Minimum 10% Down?

Jared Chamberlain video blogs (vlogs) about his experience in a conversation with another realtor in calgary and how they thought that buyers needed to put down minimum 10% for a personal residence. Jared talks about how this is NOT the case and nothing of the sorts has been passed thus far. For any comments or questions or if you don’t care for Jared’s thoughts please email him at jared@tcgroup.ca and visit wwwChamberlainGroup.ca for more info.

Canadian Housing Markets Buck Recession and Trend Upwards

With the worst of the recession over, residential real estate markets in major Canadian centres are poised for growth in the final quarter of 2009, according to a report released today by RE/MAX.

The RE/MAX Bricks and Mortar Report found the bounce back that began in early Spring has made this recession one of the shortest on record. Low interest rates, pent-up demand, and improved affordability levels have all played a role in the recovery now well-underway. Percentage increases in unit sales from January to August 2009 were led by Vancouver, (up a substantial 14 per cent to 23,158), Victoria (up 7.4 per cent to 5,266), Edmonton (up 6.2 per cent to 13,691), Regina (up five per cent to 2,597), Ottawa (up 2.4 per cent to 10,830) and Toronto (up 1.8 per cent to 58,421). Housing values are already ahead of record-breaking 2008 levels in seven of the 11 markets surveyed, including Newfoundland-Labrador (18.1 per cent year to $203,584), Regina (6.4 per cent to $244,088), Halifax-Dartmouth (3.5 per cent to $239,633), Winnipeg (3.5 per cent to $207,006), Ottawa (3.3 per cent to $301,684), and Toronto (up 0.3 per cent to $385,978). Nationally, average price hovers at $312,585, up 0.5 per cent over one year ago.

The strength of the residential housing sector cross-country has taken many economists and housing analysts by surprise once again. In terms of its impact on the resale market, by historical standards, this recession was one of the mildest. The resilience of bricks and mortar has been demonstrated time and again. While there may still be some challenges down the road, the worst is definitely behind us in the housing industry.

The recovery of Canada’s resale housing markets speaks to the tremendous value Canadians place on the importance of owning a home. The number of Canadians overall who own a home has increased since 1981 from 62.1 per cent to 68.4 per cent, with some markets posting even higher homeownership rates — Calgary (74.1), St. John’s (71.5), and Regina (70.1). Significant gains have also been made over the same period in markets such as Ottawa, where levels rose from 51.4 per cent to 66.7 per cent, and Toronto, where levels rose from 57.3 to 67.6 per cent.

Public sentiment can perhaps best be illustrated by a recent Angus Reid Omnibus Survey* that asked the question “In which do you feel more comfortable investing your money? The stock market or real estate.” Out of 1,000 respondents from coast-to-coast, 77 per cent chose real estate. The results of the RE/MAX Bricks and Mortar Report are clearly representative of this national dynamic at work.

Markets are heating up across the country as purchasers take advantage of affordable prices and rock bottom interest rates. Those who missed the boat in years past have found that sitting on the sidelines can be a costly move. Prices are on the upswing and inventory levels are tightening, so the push toward homeownership is expected to continue throughout the Fall and possibly into early 2010.

Over the past thirty years, the Canadian residential real estate market has experienced three major downturns – 1981, 1989, and 2008. While there have also been regional fluctuations throughout the years, return on investment over this period has been substantial, with Vancouver, Victoria, Toronto, Regina and Ottawa leading the country in terms of price appreciation.

The overall stability of real estate as an investment has also played a role. Markets like Halifax-Dartmouth, Regina, Ottawa, Winnipeg and London have provided steady returns (especially in recent years), with minimal fluctuation.

* The Angus Reid Omnibus Survey was conducted on September 15, 2009 and yields a margin of error of +3.1 per cent, 19 times out of 20.

Canadian Housing Market to Improve in 2009 and into 2010 – CMHC

Things are looking up for the housing market as starts are expected to make a comeback in the second half of 2009 and into 2010, according to Canada Mortgage and Housing Corporation (CMHC).

CMHC’s Third Quarter Housing Market Outlook predicts that housing starts for 2009 will reach 141,900 for that year and will continue to increase into 2010, at 150,300, showing great promise for Canada’s economic future.

“Economic uncertainty and lower levels of employment tempered new housing construction in the first half of this year,” says Bob Dugan, chief economist for CMHC. “In the second half of 2009 and in 2010, we expect housing markets across Canada to strengthen.”

Hamilton, Ottawa, Kitchener and Thunder Bay are the tightest resale home markets in Ontario and as a result of this, they are expected to see a large spur in new home construction later this year.

With buyers and builders shaking off leftover anxiety about the economy and a strong national rebound for resale homes a likely thing to come, many builders are expected to heighten the number of homes they’ll start construction on in the fall.

Improving this activity on the resale market and producing lower inventory levels in both the new and existing home markets are expected to aid in this rebound, according to CMHC.

Existing home sales, as measured by the Multiple Listing Service (MLS), have rebounded strongly since January and are expected to reach 420,700 units in 2009. This spur in the housing market will remain close to that level at 419,400 units in 2010.

Housing Market to Rebound This Year and Next

OTTAWA — Canada’s housing market is expected to see a strong rebound in the second half of this year and into 2010, the federal housing agency said Thursday.

Housing starts will reach 141,900 this year and increase to 150,300 for 2010, according to Canada Mortgage and Housing Corporation.

“Improving activity on the resale market and lower inventory levels in both the new and existing home markets are expected to prompt builders to increase residential construction,” CMHC said.

Bob Dugan, CMHC’s chief economist, said “economic uncertainty and lower levels of employment tempered new housing construction in the first half of this year.”

“In the second half of 2009 and in 2010, we expect housing markets across Canada to strengthen.”

Meanwhile, CMHC said existing home sales have “rebounded strongly since January” and will total 420,700 units in 2009 and 419,400 units next year.

The average sales price is expected to be down for the entire year, to $301,400, before rising to $306,300 in 2010.

The CMHC’s third quarter Housing Market Outlook said Alberta housing starts are forecast to drop to 16,100 in 2009 from 29,164 last year but rebound to 18,250 starts in 2010.

Source: Calgary Herald

CMHC 2008 Canadian Observer

CMHC came out with their 2008 Canadian Observer today…  In going through it, there were many interesting and informative graphs that I wanted to highlight and pass on to you.

Looking forward to hearing any comments or future predictions on the real estate market in Calgary or even in Canada…

CMHC is Purchasing $25 Billion in Insured Mortgages

Canada Mortgage and Housing Corporation(CMHC) will purchase up to $25 billion in insured mortgage pools as part of the Government of Canada’s plan, announced today, to maintain the availability of longer-term credit in Canada.

Now this is not a bail out plan like in the US.  Rather this is an attempt by the current government of Canada to keep the banks wanting to loan out to Canadians for Cars, Homes etc.  By buying some of the insured mortgages, key word is insured (unlike the US), it frees up some of the banks money, and will allow to also lend to other banks and not keep such a tight guard on lending.  To explain how banks and bankers work, they have suspenders, a jock strap and a hard hat… they are always protecting themselves too much, which in our case right now is good.  The government is doing this, so there is less pressure by the world markets.

The first purchase of $5 billion will be made October 16, 2008 through a competitive auction process. The mortgages involved are high-quality assets that are already guaranteed through government-backed mortgage insurance. The Government will announce a schedule of future purchase dates to take place over the coming weeks.

Canada Mortgage and Housing Corporation (CMHC) has been Canada’s national housing agency for more than 60 years. CMHC is committed to helping Canadians access a wide choice of quality, affordable homes, while making vibrant, healthy communities and cities a reality across the country.

Please refer to the this link to see a detailed layout of how they choose the mortgages, and the auction works.

0% Down and 40 Year Amortizations are Now no Longer!

Below is a news release from the Canadian Government stating that there will no longer be 40 year amortizations and no more zero-down mortgages in Canada.  This will however take in effect as of October 18th, 2008, and will only effect new mortgages, while existing zero-down or 40 year mortgages will not be effected.

These changes are being made to  government-backed mortgages (insured mortgages including CMHC, AIG and Genworth).

These changes include:

-Fixing the maximum amortization period to 35 years
-Requiring a minimum down payment of 5%
-Establishing a minimum credit score requirement
-Introducing new loan documentation standards
Click Here to Download government-release-40-year-zero-down.pdf