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‘Defying Gravity’; Household Credit Is Rising At The Fastest Rate Seen In Any Post-War Recession.

October 13th, 2009 No comments

Household credit is “defying gravity,” growing at the fastest pace of any recession since the Second World War when adjusted for inflation, a new report from CIBC World Markets shows.

A booming real-estate market that has sent outstanding mortgages surging 7.8% year-over-year in August is the primary driver, accounting for almost 70% of the 7% increase in overall household credit, said Benjamin Tal, senior economist at CIBC World Markets.

That is in stark contrast to the 1991 and 2001 slumps, when mortgage growth ground to a halt on an inflation-adjusted basis, the report notes.

“During a recession, usually mortgage markets go down, but this time it hasn’t and the reason is affordability, driven by low interest rates,” Mr. Tal said. “The Bank of Canada cut interest rates to stimulate the economy, and it’s working.”
Debt interest payments as a share of disposable income at 7.7% are also at their lowest point since 2006. In the 1991 recession, this ratio was more than 10%.
Craig Alexander, deputy chief economist with TD Economics, said a major part of the real-estate boom comes from pent-up demand as nervous Canadians started to realize this spring that the recession was not as bad as once feared.
“People were [also] responding to mortgage rates that are too good to last, so it’s stealing some of the 2010 sales,” he said. About half of that trend has already been absorbed, he said.

“Canada is in a unique situation where we are in the best position to provide credit and Canadians are in the best position to accept that credit,” Mr. Tal said. “It’s almost a crime not to take advantage of it. But we have to do it in a responsible way.”

Neither Mr. Tal nor Mr. Alexander see the current pace of growth in real estate continuing because the Bank of Canada will step in and raise interest rates if the real-estate market runs out of control.

 

Source: Eric Lam 07/10/2009 National Post

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Need Financial Assistance To Build A Secondary or Garden Suite?

September 10th, 2009 No comments

Thinking of building a Secondary or Garden Suite? Canada Mortgage and Housing Corporation (CMHC) offers financial assistance for the creation of a Secondary or Garden Suite for a low-income senior or adult with a disability – making it possible for them to live independently in their community, close to family and friends.

What is a Secondary Suite and a Garden Suite?

A secondary suite, sometimes called an in-law suite, is a self-contained separate unit within an existing home or an addition to a home. This means there are full kitchen and bath facilities as well as a separate entrance.

A garden suite is a separate living unit that is not attached to the principal residence, but built on the same property. Garden suites are sometimes referred to as “granny flats” because they were originally created to provide a home for an aging parent of a homeowner. Like a secondary suite, a garden suite is a self-contained unit.

Who Can Apply?

You may be eligible to receive assistance if:

  • You are a homeowner or private entrepreneur owning residential property that would accommodate an affordable, self-contained rental unit for a low-income senior (65 years of age or more) or adult with a disability.
  • Your property meets with the applicable zoning and building requirements.
  • You consent to enter into an Operating Agreement that establishes the rent that can be charged during the term of the Agreement.
  • You also agree that the household income of the occupant(s) of the newly created self-contained unit will be below a CMHC set level.

 

Financial Assistance:

The assistance is in the form of a forgivable loan that does not have to be repaid provided that you, as the owner, adhere to the conditions of the program. The maximum loan available varies in accordance with the geographic zone in which the property is located.

Zone 1 – Southern areas of Canada: Max Loan/Unit is $24,000

Contact Information:

To find out how to apply for financial assistance or for more information about these programs please call CMHC toll free at 1-800-668-2642.   

Or call Charmaine at Verico Designer Mortgages Inc. 905-336-5997, Toll Free 1-866-824-8057.


(Source: Canadian Mortgage Housing Corporation/ www.cmhc.ca)

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Categories: Reviews Tags: ,

Finding and Flipping Homes

September 9th, 2009 1 comment

Flipping houses is a hot topic these days. Here are 10 tips to help you find the perfect flip from HGTV’s The Big Flip renovator’s John Stassen and Randy Mackay.

1.      Find properties that are diamonds in the rough – homes that are rundown in comparison to those around them – as these often have a low list price.

2.      Are the surrounding properties well maintained? This can add value and clinch a sale when your house goes back on the market.

3.      Scrutinize previous renovations. Poor quality workmanship can mean you have paid a premium for finishes that you will have to repair or replace yourself.

4.      Can you add bathrooms, storage or enlarge a small kitchen to meet the needs of today’s average family? If you can’t, walk away, as these features often make or break a sale.

5.      Ensure you do a thorough home inspection before purchasing properties – this could save thousands of dollars in the long run.

6.      Identify your potential buyers (i.e. young professionals or families) and design the house with their needs in mind.

7.      Find a real estate agent who understands the market. There are thousands of real estate agents; get one who is experienced and understands the business of flipping houses!

8.      Do your research and find areas that are up and coming. Neighbourhoods that are in the early stages of being gentrified often contain homes that offer large returns on their investment.

9.      Be realistic with your budget and always leave room for hidden costs. Early budget optimism can mean cost cutting later on, which means sacrificing quality – and profits – in the final sale.

10.  Keep your eye out for properties with good layouts that can be easily updated with new paint and trim. You may get lucky and find a home that’s a good price and only needs finishing touches, adding tens of thousands of dollars with minimal investment.

Source: (Article by John Stassen and Randy Mackay / www.hgtv.ca)

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Categories: Reviews Tags: ,

Energy-Efficient Housing Made Affordable with Mortgage Loan Insurance

August 26th, 2009 No comments

More than 17 percent of the energy consumed in Canada is used to run our homes. Buying an energy-efficient home or making energy-saving renovations can offer big savings. A 10% CMHC mortgage loan insurance premium refund and extended amortization period without surcharge may be available when you use CMHC insured financing to purchase an energy-efficient home or make energy-saving renovations.

Help the Planet, Help Your Wallet

CMHC has added environmentally friendly features to the Mortgage Loan Insurance it offers. If you use CMHC insured financing to buy an energy-efficient home, purchase a house and make energy-saving renovations or renovate your existing home to make it more energy-efficient, a 10% refund on the Mortgage Loan Insurance premium may be available. You could also have the added flexibility of a longer amortization (the period of time required to repay your mortgage) from 25 years to a maximum of 35 years for loan-to-value ratios in excess of 80% (or 40 years for loan-to-value ratios of 80% or less), significantly reducing your monthly payments.

 

The Government of Canada actively promotes energy conservation and initiatives to reduce greenhouse gas emissions that contribute to climate change.

How It Works

Obtaining an energy assessment through an NRCan qualified energy advisor.

NRCan has developed an energy assessment and labelling system to help homeowners make energy-saving choices when buying a home or renovating. For a fee, a NRCan qualified energy advisor will evaluate the house to determine its energy efficiency rating on a scale of 0 – 100.

For more information, including information on the Government of Canada’s ecoEnergy initiatives, please visit:

http://ecoaction.gc.ca/buildings

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Canada’s Resales Through The Roof!

July 22nd, 2009 No comments

Reuters  Published: Friday, July 17, 2009

Sales of existing homes in Canada jumped 31.5% in the second quarter from the previous one – their first year-over-year quarterly increase since before the peak of the financial crisis, the Canadian Real Estate Association said this week.

The industry group said actual home sales totaled 147,351 units in the second quarter of 2009, up 1.4% from the same quarter of 2008.

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