CanEquity Blog on Mortgages

The Canadian housing industry recently received a boost, with the governments of Canada and Newfoundland and Labrador announcing a cost-shared investment of more than $2 million under the country's Economic Action Plan for the continuing renovation of 52 affordable social housing units located in St. John's.

The Honorable Peter Penashue, minister of Intergovernmental Affairs and regional minister for Newfoundland and Labrador, said the next phase of the plan is stimulating the economy while creating jobs.

"These upgrades will continue to provide safe and affordable homes for families and individuals with low incomes," said the Honorable Tom Hedderson, minister Responsible for Newfoundland and Labrador Housing Corporation. "Over the past two years we have carried out unprecedented renovations and improvement work on our housing portfolio throughout the Province." Continue reading »

A recent report from the Canada Mortgage and Housing Corporation reveals the nation's growing housing market is due for a stabilization of prices, sales and new construction over the course of the next two years.

The housing agency, which covers all of Canada, released its first quarter report for 2012 and projected long and short term industry expectations for individual cities and provinces including Toronto and Vancouver.

"With the Canadian economy set to expand at a moderate pace and mortgage rates expected to remain low, activity levels in 2012 in both new home construction and sales of existing homes will stay close to levels seen in 2011," said Mathieu Laberge, deputy economist of the CMHC. Continue reading »

The annual Manitoba Housing Outlook Conference held this year on February 21 addressed the prairie province's housing market.

Conducted by the Canada Mortgage and Housing Corporation, the event was hosted at the Delta Hotel in Winnipeg and brought in 200 representatives of the housing industry to hear CMHC analysts present information related to the market and other nationwide economic and demographic factors.

"Single-detached housing starts will remain close to 2011 levels with 3,850 starts in 2012 and 3,900 starts in 2013," said Lai Sing Louie, regional economist for the Prairie and Territories Region. "In the multi-family market, builders across the province set a 24-year record with 2,252 starts in 2011 … this elevated activity will continue with 2,300 units in 2012 and 2,350 units in 2013." Continue reading »

The Lloydminster region and other cities in the Canadian Prairies are expected to increase their housing starts by 10 percent this year, according to the Lloydminster Source, citing recent data analysis from the Canada Mortgage and Housing Corporation.

Keith Weinbender, co-owner and a broker at Century 21 in Lloydminster, said the CMHC's report could have further implications for certain cities in Western Canada but an increase is definitely anticipated for Lloydminster.

“We just have a really good strong economy that’s working on all cylinders right now, and that’s including a strong cattle market, a strong grain market and a strong oil market and a strong retail sector, where people are moving to town, so everything is working in Lloydminster’s favor,” Weinbender told the Lloydminster Source. Continue reading »

Toronto-Dominion Bank has told its mortgage brokers to start enforcing lending policies on new immigrants and the self employed immediately, according to a recent report by Dow Jones.

TD's Equity Lending program previously allowed Canadian residents who could not confirm their stated income to qualify for a mortgage; however, the bank will no longer allow equity lending applications whose loan-to-value eclipses 75 percent and will require brokers to include the customer's stated gross income and complete liability and asset information.

"TD has been a share-growth leader in mortgages over the last few years," David McVay, a financial-services industry consultant at McVay & Associates, a firm that tracks the latest retail-banking trends, told the news source. "They have been aggressive in the branch, broker and mortgage specialist channels."

The nation's second largest bank, TD recently raised its four-year closed fixed rate mortgage 40 basis points to 3.39 percent last week after offering ultra low mortgage rates of 2.99 percent. The bank also introduced a five-year closed fixed rate mortgage at 4.04 percent.

A recent report from Greater Toronto Realtors found a total of 3,206 home sales through the Toronto MLS system for the first two weeks of February 2012.

This is a 9 percent increase compared with the 2,933 home sales recorded during the same time last year. In addition, new listings were up 13 percent on a year-over-year basis.

"The Greater Toronto Area resale home market became better supplied during the first 14 days of February," said Richard Silver, president of the Toronto Real Estate Board. "If growth in new listings continues to outstrip growth in sales this year, competition between home buyers will ease. More balanced market conditions on a sustained basis would result in a lower annual rates of price growth later in 2012."

Also, the city of Toronto registered 1,214 home sales during that two-week period, compared with 1,244 sales for the same time last year. The rest of the GTA recorded 1,992 sales between February 1 and 14 this year, compared with 1,689 last year. Continue reading »

British Columbia Premier Christy Clark recently announced the new provincial budget could contain early harmonized sales tax relief for the home building sector in Canada.

The move comes as Clark continues to stick to the 2013 deadline for eliminating the tax struck down by voters in a referendum last year, the newspaper states. Clark is using talk radio as the preferred method for communicating with Canadian voters.

“I have always believed that talk radio is a unique place where you can actually get feedback from citizens,” she said. “It’s the town square where a politician can be held accountable in real time by real people and be required to answer questions.”

A separate report from The Globe and Mail reveals B.C. is outlining a post-HST plan for the home building industry. It is likely that prospective home loan applicants will continue with the wait-and-see approach as the transition is made between the harmonized sales tax and the provincial sales tax.

A recent report from the Canada Mortgage and Housing Corporation on the outlook of the Atlantic housing market shows performance for this year could be impacted by the remaining inventory of apartments currently under construction.

Although single housing starts increased over the latter half of 2011 due to ultra low interest rates, weak employment and wage expansion are expected to lower the outlook for this year with single housing starts expected to decline as much as 7 percent.
"Although more favorable financing conditions available in the second half of 2011 continued to support apartment construction last year, the expectation is that activity will slow in 2012," said Alex MacDonald, regional economist with the CMHC Atlantic Business Centre. "Notwithstanding the decline, the level of construction is forecast to remain historically high. Multiple starts, including apartments, are forecast to decline 15 percent in 2012." Continue reading »

The Governments of Canada and Quebec recently contributed more than $1.4 million, which has led to the opening of the Manoir des Iles, a 24-unit residential building for semi-independent seniors.

Members of the Canada Mortgage and Housing Corporation, the National Assembly and other representatives celebrated the opening of the housing units, which resulted in a total investment of more than $3 million.

"I am pleased with the development of this residence that will provide seniors in Salaberry-de-Valleyfield with affordable housing and allow them to remain in the community to which they have become attached," said MNA Lucie Charlebois. "It is important for our government to be involved in projects such as this one. I would like to thank all the partners who contributed to this project, in co-operation with the Société d'habitation du Québec." Continue reading »

Mortgage brokers in Canada are undercutting the nation's banks, with some offering to buy down the rate offered and take a hit from the commission as a result, in order to gain customers, according to a recent report from the Financial Post.

Brokers are being forced to make financial sacrifices in order to keep pace with the major banks and obtain a larger portion of the market. This strategy has become even more pressing with the news that another major Canadian bank may turn its business in-house, the news source stated. Most banks that were offering significant mortgage rate discounts have returned rates to normal levels, which has favored brokers.

“There are so many options out there besides the banks," Rob McLister, editor of Canadian Mortgage Trends, told the news source. "[These latest rate hikes] have given brokers an edge because bank pricing is notably higher." Continue reading »