-year increases or single-digit decreases. For single family detached homes, the benchmark price increased by 1.0 per cent in one year, going from $544,700 in November 2012 to $550,300 last month.

For townhouses, the benchmark price in November was $292,400, a decrease of 2.2 per cent compared to $298,900 during the same month last year. The benchmark price of apartments in the Fraser Valley in November was $196,200, a decrease of 3.3 per cent compared to $202,800 in November 2012.

Todson notes, “Those thinking of buying or selling may notice in our monthly statistics package that average prices in November are up or down substantially compared to the benchmark price.

“Talk to your REALTOR® who will explain that the volume of sales and the calibre of homes sold can dramatically skew average prices, which doesn’t happen with the benchmark price the most reliable of all pricing measurements.”

Since November 2012, the benchmark price in the Fraser Valley for all three residential property types combined is flat, having decreased by 0.4 per cent and over the last six months the price has decreased by 0.9 per cent.

-Courtesy of the FVREB

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