CMHC Premium increases

CMHC Premiums Increasing again

Canada Mortgage and Housing Corp. has announced that it will hike mortgage insurance premiums for the third time in the last four year. The increases are set to kick in as of March 17th, and only apply to new insured mortgages.

This comes as a response to stricter capital requirements for mortgage insurers which were introduced at the start of the year. Federal rules require lenders to have mortgage insurance on any loan which has a down payment of less than 20 percent – the additional costs typically get passed onto the borrowers and added to monthly mortgage payments.

Approximately two-thirds of buyers taking out a CMHC-insured mortgage have down payments of less than 10 percent – meaning that they will likely see an additional couple of dollars on each mortgage payment due to the additional insurance.

First time homebuyers are now subject to a number of new rules that could make the process more difficult for them, including stricter testing criteria for insured mortgages. Some experts are saying that 2017 could be the most difficult time to enter the market for the last 10 years.

The goal of these changes is to maintain a healthy housing industry, and protect the financial industry and consumers from rising household debts.

CMHC noted that it expects home purchases with borrowed down payments to rise in popularity as Canadians struggle to emerge themselves into the housing market.

How do these changes affect you?

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New home loan program BC

First Time Homebuyers Could Benefit from New Loan Program

The BC government has now opened the application process for its loan program for first-time home buyers. But, economists warn that the interest free loan program aimed at new buyers could inflate an already overheated market. BC Housing estimates that roughly 42,000 applications will come in for the program over the next three years.

The program has announced that it has already approved eight people for the program, which was announced in December. The program offers a matching loan that is both interest-free and payment-free for the first five years to residents purchasing their first house. The loans are available for homes up to $750,000 and are capped at 5 percent of the property’s purchase price.

The government expects to spend $702 million on the program over the next three years.

Local realtors are noting that there is some interest in the program, but that details surrounding it have been scarce. The Canada Mortgage and Housing Corp announced that the loan will be counted as deby when determining eligibility for a mortgage. They also noted that borrowers using the loan program will have to pay an insurance surcharge as their down payment would be considered “non-traditional”.

Let us know your thoughts about the new loan program below!

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New Skytrain Lines

TransLink new plans for Broadway SkyTrain, Surrey LRT

TransLink announced recently its plans for two new trail lines in Metro Vancouver: the Broadway extension of the Millennium Line, and the Surrey-Newton-Guildford LRT project.

Plans also include doubling SeaBus services on Sundays and holidays, and adding more frequent services during peak times on the Expo, Millennium, and Canada skytrain lines. TransLink noted that these are just the first of a series of announcements the company plans to announce over the next few years.

The Broadway extension will extend the Millennium line from its current endpoint on to Broadway and Main, and then continue west to Arbutus Street. This plan is intended to alleviate pressure on the current 99 B-Line route.

Officials have also proposed extended the Millennium Line all the way to UBC, but ultimately decided that aiding the 99 B-Line was more pressing a matter.

Public consultation on the projects begins in late January.

Where else would you like to see additions to transit?

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Vancouver is a buyers market

Greater Vancouver Now a Buyer’s Market

According to recent reports, home prices in Vancouver fell by 0.4 percent during the last 3 months of 2016, when compared to the three months before that. It may not sound like much, but comparing to the previous year – when home prices for the fourth quarter were up by 9.8 percent – it is pretty significant.

It seems that everything except for condos have turned into a buyer’s market, rather than a seller’s market for the end of 2016. Some are saying that injured buyer confidence may have something to do with it.

Lack of affordability, lack of quality homes, and market uncertainty due to government interaction, are all being pointed as to being part of the reason. The market is a chain reaction: qualified buyers can’t seem to find what they want, due to the lack of inventory on the market, and therefore they are not listing their homes – causing an even slower market.

While prices are down for the fourth quarter, comparing to the third, for 2016; house prices are still up in comparison year-over-year. The median price of a condo in Greater Vancouver in the fourth quarter of 2016 has risen to $529,912 – which is a 15 percent increase from the same time in 2015.

Across of all of Canada, the biggest year-over-year house price rise was in West Vancouver, where aggregate home prices increased by 32.8 percent from the year before – with the average price being $3,573,148.

Experts in the industry are expecting Greater Vancouver’s market to see a correction in 2017, with prices settling back to where they were in the first half of 2016.

Please see below for a list of home prices in the fourth quarter of 2016:

Vancouver
Aggregate: $1,506,498
Condo: $647,286
Bungalow: $1,548,976
Two-storey: $2,603,250

West Vancouver
Aggregate: $3,573,148
Condo: $984,258
Bungalow: $3,052,483
Two-storey: $3,984,852

North Vancouver
Aggregate: $1,391,197
Condo: $508,217
Bungalow: $1,563,629
Two-storey: $1,690,473

Richmond
Aggregate: $1,102,456
Condo: $442,960
Bungalow: $1,464,217
Two-storey: $1,468,059

Burnaby
Aggregate: $1,030,282
Condo: $459,684
Bungalow: $1,417,951
Two-storey: $1,499,860

Coquitlam
Aggregate: $1,003,650
Condo: $409,027
Bungalow: $1,098,441
Two-storey: $1,211,057

Surrey
Aggregate: $765,726
Condo: $263,446
Bungalow: $795,991
Two-storey: $858,768

Langley
Aggregate: $786,720
Condo: $286,363
Bungalow: $792,378
Two-storey: $856,239

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Homeowner Grant

Homeowner Grant Threshold Increased – how it may affect you!

BC’s Ministry of Finance has decided to increase the home value threshold for the homeowner grant by 33 percent this year to help out those homeowners who saw skyrocketing home values on their home assessments for 2016.

The threshold now includes homes valued up to $1.6 million, up from $1.2 million in 2016. This raise in the threshold means that 91 percent of British Columbian homeowners qualify for the grant. The benefit will cost the government $821 million this year.

Critics of the grant have been calling it a poor use of taxpayer funds which could be used for some more pressing issues, including subsidies to single mothers – or similar social issues. Some say that the grant should be based off of the homeowner’s income, instead of being a flat rate across the province, in order to help out those who need the help, and not those who would be fine without the grant.

An income-based system could be designed to provide greater benefit to low-income households and phase out as the income rises – similar to the GST rebate currently in place.

Finance Minister Mike de Jong said that the goal of raising the threshold would be to ensure anyone who qualified for the grant last year would also qualify for it this year.

Does this change help you? What are your thoughts on the change?

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Mortgage changes Canada

Changes Put First-Time Buyers at Biggest Risk

A survey put out by the Ontario Real Estate Association has found that 79 percent of first-time homebuyers are delaying their buying process due to the government’s newly introduced mortgage stress tests.

The survey made it evident that first-time buyers are the hardest hit by the new rules. Some experts are saying that policies put into place should be focusing more on affordability, rather than changing the public’s borrowing abilities. Rebates are heavily encouraged as an alternative – as any money put back into the pockets of a homebuyers is money that will go back into the country’s economy. Often rebate money is used for furniture, renovations, or appliances – which create a great opportunity for economy building, and could prove to be far more beneficial than increasing taxes would be for the country.

How have these recent changes affected you and your family?

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Victoria

Victoria Sales Continue on Rise

According to the Victoria Real Estate Board, a repeat of last year’s property sales frenzy is unlikely for 2017.

The real estate board noted that the expected influx of foreign buyers due to Vancouver’s new tax on foreign purchasers did not seem to happen. Most purchasers in Victoria have been from other areas within Canada. Government data has shown that there were a total of 90 transactions in Victoria involving a foreign purchaser between the dates of June 10th and August 1st, 2016 (before Vancouver’s new tax was implemented). More recent numbers (November 1 to November 30th, 2016) show only 39 property transfers to foreign buyers.

Meanwhile in Vancouver, there was a steep drop in real estate transactions in recent months. The Real Estate Board of Vancouver called 2016 a “rollercoaster” year – with record sales in the spring, but a 5.6 percent drop ending the year off.

Victoria isn’t expected to see a similar drop off in prices, though. It has been reported that all of Victoria’s current projects are already sold out, but demand continues to rise. Many people moving to Victoria report choosing that location for a change to their lifestyle, and to take advantage of a hopeful economy.

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