Randy Miller

Broker Of Record

Urban Avenue Realty Ltd., Brokerage

Whitby & Brooklin Real Estate

Office 905-430-1800

Direct 905-430-9444

Email: randy@randymiller.ca

Categories

Negative Financial Headlines

Canadian mortgages in arrears (homeowners who have gone 3 or more consecutive months without making a payment) have been and are extremely low.   They are historically less than 0.5% (actually Canada’s current average sits at 0.29%, Ontario sits at 0.18%, with Alberta at 0.27%!) Even through the most recent couple of 'financial crises', there was no blip in this number.   

This is a tiny fraction of the US statistic; however, common opinion leads us to believe otherwise.   There are a number of fundamental differences between the two countries'   banking and mortgage lending systems.   One difference is that most mortgages in the US are 'non-recourse', meaning you can walk away from your house and owe nothing beyond that asset's worth.   In Canada, you are liable for the entire debt, and this is a great incentive to do everything possible to make that mortgage payment.    

Canadian mortgage lenders are prudent; their goal is not be stuck with a property. Banks are not in the property ownership and management business, so it is in their best interest to make sure borrowers can make their mortgage payments.  Mortgage default insurance facilitates lenders to make more risk-based decisions, opening up the mortgage lending market to more consumers (including rental property, which is always viewed as more risky since it is assumed an owner will pay for their own housing first before covering the payment on a home they do not reside in). If a consumer falls into temporary financial hardship, there are assistance programs available from the mortgage insurers, with the goal of avoiding a default and lender having to take over the property.

Canadians with mortgages have significant equity in their home, averaging about 74% of the home's value.   In addition to that, a 2014 survey found that 16% of mortgage holders have   increased their mortgage payments, and 16% made an additional lump sum payment in the last year. From the headlines, you would think an epidemic has swept across our country with low-equity home ownership being the norm.   

Canadians, in general, are conservative with their money and the statistics show many are sitting on a healthy amount of wealth.  Naturally, there is the demographic at the beginning stages of their home ownership journey who have lower equity.   However, there a many mortgage regulations in place designed to qualify these applicants accordingly, along with mandatory mortgage default insurance for those with low down payments.   

There is much discussion today about how hard it is for first time homebuyers to qualify for a mortgage, due to these regulations which have become increasingly more strict, so it is plausible the government may realize the effects of their decisions and loosen up the reins in order to maintain balance in the housing market and economy.

Another statistic demonstrating that Canadians, overall, are conservative with their money is that 60% of Canadians pay off their credit card balance in full each month, avoiding credit card and interest payments altogether.   The truth is, no matter how many rules and regulations are implemented,   there will always be financially irresponsible people.   The headlines like to focus on this group, and regulatory decisions appear to be swayed by these sentiments, lumping everyone into the same category, including savvy real estate investors who understand how to manage debt responsibly.   

In conclusion, headlines are designed to sell.    Not everything is perfect and positive all the time, but it certainly isn't the constant doom and gloom we read about.   The messages in the headlines are often inconsistent; one day something is up, and the next day it is down.   A savvy investor knows to look beyond the headlines, not get swept up emotionally, dig deeper, filter out the irrelevant chatter and figure out what really applies to them.
(Reference sources: Canadian Mortgage and Housing Corporation, Canadian Association of Accredited Mortgage Professionals, Canada Bankers Association, Bank of Canada)

If you are planning to buy a house in Whitby or Brooklin or other areas within Durham Region, contact me. I can help you with the buying process and refer you to a mortgage specialist that can explain the products and help you choose the right mortgage product. Let me help you every step of the way!

Randy Miller
Broker of Record

Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby

905-430-1800
 

 

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Rising Home Sales

According to the Canadian Real Estate Association (CREA), the average sale price for an existing home in Canada rose 9.5 per cent, year-over-year, to $448,862 in April. Excluding the two major cities, Vancouver and Toronto, the increase was much more modest at 3.4 per cent to $339,893.

The number of home sales processed through the MLS® Systems of Canadian real estate Boards and Associations rose 2.3 per cent in April 2015 compared to March. This marks the third consecutive month-over-month increase and raises national activity back to where it was during most of the second half of last year.

April sales were up from the previous month in two-thirds of all local markets, led by the Greater Toronto Area, the surrounding Golden Horseshoe region, and Montreal.

 “In recent years, the seasonal pattern for home sales and listings has become amplified in places where listings are in short supply relative to demand,” said Gregory Klump, CREA’s Chief Economist. “This particularly stands out in and around Toronto. Sellers there have increasingly delayed listing their home until spring. Once listed, it sells fairly quickly. Sales over the year as a whole in Southern Ontario are likely being constrained to some degree by a short supply of single family homes. However, the busy spring home buying and selling season has become that much busier as a result of sellers waiting until winter has faded before listing.”

Actual (not seasonally adjusted) activity in April stood 10.0 per cent above levels reported in April 2014. This marks just the third time ever that sales during the month of April topped 50,000 transactions.

Sales were up on a year-over-year basis in about 70 per cent of all local markets, led by activity in the Lower Mainland of British Columbia, Greater Toronto, and Montreal. Of the 18 local markets that set new records for the month of April, all but two are in Southern Ontario.

The number of newly listed homes was virtually unchanged (+0.1 per cent) in April compared to March. Below the surface, new supply rose in almost two thirds of all local markets, led by a big rebound in Halifax-Dartmouth following a sharp drop in March. This was offset by declines in Greater Vancouver, Victoria, and the Okanagan Region, as well as by a continuing pullback in new supply in Calgary. New listings in Calgary have dropped by one-third from their multi-year high at the end of last year to their current multi-year low.

The national sales-to-new listings ratio was 55.3 per cent in April, up from 50.4 per cent three months earlier as the ratio has steadily risen along with sales so far this year.

A sales-to-new listings ratio between 40 and 60 per cent is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets respectively. The ratio was within this range in the majority of local housing markets in April.

The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity.

There were 5.9 months of inventory on a national basis at the end of April 2015, down from 6.1 months in March and 6.5 months at the end of January when it reached the highest level in nearly two years. While the sales-to-new listings ratio and months of inventory measures of market balance indicate that the housing market has tightened on a national basis over the past few months, both measures remain firmly entrenched in balanced market territory.

The Aggregate Composite MLS® HPI rose by 4.97 per cent on a year-over-year basis in April, on par with the 4.95 per cent year-over-year gain recorded in March.

Year-over-year price growth accelerated in April for apartment units and two-storey single family homes, while decelerating for townhouse/row units and one-storey single family homes.

Single family home sales continue to post the biggest year-over-year price gains (+5.84 per cent), led by two-storey single family homes (+6.89 per cent). By comparison, the rise in selling prices was more modest for one-storey single family homes (+4.20 per cent), townhouse/row units (+3.87 per cent), and apartment units (+2.60 per cent).

Full article & statistics: Click HERE!

Source: CREA.ca

Contact me
for information about the housing market in Durham Region!  

Randy Miller
Broker of Record

Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby

905-430-1800

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Housing Bubble

 According to The Globe and Mail the Bank of Canada’s top brass assured a parliamentary committee that Canada’s bloated housing market has not become a risky asset bubble, despite the central bank’s own calculation that house prices nationwide are roughly 20 per cent overvalued.

“We don’t believe we’re in a bubble,” Bank of Canada Governor Stephen Poloz said in testimony Tuesday to the House of Commons Standing Committee on Finance. He said Canada’s long-running boom in the housing market hasn’t been underpinned by the kind of rampant speculative buying that is the hallmark of an asset bubble.

“Our housing construction has stayed very much in line with our estimates of demographic demand,” he said. “There’s no excess.”

This despite the central bank’s own estimate, published last December in its Financial System Review, that Canada’s housing market is overpriced by between 10 and 30 per cent.

Mr. Poloz indicated that he believes the overvaluation is not a symptom of runaway prices and widespread investor speculation, but rather of ongoing strength in consumer demand spurred by historically low interest rates – rates that were cut by the central bank in order to keep consumer demand buoyant to support Canada’s economy during the Great Recession.

“This is one of the by-products of what we’ve been through. It’s not something that happened simply by itself,” he said. “It would be very unusual to have that and not have a degree of overvaluation.”

Mr. Poloz added that the overvaluation doesn’t necessarily mean the market is in need of a 10-to-30-per-cent downturn to bring it back into balance. He said that rising incomes as the economy gains momentum could help close the affordability gap, without a sharp drop in home values.

“We believe that as the fundamentals catch up with it, it will be sustained,” he said.

Senior Deputy Governor Carolyn Wilkins added that the central bank still believes Canada’s overall housing market is “headed for a soft landing,” despite the sudden oil-shock upheaval that threatens considerable instability in Alberta’s until-recently booming housing sector.

“We’re not expecting whatever transpires in Alberta to create spillovers that, from a financial stability standpoint, would be worrisome for the rest of Canada.”

Mr. Poloz also defended the Bank of Canada’s surprise cut of its key interest rate in January, which critics fear may exacerbate Canadian households’ already hyper-extended mortgage and debt loads.

“On the surface, lower interest rates would be expected to promote more borrowing, which would increase this vulnerability,” he said in his opening statement to the committee. “However, in the near term, lower borrowing rates will actually mitigate this risk, by reducing payments for mortgage holders and giving us more economic growth and employment gains.”

“We believe that the best contribution the Bank can make to lowering financial stability risks through time is to help the economy return to full capacity and stable inflation sooner, rather than later.”

Mr. Poloz added that he believes the January rate cut, which reduced the bank’s key rate to 0.75 per cent from 1.00 per cent, is doing its job in helping the Canadian economy weather the effects of the oil shock – although he admitted that the evidence of the cut’s impact “is thin at this stage.”

“The evidence we have at present would be primarily in the export sector,” he said, where the resulting decline in the Canadian dollar has been boosting exporters’ Canadian-dollar cash flow and improving their price competitiveness in export markets.

Source:  Bank of Canada's Poloz dispels speculation of housing bubble by DAVID PARKINSON, The Globe and Mail


For more insight into the housing market within Durham Region, the Whitby real estate market, or the Brooklin real estate market, contact me. If you are an existing homeowner and are thinking about a, move, I can tell you what your house or condo is worth in today’s marketplace.

Randy Miller
Broker of Record

Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby

905-430-1800

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Home in Durham Region

MoneySense magazine has ranked Durham/Oshawa as one of the Top 10 cities in Canada for the best deals in real estate for 2015. The ranking refers to the Oshawa census area, which includes Whitby and Clarington.

Click on the picture below to view the full ranking! Source: MoneySense 

Oshawa Ranking Best Cities to Live in Canada

The rankings of the country’s largest cities are based on housing value, price momentum, economic strength and rental income potential, with Durham/Oshawa placing 10th on the list of Top 35 cities in the county to buy and own real estate in now.

According to the study, the average price for a home in Durham/Oshawa is approximately $387,000, with an impressive 10-year price appreciation of 6.9 per cent. MoneySense measured real estate value using Canada Housing & Mortgage Corporation data on average home and rental prices for each of the 35 cities.

“Oshawa is one of the best places to live and invest,” said Mayor John Henry. “Residents and investors enjoy an exceptional quality of life with top-notch post-secondary options; job opportunities in growth sectors; and a wide variety of leisure and recreational opportunities. All these assets are underscored by an integrated transit network that includes Highways 401 and 407, Durham Transit, GO Transit, VIA Rail, airport and harbor. We have it all.”

“Oshawa has a robust housing market with both existing home sales and sales in new subdivisions,” added Councillor John Aker, Chair of the Development Services Committee. “There is excellent choice and value for home buyers who want to live in a healthy, safe and progressive community.”

If you are looking for a house in Durham Region or are already a homeowner and wish to move to a new house in Pickering, Ajax, Whitby, Brooklin, Oshawa, Courtice or Bowmanville, please contact me for more information. Having sold real estate in Whitby and the Durham Region for over 20 years, I have excellent market knowledge and can help you with both - the buying and selling process. 

Search Homes for Sale in Durham Region

Randy Miller
Broker of Record
Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby
905-430-1800

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credit history

One of the critical steps towards financial responsibility is understanding your credit history.  Did you know that as a consumer you are able get a copy of your credit report, and have the right to correct any errors in the report?  It is not uncommon to see various mistakes on the report, old accounts shown as open or accounts you forgot about showing balances owing.  There may even be issues with identity fraud, so it is prudent to complete the review.  When you request your own copy, it does not affect your credit score, unlike if a lender pulled your report. 

Resolving these issues may take time, especially if means you have to rebuild some history to correct past credit issues.  You do not want to be doing this when you are under a tight timeline with request for financing approval.  Also, it is very helpful to share your credit history with a mortgage broker upfront during the planning stages.  This avoids any surprises or disappointments with financing, and paints you as a more prepared and responsible applicant because your broker is able to explain any issues in the report readily if the lender asks.

Start building up a credit history as soon as possible 

Lending rules are constantly becoming more stringent, not only because of debt management concerns, but also because of fraud, money-laundering and terrorism concerns. Sometimes applicants are unable to qualify due to limited or no credit history. For the most part, in order to count income to qualify, lenders need to see a credit history. Previously it was not so much a problem applying for a mortgage. 

A specific example is a spouse pair, where one person manages the finances and holds all the credit cards and loans.  In the past, the spouse co-applicant with limited history may have been approved, but now lenders are expecting individual histories.  Even joint credit cards and lines of credit are not enough history, lenders want to see ability to handle credit individually. 

Another common example is individuals who live on a cash diet.  Ironically, these people could be one of the most financially responsible people you know, as they limit their spending to what they actually have in savings.  However, cash does not have a paper trail and there no documented history of repayment, which lenders need to see to make their decision whether you are able to repay them. Often this is seen with older individuals, who  have lived during times where approaches to debt and getting approved of a loan were different.

Lastly, individuals new to the country understandably would have no credit history. They should make it a priority to start as soon as possible to building up the credit.

Correcting or building up the credit history takes time. You need to have a plan and an understanding how credit works. A mortgage broker could provide insights and recommendations specific to your situation and discuss with you lender specific solutions that may be available in your current situation. 

There are two main credit report providers in Canada. Equifax is the biggest one. You can get an instant report, which shows an instant score and explains the report in clear language, for under $25 or you can get free Equifax report by mail, which presents the information in less comprehensive format (and no score). Transunion is the other vendor, similar reporting structure, instant report online with payment or free report request by mail.

Are you planning to buy a house? Shopping for a mortgage can be confusing, the product features vary significantly. Having sold real estate in Whitby and the Durham Region for over 25 years, I can help you with the buying process. If you wish, I can refer you to a mortgage specialist that can explain the products and help you choose the right mortgage product. Try out my Mortgage Calculator and contact me today! 

Randy Miller
Broker of Record
Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby
905-430-1800


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Mortgage Insurance Premiums going up again

As a result of its annual review of its insurance products and capital requirements Canada’s federal housing agency is raising its mortgage insurance premiums.

Canada Mortgage and Housing Corp. said it is raising premiums on the highest-risk mortgages – borrowers who have down payments of less than 10 per cent – by 15 per cent starting June 1.

The changes come as part of a broader plan by the agency, announced last August, to boost its target capital reserves to 220 per cent above the minimum set by the Office of the Superintendent of Financial Institutions, up from 200 per cent previously.

The increases only apply to new mortgages for borrowers with small down payments. Those who put down more than 10 per cent of the purchase price aren’t affected. Premiums will also remain unchanged on CMHC’s portfolio insurance, which lenders take out on bundles of uninsured mortgages so they can securitize them, as well as the agency’s insurance for apartment buildings.

The effects will be modest for affected borrowers. An average Canadian borrower who can afford to pay the only the minimum 5-per-cent down payment typically takes out a mortgage of $252,000, CMHC said. Premiums for those borrowers would rise $5 a month, or about $1,500 more over the course of a 25-year mortgage.

CMHC predicted the changes would “not have a material impact on housing markets,” suggesting the agency isn’t looking to cool the housing market. Senior vice-president Steven Mennill stressed in a call with reporters that the changes were a “business decision” related to higher capital requirements and “not in any way related to a change in policy or approach.”

One thing is clear: By limiting increases only to borrowers with less than 10-per-cent down payments, the federal corporation is concerned that it was underpricing the risk on the most indebted borrowers.

Mortgages with lower levels of equity are typically more vulnerable to a housing shock and require higher levels of capital reserves to account for potential losses, which means higher premiums for riskier borrowers.

“As we continue to enhance our modelling capabilities, we continue to be more refined in our decision making around that relationship,” said CMHC chief financial officer Brian Naish.

“If the purpose was to ensure that there were adequate reserves against future losses, then this makes sense because their biggest losses will be at the end of the continuum with small amounts of down payment and that’s exactly the category where they increased the premium.” said Ian Lee, a professor with the Sprott School of Business at Carleton University.

It is the second time the organization has boosted insurance premiums. It raised them across the board last May after nearly a decade of silence on the issue. At the time, CMHC promised to review its insurance premiums once a year, which is what sparked the most recent changes.

Source: by TAMSIN MCMAHON,The Globe and Mail, CMHC to boost premiums for high-risk home buyers

If you are planning to buy a house in Whitby, Brooklin or other areas within Durham Region, contact me. I can help you with the buying process and refer you to a mortgage specialist that can explain the products and help you choose the right mortgage product.

Randy Miller
Broker of Record
Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby

905-430-1800

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Sales and Price Up Year-Over-Year in March 2015

April 7, 2015. Toronto Real Estate Board President Paul Etherington announced that Greater Toronto Area REALTORS® reported 8,940 sales in March 2015. This result represented an 11 per cent increase compared to March 2014. Sales were up for most major home types, both in the City of Toronto and the surrounding regions. New listings were also up, but by a lesser 5.5 per cent, indicating tighter market conditions.

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“Home sales increased compared to last year as the cost of home ownership remained affordable, with lower interest rates going a long way to mitigate the effect of rising home prices. However, a substantial amount of pent-up demand remains in place, especially as it relates to low-rise market segments. This suggests that strong competition between buyers, which has fuelled strong price growth so far this year, will continue to be experienced throughout the spring,” said Mr. Etherington.

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In March, the average selling price for all reported transactions was $613,933 – up 10 per cent year-over-year. The MLS® HPI Composite Index, which tracks benchmark homes with the same attributes from one period to the next, was up by 7.9 per cent. Average price growth was strongest for detached homes in the City of Toronto, at 15.9 per cent. Over the same period the detached MLS® HPI in the '416' area code increased 7.8 per cent.

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The MLS® HPI provides a clear indication of price growth due to market forces - the relationship between demand and supply. Comparing MLS® HPI growth to average price growth provides a sense of the changing mix of home types sold from one period to the next.

"It is clear that seller's market conditions in many parts of the GTA are driving price growth. However, looking at the detached market segment in the City of Toronto in particular, growth in the average selling price outstripped growth in the MLS® HPI. This points to the fact that the mix of detached homes sold this year compared to last has shifted towards more expensive properties," said Jason Mercer, TREB's Director of Market Analysis.

Increased Average Home Prices in Durham Region

Durham Region Association of REALTORS® (DRAR) President Sandra O’Donohue reported 1,086 residential transactions in March 2015.

This resulted in an increase of 14.7 per cent from 947 in March of last year. “The number of sales increased significantly year-over-year, however, we are still seeing less inventory compared to the same period last year” reported O’Donohue. Durham saw 1,527 new listings enter the market in March 2015 compared to 1,553 in March 2014. “This makes for competition between buyers and drives home prices up” explained O’Donohue.

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The average selling price in the Durham Region reached $430,291 in March 2015. In March 2014, the average price of a home in the Durham Region was $380,267. “Low interest rates are keeping home ownership affordable even with the rise in home prices” explained O’Donohue. Average price growth was strongest for townhouses in the Durham Region, at 15.3 per cent compared to the same period last year.

Competition between buyers has also had an effect on the sale price over list price percentage. “We have seen homes sell for an average of 101 per cent of the asking price. This is a factor that is driving prices up across the Durham Region, and is an indicator of a strong seller’s market,” explained O’Donohue. In March of last year, the average home sold for 99 per cent of its asking price.

"Durham is still experiencing a seller’s market. However, low borrowing rates are keeping home ownership affordable” explained O’Donohue. “Buyers continue to view home ownership within the Durham Region as a great long-term investment”.

If you are looking for a house in Durham Region or are already a homeowner and wish to move to a new house in Pickering, Ajax, Whitby, Brooklin, Oshawa, Courtice or Bowmanville, please contact me for more information.

Having sold real estate in Whitby and the Durham Region for over 20 years, I can help you with both - the buying and selling process. 

Randy Miller
Broker of Record
Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby
905-430-1800

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Buying a first home

 The truth is, home ownership is one of the cornerstones of financial security, and if you’re thinking of buying a place don’t forget to consider your registered retirement savings plan (RRSP) as a source of some funds for a downpayment. The Home Buyer’s Plan (HBP) in our tax law makes it easy to use RRSP assets to help with a home purchase. Here’s a primer.

Eligibility

In order to use funds from your RRSP to help in a home purchase, you’ll have to be a first-time home buyer. This means that you may not have owned a home in the past five calendar years. More specifically, you’ll be out of luck if you owned a home during the window of time that starts Jan. 1 of the fourth calendar year before the year in which you make a withdrawal under the HPB, and ending 31 days before the date of the withdrawal. (If you have a disability or are buying a home for a related person with a disability, or are helping such a person to buy a home, the five-year condition may not apply)

If you’re married, each spouse can make a withdrawal under the HPB provided that neither of you has owned a home in the five-year period I’ve described, and you’re buying the home jointly. Even if your spouse has owned a home in the last five years, you can still make a withdrawal under the HBP as long as your spouse’s home was not your principal residence while you’ve been married or living common-law.

By the way, simply being pre-approved for a mortgage isn’t enough; you’ll have to actually enter into a purchase agreement to be eligible for a withdrawal under the HBP, and it has to be your intention to move into the home as your principal residence no later than one year after buying or building it. So, you can’t use the HPB to buy a rental property.

Withdrawals

You, and your spouse if he’s eligible, can each withdraw up to $25,000 from your RRSPs under the HBP. You have to be resident in Canada at the time you make the withdrawal, and you have to withdraw all the funds in the same calendar year. You can only make withdrawals from your own RRSP (that is, an RRSP under which you’re the annuitant), and not a plan under which your spouse is the annuitant.

Also, you can’t generally make withdrawals from a locked-in RRSP or a group RRSP under the HBP, and any RRSP contributions that you make must stay in your RRSP for at least 90 days before you can withdraw those funds under the HBP, otherwise you won’t get a tax deduction for those contributions.

You’ll have to close your home purchase by Oct. 1 of the year following the year of withdrawal (the taxman calls this the “completion date”). For example, if you make a withdrawal under the HBP in 2015, you’ll have to take possession of your new home no later than Oct. 1, 2016. Be aware that you can extend the completion date by one year if certain conditions are met.

Finally, you or your spouse cannot own the home for more than 30 days before you make a withdrawal under the HBP. So it’s best to make the withdrawal before the closing date if you can.

Repayments

You’ll have to repay the amounts borrowed from your RRSP under the HBP in equal instalments over 15 years, and your repayments will have to start in the second calendar year after the year of withdrawal (that is, in 2017 for withdrawals made in 2015). If you fail to repay the amounts, the shortfall is taxable to you in the year you missed the repayment. Also, be aware that you can’t claim a deduction for amounts repaid to your RRSP under the HBP. If you want more information on the HBP, check out the taxman’s booklet RC4135, Home Buyer’s Plan, which you’ll find at www.cra.gc.ca.

Source:
 Buying a home can be easier with the help of your RRSP by TIM CESTNICK. The Globe and Mail.

Whitby Brooklin Homes for Sale

Randy Miller
Broker of Record
Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby

905-430-1800

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Rising house prices

Housing markets across much of province could be boosted by slumping oil and improving U.S. economy, economist predicts.

Toronto’s record house prices could soar a further 17 per cent by the end of 2017 as the lack of supply in the face of unrelenting demand continues to drive prices far beyond the rate of inflation, says the chief economist of Central 1 credit union.

Long-time housing watcher Helmut Pastrick says those who caution that Toronto’s market is in bubble territory and about to burst are based on “inadequate models” that ignore some key basics.

“The principal drivers of home prices are market demand and supply fundamentals. Toronto’s population is growing and supply is limited. Prices will keep rising until the next economic recession, whenever that is.”

Barring any unforeseen global crises, that’s at least two years off, predicts Pastrick, who’s studied the housing market for 40 years, 18 years as chief economist with Credit 1, the umbrella organization for about 130 credit unions in Ontario and B.C.

Ontario housing markets, with the exception of Toronto, have largely underperformed since 2001. But that’s now likely to change in the face of the “economic seismic shift” of slumping oil prices that may be a drag on the Canadian economy but a boon for Ontario exporters and manufacturers, says the economic forecast being released Thursday.

He anticipates that Toronto home prices, which averaged $573,183 in 2014 could soar to $670,000 by the end of 2017. Ontario house prices, which averaged $430,984 in 2014, could hit $496,000 during the same time.

Southwestern Ontario, and especially communities with a strong manufacturing base such as Windsor and Sarnia, are likely to see an uptick in jobs and economic growth which could play out in strong house sales and above-inflation price increases to the end of 2017, he adds.

Regional markets around the GTA — such as Kitchener-Waterloo, Barrie, Hamilton and the Niagara Peninsula — could also see a surge in sales partly as a result of Toronto’s tight market. That could translate into house price gains in the 16 per cent range over the next three years, says Pastrick.

The Canadian Real Estate Association recently predicted that low oil prices could result in a 1.1 per cent decline in national home sales through 2015, but a 2 per cent increase in average prices.

Read the full article: http://www.thestar.com/business/2015/03/25/torontos-record-house-prices-to-rise-further-by-2017.html By: Susan Pigg Business Reporter, Published on Wed Mar 25 2015

To learn more about local real estate market conditions in Whitby, Brooklin, Ajax, Pickering, Oshawa, Courtice and Bowmanville, please contact me.

Randy Miller
Broker of Record

Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby

905-430-1800

 

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Roadsign good credit

One of the most important aspects of your financial life is your credit score. Your credit score follows you forever and it will play a huge role in how insurance companies, banks and other lending institutions categorize your worthiness as a customer.

It’s vital that you take steps to improve your credit score, because any credit such as a car loan or mortgage financing may be more expensive (a higher interest rate), or its unobtainable.

What does the Credit Score actually tells you?

The credit score is an assessment of your financial health, at a specific point in time. It indicates the risk you represent for lenders, compared with other consumers. This is done by converting certain aspects of your credit repayment history to a number based on a formula called the “FICO formula”. The result of this is known as a Credit Score.

When you get your Credit Score, you will see a number between 300 and 900 at the top – this is your score. The average score is in the mid-700s at present. You will also receive an interpretation of your score, and this will be more useful to you than the number itself. It will explain why your score is at its current level.

If your scores are above 760, you’re probably already getting the best rates. If they’re anywhere below that mark, though, they could stand some improvement.

Here are the main factors that make your credit score lower:

  • Too much credit. Having too many credit cards can hurt your score. If you have several consumer accounts try to consolidate those balances and close the accounts.
     
  • Your account balances are too high: As a rule of thumb keep your credit card balances below 35% of the available limit. High balances ongoing will negatively affect your credit score.
     
  • You have late payments, or are behind on making minimum payments
     
  • Legal judgements for non-payment of bills, child support, etc.
     
  • Bankruptcy or consumer proposals

  • There is not enough recent revolving account information on your credit report. Using your credit cards regularly and paying them on time builds your score higher.


So you’ve had a few problems getting the bills paid lately, and you’re wondering what you can do to repair the damage to your credit. Or maybe your credit is OK, but you’d like to make it better. After all, the better your credit, the less you pay in interest and, typically, for insurance.

Here are some tips on how to improve your credit score:

  • Get a credit card if you don’t have one: Don’t fall for the myth that you have to carry a balance to have good scores. Having and using a credit card or two can really build your scores. If you can’t qualify for a regular credit card, consider a secured credit card, where the issuing bank gives you a credit line equal to the deposit you make. Look for a card that reports to all three credit bureaus.
     
  • Add an installment loan to the mix: You’ll get the fastest improvement in your scores if you show you’re responsible with both major kinds of credit: revolving (credit cards) and installment (personal loans, auto, mortgages and student loans). If you don’t already have an installment loan on your credit reports, consider adding a small personal loan that you can pay back over time. Again, you’ll want the loan to be reported to all three bureaus, and you’ll probably get the best deal from a community bank or credit union.
     
  • Always pay your bills on time. Although the payment of your utility bills, such as phone, cable and electricity, is not recorded in your credit report, some cell phone companies may report late payments to the credit-reporting agencies, which could affect your score.
     
  • Try to pay your bills in full by the due date. If you aren't able to do this, pay at least the required minimum amount shown on your monthly credit card statement.
     
  • Try to pay your debts as quickly as possible.
     
  • Don't go over the credit limit on your credit card. Try to keep your balance well below the limit. The higher your balance, the more impact it has on your credit score. You often can increase your scores by limiting your charges to 30% or less of a card’s limit; 10% is even better. If you regularly use more than half your limit on a card, consider using other cards to ease the load or try making a payment before the statement closing date to reduce the balance that’s reported to the bureaus. Just be sure to make a second payment between the closing date and the due date, so you don’t get reported as late.
     
  • Reduce the number of credit applications you make. If too many potential lenders ask about your credit in a short period of time, this may have a negative effect on your score. However, your score does not change when you ask for information about your own credit report.
     
  • Make sure you have a credit history. You may have a low score because you do not have a record of owing money and paying it back. You can build a credit history by using a credit card. The older your credit history, the better. But if you stop using your oldest cards, the issuers may decide to close the accounts or stop updating them to the credit bureaus. The accounts may still appear, but they won’t be given as much weight in the credit-scoring formula as your active accounts.
     
  • If you’ve been a good customer, a lender might agree to simply erase that one late payment from your credit history. You usually have to make the request in writing, and your chances for a “goodwill adjustment” improve the better your record with the company (and the better your credit in general). But it can’t hurt to ask.


Following these steps should help you improve your credit score within months. Once you establish good credit habits, though, and follow them consistently, you will be able to improve your credit score, and then maintain this higher score. You’ll get access to better financial products and services, and even save money over time.

To find out more about credit scores and reports, you can also visit the Financial Consumer Agency of Canada website and download or request a free copy of their guide, Understanding Your Credit Report and Credit Score. This guide provides practical, straightforward information on how to obtain and understand your credit report and score, as well as how to build and maintain a good credit history.

To find out your credit score, contact Canada's two most popular credit-reporting agencies: Equifax Canada and TransUnion Canada. These agencies can provide you with an online copy of your credit score as well as a credit report - a detailed summary of your credit history, employment history and personal financial information. (You can request your credit report by mail for free but your score is not included. If you request your credit report online a fee is charged and your credit score is included.) 

Are you planning to buy a house? Shopping for a mortgage can be confusing, the product features vary significantly. Having sold real estate in Whitby and the Durham Region for over 25 years, I can help you with the buying process. If you wish, I can refer you to a mortgage specialist that can explain the products and help you choose the right mortgage product. Try out my Mortgage Calculator and contact me today! 

Randy Miller
Broker of Record

Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby

905-430-1800

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red house mortgage rate

On the heels of headlines forecasting ‘inevitable interest rate hikes’ came the announcement of a 0.25% rate reduction to the Bank of Canada’s overnight lending rate.

The majority of Mortgage Brokers found themselves spending the first two work weeks of 2015 calming clients in the face of multiple headlines forecasting interest rate ‘shocks’ ahead. In turn, the past two weeks were spent explaining to variable-rate clients the subtle, yet important difference between the bank of Canada’s Prime rate and their mortgage lenders' ‘Prime’ rate.

Lenders base variable-rate mortgages on what is referred to as their own internal Prime rate. Although historically lenders have moved in lockstep with the Bank of Canada decisions, there was some initial reticence to lower effective interest rates on current variable-rate mortgages and after nearly a week without movement Lenders reduced their internal Prime rate from 3.00 to 2.85% sharing some of the Bank of Canada’s reduction with variable rate mortgage and line of credit holders, but not all of the rate reduction.

One important point is that the Bank of Canada’s Prime rate is specifically NOT used to qualify clients for mortgages. In other words, Canadians do not currently qualify for any more mortgage debt today than they did the day before the rate reduction announcement. Accordingly this reduction in interest rates does not directly strengthen purchasing power for home buyers, and thus should do little to add more fuel to real estate values.

It is further worth noting that, historically, as lenders reduce their own Prime lending rate on variable-rate products, the discounts offered on these products - mortgages, lines of credit, etc . tend to be adjusted upward, negating any potential gains for new mortgage applicants. Existing closed variable-rate discounts will of course continue to be honoured until the end of the client's mortgage term.

In short, although this rate reduction may bode well for clients currently in a variable-rate mortgage, it may not be of significant net benefit for clients applying for a variable-rate product in the coming weeks. Although today we have both deep discounts on variable rate products, and the new lower 2.85% Lender Prime rate. New applicants may have their cake and eat it too.

Fixed rates, although largely dictated by the bond market, have been edging downward since Jan 5. Despite this material and documented decline, there had not been a major headline noting this. Rather headlines were largely promoting the opposite of what was occurring in reality. The day that the Bank of Canada announced the cut of 0.25%, the bond market saw a (then) record low of 0.83% and has since dipped below 0.60%.

This has created significant increases in lenders' fixed-rate profit margins, and arguably calls for further rate reductions to fixed-rate products, in particular the five-year fixed-rate mortgage. However, as with the cut to Prime, lenders have thus far been slow to respond. Offering 0.05% and 0.010% reductions and reaping the increased profits. Lenders remain unlikely to make any significant moves until one breaks ranks. With strong property values coupled with strong sales activity in most major markets, there seems little incentive - or fundamental desire - on the part of lenders to reduce rates further.

What is evident at this time is that variable-rate clients will continue to be the big winners into the foreseeable future, and those clients who prefer a fixed-rate product will also continue to benefit from historic lows as well. 

If you are planning to buy a house in Whitby, Brooklin or other areas within Durham Region, contact me. I can help you with the buying process and refer you to a mortgage specialist that can explain the products and help you choose the right mortgage product.

Randy Miller
Broker of Record

Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby

905-430-1800

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low mortgage rates

Nearly half of Canadians are planning to buy a home in the next five years, survey says. More than 15 per cent are saying cheaper mortgage rates will allow them to make the purchase sooner than expected.


On 1 February 2015 The Globe and Mail reported: Younger Canadians, who are struggling with far more debt than their parents did at the same age, are the most likely to respond to falling rates. More than a fifth of millennials told a Bank of Montreal home buyers survey that they have shortened their time-frame for buying a home because of lower rates and 75 per cent said they were planning on making a purchase within the next five years.

Regionally, the demand among buyers is strongest in Ontario and Atlantic Canada, where the combination of low interest rates and cheaper oil prices are poised to put more money in the pockets of consumers. Nearly a fifth of residents told pollsters that they would speed up their home purchase because of low interest rates.

In contrast, just 13 per cent of residents in Quebec and 12 per cent in Alberta said lower rates were having an impact on their buying decisions. Plunging oil prices have made Alberta consumers more cautious about jumping into the housing market this year, while a high vacancy rates and a glut of newly built condos in Quebec is pushing more potential first-time buyers into the rental market, according to Desjardins Group.

Mortgage rates have been falling since last week, when the Bank of Canada shocked markets by cutting interest rates by 25 basis points ( a basis point is a hundredth of 1 per cent.) Lenders soon followed, with major banks dropping five-year fixed rates mortgages to as low as 2.84 per cent and this week cutting their prime rates by 15 basis points, which quickly pushed variable-rate mortgages among the Big Six banks as low as 2.25 per cent.

Many analysts had predicted that interest rates would rise this year, so the central bank’s unexpected decision to slash rates is widely expected to reignite the country’s cooling housing market. “Given the negative impact of lower oil prices on the Canadian economy, interest rates are likely to remain low for some time, supporting home sales, especially in Vancouver and Toronto where affordability is an issue”, said BMO senior economist Sal Guatieri.

But with mortgage rates falling only slightly and more Canadians telling the BMO survey they were planning to use lower rates to pay down their debt rather than load up on new ones, cheaper rates are expected to have a modest impact on the housing market.

Shortly before the Bank of Canada cut its target overnight lending rate, more than half of Canadians told an earlier BMO poll that cheaper rates would make them more likely to buy a home, though most said the drop would need to be 10 per cent or more to have a significant impact on their buying plans.

Source: Tamsin McMahon, The Globe and Mail

If a move is in your future, let’s sit down and talk about your plans. Contact me today!

Randy Miller
Broker of Record
Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby
905-430-1800


Visit my blog: https://whitbybrooklinhomes.wordpress.com/

Whitby Brooklin Homes

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Disclosure and latent defect

I found an article by Christopher Seepe on REMonline.com that might interest you:

"On the issue of disclosure and latent defects, an Ontario Small Claims Court judge recently awarded a ruling in favour of a buyer who alleged that the seller had not disclosed a defect that had repeatedly occurred over many years prior to the seller selling the property.

The buyer purchased a three-storey 40-year-old apartment building in Durham Region in April 2011 from the seller. In January 2014, tenants reported substantial deterioration of in-suite walls. Water had entered into the plaster walls and swelled like boils.

The buyer also found several areas of uncharacteristic white stains on the external brick walls. As water moves through brick, it can pick up salt that is not bound as part of the brick. The salty water that evaporates at the brick’s surface leaves behind a white flakey-looking deposit called efflorescence.

Specialists determined that the cause was condensation forming between the walls, a problem common with buildings built before vapour barriers were mandated in the building code. The buyer then learned from a long-term tenant that the wall problems were a regularly recurring event. The tenant swore an affidavit that was admitted into evidence in the trial.

The Agreement of Purchase and Sale (APS) included a clause, “The seller states that, to the best of the seller’s knowledge and belief, there is no known damage to the basement, roof, or elsewhere in or on the property caused by water seepage or flooding.” 

The Ontario Limitations Act (2002) generally states caveat emptor – “buyer beware.” A buyer can only file a claim of defect within two years from the date of purchase, with generally no recourse after that. However, the act differentiates between two types of defects:

A “patent” defect is one that can be discovered by observation (“obviousness”) or inspection using generally accepted industry-standard practices.

A “latent” defect is one that is present but is not obvious, visible, apparent or actualized and can’t be discovered by industry-standard inspection practices.

A seller has no obligation to disclose a defect that is obvious, such as a clearly-visible water-soaked crack in a foundation wall. The buyer must also be able to prove that the seller knew about the latent defect. If the defect is proved to have existed prior to selling the property but the seller didn’t know about it (perhaps the defect didn’t appear while the seller owned the property), then the seller can’t be held liable, even innocently.

In the trial discussed above, the tenant’s affidavit strengthened the buyer’s case. The judge determined the seller knew, or ought to have known, that there was recurring water damage caused by an untreated defect in the property. The judge stated he “sympathized with the defendant” but the defendant clearly breached the “no water damage” clause in the fully-executed APS.

The small claims court can’t award punitive damages, and “betterment” costs are excluded – that is, repairs that improved the property. For example, if the original roof was 10 years old with a 20-year life expectancy, the court might rule that the buyer received a betterment of 10 years and then award only half the new roof’s cost. The buyer was also not permitted to recover personal expenses related to attending meetings, overseeing repairs and travel. Presumably this is because the value of one’s time is highly subjective and would inevitably be contested. It could also be a source of considerable abuse in inflating costs.

There are several cases in law regarding the responsibility of disclosure and latent defects: McGrath v. MacLean (1979), Krawchuck v. Scherbak (2011) and Dennis v. Gray (2011).

In Krawchuck v. Scherbak, the real estate agent was found to be 50 per cent at fault for their lack of diligence in reconciling misleading statements made by their client, failing to inform their client of the implications of their false statements and failing to bring these issues to the attention of the purchaser.
In a decision released in May 2014, a deputy Judge of the Barrie (Ontario) Small Claims Court said in his judgement that a seller must disclose to the buyer anything they know about a defect that has caused any loss of use or enjoyment of a meaningful part of the premises.

Since the case of McLean v. MacGrath, and in light of Dennis v. Gray, the principle of caveat emptor appears to be either becoming more specifically defined or more exceptions are occurring. The evolving principle appears to be that if a seller properly discloses an actual or perceived defect in a property, then this should protect them from the risk of litigation and the accusation that the seller didn’t comply with their duty to disclose. Perhaps this will mean the seller has to provide a price discount or perhaps it will lead to sellers pricing their properties as they should have been in the first place. Either way, it’ll still likely be less expensive that settling a court action."

Purchasing or selling real estate is a complex process and every element of the transaction is best handled by an experienced professional. Don’t take chances, go with proven results and experience. With 25 years of full-time local service in Whitby, Brooklin, Ajax, Pickering, Oshawa, Courtice and Bowmanville, I can make your purchase or selling worry-free. Contact me today!


Randy Miller
Broker of Record
Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby

905-831-2222

 

 

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Flooded Basement


The basement floods after closing. Can the buyer sue the seller? The agreement contained wrong information about the property dimensions but also included a disclaimer clause. Can the buyer sue if there is a problem after closing? Do you need to disclose a murder that occurred in a home? These are not simple questions, but if you remember the following principles, you should be able to understand the law.


Here are 5 key lessons to remember:


1.    When there is a flood after closing, the buyer will have to prove that the seller knew about this defect and that it was serious or else that the seller actively concealed the defect from the buyer. It will also depend on whether the buyer conducted a home inspection and in the case of basement water, whether the seller actually finished the basement themselves. A buyer will have to prove that the seller must have known about the problem during their ownership. Buyers will have to take pictures of the damage and bring in an experienced contractor who will be able to look at the damage and then give an expert opinion, in court if necessary, that the seller either must have known about the problem or did work behind the walls to conceal the problem. If the buyer cannot prove this, they will likely not be successful.


2.    The defect must make the property uninhabitable or dangerous. This means that the defect must be so serious that the buyer may not be able to continue living in the property. This would include a foundation problem. It is not clear if this would include a disclosure that the property was previously used as a grow op, as it would depend on the extent of the operation and whether it was actually remedied according to accepted industry standards. It would also depend on whether the buyer could obtain insurance for the property. Suffice to say that if the seller does not disclose a minor basement leak, the buyer will not be successful suing about it after closing.


3.    The law is not settled as to whether a seller needs to disclose a property stigma, whether it is a murder, suicide or neighbourhood condition, such as a pedophile who lives next door. Most appraisers will tell you that this will affect a property's value. However, it will still be hard to prove that this stigma would make the home uninhabitable and this is why many lawyers will tell you that you do not have to disclose property stigmas. 


4.    If you advertise the boundaries of a property in a listing, can the buyer get damages or get out of the deal if it turns out the boundaries are incorrect? Will it make a difference if there is a disclaimer clause in the offer itself, saying that the information, while believed to be correct, is not guaranteed and should not be relied upon without independent verification? In most cases, if the disclaimer is there, the buyer will not be able to sue the seller for any damages and will need to make sure that they do their own proper due diligence in advance. The lesson for any buyer is to make sure that if there is a disclaimer present, that you check a survey of the property or make the deal conditional on your own independent verification of all boundary lines.


5.    If you have any concerns about disclosure, ask the sellers point blank if they have had any water in the basement, murders or grow houses on the property in the past, or insert a clause to this effect in your offer. The sellers then have to respond truthfully. Speak to the neighbours and ask if any repairs were done at the property during the past year or whether there are any other issues with the property that you should know about. Also ask the neighbours about anything peculiar going on in the neighbourhood, including asking about the neighbours on either side of the property you are interested in buying. A major reason sellers sell a home is simply to get away from a neighbour.


When you understand the rules about disclosure and properly protect yourself, you should be able to minimize any problems that could arise after closing.


By Mark Weisleder, a Toronto lawyer, author, course developer and public speaker for the real estate industry


Randy Miller 
Broker of Record
Royal Heritage Realty Ltd., Brokerage  
905-430-1800


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Canadian Real Estate Market News


Home sales, prices to rise

 

Canada Mortgage and Housing Corp. has released a new report with everything you could possibly want to know about projected sales and prices across the country, forecasting a “steady” showing nationwide next year, followed by “some moderation” in 2016.

 

Housing starts in Canada, it predicted today, will range next year from 172,800 to 204,000, and in 2016 from 168,000 to 205,800.

 

Resales next year will come in between 457,000 and 507,300, and in 2016 between 448,000 and 508,000.

Prices are particularly interesting.

 

Average prices this year, which, of course, differ widely across Canada, are expected to range from $401,600 to $405,400, which means a so-called point forecast of $404,800.

 

Next year, according to CMHC, prices will be between $403,600 and $417,800, for an increase in the point measure to $410,600.

 

Then in 2016, expect prices to range between $407,300 and $424,500, or a point forecast of $417,300.

West to east, here’s what CMHC forecasts in terms of average prices:


  • British Columbia: Average resale price to rise to $566,300 in 2015 and $573,000 in 2016.
  • Alberta: Average to rise to $407,800 and $417,500.
  • Saskatchewan: Average to rise to $303,000 and $309,300.
  • Manitoba: Average to rise to $272,600 and $278,800.
  • Ontario: Average to rise to $435,900 and $443,800.
  • Quebec: Average to rise $270,800 and $276,600.
  • New Brunswick: Average to dip to $161,500 and $161,000.
  • Nova Scotia: Average to rise to $216,000 and $217,000.
  • Prince Edward Island: Average to slip to $157,000 in both years.
  • Newfoundland and Labrador: Average to rise to $294,000 and $298,000.

 

These findings, of course, mask the wide ranges from city to city, which CMHC also looked at.

 

For example, the average in Calgary, forecast to jump 5 per cent this year to $459,000, should rise further, to $472,000 in 2015 and $483,000 a year later.

 

Source: By MICHAEL BABAD, The Globe and Mail,

http://www.theglobeandmail.com/report-on-business/top-business-stories/from-west-to-east-a-look-at-projected-house-price-gains-across-canada/article21379179/

 

Randy Miller 

Broker  

Re/Max Rouge River Realty Ltd., Brokerage  

905-668-1800 or 905-427-1400

 

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