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Realtors prepare for annual blanket drive

Realtors in Vancouver’s Lower Mainland will be launching their coordinated effort to help people in need next week.


The Realtors Care Blanket Drive is the largest of its kind in the Lower Mainland and, now in its 24th year, aims to collect enough to help 30,000 people keep warm this winter.


“A recent homeless count in Metro Vancouver indicates there are more people living in shelters or on the streets than ever before,” Phil Moore, Real Estate Board of Greater Vancouver president said.


Between November 13 and 20, Realtor volunteers will collect warm clothing and blankets across the region. The donations are then distributed to partner charities from the same community where the item was donated.


More than 100 real estate offices will be utilized as collection points for clothing, blankets, and sleeping bags.


“Anything you can give that’s in good shape – an unused blanket, spare coat, even a pair of mittens – will directly help a person in need in your area,” John Barbisan, Fraser Valley Real Estate Board president said. “Please look through your closets and reach out to a participating Realtor or real estate office. They can help get your donation into the hands of someone who could really use it.” 

4 in 10 Canadian workers find their debts "overwhelming"

A large proportion of Canadian workers are living in the shadow of debts that they say are overwhelming.


Four in 10 respondents to a new survey by the Canadian Payroll Association expressed that sentiment, up 5% from a year ago; while more than a third said their debt levels have increased year-over-year.


A higher cost of living is the biggest concern followed by higher interest and mortgage rates – 96% believe costs will rise over the next year.


Debt is such a concern for workers that 46% say that it impacts their workplace performance, however a similar share say they would feel uncomfortable discussing their financial situation with peers.


Trust in their pay cheques

The survey also reveals that most Canadian workers trust that their pay check is correct with just 36% reviewing pay statements.


Workers are open to the prospect of receiving help with financial management through their workplace with 84% saying this would be of interest; saving and planning for the future is the preferred topic.


“Decreased productivity, absenteeism and high turnover are just some of the negative ways that stress arising from finances can affect employees,” says Peter Tzanetakis, President of the CPA. “Employers are uniquely positioned to support employee financial wellness, either by offering them financial resources or methods to help employees save.” 

Are your rental apartment buildings safe?

A new advertising campaign is urging renters in Toronto to ensure their landlords comply with RentSafeTO.


The program requires rental apartment owners to comply with building operation and maintenance standards. It was launched in 2007 and applies to all rental apartment buildings with three or more storeys and 10 or more units.


Landlords that don’t comply can face orders and court charges which can result in substantial fines.


The new campaign, launched by the City of Toronto, is urging residents to speak to the RentSafeTO team on 311 if they have any issues. It reflects the top 3 complaints that the RentSafeTO officers hear about: pests, broken elevators and leaky ceilings.


“Ultimately we are striving to help ensure that tenants have a safe, secure and decent place to live, as well as protect and preserve the rental housing stock in the city. Our goal with this ad campaign is to remind residents to call the RentSafeTO team if they need support to have problems addressed,” said Mark Sraga, Director of Investigation Services in Municipal Licensing and Standards. “Our message is simple: The RentSafeTO team is the next step after your landlord, and we are here to help.”


Renters that live in buildings not covered by the program are urged to speak to their landlords but the City will still investigate if issues are reported. 

Downtown condos remain Ontario’s priciest homes per square foot

 The price per square foot (PPSF) of a downtown Toronto condo increased more than 10% in the last year according to a new survey from CENTURY 21 Canada.


It found that the PPSF of a downtown Toronto condo rose to $903 from $819 in 2017, while suburban prices were more volatile with a detached house in Markham and Richmond Hill each down 24% to $379 and $445 respectively.


Condos in Peterborough rose to $255, while house prices in Ottawa and Guelph were more stable, rising 4.65% to $225 and 4.5%to $397, respectively.


“It has been an unpredictable year in Ontario housing prices, with the price per square foot rising and falling from community-to-community and even suburb-to-suburb,” said Brian Rushton, Executive Vice-President of CENTURY 21 Canada. “Much like in Canada’s other major centres prices fall rapidly once you are outside the downtown core of Toronto, and homes in those communities remain relatively affordable. Even with an increase of almost five percent Ottawa remains one of the least expensive places to live in Ontario.”


Elsewhere in Canada

The cost of a downtown condo makes Toronto the second highest market behind Metro Vancouver where the PPSF for a condo is $1,345 and a home in Vancouver, West Side costs $1,147 psf.


The top ten most expensive areas also include West Vancouver ($899 psf); Vancouver, East Side ($721); Surrey, BC – condos ($685); North Vancouver ($681); Richmond, BC ($677); and Montreal, Downtown and SW ($603).


Meanwhile, the least expensive markets are led by St. John’s, NL ($137 psf); Owen Sound, ON ($145); and Prince George, BC, and Halifax, NS (both $155).


The survey looks at prices across Canada for the first half of the year and compares with the same period of previous years.

My Informed Advantage for the Canadian New Homes Industry
September 2018 GTA New Home Sales Recap
There were 1,747 total new home sales in September 2018, with 253 Low Rise sales, down -28% from September 2017 (down -77% from 10yr avg) and 1,494 High Rise sales, down -22% from September 2017 (down -42% from 10yr avg).
The New Home Benchmark Price tracks the average Low and High Rise home or unit price in the Greater Toronto Area for a particular month and compares it to the previous month in the same year and to the same month in the previous year.
As of September 2018, there were 243 active Low Rise sites in the Greater Toronto Area and the total unsold inventory was 5,132 lots. The total number of active High Rise sites was 299, with a total unsold inventory of 8,820 units.
nvestors remain confident in GTA housing market says CBRE

The moderation of the single-family housing market in the Greater Toronto Area has not dampened the market for residential land.


Demand and prices remain strong as population growth meets with constrained supply. That means increased competition for residential land which will in turn impact home prices.


According to a new report from CBRE Canada, residential land investment volume in the GTA totaled $6.8 billion in 2017, more than three times the volume seen a decade earlier and the highest on record.


As a stark example of the surge in prices, an acre of low-density residential land would have cost an average $382,000 in 2008. In the first half of 2018, that same piece of land would cost more than a million dollars.


Year-to-date in 2018, the average price per square foot of buildable high-density space is $87, compared with $42 in 2008.


“Despite rising home prices and new mortgage qualification rules, supply issues are propelling residential land deal volumes and prices to all-time highs in the GTA as developers and investors are willing to pay for this sought-after asset,” commented Mike Czestochowski, Executive Vice President, Land Services Group at CBRE Canada. “Land investment activity reflects strong developer and investor confidence in a housing market that is faced with the challenge of accommodating a rapidly growing population amid serious government-imposed constraints.”


Deals for low-density land set new record

The number of deals involving low-density residential land totalled 149 in 2017 CBRE’s data shows. It was the best year on record for these transactions and a 39% increase from 10 years earlier.


The strength of the market has carried into 2018 with $754 million of investment in the first half of 2018, although the full-year will be short of 2017’s record-breaking $2.4 billion.


“There is sustained investor confidence in this city, owing to the GTA’s strong fundamentals, specifically the 100,000 new residents a year and strong employment growth, with 93,000 jobs added in the Toronto CMA between June 2017 and June 2018,” added Czestochowski. “It’s not hard to see why the GTA continues to be a prime destination for investor capital, both domestic and foreign.” 

Home Equity Loan vs HELOC: Which is Right for You?

 Whether it’s to afford a home renovation, invest in a child’s education or simply pay for unique expenses – like weddings and funerals – a home equity loan or a home equity line of credit are popular borrowing options for Canadian homeowners.


While mortgage debt accounts for 66% of all household debt, only 11% is tied up in home equity lines of credit. The average home equity line of credit balance in Canada is about $65,000.


Yet many Canadians might still not fully understand what a HELOC is or how it is different from a home equity loan. Here, we break down the various home borrowing terms so you can determine which loan is right for you.


What is a home equity line of credit (HELOC)? 


 According to Nicole Beaton, District Vice-President of Calgary South with TD Bank, a HELOC allows homeowners to use their home’s equity as collateral to fund a number of financial needs.


Using your home as collateral means limits can be higher than other borrowing options and banks can often offer a lower interest rate. The Financial Consumer Agency of Canada (FCAC) describes HELOC’s as revolving credit: people get money, pay it back and borrow it again to a certain maximum credit limit. This is different from a home equity loan.


What is the difference between a HELOC and a home equity loan?

Don’t get these two confused. While they both use your home’s value as collateral, they are essentially two different types of loans.


A home equity loan lets you borrow one lump sum of money, which you must make monthly payments on at a (usually) fixed interest rate over a predetermined length of time. These are common for people who need a large sum of money in a short amount of time.


A home equity line of credit, on the other hand, is similar to a credit card. You only pay interest on what you use and you can draw from it as needed. Interest rates are variable and calculated daily based on the prime rate.


What about a “second mortgage”?


A second mortgage is exactly what the name implies. It can be used to describe any loan that uses home equity as a means to borrow, though it typically refers to a home equity loan (one lump sum cash out) over a home equity line of credit. The first mortgage always takes priority over the second mortgage.


The term “second mortgage” can be confusing since you can technically have a HELOC as a first mortgage – that is if you own a house free and clear and you simply want a line of a credit on it. Most of these loans, however, are second mortgages.


How does a home equity loan work versus a HELOC? 


 For a home equity loan, you can borrow up to 80% of your home’s total appraised value minus the unpaid balance of the existing mortgage.


It works a bit differently for a HELOC. You can access up to 65% of your home’s market value with a HELOC and “the amount of credit available in the home equity line of credit will go up to that credit limit as you pay down the principal on your mortgage,” according to the FCAC.


Keep in mind, however, your outstanding mortgage + your HELOC cannot equal more than 80% of your home’s total value. Neither loan is a viable option for most new homeowners, who have yet to pay off a large chunk of their mortgage or who began their home buying journey with a down payment of 20% or less.


To determine how much home equity is available to you, multiply your home’s current market value by 80% and then subtract your mortgage. As long as this amount is not more than 65% of the value of your home, you qualify. Divide the HELOC number by your home’s market value to make sure.


Advantages to a HELOC vs. home equity loan


Nicole Wells, Vice-President of home equity finance for RBC, says HELOCs are appealing to homeowners for a multitude of reasons.


“It’s always there for the consumer when they need it,” she says.” They only pay interest on what they use and they can pay it back at any time without a penalty.”


Not only are interest rates on a HELOC lower than that of an unsecured loan but, because repayment is flexible, it can be a great fallback option for borrowing on a rainy day.


“A lot of people are using this option because it gives them the flexibility they need for when life happens. They have the ability to access funds without having to apply for any additional credit,” says Beaton. “And it also gives customers additional flexibility on a payment.”


Other advantages include the freedom to borrow as much as you want (within the maximum limit), access cash easily, consolidate debts (from credit cards or other loans) for a lower overall interest rate and only pay interest on what you borrow.




 As with a home equity loan, you’ll suffer if you can’t repay. Foolhardy homeowners who habitually only pay monthly minimums might end up carrying large amounts of debts for a long time.


Unlike most home equity loans, interest rates are not fixed and can increase at any time with a HELOC. And if you switch your mortgage to another lender, you have to pay off the entirety of your HELOC with your previous bank first.


If you can’t pony up, your credit score will suffer and your home could even be repossessed. The accessibility and flexibility of the HELOC are what could be your downfall, so foresight and careful financial planning are key.


“Like any credit product, you want to make sure you’re borrowing what you can afford, you’re using what you can afford and you have a plan to pay it back,” says Wells.


Which loan is right for you?


You might choose a home equity loan if you need to pay for a one-time event and prefer the security of a fixed-rate loan. A HELOC, meanwhile, is a great option if you need to borrow over a longer period of time and need more flexibility. 

CMHC forecasts ‘moderation’ in Canadian housing market over next two years

OTTAWA — Canada Mortgage and Housing Corp. says the country’s real estate market is expected to moderate over the next two years as the growth in housing prices is expected to slow to more in line with economic fundamentals.


In its 2018 housing market outlook released today, the national housing agency projects housing starts and sales are both expected to decline in 2019 and 2020.


It predicts housing starts for single and multi-unit starts will fall to between 193,700 and 204,500 in 2019, while sales are anticipated to be between 478,400 and 497,400 units. Prices are anticipated to range between $501,400 and $521,600.


CMHC says it expects economic indicators like income and employment to continue to help support demand for housing starts, but these fundamentals are anticipated to slow down to a more sustainable pace.


Rising mortgage rates are also expected to affect housing demand and the resale market.


By 2020, CMHC anticipates demand will continue to shift towards relatively less expensive housing options like apartment condominiums versus higher-end single-detached homes.


“Over our forecast horizon, housing starts are projected to decline from elevated levels recorded recently. Resales should also moderate while house prices are expected to reach levels that are more in line with the fundamentals,” Bob Dugan, chief economist at the CMHC, said in a statement. 

News InFocus Investor Resources Mortgage Calculators Subscribe IN FOCUS: Real Estate Mentoring The risks for an investor who ignores help
Real estate investors who think they can do everything are playing a very risky game. Whether it comes from an elevated sense of pride or a desire to save money, investors who refrain from educating themselves and finding mentors are seriously inhibiting their own chances of growing a successful portfolio.

“An investor who takes that approach is going to lose money; either the money they have invested or any capital they have raised,” says Nam Ratna of Go Get It Real Estate. “So many investors lose money because they didn’t have the proper skills to analyze a property, asses a budget, or to determine what the after repair value is going to be.”

Ratna encounters many real estate investors who are suffering from making some basic errors. A common consequence for investors without the adequate knowledge is being stuck with a property they had intended to flip. A successful flip should be done in 3 – 4 months, but some investors are still holding their properties three years later.

“It generally happens because the investor didn’t analyze the property – they overvalued it and under budgeted for their repairs,” Ratna says. “These are two of the biggest mistakes investors make and they can be mitigated by partnering with an experienced mentor, someone who has been there and done it. So many investors don’t know how to study comparables and then under budget their repairs because they are either trying to cut corners or trying to justify the deal because they were not able to negotiate the right price.”

In addition to the financial problems that arise from investing without the right guidance, those investors are also likely to suffer mental strife, which can be even more damaging.  When people get into the industry without mentorship and support and then lose money, they often lose faith in the opportunities that real estate investing presents when it’s done properly.

“Going about it the wrong way and having a bad experience can seriously halt someone’s ability to secure the life and retirement that they wanted,” Ratna says. “Having a mentor helps people find ways to avoid that happening. It helps them deal with obstacles and develop the right mindset.”
TREB releases Oct. home prices

TORONTO _ Strong sales in the condo and higher-density low-rise markets helped drive home prices in the Greater Toronto Area higher last month, compared with a year ago.


The Toronto Real Estate Board says the average sale price was $807,340 in October, up 3.5 per cent from $780,400 year-over-year. Adjusted seasonally, the average selling price last month was up one per cent compared with September.


The MLS HPI composite benchmark price jumped by 2.6 per cent compared to October 2017.


TREB says there were 7,492 sales in October 2018, up six per cent versus a year ago. On a preliminary seasonally adjusted basis, sales were down one per cent compared to September 2018.


The growth in sales and prices came as the number of new listings fell compared with a year ago, says the country’s largest real estate board. Last month, there were 14,431 new listings, down 2.7 per cent compared with October 2017.


The board says this suggests that real estate market conditions in the Greater Toronto region continue to become tighter as sales growth has outpaced listings growth for the past five months.




The Canadian Press 

Private lending attracts Toronto homeowners

 Toronto homeowners are reportedly turning to private lenders for mortgage loans, due to increasing interest rates and tougher lending standards implemented by most banks and conservative lenders.


According to Toronto brokerage Realosophy and property data provider Teranet, 20% of refinancing for mortgage deals in the second quarter was facilitated by private lenders. This marked a 67% rise from the first quarter of 2016.


As mentioned earlier, the increased difficulty of applying for mortgages have significantly affected homeowners’ behaviors.


“Purchasing homes and paying off mortgages are getting harder in Canada’s biggest city due to a combination of rising interest rates, higher home prices and tougher standards to qualify for a mortgage. The new rules require borrowers to prove they can make payments at higher rates and apply to new mortgages as well as refinancings or transfers to a new bank,” noted Bloomberg News.


More Torontonians were enticed by private lenders, which are more open to riskier financing arrangements than traditional lenders. While private lenders charge higher interest rates, the share of mortgages financed by them climbed has from a low of 12% in 2016 to 20% in the second quarter this year.


In an email to Bloomberg, President of Realosophy John Pasalis revealed that these lenders are mortgage brokers who have established mortgage investment corporations to earn funds for lending.


For reference, total private mortgage volume rose to $1.5 billion in the second quarter, from $920 million in the first quarter of 2016. Digging deeper, it was noted that nearly half of private lending activity over that period was on detached homes that were refinanced. This was followed by condos, which were also refinanced.


The study found that Generation Xers, or people in their 30s and 40s, were the largest group of consumers preferring private lenders. They cover 42% of all transactions.

Report shows satisfaction rates up among young homeowners
A recent report revealed that, despite admitting to making some compromises, most modern families in key urban areas throughout Canada are satisfied with their property purchases.

In a recent report released by Mustel Group and Sotheby’s International Realty Canada on home ownership trends among modern families, 82% of families surveyed believed that they made some compromises in their purchase. However, 93% said that they were ultimately satisfied with their decision.

The 2018 Modern Family Home Ownership Trends Report surveyed 1,743 young families, whose eldest adult is between 20 to 45 years old, across the Vancouver, Toronto, Calgary, and Montreal metropolitan areas.

“This is the first Canadian study to focus on the home buying preferences and habits of this segment of young families, with findings based on actual home ownership data rather than purchase intentions,” said Josh O’Neill, general manager of Mustel Group.

“Results from the survey uncovered new data and trends within this key demographic.”

The report also showed that, if money wasn’t an object, eight out of ten modern families would prefer a detached single family home over a condominium unit. However, 43% of families who already own property that isn’t a single-detached home have given up on ever owning one.

“Young families are much more influential in Canada’s metropolitan real estate markets than many realize,” said Brad Henderson, president and CEO at Sotheby’s International Realty Canada. “With 9.1 million Canadian millennials now entering the partnership, marriage and parenting stages of the family life cycle, the ranks of these ‘modern families’ are swelling.”

“Our research dispels several urban myths about the housing preferences of this group. It suggests that the wave of demand for single family home ownership will continue to rise in spite of mounting affordability challenges. Moreover, it highlights the fact that cities will continue to face significant pressure to overcome these challenges with solutions that go beyond the addition of higher density housing.” 
Industrial, retail spaces feeling the pressure of pot shortages

Major cannabis producers and sellers are struggling to keep up with the enormous demand for the plant after it was legalized last month.


Canadians’ craving for the herb was such that shortages have become all too apparent in the few short weeks after October 17.


“The response has been pretty unbelievable,” Canopy Growth Corp. CEO Bruce Linton told Bloomberg. “I don’t think everything will run out but you might not be able to get the identical stuff you got last time.”


The most notable supply-side issue is the sheer amount of time that sales licensing takes, which can take as much as a year.


“We’re biting our nails and I think our shareholders are biting their nails too,” according to Anthony Durkacz, director at Ontario-based producer FSD Pharma Inc. “We want to be supplying.”


FSD has acquired its cultivation license back in 2017, but it has yet to receive its sales license.


The Ontario Cannabis Store reported that it has received 100,000 orders in just the first 24 hours of its operation, defying even the most optimistic projections.


Meanwhile, Quebec’s online and in-store orders almost broke through 140,000 in the first week since legalization. Some locations might even get shut down due to the scarcity of supply, the provincial-owned retailer said. 

Private mortgages soar in popularity, are ripe for investment
According to a report released this week, private lenders funded 20% of mortgage refinances in the second quarter of this year, highlighting how profitable mortgage investment is becoming.

The joint report between Teranet and Realosophy also revealed that private mortgages during Q2 2018 jumped 67% compared to the same period two years ago. While much of that can be attributed to new mortgage rules, says Laura Martin, COO of Matrix Mortgage Global and director of Private Lending Hub, there’s nary a reason for concern because the quality of private mortgage borrowers has improved dramatically over the last decade.

“The mortgage default rate in Ontario in 2017 was 0.24%,” Martin told CREW. “The mortgage stress test of plus-2% on the contract rate, as mandated by OSFI [Office of the Superintendent of Financial Institutions], has meant a reduction of 20% in purchasing power. High net worth individuals typically have at least 30% of their investments in real estate holdings. They enjoy the liquidity of an investment that matures every year so that they can reinvest, as well as monthly cash flow that is secured on an inherent and tangible value from the real estate asset.”

Private mortgage investors, according to Martin, make 8-10% returns on their investments, even with lower loan-to-value ratios.

“The average private mortgage amount in the GTA for Q1 2018 was $179, 280,” she said. “The typical term of a private second mortgage is 10% interest-only monthly payments, which amounts to $1,494 times 12 months, which equals $17,928, plus the entirety of the principal loan amount back.”

Private mortgage funding has been marred by a few predatory lenders, but according to Zahra Marani, principal of Marani Law, the stigma is dissipating largely because people realize the mortgages are registered against the properties.

Moreover, in light of the Guideline B-20 mortgage rules taking effect at the beginning of the year, the private mortgage space has burgeoned thanks to an expansive clientele.

“Private mortgages are an ideal investment for those who don’t want the responsibility of owning their own property, as well as for those who wish to diversify their portfolios,” said Marani. “Our lender clients are lending to borrowers such as business owners, builders, investors of preconstruction condos, and others, many of whom previously qualified with A and B lenders, and who can still afford the mortgage payments, but no longer qualify with those lenders.” 
Real estate agent lists abandoned New Zealand village for $2.4m

A real estate agent in New Zealand has gained worldwide attention for an unusual listing.


Kelli Milmine of One Agency in Oamaru is handling the listing of a village that has been mostly abandoned since 1989 after its main employer, a dam, was automated.


Lake Waitaki near Canterbury on the South Island includes eight 3-bedroom homes, a restaurant, lodge, 14 hectares of land, and water rights.


It was once home to 40 people and frequented by hundreds more but the loss of jobs and a preference for urban living has made the rural location unpopular.


The state sold the village in the 1990s but the current owner is struggling to find a buyer despite the seemingly bargain price of NZ$2.8 million, or C$2.4 million.


There has been interest from foreign buyers but last week New Zealand banned foreigners from buying homes that New Zealanders could live in themselves, to tackle supply issues.


However, Milimine says that Kiwis don’t want to pay more than NZ$1 million, almost a third of the current asking price. 

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