Sales of new homes were down 48% in the Greater Toronto Area compared to a year earlier as low- and high- rise sectors saw large declines.

High-rise sales fell 37% to 1,749, 3% below the 10-year average; and low-rise sales of just 352 was 73% below September 2016 and 70% below the 10-year average.

The figures from the Altus Group show that the total of 2,101 sales was 30% below the 10-year average.

Year-to-date the stats show improvement for the high-rise sector with 27,153 units sold, up 29% from the same period of 2016 and 72% above the 10-year average.

However, low-rise sales year-to-date of 6,718 is 53% lower than the same period of 2016 and 44% below the 10-year average.

The overall total year-to-date is 5% down from 2016 and 22% above the 10-year average.

Often, the route to owning your own home can seem like a trip to the moon and back.

Really though, it comes down to five key steps:

1 – Manage your credit wisely.
If there is one thing that will gum up the purchase of that perfect home, it’s an unwise purchase or extra credit obtained. Keep your credit spending to a minimum at all times, make every payment on time and most of all pay more than the minimum payment. Remember that if you just make the minimum payment on your credit cards, chances are you will still be making payments 100 years from now.

2- Assemble a down payment.
At first glance, the challenge of finding a down payment can seem insurmountable. In fact, you just need to consider all the sources for down payment funds. yes, you will have saved some but remember you can also, in some situations, use RRSP funds, grants ( BC Home Equity Partnership for example ) and non traditional sources like insurance settlements, severance and of course, gifted funds from a family member. Don’t forget that you’ll need to demonstrate that you’ve had the funds on deposit for up to 90 days and also that you have an additional one and a half percent of the mortgage amount for closing costs.

3- Figure out how much you can afford.
It’s at this point that most people usually stop and scratch their heads. Some even try and tough it out, using the raft of online calculators to figure it out, but new mortgage rules can make even that a challenge.
If you talk to a Dominion Lending Centres mortgage specialist ( like me! ) though, they can help you figure it out and even go as far as getting you a “pre-approval” from a financial institution. This can give you the confidence you need to actually start looking around.

4- Figure out what you want.
You’ll want to make a list of things your new home has to have and what the neighbourhood has to have. Things you want to think about are the things that are important to you now; is there access to a dog park? Is there ensuite laundry? Divide the list into things you can’t live without and things you’d like to have. It’s way easier to look when you know what you want to look at.

5- Look with your head, buy with your heart.
The final step is, with the help of a realtor, look at properties that meet your requirements. Yes, the market is a little frenzied at the moment, but remember, if your perfect property is sold to someone else, the next perfect property will soon appear.

When you do finally buy, chances are, you’ll buy with your heart. My sister Noona moved to London some years back and after settling in, decided to buy. Her list was fairly lengthy, one of the key elements was being able to walk to work. In a market similar to what we face now, she found a property that met most of her requirements. In the end though, she bought with heart, mostly because of the view from the balcony.

The decision which home to buy is a tricky thing, it should be made with your head and heart. Deciding, while balancing what you think and feel, really is rocket science.

I know that this may seem to be an oversimplification but really, the thing that complicates the process is your own emotions – all of the stress that comes along with making a life change can make the process challenging.

Approximately 32 per cent of Canadians are in a variable rate mortgage, which with rates effectively declining steadily for the better part of the last ten years has worked well.

Recent increases triggers questions and concerns, and these questions and concerns are best expressed verbally with a direct call to your independent mortgage expert – not directly with the lender. There are nuances you may not think to consider before you lock in, and that almost certainly will not be primary topics for your lender.

Over the last several years there have been headlines warning us of impending doom with both house price implosion, and interest rate explosion, very little of which has come to fruition other than in a very few localized spots and for short periods of time thus far.

Before accepting what a lender may offer as a lock in rate, especially if you are considering freeing up cash for such things as renovations, travel or putting towards your children’s education, it is best to have your mortgage agent review all your options.

And even if you simply wanted to lock in the existing balance, again the conversation is crucial to have with the right person, as one of the key topics should be prepayment penalties.

In many fixed rate mortgage, the penalty can be quite substantial even when you aren’t very far into your mortgage term. People often assume the penalty for breaking a mortgage amounts to three months’ interest payments, which in the case of 90% of variable rate mortgages is correct. However, in a fixed rate mortgage, the penalty is the greater of three months’ interest or the interest rate differential (IRD).

The ‘IRD’ calculation is a byzantine formula. One designed by people working specifically in the best interests of shareholders, not the best interests of the client (you). The difference in penalties from a variable to a fixed rate product can be as much as a 900 per cent increase.

The massive penalties are designed for banks to recuperate any losses incurred by clients (you) breaking and renegotiating the mortgage at a lower rate. And so locking into a fixed rate product without careful planning can mean significant downside.

Keep in mind that penalties vary from lender to lender and there are different penalties for different types of mortgages. In addition, things like opting for a “cash back” mortgage can influence penalties even more to the negative, with a claw-back of that cash received way back when.

Another consideration is that certain lenders, and thus certain clients, have ‘fixed payment’ variable rate mortgages. Which means that the payment may at this point be artificially low, and locking into a fixed rate may trigger a more significant increase in the payment than expected.

There is no generally ‘correct’ answer to the question of locking in, the type of variable rate mortgage you hold and the potential changes coming up in your life are all important considerations. There is only a ‘specific-to-you’ answer, and even then – it is a decision made with the best information at hand at the time that it is made. Having a detailed conversation with the right people is crucial.

It should also be said that a poll of 33 economists just before the recent Bank of Canada rate increase had 27 advising against another increase. This would suggest that things may have moved too fast too soon as it is, and we may see another period of zero movement. The last time the Bank of Canada pushed the rate to the current level it sat at this level for nearly five full years.

Life is variable, perhaps your mortgage should be too.

As always, if you have questions about locking in your variable mortgage, or breaking your mortgage to secure a lower rate, or any general mortgage questions, contact a Dominion Lending Centres mortgage specialist.

The Bank of Canada held interest rates steady at 1% and signalled a cautious approach to future rate rises.

The bank is forecasting a continued rise in inflation, reaching 2% in the second half of 2018 and for the economy to grow at above-potential with 3.1% for this year, 2.1% for 2018 and 1.5% in 2019.

Slack in the labour market including wage growth means there could be greater potential, however the high value of the loonie is a hinderance for exports.

TD Economics senior economist Brian DePratto said that the economy is in something of a sweet spot for the BoC meaning that there is no immediate urgency for a further rise in interest rates but also that the low interest environment is no longer necessary.

CIBC’s Nick Exarhos said that the dovish tone of the BoC means that he still expects the next rise in interest rates to be in the spring of 2018.

The Conference Board of Canada’s Chief Economist Craig Alexander and Economist Alicia MacDonald said that the dovish tone was surprising.

“With the economy quickly absorbing its excess capacity and growth in labour productivity suggesting a forthcoming acceleration in wage gains, we continue to believe that three more interest rate increases may be warranted before the end of 2018,” they said.

Brought to you by:

Dave, Cindy, Amanda & Kimberly Walker

Iris Zhang

The Walker Real Estate Team

20 Year Emerald Medallion Winners

HomeLife Benchmark Realty

#1 1920 152 Street

South Surrey, B.C. V4A 4N6

604-889-5004 or info@WalkerRealEstate.ca

www.WalkerRealEstate.ca

Kimberly Walker

5 Year Mortgage Broker

Cindy Walker

15 Year Licensed Assistant

Dominion Lending Centers

Valley Specialists

#111 20434 64 Avenue

Langley, B.C. V2Y 1N4

604-889-5004 or cindywalker@shaw.ca

www.WalkerMortgages.ca

It has been said that there are two certainties in life; death and taxes. Well, as it relates to your mortgage, the single certainty is that you will pay back what you borrowed, plus interest. However, how you make your mortgage payments, the payment frequency, is somewhat up to you! The following is a look at the different types of payment frequencies and how they will impact you and your bottom line.

Here are the six main payment frequency types:

1. Monthly payments – 12 payments per year
2. Semi-Monthly payments – 24 payments per year
3. Bi-weekly payments – 26 payments per year
4. Weekly payments – 52 payments per year
5. Accelerated bi-weekly payments – 26 payments per year
6. Accelerated weekly payments – 52 payments per year

Options one through four are designed to match your payment frequency with your employer. So if you get paid monthly, it makes sense to arrange your mortgage payments to come out a few days after payday. If you’re paid every second Friday, it might make sense to have your mortgage payments match your payday! These are lifestyle choices, and will of course pay down your mortgage as agreed in your mortgage contract, and will run the full length of your amortization.
However, options five and six have that word accelerated attached… and they do just that, they accelerate how fast you are able to pay down your mortgage. Here’s how that works.
With the accelerated bi-weekly payment frequency, you make 26 payments in the year, but instead of making the total annual payment divided by 26 payments, you divide the total annual payment by 24 payments (as if the payments were being set as semi-monthly) and you make 26 payments at the higher amount.

So let’s say your monthly payment is $2,000.
Bi-weekly payment : $2,000 x 12 / 26 = $923.07
Accelerated bi-weekly payment $2,000 x 12 / 24 = $1,000

You see, by making the accelerated bi-weekly payments, it’s like you’re actually making two extra payments each year. It’s these extra payments that add up and reduce your mortgage principal, which then saves you interest on the total life of your mortgage.
The payments for accelerated weekly work the same way, it’s just that you’d be making 52 payments a year instead of 26.
Essentially by choosing an accelerated option for your payment frequency, you are lowering the overall cost of borrowing, and making small extra payments as part of your regular cash flow.
Now, It’s hard to nail down exactly how much interest you would save over the course of a 25 year amortization, because your total mortgage is broken up into terms with different interest rates along the way. However, given todays rates, an accelerated bi-weekly payment schedule could reduce your amortization by up to three and a half years.
If you’d like to have a look at some of the mortgage numbers as they relate to you, please don’t hesitate to contact a Dominion Lending Centres mortgage specialist who would love to work with you and help you find the mortgage (and the mortgage payment frequency) that best suits your needs.

Brought to you by:

Dave, Cindy, Amanda & Kimberly Walker

Iris Zhang

The Walker Real Estate Team

20 Year Emerald Medallion Winners

HomeLife Benchmark Realty

#1 1920 152 Street

South Surrey, B.C. V4A 4N6

604-889-5004 or info@WalkerRealEstate.ca

www.WalkerRealEstate.ca

Kimberly Walker

5 Year Mortgage Broker

Cindy Walker

15 Year Licensed Assistant

Dominion Lending Centers

Valley Specialists

#111 20434 64 Avenue

Langley, B.C. V2Y 1N4

604-889-5004 or cindywalker@shaw.ca

www.WalkerMortgages.ca

By now the media, along with multiple mortgage brokers’ social media feeds, have likely let you know that more changes to your ability to get a mortgage are arriving soon. But so what? Should you care?

SHORT VERSION; Probably Not.

LONG VERSION; The five ’W’’s follow to help answer the above questions and more;

Who is affected?

Nobody simply renewing an existing mortgage. No changes for you.
Nobody buying with less than a 20% down payment. No changes for you.

Group 1 – Current homeowners with more than 20% equity who want to access that equity.

Mind you we are still talking specifically about people wanting to borrow more than 80% of what they currently qualify for. This is less than 10% of my own clients.
And even then, often there will still be a way; co-signors, alternative lenders, etc.

Group 2 – Buyers with 20%+ down payment who specifically planned on borrowing more than 80% of what the currently qualify for.

What does this mean for the market? Is meltdown imminent?

Um. No.

Where?

These changes are unlikely to have a significant impact on the Vancouver or Toronto markets due primarily to higher than average household incomes and higher than average net worth of our parents if they live locally.

In small town Canada where average household incomes and average net worth numbers are lower, the impact of these changes could in fact be much more pronounced. Rather than a slight dip in specific price brackets and specific property types as might be seen in the GVA (Greater Vancouver Area), one might expect as much as a 10% drop in values in smaller communities.

When?

Jan 1, 2018***

Who picks these dates?

People who believe that mortgage brokers, lenders, and underwriters don’t deserve and sort of holiday break at all.

The changes themselves are poorly thought out as it is. But the date of implementation appears to have been generated by the coldest, loneliest, most robotic person in government today.

Why not Dec 15? Or why not Feb 1?

Seriously? Jan 1?

***If you believe these changes may affect you take action well before Dec 1, 2017.
Lenders will be implementing the new rules early, they always do.

Why did the Government make more changes?

Because they can.

For one reason only. OSFI aka the ‘Office of the Superintendent of Financial Institutions’ has a singular mandate.

It’s not to calm prices, it’s not to protect consumers from themselves.

OSFI’s mandate is purely ‘to protect the stability of the CDN banking system’

Period.
The end.

It is not about you, me, consumer debt, bidding wars, subject free offers, runaway property prices, etc. No, it’s all about protecting the banks.

Conclusion

We are at a point where for ten years running the government has made significant changes to the mortgage lending market every single year.

What’s happened to prices pretty much every year for ten years running?

What’s happened to market activity pretty much every year for ten years running?

At this point it feels a bit like we have an impatient child smashing their toy against the ground because it’s not working to their liking.

It was/is actually working fine, but after the tenth hit maybe it may well start to falter, perhaps government should have paused after the ninth hit and seen if things were falling into place (they are), but no – here we go again.

I’d like to say hopefully they are not winding up for yet another hit. However, sadly, all indications from inside the machine indicate that they are in fact winding up for yet another hit. More on that one if and when it happens.

If you are a buyer in the 500K – 1M$ zone watch for some opportunities as that may be where things soften slightly.

Otherwise, business as usual.

Brought to you by:

Dave, Cindy, Amanda & Kimberly Walker

Iris Zhang

The Walker Real Estate Team

20 Year Emerald Medallion Winners

HomeLife Benchmark Realty

#1 1920 152 Street

South Surrey, B.C. V4A 4N6

604-889-5004 or info@WalkerRealEstate.ca

www.WalkerRealEstate.ca

Kimberly Walker

5 Year Mortgage Broker

Cindy Walker

15 Year Licensed Assistant

Dominion Lending Centers

Valley Specialists

#111 20434 64 Avenue

Langley, B.C. V2Y 1N4

604-889-5004 or cindywalker@shaw.ca

www.WalkerMortgages.ca

Vancouver West Side is the priciest neighbourhood in Canada on a price-per-square-foot basis, and the city dominates the top 10.

A nationwide study by Century 21 reveals that Vancouver West Side has a PPSF of $1,201 with the city’s Downtown second at $962.75 and Toronto Downtown taking third place at $818.86.

Metro Vancouver is home to 7 of the 10 priciest neighbourhoods in Canada with while Toronto’s Downtown is joined by Oakville and Richmond Hill in the top 10.

Elsewhere in the country Montreal Downtown ranks as the 12th most expensive, Victoria 18th, Calgary South West 19th, Saskatoon 31st, Edmonton 32nd, Winnipeg 37th and Ottawa 41st.

Oakville has shown the largest growth in price-per-square-foot in the past 20 years, the data shows. There has been a 493% rise from $105.77 for a typical detached home in 1997 to $627.33 now.

“For the most part, we see a stable and growing real estate industry in Canada,” says Brian Rushton, Executive Vice-President of CENTURY 21 Canada. “Regions are absolutely susceptible to the economic factors in their province, like oil prices in Alberta, but we’ve seen steady growth for two decades. Certainly Vancouver and Toronto have seen significant price spikes, but other areas like the Prairies and Atlantic Canada have had fairly steady and predictable markets.”

Although home prices in Toronto and Vancouver seem to have stabilized recently, they are still at historical levels.

The average home price in these two major Canadian cities are still well over $1 Million. Unsurprisingly, first-time homebuyers are finding it increasingly difficult to get onto the “property ladder”. It is now harder than ever for first-time homebuyers to own a home; so what are they to do? Studies have shown that more and more millennials are turning to the bank of mom and dad for help with their down payments.

According to the latest statistics from Mortgage Professionals Canada, down payment gifts from parents have increased significantly in the last 16 years, going from 7% in 2000 to 15% for homes purchased between 2014-2016. The average gift amount has skyrocketed as well. Industry experts have seen many down payments in the six-figure range – $100,000 to $200,000. The trend is expected to continue, as 2017 is predicted to be “the most difficult year for a first-time homebuyer in the last [decade]”, according to James Laird, co-founder of RateHub, a mortgage rate comparison website.

How can you help your children climb the property ladder?
With soaring property prices, you may be asking about your options to help your children break into the housing market. One way is by getting a reverse mortgage on your home. The CHIP Reverse Mortgage from HomEquity Bank has seen a growing number of senior Canadians over the years access their home equity in order to give a financial gift to their family members to help them with big purchases such as a down payment for a house. “We definitely see a growing trend of this at HomEquity Bank. We get a large number of clients who would take out $100,000-$200,000 in a reverse mortgage, they have the benefit of not having to make payments, and they give that lump sum of money to their kids to help them get started in the real estate market.” says Steve Ranson, President and CEO, HomEquity Bank.

How does it work?
A reverse mortgage is a loan secured against the value of your home. It allows you to unlock up to 55% of the value of your home without having to sell or move. The money you receive is tax-free and you are not required to make any regular mortgage payments until you move, sell or pass away.

Why should you give an early inheritance as a down payment now?
Life Expectancy – According to Statistics Canada, for a 65-year old couple there is a one-in-two chance that one of them will reach the age of 92. Do your children really need an inheritance when they are in their mid-to-late 60’s?
Create memories now – After you are gone, you will have missed out on seeing your children build a family in their new home. Giving a down payment now will enable you to create lasting memories while your health allows you to.

Find out more about this incredible opportunity to use a reverse mortgage to give the gift of a down payment to your loved ones today. If you’re 55 years or older and want to learn more about your financial options, including a reverse mortgage, talk to your Dominion Lending Centre mortgage specialist today.

When the new tighter restrictions on mortgage lending come into effect in just over two months they could spark a new trend – longer amortizations.

With OSFI’s stress test requiring borrowers of uninsured mortgages to prove they can afford payments 2% above their contract rate, fewer people will qualify.

However, switching to a longer amortization period could help offset the restriction says Ratespy.com founder Rob McLister. He told the Financial Post that the lower payments from a 35-year period compared to 25 years could enable qualification but noted that interest rates would be higher.

OSFI responded that, while it has not included amortization as part of the updated B-20 Guideline, it would be “monitoring” regulated lenders as the new rules are implemented in January.

Mortgage lenders may choose not to try to circumvent the tighter rules fearing that the regulator may intensify scrutiny.

Meanwhile, comments from the chief executive of the Canadian Credit Union Association says the rule changes will hamper competition in the mortgage market.

Martha Durdin told the Globe and Mail that the stress test will make it harder for existing homeowners to shop around for a new deal as they may not qualify for a new mortgage

Brought to you by:

Dave, Cindy, Amanda & Kimberly Walker

Iris Zhang

The Walker Real Estate Team

20 Year Emerald Medallion Winners

HomeLife Benchmark Realty

#1 1920 152 Street

South Surrey, B.C. V4A 4N6

604-889-5004 or info@WalkerRealEstate.ca

www.WalkerRealEstate.ca

Kimberly Walker

5 Year Mortgage Broker

Cindy Walker

15 Year Licensed Assistant

Dominion Lending Centers

Valley Specialists

#111 20434 64 Avenue

Langley, B.C. V2Y 1N4

604-889-5004 or cindywalker@shaw.ca

www.WalkerMortgages.ca