,

Mortgage brokers help the homeless across Canada

Mortgage brokers and staff from Invis-Mortgage Intelligence delivered more than 100,000 items of clothing and supplied to homeless shelters across Canada this week.

The Angels in the Night program began in 2002 and has raised around $4 million to date in cash and in kind donations for homeless shelters.

Funds are used to buy items identified by local homeless charities as most in demand, typically including coats, snow pants, rain ponchos, boots, hats, gloves, sweatshirts, pants, t-shirts, socks, underwear, pajamas, blankets/bedding and backpacks, and personal toiletries.

“As Mortgage Brokers in the business of helping people find their homes, it seems right to extend some support and help those who might not have a warm home to go to every night,” says Cameron Strong, CEO, Invis-Mortgage Intelligence. “Our brokers, employees and business partners are passionate about this cause and work tirelessly to make it a success each year.”

The annual program delivers items on the second Tuesday of December.

/by
,

Lack of homes for the ‘missing middle’ to impact GTA

Building the right homes to meet the demands of the population is essential to avoid a sizeable deficit in housing supply in the Greater Toronto and Hamilton region. A new report from the Residential and Civil Construction Alliance of Ontario warns that the region is at risk of missing provincial population targets, which could potentially result in 7,200 fewer new homes being built each year until 2041.

The report says that homes to encourage seniors to downsize and to provide the right space for families are essential to avoid skewing the region’s population older with a resulting impact on the economy.

The report – GTHA’s Unbalanced Housing Stock: Benchmarking Ontario’s New LPAT System – says that up to 165,600 homes are at risk of not being built over the next 23 years, equal to an annual loss of $1.95 billion in GDP from residential construction activity if various constraints continue to inhibit the goals set by the provincial growth plan, Places to Grow.

Medium density homes – the so called ‘missing middle’ are key to addressing this issue says Paul Smetanin – president of socio-economic research and data firm the Canadian Centre for Economic Analysis (CANCEA)who conducted the research.

“Hamilton has made the most progress on the ‘Missing Middle,'” Smetanin says. “Toronto, Mississauga, Markham, Newmarket less so, while Brampton is biased towards lower density starts.”

The big issues
The report highlights the key issues for the region’s most populous municipalities including:

  • Only 15% of GTHA households live in medium-density housing, which leads to an inadequate supply of appropriate housing types for a range of household sizes and budgets.
  • Toronto’s number of annual starts is 5-15% higher than required to hit P2G targets. However, the mix of housing is constrained by land, meaning the city’s supply will be highly skewed towards taller towers.
  • York Region is the only one in the GTHA with current annual starts on pace to meet its future target population.
  • Among municipalities with populations over 80,000 people, Oshawa, Brampton and Newmarket have the lowest share of higher-density starts.
  • Municipalities can better optimize infrastructure investments by ensuring that community growth planning is based on a long-term and strategic analysis of our future housing requirements.
/by
,

Don’t let market uncertainty prevent you from buying your dream home

Toronto recently plummeted in a global ranking of housing markets. Is it a bad thing? Is it a sign of things to come? I think it might be a good thing. Having the hottest market sometimes means there are more people who can’t afford a home.

Real estate consultancy, Knight Frank, released its global index of housing markets around the world, and Toronto real estate fell to 137th out of 150 for the second quarter of the year. A year ago, Toronto was number one, the hottest market in the world.

What changed?

Interest rates are on the rise, making the mortgage stress test even more of a burden on homebuyers. The Canadian dollar is strong and businesses are optimistic, that means we may see another rate hike this month. Since July 2017, the rate’s been increased four times.

In these uncertain times, I’ve had a few people ask me when would be the best time to buy a home. My answer is always the same. When you’re ready and you find the right home for you and your family.

You can try to time or predict the market, but what if you’re wrong? What if I’m wrong? Don’t think of your home from purely a financial perspective. It’s the place where you live, raise your children, work, play, eat, sleep. I see my home as a foundation. Do I have real estate investments? Yes, but only because I’m comfortable in my family home.

Rising interest rates combined with the stress test may very well have an impact on home prices. We’ve been watching the average selling price of detached homes drop gradually almost all year. But, there are also predictions of the average price per square foot in Toronto soaring to $2,000 in the next few years.

Think about the definition of affordable. For your home to truly be affordable for you and your family, your monthly shelter costs should not exceed 30% of your income. I feel like there is wiggle room here because everyone has different lifestyles. For example, someone who doesn’t own a car and bikes every day may be able to commit more of their income to their monthly shelter costs.

If you fall into this 30% area, qualify for a mortgage, and you find a home you want to buy, don’t let negative news headlines sway your decision making. Say you decide not to buy because of market uncertainty, prices may jump and your dream home will suddenly be out of reach.

On the other hand, you may pull the trigger on a home purchase, but then the market dips and suddenly your home is worth less than what you paid. Don’t worry. You bought because you can afford the home, and prices fluctuate. The value of your property will always go up and down.

My best advice I can give to buyers sitting on the fence about a purchase is to think long-term about your family home. If you can afford it, you qualify, and you love the home, what are you waiting for?

/by
,

Why VR and AR may become standard terms for real estate agents

The importance of effective listings is highlighted by a new report which shows that 1 in 5 homebuyers bought their home without physically walking through the property before deciding it was ‘the one’.

While that may be a risky strategy and most buyers still want to go inside their potential purchase, online listings do play an increasingly prominent role with almost three quarters saying that they toured or viewed images online before deciding which homes to physically visit.

The survey also reveals that 60% of respondents said they prefer to see homes furnished and professionally staged, or both furnished and empty, before making a purchase or signing a lease.

When moving into a new space, 65.4% of respondents said their top pain points included the stress of buying new furniture at once, shopping for furniture or designing their homes and finding furnishings to match their existing pieces.

The study was carried out by roOomy, a virtual staging and 3D modeling company which has just launched custom augmented reality (AR) and virtual reality (VR) tools for the real estate industry. The technologies allow for enhanced live views or an immersive digital experience.

“We’re enabling our Real Estate partners to transform the home buying and renting processes with the development of custom apps that allows users, both agents and home seekers, to take control of how they visualize a new space. In this digital era, consumers expect to use advanced technology regularly, including when considering one of the biggest purchases of their lives – a home,” said Pieter Aarts, CEO of roOomy.

Sothebys International adopts AR
Sotheby’s International Realty has launched an AR app called Curate, which it says has empowered agents and consumers to virtually stage properties and view them with AR technology.

Nick Church, Pacific Sotheby’s International Realty sales associate says it adds an extra tool to win business.

“The seller felt confident in my ability to use the latest technology to sell the home,” he said.

/by
,

Fraser Valley sales in line with historic averages

Home sales slipped back in the Fraser Valley last month but were broadly in line with historic averages for the time of year.

A total of 1,028 sales were recorded through the MLS system of the Fraser Valley Real Estate Board, including 383 residential detached homes, 241 townhouses, and 286 apartments.

This was a decline of 41% compared to the record high of November 2017 (1,743) and down 11% from October 2018.

“Lessening demand continues to impact our market significantly,” said John Barbisan, President of the Board. “In turn, that has given purchasing power back to buyers who now have more time and more options when it comes to making a decision.”

Although the number of active listings fell 5% month-over-month, buyers had 41% more choice than a year ago with 7,355 in the inventory. New listings totaled 2,077, down 25.2% from the previous month and down 10.6% from November 2017.

HPI benchmark prices varied
FVREB’s HPI Benchmark Price across the three main home types in November were:

  • Single Family Detached: $976,200, down 1.1% from October but unchanged from November 2017.
  • Townhomes: $532,800, down 1% compared to October 2018 but up 5.4% year-over-year.
  • Apartments: $422,500, down 2.4% month-over-month but up 12.2% compared to November 2017.

The market is shifting, albeit slowly. But while buyers are enjoying a more comfortable real estate environment, sellers will have to pay attention to how these changes will affect their chances at success,” added Barbisan.

/by
,

Competition has increased in some Toronto neighbourhoods

Moderate price growth and a decline in sales continued the trend in the Toronto residential home sales market in November.

But in some markets there appears to have been an increase in competition in some parts of the market according to the Toronto Real Estate Board.

Sales through the MLS totaled 6,251, down 14.7% year-over-year; although November 2017 has seen a spike in demand as the market was distorted by approach of mortgage stress tests.

“New listings were actually down more than sales on a year-over-year basis in November. This suggests that, in many neighbourhoods, competition between buyers may have increased. Relatively tight market conditions over the past few months have provided the foundation for renewed price growth,” said TREB president Garry Bhaura.

On a preliminary seasonally adjusted basis, sales were down by 3.4 per cent compared to October 2018.

Prices up from a year ago
The MLS Home Price Index (HPI) Composite Benchmark was up by 2.7% year-over-year while the average selling price was up 3.5% year-over-year to $788,345.

The average selling price after preliminary seasonal adjustment was down by 0.8 per cent compared to October 2018.

“Home types with lower average price points have been associated with stronger rates of price growth over the past few months. Given the impact of the OSFI-mandated mortgage stress test and higher borrowing costs on affordability, it makes sense that the condo apartment and semi-detached market segments experienced relatively stronger rates of price growth in November, as market conditions in these segments remained tight or tightened respectively over the past year,” said Jason Mercer, TREB’s Director of Market Analysis.

/by
,

Mortgage, real estate professionals warned about cyber threat

Mortgage and real estate professionals may be in the sights of a group of Nigerian cyber criminals who are trying to steal company funds.

CNN reports that the group, called London Blue, have obtained a list of the email addresses of around 50,000 executives, including 35,000 chief financial officers, across 80 countries. Some are from banks and mortgage companies.

According to Mastercard company NuData Security, the scammers’ access to the direct email addresses of CFOs means that they can orchestrate targeted attacks requesting transfers of funds.

These kind of attacks are known as business email compromise campaigns (BEC) and the FBI says companies have lost an estimated $12 billion over the past 5 years.

“Banks, mortgage lenders and other financial corporations need to remain extremely vigilant to this kind of activity,” said Ryan Wilk, VP of customer success for NuData Security. “BEC fraud can be incredibly difficult to spot as these hackers will take the time to make their attempts as accurate as possible using social engineering – learning job titles and names of key decision makers with tools such as LinkedIn and Twitter.”

Wilk adds that CFOs and other potential targets of this campaign should use extreme caution when clicking on unsolicited email links and should flag the email with the decision maker it allegedly came from if it seems in any way unusual.

/by
,

Annual Growth in Resale Condo Apartment

/by
,

U.S. financing from Canadian bank offsets purchase

Canadian real estate investors are often dissuaded from purchasing American properties because of the exchange rate, but a lot of needless headaches can be avoided by receiving U.S. financing from select Canadian banks.

“A $400,000 home in the U.S. will become $532,000CAD, so the U.S. mortgage makes sense to mitigate the impact of the weak Canadian dollar,” said Alain Forget, RBC’s director of business development in the U.S. “At $0.76, a lot of Canadians are backing out of purchases because they’ll still have to change their money at about 33% exchange. A lot of Canadians don’t know they can get U.S. financing from a Canadian bank like RBC, and for investment properties they rent out all year long we can finance 75% of that. But for a second home, if they use the property for six to eight weeks and want to rent seasonally for a few months, we can go with 20% down.”

Canadians are investing increasingly south of the border, spending $10.5 billion last year.

“It averaged $384,000, and that number can buy you a lot of real estate in the U.S.’s Sun Belt states,” continued Forget. “There’s a lot of opportunity in those markets to get three- or four-bedroom homes, or even nice townhomes with three bedrooms and 3,000 square feet in gated communities that have resort lifestyles.”

A home worth $1 million in Canada goes for about $400,000 in much of Florida, but choosing the right kind of home will offset the purchase price, especially during the peak season.

“In Southwest Florida, the west coast of Florida and Central Florida, for $250,000 to $300,000, Canadian investors can rent out their homes for $3,000 to $4,000 a month,” said Forget. “A lot of Canadians are using properties for themselves for up to a couple of months and then renting them out during the peak months of January to April, and they still generate enough U.S. cash flow income to cover their property taxes, HOAs, taxes and insurance. It can even cover financing principal and interest.”

A five-bedroom house in Orlando goes for roughly $450,000 and typically fetches substantial monthly rental income.

RBC has dropped its down payment requirement on investment properties to 25% from 40%—a sign that it regards Florida rental properties as low-risk, high-yield investments.

“The real estate market in Florida varies but you can buy new construction from reputable builders in beautiful gated communities for $200 to $250 per square foot,” said Forget. “It has solid rental potential from an ROI perspective. That’s the beauty of the real estate market in Sun Belt states like Arizona and Florida—you can rent homes out year round or just for a few months.”

Condo hotels are other worthwhile investments. The HOA fee is higher, but those monies are recouped with yield from as little as 65% rental occupancy. Some projects offer up to 10% lease backs, as well.

/by