Current Mortgage Rates in Ontario

Interest rates

Ontario Mortgage Rates – Current Promotions

  • 2.19% 3 Year fixed – Switch, Refinance or Purchase
  • 2.44% 5 Year Fixed – High Ratio
  • 2.49% 5 Year Fixed – Switch, Refinance or Purchase
  • Variable Rate 2.1% – Conventional to 80% LTV
  • Variable Rate 1.8% – High Ratio Only
  • Reverse Mortgage 5.59% – 5 Year Fixed – 4.99% Variable
  • Private Mortgages 5.99% **
  • Second Mortgages 7.99% **

Cashback rates on 5 year fixed (High Ratio Purchase)

  • $1000 Cash Back 2.69%
  • 1% – 3.14%
  • 1.5% – 3.19%
  • 2% – 3.44%
  • 3% – 3.74%

Apply Now online or call (705) 717-5598

Continue reading “Current Mortgage Rates in Ontario”

Mortgage Application – Apply Online

online mortgage application

Online Mortgage Application Form
Printable Mortgage Application Form

The online mortgage application can be filled out on your phone or tablet/computer and the printable one can be emailed to mcurry@mortgagewellness.ca, faxed back to 705-506-0501, or dropped off at 35 Worsley Street suite 201, in Barrie.

Please Note: If you are just “shopping around” for mortgage rates, or if you are currently working with another mortgage broker or financial institution, having multiple credit bureau checks done in a short period of time can actually harm your credit rating, as this is often an early indication of fraudulent activity. Credit Bureau checks will show when and who has been checking. Some lenders may refuse to deal with a borrower who has multiple recent credit checks on their credit report, or may require a valid reason why multiple credit checks were done.

Mortgage Applications will be processed by:

Michael Curry (705)717-5598
Mortgage Agent (Lic. M1200155)
VERICO The Mortgage Wellness Group
Head Office
35 Worsley Street, Suite 201
Barrie, ON
L4N 1L7

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The Mortgage Application Process

From filling in the paperwork, to signing on the dotted line.

There are various steps that will have to happen before you will be approved for a mortgage loan for a home purchase:

  • Choosing a potential lender
  • A pre-approval process if you want to know how much money you’ll have to shop with
  • Meeting and information download
  • A Debt Service Ratios analysis
  • A property analysis if you have identified the home of your dreams
  • Completing the Application
  • Negotiation and commitment
  • Closing process liaison
  • Mortgage administration

Choosing a potential lender

Using a mortgage broker/agent

  • If you are using a mortgage broker/agent and when they know all they need to know about you and your needs, they will start to consider which mortgage might be a good fit for you. They will think about whether you meet various lenders’ qualification requirements.
  • The mortgage broker/agent will provide you with options based on an assessment of the lender, the mortgage, its structure, its features and its risks in light of the information you have provided about your circumstances. The mortgage broker/agent must also explain his or her rationale for the options that have been identified.
  • Make sure the mortgage broker/agent provides you with information that will help you determine whether you can afford the mortgage, including an estimate of the total cost of borrowing for the term of the mortgage. The total cost of the mortgage depends on the terms and conditions for paying it back, such as the interest rate and the amount of time it takes to pay off the entire mortgage or “amortization period”. The total cost can be much more than the amount you are borrowing. You need to determine if the rate, amortization period and total cost of the mortgage are right for you.

Going direct to a lender or through other channels

  • Make sure you shop around to find a mortgage at a rate and for a term that is affordable for you, and with conditions with which you can live. If you are using a private lender, lending their own money on the security, make sure that they are either licensed if doing business as a mortgage lender, or otherwise are using a licensed Mortgage Brokerage.

Want to be Pre-Approved?

It is a good idea to get pre-approved for a mortgage before you start your search for a new home as it might help you keep a budget range in mind. You can ask a mortgage broker/agent to help you with this process, or go straight to a financial institution or other lender.

You will receive written confirmation for a certain amount at a particular interest rate and the offer will be good for a specified amount of time. Keep in mind however that a pre-approved mortgage is not a guarantee of being approved for the mortgage loan, as that depends on a number of things including the property you want to purchase.

Meeting and Information

Your mortgage broker/agent or your lender will ask you for information to help them better understand you, your goals for the mortgage loan, and the type of mortgage you want or need including:

  • Your financial circumstances
  • Your assets
  • Your sources of income and/or funds, including employment
  • Your mortgage needs and objectives
  • Your knowledge of mortgages
  • Your preference in terms of amount, rate, term, amortization and conditions
  • Your risk tolerance
  • Other parties to the transaction
  • If you have identified a property you wish to purchase, information about the property that will become the security for the mortgage loan
  • If you know what your credit rating is
  • Your debt load or liabilities
  • The amount of down payment you have saved

They will also ask for documentation to confirm the information you provide.

Take the following information with you to your first meeting with a mortgage broker/agent or lender:

  • Information about your employment including confirmation of salary. A letter from your employer will be suitable for this
  • Information about any other sources of income you have and evidence
  • Details regarding where you bank
  • Proof of any assets including RRSPs or a savings account
  • Details of any loans or other debts such as student loans
  • Evidence of your down payment including information about the amount of down payment you have saved and where it’s coming from
  • The full address of the property
  • A copy of the real estate listing, if applicable
  • Your mortgage pre-approval certificate, if one was issued and you have now identified a property
  • Contact information for your lawyer or notary
  • A copy of the agreement of purchase and sale
  • Estimates of your monthly housing costs (e.g., property taxes, utilities, etc.)
  • Proof that you have the funds to cover any closing costs

Lenders or mortgage brokers/agents will rely on the information you provide. This information helps them find the mortgage option(s) and/or lender(s) that are right for you. It is critical that you are completely honest when providing them this information. Errors in your application can easily lead to a mortgage that is not right for you or fit for your circumstances, plus misstating facts or providing false information in your mortgage application can have serious consequences. You could face up to 10 years of jail time.

Lenders and mortgage brokers/agents are expected to ask questions and seek additional information in the event of inconsistencies with the information you provide.

Debt Service Ratios Analysis

Your mortgage broker/agent or lender will need to make sure that you can carry a mortgage. They will do this by performing a Debt Service Ratio Analysis, basically comparing your debt to your income to see whether you can afford the mortgage loan you want.

Most lenders will require that your monthly housing costs (Gross Debt Service), including mortgage payments, property taxes, condo fees and heating expenses, are no more than 32 per cent of your gross monthly income.

They also want to know that your total monthly debt load, including for example car loans or leases and credit card payments (Total Debt Service), is not more than 44 per cent of your gross monthly income.

As well as qualifying for the mortgage loan at the rate offered by the lender, if you are putting less than 20 per cent of the purchase price down and are therefore applying for a high-ratio mortgage, you will also need to qualify at the Bank of Canada’s five-year fixed posted mortgage rate, which is usually higher. In that case your lender will also require that housing costs are no more than 39 per cent of your monthly income.

This extra “stress test” is the Government of Canada’s response to the sharp increase in house prices in certain Canadian cities, and concerns that currently low mortgage rates will eventually rise. All home buyers applying for a high-ratio loan, and therefore requiring mortgage insurance, or those required by their lender to get mortgage insurance for other reasons, are subject to the “stress test”. It assures mortgage lenders that the home buyer would still be able to afford the mortgage if prices or rates increase.

Property Analysis

If you have already identified a property, your lender or mortgage broker/agent might need to analyze the property to ensure it is worth enough to provide security for the mortgage loan.

They might want to view the property online with you, view the property listing on MLS or a self-listing website and/or obtain a property appraisal or home inspection to determine fair market value. You may need to negotiate access to the property with the sellers, and you will be responsible for paying appraisal and home inspection fees, unless a lender pays as an incentive for you to sign up.

Completing the Application

If you are using a mortgage broker/agent to find you a loan, once they have your approval to approach a particular lender, they will complete your application including information about the property if you have chosen one, and information about you from your meeting. You should be asked to sign a written acknowledgement that they have disclosed the risks associated with the mortgage they have presented.

If you are dealing direct with a lender, you will complete the application with them.

The mortgage application will include basic information such as your name, address and telephone number, social insurance number, employer, income, number of dependents, and the name and address of your bank or other financial institution.

The application will also detail: your assets, such as mutual funds and RRSPs and liabilities, including credit cards, credit lines, loans or leases; the purpose of the loan; mortgage loan amount required; the type of mortgage loan you want; the mortgage term, amortization and interest rate you seek; plus a description of the property you want to purchase such as address, size, type and construction.

Make sure you read the application carefully before signing it, and never sign an incomplete form.

You will also need to sign a Credit Authorization Form giving the mortgage broker/agent or lender authorization to perform a credit check. A mortgage broker/agent cannot and should not request a credit report without prior consent from you.

Credit Bureau Check

A credit report from a credit bureau will tell a potential lender how well you have paid your debts and bills in the past, your outstanding debt levels, and employment, income and residence history.

The credit bureau report will include a credit score – a single indicator of how likely you are to repay your loan at the agreed upon terms. It summarizes all the information available about you and provides the findings as a single number.

The report will also include information about any bankruptcies, collections, judgments, garnishments or liens against you and whether you have gone through a foreclosure or Power of Sale proceeding in the last five to seven years.

Neither the lender nor your mortgage broker/agent will be able to give you a copy of this report, but can discuss issues with you and must note these issues in the mortgage application.

While the mortgage broker/agent or lender is required to do a credit check, you can always also get a copy of your own credit history and make sure it is complete and accurate. Doing this early in your home buying journey and before you meet with a mortgage broker/agent or lender gives you the chance to re-establish a good credit history if the report shows you currently have poor credit.

There are two main credit-reporting agencies: Equifax Canada Inc. and TransUnion of Canada. You will pay a small fee for this service.

Once completed you will sign the mortgage application form, confirming that the facts on the application are correct.

Negotiation and Commitment

Once a potential lender lets you or your mortgage broker/agent know that they are willing to advance the loan, you or your mortgage broker/agent will then start to negotiate the deal. You will discuss a final mortgage rate and term for the loan and you or your mortgage broker/agent might need to supply more documentation to support your application.

Once you receive the official Mortgage Approval or Letter of Commitment, make sure to review all of the terms and conditions before you sign and return the agreement.

Closing Process Liaison

Once the lender has received your signed agreement the closing process will start. Your mortgage broker/agent may continue to liaise between you and the lender and perhaps even the lawyers involved for you and the seller.

Ongoing Mortgage Administration

If you have used a mortgage broker/agent to help you find a mortgage loan, and their brokerage is also licensed as an administrator, after the property sale closes and the funds are provided by the lender, your mortgage file may be sent to the mortgage brokerage’s administration department. They will track payments, calculate outstanding loan balances and might collect municipal property taxes. They may alert the mortgage broker/agent when your mortgage term is near completion so that the mortgage broker/agent can assist you with renewal or the selection of a new lender for the next term.

Source:

Financial Services Commission of Ontario (FSCO)

5160 Yonge Street, P.O. Box 85,
Toronto, Ontario M2N 6L9
Telephone: (416) 250-7250 | Toll free: 1 (800) 668-0128
Fax: (416) 590-7070 | TTY: 1 (800) 387-0584
Website: www.fsco.gov.on.ca

Mortgage Terminology Explained

Agreement of Purchase and Sale
A legal agreement that offers a certain price for a home. The offer may be firm (no conditions attached), or conditional (certain conditions must be fulfilled before the deal can be closed).

Amortization Period
The time over which all regular payments would pay off the mortgage. This is usually 25 years for a new mortgage, however can be greater, up to a maximum of 30 years.

Appraisal
The process of determining the value of property, usually for lending purposes. This value may or may not be the same as the purchase price of the home.

Appraisal Value
An estimate of the market value of the property.

Blended Payments
Payments consisting of both a principal and an interest component, paid on a regular basis (e.g. weekly, biweekly, monthly) during the term of the mortgage. The principal portion of payment increases, while the interest portion decreases over the term of the mortgage, but the total regular payment usually does not change.

Canada Mortgage and Housing Corporation (CMHC)
The National Housing Act (NHA) authorized Canada Mortgage and Housing Corporation (CMHC) to operate a Mortgage Insurance Fund which protects NHA Approved Lenders from losses resulting from borrower default.

Certificate of Location or Survey
A document specifying the exact location of the building on the property and describing the type and size of the building including additions, if any.

Certificate of Search or Abstract of Title
A document setting out instruments registered against the title to the property, e.g. deed, mortgages, etc.

Closed Mortgage
A mortgage agreement that cannot be prepaid, renegotiated or refinanced before maturity, except according to its terms.

Closing Costs
Various expenses associated with purchasing a home. These costs can include, but are not limited to, legal/notary fees and disbursements, property land transfer taxes, as well as adjustments for prepaid property taxes or condominium common expenses, if any.

Closing Date
The date on which the sale of a property becomes final and the new owner usually takes possession.

CMHC or GEMICO Insurance Premium
Mortgage insurance insures the lender against loss in case of default by the borrower. Mortgage insurance is provided to the lender by CMHC or GEMICO and the premium is paid by the borrower.

Conditional Offer
An offer to purchase subject to conditions. These conditions may relate to financing, or the sale of an existing home. Usually a time limit in which the specified conditions must be satisfied is stipulated.

Conventional Mortgage
A mortgage that does not exceed 80% of the purchase price of the home. Mortgages that exceed this limit must be insured against default, and are referred to as high-ratio mortgages (see below).

Debt-Service Ratio
The percentage of the borrower’s gross income that will be used for monthly payments of principal, interest, taxes, heating costs and condominium fees.

Deed (Certificate of Ownership)
The document signed by the seller transferring ownership of the home to the purchaser. This document is then registered against the title to the property as evidence of the purchaser’s ownership of the property.

Deposit
A sum of money deposited in trust by the purchaser when making an offer to be held in trust by the vendor’s agent, broker, lawyer or notary until the closing of the transaction.

Equity
The interest of the owner in a property over and above all claims against the property. It is usually the difference between the market value of the property and any outstanding encumbrances.

Fire Insurance
Before a mortgage can be advanced, the purchaser must have arranged fire insurance. A certificate or binder from the insurance company may be required on closing.

Firm Offer
An offer to buy the property as outlined in the offer to purchase with no conditions attached.

Fixed-Rate Mortgage
A mortgage for which the rate of interest is fixed for a specific period of time (the term).

Foreclosure
A legal procedure whereby the lender eventually obtains ownership of the property after the borrower has defaulted on payments.

Gross Debt Service (GDS) Ratio
The percentage of gross income required to cover monthly payments associated with housing costs. Most lenders recommend that the GDS ratio be no more than 32% of your gross (before tax) monthly income.

Gross Household Income
Gross household income is the total salary, wages, commissions and other assured income, before deductions, by all household members who are co-applicants for the mortgage.

High Ratio Mortgage
If you don’t have 20% of the lesser of the purchase price or appraised value of the property, your mortgage must be insured against payment default by a Mortgage Insurer, such as CMHC.

Holdback
An amount of money required to be withheld by the lender during the construction or renovation of a house to ensure that construction is satisfactorily completed at every stage.

Home Equity
The difference between the price for which a home could be sold (market value) and the total debts registered against it.

Inspection
The examination of the house by a building inspector selected by the purchaser.

Interest Rate Differential Amount (IRD)
An IRD Amount is a prepayment charge that may apply if you pay off your mortgage principal prior to the maturity date or pay the mortgage principal down beyond the prepayment privilege amount. The IRD amount is equivalent to the difference between your annual interest rate and the posted interest rate on a mortgage that is closest to the remainder of the term less any rate discount you received, multiplied by the amount being prepaid, and multiplied by the time that is remaining on the term.

Interim Financing
Short-term financing to help a buyer bridge the gap between the closing date on the purchase of a new home and the closing date on the sale of the current home.

Maturity Date
Last day of the term of the mortgage agreement.

Mortgage Critical Illness Insurance
Mortgage Critical Illness Insurance is available as an enhancement to Mortgage Life Insurance. Mortgage Critical Illness Insurance is underwritten by the Canada Life Assurance Company. Complete details of benefits, exclusions and limitations are contained in the Certificate of Insurance. It is recommended for all mortgagors. It can pay off your mortgage — up to $300,000 — if you are diagnosed with life-threatening cancer, heart attack or stroke.

Mortgagee and Mortgagor
The lender is the mortgagee and the borrower is the mortgagor.

Mortgage Life Insurance
A form of reducing term insurance recommended for all mortgagors. If you die, have a terminal illness, or suffer an accident, the insurance can pay the balance owing on the mortgage. The intent is to protect survivors from the loss of their homes.

Mortgage Term
The number of years or months over which you pay a specified interest rate. Terms usually range from six months to 10 years.

Open Mortgage
A mortgage which can be prepaid at any time, without requiring the payment of additional fees.

Payment Frequency
The choice of making regular mortgage payments every week, every other week, twice a month or monthly.

P.I.T.
Principal, interest and taxes. Together, these make up the regular payment on a mortgage if you elect to include property taxes in your mortgage payments.

Porting
This allows you to move to another property without having to lose your existing interest rate. You can keep your existing mortgage balance, term and interest rate plus save money by avoiding early discharge penalties.

Prepayment Charge
Compensation when the borrower prepays all or part of a closed mortgage more quickly than is allowed as set out in the mortgage agreement.

Prepayment Option
The ability to prepay all or a portion of the principal balance. Prepayment charges may be incurred on the exercise of prepayment options.

Principal
The amount of money borrowed for a new mortgage.

Refinancing
Renegotiating your existing mortgage agreement. May include increasing the principal or paying out the mortgage in full.

Renewal
At the end of a mortgage term, the mortgage may “roll over” on new terms and conditions acceptable to both the lender and the borrower. This is known as renewing a mortgage. Otherwise, the lender is entitled to be repaid in full. In this case, the borrower may seek alternative financing.

Continue reading “Mortgage Application – Apply Online”

Ontarians Say Foreign Speculation Tax on Housing Was a Good Idea

New research about Ontarians’ voting intentions, housing policy sentiment being released today at Housing Summit

A large majority of Ontarians, 81%, support the introduction of a 15% Non-Resident Speculation Tax (NRST) on home purchasers who are not Canadian citizens or permanent residents, shows new research conducted by Ipsos and commissioned by the Ontario Real Estate Association (OREA), Ontario Home Builders’ Association (OHBA) and Federation of Rental-Housing Providers of Ontario (FRPO). Full study results are being released today at the Housing Summit, an initiative born of the three associations’ collective interest in keeping home affordability, consumer choice and housing supply a priority for political Parties in the 2018 election.

Sean Simpson of Ipsos Public Affairs will reveal Ontarians’ sentiment on a variety of housing related issues, including their impressions of the Fair Housing Plan and the importance of home affordability as an issue in the 2018 election. A fireside chat with Finance Minister Charles Sousa, and moderated by Steve Paikin, host of TVO’s The Agenda, will take place over the noon hour. Academia, economists, housing industry leaders, MPPs and senior government officials will take part in a full day of panel discussions on a range of housing topics. Click here to see a copy of the Housing Summit agenda.

As advocates for greater home supply and home affordability in the province, OREA, OHBA and FRPO have joined forces to ensure that these issues remain a priority for Party leaders and policy makers. The three associations say the solution to home affordability is increasing consumer choice and the supply of housing in the province by streamlining the building approvals process and reducing red tape, which is preventing new homes and rentals from coming to market.

To read a copy of the full Ipsos factum, visit https://www.ipsos.com/en-ca/news-polls/oreaindex-2017-06-13.

QUOTES

“Ontario’s Realtors are committed to working with government to keep the Canadian dream of home ownership within reach for every Ontarian. The ultimate solution is to increase the supply of housing in the marketplace including reducing the regulatory hurdles and red tape that unnecessarily delay projects and drive up costs.”

Tim Hudak, Chief Executive Officer, OREA

“As the industry that builds 95 per cent of all new housing in Ontario, home builders know that increasing supply is the key to improving affordability.”

-Joe Vaccaro, Chief Executive Officer, OHBA

“FRPO welcomes a fulsome discussion with government and all interested parties about the future of Ontario’s rental sector. This includes the need to provide a strong rental sector that meets housing needs.”

-Jim Murphy, Chief Executive Officer, FRPO

OREA represents 70,000 brokers and salespeople who are members of the 39 real estate boards throughout the province. OREA serves its REALTOR® members through a wide variety of professional publications, educational programs, advocacy, and other services. www.OREA.com

OHBA is the voice of the land development, new housing and professional renovation industries in Ontario. OHBA represents over 4,000 member companies, organized through a network of 29 local associations across the province. www.ohba.ca

FRPO is the province’s leading advocate for quality rental housing. FRPO represents over 2,200 rental housing providers who supply and manage homes for over 350,000 tenant households across Ontario. www.frpo.org

8-10 Ontarians Want to See Home Affordability addressed in the 2018 Election

New research shows a majority agrees that the provincial government needs to encourage more housing supply

Ontario political parties should address home affordability in their 2018 election platforms, according to 85% of Ontarians in new research conducted by Ipsos and commissioned by the Ontario Real Estate Association (OREA), Ontario Home Builders’ Association (OHBA) and Federation of Rental-Housing Providers of Ontario (FRPO). Six-in-ten Ontarians (63%) agree the provincial government needs to encourage more housing supply by reducing regulation, in order to provide affordable housing options for more Ontarians.

According to the study, millennials are most intent on seeing home affordability addressed by Party leaders. Nine-in-ten (90%) Ontarians between the ages of 18 and 34 want Parties to address the issue in the next election, compared to 82% of Gen X’ers. Furthermore, 9-in-10 (88%) millennials state that they would be more likely to vote for a Party whose platform promotes home affordability.

As advocates for greater home supply and home affordability in the province, OREA, OHBA and FRPO have joined forces to ensure that these issues remain a priority for Party leaders and policy makers by hosting thought leaders at the Housing Summit on Tuesday, June 13.

The three associations say the solution to home affordability is increasing the supply of housing in the province, and thereby consumer choice, by streamlining the building approvals process and reducing red tape, which is preventing new homes and rentals from coming to market. Nearly 7-in-10 (66%) millennials agree that the provincial government needs to encourage more housing supply by reducing regulation on the home building industry, the research shows.

Full results from the research study are being presented at the Housing Summit in Toronto. Academia, economists, housing industry leaders, MPPs and senior government officials, including Finance Minister Charles Sousa, are expected to come together at the Summit to discuss the issues facing Ontario’s housing market.

QUOTES

“The best way to get millennials out of mom and dad’s basement and into a home of their own is to build more housing that young buyers can afford. If they want to appeal to voters in the next election, all political Parties need to put home affordability and housing supply front and centre in their election platforms.”

Tim Hudak, Chief Executive Officer, OREA

“Ontarians still believe in the dream of home ownership, but the challenges of today’s housing supply keeps pushing their dream beyond reach. If political parties are serious about improving housing affordability, they need to let voters know how they’re going to help Ontarians achieve their dream.”

-Joe Vaccaro, Chief Executive Officer, OHBA

“New rental housing is needed across Ontario to assist with affordability and provide tenants choice. All parties need to support solutions and regulations that encourage new supply and investment benefiting tenants.”

-Jim Murphy, President & Chief Executive Officer, FRPO

OREA represents 70,000 brokers and salespeople who are members of the 39 real estate boards throughout the province. OREA serves its REALTOR® members through a wide variety of professional publications, educational programs, advocacy, and other services. www.OREA.com

OHBA is the voice of the land development, new housing and professional renovation industries in Ontario. OHBA represents over 4,000 member companies, organized through a network of 29 local associations across the province. www.ohba.ca

FRPO is the province’s leading advocate for quality rental housing. FRPO represents over 2,200 rental housing providers who supply and manage homes for over 350,000 tenant households across Ontario. www.frpo.org

Unexpected expenses big trouble for homeowners

The debt truth: Unexpected expenses could spell big trouble for Millennial homeowners

  • A significant percentage of Canadian homeowners lack the financial flexibility to adjust to rising interest rates, unexpected expenses or interruption of income, with Millennials most at risk, according to Manulife Bank survey
  • One in four Canadian homeowners have not had enough money on hand to pay bills once in the last 12 months while one in five are unprepared for a financial emergency
  • Average mortgage debt is up 11% to $201,000
  • Almost half of Millennial homeowners received help for their first homes

Mortgage debt increased by 11 per cent to $201,000 last year and more than half (52 per cent) of Canadian mortgage holders lack the financial flexibility to quickly adjust to unexpected costs, per a new Manulife Bank of Canada survey. This despite 78 per cent of Canadians having made debt freedom a top priority.

The problem is most acute among Millennials, who saw their mortgage debt rise more than any other generation. Millennials are also most likely to have difficulty making a mortgage payment in the event of an emergency or if the primary earner in the household were to become unemployed.

“The truth about debt in Canada is that many homeowners are not prepared to adjust to rising interest rates, unforeseen expenses or interruption in their income,” says Rick Lunny, President and Chief Executive Office, Manulife Bank of Canada. “However, building flexibility into how they structure their debt can help ease the burden.”

Overall, nearly one quarter (24 per cent) of Canadian homeowners reported they have been caught short in paying bills in the last 12 months. The survey also revealed that 70 per cent of mortgage holders are not able to manage a ten per cent increase in their payments. Half (51 per cent) have $5,000 or less set aside to deal with a financial emergency while one fifth have nothing.

Millennials not alone

Despite generally having more equity in their homes, many Baby Boomers face the same challenges as Millennial homeowners. Some 41 per cent of Baby Boomers said that home equity accounted for more than 60 per cent of their household wealth and for one in five (21 per cent) it makes up more than 80 per cent.

This indicates Boomers may need to rely on the sale of their primary residence to fund retirement, since much of their household wealth is wrapped up in home equity. However, more than three quarters (77 per cent) of Baby Boomer respondents want to remain in their current homes when they retire.

“Many Boomers approaching retirement share the same lack of financial flexibility as Millennials,” said Lunny. “They want to remain in their current homes, but their home makes up a big part of their net worth. Instead of downsizing, or even selling and renting, homeowners in this situation could consider using a flexible mortgage to access their home equity to supplement their retirement income.”

Helped into the housing market

Almost half (45%) of Millennial homeowners reported that they received a financial gift or loan from their family when purchasing their first home. By comparison, just 37 per cent of Generation X and 31 per cent of Baby Boomers received help from family members when they purchased their first home. Conversely, almost two in five (39 per cent) Boomers, many of whom are the parents of Millennials, still have mortgage debt.

The generational increase in new homeowners requiring family support comes despite a long-term trend toward two-income households. The number of Canadian families with two employed parents has doubled in the last 40 years, but housing costs are growing faster than incomes.

“With higher home prices and larger mortgages, it is more important than ever to find the mortgage that is right for you,” says Lunny. “A flexible mortgage that offers the ability to change or skip payments, or even withdraw money if your circumstances change, can help you ride out financial difficulties more easily.”

Manulife Bank recommends that Canadians have access to enough money to cover three to six months of expenses.

Quebec homeowners most at risk

In addition, the Manulife Bank survey found that:

  • Mortgage holders in Quebec (76 per cent) would have the most difficulty with an increase of 10 per cent to their mortgage payment and are more likely to be impacted should they have a fiscal emergency, as almost 30 per cent have no emergency funds.
  • British Columbia had the highest instance of homeowners getting help from family members when they purchased their first home, with almost half (45 per cent) saying they either borrowed or were given money.
  • Compared with other regions, homeowners in Manitoba and Saskatchewan (73 per cent) prefer most to own and live in their current home when they retire.

Debt management should begin at an early age

More than two in five (44 per cent) learned “a little” or nothing about debt management from their parents – and were also most likely to have been caught short financially in the past 12 months (28 per cent).

“Kids who learn about money and debt management are more likely to become financially healthy adults,” says Lunny. “One of the best lessons we can teach our children is the importance of saving for a rainy day. Being prepared for unexpected expenses is good for our financial health, good for our mental health and gives us the freedom and confidence to deal with the unexpected expenses and opportunities that come our way.”

About the Manulife Bank of Canada Debt Survey

This survey was conducted online within Canada by Nielsen on behalf of Manulife Bank of Canada from February 1 to 14, 2017, among 2,098 Canadian homeowners aged 20 to 69 with household income of $50,000 or more. The data were weighted by age, province of residence and household income where necessary to bring them in line with their actual proportions in the Canadian homeowner population.

About Manulife Bank

Established in 1993, Manulife Bank was the first federally regulated bank opened by an insurance company in Canada. It is a Schedule l federally chartered bank and a wholly-owned subsidiary of Manulife. As Canada’s first advisor-based bank, it has successfully grown to more than $22 billion in assets and serves clients across Canada.

About Manulife

Manulife Financial Corporation is a leading international financial services group that helps people achieve their dreams and aspirations by putting customers’ needs first and providing the right advice and solutions. We operate as John Hancock in the United States and Manulife elsewhere. We provide financial advice, insurance, as well as wealth and asset management solutions for individuals, groups and institutions. At the end of 2016, we had approximately 35,000 employees, 70,000 agents, and thousands of distribution partners, serving more than 22 million customers. As of March 31, 2017, we had $1 trillion (US$754 billion) in assets under management and administration, and in the previous 12 months we made almost $26.3 billion in payments to our customers. Our principal operations are in Asia, Canada and the United States where we have served customers for more than 100 years. With our global headquarters in Toronto, Canada, we trade as ‘MFC’ on the Toronto, New York, and the Philippine stock exchanges and under ‘945’ in Hong Kong.

FutureShare Helps Canadians Unlock Their Real Estate Wealth

Fintech Platform FutureShare Launches to Help Canadian Homeowners Unlock Their Real Estate Wealth

Alternative to HELOCs and reverse mortgages means homeowners don’t have to sell to tap into their home equity

There is more than $2.9 trillion in unmortgaged real estate equity in Canada (CREA), and today fintech platform futureshare launches to help Canadians unlock that real estate wealth without taking on new debt. The company was founded in 2016 as an alternative to home equity loans, home equity lines of credit (HELOCs) and reverse mortgages and gives homeowners a lump sum free of ongoing payments and interest rates in exchange for a percentage of the home’s appreciation, which can be paid out without penalty at any time or once the property is sold. futureshare’s online platform is the first of its kind in Canada and is now live in beta and accepting online applications for homes within Ontario with plans to launch in Alberta, Manitoba and British Columbia by the end of 2017.

“Canada’s housing market has billions in untapped equity and futureshare is giving that wealth back to Canadians to help them reduce financial stress and live happier lives. We’re revolutionizing the process by giving Canadians an alternative to home equity loans or HELOCs that’s interest rate and payment free, allowing them to unlock their real estate wealth and increase their cash flow,” said Michael Orrbrooke, CEO and founder of futureshare. “Whether it is, for example, for home improvements, debt consolidation, for funding retirement or investing in a small business, futureshare wants to help Canadians achieve their financial goals without adding new debt.”

The average Canadian owes $1.67 for every dollar in income (StatsCan), and futureshare is designed to help homeowners access the equity tied up in their home without adding to their ongoing debt burden. Unlike a reverse mortgage or HELOC, futureshare doesn’t require homeowners to have perfect credit scores or to fall within a specific income bracket, and it doesn’t increase monthly payments. A homeowner’s eligibility is based primarily on their home value and whether they have at least 25 per cent equity ownership in their home. Homeowners will be able to access on average up to 10-20 per cent of their home equity using futureshare’s platform, and unlike a loan, there’s no ongoing payments or interest rates.

Canada has become a hub for fintech innovation, with venture capital financing for fintech companies increasing by 74% from 2015 to 2016 (Thomson Reuters). Like other fintech platforms, futureshare’s process is simple and easy to complete online. Homeowners can use the online equity release calculator to see how much of their wealth they can unlock, and once they complete the 90 second pre-qualification questions, the homeowner receives a real-time conditional offer outlining the details of the equity release amount and terms they could receive. The home is then appraised and a final offer is sent via email by futureshare to the homeowner, with the credit application and underwriting process continuing online. Homeowners receive their funds, via electronic transfer, on average within 10-15 business days of signing the final offer.

Homeowners can use futureshare’s free qualification tool here to find out if they qualify in two minutes or less.

To learn more about futureshare, visit futureshare.ca.

Social media links:

Facebook: facebook.com/futuresharedf
Twitter: twitter.com/futuresharedf

About futureshare

futureshare provides an alternative to home equity loans, home equity lines of credit (HELOCs) and reverse mortgages, helping homeowners unlock their real estate wealth without having to sell their home. The online platform provides consumers with the opportunity to receive funds based on an appraisal on their home in exchange for a portion of their homes future appreciation, meaning that homeowners have zero ongoing payments, and incur zero interest. futureshare is currently available in beta in Ontario with plans to launch in Manitoba, Alberta and British Columbia by the end of 2017. futureshare is based in Toronto, and the platform launched in May 2017.

CONTACT INFORMATION

Ontario Passes Legislation for Home Inspections

Ontario Pension Plan

Ontario passed legislation today that will strengthen consumer protection by introducing new rules for home inspections.

The Putting Consumers First Act will:

  • Regulate the home inspection industry through mandatory licensing and proper qualifications for home inspectors, as well as minimum standards for contracts, home inspection reports, disclosures and the performance of home inspections.

Strengthening consumer protection is part of our plan to create jobs, grow our economy and help people in their everyday lives.

Quick Facts

  • Home inspectors are one of the only professionals involved in a real estate transaction that are not currently provincially regulated.
  • The proposed legislation to regulate home inspectors was based on 35 recommendations made by a 16-member expert panel, which were supported by both industry and consumers.

The ministry is seeking input on a proposal for legislation that would establish mandatory qualifications for home inspectors.

Currently anyone in Ontario can call themselves a home inspector. Many consumers depend on the opinions of their home inspector to make what is often the largest purchase decision of their lifetime.

In order to improve consumer protection in this important part of the home buying process, the Ministry of Consumer Services is consulting on a panel’s findings and recommendations to introduce mandatory qualifications for home inspectors.

The panel was established by the Ministry of Consumer Services and met for four months to discuss issues, consider options, and make recommendations on qualifications of home inspectors.

The panel has made thirty-five recommendations in five areas:

– regulation of home inspectors
– technical standards for home inspectors
– professional home inspector qualifications
– consumer protection requirements
– regulatory governance for Ontario’s home inspection industry

The Ministry of Consumer Services is now collecting public comments on the panel’s recommendations. The panel’s report with the recommendations is attached here and the ministry welcomes feedback and encourages anyone interested to provide comments.

The panel’s report and any public feedback the ministry receives will guide the government as it considers whether to bring forward legislation to establish qualifications for home inspectors.

Source: Ministry of Consumer Services

https://www.ontario.ca/

Many Canadians Delaying Home Purchase

Royal Bank of Canada

Canadians cite belief that home prices may come down, lack of affordability and economic unpredictability as main reasons for delaying purchase

  • Over 80 per cent of Canadians feel that buying a home is a good or very good investment.
  • Only one-quarter of Canadians plan to purchase a home this year (down from 29 per cent in 2016); and highest among millennials (aged 18 – 34 years).
  • One in three Canadians would be concerned if their mortgage payment increased by more than 10 per cent.

The idea of a white picket fence may be antiquated, but the dream of home ownership is alive and well in Canada. But with the average Canadian home price topping out at over $500,000 (Canadian Real Estate Association) many Canadians are finding home ownership to be out of reach.

Despite this, according to the 2017 RBC Home Ownership Poll the majority of Canadians (82 per cent) believe that home ownership is a good investment…just not right now. The number of Canadians intending to buy a home within the next two years has decreased to 25 per cent, from 29 per cent in 2016. Millennials (aged 18 to 34), however appear to be feeling more optimistic than other age groups with two in five (39 per cent) saying they intend to buy a home in the next two years.

Why are Canadians delaying home buying?
Among Canadians who are delaying purchasing a home, the top three reasons cited include: belief that house prices may come down (58 per cent), uncertainty about the economy (51 per cent) and concerns about affordability (38 per cent).

“For many Canadians, buying a home is a financial and personal milestone – often the biggest investment one will make,” says Nicole Wells, Vice President, Home Equity Financing, Products and Segments, RBC. “In today’s market, the best advice is to start with understanding exactly how much you can afford and focus on your wants and needs ahead of starting the house hunt. This will help set expectations and get you started on finding the home that fits your budget and lifestyle. Knowledge and education are key.”

Ongoing cost of ownership
As home prices and carrying costs continue to climb, Canadians admit they are feeling the pressure. Fewer Canadians believe they are well positioned to weather a downturn in the market (65 per cent versus 73 per cent in 2016) or a potential increase in interest rates (57 per cent versus 63 per cent in 2016). Another one-third of Canadians (36 per cent) would be concerned if their mortgage payment went up by 10 per cent or more.

“The homeowner journey starts long before you get the keys, and continues well beyond the first mortgage payment. Create a budget by knowing what you can comfortably afford throughout the home ownership journey. From there, arm yourself with expert advice, the right tools and resources to stay informed today, tomorrow and well into the journey,” adds Wells.

Empowering consumers to make informed decisions
In the information age, consumers are not starved for resources – they are starved for time. Understanding what tools are available and using them can help get the home buying research started how they want, when they want. With tools available to help with everything from assessing affordability, to interest rate changes, determining the best type of mortgage for your situation and even finding the neighbourhood that matches your lifestyle, research and information are critical to good decision making when buying a home.

Regional expectations on price vary
When it comes to housing prices, expectations vary greatly from region to region. Residents in British Columbia and Ontario feel strongly that they are living in a sellers’ market where demand is exceeding the number of homes available. But that is where the comparisons stop. For the first time in three years, fewer residents of B.C. believe prices will go up by this time next year, showing a change in perception that may impact the trend of the market. Meanwhile, all other provinces show an increase in the number of people who feel that prices will go up.

Believe prices will go up

Seller’s Market

2016

2017

2016

2017

British Columbia

50%

36%

53%

60%

Alberta

22%

35%

6%

10%

Man/Sask

23%

41%

30%

27%

Ontario

51%

56%

44%

61%

Quebec

34%

36%

13%

16%

Atlantic

28%

39%

11%

13%

Whether it is your first or fifth time buying a home, RBC offers the following tips for success:

Be patient: It is easy to get worked up and emotional during the home buying process. Staying focused and patient can help ease the stress that comes with this financial investment and can stop you from making a rushed decision on a home.

Be informed: From budget constraints, to neighbourhood desires, know what you want and what you are willing to compromise. Try RBC’s True House Affordability tool to get pre-qualified in 60 seconds, and understand how much home you can afford.

Be flexible: Stay open-minded to different locations that match your preferences and budget. Try RBC’s Neighbourhood Finder and learn what neighbourhood may be right for you, what amenities are nearby and the cost of homes. Although you might have your heart set on a specific neighbourhood, a nearby borough or even a similar pocket elsewhere might fit into your price range and still offer the lifestyle and amenities you want.

Go local: The RBC poll shows that the home buying journey varies for Canadians based on where they live. Seek advice from market experts who know your city and neighbourhood as they will be able to offer the best advice for your situation. If you are considering your next home, try RBC’s Home Value Estimator and find out what your current home is worth today versus when you first bought it.

Consider the costs: Saving for a home is no easy feat and it starts well before you begin your house hunt. Start by having a savings plan in place and aim to put down more than the minimum required down payment. Run scenarios to see how much you can afford over time as your monthly income fluctuates. This includes factoring in future events like having children.

About RBC
Royal Bank of Canada is Canada’s largest bank, and one of the largest banks in the world, based on market capitalization. We are one of North America’s leading diversified financial services companies, and provide personal and commercial banking, wealth management, insurance, investor services and capital markets products and services on a global basis. We have over 80,000 full- and part-time employees who serve more than 16 million personal, business, public sector and institutional clients through offices in Canada, the U.S. and 35 other countries.

RBC helps communities prosper, supporting a broad range of community initiatives through donations, community investments and employee volunteer activities. For more information please see: http://www.rbc.com/community-sustainability/.

About the annual RBC Home Ownership Poll
These are some of the findings of the annual RBC Home Ownership Poll conducted by Ipsos from January 13 to January 25, 2017 on behalf of RBC, through a national survey of 2,073 Canadians ages 18+ who completed their surveys online. Quota sampling and weighting are employed to balance demographics to ensure that the sample’s composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within +/- 2.5 percentage points, 19 times out of 20, had all Canadian adults been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.

SOURCE RBC Royal Bank

For further information: Sophie Connor, sophie.connor@rbc.com, RBC Communications, 647-823-4790

RELATED LINKS
http://www.rbc.com

Canadian housing starts trend upwards in March

new home mortgages

Housing starts are trending higher at 211,342 units in March 2017, compared to 205,521 units in February 2017, according to Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

“March housing starts were at their highest level since September 2007, pushing the trend in housing starts upward for a third consecutive month,” said Bob Dugan, CMHC’s Chief Economist. “Stronger residential construction at the national level is reflected by a rising trend in single-detached and multi-unit starts in Ontario and continued growth of new rental apartments in Quebec.”

Monthly highlights

  • Vancouver housing starts trended lower for the fourth consecutive month but, remained above the five-year average. Actual housing starts reached the highest level on record for March since 1972, driven by new apartment construction. Starts activity in the Vancouver CMA is also picking up again after an unusually cold winter.
  • In Toronto, the total starts trend moved higher in March, supported by all housing types. While apartment starts registered the strongest trend increase in March, single-detached home construction has been trending higher since the end of last summer. Demand for new housing is growing as supply in the rental and resale markets is short, reflected by low rental apartment vacancy rates and declining active listings.
  • The decline in townhouse starts contributed to a downward trend in Hamilton CMA total housing starts, despite the strength in single-detached and semi-detached housing starts. Notwithstanding this month’s decline, strong demand from local residents and out-of-town buyers continued to support townhouse construction as this type of dwelling remains the most viable option for many first time homebuyers.
  • ‘Demand’ is the story in St. Catharines-Niagara. As buyers from Toronto and Hamilton seek the relatively affordable options, resale inventory is being squeezed and prices are soaring. This is prompting buyers to turn to the new housing market, where singles in land-abundant Niagara Falls remain a sought-after commodity.
  • Multi-unit residential construction in the Montreal area remained significant in March. In addition to several seniors’ residences, many rental apartments were started in all parts of the metropolitan area this past month, and new rental units reached a 25-year high. With the decrease in inventories of unsold condominium units, renewed growth was also noted in this segment, as many new projects got under way.
  • The pace of residential construction in the Quebec area has slowed down since the beginning of the year. This decline has been mainly due to a decrease in activity in the purpose-built rental housing segment. It should be mentioned that starts of this type reached historically high levels in 2015 and 2016. Consequently, given the significant number of rental apartments currently under construction and the recent increase in the vacancy rate in the area, a downward adjustment was expected.
  • There is an upward momentum to residential construction in Charlottetown. Strong population growth coupled with a tight supply of both resale homes and rental units has led more home buyers to look to the new home market. Singles starts over the first quarter of 2017 reached levels not recorded since 1987.

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of Canada’s housing market. In some situations analyzing only SAAR data can be misleading, as they are largely driven by the multi-unit segment of the market which can vary significantly from one month to the next.

The standalone monthly SAAR of housing starts for all areas in Canada was 253,720 units in March, up from 214,253 units in February. The SAAR of urban starts increased by 20.2 per cent in March to 235,674 units. Multiple urban starts increased by 30.2 per cent to 160,989 units in March, while single-detached urban starts increased by 3.1 per cent, to 74,685 units.

Rural starts were estimated at a seasonally adjusted annual rate of 18,046 units.

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

Source CMHC

Humber College new education provider for Ontario real estate agents

The Real Estate Council of Ontario announced today that the consortium of Humber College Institute of Technology & Advanced Learning and NIIT Canada will be the future provider of registration education for aspiring real estate salespersons and brokers (commonly called real estate agents) in the province.

After a rigorous Request for Proposal (RFP) process, Humber and NIIT Canada were selected to design, develop, administer and deliver the New Program. Their innovative solution best met the requirements set out in the RFP.

The New Program will launch on July 1, 2019. Students enrolling until that date will enroll with the current provider, the OREA Real Estate College.

“We’re pleased to announce that the New Program will be developed by this partnership of two innovative leaders in professional education,” said RECO Registrar Joseph Richer. “The New Program will bring together the best in local real estate knowledge and education delivery, and leading edge expertise in program development. It will help ensure that students are practice-ready when they begin their real estate careers.”

“Humber has a strong industry reputation for credential testing and delivery of professional designation programs,” said Alister Mathieson, vice-president, Advancement and External Affairs, Humber College. “Further, Humber is closely connected with our local and provincial communities, and the opportunity to deliver specialized education and skills to real estate salespersons and brokers will help contribute to Ontario’s economy as newly trained professionals enter the workforce.”

“NIIT Canada is truly honored to have been selected as the provider of the real estate professional training programs to RECO. We are looking forward to developing the highest quality of training programs for Ontario’s real estate professionals. Canada is a very important market for us and we are committed to expanding our operations in Canada, specifically Ontario, through our Toronto office to better serve the needs of our Canadian customers,” said Sapnesh Lalla, President, NIIT Corporate Learning Group.

This milestone follows a four-year process that included: extensive research and consultation with the real estate sector, education providers and regulatory bodies; the distribution of a white paper on RECO’s vision for registration education; and a public RFP that was distributed broadly.

Upon its launch in July 2019, the New Program will offer courses in-class, in real-time virtual classrooms, and through self-paced e-learning modules to more than 12,000 students annually.

More information is available on RECO’s website.

About RECO:

The Real Estate Council of Ontario regulates real estate professionals in the province on behalf of the Ontario government by enforcing the Real Estate and Business Brokers Act, 2002 (REBBA 2002). We protect the public interest through a fair, safe and informed marketplace. RECO holds registered brokers and salespersons to professional standards, protects the public interest, and enhances consumer confidence in the real estate profession. In addition, RECO strives to educate consumers to ensure they understand the benefits of a regulated real estate sector.

About Humber College:

Established in 1967, Humber College is one of Canada’s leading post-secondary institutions offering programs to over 29,200 full-time students and 23,000 continuing education students. Humber College partners with government, industry and community in the development and delivery of customized training programs, and government and industry credential testing programs, including: Ontario Building Code certification examinations, and programs for IHM Property Management and Condominium Management and Administration. From the 1980s through to 2000, Humber College was a delivery partner of the original Real Estate Education Program, delivering courses to over 18,000 students.

About NIIT Learning Solutions (Canada) Limited:

NIIT Learning Solutions (Canada) Limited is a subsidiary of NIIT Limited, a global leader in skills and talent development, established in 1981. NIIT Limited offers multi-disciplinary learning management and training delivery solutions to institutions, individuals, and corporations in over 40 countries. NIIT’s comprehensive suite of Managed Training Services includes custom curriculum design and content development, learning administration and delivery, strategic sourcing, learning technology, and advisory services. NIIT’s global customers include leading global energy and petrochemical companies headquartered in Europe; some of the largest multi-national banks, insurance, and financial services companies in North America; and market-leading global technology companies. The Learning and Performance Institute, UK has internationally accredited NIIT as a forward-thinking, reputable provider, committed to learner outcomes, performance development, and customer satisfaction.

SOURCE Real Estate Council of Ontario

For further information: James Geuzebroek, Director, Communications, Real Estate Council of Ontario, 416-207-3108, james.g@RECO.on.ca

RELATED LINKS
http://www.reco.on.ca

Online Database Protects Canadians Getting Mortgages

Mortgage Broker Regulators' Council of Canada logo

Disciplinary records from provincial mortgage regulators now in one, convenient place

A new online database helps consumers find out if mortgage brokers have broken the rules that govern their profession.

Consumers can enter a mortgage broker’s name or company into the search-friendly database and see disciplinary actions (e.g., licence suspensions, administrative penalties, cease and desist orders) that have been taken against a broker by their provincial mortgage regulator and other Canadian regulators.

The database, developed by the Mortgage Broker Regulators’ Council of Canada (MBRCC), integrates disciplinary records from most provincial regulators into a single, convenient place. It helps consumers save time and provides additional peace of mind when choosing a mortgage broker.

In addition, mortgage brokerages and regulators across Canada now have easier access to disciplinary information. Brokerages can use the new tool to look up potential brokers, and provincial regulators can use it to assess the suitability of brokers who want to be licensed in other provinces.

Developing the database supports the MBRCC’s mandate to improve and promote harmonization of mortgage broker regulatory practices across Canada.

“Mortgages are often the biggest financial commitment Canadians make. Mortgage brokers are regulated professionals who can help you find the right mortgage to finance your home. This new, easy-to-use database gives consumers a way to help check a broker’s background before entrusting them with such an important financial transaction.”

Cory Peters, Chair, MBRCC

Quick Facts

  • More than 23,000 mortgage brokers are currently licensed across Canada.
  • Disciplinary actions will be posted on the database for varying amounts of time, matching how long each regulator posts records in their own province.
  • Consumers should still visit their provincial regulator’s website to get licence status information for mortgage brokers authorized to operate in that province.

Additional Resources

About MBRCC

The MBRCC is an inter-jurisdictional association of mortgage broker regulators that seeks to improve and promote harmonization of mortgage broker regulatory practices to serve the public interest. Its members work together and with stakeholders to identify trends and address common regulatory issues through national solutions that support consumer protection and an open and fair marketplace.

MBRCC members represent the nine provinces that currently have legislative and regulatory frameworks governing mortgage brokers or have an interest in developing one; British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia and Newfoundland & Labrador.

SOURCE Mortgage Broker Regulators’ Council of Canada

For further information: Shani Ratnapala, Mortgage Broker Regulators’ Council of Canada, Shani.Ratnapala@fsco.gov.on.ca, 416-590-2036

Sale of Infill Site in Richmond Hill

Townhouses Richmond Hill

Building and Development Mortgages Canada Inc. (BDMC) announced today that lenders in a syndicate mortgage that funded Towns on Hall, a low-rise development in Richmond Hill by Fortress Real Developments Inc. (Fortress), received their principal back in full and an estimated annualized return of 8.13%.

The 1.3 acre infill site located just west of Yonge Street, in the heart of the old downtown Richmond Hill, was recently approved for 23 townhomes by the Ontario Municipal Board and a site plan application for the development was made in December 2016. “The increase in value was created by achieving zoning approvals. The trends we have seen for low-rise dwellings in the GTA, gave us an opportunity to explore a sale of the site while creating tremendous value for our stakeholders”, commented Vince Petrozza, COO of Fortress Real Developments.

This is the second exit in 2017 that has been generated by a sale of the lands through value created in the development and approval process. “Lenders received a healthy return over a 36 month period. The strong due diligence of the asset and market demand for low-rise approved sites created a positive return for all involved in the project,” said BDMC principal Ildina Galati. “We are pleased that syndicate mortgage lenders have benefited from this well analyzed opportunity.”

The sale of these lands marks the 19th exit for lenders who have funded Fortress projects through a syndicate mortgage. To date, over $80 Million of principal has been repaid to lenders, and the average estimated annualized returns in the 19 completed projects is 9.44%.

Fortress CEO Jawad Rathore remarked, “Fortress continues to seek out high quality real estate assets across Canada and our development team is able to bring immense value to all the projects in our portfolio. Real estate offers tremendous flexibility, with opportunities to exit a development at several different stages, and as we look forward, we anticipate a very busy 2017 as our portfolio of more than 70 sites matures.”

About the Companies

Building & Development Mortgages Canada Inc. – established in 2007, is a premier mortgage brokerage licensed in Ontario, Nova Scotia, Alberta, Manitoba, British Columbia and Saskatchewan. BDMC closes all of the syndicate mortgage transactions that fund Fortress projects. For more information visit: https://bdmc.ca

Fortress Real Developments Inc. is a Canadian real estate development company that seeks out and analyzes opportunities in major Canadian markets. The company is focused on quality projects with recognizable alpha in residential low-rise, high-rise, commercial and industrial market segments.
https://fortressrealdevelopments.com

*SOURCE Building & Development Mortgages Canada Inc.

Mortgage professionals Canada reacts to Budget 2017

Mortgage Professionals Canada, the national mortgage industry association, is pleased that the government has listened to our members and has not made any new mortgage rule changes that could negatively impact them. We also support the significant investments made in Budget 2017 to create a national Housing Statistics Framework, which will greatly improve the quality of housing data in Canada. This is an important step that responds to our calls to assess the impact of the recent changes.

“We are pleased that the government has listened to our concerns and not introduced any additional measures that would negatively impact Canadian mortgage consumers” said Paul Taylor, President and CEO, Mortgage Professionals Canada. “We applaud the government for listening to our membership and taking steps to significantly improve the quality of housing data in Canada. This will help assess the impact that the recent changes have had on Canadian homebuyers.”

Mortgage Professionals Canada also supports the government’s efforts towards creating a resilient and competitive financial sector and looks forward to continuing to work with the government on ensuring financial stability, competition, and choice for Canadians. We will continue to work with government on the ongoing consultations on lender risk sharing and will continue to advocate for technical changes to the mortgage insurance and eligibility rules that were announced in 2016.

Mortgage Professionals Canada is the national mortgage industry association representing 11,500 individuals and 1,000 companies, including mortgage brokerages, lenders, insurers and industry service providers. The mortgage broker channel we represent, originates 33% of all mortgages in Canada and nearly 50% of mortgages for first-time homebuyers, representing approximately $80 billion dollars in annual economic activity. With this diverse and strong membership, we are uniquely positioned to speak to issues impacting all aspects of the mortgage origination process.

 

SOURCE Mortgage Professionals Canada

For further information: Paul Taylor, President and CEO, Mortgage Professionals Canada, 416-644-5465  905-334-1165, ptaylor@mortgageproscan.ca

What $1 Million Can Buy Across Canada

new home financing

Bang for your buck varies significantly, as the location, size, home finishes and condition of a $1 million home range widely by region

According to Royal LePage, Canada’s leading real estate services provider, extreme variances in recent home price appreciation across Canada have contributed to vast differences in the types of properties a prospective homeowner can expect to buy with a $1 million budget. While the once-exclusive $1 million home has become the norm in certain markets, in others, it can purchase anything from an ultra-luxury abode to an entry-level residence.

A $1 million home’s location, size, proximity to amenities and current condition ranked as the top four factors that influenced its pricing, not unlike homes in other price ranges. However, together, these four characteristics varied considerably from region to region, with Canada’s two hottest markets – Toronto and Vancouver – offering smaller, more dated two-storey “starter” homes when compared to larger, luxurious mansions elsewhere. While the average number of bedrooms and bathrooms typically found in a $1 million dollar home did not differ by region as materially as the aforementioned four factors, there were noticeable differences between certain regions. In January, 2017, a $1 million home in the City of Vancouver had an average of 2.6 bedrooms and 2.1 bathrooms, while on Canada’s other coast, a $1 million home in Halifax had an average of 3.1 bedrooms and 3.8 bathrooms. Looking to Central Canada, $1 million secured an average of 3.4 bedrooms and 2.5 bathrooms in the City of Toronto, while purchasing a $1 million home in Winnipeg delivered the biggest bang for your buck, with an average of 4.1 bedrooms and 4.0 bathrooms.

In fact, of the seven cities studied across Canada – including Vancouver, Calgary, Saskatoon, Winnipeg, Toronto, Montreal and Halifax – Winnipeg provided the most living space overall, with $1 million fetching on average, a 3,505 sq. ft. luxury home in a desirable neighbourhood. During the same period, $1 million in Saskatoon secured the largest lot size of all regions, with an average of 65,838 sq. ft. In contrast, Vancouver offered prospective homebuyers the least amount of home for $1 million, with an average of 1,229 sq. ft. on a 3,134 sq. ft. lot.

“There are striking differences in the options available for those who are looking to purchase a $1 million two-storey home in Canada,” said Dianne Usher, senior vice president of Johnston and Daniel, a division of Royal LePage. “From an older starter home in Vancouver to a waterfront property with all of the bells and whistles in Halifax, the amount of value and space that prospective buyers receive is largely dependent on the characteristics of the market in which they are located.”

When looking at inventory levels and sales activity, $1 million properties and transactions have been more prevalent in highly sought-after markets where greater demand has pushed home values higher. As a result, this has led these regions to experience a weakening in the overall value received for $1 million when compared to other areas across the nation that are less constrained by supply and demand.

While smaller, regional markets have continued to maintain their value over the last decade, 10 years ago prospective homeowners in Canada’s largest metropolitan areas were able to purchase fully-renovated homes in desirable neighbourhoods with considerably more space for $1 million.

“What used to be considered a luxury price point is now the status quo in Canada’s two hottest markets,” added Usher. “Once carrying significant purchasing power, $1 million is now either below or on par with the price of an average two-storey home in Toronto and Greater Vancouver. Now, instead of a fully upgraded three bedroom, three bathroom two-storey property in prestigious neighbourhoods like Rosedale or West Vancouver, you’re getting a much smaller two or three bedroom, two bathroom property in need of renovation in a less sought-after location.”

“However, significant value can still be found in the suburbs or city-centres like Saskatoon and Montreal, where homes are more affordable, landing you substantially more home with better features as a result.”

The profile of a $1 million buyer was also found to vary by region, with developers and first-time buyers dominating the $1 million two-storey property segment in Canada’s largest metropolitan areas, while wealthy young to middle-aged professional couples with children acted as the predominant purchasers elsewhere.

Aggregate and regional $1 million two-storey home attributes

RegionYearBedroomsBathroomsLiving AreaLot Size
Canada20073.93.32,860 sq. ft.26,684 sq. ft.
20163.83.02,454 sq. ft.23,226 sq. ft.
January 20173.82.92,436 sq. ft.22,624 sq. ft.
Greater Vancouver20074.03.42,664 sq. ft.16,429 sq. ft.
20163.83.22,175 sq. ft.8,402 sq. ft.
January 20173.73.22,166 sq. ft.8,149 sq. ft.
Greater Toronto Area20074.03.42,843 sq. ft.17,170 sq. ft.
20163.82.92,387 sq. ft.8,336 sq. ft.
January 20173.82.92,363 sq. ft.8,168 sq. ft.
Greater Montreal Area20075.85.95,429 sq. ft.12,756 sq. ft.
20164.12.82,732 sq. ft.13,058 sq. ft.
January 20174.12.82,758 sq. ft.13,040 sq. ft.
RegionYearBedroomsBathroomsLiving AreaLot Size
Vancouver20073.52.61,846 sq. ft.4,798 sq. ft.
20162.62.11,241 sq. ft.3,134 sq. ft.
January 20172.62.11,229 sq. ft.3,134 sq. ft.
Calgary20073.32.62,513 sq. ft.6,897 sq. ft.
20163.42.82,492 sq. ft.7,129 sq. ft.
January 20173.32.82,477 sq. ft.7,004 sq. ft.
Saskatoon20084.03.33,117 sq. ft.6,250 sq. ft.
20163.12.62,775 sq. ft.71,767 sq. ft.
January 20173.22.72,829 sq. ft.65,838 sq. ft.
Winnipeg20074.34.24,400 sq. ft.23,850 sq. ft.
20164.03.83,385 sq. ft.13,501 sq. ft.
January 20174.14.03,505 sq. ft.13,453 sq. ft.
Toronto20073.93.42,664 sq. ft.5,669 sq. ft.
20163.52.51,747 sq. ft.3,744 sq. ft.
January 20173.42.51,722 sq. ft.3,731 sq. ft.
Montreal20074.52.32,984 sq. ft.3,986 sq. ft.
20164.02.62,585 sq. ft.5,361 sq. ft.
January 20174.02.62,585 sq. ft.5,361 sq. ft.
Halifax20073.32.53,154 sq. ft.23,144 sq. ft.
20162.82.72,945 sq. ft.55,582 sq. ft.
January 20173.13.83,316 sq. ft.43,521 sq. ft.

People armed with a million dollars in search of a waterfront mansion need not look any further than Halifax. With enough million-dollar inventory to satisfy demand, prospective buyers within the region are able to purchase a number of unique types of properties reflective of their tastes and desired lifestyle. In January 2017, the average $1 million two-storey home within the region had 3.1 bedrooms, 3.8 bathrooms, 3,316 sq. ft. of living area and a lot size of 43,521 sq. ft.

While homes tend to be much larger on the fringes of the city and offer prospective homeowners direct access to the water, buyers with seven-figure budgets can also tap into the heart of downtown to find stunning heritage homes. As with the rest of Atlantic Canada, properties in Halifax have maintained their affordability relative to other regions across the nation, landing purchasers just as much, if not more, property than what was previously available a decade ago.

“The value of a million-dollar property in Halifax continues to grow, both when compared to other cities across Canada and when compared to 10 years ago,” said Sandra Pike, team lead, Royal LePage Atlantic. “Recently, the region’s urban sprawl has enticed developers to expand into untapped regions of Halifax, giving prospective purchasers the option of buying brand new, fully upgraded homes with a substantial amount of space for $1 million.”

Methodology

The tables found within this report represent averaged characteristics for two-storey properties that sold between $950,000 and $1,050,000 in 2007, 2016 and January 2017. Highlighted property listings were collected based on a uniform set of criteria, where listings in each region required a standard two-storey that is selling or has been sold in the last two months within 10 per cent of $1 million. To gain additional insight into regional market dynamics and property characteristics, interviews were conducted with Royal LePage real estate professionals in the featured cities.

About Royal LePage

Serving Canadians since 1913, Royal LePage is the country’s leading provider of services to real estate brokerages, with a network of over 17,000 real estate professionals in more than 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women’s and children’s shelters and educational programs aimed at ending domestic violence. Royal LePage is a Brookfield Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE.

For more information visit: www.royallepage.ca.

For further information, please contact:

Michael Jesus
Kaiser Lachance Communications
p: 647-783-1807
e: michael.jesus@kaiserlachance.com

Ryerson City Building Institute addresses GTA home prices

Ryerson City Building Institute examines demand factors behind the unaffordable Toronto real estate market

A new policy paper released by the Ryerson City Building Institute examines demand factors behind the unaffordable Toronto real estate market.

The paper, titled “In High Demand: Addressing the demand factors behind Toronto’s housing affordability problem”, also finds that the case for supply-side reform is overstated and wouldn’t address the immediate challenges facing the Greater Toronto Area real estate market.

Among the paper’s findings:

  • High demand, both foreign and domestic and multi-property investment and speculation, are the primary drivers; low inventory is a result of this demand.
  • Although critics allege that there is weak supply, housing construction in Toronto has kept up with population growth, so demand factors beyond population growth are at play.
  • Active listings are at record lows, while new listings have remained steady, indicating that high demand is drawing down inventory.
  • While some analysts point to the Greenbelt as a major cause of rising prices, research shows geographic constraints don’t account for the price increases Toronto has experienced.
  • In a housing bubble, not even a substantial amount of new supply can meet speculative demand. In U.S. cities like Phoenix and Las Vegas, for example, prices continued to skyrocket despite elastic supply.
  • Careful demand strategies are needed to curtail or discourage speculation and shift market expectations.

“It’s clear from this analysis that demand factors are driving up prices in the GTA, “says Cherise Burda, Executive Director of the Ryerson City Building Institute. “The provincial government should carefully consider a range of solutions to address demand. Focusing on supply only will not solve the problem.”
“A demand-oriented policy approach would help tackle the affordability problem in Toronto,” says author of the paper, Josh Gordon, assistant professor of public policy at Simon Fraser University (SFU). “Examples that may help homebuyers include a foreign-buyer tax as well as a progressive property surtax that can be offset by income taxes paid.”

Download the policy paper.

Contact:

Dominic Ali
Communications Coordinator
Ryerson City Building Institute
domali@ryerson.ca 647-378-6425

Canadian housing starts trend upwards in February

Mortgages insured by CMHC

Housing starts are now on pace to hit 204,669 units in Canada, whereas January saw them hitting 200,255 units, according to Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

“This winter has seen Canada’s national housing starts trend upward, supported mostly by increased construction of homes in Ontario,” said Bob Dugan, CMHC Chief Economist. “New single-detached home construction in Ontario is reaching levels not seen in the province since July 2008 – offsetting recent slowdowns in British Columbia.”

Monthly highlights

  • Condominium starts in the Montreal area increased considerably in February. The hike was mainly due to construction starting on some large real estate projects in the downtown Montreal-Griffintown sector. Activity on the new condominium market therefore remains strong in this zone, as these new units add to the nearly 3,000 units currently under construction.
  • Sherbrooke has seen a rebound in single-detached housing starts in recent months. Lower supply on the resale market and a favourable job market have stimulated demand for new homes. In 2016, employment in Sherbrooke continued to grow, and the year ended with net gains in full-time jobs among people aged 25-44. These factors should support housing demand in 2017.
  • In Toronto, low supply in the resale market resulted in demand spilling over into the new home market, particularly for low rise homes. Single-detached home starts were at their highest level for February in more than ten years. The total housing starts trend remained steady in February despite a drop in apartment starts.
  • St. Catharines saw February 2017 housing starts reach the highest level for any February since 1991. A third of starts were townhouses and two-thirds were new singles across the region. This comes on the heels of a strong year for St. Catharines starts, where demand has been driven in large part by the relative affordability of housing compared to neighbouring markets.
  • February saw total housing starts more than double in Winnipeg compared to the same period last year. New construction of multi-family units continued to drive total starts higher, with both purpose built rental and condominium units increasing year-over-year. Single-detached starts were also up by roughly 30% reflecting low inventories of completed and unsold new homes in 2016.
  • Multi-family home construction more than doubled in Edmonton last month from the same period last year. This was unexpected given the near record levels of complete and unsold apartments on the market. The Edmonton apartment inventory has been high since the start of 2016.
  • Housing starts in the Victoria CMA trended upwards in February. In particular, there was a surge in single-detached home starts in the West Shore municipalities. New construction has been supported by low inventories of homes for sale and strong migration to the region.

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of Canada’s housing market. In some situations analyzing only SAAR data can be misleading, as they are largely driven by the multi-unit segment of the market which can vary significantly from one month to the next.

The standalone monthly SAAR of housing starts for all areas in Canada was 210,207 units in February, up from 208,934 units in January. The SAAR of urban starts increased by 0.9 per cent in February to 193,035 units. Multiple urban starts decreased by 4.7 per cent to 121,164 units in February, while single-detached urban starts increased by 12.1 per cent, to 71,871 units. Rural starts were estimated at a seasonally adjusted annual rate of 17,172 units.

Preliminary Housing Starts data is also available in English and French through our website and through CMHC’s  Housing Market Information Portal. Our analysts are also available to provide further insight into their respective markets.

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

For more information, follow CMHC on Twitter, YouTube, LinkedIn and Facebook.

Housing Sector Calls on Queen’s Park to Take Immediate Action to Address Home Affordability

new home financing

Population growth and a strong economy in the Greater Toronto and Hamilton Area (GTHA) have created a high demand housing market where housing supply is critically low and home prices are becoming out of reach for many families and first-time home buyers.

The Ontario Home Builders’ Association (OHBA) and the Ontario Real Estate Association (OREA) are urging the Provincial Government to create a housing experts task force to provide ideas for increasing housing supply in Ontario, thus alleviating the growing home affordability challenges facing Ontarians.

Off the top, here are four things the government can do to relieve the underlying housing supply crunch that threatens the dream of home ownership for young families and future generations:

1. Fix the “One Size Fits All” Growth Plan

Instead of a blanket provincial preference for high density, give municipalities more flexibility and create more choice in housing for growing families and empty nesters, such as family homes and townhomes.

2. Improve the Planning Approvals Process

With better alignment of municipal and provincial housing priorities, including the requirement for updated zoning around transit corridors, we can get new homes to the market quickly in exactly the places where we want them.

3. Address the “Missing Middle” of Housing Supply

There is huge opportunity to modernize outdated zoning laws and build the “missing middle” of housing supply in existing communities that are connected to transit and closer to jobs. This includes innovative solutions like laneway housing and multi-unit homes, such as townhouses, stacked flats or mid-rise buildings.

4. Target Infrastructure to Support New Housing Supply

The province should support new housing supply with targeted infrastructure investments to get more housing to the market for consumers.

The OHBA and OREA agree that sustainable, long-term solutions are necessary to get to the root of the affordability problem, and it starts with increasing housing supply. Together, they are appealing to the provincial government to take stock of the housing supply problem and work with real estate industry leaders to design solutions that will improve home affordability for all Ontarians.

QUOTES

“Ninety-five per cent of Ontario’s new housing supply is built by our industry, and new home prices reflect the market conditions affected by government policy, like municipal and provincial approvals. It only makes sense to bring together private sector expertise and government policy makers if we are serious about making home ownership more affordable.”

-Joe Vaccaro, Chief Executive Officer, OHBA

“The Canadian dream of home ownership is at risk in the GTA. This is the year for provincial and municipal governments to step up with solutions to ensure the dream of home ownership does not slip away from future generations. The housing supply issue is a real problem, but the solutions exist. We need the government to get real estate experts together on this issue, to hammer out a plan for putting more homes on the market and making home ownership more affordable for young families and first-time buyers.”

Tim Hudak, Chief Executive Officer, OREA

OHBA is the voice of the land development, new housing and professional renovation industries in Ontario. OHBA represents over 4,000 member companies, organized through a network of 29 local associations across the province. www.ohba.ca

OREA represents 70,000 brokers and salespeople who are members of the 39 real estate boards throughout the province. OREA serves its REALTOR members through a wide variety of professional publications, educational programs, advocacy, and other services. www.OREA.com

CONTACT INFORMATION

  • Contact

    Valerie Lam-Bentley
    Ontario Home Builders’ Association
    Valerie@ohba.ca
    416.443.1545 x223

    Jamie Hofing
    Ontario Real Estate Association
    JamieH@orea.com
    416.445.9910 x341

Mortgage Professionals Canada’s update on impact of recent mortgage changes

Mortgage Professionals Canada

Members of Mortgage Professionals Canada were pleased to have the opportunity to meet with dozens of Members of Parliament and senior government officials over the past two days. We discussed issues of housing affordability, availability and accessibility and the negative impacts that the recent mortgage insurance and eligibility are having on first-time homebuyers in Canada.

“I am extremely pleased that there is a real sense that Members of Parliament are listening to the concerns from our industry.” said Paul Taylor, President of Mortgage Professionals Canada. “This weeks advocacy efforts have gone a long way in educating Members of Parliament on the positive role that mortgage brokers play in the Canadian housing market and the negative impacts that recent changes are having on first-time homebuyers”.

Our membership is very concerned with the negative economic impacts that these changes are having on housing activity in Canada and the additional costs that are being placed on the Canadian middle class through higher rates and reduced purchasing power. Middle class Canadians are already paying thousands more over their mortgage term in interest payments and many first-time homebuyers are unable to qualify for a mortgage. This is hurting Canadian consumers and slowing the Canadian economy. This is why we are calling for some common-sense adjustments to the new rules that will help soften the impact of these changes on middle class Canadians. We are also asking the government to refrain from any further changes to the housing market for at least 18 months.

Mortgage Professionals Canada is the national voice of the mortgage industry, an association whose members include mortgage brokers, mortgage lenders, mortgage insurers and industry service providers. We represent over 11,500 individual members and over 1,000 businesses across Canada.

Backgrounder

Who We Are:

Mortgage Professionals Canada is an industry association whose members include mortgage brokers, mortgage lenders, mortgage insurers and industry service providers. We have over 11,500 individual members and over 1,000 businesses across Canada.

The mortgage broker channel originates approximately 33% of all mortgages in Canada and approximately 50% of mortgages for first time home buyers. This represents approximately $80 billion dollars in economic activity.

What the Changes Are:

  • All insured mortgages now need to be qualified at either the Bank of Canada benchmark rate (currently 4.64%) or the contract rate offered on the homebuyer’s commitment, whichever is greater.
  • Portfolio (‘bulk’) insurance must now meet the same criteria as those that are high-ratio insured. This means that amortizations greater than 25 years, rental and investment properties, refinances, and homes with values greater than $1M can no longer be portfolio-insured.
  • The proposed ‘risk-sharing’ model for lenders to share in losses of insured mortgage claims.
  • New capital requirements as of January 1, 2017 that require mortgage insurers to increase the amount of capital they need to hold in reserve.
  • The increase announced by CMHC for insurance premiums that consumers pay on unconventional mortgages. In some loan-to-value categories, premiums will be increasing by more than a whole percentage point of the value of the mortgage, effective March 17, 2017. This is the third increase in three years.

Concerns/Considerations:

Canadians elected the government on a mandate to grow the economy for the middle class. Support for middle class home ownership is an important way for to achieve middle class growth. In fact, the 2015 Liberal platform recognized this in committing to “considering all policy tools that could keep home ownership within reach for more Canadians” (Liberal Platform, 2015, page 7,8). We would like you to call on the government to honour that commitment instead of making home ownership more difficult and further out of reach for more middle class Canadians.

We are concerned with the negative economic impact that these changes are having on housing activity in Canada. We are also very concerned with the additional costs that these changes will place on the Canadian middle class by way of higher interest rates and reduced purchasing power. We have already seen banks increase their mortgage prime rates in part because of these changes, which will cost Canadians thousands more over the course of their mortgage term.

The reduction of portfolio mortgage insurance eligibility, in addition to the increase in premiums for this insurance due to OSFI’s recent increased requirements for capital adequacy is disproportionately affecting the competitive positioning of small and mid-sized lenders. These changes are reducing mortgage competition and affordability for Canadian homeowners and would-be homeowners.

Our membership has been vocal with their displeasure regarding the impacts that these changes are having, especially outside of the Toronto and Vancouver markets. There is a real and growing resentment that the activity in Toronto and Vancouver is negatively and unfairly impacting those in the rest of the country. We believe moving ahead with a risk sharing provision would be additional burden on the market and will further the divide between rural and urban Canada.

The Canadian economy has seen only modest growth in 2016, especially for the middle class, and the housing sector is one of the few strong performers that has been driving this growth. We are concerned that these changes will hurt the economy as the Bank of Canada noted that the new rules that are being imposed will reduce growth in the Canadian economy, which will hurt the middle class.

What We Are Asking the Government to Consider:

  1. That in light of all of the changes that have been made recently and the uncertainty that the American election has brought that the government slow down and hit pause on the measures yet to be implemented, most specifically its proposed risk sharing provision. We believe it prudent for the government to take 12-18 months to examine and assess the impact of these changes.
  2. That the government adjust the November 30th change to allow for refinances to be included in portfolio insurance. If 80% LTV is unpalatable, please consider reducing the threshold to 75% or 70% rather than removing these products eligibility altogether
  3. That the government decouple the stress test rate from the posted Bank of Canada rate. Instead, set the stress test based on a market rate, either by looking at the Canadian ten-year bond yields or having the Bank of Canada set a rate that is independent of the average of the banks posted rates.
  4. For the sake of ensuring competition is maintained in as fair a manner as possible, OSFI should require all mortgages to qualify at the stress test rate, not just insured mortgages.

 

SOURCE Mortgage Professionals Canada

For further information: Paul Taylor, President and CEO, Mortgage Professionals Canada, O: 416-644-5465 / C: 905-334-1165, ptaylor@MortgageProsCan.ca

CMHC releases updated road map to homeownership

Mortgages insured by CMHC

Buying a home can be exciting, but it can also be a challenging and confusing experience. CMHC is providing guidance to Canadians who are considering buying a home with our updated Homebuying Step by Step guide, released today.

The interactive guide seeks to demystify the process of buying a home in Canada. It has been revised to better reflect the realities of today’s housing market by illustrating how to assess financial readiness, providing tools to help prospective homebuyers calculate how much they can afford, and incorporating information about next steps, whether these are to make a purchase or make budget changes.

Because the decision to buy a home is a personal one, it is difficult to offer advice that applies across the board. That is why the guide includes a complementary workbook to help potential homebuyers identify their specific housing needs and plan according to their budget, lifestyle, and goals.

Guide highlights

  • Guiding principles that help determine how much you can afford to spend on housing without putting your financial health at risk
  • List of the upfront and ongoing costs of homeownership
  • How to prepare for a meeting with a lender or broker, including key documents to bring
  • Definitions of words to know when buying a home
  • Explanation of mortgage basics and tips for managing your mortgage
  • Tips for maintaining your home and protecting your investment

The complete guide is available for download on our website.

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need and offers objective housing research and information to Canadian governments, consumers and the housing industry.

For more information, follow CMHC on Twitter, YouTube, LinkedIn and Facebook.

“Mortgage rules and evolving markets have Canadians who are looking to buy a home asking important questions and they want answers that are tailored to them. Our step by step guide helps home buyers get to those answers by walking them through the process of buying a home – from figuring out their needs, to knowing their mortgage options, to moving day.” Ina Wielinga, Knowledge Transfer Consultant, CMHC

“Choosing to buy a home can be exciting but also requires careful planning. CMHC’s Home Buying Step by Step guide gives Canadians the tools and information they need to make informed decisions that they can feel good about.” Claude Gautreau, Knowledge Transfer Consultant, CMHC

Source: CMHC Press Release.

Canadian pensioners not living as long as expected

Ground-breaking results from Club Vita Canada reveal some DB pension plans are overestimating their liabilities

New research finds longevity for Canadian pensioners is lower than anticipated – which may actually be costing defined benefit (DB) plan sponsors.

Canadian male pensioners are living about 1.5 years less than expected from age 65, according to the latest data from Club Vita Canada Inc. – the first dedicated longevity analytics firm for Canadian pension plans and a subsidiary of Eckler Ltd. Female pensioners are living about half a year less than expected.

“Based on our data, some DB plans are overestimating how long their members are currently living and are therefore taking an overly conservative approach to funding their liabilities,” explains Ian Edelist, CEO of Club Vita Canada. “Correcting that overestimation could reduce actuarial reserves by as much as 6% – improving Canadian pension funds’ and their plan sponsors’ balance sheets just by using more accurate, granular and up-to-date longevity assumptions.”

The data comes from Club Vita Canada’s first annual and highly successful longevity study completed in 2016 – one of the largest, most rigorous research studies on the impact of longevity on defined benefit pension and post-retirement health plans.

The newly created “VitaBank” pool of longevity data (provided by Club Vita Canada members) spans a wide range of industries and geographic regions in both the public and private sectors. VitaBank is currently tracking more than 500,000 Canadian pensioners from over 40 pension plans. Unlike the most widely used study to set longevity expectations – the Canadian Pensioners’ Mortality (CPM) study, which relies on data up to 2008 – VitaBank includes fully cleaned and validated data up to 2014.

The Club Vita Canada study brings to the Canadian pension market leading-edge modelling techniques already used by the insurance industry and in other countries. Club Vita U.K. recently released similar results, noting 25 billion GB pounds could be wiped off the collective U.K. DB deficit by using more accurate longevity assumptions.

“Naturally, the ultimate cost of a pension plan will be determined by how long its members actually live. But assumptions made today really do matter for such long-duration commitments,” explains Douglas Anderson, founder of Club Vita in the U.K. “Club Vita’s data gives DB plan sponsors the tools they need to evaluate their willingness to maintain their longevity risk or offload that risk to insurers.”

About Club Vita Canada Inc. (clubvita.ca)

Club Vita Canada Inc. was created by Eckler Ltd. It is an extension of Club Vita LLP, a longevity centre of excellence launched in the U.K. in 2008 by Hymans Robertson LLP. By pooling robust data from a wide range of pension plans, Club Vita provides its members with leading-edge longevity analytics helping them better measure and manage their retirement plan.

About Eckler Ltd. (eckler.ca)

Eckler is a leading consulting and actuarial firm with offices across Canada and the Caribbean. Owned and operated by active Principals, the company has earned a reputation for service continuity and high professional standards. Our select group of advisers offers excellence in a wide range of areas, including financial services, pensions, benefits, communication, investment management, pension administration, change management and technology. Eckler Ltd. is a founding member of Abelica Global – an international alliance of independent actuarial and consulting firms operating in over 20 countries.

About Hymans Robertson LLP (hymans.co.uk)

Established in 1921, today Hymans Robertson is one of the longest established independent consulting and actuarial firms in the UK. The firm offers a full range of services including the provision of actuarial, investment consultancy, administration and general consultancy services to the trustees and sponsors of defined benefit and defined contribution pension schemes, and an enterprise risk management practice advising banks and life insurers. Hymans Robertson is also a member of the Abelica Global network.

SOURCE Club Vita Canada Inc.

For further information: To find out more about how Club Vita Canada works or how to join, visit clubvita.ca or contact Ian Edelist at 416-696-3067 or iedelist@clubvita.ca, or Richard Brown at 416-696-3016 or rbrown@clubvita.ca. For media inquiries, please contact Nancy Peppard at 416-696-3081 or npeppard@eckler.ca.

Canada Pension Plan Changes Are On the Way. Is Your Organization Prepared?

Understanding Retirement Plans and Benefit Offerings Helps Employers and Employees Prepare for Changes

Retirement will look very different for millennials, baby boomers and others as the economy continues to change. The move towards Group Registered Retirement Savings Plans (RRSPs), coupled with the decline of employer-sponsored defined benefit pension plans, brings a new retirement reality for many employees. This changing environment was the impetus for the expansion of the Canada Pension Plan (CPP), a deal struck between the Federal and provincial governments in late 2016, to ensure a higher level of retirement security for Canadians in the future. Employers, including those that currently sponsor retirement plans, will have to ensure compliance with the governments’ plan to move ahead with CPP changes.

Employers will have to take stock of their internal retirement and benefit offerings to ensure they are operationally and financially equipped to make the proper changes needed. In evaluating an organization’s employee offerings, employers should equip their payroll, human resource and accounting staff with practical pension and benefit knowledge through the Canadian Payroll Association’s (CPA’s) Pensions & Benefits seminar.

Understanding Changes to the Canada Pension Plan

Employers will need to have the necessary changes programmed into their payroll systems well in advance to fulfil their legal responsibilities when the CPP expansion goes into effect in 2019. Employers should also anticipate that such changes may affect organizational policies, staff responsibilities and remuneration planning. The CPA offers its members payroll compliance resources, including the valuable e-Source legislative newsletter, Payroll InfoLine Q & A inquiry service (by phone and email), and a host of self-service web resources, to keep payroll, accounting and HR professionals up-to-date on regulatory and legislative changes impacting employers.

“With imminent changes to CPP, employers need to reassess their current retirement and benefit offerings for compliance, practicality, and financial preparedness,” says Steven Van Alstine, Vice President of Education at the CPA. “Employers and employees alike will be impacted by such changes. Employers should make sure their staff and their organization are equipped with comprehensive retirement planning knowledge for the future.”

Reviewing Your Full Offering of Benefits

Part of these preparations should also include an assessment of employer-sponsored benefits plans. Group health, disability and insurance plans should receive a thorough review to ensure that employees are receiving quality benefits without exorbitant costs to employers. Understanding the basics of such plans, how they are formed, and their tax and reporting considerations will help payroll, human resource and accounting staff to better support these functions within the organization and provide fundamental knowledge to help strike better deals at negotiation time. The CPA’s seminars offer comprehensive overviews of these areas; Pensions & Benefits focuses on the key elements used to apply, administer or support pension and benefits functions within the organization, while the Best Practices of Employee Group Benefits seminar focuses on proper management and negotiation of group benefits.

For more information about the CPA and the many benefits that membership provides, visit payroll.ca.

About the Canadian Payroll Association:
Canada’s 1.5 million employers rely on payroll practitioners to ensure the timely and accurate annual payment of $928 billion in wages and taxable benefits, $313 billion in statutory remittances to the federal and provincial governments, and $177 billion in health and retirement benefits, while complying with more than 200 federal and provincial regulatory requirements. Since 1978, the Canadian Payroll Association has annually influenced the payroll compliance practices and processes of over 500,000 organizational payrolls. As the authoritative source of Canadian payroll compliance knowledge, the Canadian Payroll Association promotes payroll compliance through education and advocacy.

SOURCE Canadian Payroll Association

For further information: Alison Rutka, Communications Specialist, alison.rutka@payroll.ca, 416-487-3380 x 125

RELATED LINKS
http://www.payroll.ca

Household Borrowing: Elevated, But Slowing

Canadian Imperial Bank of Commerce

Canadian Imperial Bank of CommerceReport by CIBC Economist Benjamin Tal

CIBC expects household credit outstanding to slow moderately in the coming years as growth in almost every credit vehicle is projected to soften relative to the performance seen over the past two years or so. Household Credit Growth in household credit in 2016 was very stable with outstanding rising by just over 5% on a year-over-year basis. On an inflation-adjusted basis, household credit is still rising by a full percentage point below its long-term average. That is, despite the drama in the housing market, the recent pace of credit growth in Canada is not rapid by any stretch of the imagination. And we expect that pace to slow in the coming years. Mortgage Debt Mortgage credit is currently rising at a year-over-year pace of close to 6%. We estimate that for 2016 the mortgage market accounted for just over 80% of growth in household credit. As for the stock of debt, mortgages now account for just under 72% of total household credit – the highest share in almost two decades. We estimate that new mortgage originations in Canada amounted to just over $405 billion in 2016, rising by 5.5% from 2015. As for 2017, we expect the pace of growth in mortgage originations to cool, reflecting factors such as reduced affordability due to tougher qualification criteria, increased share of less expensive (condo) units in total housing sales, marginally higher mortgage rates and slowing activity in centers such as Vancouver. Overall we expect mortgage debt outstanding to rise by an annual rate of around 5% in the coming two years. The rate of mortgage arrears has stabilized at around 0.30% – very close to the rate seen before the recession. The arrears rate in Atlantic Canada at close to 0.65% is the highest in the nation, followed by the Prairies and Alberta. The arrears rate in Ontario at 0.14% is by far the lowest in the nation.

Consumer Credit
The pace of growth in consumer credit has been relatively stable with outstanding rising by 3.2% on a year-over-year basis. Credit card debt is now advancing at a 3.5% annual pace, roughly the same pace seen in the lines of credit portfolio. Delinquencies continue to behave well, stabilizing at around 1% for credit cards and, in fact, declining for lines of credit. The auto loan market has seen robust growth in recent years. Currently auto loans outstanding are rising at a year-over-year rate of 6.7%. Close to 70% of the estimated $155 billion market is controlled by banks. The average loan size in that space is around $19,000, up by 22% (inflation-adjusted) since 2009.

Banks have been gaining market share because of stronger organic growth and the acquisition of firms in the space. The banks’ portfolios are currently rising by more than 7% on a year-over-year basis while non-banks have seen their growth stagnate. The auto delinquency rate among banks is close to 1.2%, roughly in line with the rate seen among non-banks. We expect growth in auto loans to moderate in the coming years reflecting some softness in auto sales following a record breaking 2016. As well, after a dramatic decline during the recession, leasing activity has been on the rebound and currently accounts for close to 9% of transactions. We expect auto loans to advance by 4% in 2017.

Source CIBC – See the full report here:
https://economics.cibccm.com/economicsweb/cds?ID=2272&TYPE=EC_PDF

Technology That Enhances Your Real Estate Buying Experience

Harcourts Canada

Harcourts CanadaHarcourts was selected from a world-wide category to be the first real estate company to be featured across Apple’s global web network, with a case study showing how they have used Apple’s iOS technology to transform their business is an example of the progressive approach Harcourts take to the client experience in real estate.

Harcourts Canada, a New Zealand-based real estate company is hoping to start a new trend in Metro Vancouver house sales by introducing auction-style property bidding.

“We see auctions as a really strong thing going forward,” said Hayden Duncan, CEO of Harcourts Canada.

In recognition of their innovation and use of the iPad and iPhone to enhance client experience and drive greater efficiency for their business, Apple has produced a video and business case study about Harcourts’ work – an accolade reserved only for companies developing the most cutting edge business solutions using Apple technology.

Harcourts is the first and only real estate group world-wide, to be selected by Apple for this recognition.

Harcourts CEO Hayden Duncan, says the custom suite of apps developed by Harcourts, has transformed the way they do business and is excited about the benefits they will bring to the Canadian market as the brand opens its first office here this month.

By nature real estate is a mobile business. Realtors are on the road, meeting clients, inspecting properties and showing houses. The apps save our Realtors hundreds of hours per year by streamlining tasks and they help us deliver a great client experience.

“Take e-Campaign for iPad, for example. From the comfort of your living room, a Realtor can help you build your ideal marketing campaign; visually showcasing the complete range of marketing options available, and booking everything into an online calendar so you know exactly what to expect every step of the way.

Information is all stored digitally so there’s no need for paper forms or folders or for data re-entry back at the office, which means we can deliver a timely, professional, and consistent level of service.

The i-pad has also allowed us to enhance home security for property viewings and communicate quickly and effectively with buyers interested in more information to help make the buying process much easier. ” says Mr Duncan.

 

 

Harcourts is an international real estate business founded 129 years ago in New Zealand. The company has more than 7,200 Realtors, 790 Brokerages in ten countries.

Canadian home sales down from December to January

housing prices rise

housing prices riseAccording to statistics released today by The Canadian Real Estate Association (CREA), national home sales were down slightly in January 2017 on a month-over-month basis.

Highlights:

  • National home sales declined 1.3% from December 2016 to January 2017.
  • Actual (not seasonally adjusted) activity in January was up 1.9% from a year earlier.
  • The number of newly listed homes dropped 6.7% from December 2016 to January 2017.
  • The MLS Home Price Index (HPI) in January was up 15.0% year-over-year (y-o-y).
  • The national average sale price was little changed (+0.2%) y-o-y in January.

Home sales over Canadian MLS Systems edged down by 1.3% month-over-month in January 2017, putting them at the second lowest monthly level since the fall of 2015 and only slightly above levels recorded last November when recently tightened mortgage regulations came into effect.

Sales activity was down from the previous month in about half of all local markets, led by three of Canada’s largest urban centres: the Greater Toronto Area (GTA), Greater Vancouver and Montreal.

Actual (not seasonally adjusted) sales activity was up 1.9% compared to the same month last year. While sales were up from year-ago levels in about two-thirds of all local housing markets including in the GTA, Calgary, Edmonton, London and St Thomas, and Montreal, they were down significantly in the Lower Mainland of British Columbia.

“Canadian homebuyers face some challenges this year, including new mortgage rules that make it harder to qualify for a mortgage and regulatory changes that will push up mortgage financing costs,” said CREA President Cliff Iverson. “It will take some time to gauge the extent to which these challenges will weigh on home buyers in different housing markets across Canada. All real estate is local, and realtors remain your best source for information about sales and listings where you live or might like to in the future.”

“The shortage of homes available for sale has become more severe in some cities, particularly in and around Toronto and in parts of BC,” said Gregory Klump, CREA’s Chief Economist. “Unless sales activity drops dramatically, the outlook for home prices remains strong in places that face a continuing supply shortage.”

The number of newly listed homes dropped 6.7% in January 2017, the second consecutive monthly decline. New listings were down in about two-thirds of all local markets, led by the GTA and environs across Vancouver Island.

With the monthly decline in new listings surpassing the decline in sales, the national sales-to-new listings ratio jumped to 67.7% in January compared to 64.0% in December and 60.2% in November.

A sales-to-new listings ratio between 40 and 60 is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers’ and sellers’ markets respectively.

The ratio was above 60% in about half of all local housing markets in January, the vast majority of which are located in British Columbia, in and around the GTA and across southwestern Ontario. A monthly decline in newly listed homes further tightened housing markets that were already in sellers’ market territory.

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

There were 4.6 months of inventory on a national basis at the end of January 2017 – unchanged from December 2016 and a six-year low for the measure.

The imbalance between limited housing supply and robust demand in Ontario’s Greater Golden Horseshoe region is without precedent (the region includes the GTA, Hamilton-Burlington, Oakville-Milton, Guelph, Kitchener-Waterloo, Cambridge, Brantford, the Niagara Region, Barrie and nearby cottage country). The number of months of inventory in January 2017 stood at or below one month in the GTA, Hamilton-Burlington, Oakville-Milton, Kitchener-Waterloo, Cambridge, Brantford and Guelph.

The MLS Home Price Index (MLS HPI) now includes Oakville-Milton and Guelph, and has been historically revised to ensure that all aggregate measures remain comparable.

The Aggregate Composite MLS HPI rose by 15.0% y-o-y in January 2017. This was up slightly from December’s gain, reflecting an acceleration in apartment and townhouse/row unit price increases.

Prices for two-storey single family homes posted the strongest year-over-year gains (+16.8%), followed closely by townhouse/row units (+15.8%), one-storey single family homes (+14.4%) and apartment units (+13.3%).

While benchmark home prices were up from year-ago levels in 10 of 13 housing markets tracked by the MLS HPI, price trends continued to vary widely by location.

In the Fraser Valley and Greater Vancouver, prices have receded from their peaks posted in August 2016. That said, home prices in these regions nonetheless remain well above year-ago levels (+24.9% and +15.6% respectively).

Meanwhile, benchmark prices continue to climb in Victoria and elsewhere on Vancouver Island together with Greater Toronto, Oakville-Milton and Guelph. Year-over-year price gains in these five markets ranged from about 18% to 26% in January.

By comparison, home prices were down 2.9% y-o-y in Calgary and by 1.0% y-o-y in Saskatoon. Prices in these two markets now stand 5.9% and 4.3% below their respective peaks reached in 2015.

Home prices were up modestly from year-ago levels in Regina (+3.8%), Ottawa (+3.7%) and Greater Montreal (+3.1%). In Greater Moncton, home prices for the market overall held steady (-0.2%), reflecting an increase in townhouse row units prices (5.8%) that was offset by a decline in prices for one-storey single family homes (-1.0%).

The MLS Home Price Index (MLS HPI) provides the best way of gauging price trends because average price trends are prone to being strongly distorted by changes in the mix of sales activity from one month to the next.

The actual (not seasonally adjusted) national average price for homes sold in January 2017 was $470,253, almost unchanged (+0.2%) from where it stood one year earlier.

The national average price continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which remain two of Canada’s tightest, most active and expensive housing markets.

That said, Greater Vancouver’s share of national sales activity has diminished considerably over the past year, giving it less upward influence on the national average price. The average price is reduced by almost $120,000 to $351,998 if Greater Vancouver and Greater Toronto sales are excluded from calculations.

Source: CREA

PLEASE NOTE: The information contained in this news release combines both major market and national sales information from MLS Systems from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS Systems are co-operative marketing systems used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 120,000 realtors working through some 90 real estate Boards and Associations.

Further information can be found at http://crea.ca/statistics.

For more information, please contact:

Pierre Leduc, Media Relations
The Canadian Real Estate Association
Tel.: 613-237-7111 or 613-884-1460
E-mail: pleduc@crea.ca

Fitch credit rating agency warns Canada of Trump

fitch ratings

fitch ratingsThe Trump Administration represents a risk to international economic conditions and global sovereign credit fundamentals, Fitch Ratings says. US policy predictability has diminished, with established international communication channels and relationship norms being set aside and raising the prospect of sudden, unanticipated changes in US policies with potential global implications.

The primary risks to sovereign credits include the possibility of disruptive changes to trade relations, diminished international capital flows, limits on migration that affect remittances and confrontational exchanges between policymakers that contribute to heightened or prolonged currency and other financial market volatility. The materialisation of these risks would provide an unfavourable backdrop for economic growth, putting pressure on public finances that may have rating implications for some sovereigns. Increases in the cost or reductions in the availability of external financing, particularly if accompanied by currency depreciation, could also affect ratings.

In assessing the global sovereign credit implications of policies enacted by the new US Administration, Fitch will focus on changes in growth trajectories, public finance positions and balance of payments performances, with particular emphasis on medium-term export prospects and possible pressures on external liquidity and sustainable funding. US positions on some countries may change quickly, at least initially, but any potential rating adjustments will depend on consequent changes to sovereign credit fundamentals, which will almost certainly be slower to materialise.

Elements of President Trump’s economic agenda would be positive for growth, including the long-overdue boost to US infrastructure investment, the focus on reducing the regulatory burden and the possibility of tax cuts and reforms, assuming cuts don’t lead to proportionate increases in the government deficit and debt. One interpretation of current events is that, after an early flurry of disruptive change to establish a fundamental reorientation of policy direction and intent, the Administration will settle in, embracing a consistent business- and trade-friendly framework that leverages these aspects of its economic programme, with favourable international spill-overs.

In Fitch’s view, the present balance of risks points toward a less benign global outcome. The Administration has abandoned the Trans-Pacific Partnership, confirmed a pending renegotiation of the North American Free Trade Agreement, rebuked US companies that invest abroad, while threatening financial penalties for companies that do so, and accused a number of countries of manipulating exchange rates to the US’s disadvantage. The full impact of these initiatives will not be known for some time, and will depend on iterative exchanges among multiple parties and unforeseen additional developments. In short, a lot can change, but the aggressive tone of some Administration rhetoric does not portend an easy period of negotiation ahead, nor does it suggest there is much scope for compromise.

Sovereigns most at risk from adverse changes to their credit fundamentals are those with close economic and financial ties with the US that come under scrutiny due to either existing financial imbalances or perceptions of unfair frameworks or practices that govern their bilateral relations. Canada, China, Germany, Japan and Mexico have been identified explicitly by the Administration as having trade arrangements or exchange rate policies that warrant attention, but the list is unlikely to end there. Our revision of the Outlook on Mexico’s ‘BBB+’ sovereign rating to Negative in December partly reflected increased economic uncertainty and asset price volatility following the US election.

The integrative aspects of global supply chains, particularly in manufactured goods, means actions taken by the US that limit trade flows with one country will have cascading effects on others. Regional value chains are especially well developed in East Asia, focused on China, and Central Europe, focused on Germany.

Tighter immigration controls and possible deportations could have meaningful effects on remittance flows, as the US has the world’s largest immigrant population. World Bank data confirm that the US and Mexico share the world’s top migration corridor and have the largest bilateral remittance flows. Relative to GDP, remittances are even larger for Honduras, El Salvador, Guatemala and Nicaragua, all of which receive most inflows from the US.

Countries hosting US direct investment, at least part of which has financed export industries focused back on the US, are at risk of being singled out for punitive trade measures. The list of these countries is potentially long, since US-based entities account for nearly one-quarter of the stock of global foreign direct investment. Countries with the highest stock of US investment in manufacturing are Canada, the UK, Netherlands, Mexico, Germany, China and Brazil.

Contact:
James McCormack
Managing Director, Sovereigns
+44 20 3530 1286
Fitch Ratings Ltd
30 North Colonnade
London E14 5GN

Charles Seville
Senior Director, Sovereigns
+1 212 908 0277

Mark Brown
Senior Analyst
Fitch Wire
+44 20 3530 1588

Media Relations: Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: peter.fitzpatrick@fitchratings.com; Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email: elizabeth.fogerty@fitchratings.com; Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com.

The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.

 

Canadian Housing Starts Increased in January

housing starts in ontario

The trend measure of housing starts in Canada was 199,834 units in January compared to 197,881 in December, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

housing starts in ontario
“New home construction started off strong in 2017, both in terms of single-detached homes and multi-unit residential,” said Bob Dugan, CMHC Chief Economist. “While Ontario starts continue to drive the national trend upwards, construction has slowed in BC since last July when it reached a near record high. This slowdown can be partly attributed to builders focusing on projects still underway.”

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of the state of Canada’s housing market. In some situations analyzing only SAAR data can be misleading, as they are largely driven by the multi-unit segment of the market which can vary significantly from one month to the next.

The standalone monthly SAAR for all areas in Canada was 207,408 units in January, up from 206,305 units in December. The SAAR of urban starts increased by 1.0 per cent in January to 189,688 units. Multiple urban starts increased by 4.2 per cent to 125,886 units in January and single-detached urban starts decreased by 4.6 per cent, to 63,802 units.

In January, the seasonally adjusted annual rate of urban starts increased in Ontario and Atlantic Canada, but decreased in British Columbia, the Prairies and Quebec.

Rural starts were estimated at a seasonally adjusted annual rate of 17,720 units.

Preliminary Housing Starts data is also available in English and French at the following link: Preliminary Housing Starts Tables

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

For more information, follow us on Twitter, YouTube, LinkedIn and Facebook.

Information on This Release:

Karine LeBlanc
CMHC Media Relations
613-740-5413
kjleblan@cmhc-schl.gc.ca

Additional data is available upon request.

Preliminary Housing Start Data January 2017
December 2016January 2017
Trend1, all areas197,881199,834
SAAR, all areas206,305207,408
SAAR, rural areas218,55317,720
SAAR, urban centres3
Single-detached66,89563,802
Multiples120,857125,886
Total187,752189,688
Atlantic, urban centres35,2085,941
Quebec, urban centres333,44431,475
Ontario, urban centres377,47496,883
Prairies, urban centres332,61529,081
British Columbia, urban centres339,01126,308
CanadaJanuary 2016January 2017
Actual, all areas10,21712,964
Actual, rural areas2508638
Actual, urban centres3
January – Single-detached3,1913,318
January – Multiples6,5189,008
January – Total9,70912,326
January to January – Single-detached3,1913,318
January to January – Multiples6,5189,008
January to January – Total9,70912,326

Source: CMHC
1 The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR). By removing seasonal ups and downs, seasonal adjustment allows for comparison of adjacent months and quarters. The monthly and quarterly SAAR and trend figures indicate the annual level of starts that would be obtained if the same pace of monthly or quarterly construction activity was maintained for 12 months. This facilitates comparison of the current pace of activity to annual forecasts as well as to historical annual levels.
2 CMHC estimates the level of starts in centres with a population of less than 10,000 for each of the three months of the quarter, at the beginning of each quarter. During the last month of the quarter, CMHC conducts the survey in these centres and revises the estimate.
3 Urban centres with a population of 10,000 and over.
Detailed data available upon request

Canadian House Price Growth Remains Elevated

Mortgages insured by CMHC

Canada Mortgage and Housing Corporation (CMHC) is reporting strong overall evidence of problematic housing market conditions nationally for the second consecutive quarter due to overvaluation and price acceleration in Canada’s housing markets. This assessment largely accounts for market conditions in Vancouver and Toronto where strong price growth has been spreading to neighbouring centres such as Hamilton and Victoria.

Canada saw house prices grow by 7 per cent year-over-year at the end of the third quarter of 2016 after adjusting for inflation. However, removing Ontario from the calculation would have seen house prices remain flat through to the third quarter.

This analysis is the result of insight from CMHC’s quarterly Housing Market Assessment (HMA). The HMA serves as an early warning system, alerting Canadians to areas of concern developing in our housing markets so that they may take action in a way that promotes market stability.

 

 

Report Highlights

  • Overvaluation and overbuilding remain the most prevalent problematic conditions observed across the 15 centres covered by the HMA.
  • Overvaluation and overbuilding are detected in 8 centres.
  • Evidence of problematic conditions has increased in Victoria since the previous assessment due to moderate evidence of price acceleration and overvaluation.
  • Evidence of problematic conditions has decreased in Calgary since the previous assessment as some housing markets in oil-dependent centres are now rebalancing.
  • Strong evidence of problematic conditions continue to be detected in Vancouver, Toronto, Regina, Saskatoon and Hamilton.
  • Evidence of problematic conditions in Ottawa and Atlantic Canada remains weak.

CMHC defines evidence of problematic conditions as imbalances in the housing market. Imbalances occur when overbuilding, overvaluation, overheating and price acceleration, or combinations thereof depart significantly from historical averages. For examples, please consult the Overview section of the national report.

The complete HMA, including national, regional and CMA insight and analysis, is available on our website. To access future CMHC market analysis reports, subscribe to Housing Observer Online.

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

For more information, follow us on Twitter, YouTube, LinkedIn and Facebook.

 

Equifax Canada Says Mortgage Fraud on the Rise

Mortgage Credit Score

Mortgage Credit Score13% of Canadians Say ‘a Little White Lie’ is Okay to Get the House You Want

Equifax Canada data suggests high-risk and suspected fraudulent mortgage activity is on the rise noting a 52 per cent increase in suspected fraudulent mortgage applications since 2013.

According to data from Equifax’s enterprise fraud management solution, ‘Falsified Account Statements’ and ‘Falsified Documents’ were the most prominent application tags, as reported by investigators. The other was ‘Conflicting Information’. Of those applications flagged, 67 per cent were from Ontario while the next highest was 12 per cent from B.C.

Equifax also conducted a survey to chart the attitudes and perceptions of Canadians with respect to the current housing market. One-in-five Canadians, who do not have a mortgage, indicated they are nervous they will never own a home because of rising prices and want to buy a home but can’t because of the down payment.

“We’re certainly seeing more mortgage applications being flagged as suspicious by our reporting institutions,” said Tara Zecevic, Vice President, Customer Insight at Equifax Canada. “While we cannot entirely attribute these increases to consumers overstating personal income or falsifying applications, we do want to remind people that there are serious consequences for making false or inaccurate claims on any loan or mortgage applications. Not only will it stretch your finances, it is in breach of your contractual obligations with the lender, and simply put, it’s against the law.”

Little White Lies

With respect to mortgage fraud, the results of the recent Equifax survey showed:

  • 13 per cent of Canadians indicated they felt it was okay to tell ‘a little white lie’ when applying for a mortgage to get the house they want.
  • 16 per cent said they believe mortgage fraud is a victimless crime
  • 8 per cent admitted to misrepresenting the facts on a credit or loan application

The Cost of Buying a Home

When asked about housing prices, the results of the recent Equifax survey showed:

  • 84 per cent believe that the cost of home ownership is too high for first-home buyers today
  • Nearly three-in-ten Canadians cite ‘more demand than supply’ (29 per cent) and ‘foreign buyers’ (27 per cent), as the main factors driving up home prices
  • B.C. residents (compared to other provinces) were significantly more likely to cite foreign buyers as the top reason for home prices being driven up (75 per cent versus 42 per cent for all other provinces, respectively)

Examining Trust

When asked about who they trust in the home-buying experience, the results of the recent Equifax survey showed:

  • 44 per cent of Canadians trust real estate agents the least during the home-buying experience
  • About one-in-four also distrust homeowners (27 per cent) and home inspectors (26 per cent)
  • 20 per cent distrust mortgage brokers, another 16 per cent don’t trust their bank and equally 16 per cent have little trust in their insurance agent
  • Only 9 per cent said they trust all professionals involved in the home-buying experience

The survey was conducted online using Leger’s weekly OMNI via LegerWeb, capturing a representative sample of 1,547 Canadians from across the country. A sample of this size would yield a margin of error of +/- 2.5% 19 times out of 20.

About Equifax

Equifax powers the financial future of individuals and organizations around the world. Using the combined strength of unique trusted data, technology and innovative analytics, Equifax has grown from a consumer credit company into a leading provider of insights and knowledge that helps its customers make informed decisions. The company organizes, assimilates and analyzes data on more than 820 million consumers and more than 91 million businesses worldwide, and its databases include employee data contributed from more than 6,600 employers.

Headquartered in Atlanta, Ga., Equifax operates or has investments in 24 countries in North America, Central and South America, Europe and the Asia Pacific region. It is a member of Standard & Poor’s (S&P) 500 Index, and its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. Equifax employs approximately 9,400 employees worldwide.

Some noteworthy achievements for the company include: Ranked 13 on the American Banker FinTech Forward list (2015); named a Top Technology Provider on the FinTech 100 list (2004-2015); named an InformationWeek Elite 100 Winner (2014-2015); named a Top Workplace by Atlanta Journal Constitution (2013-2015); named one of Fortune’s World’s Most Admired Companies (2011-2015); named one of Forbes’ World’s 100 Most Innovative Companies (2015). For more information, visit www.equifax.com

 

Media Contacts:
Andrew Findlater
SELECT Public Relations
(416) 659-1197
afindlater@selectpr.caTom Carroll
Equifax Canada
(416) 227-5290
MediaRelationsCanada@equifax.com

2017 Commercial Real Estate Forecast

Avison Young Commercial Real Estate

Avison Young Commercial Real EstateAvison Young releases 2017 North America, U.K. and Germany commercial real estate forecast

The commercial real estate industry ended 2016 as it began – with low interest rates, low cap rates and moderate GDP growth in most nations – but it does not feel like the same environment heading into 2017. Rising protectionism and political unrest have introduced a healthy dose of fear and skepticism as to where we are in the current market cycle and what comes next. Despite job growth, improving market fundamentals and superior yields to alternative investments, commercial real estate owners, occupiers and investors disagree about how long this cycle could – and should – continue. It is the seventh inning, but how long is this ball game?

These are some of the key trends noted in Avison Young’s 2017 North America, U.K. and Germany Forecast.

The annual report covers the office, retail, industrial and investment sectors in 63 markets in five countries on two continents: Calgary, Edmonton, Halifax, Lethbridge, Montreal, Ottawa, Quebec City, Regina, Toronto,Vancouver, Waterloo Region, Winnipeg, Atlanta, Austin, Boston, Charleston, Charlotte, Chicago,Cleveland, Columbus, OH; Dallas, Denver, Detroit, Fairfield County, Fort Lauderdale, Greenville, Hartford, Houston, Indianapolis, Jacksonville, Las Vegas, Long Island, Los Angeles, Miami, Minneapolis, Nashville, New Jersey, New York, Oakland, Orange County, Orlando, Philadelphia,Phoenix, Pittsburgh, Raleigh-Durham, Reno, Sacramento, San Antonio, San Diego, San Francisco, San Mateo, St. Louis, Tampa, Washington, DC; West Palm Beach, Mexico City, Coventry, London, U.K.; Berlin, Duesseldorf, Frankfurt, Hamburg and Munich.

“Take me out to the ball game! It is only fitting that, in a year full of upsets, the Chicago Cubs celebrated their first World Series win in 108 years. The nine innings of American baseball have become a metaphor for the global real estate market cycle, but given the many variables of the current climate, just like the World Series finale, this cycle may be going into overtime,” comments Mark E. Rose, Chair and CEO of Avison Young.

“Will we see 2016 redux, or changes ahead? Pundits have taken both sides of the interest rate debate, from low rates indefinitely to a gradual return to historical levels. Meanwhile, virtually all developed countries piled on additional debt, ensuring that no government would lead the charge to raise rates. Economists disagree about how best to proceed, but a majority of business executives understand that we need to normalize rates one day – and sooner rather than later. It is hard to conceive a climate with less consensus.”

Rose continues: “Buyers and sellers used Brexit and the U.S. presidential election to pause and gather data points. Decision-making might have slowed in 2016, but the appetite for investment in real estate continues unabated. The overarching themes of global financial growth from a depressed base and global population topping 10 billion in the next few decades provide strong support for everything related to real estate. Technology is a game-changer, potentially impacting what, where and how properties get used and constructed. If history is a guide, technology – like immigration – has redistributive impacts but can create meaningful positive economic growth for decades to come.”

To make the case for the cycle being in extra innings, Rose pivots back to the baseball analogy.

“The widely held opinion is that real estate is in the seventh inning,” he says. “At Avison Young, we disagree. We see something very different. We might be in the seventh or eighth inning from a pricing perspective, but given the market forces and attributes that currently exist, we could be in the seventh inning of a very long extra-innings game for our industry. Real estate is a legitimate investment alternative and is currently producing higher yields than stocks and bonds.”

Rose adds that the U.K., Germany and Western Europe, the U.S., Canada and Mexico boast some of the largest GDP markets in the world, and global trade has not seized up – nor will it.

North America has been the preferred destination for global capital, and will continue to be in 2017,” he notes. “Additionally, investors in this region are beginning to harvest gains, creating a ‘wall of capital’ to take advantage of any dislocations in the marketplace. This wall is one of the reasons we are predicting that North American global investors will have the U.K. and, specifically, London in their sights in 2017. We believe that well-timed portfolio acquisitions could produce significant returns.”

CANADA
“In the face of ongoing global political and economic upheaval, stability will define Canada’s commercial real estate sector in 2017,” comments Bill Argeropoulos, Principal, Practice Leader, Research (Canada) for Avison Young. “Despite challenges in Alberta, it is business as usual in most major markets as trends prevalent in 2016 – changing demographics, workplace design and disruptive technology – continue to test the status quo. Successful real estate strategies will evolve to address risk and opportunity in response to these changing circumstances.”

Argeropoulos notes: “In general, office fundamentals remain relatively intact. However, varying demand and construction levels, driven largely by urban intensification, have widened the performance gap between downtown and suburban markets and from city to city. Transit-oriented development will intensify, while evolving workplace concepts will have a profound impact on occupiers and landlords. Traditional drivers – finance and professional services – may moderate, with new growth stemming from the technology sector, ongoing urban intensification and efficiency-increasing consolidations.”

Notable Canadian office market highlights include:

  • Uneven demand and steady new supply lifted Canada’s overall office vacancy rate 150 basis points (bps) from year-end 2015 to close 2016 at 12.5%. As expected, vacancy increased in 10 of 12 markets surveyed with Calgary posting the highest rate (22%) and biggest change (+600 bps). A supply-demand imbalance will drive office vacancy higher in most markets, lifting Canada’s vacancy rate slightly above 13% by year-end 2017.
  • Due to weak fundamentals in Calgary and, to a lesser extent, in Edmonton, Western markets will lag Eastern markets by a wider margin. Vacancy among Western markets jumped to 15.2% at year-end 2016 from 11.9% at year-end 2015, and is poised to rise to 17.1% by year-end 2017. By comparison, the rise in vacancy among Eastern markets has been more modest, climbing to 11.1% at year-end 2016 from 10.5% at year-end 2015, and is forecasted to settle at 12% by year-end 2017.
  • Almost 6.5 million square feet (msf) of office space was completed in 2016, while a further 14 msf (61% preleased) was under construction near year-end – a mere 2.6% of existing inventory. Currently, Toronto and Calgary lead, with notable development also underway in Montreal, Edmonton and Vancouver. Calgary and Toronto are among the 10 most active office development markets in North America, ranked sixth and eighth, respectively.

Argeropoulos continues: “Retail is, perhaps, regarded as the most volatile sector as technological disruptors and rising consumer debt levels remain among the major threats. As in 2016, big data, demographics and millennial behaviour will preoccupy the retail sector in 2017. A surprising trend is the increase in physical stores opened by online retailers, forcing all stakeholders to rethink their digital and physical retailing strategies.

“The retail sector will continue to see well-thought-out ‘gambles’ implemented as stakeholders in key retail segments attempt to gain the upper hand on one another.”

He points to a number of “firsts”, including: Costco’s launch of its first Business Centre store concept in Toronto – focusing more tightly on the office and business-supplies sector; Best Buy’s new “experience stores,” set to host Google’s first “shops within a shop” in four Canadian locations; Amazon’s line-free grocery store in challenge to supermarkets; and LoyaltyOne’s rewards program, Air Miles, which opened its first brick-and-mortar retail store (Gifted by Air Miles) and a pop-up boutique at Toronto’s CF Shops at Don Mills, to mention a few.

“Though technology is driving retail behaviour, the consensus is that hard assets will always be needed,” adds Argeropoulos.

“The industrial market has been resilient and remains the darling among Canada’s commercial property sectors, exceeding expectations in most markets in 2016. Although the manufacturing sector continues to retool, e-commerce is accelerating the rapid-order-fulfillment phenomenon, fuelling both leasing and investment sales. The outlook is promising with competition intensifying among existing landlords and developers to offer viable, flexible and affordable product near urban centres to meet the rapidly changing demands of e-commerce. Matching the right supply with demand will be the challenge.”

Notable Canadian industrial market highlights include:

  • Canada’s overall industrial vacancy rate hovered at 3.1% near the end of 2016, compared with 3.6% at year-end 2015. Ten of the 11 markets surveyed displayed single-digit vacancy in 2016, with Toronto and Vancouver posting rates below the national average. Speculative construction coming online is expected to push vacancy modestly higher, to 3.4% by year-end 2017.
  • Led by Toronto, the nation’s largest and North America’s third-largest industrial market, Canadian markets captured five of the 10 lowest vacancy rates in North America – a trend that will persist in 2017.
  • Keeping pace with demand, more than 12 msf (34% preleased) was under construction near the close of 2016 (less than 1% of total industrial stock). This total is down from 14 msf at the end of 2015. While Toronto and Vancouver remain construction hubs – accounting for nearly 80% of total development – Toronto was the only Canadian market to claim a spot (No. 9) in North America’s top 10 most active development markets.
  • In some markets, investment sales are the largest source of activity in this sector as users are taking advantage of available credit options to purchase, lowering their operating costs. Elsewhere, the lack of industrial properties for sale and the absence of industrial land for additional development are pushing pricing to new heights.

Argeropoulos says: “The investment market was red-hot in 2016 – if only we had more product for sale to match the capital chasing it. Elevated pricing in key entry markets such as Vancouver and Toronto led some owners to sell assets, including whole or partial interests, to crystallize gains, fund new investments and pay down debt, while joint-ventures are increasingly popular as a means of spreading risk.”

Headline sales transactions in the hundreds of millions of dollars that defined the investment market from coast to coast included: Vancouver’s Bentall Centre and Royal Centre, TransCanada Tower in Calgary, Scotia Plaza in Toronto, and 1350-1360 Rene Levesque West in Montreal.

“Flush with capital, investors will resume their pursuit of the best risk-adjusted returns across the risk spectrum – including core to opportunistic, debt and equity – in 2017. Demand for high-quality product will spill over from Toronto and Vancouver to Montreal – and, perhaps, Calgary, if the price of oil stabilizes,” concludes Argeropoulos.

U.S.
“U.S. markets continued to reflect strength in most real estate fundamentals in 2016. The year was marked by continued improvement, resulting in numerous markets breaking decades-long pricing and occupancy records. As we forecasted a year ago, the U.S. provided investors with solid rates of risk-adjusted returns, the supply of space kept pace with steadily increasing demand in nearly all asset classes and the influx of foreign capital continued to amplify pricing pressure for the most desired gateway assets,” comments Earl Webb, President, U.S. Operations for Avison Young. “The burgeoning demand for online shopping, while causing some disruption in traditional brick-and-mortar retail assets, has provided immense opportunities in industrial, distribution and warehouse assets as supply chains become increasingly complex and strive for efficiency.”

Webb continues: “Demand for office remained strong, mirroring solid job growth throughout the year, and rental rates pushed higher. At the same time, leasing demand for CBD office space may be approaching equilibrium with occupancy stabilizing as tenants consider more affordable suburban alternatives where repositioning has led to a flourishing of quasi-urban live-work-play environments. In the multi-residential sector, demand from millennials, as well as empty-nesters, continues to drive the need for higher-quality urban assets, although apartment rent growth has begun to slow in some metropolitan areas.”

“And as we approach the U.S. presidential inauguration and the launch of a new federal administration,” Webb adds, “Avison Young anticipates that an increase in federal government spending -and a subsequent breakup of the Capitol Hill gridlock – should have a positive impact on economic activity and, thus, real estate fundamentals.”

Cybersecurity, anti-terrorism and rising protectionism sentiment will likely fuel federal spending, and these issues are forecasted to impact technology-driven markets. Office leasing again faced challenges and disruption in 2016 as tenants embraced efficient office design and lower per-employee utilization rates. Many markets experienced a rise in the co-working model and properties being repositioned by adding tenant amenities in response to this competitive environment.

Notable U.S. office market highlights include:

  • Another year of solid job growth was reflected in strong U.S. office fundamentals as 2016 ended with a 12.4% vacancy rate, a slight improvement compared with year-end 2015.
  • In Boston, class A rents in some submarkets now rival those within the city, while in the San Francisco Bay Area, San Mateo office and industrial owners enjoyed double-digit rate growth year-over-year and Oakland’s vacancy fell to historic lows.
  • There was 95 msf under construction at year-end 2016 – up 8% year-over-year – of which 52% was pre-leased. Three cities, New York, Washington, DC and Dallas, together accounted for 40% of all new construction in the U.S.
  • Despite development reaching multi-decade highs in many U.S. cities, speculative construction is tempered, and there is little concern of significant oversupply as upcoming projects exhibit strong pre-leasing.
  • Years of sustained improvement have led to speculation of a pending market contraction; however, leasing conditions remain sound, supporting moderate growth in 2017, and the majority of U.S. cities are forecasting office vacancy levels to remain stable or tighten.

The report goes on to say that e-commerce again accounted for a greater portion of all retail sales in 2016 and, as is occurring in Canada, brick-and-mortar stores are evolving along with omni-channel retailing. Successful neighborhood retail comprises specialty grocers, fitness, food-service outlets that also serve as gathering places, the ubiquitous salon, and urgent-care and walk-in clinics are often in the mix.

Notable U.S. industrial market highlights include:

Ongoing disruption in the retail landscape will create further opportunities for the industrial sector where emphasis on supply-chain logistics and speed of delivery could result in an increase in the number of warehouse, distribution and pick-up centers expanding in urban-centric locations.

  • The U.S. industrial sector registered further improvement in 2016, ending the year with 5.7% vacancy.
  • Although considerable new development is underway, vacancy for year-end 2017 is forecasted to mirror the 2016 overall average.
  • In total, 166 msf is under construction compared with 147 msf one year ago. Sixty per cent is concentrated in five key U.S. markets, each of them having more than 17 msf underway: Los Angeles, Chicago, Philadelphia, Atlanta and Dallas.
  • Nevertheless, a significant number of cities are forecasting vacancy increases, most notably Nashville, where an increase of 140 bps is expected, Atlanta (+100 bps) and Philadelphia (+70 bps).

Historically low interest rates will keep spreads attractive and support the investment sales market well into 2017. Year-to-date sales volume approached $400 billion in November 2016 and, although lower overall when compared with portfolio-sales-heavy 2015, that total is in line with the prior two-year annual average sales volume. In 2016, buyers sought core, core-plus and value-add properties and U.S. markets demonstrated liquidity and yields, while investors favored assets in transparent markets where demand drivers were quantifiable and clear. Led by China, foreign investment in U.S. real estate was significant in 2016 but fell short of 2015’s total.

“Many investors were waiting on the sidelines for clarity during the U.S. presidential election cycle; however, the availability of capital will support trades in 2017, and pricing should maintain an upward trajectory, albeit less steep, than in recent years. Interest rates will remain very low compared with historical levels, and the attractive spread on leveraged cash returns from sound real estate investments should remain throughout 2017. As we said a year ago, the ability to create value exclusively through cap rate compression is largely over for this market cycle.”

Webb concludes: “Going forward, value will be created by investing wisely and then leasing and managing properties in an optimal way to drive cash flow upward. The U.S. real estate market should keep providing foreign investors with transparency, liquidity and yield, whereas many foreign markets will provide much less of each. U.S. investors, in their constant search for yield, will continue to allocate significant capital for core, core-plus and value-add properties. In secondary markets, we expect demand for high-quality assets to increase – as was the case in 2016.”

For further information/comment/photos:

Sherry Quan, Principal, Global Director of Communications & Media Relations, Avison Young: 604.647.5098; cell: 604.726.0959 sherry.quan@avisonyoung.com

Bill Argeropoulos, Principal, Practice Leader, Research (Canada), Avison Young: 416.673.4029; cell 416.906.3072 bill.argeropoulos@avisonyoung.com

Margaret Donkerbrook, Principal, Practice Leader, Research (U.S.), Avison Young: 202.644.8677 margaret.donkerbrook@avisonyoung.com

Mark Rose, Chair and CEO, Avison Young: 416.673.4028

Earl Webb, President, U.S. Operations, Avison Young: 312.957.7610

www.avisonyoung.com

Avison Young was a winner of Canada’s Best Managed Companies program in 2011, 2012, 2013 and 2014 and requalified in 2015 to maintain its status as a Best Managed Gold company.

Follow Avison Young on Twitter:
For industry news, press releases and market reports: www.twitter.com/avisonyoung
For Avison Young listings and deals: www.twitter.com/AYListingsDeals

Follow Avison Young Bloggers: http://blog.avisonyoung.com

Follow Avison Young on LinkedIn: http://www.linkedin.com/company/avison-young-commercial-real-estate

Follow Avison Young on YouTube: www.youtube.com/user/AvisonYoungRE

 

Editors/Reporters

View and download Avison Young’s 2017 North America, U.K. and Germany Forecast, FULL REPORT:
https://avisonyoung.uberflip.com/i/770979-ay2017namericaukgermanyforecastjan12-17final

View Avison Young CEO Mark Rose’s 2017 Commercial Real Estate Forecast VIDEOCAST
http://www.avisonyoung.com/media-room/ceo-video-audiocasts

SOURCE Avison Young Commercial Real Estate (BC)

Canada Pension Plan reform, employers have concerns, but many have yet to begin preparing for change

Aon survey suggests less than half of employers will plan for CPP reform in 2017

As the government commitment to expanding the Canada Pension Plan (CPP) moves forward, the need is pressing for Canadian employers to assess employee compensation, pensions and benefits, and to prepare for integrating the new CPP into their total rewards strategies. Yet according to research from Aon Hewitt, the global talent, retirement and health solutions business of Aon plc, most Canadian employers have yet to begin this important task. In fact, less than half of Canadian employers say they will be planning for CPP enhancement this year, and nearly the same proportion do not know when they will begin the planning process.

The survey, completed in early October, compiled responses from nearly 250 Canadian organizations in the private and public sectors about their attitudes towards and level of preparedness for CPP expansion; 95% of surveyed companies offer some form of pension plan (defined benefit, defined contribution or hybrid DB/DC).

When it comes into effect in 2019, CPP enhancement could have a significant impact on employee compensation, pension funding formulas, total rewards strategies and other factors. For Canadian employers, the challenge and the opportunity of enhanced CPP lies in integrating the changes into their rewards and pension strategies. “The CPP enhancement is big enough to provide meaningful benefits, yet small enough that it won’t cause the elimination of workplace pension plans,” said Allan Shapira, Managing Director and Senior Partner, Aon Hewitt. “The challenge for employers now is how best to integrate a bigger CPP into their overall compensation and rewards strategies.”

According to the Aon survey, only 13% of employers have started to plan for CPP reform, and 35% will begin planning by October 2017. Meanwhile, 46% of respondents said they do not know when they will start preparing for CPP reform.

The employers surveyed share some common concerns. Many (36%) are worried about increased administrative complexity; others (22%) are concerned about potentially negative employee reactions. The chief concern, cited by 65% of respondents, is increased cost, although there is no consensus on how best to address this challenge. Two-thirds of respondents said that they simply do not know. Of those who do, about a quarter (27%) said they plan to absorb any cost increases; eight percent said they will make changes to current retirement plans, and six percent plan to change other employee compensation. Meanwhile, only three percent of respondents said they expect to look at health benefits plans to find funding, even though the CPP changes provide an opportunity for employers to look holistically at their pension, compensation and pre-/post-retirement health benefits spends to maximize value.

According to Aon, a comprehensive strategy to integrate the new CPP into their total rewards strategies is vital for employers. Most registered workplace retirement plans are designed to target an overall benefit level for employees, inclusive of current CPP benefits. As part of planning for public pension enhancement, employers should prioritize assessing benefits adequacy in light of a bigger CPP. According to the Aon survey, however, only seven percent of respondents said they are using the CPP enhancement as an opportunity to reassess total rewards strategies, and 18% intend to do so. Still, more than half (57%) have no plans yet.

“The phase-in period for CPP enhancement is a long one, and for good reason, but pension plan sponsors should not look at it as a grace period,” said William da Silva, Senior Partner and National Retirement Practice Leader, Aon Hewitt. “The work to design, implement, communicate and administer the changes is significant, and employers should not underestimate it.”

CONTACT INFORMATION

Genworth Canada Increasing Mortgage Insurance Premiums

Genworth mortgage insurance

Genworth mortgage insuranceEffective March 17, 2017, Genworth Canada will increase its transactional mortgage insurance premium rates for homebuyers.

“We believe this new pricing is prudent and reflects the new regulatory capital framework for mortgage insurers that came into effect on January 1, 2017,” said Stuart Levings, President and CEO of Genworth Canada. “Genworth Canada remains committed to helping Canadians achieve responsible homeownership. We believe these pricing actions are supportive of the long-term safety and sustainability of the Canadian housing finance system.”

The premium rate changes are not expected to have a significant impact on affordability for homebuyers. To illustrate, a typical first-time homebuyer making a 5% down payment will see an increase of approximately $6 in their monthly mortgage payment on a $300,000 mortgage amount. This assumes a 3 per cent interest rate and a 25-year amortization period.

The new premium rates for standard owner-occupied purchase applications submitted on or after March 17, 2017 are as follows:

Loan-to-Value Ratio

Standard Premium (Current)

Standard Premium (Effective March 17, 2017)

Up to and including 65%

0.60%

0.60%

Up to and including 75%

0.75%

1.70%

Up to and including 80%

1.25%

2.40%

Up to and including 85%

1.80%

2.80%

Up to and including 90%

2.40%

3.10%

Up to and including 95%

3.60%

4.00%

90.01% to 95% Non-Traditional Down Payment

3.85%

4.50%

 

Genworth Canada will be working with its customer base to ensure a smooth implementation of the new rates. The changes will not affect existing Genworth insured mortgages or applications received prior to March 17, 2017.

About Genworth Canada
Genworth MI Canada Inc. (TSX: MIC) through its subsidiary, Genworth Financial Mortgage Insurance Company Canada (Genworth Canada), is the largest private residential mortgage insurer in Canada. The Company provides mortgage default insurance to Canadian residential mortgage lenders, making homeownership more accessible to first-time homebuyers. Genworth Canada differentiates itself through customer service excellence, innovative processing technology, and a robust risk management framework. For more than two decades, Genworth Canada has supported the housing market by providing thought leadership and a focus on the safety and soundness of the mortgage finance system. As at September 30, 2016, Genworth Canada had $6.6 billion total assets and $3.6 billion shareholders’ equity. Find out more at www.genworth.ca.

SOURCE Genworth MI Canada

Media: Susan Carter, Vice President, Marketing and Communications, 905.287.5520 or Susan.Carter@genworth.com; Investors: Jonathan Pinto, Vice President, Investor Relations, 905.287.5482 or Jonathan.Pinto@genworth.com

CMHC to Increase Mortgage Insurance Premiums

Mortgages insured by CMHC

Mortgages insured by CMHCCMHC is increasing its homeowner mortgage loan insurance premiums effective March 17, 2017. For the average CMHC-insured homebuyer, the higher premium will result in an increase of approximately $5 to their monthly mortgage payment.

“We do not expect the higher premiums to have a significant impact on the ability of Canadians to buy a home,” said Steven Mennill, Senior Vice-President, Insurance. “Overall, the changes will preserve competition in the mortgage loan insurance industry and contribute to financial stability.”

Capital requirements are an important factor in determining mortgage insurance premiums. The changes reflect OSFI’s new capital requirements that came into effect on January 1st of this year that require mortgage insurers to hold additional capital. Capital holdings create a buffer against potential losses, helping to ensure the long term stability of the financial system.

During the first nine months of 2016:

  • The average CMHC-insured loan was approximately $245,000.
  • The average down payment was approximately 8%.
  • The average gross debt service ratio (GDS) was 25.6%. To qualify for CMHC insurance, a homebuyer’s GDS should not exceed 32% of their total monthly household income.
Down payment between 5% and 9.99%
Loan Amount$150,000$250,000$350,000$450,000$550,000$850,000
Increase to Monthly Mortgage Payment$2.82$4.70$6.59$8.47$10.35$15.98

Based on a 5 year term @ 2.94% and a 25 year amortization

*Premiums in Manitoba, Ontario and Quebec are subject to provincial sales tax – the sales tax cannot be added to the loan amount.

Premiums are calculated based on the loan-to-value ratio of the mortgage being insured. The premium can be paid in a single lump sum but more frequently is added to the mortgage principal and repaid over the life of the mortgage as part of regular mortgage payments. Additional details and scenarios are included in the backgrounder below.

CMHC regularly reviews its premiums and sets them at a level to cover related claims and expenses while also reflecting the regulatory capital requirements.

CMHC is Canada’s most experienced mortgage loan insurer. Our mortgage loan insurance enables Canadians to buy a home with a minimum down payment starting at 5%. As a Crown corporation, CMHC is the only mortgage insurer whose proceeds benefit all Canadians.

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need and offers objective housing research and information to Canadian governments, consumers and the housing industry.

For additional highlights please see the attached backgrounder.

Information on This Release:

Karine LeBlanc
Media Relations
613-740-5413
kjleblan@cmhc-schl.gc.ca

Backgrounder

  • CMHC’s standard mortgage loan insurance premiums will be changing as follows:
Loan-to-Value RatioStandard Premium (Current)Standard Premium (Effective March 17, 2017)
Up to and including 65%0.60%0.60%
Up to and including 75%0.75%1.70%
Up to and including 80%1.25%2.40%
Up to and including 85%1.80%2.80%
Up to and including 90%2.40%3.10%
Up to and including 95%3.60%4.00%
90.01% to 95% – Non-Traditional Down Payment3.85%4.50%
Down payment between 10% and 14.99%
Loan Amount$150,000$250,000$350,000$450,000$550,000$850,000
Increase to Monthly Mortgage Payment$4.94$8.23$11.52$14.81$18.10$27.98

Based on a 5 year term @ 2.94% and a 25 year amortization

Down payment between 15% and 19.99%
Loan Amount$150,000$250,000$350,000$450,000$550,000$850,000
Increase to Monthly Mortgage Payment$7.06$11.75$16.46$21.16$25.86$39.96

Based on a 5 year term @ 2.94% and a 25 year amortization

  • During the first nine months of 2016
    • Nearly 50% of CMHC’s transactional mortgage loan business were for loans of less than $300,000
    • Nearly 95% of CMHC’s transactional mortgage loan business were for loans of less than $600,000
    • Less than 1% of CMHC’s transactional mortgage loan business were for loans of more than $850,000
  • CMHC follows OSFI guidelines for federally regulated mortgage insurers in Canada.
  • Calculating the gross debt service ratio (GDS) allows potential homebuyers to estimate the maximum home-related expenses they can afford to pay each month.

GDS = Principal + Interest* + Property Tax + Heat
Monthly Income

*Interest is calculated using the qualifying rate

  • Mortgage loan insurance helps protect lenders against mortgage default and enables consumers to purchase homes with a minimum down payment of 5% with interest rates comparable to those with a 20% down payment. Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20% of the purchase price.
  • CMHC’s new premium rates will be effective for new mortgage loan insurance requests submitted on or after March 17, 2017. The current mortgage loan insurance premiums will apply for applications submitted to CMHC prior to this date, regardless of the closing date. As is normal practice, complete borrower and property details must be submitted to CMHC when requesting mortgage loan insurance.
  • The changes do not impact mortgages currently insured by CMHC.

Equifax Canada Mortgage Fraud on the Rise

Mortgage Credit Score

Mortgage Credit Score13% of Canadians Say ‘a Little White Lie’ is Okay to Get the House You Want

Equifax Canada data suggests high-risk and suspected fraudulent mortgage activity is on the rise noting a 52 per cent increase in suspected fraudulent mortgage applications since 2013.

According to data from Equifax’s enterprise fraud management solution, ‘Falsified Account Statements’ and ‘Falsified Documents’ were the most prominent application tags, as reported by investigators. The other was ‘Conflicting Information’. Of those applications flagged, 67 per cent were from Ontario while the next highest was 12 per cent from B.C.

Equifax also conducted a survey to chart the attitudes and perceptions of Canadians with respect to the current housing market. One-in-five Canadians, who do not have a mortgage, indicated they are nervous they will never own a home because of rising prices and want to buy a home but can’t because of the down payment.

“We’re certainly seeing more mortgage applications being flagged as suspicious by our reporting institutions,” said Tara Zecevic, Vice President, Customer Insight at Equifax Canada. “While we cannot entirely attribute these increases to consumers overstating personal income or falsifying applications, we do want to remind people that there are serious consequences for making false or inaccurate claims on any loan or mortgage applications. Not only will it stretch your finances, it is in breach of your contractual obligations with the lender, and simply put, it’s against the law.”

Little White Lies

With respect to mortgage fraud, the results of the recent Equifax survey showed:

  • 13 per cent of Canadians indicated they felt it was okay to tell ‘a little white lie’ when applying for a mortgage to get the house they want.
  • 16 per cent said they believe mortgage fraud is a victimless crime
  • 8 per cent admitted to misrepresenting the facts on a credit or loan application

The Cost of Buying a Home

When asked about housing prices, the results of the recent Equifax survey showed:

  • 84 per cent believe that the cost of home ownership is too high for first-home buyers today
  • Nearly three-in-ten Canadians cite ‘more demand than supply’ (29 per cent) and ‘foreign buyers’ (27 per cent), as the main factors driving up home prices
  • B.C. residents (compared to other provinces) were significantly more likely to cite foreign buyers as the top reason for home prices being driven up (75 per cent versus 42 per cent for all other provinces, respectively)

Examining Trust

When asked about who they trust in the home-buying experience, the results of the recent Equifax survey showed:

  • 44 per cent of Canadians trust real estate agents the least during the home-buying experience About one-in-four also distrust homeowners (27 per cent) and home inspectors (26 per cent)
  • 20 per cent distrust mortgage brokers, another 16 per cent don’t trust their bank and equally
  • 16 per cent have little trust in their insurance agent Only 9 per cent said they trust all professionals involved in the home- buying experience

The survey was conducted online using Leger’s weekly OMNI via LegerWeb, capturing a representative sample of 1,547 Canadians from across the country. A sample of this size would yield a margin of error of +/- 2.5% 19 times out of 20.

About Equifax

Equifax powers the financial future of individuals and organizations around the world. Using the combined strength of unique trusted data, technology and innovative analytics, Equifax has grown from a consumer credit company into a leading provider of insights and knowledge that helps its customers make informed decisions. The company organizes, assimilates and analyzes data on more than 820 million consumers and more than 91 million businesses worldwide, and its databases include employee data contributed from more than 6,600 employers.

Headquartered in Atlanta, Ga., Equifax operates or has investments in 24 countries in North America, Central and South America, Europe and the Asia Pacific region. It is a member of Standard & Poor’s (S&P) 500(R) Index, and its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. Equifax employs approximately 9,400 employees worldwide.

Some noteworthy achievements for the company include: Ranked 13 on the American Banker FinTech Forward list (2015); named a Top Technology Provider on the FinTech 100 list (2004-2015); named an InformationWeek Elite 100 Winner (2014-2015); named a Top Workplace by Atlanta Journal Constitution (2013-2015); named one of Fortune’s World’s Most Admired Companies (2011-2015); named one of Forbes’ World’s 100 Most Innovative Companies (2015). For more information, visit www.equifax.com

Media Contacts: Andrew Findlater SELECT Public Relations (416) 659-1197 afindlater@selectpr.ca Tom Carroll Equifax Canada (416) 227-5290 MediaRelationsCanada@equifax.com Source: Equifax Canada

Credit Card Fraud Stats – Protect Yourself from Being Scammed

credit card fraud

credit card fraud A great number of researches have shown that hackers and fraudsters actually have an easy time getting into credit card accounts and gain access to a whole lot of information about the account holder. The truth is they do not need a lot of it. They only need the number and they can hack their way through security codes and passwords. This is all according to research. After they gain access of the account, they now can make purchases and charge it to the card they defrauded.

It is the number one reason why cyber attacks are done in groups of accounts. Cyber thieves have caused millions in losses. Most of these involve the illegal acquisition of financial details, passwords, and contacts.

Credit and debit cards are the most affected when it comes to cyber crime. Every time a hacker prevails in doing so, someone else gets charged for something he never spent for.

The hacking of credit cards is a crime in which cyber thieves steal money from account holders and use their credit by copying or cloning their card information.

The sad part is this has been happening for a good number of years now. What makes it worse is that this has become bigger than ever with the money involved numbering in the millions. The reason for this proliferation is that more businesses are being done on the Internet where the main mode of payment is through cards.

To give you some protection against cyber financial crime, here are some statistics on credit card fraud. This infographic also shows you ways on how you can protect yourself from people who want to cheat you off your hard-earned money.

Source:
Marina Robertson

credit card fraud

First National Announces January Distribution

first national logo

first national logoFirst National Mortgage Investment Fund today announced its monthly cash distribution of $0.05 per unit for the period January 1 to January 31, 2017. The distribution will be payable on February 15, 2017 to unitholders of record at the close of business on January 31, 2017.

The Fund also announced its intention to continue to pay $0.05 per unit per month for the remainder of 2017, subject to continued performance of the underlying mortgage assets.

About First National Mortgage Investment Fund
The Fund provides unitholders with tax-advantaged monthly distributions by investing in Canadian mortgage loans originated by First National Financial LP. Today, the Fund is fully invested in a diversified portfolio of mortgages on multi-unit residential, industrial, and retail properties as well as land. To deliver an attractive yield, the Fund invests primarily in short-term bridge mortgages, which typically bear higher rates of interest than traditional debt financing, and the Fund’s manager applies leverage. To achieve its objective of preserving capital, the portfolio’s weighted average loan-to-value ratio will not exceed 75%. For more information, visit the Fund’s website at: www.firstnational.ca/investor-relations/first-national-mortgage-investment-fund.

About First National Financial Corporation
First National Financial Corporation (TSX: FN, TSX: FN.PR.A, TSX: FN.PR.B) is the parent company of First National Financial LP, a Canadian-based originator, underwriter and servicer of predominantly prime residential (single-family and multi-unit) and commercial mortgages. With over $98 billion in mortgages under administration, First National is Canada’s largest non-bank originator and underwriter of mortgages and is among the top three in market share in the mortgage broker distribution channel. For more information, please visit www.firstnational.ca.

About Stone Asset Management Limited
Stone Asset Management Limited (“SAM”) manages the Fund.  Established in 1999, SAM is an independent, Canadian-owned asset management company that specializes in structuring and managing high quality investment products. Its professionals are well regarded in the Canadian investment community for their disciplined investment process. The Fund’s daily unit price can be found at: www.stoneco.com/allproducts/first-national-mortgage-investment-fund/.

SOURCE First National Mortgage Investment Fund

For further information: Robert Inglis, Chief Financial Officer, First National Financial Corporation, Tel: 416-593-1100, Email: rob.inglis@firstnational.ca; Ernie Stapleton, President, Fundamental Creative Inc., Tel: 905-648-9354, Email: ernie@fundamental.ca

OREA Calls For Affordable Home Ownership Task Force

ontario real estate association logo

ontario real estate association logoPre-budget consultation offers ways to improve affordability for first-time buyers & young families

The best way to ensure millennials have a good shot at achieving the Canadian dream of home ownership is by putting more homes on the market, the Ontario Real Estate Association (OREA) told the Standing Committee on Finance and Economic Affairs today. In its 2017 pre-budget consultation, OREA recommended the creation of an Affordable Home Ownership Task Force to determine how government can best improve housing supply and expand consumer choice.

“We are facing a critical housing supply shortage that is putting home ownership out of reach for Ontario’s first-time buyers and young families,” said Valerie Miles, OREA Government Relations Committee Chair. “In some markets, housing inventory is at all-time lows and prices are at record highs. Increasing the housing stock is necessary to give buyers more options at affordable levels. We need industry leaders to come together on this issue before the supply problem gets any worse.”

The Building Industry and Land Development Association (BILD) recently reported that housing supply has plummeted over the past decade. The lack of housing supply is a main driving factor for increasing prices of new single-family detached houses and high-rise condos in the GTA.

In its pre-budget consultation, OREA recommended several ways to increase housing stock, including: reducing the red-tape around getting building permits approved; dedicated funding to help service land designated for development to incent builders to start projects sooner; and, moving away from the proposed ‘one-size-fits-all’ intensification targets under the provincial growth plan to allow developers to build “missing middle” housing types, namely townhomes, duplexes and stacked townhomes.

“The government is asking Ontarians for ways to create jobs, grow the economy and help people in their everyday lives — a strong real estate market checks off all three boxes,” said Tim Hudak, OREA CEO. “Every home transaction generates $55,000 in economic spin-offs which creates jobs and supports local business, while home ownership offers endless social benefits for families and communities. If the goal of the pre-budget consultation is to build up Ontario’s future, then finding ways to make home ownership affordable is a great place to start.”

This month the Government of Ontario increased the land transfer tax rebate to $4,000, which was previously $2,000, to help make home ownership more affordable for first-time buyers.

“The government deserves credit for taking positive steps to address affordability,” said Hudak. “We need more efforts like this to keep the dream of home ownership alive in Ontario. We look forward to continuing to work with policy makers on improving affordability even further.”

About the Ontario Real Estate Association

The Ontario Real Estate Association represents 70,000 brokers and salespeople who are members of the 39 real estate boards throughout the province. OREA serves its REALTOR members through a wide variety of professional publications, educational programs, advocacy, and other services. www.OREA.com

CONTACT INFORMATION

  • For more information, or to schedule an interview, contact:
    Katarina Markovinovic
    Ontario Real Estate Association
    (416) 445-9910 ext. 615
    katarinam@orea.com

Canadian home sales up from November to December

Canadian Real Estate Association

Canadian Real Estate Association

According to statistics released today by The Canadian Real Estate Association (CREA), national home sales were up on a month-over-month basis in December 2016.

Highlights:

  • National home sales rose 2.2% from November to December.
  • Actual (not seasonally adjusted) activity in December was down 5.0% from a year earlier.
  • The number of newly listed homes dropped 3.0% from November to December.
  • The MLS Home Price Index (HPI) in December was up 14.2% year-over-year (y-o-y).
  • The national average sale price climbed 3.5% year-over-year in December.

The number of homes trading hands via Canadian MLS Systems rose 2.2 % month-over-month in December 2016. The rebound recovered less than half of the drop in activity from October to November, when it posted the biggest monthly retreat in more than four years after tightened mortgage regulations came into effect.

Activity was up on a month-over-month basis in about 60% of all local markets, led by Calgary and Edmonton where sales rallied following large declines in November.

Actual (not seasonally adjusted) sales activity was down 5.0% in December from a year ago, when it reached the highest level ever for the month. The number of homes changing hands in 2016 was up by 6.3% annually, reflecting strong sales activity in the first half of the year that has softened since.

“Sales set a new annual record last year, “said CREA President Cliff Iverson. “However, tightened mortgage regulations are expected to contribute to lower sales activity this year, though the extent to which they will weigh on housing markets across Canada will vary. All real estate is local, and REALTORS remain your best source for information about sales and listings where you live or might like to in the future.”

“Home sales are unlikely to benefit the Canadian economy as much in 2017 as they did in 2016, “said Gregory Klump, CREA’s Chief Economist. “New regulations mean that in order to qualify for a mortgage, home buyers will either have to save longer for a bigger down payment or purchase a lower priced home. In urban centres where the latter are in short supply, that is likely to translate into fewer sales.”

The number of newly listed homes fell 3.0% in December 2016 compared to November. New listings were down in about 60% of all local markets, with sizeable declines in B.C.’s Lower Mainland, Calgary and the Greater Toronto Area (GTA).

With sales up and new listings down, the national sales-to-new listings ratio rose to 63.5% in December compared to 60.3% in November.

A sales-to-new listings ratio between 40% and 60% is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers’ and sellers’ markets respectively.

The ratio was above 60% in more than half of all local housing markets in December, the vast majority of which are located in British Columbia, in and around the GTA and across Southwestern Ontario.

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

There were 4.6 months of inventory on a national basis at the end of December 2016 – down from 4.8 months in November.

The tight balance between housing supply and demand in Ontario’s Greater Golden Horseshoe region is without precedent (the region includes the GTA, Hamilton-Burlington, Oakville-Milton, Guelph, Kitchener-Waterloo, Cambridge, Brantford, the Niagara Region, Barrie and nearby cottage country). The number of months of inventory in December ranged between one and two months in many of these housing markets, and stood below one month in the Durham Region, Orangeville, Oakville-Milton, Kitchener-Waterloo, Brantford and Cambridge.

The Aggregate Composite MLS HPI rose by 14.2% y-o-y in December 2016. The increase has diminished in recent months (14.4% y-o-y in November; 14.6% y-o-y in October) due to softening price trends for single family homes in B.C.’s Lower Mainland.

Price gains remained strongest for two-storey single family homes and townhouse/row units (16.1% y-o-y and 15.4% y-o-y respectively), followed closely by one-storey single family homes (13.3% y-o-y) and apartment units (12.0% y-o-y).

While benchmark home prices were up from year-ago levels in 9 of 11 housing markets tracked by the MLS HPI, trends continued to vary widely by location.

In the Fraser Valley and Greater Vancouver, prices continued to recede from their peaks reached in August 2016 but remained above year-ago levels (+27.0% y-o-y and +17.8% y-o-y respectively). Meanwhile, benchmark prices climbed to new heights in Victoria and elsewhere on Vancouver Island, and in the GTA.

By comparison, home prices were down 3.7% y-o-y in Calgary and edged lower by 1.6% y-o-y in Saskatoon, continuing their retreat from peaks reached in 2015.

Home prices were up modestly from year-ago levels in Regina (+5.2%), Ottawa (+4.0%), Greater Montreal (+3.3%) and Greater Moncton (+1.9%). Monthly trends suggest that prices have begun to stabilize in all of these markets except Greater Montreal, where values continue to rise modestly.

The MLS Home Price Index (MLS HPI) provides the best way of gauging price trends because average price trends are prone to being strongly distorted by changes in the mix of sales activity from one month to the next.

The actual (not seasonally adjusted) national average price for homes sold in December 2016 was $470,661, up 3.5% from where it stood one year earlier. This marks the smallest y-o-y increase in nearly two years.

The national average price continues to be pulled upward by sales activity in Greater Vancouver and the GTA, which remain two of Canada’s tightest, most active and expensive housing markets.

That said, Greater Vancouver’s share of national sales activity has diminished considerably over the last year, giving it less upward influence on the national average price. The average price is reduced by almost $120,000 to $352,513 if Greater Vancouver and GTA sales are excluded from calculations.

PLEASE NOTE: The information contained in this news release combines both major market and national sales information from MLS Systems from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS Systems are co-operative marketing systems used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 115,000 REALTORS working through some 90 real estate Boards and Associations.

Further information can be found at http://crea.ca/statistics.

For more information, please contact:

Pierre Leduc, Media Relations
The Canadian Real Estate Association
Tel.: 613-237-7111 or 613-884-1460
E-mail: pleduc@crea.ca

OREA to Mayor John Tory: “Make Toronto More Affordable for Young Families”

Toronto city counsil

Toronto city councilReal Estate Experts Urge City Council to Reject Proposal to Increase Land Transfer Tax

Finding an affordable home in Toronto is becoming a CN Tower-sized challenge for many young families and it could get worse if Toronto City Council increases the Toronto Land Transfer Tax (LTT). Representatives from the Ontario Real Estate Association (OREA) presented at today’s Toronto Budget Committee meeting, where they urged City Council to reject a proposal by city staff to increase the Toronto LTT.

“Toronto City Council has an opportunity to take action to support more affordable home ownership in our city,” said Tim Hudak, OREA CEO. “Today, home prices are at record highs and new listings are at record lows. It’s become so much harder for first-time home buyers and young families to break into the market. A proposed tax increase could not come at a worse time.”

On the average priced Toronto home, a first-time home buyer pays over $15,000 in taxes to the city and the province. As part of the 2017 budget, city staff are proposing to hike the local LTT. The staff proposal would impose over $85 million in new taxes on home buyers with first-time home buyers paying almost $500 more in LTT on an average priced home.

“Ultimately, Toronto needs to roll back the LTT or, at the very least, not make this punishing tax even worse,” said Hudak. “Voting down the proposal to increase the LTT is a good first step but I encourage Council to go even further. To start, Toronto should follow Ontario’s lead and double the city land transfer tax rebate for first-time home buyers.”

As of January 1, 2017, Premier Wynne doubled the provincial land transfer tax rebate program meaning that first-time home buyers receive up to $4,000 in land transfer tax relief. If the City matched the provincial relief, first-time buyers in Toronto would see up to $12,000 in tax savings. Unfortunately, Toronto is proposing to swipe up to 25 per cent of the provincial savings out of the pockets of young couples and put it into city coffers instead.

“Toronto is a great place to live, work and raise a family; for generations, it’s where thousands of young people got their start in life,” said OREA president Ray Ferris. “Research has demonstrated the LTT has discouraged economic activity and reduced listings since all home sellers know they have to pay the tax on their next purchase. Reducing the LTT will help alleviate the housing supply shortage by bringing much needed housing stock on the market.”

Ontario Realtors suggest that Toronto work with the province to encourage the building of a greater range of housing types, namely townhomes, duplexes and stacked townhomes. Building more of these units would give a growing family more affordable options for staying in Toronto and baby-boomers more options for ‘right sizing’ out of their large detached homes.

About the Ontario Real Estate Association

The Ontario Real Estate Association represents 67,800 brokers and salespeople who are members of the 40 real estate boards throughout the province. OREA serves its REALTOR members through a wide variety of professional publications, educational programs, advocacy, and other services. www.OREA.com

CONTACT INFORMATION

  • For more information, or to schedule an interview, contact:
    Katarina Markovinovic
    Ontario Real Estate Association
    (416) 445-9910 ext. 615
    katarinam@orea.com

Kroll Bond Rating Agency Releases 2017 Canadian Banking Outlook

Kroll logo

Kroll logoKroll Bond Rating Agency (KBRA) has released its 2017 Canadian Banking Outlook report.

The 2017 financial outlook remains moderately negative for Canadian banks, reflective of the following factors: potential asset quality risks, uncertainties surrounding government support, relatively high levels of household debt in Canada, a sluggish Canadian economy, and vulnerability to any renewed pressure in commodity prices. However, at present, the largest banks in Canada continue to report solid capital ratios, profitable operations, and relatively low levels of impaired loans. Though the banks have overall strong financials, risks remain for the Canadian banking sector. The housing market in Canada remains frothy and is susceptible to negative trends in commodities particularly if these developments translate to higher unemployment over time. Partially mitigating housing market concern is the high proportion of mortgages insured by the Canada Mortgage and Housing Corporation (CMHC), a Crown corporation, and the generally sound mortgage underwriting practices in Canada, especially relative to the U.S. before the 2008 financial crisis. Moreover, the Canadian economy is exposed to energy, mining, and other commodities sectors which would likely impact asset quality, particularly if a negative trend in commodity prices is re-established. Commodity prices have generally rebounded from lows early in 2016 and many banks have already absorbed considerable losses related to direct exposure to commodity and related industries.

Please click here to view the report.

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

Analytical:
Kroll Bond Rating Agency
Ashley Phillips, 301-969-3185
Associate Director
aphillips@kbra.com
or
Joseph Scott, 646-731-2438
Managing Director
jscott@kbra.com
or
Christopher Whalen, 646-731-2366
Senior Managing Director
cwhalen@kbra.com
or
Follow us on Twitter!
@KrollBondRating

Read more: http://www.digitaljournal.com/pr/3195217#ixzz4VbII54zV

Housing prices continue to grow as supply declines

BILD Logo

BILD LogoLack of new housing supply continues to escalate prices and average prices for both new single-family detached houses and high-rise condos in the GTA reached unprecedented levels in November, the Building Industry and Land Development Association (BILD) announced today.

The number of new homes available for purchase in the GTA continues to be around all-time lows. At the end of November, there were 15,184 new homes in builders’ inventories, only 84 more than in August which reported the lowest level on record. Housing supply has plummeted over the past decade. In November 2006 there were 31,150 new homes available for sale according to Altus Group, BILD’s official source for new home market intelligence.

Only 13 percent of the available inventory at the end of last month was low-rise homes with just 2,036 units and of those 789 were detached single-family houses. Available high-rise supply was also down in November, falling to 13,148 units.

“The low inventory story is not only about low-rise – high-rise inventories have been on a downward path over the past 3 years,” said Patricia Arsenault, Executive Vice President of Research Consulting Services at Altus Data Solutions. “Total available inventory in November was the lowest November level we have seen since we first started to track this data in 2000.”

Low levels of inventory resulted in record-setting prices for detached homes and high-rise condominiums in November. The average price of new condos in the GTA reached $493,137, a 10 per cent increase from a year ago. Condo unit size continued to increase with the average in November at 820 square feet.

Meanwhile, the average price of new detached homes in the GTA hit $1,230,961 in November, up 27 per cent from last year. Since the beginning of the year, new detached single-family homes in the GTA have gone up by more than $258,000.

Overall, average prices for new low-rise homes, which includes detached and semi-detached houses as well as townhomes, increased 20 per cent over the past 12 months. In November, a buyer needed $977,890 to buy the average low-rise home.

“The industry is building to government policy and building far fewer low-rise homes, especially detached single-family homes, but demand has not dropped with the supply so prices continue to increase,” said Michelle Noble, Vice President of Communications, Marketing and Media Relations at BILD.

So far this year there were 8,843 detached homes sold in the GTA, which is 16 per cent fewer than in 2015. At this time 10 years ago, 12,273 detached homes were sold across the region.

Overall there have been 43,651 new homes sold in 2016 with high-rise accounting for 60 per cent or 26,299 homes and low-rise totalling 17,352 homes.

A detailed table of new-home sales in the GTA is available below.

November New-Home Sales by Municipality:

November ’16

Low Rise

High Rise

Total

Region

2014

2015

2016

2014

2015

2016

2014

2015

2016

Durham

249

303

170

29

307

58

278

610

228

Halton

244

513

396

98

149

100

342

662

496

Peel

437

515

89

144

121

151

581

636

240

Toronto

70

45

70

2,188

2,023

2,030

2,258

2,068

2,100

York

290

473

845

142

225

308

432

698

1,153

GTA

1,290

1,849

1,570

2,601

2,825

2,647

3,891

4,674

4,217

Jan-Nov

17,103

18,970

17,352

21,005

21,164

26,299

38,108

40,134

43,651

Source: Altus Group

With more than 1,450 members, BILD, formed through the merger of the Greater Toronto Home Builders’ Association and Urban Development Institute/Ontario, is the voice of the land development, home building and professional renovation industry in the Greater Toronto Area.  BILD is proudly affiliated with the Ontario and Canadian Home Builders’ Associations.

These results were previously released under the REALNET Canada name, whose independent and comprehensive data, analyses and insights on the commercial real estate investment and residential development markets is collected and compiled using a nationally consistent research process established in 1995. Going forward they will be released by Altus Group, powered by a proprietary data platform led by Altus Data Solutions Canada. This team is the formal unification of leading Canadian real estate data companies previously acquired by Altus Group, including REALNET Canada.

SOURCE Building Industry and Land Development Association

For further information: or to schedule an interview, contact Andrei Zaretski, Manager of Marketing and Media Relations at 416-391-3450 or 416-843-4898 or azaretski@bildgta.ca

RELATED LINKS
www.bildblogs.ca

Ontario Real Estate Outlook Remains Strong Heading into Winter Season

ontario real estate association logo

ontario real estate association logoPerceptions of real estate markets in Ontario remain strong heading into the winter season as the Ontario Home Ownership Index edges to an all-time high of 131 points, according to new research from the Ontario Real Estate Association (OREA).

Driving the positive shift in sentiment are perceived improvements in current real estate markets and within the last year. More than half of Ontarians (55%) say the current residential real estate market in their neighbourhood is favourable, up 5 points from a year ago. Half of Ontarians (51%) say that the residential real estate market in their city or town is stronger than it was a year ago, up 11 points from a year ago.

“According to the results, it is likely that perceptions of strengthening markets will continue in Ontario into the foreseeable future,” said Tim Hudak, Chief Executive Officer, OREA. “Despite rising house prices in the GTA, buyers remain optimistic. In fact, even more Ontarians than last year say they intend to buy in the future. This speaks to the value of home ownership and the timelessness of this all-important commodity.”

More than four-in-ten (43%) Ontarians say their city’s real estate market will be stronger in the next year, up 5 points from a year ago. Furthermore, 14% of Ontarians say that they are very likely to purchase a home in the next two years, up 3 points from a year ago. Fifteen per cent of Ontarians say they are very likely to sell a home within the next 2 years, up 4 points from a year ago.

Home Hunting in Ontario
Among those who are at least somewhat likely to be buying a home in the next two years, detached homes remain the most popular housing choice (49%), up 13 points from a year ago. Interestingly, interest in condos (19%) has declined by 7 points year over year, while interest in semi-detached homes (19%) has ticked upwards (4 points). The least popular type of home among prospective buyers is row homes or townhomes (14%, down 2 points).

Majority of First-Time Home Buyers Think they will be Impacted by New Stress Test Rules
Eight-in-ten (79%) first-time home buyers in Ontario believe that at some point the new federal government rules about mortgage stress1 testing will impact them. Thinking about how the new rules could impact them, 45% of first-time home buyers say they will need to keep saving for a 20% down payment before buying a home; 27% believe they will need to find additional money to increase their down payment, and many say they will need to look for a less expensive home either in the same city (34%) or a different city (22%).

As of October 17th, 2016, the Federal Government of Canada requires prospective home buyers with less than 20% down-payment to pass a mortgage-rate “Stress Test” to ensure they will still be able to make their mortgage payments in the event mortgage rates go up in the future (about 2% above the current rates).

About The Ontario Home Ownership Index
The Ontario Home Ownership Index is designed to reflect Ontarians’ overall views of the residential real estate market in Ontario, and incorporates measures such as Ontarians’ perceptions of whether the market in their neighbourhood, city, and Ontario, respectively, have improved or worsened in the last year and looking ahead into the future, whether home ownership is important to them and whether it is a good investment in the long-term. The first wave of the index, conducted in the fall 2013, was set to a baseline of 100 points.

About the Ontario Real Estate Association
The Ontario Real Estate Association represents 67,800 brokers and salespeople who are members of the 40 real estate boards throughout the province. OREA serves its REALTOR® members through a wide variety of professional publications, educational programs, advocacy, and other services. www.OREA.com

CONTACT INFORMATION

  • For more information, or to schedule an interview, contact:
    Katarina Markovinovic
    Ontario Real Estate Association
    (416) 445-9910 ext. 615
    katarinam@orea.com

Greybrook Invests $8,900,000 with Fieldgate Homes in Shelburne, Ontario

greybrook-realty-partnersGreybrook Realty Partners Inc. is pleased to announce the successful deployment by its managed issuer of $8,900,000 in equity to acquire and subsequently manage the development of a parcel of land located in Shelburne, Ontario. The property is co-owned with Fieldgate Homes and is expected to be developed into a residential community consisting of 246 detached homes.

Located north of the Greater Toronto Area (GTA), the Town of Shelburne is Dufferin County’s fastest growing municipality. Shelburne offers residents small town charm, along with easy access to desirable amenities, and has quickly established itself as a desirable residential community for prospective homebuyers. The development site which is nestled next to 32 acres of natural green space, is located near the intersection of two major thoroughfares that will provide future residents convenient access to Shelburne and Dufferin County.

“Shelburne has experienced strong absorption rates in recent years and with the limited supply of new homes, similar developments have fully sold out within months of release,” stated Alex Riajskikh, Director, Private Capital Markets, for Greybrook Realty Partners. “The development offers residents more living space at an affordable price point relative to comparable housing options within the GTA and we expect residential demand in Shelburne to remain robust, as the Town’s accessibility, livability and proximity to larger urban centres like Orangeville and Brampton, will continue to attract residents.”

This transaction represents Greybrook Realty Partners’ inaugural partnership with Fieldgate Homes, an industry leading developer with nearly 60 years of experience that has delivered more than 20,000 homes across Southern Ontario. “This project marks the first development in what we expect will be a very strong and successful partnership with Fieldgate Homes. Fieldgate Home’s years of development experience, industry knowledge and management expertise are second to none and reflect the attributes we look for in our development partners.”

The portfolio of low-rise development holdings managed by Greybrook Realty Partners includes over 900 acres of land in Southern Ontario. The development of these properties is projected to result in the completion of over 5,000 single-family homes in the Greater Golden Horseshoe region.

About Greybrook Realty Partners Inc.

Greybrook Realty Partners offers investors the unique ability to partner with top-tier North American real estate developers and share in their value creation activities. In addition, Greybrook Realty Partners provides asset management and advisory services to investors and landowners, respectively. Greybrook Realty Partners and its affiliates have been involved in the creation, development, construction and management of over 50 real estate projects which are expected to result in the development of over 15,000 residential and commercial units.

This news release contains forward-looking statements that are based on management’s current expectations and are subject to known and unknown uncertainties, which could cause actual results to differ from those contemplated or implied by such forward-looking statements. Greybrook is under no obligation to update or revise any forward-looking statements contained herein, whether as a result of new information, future events, or otherwise.

For further information:
Greybrook Realty Partners Inc.
Sarah Mansour, SVP Corporate Strategy & Marketing
E: sarah.mansour@greybrook.com T: 416.322.9700 x551

Police request assistance with Fraud Over $5000 investigation

mortgage fraud investigation

mortgage fraud investigationWarden Avenue and Sheppard Avenue East area,
Photographs of two suspects released

Broadcast time: 11:26
Friday, December 30, 2016

Financial Crimes
416-808-7300

Case #: 2016-326674

Toronto Police Service Financial Crimes is requesting the public’s assistance identifying two suspects in a mortgage fraud investigation.

It is alleged that:

– during September 2015, a man and a woman attended a mortgage broker’s office in the Warden Avenue and Sheppard Avenue East area

– they applied for a second mortgage on a property in the amount of $200,000

– the mortgage broker was able to find financing through a mortgage lender and a second mortgage was registered on the home

– they received $200,000 through their real estate lawyer

– several months after the mortgage was registered, the real homeowner was served court documents advising him that he was being sued by the mortgage lender for non-payment of the mortgage

The real homeowner called the police and reported the mortgage fraud.

It is further alleged that:

– the man and woman in this investigation used fake identification to personate the real homeowners.

Police are requesting the public’s assistance identifying them. Their photographs have been released.

Anyone with information is asked to contact police at 416-808-7310, Crime Stoppers anonymously at 416-222-TIPS (8477), online at www.222tips.com, or text TOR and your message to CRIMES (274637). Download the free Crime Stoppers Mobile App on iTunes, Google Play or Blackberry App World.

Please download the Toronto Police Service Mobile App for iOS or Android.

For more news, visit TPSnews.ca.


Constable Caroline de Kloet, Corporate Communications, for Detective Adkin Holder, Financial Crimes Unit.

http://torontopolice.on.ca/newsreleases/36810
Photographs of the two suspects:
Woman and man to be identified in Fraud Over $5000 investigation

Desire for detached homes growing in Ontario, new research from OREA

ontario real estate association logo

ontario real estate association logoAll-time low inventory driving up house prices, reducing affordability for buyers

Half of Ontarians in the market to buy a home in the next two years say they are looking for a detached house, up 13 points from a year ago, shows new research from the Ontario Real Estate Association (OREA). In Toronto, where supply of detached homes is at an all-time low, the demand is up 21 points from a year ago, with 50% of buyers saying they are likely to buy this housing type, according to the Ontario Home Ownership Index, OREA’s semi-annual consumer study conducted by Ipsos Reid.

“With limited supply of this housing type, it’s becoming increasingly difficult to meet the demand,” said Tim Hudak, OREA CEO. “Young families looking for more space, a backyard to play with their kids in, simply don’t have enough options to choose from. Increasing the supply of single-family detached houses, as well as semis and townhouses, will give buyers more choice at affordable levels.”

The Building Industry and Land Development Association (BILD) recently reported that housing supply has plummeted over the past decade. The lack of housing supply is a key driving factor for increasing prices of new single-family detached houses and high-rise condos in the GTA.

“Demand for detached houses is up while supply is critically low — no wonder prices are rising so quickly,” said Hudak. “We need more homes on the market; government should give careful consideration to policies that will increase supply. Home ownership is not a fad — it is the Canadian dream.”

According to OREA’s Ontario Home Ownership Index, eight out of ten Ontarians consistently say that home ownership is important to them (79%), real estate is a good investment (82%) and it makes more sense to own rather than rent (81%). ‘Long-term investment value’ is Ontarians’ top reason for buying a home (34%).

Housing Types – Ontario compared to Toronto
Types of homes Ontario and Toronto buyers say they are likely to purchase in the next two years
Ontarians say:Torontonians say:
50% – likely to buy a detached house in the next two years, up 13 points from a year ago50% – likely to buy a detached house, up 21% from a year ago
19% – likely to buy a condo in the next two years, down 7 points from a year ago22% – likely to buy a condo, down 17% from a year ago
19% – likely to buy a semi-detached home, up 4 points from a year ago23% – likely to buy a semi-detached home, up 3 points
14% – likely to buy a townhome, down 2 points from a year ago22% – likely to buy a townhome, up 2 points

Methodology

These are some of the findings of an Ipsos poll conducted between October 27 and 31, 2016, on behalf of the Ontario Real Estate Association (OREA). For this survey, a sample of 1,003 Ontarians from Ipsos’ online panel was interviewed online. Weighting was then employed to balance demographics to ensure that the sample’s composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within +/ – 3.5 percentage points, 19 times out of 20, had all Ontario adults been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.

About The Ontario Home Ownership Index

The Ontario Home Ownership Index is designed to reflect Ontarians’ overall views of the residential real estate market in Ontario, and incorporates measures such as Ontarians’ perceptions of whether the market in their neighbourhood, city, and Ontario, respectively, have improved or worsened in the last year and looking ahead into the future, whether home ownership is important to them and whether it is a good investment in the long-term. The first wave of the index, conducted in the fall 2013, was set to a baseline of 100 points.

About the Ontario Real Estate Association

The Ontario Real Estate Association represents 67,800 brokers and salespeople who are members of the 40 real estate boards throughout the province. OREA serves its REALTOR members through a wide variety of professional publications, educational programs, advocacy, and other services. www.OREA.com

Province Proposes Initiatives to Improve Housing Affordability

Ontario Pension Plan

Ontario Pension PlanOntario will help more people purchase their first home through a proposal to double the maximum Land Transfer Tax refund to $4,000 for eligible first-time homebuyers, as of January 1, 2017.

Charles Sousa, Minister of Finance, along with Chris Ballard, Minister of Housing, were at Gateway Park in Toronto today to highlight the proposal, announced yesterday in the 2016 Ontario Economic Outlook and Fiscal Review.

If passed, the proposal would mean that no Land Transfer Tax would be payable on the first $368,000 of the cost of a first home, and more than half of first-time homebuyers would pay no Land Transfer Tax on the purchase of their home.

Ontario is taking further action to address housing affordability by proposing to:

  •  Freeze the municipal property tax on apartment buildings while undertaking a review of how the high property tax burden for these buildings affects housing affordability in the rental market.
  • Modernize the Land Transfer Tax to reflect the current real estate market, including increasing rates on one or two single-family residences over $2 million. Revenue generated from proposed increased rates would be used to fund the enhancements to the First-time Homebuyers Refund.

Improving housing affordability is part of Ontario’s plan to create jobs, grow our economy and help people in their everyday lives.

Quick Facts

  • Residential investment as a share of GDP has increased to 7.9 per cent in 2015 from 4.8 per cent in 2000.
  • The average purchase price for a first-time homebuyer in Ontario in 2015 was $375,000.
  • In 2015, 99 per cent of single-family residence transactions in Ontario were below $2 million.
  • Eligibility for the Land Transfer Tax refund for first-time homebuyers is proposed to be restricted to Canadian citizens and permanent residents. First-time homebuyers who become Canadian citizens or permanent residents within 18 months of purchasing a home could also apply for the refund.
  • The average municipal property tax burden on apartment buildings is more than double that for other residential properties such as condominiums.

Additional Resources

“We know that rising home values are a good thing for the provincial economy, but also a concern for a growing number of Ontarians. The government is committed to supporting an affordable and stable housing market while balancing the concerns of homeowners, first-time homebuyers and renters. Ontario is taking action to address housing affordability and to help people in their everyday lives.”

Charles Sousa

Minister of Finance

“We’re working to protect renters across the province, to make housing more affordable for all Ontarians and to ensure that Ontario continues to be the best place to live and raise a family.”

Chris Ballard

Minister of Housing and Minister Responsible for the Poverty Reduction Strategy

Canada Revenue Agency maximum pensionable earnings for 2017

canada-revenue-agencyThe Canada Revenue Agency announced today that the maximum pensionable earnings under the Canada Pension Plan (CPP) for 2017 will be $55,300, up from $54,900 in 2016. The new ceiling was calculated using a CPP legislated formula that takes into account the growth in average weekly wages and salaries in Canada.

Contributors who earn more than $55,300 in 2017 are not required or permitted to make additional contributions to the CPP.

The basic exemption amount for 2017 remains $3,500.

The employee and employer contribution rates for 2017 will remain unchanged at 4.95%. The self-employed contribution rate will remain unchanged at 9.9%.

The maximum employer and employee contribution to the CPP for 2017 will be $2,564.10 each. The maximum self-employed contribution will be $5,128.20. The maximums in 2016 were $2,544.30 and $5,088.60, respectively.

Quick facts

  • The CPP applies in every province and territory in Canada with the exception of Quebec, where the Quebec Pension Plan (QPP) provides similar pensions and benefits.
  • Every employed Canadian over the age of 18 must contribute to the CPP (QPP for those employed in Quebec) to qualify for a retirement pension.
  • Contributions to the CPP end when a contributor turns 70.
  • The CPP provides retirement, disability and survivor benefits and pensions to contributors and their families.

Associated links

Canada Pension Plan (CRA)

Canada Pension Plan (Service Canada)

Types of Pension Plans (Service Canada)

Stay connected

Follow the Canada Revenue Agency on Twitter and YouTube.

CONTACT INFORMATION

  • Media Relations
    Canada Revenue Agency
    613-952-9184

Home inspector licensing is good for consumers, say Ontario Realtors

ontario real estate association logo

ontario real estate association logoOntario Real Estate Association supports new legislation that will better protect consumers against unscrupulous home inspectors

Ontario Realtors announced today their support for new legislation to regulate the provincial home inspection industry. If passed, the legislation would introduce mandatory licensing requirements for Ontario’s home inspectors and will give consumers peace of mind that they are hiring a qualified professional.

“Buying a home is the largest investment most of us will ever make,” says Ray Ferris, President of the Ontario Real Estate Association (OREA). “The information a home inspector provides to a consumer is critical to their decision to purchase a property.”

This new legislation is the culmination of extensive consultations with home inspection associations, consumer advocates, and the real estate industry on mandatory qualifications for home inspectors to enhance consumer protection. OREA was happy to be a member of the volunteer panel of experts who developed a report with 35 recommendations for the home inspection industry.

“When buying a home, people have a right to expect high professional standards and government oversight of all professionals involved in a real estate transaction,” said Tim Hudak, CEO Designate of OREA. “High standards and a clear legal framework in the home inspection industry will ensure home buyers and sellers receive reliable, informative and professional advice when making one of the largest decisions of their lives.”

The proposed legislation would also create an administrative authority which will oversee the industry and establish a code of ethics, additional licensing requirements and provide consumers with a complaint and enforcement process.

About the Ontario Real Estate Association

The Ontario Real Estate Association represents over 66,750 brokers and salespeople who are members of the 40 real estate boards throughout the province. Ontario REALTORS are regulated under the Real Estate and Business Brokers Act, 2002 (REBBA). REBBA is administered by the Real Estate Council of Ontario. OREA serves its REALTOR members through a wide variety of professional publications, educational programs, advocacy, and other services. www.OREA.com

CONTACT INFORMATION

  • For more information contact:
    Katarina Markovinovic
    Ontario Real Estate Association
    (416) 445-9910 ext. 615
    katarinam@orea.com

Tarion Announces Best New Home Builders

Tarion Logo

Tarion LogoAs Chosen By Their Customers

The finalists for the 2016 Homeowners’ Choice Awards, presented by Tarion, are announced today. These are the only awards that give Ontario’s new home buyers the power to have their new home builder recognized for customer service excellence.

Formerly known as the Tarion Awards of Excellence, the Homeowners’ Choice Awards recognize a builder’s excellence in customer service each year in four categories: Small, Medium, Large Volume and High Rise. The process for selecting finalists has not changed, only the name has changed to better reflect how the award recipients are chosen.

“These awards have always been about new home buyers in Ontario and their level of satisfaction with their individual builder,’ said Tarion President and CEO Howard Bogach. Changing the name to the Homeowners’ Choice Awards simply reflects the importance of the customer’s experience in the new home buying process, and how each and every home buyer can have a say in whether a new home builder receives recognition,” adds Bogach.

Finalists were determined based on the results of a comprehensive survey sent to more than 56,000 Ontario homeowners who took possession of a new home between October 1, 2014 and September 30, 2015. Almost 12,000 completed survey responses were received, representing a high response rate of more than 21 per cent. The results were tabulated by Crunch Research and Nielsen.

Survey questions focused on homeowners’ satisfaction with their builder, covering every stage in the homeowner-builder relationship from the signing of the Agreement of Purchase and Sale, through construction and the pre-delivery period, to after-sales service.

According to Bogach, “This year marks Tarion’s 40th anniversary of protecting new home buyers in Ontario. Throughout the decades, we’ve witnessed home buyers having an increased impact on the new home buying experience based on the decisions they make. The Homeowners’ Choice Awards reflects the importance of their opinions, and champions excellence in customer service.”

To qualify for the Awards, builders must have at least five new home possessions during the survey timeframe and a specified number of completed questionnaires must have been received.

Award recipients will be announced at a luncheon in Toronto on Thursday, April 28, 2016.

The following new home builders compete in four award categories: Small, Medium, Large Volume and High-Rise.

High-Rise Category
(More than 100 high-rise possessions per year)
The Daniels Corporation – Toronto
Del Ridge Homes – Markham
Domicile – Ottawa
Plaza – Toronto
The Tricar Group – London
Tridel – Toronto

Large Volume Category
(More than 100 possessions per year)
Arista Homes Ltd. – Vaughan
The Daniels Corporation – Toronto
Granite Homes – Guelph
Mountainview Homes – Thorold
Tamarack Development Corp. – Ottawa
Tribute Communities – Pickering

Medium Volume Category
(21-100 possessions per year)
J .F. Markell Homes Ltd. – Cornwall
Klemencic Homes – Trenton
LEMAY Homes – Maisons LEMAY – Gloucester
Mikmada Homes Inc. – Burlington
SACA Homes – Casselman
Wrighthaven Homes Limited – Elora

Small Volume Category
(5-20 possessions per year)
Beisel Contracting Inc. – Kincardine
Bouma Builders Inc. – Chatham
Kolody Homes – Tecumseh
Marlo Homes Inc. – London
Menard Bros. & Associates Ltd. – Cornwall
Terry Waito Homes Inc. – Petawawa

For more information, please contact:
Senior Manager, Corporate Communications at (416) 229-3863

mediainquiries@tarion.com

 

HomEquity Bank on the 2016 PROFIT 500

chip reverse mortgageCanadian Business and PROFIT today placed HomEquity Bank on the 28th annual PROFIT 500, the definitive ranking of Canada’s Fastest-Growing Companies. Published in the October issue of Canadian Business and at PROFITguide.com, the PROFIT 500 ranks Canadian businesses by their five-year revenue growth.

HomEquity Bank, the only national provider of reverse mortgages in Canada, placed 475 on the 2016 PROFIT 500 list, thanks to a five-year revenue growth of 80%. The company’s total revenues and number of employees have soared, while assets under management have climbed to $2.2 billion.

Celebrating 30 years in business, the company is in significant growth mode and leveraging product and channel innovation to sustain increases in total revenue. By reaching seniors via digital channels such as social media, as well as partnering with banks to extend reach, HomEquity Bank has addressed the changing needs of today’s older Canadians. In fact, 80% of HomEquity Bank’s direct-to-consumer leads are obtained online.

Canadian seniors obtain reverse mortgages from HomEquity to: address retirement planning; enhance lifestyle; and, address insufficient savings and inadequate pensions.

“HomEquity Bank is honoured to be on the PROFIT 500 ranking,” said HomEquity Bank CEO Steven Ranson. “Our reverse mortgage product is helping Canadian seniors remain in their homes, by allowing them to tap into the equity they have accumulated.”

“Companies become a part of the PROFIT 500 through innovative thinking, smart strategy and sheer grit,” says James Cowan, Editor-in-chief of PROFIT and Canadian Business. “These firms demonstrate what Canadian entrepreneurs can achieve, both at home and across the globe.”

About PROFIT and PROFITguide.com
PROFIT: Your Guide to Business Success is Canada’s preeminent media brand dedicated to the management issues and opportunities facing small and mid-sized businesses. For 34 years, Canadian entrepreneurs across a vast array of economic sectors have remained loyal to PROFIT because it’s a timely and reliable source of actionable information that helps them achieve business success and get the recognition they deserve for generating positive economic and social change. Visit PROFIT online at PROFITguide.com.

About Canadian Business
Founded in 1928, Canadian Business is the longest-serving, best-selling and most-trusted business publication in the country. With a total brand readership of more than 1.1 million, it is the country’s premier media brand for executives and senior business leaders. It fuels the success of Canada’s business elite with a focus on the things that matter most: leadership, innovation, business strategy and management tactics. We provide concrete examples of business achievement, thought-provoking analysis and compelling storytelling, all in an elegant package with bold graphics and great photography. Canadian Business – what leadership looks like.

About HomEquity Bank

HomEquity Bank is the only national provider of reverse mortgages to homeowners aged 55 and over, Canada’s fastest growing demographic segment. HomEquity Bank originates and administers Canada’s largest portfolio of reverse mortgages under the CHIP Reverse Mortgage and Income Advantage brands. HomEquity Bank has been the main underwriter of reverse mortgages in Canada since its predecessor, Canadian Home Income Plan, pioneered the concept in 1986.

For more information visit www.homequitybank.ca or call 1.877.503.2447.

SOURCE HomEquity Bank

For further information: on HomEquity Bank, or to interview Steven Ranson, please contact: Teresa Donia, iAMBIC Communications, teresa@iambic.ca, 905-508-5550; Yvonne Ziomecki, Senior Vice President, Marketing and Sales, HomEquity Bank, yziomecki@homequitybank.ca, 647-723-6812

Federal Tax Obligations When Buying and Selling Property in Canada

canada-revenue-agency

canada-revenue-agencyThe Canadian real estate market is active, particularly in some major Canadian cities like Vancouver and Toronto. Questions have been raised about what federal tax obligations the buyers and sellers of real estate in Canada must meet, and how the Canada Revenue Agency (CRA) ensures tax compliance on these transactions.
This fact sheet is intended to answer these questions and address some myths about real estate transactions in Canada and the CRA’s role in administering the tax rules that apply to these transactions.

Myth – The CRA has a role to play in reducing housing costs.

Fact – The CRA does not have any role to play concerning the affordability of real estate. The CRA has no influence over market-based or economic forces that influence the cost of housing, such as supply and demand, construction costs, and market speculation.

Rising real estate prices do, however, create an incentive for real estate flipping. The CRA has dedicated resources to ensure compliance with the tax rules for property sales and other real estate transactions. The extent of our compliance activities is detailed in How does the CRA address non-compliance in the real estate sector. This work helps to maintain the fairness of our tax system.

Myth – Real estate flipping is illegal.

Fact – Real estate flipping is not against the law. Flipping is a method of buying and selling real estate to earn income. Individuals may also use assignment clauses in real estate contracts to flip a property once or more before a final sale is made.

However, all the money made on real estate flips, including real estate commissions and appreciation in value (the difference between the purchase price and sale price), must be reported to the CRA.

Myth – The sale of a new or substantially-renovated home is GST/HST exempt if the home has remained vacant or has been occupied temporarily by the builder after it is completed.

Fact – In fact, generally, the GST/HST must be charged on sales of new or substantially-renovated homes that were built or substantially renovated for sale, even when the home has remained vacant or has been occupied temporarily by the builder after completion. Please refer to GST/HST Memorandum 19.2.1, Residential Real Property – Sales, for more details, including possible, limited exceptions. For more information on the GST/HST and housing, go to GST/HST and housing.

Myth – Non-resident real estate investors do not have to pay Canadian federal income tax.

Fact – A non-resident who sells any taxable Canadian property must notify the CRA of the sale no later than 10 days after the date of the sale and pay an amount to cover the estimated taxes on that sale.

A person’s residency status is determined on a case-by-case basis by considering a number of factors which include:

  • residential ties in Canada
  • purpose and duration of visits outside Canada
  • social and economic ties outside of Canada

For more information, go to Non-residents of Canada.

What can you do?
If you suspect that someone has not reported income or GST/HST related to a real estate transaction or any other type of transaction, you should contact the CRA’s National Leads Centre. Your identity will not be disclosed, and you can provide information anonymously. For more information, go to the Informant Leads Program.

Taxpayers who have engaged in real estate transactions and have not reported them or have not correctly reported them to the CRA can go to How to change your return to obtain information on how to correct their tax affairs.

For more information on the tax-related obligations of vendors and purchasers, go to Disposing of or acquiring certain Canadian property. For more information on the CRA’s compliance activities, go to Compliance Programs.

Canada Pension Plan Investment Board Announces Senior Executive Appointments and Establishes Real Assets Investment Department

Canada Pension Plan Investment Board

Canada Pension Plan Investment BoardMark Machin, President & CEO of Canada Pension Plan Investment Board (CPPIB) announced the following appointments:

Graeme Eadie is appointed Senior Managing Director & Global Head of Real Assets, a new investment department that brings together the Real Estate Investments department with our existing Infrastructure and Agriculture groups. This change will create a better alignment with our Strategic Portfolio. Mr. Eadie has been with CPPIB since 2005, and was most recently Senior Managing Director & Global Head of Real Estate Investments.

Shane Feeney is appointed Senior Managing Director & Global Head of Private Investments. Mr. Feeney will also join CPPIB’s Senior Management Team. In this role, Mr. Feeney will be responsible for CPPIB’s private investment activities and will report to Mark Machin. Mr. Feeney was most recently Managing Director, Head of Direct Private Equity for CPPIB. He joined CPPIB in 2010 and has 18 years of private equity experience. Before joining CPPIB, he was a partner and founding member of Hermes Fund Managers Limited’s direct private equity business. He had also previously been an Associate Director with Morgan Grenfell Private Equity in London.

Ryan Selwood is appointed Managing Director, Head of Direct Private Equity, and will be responsible for overseeing co-sponsorships and other direct private equity transactions. Mr. Selwood was most recently a Managing Director in the Direct Private Equity group and lead for CPPIB’s financial institutions investing initiative. Mr. Selwood previously led CPPIB’s direct private equity activities in Europe. Prior to joining CPPIB in 2006, Mr. Selwood was a Vice-President at Merrill Lynch & Co. in the Financial Institutions Group in the Investment Banking Division in New York.

Mr. Eadie, Mr. Feeney and Mr. Selwood will transition into their new roles effective immediately.

Mr. Machin also announced today that Mark Jenkins will be leaving CPPIB on September 16 to assume a senior leadership role at The Carlyle Group. Mr. Jenkins joined CPPIB in 2008 and was most recently Senior Managing Director & Global Head of Private Investments.

“These appointments demonstrate the deep bench strength and investment expertise we have developed at CPPIB. Graeme, Shane and Ryan have been instrumental in a number of our major transactions and will no doubt continue to provide superb leadership in their new roles,” said Mr. Machin. “I would also like to thank Mark for his strong leadership and many contributions to CPPIB’s success.”

The Private Investments department will continue to invest in a wide range of private equity and credit assets, and will comprise four groups: Direct Private Equity, Natural Resources, Principal Credit Investments and Portfolio Value Creation.
About Canada Pension Plan Investment Board

Canada Pension Plan Investment Board (CPPIB) is a professional investment management organization that invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits on behalf of 19 million contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, CPPIB invests in public equities, private equities, real estate, infrastructure and fixed income instruments.

Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City and Sao Paulo, CPPIB is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At June 30, 2016, the CPP Fund totalled $287.3 billion. For more information about CPPIB, please visit www.cppib.com or follow us on LinkedIn or Twitter.

CONTACT INFORMATION
Canada Pension Plan Investment Board
Dan Madge
Senior Manager, Media Relations
+1 416 868 8629
dmadge@cppib.com

Canada Pension Plan Investment Board
Mei Mavin
Director, Corporate Communications
+1 646 564 4993
mmavin@cppib.com

OSFI releases for public consultation revisions to its CAR Guideline

Office of the Superintendent of Financial Institutions

Office of the Superintendent of Financial InstitutionsThe Office of the Superintendent of Financial Institutions (OSFI) today released for public consultation revisions to its Capital Adequacy Requirements Guideline (CAR).

OSFI’s CAR Guideline provides a framework for assessing the capital adequacy of federally regulated deposit-taking institutions and is updated periodically to ensure that capital requirements continue to reflect underlying risks and developments in the financial industry.

The CAR Guideline is based on requirements agreed by the Basel Committee on Banking Supervision. As a member of the Basel Committee, OSFI supports and applies the global risk-based framework to its regulated institutions through a measured and tailored approach that is suited to the Canadian context.

Captured in this set of revisions are OSFI’s expectations on the domestic implementation of two global capital adequacy standards issued by the Basel Committee in recent years. In this draft, OSFI outlines its discretionary approach to the implementation of the Basel III countercyclical buffer regime in Canada as well as provides guidance on the application of Basel’s equity investment in funds rules, which require institutions to hold adequate capital against equity investments in funds.

To reflect the changing risks in the Canadian mortgage market, the draft CAR Guideline has also been updated to include planned revisions to the treatment of insured residential mortgages (see OSFI’s December 2015 letter to industry). Through the capital framework, OSFI is clarifying the conditions under which risk mitigation benefits of mortgage insurance are recognized for regulatory capital purposes. These changes aim to reinforce the need for banks to exercise prudent underwriting and proper due diligence when originating insured mortgages.

Finally, the revisions to the draft guideline provide clarification on how OSFI’s capital framework will apply to federal credit unions.

Quick Facts

The implementation date for these changes is set for November 1, 2016 for institutions with an October 31 year end, and January 1, 2017 for institutions with a December 31 year end. OSFI is inviting comments on the proposed updates, which it will consider during the development of the final version of the guideline. The deadline for submitting comments is October 18, 2016. A non-attributed summary of industry comments received along with OSFI’s responses will be posted on OSFI’s website when the final version of the guideline is released.

 

Associated Links

About OSFI

The Office of the Superintendent of Financial Institutions (OSFI) is an independent agency of the Government of Canada, established in 1987, to protect depositors, policyholders, financial institution creditors and pension plan members, while allowing financial institutions to compete and take reasonable risks.

Media Contact Annik Faucher OSFI

Public Affairs annik.faucher@osfi-­bsif.gc.ca 613-949-8401

Many Ontarians living pay cheque to pay cheque

Canadian Payroll Association

Canadian Payroll AssociationOntario employees’ retirement goals challenged by debt and economy, payroll survey finds

For many working Canadians, including those in Ontario, the road to a comfortable retirement is becoming longer and more difficult. A large portion of the working population is living paycheck to paycheck, unable to save, and worried about their local economy, according to the Canadian Payroll Association’s eighth annual Research Survey of Employed Canadians, released today ahead of National Payroll Week. The survey reveals that only 37% of working Ontarians and 36% of Canadian employees, expect the economy in their city or town to improve in the coming year.

Almost half of working Ontarians living pay cheque to pay cheque
Many working Canadians are cash strapped and barely making ends meet. In Ontario, almost half (49%) report it would be difficult to meet their financial obligations if their paycheque was delayed by even a single week (48% nationally). Nationally, just 20% in Ontario and 24% nationally say they probably could not come up with $2,000 if an emergency arose within the next month, making Ontarians the least financially prepared for an emergency in all of Canada.
“A significant percentage of working Canadians carry debt, have a gloomy view of their local economy and are fearful of rising interest rates, inflation, and costs of living,” says Patrick Culhane, the Canadian Payroll Association’s President and CEO. “In this time of uncertainty, people need to take control of their finances by saving more. ‘Paying Yourself First’ (by automatically directing at least 10% of net pay into a separate savings account or retirement plan) enables employees to exercise some control over their financial future.”

Incomes flat, saving capacity drained by spending and debt
“Survey data suggests that household income growth has stalled, as respondents reporting household income above $100K has hardly increased in five years,” says Alec Milne, Principal at research provider Framework Partners. “In fact, real incomes have actually declined when inflation is taken into account.”
While pay has remained largely unchanged, employees’ spending and debt levels have affected their ability to save. According to the survey, 38% of employees in Ontario, and 40% nationally, say they spend all or more than their net pay.
Despite employees’ challenging financial situations, only 28% of respondents nationally (and in Ontario) cite higher wages as a top priority. Instead, an overwhelming 46% in Ontario, and 48% nationally, are most interested in better work-life balance and a healthy work environment.
“Clearly, many Canadians are concerned about their financial situation,” says Lucy Zambon, the Canadian Payroll Association’s Board Chair. “But better work-life balance does not have to mean reduced financial security if you spend within your means and ‘Pay Yourself First’ as a step towards financial well-being.”

Ontario employees feeling overwhelmed by debt
Nearly one-half of working Ontarians (42%), and over one-third (39%) of working Canadians, feel overwhelmed by their level of debt, an increase from the three-year average of 36%. Debt levels have risen over the past year for 32% of Ontario respondents and 31% of respondents nationally. Unfortunately, 11% nationally and in Ontario do not think they will ever be debt free.
Similar to prior years, 92% of Ontario respondents nationally carry debt (93% nationally). Over half of respondents nationally (58%) said that debt and the economy are the biggest impediments to saving for retirement.
Retirement savings fall short, retirement pushed back Half of Canadians and 55% of Ontario respondents think they will need a retirement nest-egg of at least $1 million. Unable to save adequately, the vast majority of working Canadians have fallen far behind their retirement goals, with 76% nationally and in Ontario saying they have saved only one-quarter or less of what they feel they will need.
Nearly one-half of employees nationally (45%) now expect they’ll have to work longer than they had originally planned five years ago, primarily because they have not saved enough. Respondents’ average target retirement has risen to 62, whereas these same respondents’ target retirement age five years ago was 60.

How payroll can help
“Payroll professionals can arrange to automatically deduct a portion of an employee’s net pay each pay period and direct it into a separate savings or retirement account. These deductions come right off the top, making it easier to save,” Zambon explains.
To learn more about automatic savings – and how you can Pay Yourself First – talk to your payroll professional.
The Canadian Payroll Association’s Research Survey of Employed Canadians is conducted to mark National Payroll Week (September 12-16, 2016). For more information about National Payroll Week, and the mission-critical role of payroll professionals, visit npw-snp.ca.

Canadian Payroll Association spokespersons are available across Canada for interviews.
Contact:
Robert Stephens robert@prpost.ca 416.777.0368
Leslie Challis lesliechallis@sympatico.ca 416.767.0167
Alison Rutka alison.rutka@payroll.ca 416.487.3380 x 125

Canadian Payroll Association Research Survey of Employed Canadians
A total of 5,629 employees from across Canada, and from a wide range of industry sectors, responded to an online research survey between Monday, June 27th, 2016 and Friday, August 5th, 2016, using a convenience sampling methodology. The survey was developed by the Canadian Payroll Association and conducted by Framework Partners. The survey is consistent with a margin of error of plus or minus 1.3% 19 times out of 20, but as a non-probabilistic methodology was used, a definitive margin of error cannot be expressed.

Payroll Professionals – Keeping Canada Paid
Canada’s 1.5 million employers rely on payroll practitioners to ensure the timely and accurate annual payment of $901 billion in wages, $305 billion in statutory remittances to the federal and provincial governments, and $163 billion in health and retirement benefits, while complying with more than 200 federal and provincial regulatory requirements. Since 1978, the Canadian Payroll Association has annually influenced the payroll compliance practices and processes of over five hundred thousand organizational payrolls. As the authoritative source of Canadian payroll knowledge, the Canadian Payroll Association promotes payroll compliance through education and advocacy.

See original PDF here.

RECO launches Be Home Smart helping consumers in a hot real estate market

recoHow much would you go over budget to win a bidding war for your dream home? A new study of recent Ontario home buyers and home sellers, commissioned by the Real Estate Council of Ontario (RECO), found that 47% of those polled would consider paying up to 10% over their budget and 31% would consider offering 10 to 20% more to outbid the competition. In the Greater Toronto Area, where bidding wars are more likely to occur, 57% of respondents would consider offering up to 10% over budget and 38% would consider going over their budget by between 10 to 20%.

To help consumers overcome the challenges of a hot market, today RECO launched the Be Home Smart Tour, a community outreach campaign that will travel to 13 locations across Ontario this fall and into 2017. The campaign includes an interactive display booth targeting those in the buying and/or selling stage of their lives engaged/newly married couples, new parents and downsizing boomers.

“Our research findings make it clear that too many Ontarians may be struggling to keep a cool head in the hot and highly-competitive real estate markets that are becoming the norm,” said Joe Richer, Registrar of RECO. “Buying or selling a home can be a rollercoaster of emotions. People tend to let their heart rule their heads, especially first-time buyers,””he added.

In fact, the survey found that 35% of recent homebuyers said they let their emotions influence them more than they should have the last time they purchased a home. Among millennials 18 to 34 years of age, the number jumped to 42%.

The RECO Be Home Smart Tour makes its first tour stop at Canada’s Bridal Show in Toronto at the Metro Convention Centre from September 9 to 11. At the interactive display booth, consumers will take a fun quiz to test their Real Estate IQ and have their photo taken with an image of their ‘dream home.’ They’ll receive the photo printed on the cover of RECOnnect, RECO’s magazine and electronically for sharing on social media.

“Real estate transactions can happen at lightning speed, especially in markets where there is a shortage of listings. The best way to make quick decisions in the heat of the moment is to prepare in advance,” Mr. Richer said.

Other upcoming stops in the RECO Be Home Smart Tour include the London Baby Expo at the Metroland Media Agriplex on October 1 and 2; the Zoomer Show in Toronto at the Enercare Centre on October 29 and 30; and the BabyTime Show in Toronto at the Metro Convention Centre from November 11 to 13. More shows around the province will be added in 2017. Check the RECO website for complete details.

About RECO:

RECO regulates the real estate profession in Ontario. RECO is responsible for administering the Real Estate and Business Brokers Act, 2002 (REBBA 2002)
and associated regulations on behalf of the provincial government. In order to trade in real estate in Ontario, brokers and salespersons must be registered under REBBA 2002. RECO’s mission is excellence in the delivery of regulatory services that protect the public interest and enhance consumer confidence in the real estate profession. RECO is part of Consumer Protection Ontario (CPO), an awareness program from Ontario’s Ministry of Government and Consumer Services. CPO helps Ontarians learn about the right questions to ask before making important purchasing decisions. For more information, visit www.reco.on.ca.

Methodology:

From August 25th to August 29th, 2016 an online survey was conducted among 505 randomly selected Ontario adults who purchased or sold their home within the past 5 years and are Angus Reid Forum panelists. The margin of error – which measures sampling variability – would be +/-4.3%, 19 times out of 20 on a probability sample of this size. Discrepancies in or between totals are due to rounding.

For further information contact:
Ellen Woodger, Communications Consultant The Gabor Group
416-483-2358
ellen.woodger@sympatico.ca

‘Sell ‘n STAY’ incorporates across Canada from Keller Williams Realty Solutions

sell n stay

sell n stay‘Sell ‘n STAY’ Just incorporated across Canada creating a partnership between Theresa Baird, Broker and Saskia Wijngaard, Sales Representative, from Keller Williams Realty Solutions in order to serve Canadians everywhere.

‘Sell ‘n STAY’ is an alternative to reverse mortgages providing 100% of the equity with no property tax, no maintenance. The Senior’s heirs loves ‘Sell ‘n STAY’ because they don’t pay Probate on a home that needs to be sold. However, this program is not just for seniors anymore, recently 40’s and 50 year old are listing their home as a hedge against future uncertainty. This program delivers 21-35% ROI for investors, in a simple and safe way.

‘Sell ‘n STAY’s concept is so easy. Here is how it works: ‘Sell ‘n STAY’ has a roster of Investors looking to put their money into the Real Estate market. They have no desire to live in the property, their biggest concern is getting a good tenant. But to think of it, who is better to rent from the investor than the person who has previously loved and cared for the home? With the ‘Sell ‘n STAY’ program, people can sell their home to an investor, take the money and reinvest it with their trusted financial advisor! People can pay their rent using the interest from the equity!! It’s a simple and brilliant concept isn’t it?

Saskia Wijngaard is the brilliant mind who took the idea and ran with it is a REALTOR with Keller Williams Realty Solutions, creating a solution born of the Rotary Club’s four way test. Looking for a partnership to take ‘Sell ‘n STAY’ to the next level she partnered with Theresa Baird. Theresa immediately loved a concept which protected seniors and yet benefitted investors and utilized her formidable resources to promote the concept. Theresa Baird, Broker, as a top producer, a recognized trusted name in Mississauga, loved the concept and utilized her formidable resource to promote the concept. “This is an alternative to the Reverse Mortgage beneficial to all parties concerned” she said.

The program has thought of all the “What ifs” and made the appropriate provisions. Someone takes a spill and needs to go into long term care? No problem. There is a clause that speaks to the various case scenarios that can occur. It is a program that works for both the Investor and the Seller. It is a win/win scenario.

About ‘Sell ‘n STAY’

‘Sell ‘n STAY’ which is a residential sale and leaseback program available in Ontario is now able to Specially trained, licensed and insured real estate agents deliver creative solutions to owners of a home, condo, and townhouse. Wherever people are located in Ontario, mostly in the Greater Toronto Hamilton Area they are able to sell your home and lease it back to investors. For more information, please go to www.sellnstay.com

Media Contact
Company Name: Sell ‘n STAY Inc.
Contact Person: Saskia Wijngaard & Theresa Baird
Email: saskia@kw.com
Phone: 905- 855- 1558
Address: 2580 Homelands Drive
City: Mississauga
State: Ontario
Country: Canada
Website: http://www.sellnstay.com/

Toronto Home Sales Soaring

new home mortgages

new home mortgagesA record number of homes were sold in the Greater Toronto Area last month as listings continued to dwindle, the city’s real estate board said Wednesday.

The Toronto Real Estate Board said its members had 9,813 sales in August, a 23.5 per cent increase from the same month last year, though there were two more working days this year.

Still, even adjusting for an equal number of days, last month’s sales volume in the Greater Toronto Area was up about 13 per cent from August 2015.

“The conditions underlying strong demand for … housing remained in place, including a relatively strong regional economy, growth in average earnings and low borrowing costs,” Larry Cerqua, president of the Toronto Real Estate Board, said in a statement.

“Unfortunately, we did not see any relief on the listings front, with the number of new listings down compared to last year. This situation continued to underpin very strong home price growth, irrespective of home type or area.”

The average price for homes sold, regardless of type of property, was $710,410, an increase of 17.7 per cent. Detached homes in the city of Toronto proper cost on average $1.2 million, up 18.3 per cent.

Some industry observers have voiced concerns that Vancouver’s new 15 per cent tax on foreign buyers could send investors to Toronto, driving up prices in a market that is already scorching.

Sales in Vancouver dropped 26 per cent in August compared to a year ago, following the introduction of the tax on Aug. 2.

Prices in Vancouver continued to rise, however, with the benchmark price for all residential properties climbing 31.4 per cent from a year ago to $933,100.

Source: The Canadian Press

Fortress Takes Over Collier Centre

Collier Center Barrie
Update 2016:

Fortress Real Developments Inc. is pleased to announce that the the Collier Centre and Lakeview Condominium project (“Collier Centre”) in Barrie, Ontario, is now over 80% completed.

Fortress is also pleased to announce that 78 of 82 residential condominium units are sold, and occupancy is currently scheduled to begin in January 2017. Fortress and EllisDon are currently working with purchasers to finalize selection of colours and finishes. Fortress is also pleased to welcome the Bank of Montreal, and most recently Druxy’s as commercial tenants.

“The substantial progress in the Collier Centre project is even more significant when you consider where the project was just over a year ago when Fortress stepped in to rescue it during CCAA proceedings. Since then, as has been widely acknowledged in the press, Fortress Collier restarted construction and committed to repay syndicated mortgage lenders,” said Jawad Rathore, President and CEO of Fortress.

“Our commitment to this project since purchasing the Mady Collier assets has never wavered. In addition to the amount paid to purchase the Collier Centre, Fortress Collier has invested to-date an additional $5 million into the project. Fortress Collier will only realize profit on the project should the sale price exceed the amount of outstanding principal and interest owed under the mortgage given to the Mady Collier syndicated mortgage lenders,” continued Mr. Rathore.

The Collier Centre is a mixed use mid-rise development in downtown Barrie with office, retail and a 7-storey residential condominium. The commercial retail and office components of the project have attracted major anchor tenants like the Bank of Montreal and Druxy’s. Both the office and residential buildings will have spectacular views of Kempenfelt Bay and Barrie’s picturesque downtown.

Original Story from 2015:

Fortress Real Developments revealed today that it has completed an agreement to purchase the partially completed Collier Centre project located in Barrie. This contract is pending court approval and will give Fortress sole ownership of the entire project.

The venture, which commenced construction in 2012 by Mady Developments the corner of Collier and Mulcaster streets, is now about 65% finished and is estimated to require an additional year of work before full occupancy. In January, word spread about construction being severely delayed due to tradespeople walking off the job and growing construction liens against Mady.

Mady sought bankruptcy protection Jan. 30 after owner Chuck Mady admitted to the courts he could not afford to continue construction without refinancing.

The retail part of the project is currently leased to several prominent tenants including Bank of Montreal, who took possession in 2014. The residential section of the project named LakeView Condominiums, is presently 100% sold.

“Situated right across from City Hall and overlooking Kempenfelt Bay, this will be the best address in Barrie for residents and retailers alike when it’s finished,” stated Jawad Rathore , CEO of Fortress Real Developments.

Fortress has been consulting with a large national builder who will be finishing this project, with work is forecasted to commence directly following the finalization of the purchase.

“We’ve put an exceptional team in place to complete the project. This is a complex build, and we recognized early on the importance of bringing in the best,” added Vince Petrozza , COO of Fortress.

Barrie has been specified as an Urban Growth Centre in the Province’s Places to Grow Act, and has seen considerable growth in recent years. Barrie has accepted the condominium type building in recent years with over 300 suites presently under construction. As soon as the courts agree to the sale, Fortress plans to reveal all of the construction details and plans for completion.

“The tradespeople will soon be back to work, the condo buyers are going to get a wonderful building, the mortgage lenders and Stakeholders have a clear plan to exit and potentially earn even more profit and, best of all, the residents of Barrie will soon have new exciting shops and businesses at which to spend their time.”

Fortress Real Developments Inc. is a Canadian real estate development business. The company is focused on quality projects in residential low-rise, high-rise, commercial and industrial building. http://fortressrealdevelopments.com.

Home Inspection Still Necessary in a Hot Real Estate Market

housemasterExperts from HouseMaster Home Inspections say that while there may be multiple bids on a house, buyers shouldn’t forgo the home inspection to help get their offer accepted.
As the weather heats up, there are no signs of the real estate market cooling in the Guelph/Cambridge market. Many real estate markets throughout Toronto remain hotter than ever, categorized by high demand and low inventory. “If you are in the market for a home in and around the GTA, you may find yourself making an offer above the asking price, to keep from losing the house to another bidder,” says Felix Fujs, of the Wellington County-franchise of HouseMaster, the first company to franchise in the home inspection industry in North America. “In some cases, buyers may consider submitting their offers without a home inspection contingency — a clause that allows the buyer to have a professional document of the condition of the major components of the home such as the roof, foundation, and major systems.”
But “buyer beware,” cautions Mr. Fujs. When it comes to buying a home in a hot market, buyers often get burned when they let emotion or pressure cloud their decision. While buyers want to get an accepted offer quickly, eliminating the home inspection to get a leg up over other bidders is not a good investment decision.
“Keep in mind that sellers who are inclined to accept an offer without the buyer’s home inspection contingency (over other offers that have maintained this clause), may be doing so because they know many of the home’s components are older and possibly in need of expensive repairs,” says Mr. Fujs. “I’ve seen buyers skip the home inspection, only later to move in and find that the home needs thousands of dollars in repairs and replacements.”
It can be understandable why home sellers and real estate agents see a deal without a home inspection contingency as an added value. Not having the home inspection saves time for all parties and keeps the deal moving forward, but at what cost? Ontario law does not require sellers to disclose any defect that would have been revealed by a home inspection, according to the Ontario Bar Association. “By not having the opportunity to review a comprehensive inspection by a professional home inspector prior to purchase, buyers can basically be guaranteed they will face unknown repair expenses after they move in,” adds Fujs. Savvy, risk adverse real estate agents and astute home sellers can assist buyers to avoid post sale surprises even in hot markets by having a pre-listing inspection. Home sellers can hire a reputable home inspector to document the condition in writing before the bids even start. Buyers can then review the inspection report and make their offer without an inspection contingency, but with the peace of mind that they know what they are buying, the existing conditions, and what to expect once they move in. Home sellers and agents both win because by having a professional, third-party pre-listing inspection performed, they can still sell the home fast, eliminate negotiations, and accept the highest offer knowing they did the right thing. “In a market this hot, the seller is in the driver’s seat, so disclosing the condition of it through a pre-listing inspection won’t stall the home from selling; it will simply give all parties peace of mind with no surprises after closing,” Fujs adds.
To view a quick informational video on Pre-Listing Inspections visit https://housemaster.com/sellers or contact your local HouseMaster office at 866 955-8617 or email felix.fujs@housemaster.com

About HouseMaster:
Founded in 1979 and Headquartered in Somerville, NJ, HouseMaster is the oldest and one of the largest home inspection companies in North America. With more than 310 franchised areas throughout the US and Canada, HouseMaster is the most respected name in home inspections. For over 35 years, HouseMaster has built upon a foundation of solid leadership and innovation with a continued focus on delivering the highest quality service experience to their customers and providing HouseMaster franchisees the tools and support necessary to do so. Each HouseMaster franchise is an independently owned and operated business. HouseMaster is a registered trademark of HouseMaster LLC.

CONTACT INFORMATION
HouseMaster
866 955-8617
felix.fujs@housemaster.com

Free Credit Score – Equifax

free credit score equifax

free credit score equifaxBorrowell and Equifax Canada Partner To Provide Canadians Free Access to Credit Scores – Check Now – Click HERE

Fintech company becomes first in Canada to provide credit scores for free without applying for credit

Borrowell, a leading Canadian fintech lender, today announced a new service that gives Canadians access to their Equifax credit score for free. From the privacy and security of their own homes, Canadians can access their Equifax credit score through Borrowell’s easy-to-use website. Available for the first time in Canada, the no-obligation service allows consumers to learn about their financial well being, without having to apply for credit.

In addition to allowing consumers access to their Equifax credit score, Borrowell’s simple-to-use service also provides information about the factors that may impact credit scores and recommendations on how to improve an individual’s credit worthiness. Furthermore, Borrowell will provide consumers with an updated score every three months, allowing them to track their progress.

“In talking to consumers everyday, we came to realize that many Canadians don’t know their current credit score, or how to improve it,” said Andrew Graham, CEO, Borrowell. “The reality is that lenders across the country use credit scores to decide who qualifies for loans and at what price. By providing Canadians with their scores and educational resources on how to improve them, Canadians will have better options when it comes to accessing credit.”

According to a 2015 recent survey published by BMO Bank of Montreal, approximately 56 percent of Canadians said they have never checked their credit score, and only 14 percent check at least once a year. In an April 2016 survey conducted by Equifax of more than 1,000 U.S. consumers nationwide, only 27 percent of consumers check their credit score – with the majority of those consumers receiving their score for free from a third-party website.

“We are excited to partner with Borrowell to bring this game-changing financial service to Canadians,” said Chris Briggs, Chief Marketing Officer, Equifax Canada. “Accessing a credit score can be an important first step for a consumer on his or her financial journey – in helping them better understand their personal financial situation. Our decision to work with Borrowell is based on our mutually similar desire to work with consumers to provide them with the information they need to get started on the path toward financial wellness.”

As well as providing resources that help Canadians better understand their credit scores, Borrowell also plans to present consumers with personalized offers for third-party financial products in addition to its own loan products.

For more information, go to www.borrowell.com

About Borrowell

Borrowell is a Canadian fintech lender that offers fast, fair, and friendly personal loans. Its affordable, fixed-interest loans give Canadians a smarter way to access credit. A wholly online application process instantly provides personalized loan options to Canadians with good credit who want better alternatives to expensive credit card debt. Borrowell is backed by a number of investors including Equitable Bank, Power Corporation, David Chilton (The Wealthy Barber, Dragons’ Den), John Bitove (Sirius XM Canada, Mobilicity) and Joe Canavan (Assante Wealth Management).

Find out more at www.borrowell.com.

About Equifax Canada

Equifax powers the financial future of individuals and organizations around the world. Using the combined strength of unique trusted data, technology and innovative analytics, Equifax has grown from a consumer credit company into a leading provider of insights and knowledge that helps its customers make informed decisions. The company organizes, assimilates and analyzes data on more than 800 million consumers and more than 88 million businesses worldwide, and its databases include employee data contributed from more than 5,000 employers.

Headquartered in Atlanta, Ga., Equifax operates or has investments in 24 countries in North America, Central and South America, Europe and the Asia Pacific region. It is a member of Standard & Poor’s (S&P) 500 Index, and its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. Equifax employs approximately 9,200 employees worldwide.

Some noteworthy achievements for the company include: Ranked 13 on the American Banker FinTech Forward list (2015); named a Top Technology Provider on the FinTech 100 list (2004-2015); named an Information Week Elite 100 Winner (2014-2015); named a Top Workplace by Atlanta Journal Constitution (2013-2015); named one of Fortune’s World’s Most Admired Companies (2011-2015); named one of Forbes’ World’s 100 Most Innovative Companies (2015). For more information, visit www.equifax.com

Canadian housing market and economy hanging in the balance

Mortgage Professionals Canada logoMortgage Professionals Canada economist provides views on evolving conditions in the housing market and the implications for the mortgage market

Mortgage Professionals Canada Chief Economist Will Dunning, in a report released today, cautioned against further tightening of mortgage lending conditions in Canada, which would significantly reduce housing activity. He said housing activity is a primary driver of the Canadian economy and any adjustments to mortgage lending that takes people out of the market could have severe adverse effects. Dunning discusses this delicate balance and other findings about the climate of the housing market in his new report, Looking for Balance in the Canadian Housing and Mortgage Markets.

For the past few years, Canadians have been waiting for the housing “bubble” to burst; however, Dunning explains that to the contrary, there is insufficient proof that a bubble exists. For one, statistical research shows that growth of house prices has very little influence on market activity and, therefore, there is no evidence of a “speculative mindset”.

Secondly, low interest rates have created “affordability space” in which Canadian house prices could rise. Rather than illustrating that housing market bubbles have been created, this data shows that housing markets in Canada are very good at incorporating fundamental economic conditions, as well as other local conditions.

“Economic fundamentals can change,” says Dunning. “One of those fundamentals is availability of finance. There is a risk that changes in policies of lenders or mortgage insurers that reduce access to mortgages could cause an unnecessary drop in housing demand and housing prices, and bring consequent economic damage.”

In light of widespread calls for further tightening of mortgage lending conditions in Canada to address what is considered to be excessive risk, Dunning points out that, based on available data, there is no evidence of an increase in risk by borrowers or lenders. Policy changes made by mortgage insurers or lenders are a much greater risk to the housing market and would make it harder to finance home purchases.

“Now that the energy sector is no longer a major economic driver, a healthy housing sector is even more essential,” says Dunning. “It would be tragic to unnecessarily impair this key economic force. Such errors have the potential to cause a sharp downward adjustment of prices.”

Economic confidence is what most influences purchasing decisions by future homeowners as discussed in The Next Generation of Homebuyers, the latest Spring Survey by Mortgage Professionals Canada. Most of these Next Gens feel that Canadian real estate is a good long-term investment and 72 per cent view having a mortgage as good debt, as long as they see Canada is on a strong economic footing.

Canadian Housing Market Findings

Job growth has been the predominant driver of housing activity, but record-low interest rates make this an unusual time as interest rates have greater influence
Canada currently has a “sellers’ market” where there is a strong demand for housing and a flat supply
During the past five years, the average resale price in Canada (as reported by the Canadian Real Estate Association) has increased by an average of 6.4% per year
When housing affordability is calculated using the actual interest rates that can be obtained in the market, conditions are excellent across the country (even in spite of higher house prices), which has bolstered demand. A non-trivial rise in interest rates that is sustained for more than a few months could push mortgage costs to unaffordable levels and sharply limit housing activity
The recent strength of housing indicators is largely centred in two major markets: Vancouver and Toronto, and their surrounding areas
Anecdotal evidence suggests that, in Vancouver, activity by foreign investors is distorting the housing market; observers are now starting to question if a similar effect is developing in Toronto
About Mortgage Professionals Canada
Mortgage Professionals Canada (formerly CAAMP) is Canada’s national mortgage broker channel association representing more than 11,000 members from coast to coast. We recognize that Canadians need and deserve more. We believe in competition as it produces better options and demands ever-improving service and products. We believe in choice as it benefits Canadians and delivers an environment of opportunity. We believe in professionalism as it demonstrates commitment, trust and excellence. The mortgage broker channel is a critical and valuable profession. It creates possibility, fuels the economy and provides Canadians with choice when making among the most important financial decisions of their lives.
SOURCE Mortgage Professionals Canada
For further information: Will Dunning, Chief Economist, Mortgage Professionals Canada, O: 416-236-5115, wdunning@sympatico.ca; Karolina Olechnowicz, Senior Consultant, Media Profile, O: 416-342-1822, karolina.olechnowicz@mediaprofile.com

MFDA Protecting Seniors from Financial Harm

Mutual Fund Dealers Association of Canada

Mutual Fund Dealers Association of CanadaSeniors across Canada are celebrated during Seniors’ Month and Seniors’ Week events held across the country in the month of June. The Mutual Fund Dealers Association of Canada (the “MFDA”) is marking this by launching its first Investor Bulletin with a focus on seniors’ issues. The Investor Bulletin provides general investor news, alerts, notable cases and information on how investors can better protect themselves from financial harm.

“Protecting senior investors and enhancing investor education are key initiatives of the MFDA under its strategic plan, and the launch of the MFDA Investor Bulletin broadens the scope of our investor focused communications. Readers of the first edition will learn about the actions the MFDA is taking to protect seniors, as well as steps investors can take to avoid financial harm,” said MFDA President and CEO Mark Gordon.

All MFDA Investor Bulletins will be published on the For Investors section of the MFDA website. Readers can also subscribe to receive the MFDA Investor Bulletin by email by using the MFDA Subscription Service.

The MFDA also encourages senior investors to visit the Seniors’ Section of the MFDA website where investors can find links to resources for seniors organized by Province and Territory, as well as links to investor education resources from the MFDA, its regulatory partners, and other organizations.

In addition, below are some regulatory activities and initiatives recently undertaken by the MFDA in regards to protecting senior investors:

In October 2015 the MFDA held its second Seniors Summit where various specialists and subject matter experts provided practical advice on dealing with the issues and challenges faced by dealers and advisors in servicing senior clients. A webcast of the 2015 Seniors Summit is available on the MFDA website.
The MFDA continues to place a priority on cases involving Seniors and Vulnerable Persons. Forty percent of proceedings commenced in 2015 (other than signature falsification cases that do not involve a client complaint or harm to a client) involved Seniors or Vulnerable Persons. Highlights from enforcement proceedings involving senior investor and other vulnerable investors are set out in the 2015 Annual Enforcement Report.
The MFDA published amendments to strengthen and clarify its existing rule against advisors having any form of control or authority over the financial affairs of a client, such as a power of attorney from a client, or an appointment to act as a trustee or executor of a client or client’s estate.
The MFDA is the self-regulatory organization for Canadian mutual fund dealers, regulating the operations, standards of practice and business conduct of its Members and their approximately 83,000 Approved Persons with a mandate to protect investors and the public interest. For more information about the MFDA’s complaint and enforcement processes, as well as links to ‘Check an Advisor’ and other Investor Tools, visit the For Investors page on the MFDA website.

SOURCE Mutual Fund Dealers Association of Canada
For further information: Ian Strulovitch, Director, Public Affairs, (416) 943-7425 or istrulovitch@mfda.ca

RELATED LINKS
http://www.mfda.ca

Generation X Driving Demand for Recreational Properties

Generation X buyers of cottages, cabins and chalets across Canada outnumber Baby Boomers by almost two to one, according to the Royal LePage 2016 Canadian Recreational Housing Report released today. Still, planning for retirement living is among the most common reasons potential buyers give for the purchase of a recreational property. The annual report compiles information from a cross-Canada survey of real estate advisors who specialize in recreational property sales.

The survey found that 65 per cent of advisors polled indicated that potential purchasers were considering their retirement needs in deciding to buy a recreational property, while a significant number of respondents (88 per cent) said that potential purchasers identified desired lifestyle and vacationing as their main purpose. Just under half of respondents (49 per cent) said that clients wanted a recreational property as an investment and a little over a third (37 per cent) indicated that low interest rates were a deciding factor.

The family status of the typical recreational property buyer is a couple with children, according to 76 per cent of survey respondents. When asked about the most prevalent age range of current buyers, 63 per cent of respondents identified Gen Xers (36 to 51 years old), almost double the 33 per cent who identified Baby Boomers (52 to 70 years old).

“We found it interesting that a majority of respondents identified retirement as a driving factor for a recreational property purchase consideration, but Gen Xers, still decades from retirement, were identified as the typical buyer in the current market,” said Phil Soper, president and chief executive officer, Royal LePage. “This cohort, having reached a place of stability, and often owners of primary residences in the country’s city centres, is making recreational property purchases for family enjoyment in the near-term and as a key strategy for retirement.”

“Canada’s extended low interest rate environment has clearly provided buyers with the confidence they need to invest in a cottage or cabin,” added Soper. “In contrast to urban home purchase decisions, buying a property on a lakefront or mountainside is much less about interest rates, and more about enhancing lifestyle. Cash savings trump mortgage financing when it comes to how people are acquiring recreational property.”

Foreign purchases – A relatively small proportion of transactions

Almost 95 per cent of respondents stated that foreign buyers1 were responsible for 10 per cent or less of recreational property transactions. When asked to identify where foreign buyer activity originates from, the most common answer was North America (79 per cent), with the majority (64 per cent) of those who specified a country of origin stating purchasers were Americans. Respondents were split on factors driving international interest between the quality of living in Canada (30 per cent), geography (27 per cent) and the low Canadian dollar (27 per cent).

“We Canadians enjoy a wonderful recreational real estate reciprocity with our American cousins. Like flocks of happy geese, we fly south in the winter, and in return, Americans head to the beautiful north country when summer arrives. Canadians have been, for years, the principal foreign buyers of sunbelt property in states like Florida and Arizona, while a lower Canadian dollar has encouraged a new wave of U.S. buyers here,” said Soper. “Whether recreational property buyers live in Canada or come from abroad, the beauty of this country, from coast-to-coast, is the appeal for families looking to ‘get away’ and enjoy the cottage experience, one that is quintessentially Canadian.”

Regional trends – Sales volumes increased year-over-year in majority of Canada’s recreational property markets

While common elements impacting the country’s regional recreational property market can be identified, variability in provincial economies and inter-provincial migration has resulted in disparate local conditions. Depressed oil prices may have dampened the recreational property activity in energy-dependent regions, and caused workers who moved for energy jobs to return to their home provinces. These provinces have seen a general uptick in demand for real estate, as the older, repatriated workers look to spend their savings on leisure properties.

Across the country, roughly two-thirds (67 per cent) of those polled said they have seen increases in sales over the past 12 months, and over half (53 per cent) expect sales activity in 2016 to exceed 2015 levels.

British Columbia saw year-over-year2 price appreciation, and Royal LePage expects sales activity to increase throughout the remainder of the year. Advisors cited demand from retirees as a major factor driving the market.

In Alberta, sentiments were somewhat mixed, with advisors generally expecting continued softness in both price and sales activity in the coming year.

In neighbouring Saskatchewan, recreational property prices were up slightly compared to last year, with inventory and demand levels remaining stable.

Meanwhile in Manitoba, the recreational property market is recording slight softness, with inventory levels outpacing demand.

In Ontario slight increases over last year were reported in both price and sales volumes across the recreational property communities studied, with inventory levels slightly down in most markets. Looking ahead, Ontario’s recreational property markets are expected to be active for the remainder of 2016.

Similarly in Quebec, most reported that recreational property prices and activity levels have been showing slight increases this year over last, with sales volumes projected to remain healthy for the remainder of the year.

Atlantic Canada recorded that regional market conditions were mixed. Advisors in Nova Scotia reported slight year-over-year price and sales activity increases, while recreational property markets in New Brunswick remained stable on both fronts. In contrast, Newfoundland’s recreational property market reported slight decreases in prices and sales when compared to the same period last year. In light of the negative economic impacts of the oil industry’s downturn, this softness is expected to continue for the remainder of 2016, as buyers and sellers wait on the sidelines amid market uncertainty.

Average regional prices

The chart below provides average 2016 prices across Canada for six recreational property types studied in the report including lakefront, riverfront, oceanfront, island, woods cottage/cabin, and resort/condo.

 

Newfoundland and Labrador

Lakefront

Riverside

Resort/
Condo

Woods
Cabin

Oceanfront

Island

Lakefront
Cabin

Newfoundland

$250,000

$200,000

$180,000

$300,000

$300,000

 

Prince Edward Island

Lakefront

Riverside

Resort/
Condo

Woods
Cabin

Oceanfront

Island

Lakefront
Cabin

Prince Edward Island

$120,000

$120,000

$100,000

$150,000

 

Nova Scotia

Lakefront

Riverside

Resort/
Condo

Woods
Cabin

Oceanfront

Island

Lakefront
Cabin

Nova Scotia

$325,000

$275,000

$175,000

$400,000

$180,000

 

New Brunswick

Lakefront

Riverside

Resort/
Condo

Woods
Cabin

Oceanfront

Island

Lakefront
Cabin

Fredericton

$97,000

Perth and Rowena

$275,000

$100,000

Southeast New Brunswick

$150,000

$150,000

$200,000

$40,000

$250,000

 

Quebec

Lakefront

Riverside

Resort/
Condo

Woods
Cabin

Oceanfront

Island

Lakefront
Cabin

Chaudière-Appalaches (Lac
Saint-François)

$350,000

$200,000

Capitale-Nationale  (Charlevoix,
Mont Sainte-Anne, Saint-Ferréol-
les-Neiges)

$229,000

$152,000

$79,000

$242,000

Estrie (Lac Brome, Sutton,
Bromont)

$350,000

$350,000

$210,000

$300,000

Estrie (Memphrémagog)

$308,000

$260,000

Lanaudière (Sainte-Julienne,
Rawdon, Saint-Alphonse, Saint-
Donat, Sainte-Marceline, Saint-
Come)

$450,000

$200,000

$150,000

$150,000

The Laurentides (Mont-
Tremblant, Lac Supérieur, Lac
Labelle)

$750,000

$400,000

$350,000

$350,000

The Laurentides (Saint-Sauveur,
Sainte-Adèle, Saint-Adolph
d’Howard, Sainte-Marguerite-du-
Lac-Masson)

$260,000

$195,000

Capitale-Nationale (RCM de la
Jacques-Cartier: Lac-St-Joseph,
Lac-Beauport, Lac Delage, Lac
Croche, Fossambeault-sur-le-Lac)

$600,000

$350,000

$250,000

$250,000

Capitale-Nationale (RCM de la
Jacques-Cartier: Sainte-Brigitte-
de-Laval, Sainte-Catherine-de-la-
Jacques-Cartier, Saint-Gabriel-de-
Valcartier, Shannon, Stoneham-
Tewkesbery)

$400,000

$325,000

$175,000

Outaouais (Petite-Nation Nord)

$300,000

$220,000

$200,000

$200,000

Outaouais (Petite-Nation Sud)

$300,000

$200,000

Capitale-Nationale (Portneuf Lac
Sept-Îles, Lac Sergent, Lac-Blanc,
Rivière à Pierre, Deschambeault-
Grondine, Saint-Raymond)

$350,000

$150,000

$100,000

 

Ontario

Lakefront

Riverside

Resort/
Condo

Woods
Cabin

Island

Lakeview

Year-
round
Lakefront

Seasonal
Lakefront

East Kawarthas

$700,000

$400,000

$350,000

$550,000

Haliburton Highlands

$400,000

$250,000

$200,000

$250,000

Honey Harbour

$650,000

$250,000

$350,000

Kawartha Lakes

$695,000

$350,000

$145,000

Land O’ Lakes

$325,000

$95,000

$209,000

Muskoka

$790,000

$290,000

$400,000

Niagara-on-the-Lake

$769,000

$700,000

Orillia/ South Muskoka

$650,000

$275,000

Parry Sound

$400,000

$250,000

$200,000

$350,000

Rideau Lake

$400,000

$300,000

$250,000

$250,000

Southern Georgian Bay

$845,000

$400,000

$275,000

$452,000

Southwestern Ontario

$485,000

$245,000

$205,000

$246,000

St. Joseph Island and Lake Huron

$80,000

$250,000

$150,000

Sudbury

$230,000

$210,000

$100,000

$175,000

 

Manitoba

Lakefront

Riverside

Resort/
Condo

Woods
Cabin

Oceanfront

Island

Lakefront
Cabin

Grand Beach district

$250,000

Interlake

$300,000

$100,000

Lac du Bonnet

$293,000

$270,000

$137,000

Lake Manitoba

$155,000

$100,000

Lake Winnipeg

$180,000

 

Saskatchewan

Lakefront

Riverside

Resort/
Condo

Woods
Cabin

Oceanfront

Island

Lakefront
Cabin

Christopher Lake, Emma Lake
and Candle Lake

$454,000

$266,000

Melfort

$320,000

$225,000

Regina

$350,000

$280,000

$180,000

 

Alberta

Lakefront

Riverside

Resort/
Condo

Woods
Cabin

Oceanfront

Island

Lakefront
Cabin

Canmore

$2,500,000

$750,000

Sylvan Lake

$1,000,000

Wabamun Lake, Lac St. Anne,
and Pigeon Lake

$480,000

 

British Columbia

Lakefront

Riverside

Resort/
Condo

Woods
Cabin

Oceanfront

Island

Island
with Ferry
Service

100 Mile House

$320,000

Central Vancouver Island

$380,000

Cranbrook and Kimberley

$800,000

$300,000

$200,000

$200,000

Gulf Islands

$500,000

$1,000,000

Kelowna

$1,600,000

$350,000

$450,000

Sunshine Coast

$500,000

$390,000

$400,000

$800,000

$700,000

About Royal LePage

Serving Canadians since 1913, Royal LePage is the country’s leading provider of services to real estate brokerages, with a network of over 16,000 real estate professionals in more than 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women’s and children’s shelters and educational programs aimed at ending domestic violence. Royal LePage is a Brookfield Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE.

For more information, visit: www.royallepage.ca.

__________________________________
1
For the purposes of the Report, “foreign buyers” are defined as buyers who live outside of Canada all, or most of the time.
2 The survey specifies year-over-year as May 2015/2016.

SOURCE Royal LePage Real Estate Services

High-rise booms while low-rise inventory continues to shrink

Building Industry and Land Development AssociationGREATER TORONTO – Sales of new high-rise homes surged in May while low-rise inventory fell to a new record low, the Building Industry and Land Development Association (BILD) announced today.

In May there were 3,623 new high-rise units sold, making it the second-highest month on record for high-rise sales. Only November 2011 saw more new high-rise condos sold in the GTA.

At the same time, the supply of low-rise homes available for purchase in the GTA reached a new record low of 1,985 homes. This is the first time that builders’ inventory of new detached, semi-detached and townhomes in the GTA has fallen below 2,000 homes. Ten years ago in May 2006, there were 16,420 low-rise homes in builders’ inventory.

Total inventory of new homes in May declined to 19,209 units, down from 29,754 in May 2006. High-rise inventory in consisted of 17,224 homes, compared to 13,334 a decade ago.

“The industry is following the Province’s Growth Plan intensification policies which emphasize high-rise development in the GTA,” said BILD President and CEO Bryan Tuckey. “Nine out of 10 of the new homes available for sale in the GTA are high-rise and mid-rise condominiums.”

The launch of two major condo projects in Vaughan and Ajax contributed to the strong high-rise sales, according to Altus Group, BILD’s official source for new-home market intelligence. May high-rise sales were up 76 per cent from a year ago and nearly double the 10-year average of 1,896.

The average price of a new low-rise home in the GTA reached yet another new record high in May, when it climbed to $875,154. After surpassing the million-dollar mark for the first time in March, the average price of detached homes grew to $1,125,988 in May.

“A shortage of serviced developable land in the region is significantly reducing the supply of new low-rise homes brought to market and helping drive up prices,” said Tuckey.

“Healthy levels of condo supply, combined with creative suite designs that maximize each square foot of space, have helped keep homeownership within reach for the many buyers who have been priced out of the low-rise market,” he added.

The average price of a new high-rise home was $454,304, a three per cent increase from May 2015. The average price per square foot in May was $573, and up 3 per cent from last May.

Low-rise sales declined 15 per cent from May 2015 with 2,091 homes sold. High-rise sales recorded increases in all GTA regions except Halton Region, with the highest increases coming in Durham and York Regions. A complete table of May 2016 sales is available below.

May New-Home Sales by Municipality:

May ’16

Low Rise

High Rise

Total

Region

2014

2015

2016

2014

2015

2016

2014

2015

2016

Durham

296

252

502

47

27

602

343

279

1,104

Halton

188

310

408

105

118

107

293

428

515

Peel

423

874

738

58

186

206

481

1,060

944

Toronto

222

157

12

1,604

1,281

1,476

1,826

1,438

1,488

York

752

855

431

234

441

1,232

986

1,296

1,663

GTA

1,881

2,448

2,091

2,048

2,053

3,623

3,929

4,501

5,714

Jan-May

7,780

9,492

9,342

8,429

8,283

10,571

16,209

17,775

19,913

Source: Altus Group

With more than 1,480 members, BILD, formed through the merger of the Greater Toronto Home Builders’ Association and Urban Development Institute/Ontario, is the voice of the land development, home building and professional renovation industry in the Greater Toronto Area. BILD is proudly affiliated with the Ontario and Canadian Home Builders’ Associations.

These results were previously released under the REALNET Canada name, whose independent and comprehensive data, analyses and insights on the commercial real estate investment and residential development markets is collected and compiled using a nationally consistent research process established in 1995. Going forward they will be released by Altus Group, powered by a proprietary data platform led by Altus Data Solutions Canada. This team is the formal unification of leading Canadian real estate data companies previously acquired by Altus Group, including REALNET Canada.

A statistical backgrounder is available for viewing.

SOURCE Building Industry and Land Development Association
For further information: or to schedule an interview, contact Andrei Zaretski, Manager of Marketing and Media Relations, at 416-391-3450 or 416-843-4898 or azaretski@bildgta.ca.

RELATED LINKS
www.bildblogs.ca

Dan Brewer Elected New President of the Appraisal Institute of Canada

appraisal institute of canada logoThe Appraisal Institute of Canada (AIC) announces the election of Dan Brewer, AACI, P.App of Richmond Hill Ontario as AIC’s National President for 2016-2017. Mr. Brewer was formally inducted during the AIC’s Annual Conference held from June 8 – 11, 2016 in Winnipeg, MB.

Dan Brewer has over 38 years of property valuation experience in the private sector and is currently a senior appraiser and consultant for Appraisers Canada Inc with offices in Richmond Hill and Barrie. Dan joined the Appraisal Institute of Canada in 1983 and earned his CRA designation in 1987, then his AACI, P.App in 2006. He is a licensed Real Estate Broker, a licensed Mortgage Broker and he holds the Real Estate Institute of Canada’s CRP designation for Certified Reserve Fund Planners. During the past 24 years Dan has served on several committees at both the provincial and national level and he also speaks at various seminars and conferences. As president-elect, Dan also served as chair of the Professional Practice Committee.

“I am honored to be president of the Appraisal Institute of Canada. AIC has been the preeminent professional valuation association for almost 80 years and I plan to build on its proud reputation as the appraisal professionals of choice within Canada,” states Dan Brewer, president of the Appraisal Institute of Canada. ”

“I look forward to working with the 2016/2017 Board of Directors to represent AIC Members and to continue to strengthen our partnerships within Canada and around the world.”

Joining Mr. Brewer on the AIC Executive Committee are:

Rick Colbourne, AACI, P.App – President Elect – Nova Scotia
Thomas Fox, AACI, P.App – Vice-President – Saskatchewan
Peter McLean, AACI, P.App – Vice-President – Ontario
Daniel Doucet, AAIC, P.App, Fellow – Past President – New Brunswick
Keith Lancastle, Chief Executive Officer, Non-voting member

The 2016/2017 Board Members include:

Craig Barnsley, AACI, P.App, British Columbia
Dan Jones, AACI, P.App, British Columbia
John Manning, AACI, P.App, Alberta
Ernie Paustian, AACI, P.App, Alberta
Darrell Thorvaldson, AACI, P.App, Manitoba
Paula Malcolm-Schaller, CRA, Ontario
Peter McLean, AACI, P.App, Ontario
Daniel Pinard, AACI, P.App, Quebec
Mike Kirkland, AACI, P.App, Newfoundland
Scott Wilson, AACI, P.App, Fellow, Prince Edward Island

For more information about the 2016/2017 board, please visit www.AICanada.ca/board-of-directors/.

The AIC’s highest honour, the Fellow, was also awarded to two AIC Designated Member who have emulated AIC’s values and integrity in every facet of their career. This year’s recipients include: Daniel Doucet, AACI, P.App, Fellow of New Brunswick and Peter Lawrek, AACI, P.App, Fellow of Saskatchewan.

An Honourary AACI was also awarded to Craig Kelman, Owner, Kelman & Associates, who has published AIC’s quarterly publication, Canadian Property Valuation, for more than 30 years and Davida Mackay, the Executive Director of the Nova Scotia Real Estate Association in recognition of close to 30 years of dedicated service to members and her involvement with various provincial and national committees.

ABOUT AIC
The Appraisal Institute of Canada (AIC) is a leading real property valuation association with over 5,000 members across Canada. Established in 1938, the AIC works collaboratively with its 10 provincial affiliated associations to grant the distinguished Accredited Appraiser Canadian Institute (AACI) and Canadian Residential Appraiser (CRA) designations. AIC Designated Members are highly qualified, respected professionals who undertake comprehensive curriculum, experience and examination requirements. Our members provide unbiased appraisal, appraisal review, consulting, reserve fund study and machinery and equipment appraisal services on all types of properties within their areas of competence. For more information, go to www.AICanada.ca and follow AIC on LinkedIn, Twitter, Facebook and the AIC Exchange.

SOURCE Appraisal Institute of Canada

CREA Updates Resale Housing Forecast June 2016

Canadian Real Estate Association

Canadian Real Estate AssociationThe Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations in 2016 and 2017.

Canadian resale housing market trends that defined 2015 have intensified. National sales activity and average prices reached new heights in the first half of 2016 amid a growing supply shortage of single family homes in British Columbia and Ontario, particularly in B.C.’s Lower Mainland as well as in and around the Greater Toronto Area (GTA).

Price gains in these regions stand in contrast to declines in provinces where economic and housing market prospects are closely tied to the outlook for the oil patch and other natural resource industries. Elsewhere, home prices are growing modestly, such as in Ottawa or Montreal.

Activity should begin to rebalance away from B.C. and Ontario, as supply shortages put upward pressure on home prices and constrain transactions even as housing demand remains strong in these provinces and interest rates remain low. Accordingly, sales activity over the second half of the year is expected to ease in B.C., Ontario and on a national basis.

Sales in Alberta, Saskatchewan and Newfoundland & Labrador are expected to struggle to regain traction this year, resulting in continuing softness for home prices. In most other provinces, home sales activity and average prices should improve as their economies strengthen and interest rates remain low.

Nationally, sales activity is forecast to rise by 6.1 per cent to 536,400 units in 2016. This would represent a new annual record, but remain below the peak reached in the 2007 after adjusting for population growth.

British Columbia is forecast to post the largest annual increase in activity (+20.0 per cent) this year, while Alberta is expected the record the largest annual decline in activity (-11.5 per cent). Although housing demand remains strong among many housing markets in Ontario, a lack of supply is projected to constrain the increase in sales activity (+5.2 per cent) this year.

Elsewhere, sales are forecast to rise in Manitoba (+7.1 per cent), Quebec (+5.1 per cent) and Nova Scotia (+5.8 per cent), reflecting anticipated economic improvements in these provinces. In New Brunswick, strong home sales toward the end of last year and a weak start to 2016 is projected to result in a small annual decline in activity this year despite an anticipated improvement in its economic prospects.

In Saskatchewan and Newfoundland & Labrador, where housing market prospects are tied to the outlook for natural resource prices, annual sales activity is forecast to ease by four per cent and one per cent respectively this year.

Prices have continued to push higher in British Columbia and Ontario and sales in these expensive real estate markets have recently hit record highs. Accordingly, CREA’s forecast for the national average price has been revised upward to $490,700 in 2016, representing an annual increase of 10.8 per cent.

Highlighting how provincial sales activity affects the national average price, British Columbia is the only province where the average home price is forecast to climb faster (+13.5 per cent) than the national average in 2016. Ontario’s average price is forecast to rise roughly in line with the national increase.

Elsewhere, average prices in 2016 are forecast to rise by 1.4 per cent in Manitoba, 1.1 per cent in Quebec, 1.4 per cent in New Brunswick, and 0.2 per cent in Nova Scotia. Reflecting recent housing market strength in Prince Edward Island, its average price is forecast to advance by 4.5 per cent in 2016.

The forecast for Alberta’s average price has been revised upward and is now projected to eke out a small gain (+0.6 per cent) this year as the province’s supply of listings continues to be drawn down by sales activity. By contrast, average price is expected to ease in Saskatchewan (-1.4 per cent) and record a marked decline in Newfoundland & Labrador (-8.0 per cent).

In 2017, national sales are forecast to number 537,500 units, which is virtually unchanged (+0.2 per cent) from the forecast for sales this year. Activity in B.C. and Ontario is anticipated to remain strong but unable to match records set this year due to a combination of deteriorating affordability and a lack of supply.

Meanwhile, consumer confidence should begin to strengthen and begin drawing homebuyers off the sidelines in Alberta and Saskatchewan as oil prices improve and their economic prospects strengthen. This should contribute to a modest rebound in sales activity for these provinces in 2017.

British Columbia is projected to post an annual decline of 2.3 per cent in home sales in 2017, while annual sales in Ontario are forecast to edge back by 0.6 per cent in 2017.

By contrast, sales activity is forecast to continue rising in Manitoba, Quebec and Nova Scotia next year, reflecting further anticipated economic improvement in these provinces. Meanwhile, sales in Prince Edward Island are expected to remain near on par with record levels forecast for 2016, as the province’s economy continues to benefit from a lower Canadian dollar.

The national average price is forecast to remain stable (+0.1 per cent or +$400) to $491,100 next year, with modest price gains near or below inflation in most provinces.

Slower national average price growth in 2017 primarily reflects the effect of a projected slowdown in sales activity in British Columbia and Ontario. In these two provinces, luxury sales activity is anticipated to recede from current record levels, resulting in a decline in their share of total sales activity. An ample supply of listings relative to demand will continue to keep price gains in check in other provinces, although inventories have begun to shrink in provinces where supply had been elevated in recent years.

About The Canadian Real Estate Association
The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 115,000 real estate Brokers/agents and salespeople working through more than 100 real estate Boards and Associations.

SOURCE Canadian Real Estate Association
For further information: Pierre Leduc, Media Relations, The Canadian Real Estate Association, Tel.: 613-237-7111 or 613-884-1460, E-mail: pleduc@crea.ca

Canadian home sales drop in May following April’s record

Canadian Real Estate AssociationAccording to statistics released today by The Canadian Real Estate Association (CREA), national home sales dropped in May 2016 after having set an all-time monthly record in April.

Highlights:

  • National home sales dropped 2.8% from April to May.
  • Actual (not seasonally adjusted) activity was up 9.6% compared to May 2015.
  • The number of newly listed homes fell 3.2% from April to May.
  • The MLS® Home Price Index (HPI) rose 12.5% year-over-year in May.
  • The national average sale price climbed 13.2% in May from one year ago; net of Greater Toronto and Greater Vancouver, it advanced 9.1% year-over-year.
  • The number of homes trading hands via Canadian MLS® Systems fell by 2.8 percent month-over-month in May 2016 after having broken all previous monthly sales records in April.

Sales activity dropped in May from the previous month in about 70 percent of all markets, led by those in British Columbia and Ontario where the number of homes listed for sale has fallen to multi-year or all-time lows.

“National sales activity is still strong, even after coming off the record levels of the past couple of months,” said CREA President Cliff Iverson. “But, there are housing markets where sales continue to reflect a cautious mood among homebuyers and uncertainty about the local economy,” he added. “All real estate is local, and REALTORS® remain your best source for information about sales and listings where you live or might like to in the future.”

“Many of the housing markets in BC and Ontario that led the monthly decline in national sales are also places where months of inventory have fallen to all-time lows,” said Gregory Klump, CREA’s Chief Economist. “This suggests a lack of supply may be starting to rein in sales amid a continuation of strong housing demand.”

Actual (not seasonally adjusted) sales activity was up 9.6 percent year-over-year in May 2016 and stood 15.1 percent above the 10-year average for the month of May.

The number of newly listed homes fell by 3.2 percent in May 2016 compared to April. New supply was down in about two-thirds of all local markets, led by the Fraser Valley, Victoria, Edmonton, Montreal and Quebec City.

The national sales-to-new listings ratio edged up to 64.8 percent in May 2016 – the ratio’s tightest reading since October 2009. A sales-to-new listings ratio between 40 and 60 percent is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers’ and sellers’ markets respectively.

The ratio was above 60 percent in about half of all local housing markets in May, virtually all of which are located in British Columbia, in addition to housing markets in and around Toronto and across Southwestern Ontario.

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 4.7 months of inventory on a national basis at the end of May 2016, which is unchanged from April’s reading and the lowest level in more than six years. Months of inventory have been trending lower since early 2015, reflecting increasingly tighter housing markets in B.C. and Ontario. It currently sits at or below two months in a growing number of local markets in British Columbia, the GTA and environs and in Southwestern Ontario.

The Aggregate Composite MLS® HPI rose by 12.5 percent on a year-over-year basis in May 2016, the biggest gain since February 2007.

For the fourth consecutive month, year-over-year price growth accelerated for all Benchmark property types tracked by the index.

Two-storey single family home prices continued to post the biggest year-over-year gain (+14.7 percent), followed by one storey single family homes (+12.7 percent), townhouse/row units (+11.6 percent), and apartment units (+8.6 percent).

While 9 of the 11 markets tracked by the MLS® HPI posted year-over-year price gains in May, price growth among housing markets continues to vary widely.

Greater Vancouver (+29.7 percent) and the Fraser Valley (+31.7 percent) posted the largest gains, followed by Greater Toronto (+15.0 percent), Victoria (+13.9 percent), and Vancouver Island (+9.5 percent). By contrast, prices fell by -3.9 percent and -2.3 percent in Calgary and Saskatoon respectively.

Year-over-year price growth advanced further into positive territory in Regina (+3.4 percent) and strengthened further in Ottawa (+1.3 percent) and Greater Montreal (+1.9 percent). Home prices in Greater Moncton recorded their tenth consecutive year-over-year gain, rising 8.2 percent from where they stood one year earlier.

The MLS® Home Price Index (MLS® HPI) provides a better gauge of price trends than is possible using averages because average price is prone to being distorted by changes in the mix of sales activity.

The national average price continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which remain two of Canada’s tightest, most active and expensive housing markets. The actual (not seasonally adjusted) national average price for homes sold in May 2016 was $509,460, up 13.2 percent on a year-over-year basis.

If these two housing markets are excluded from calculations, the average price is a more modest $375,532 and the year-over-year gain is trimmed to 9.1 percent.

Even then, this reflects a tug of war between strong average price gains in housing markets around the GTA and in British Columbia versus flat or declining average prices elsewhere in Canada. The average price for Canada net of sales in British Columbia and Ontario in May 2016 was down 0.7 percent year-over-year to $310,007.

PLEASE NOTE: The information contained in this news release combines both major market and national sales information from MLS® Systems from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS® Systems are co-operative marketing systems used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 115,000 REALTORS® working through some 90 real estate Boards and Associations.

Further information can be found at http://crea.ca/statistics.

SOURCE Canadian Real Estate Association
For further information: Pierre Leduc, Media Relations, The Canadian Real Estate Association, Tel.: 613-237-7111 or 613-884-1460, E-mail: pleduc@crea.ca

Co-op housing funding renewed

Co-operative Housing Federation of CanadaThousands of low income co-op residents are sleeping easier after learning their rental assistance will continue for two more years.

The news comes as 700 co-op housing members gather from across the country for the the annual general meeting of the Co-operative Housing Federation of Canada (CHF Canada) in Hamilton, ON.

Federal and provincial funding agreements that assist over 50,000 low-income co-op residents are coming to an end. Without renewed support, low-income households are at serious risk.

A recent announcement from the federal government confirms that subsidies will continue for federally administered co-ops for at least two more years. Jean-Yves Duclos, federal Minister responsible for CMHC is expected to address the subject during a speech to CHF Canada delegates on Saturday June 11, 2016.

CHF Canada is the national voice of the Canadian co-operative housing movement. Its members include over 900 non-profit housing co-operatives and other organizations across Canada.  More than a quarter of a million Canadians live in housing co-ops, in every province and territory.

 

SOURCE Co-operative Housing Federation of Canada

For further information: Tim Ross, Program Manager, Policy and Government Relations, 613-314-6267, tross@chfcanada.coop; Scott Jackson, Program Manager, National Communications, 778-227-3864, sjackson@chfcanada.coop

RELATED LINKS
www.chfcanada.coop

Drew MacMartin Launches Real Estate Service

Drew MacMartin Real EstateDrew MacMartin, a real estate sales representative with over five years of experience as a zoning examiner and city planner in the local area, has announced the launch of a real estate service and website for Newmarket and East Gwillimbury, Ontario, Canada. The service/website is intended to reach out to local residents and investors of the above mentioned Towns and surrounding area to outline the real estate services offered by Drew MacMartin.

The Drew MacMartin Real Estate Services web portal is a member of Keller Williams Realty Centers, affording access to a wide range of properties and market resources. The web portal specializes in buying homes in high growth capital neighbourhoods, as well as selling Homes for top market value. Help is available from mortgages to moving trucks and everything in between.

Drew MacMartin also specializes in Investment Real Estate. All investment properties are pre-screened and analyzed, so their cash-flow potential and income generating yields are understood. He relies on his own real estate investment portfolio to demonstrate his expertise and the potential for clients to grow their own portfolios.

Testimonials, a blog, and social media connections are featured on the website, as with any well-connected, informative online resource should be. Drew MacMartin is a real estate sales representative with a Masters Degree in Land Use Planning and Real Estate Decision Making. Drew MacMartin’s primary strengths are customer service, work ethic, competency and integrity. Speaking to past clients of Drew MacMartin is strongly encouraged.

To learn more about Drew MacMartin and his real estate service/website, visit http://www.drewmacmartin.com. An embedded contact form is also available on the website to submit any requests or questions, or to subscribe to the newsletter.

Media Contact
Company Name: Drew MacMartin Real Estate Services
Contact Person: Drew MacMartin
Email: info@drewmacmartin.com
Phone: 905 726 0654
Address:16945 Leslie Street Unit 7
City: Newmarket
State: Ontario
Country: Canada
Website: http://www.drewmacmartin.com

National balance sheet first quarter 2016 – StatCan

Statistics CanadaNational net worth declines as Canada’s net foreign asset position weakens
National net worth declined 1.5%, or $144.7 billion, to $9,571 billion at the end of the first quarter. This was mainly due to a decrease in the market value of financial assets held abroad, as Canada’s net foreign asset position fell in the first quarter. On a per capita basis, national net worth was $265,200 compared with $269,500 in the fourth quarter.

National wealth, the total value of non-financial assets in the Canadian economy, rose $75.6 billion to $9,306 billion at the end of the first quarter. The main contributor to growth was a $105.2 billion increase in the value of real estate. This was partially offset by a $36.0 billion decline in the value of natural resource wealth, as energy prices continued to decrease.

Canada’s net foreign asset position fell $220.2 billion in the first quarter to $264.8 billion. This decline more than offset the $201.7 billion gain recorded in the fourth quarter. Canada’s international assets were down in the first quarter, while international liabilities edged up. The appreciation of the Canadian dollar, combined with the stronger performance of the Canadian stock market relative to foreign stock markets, mainly contributed to the drop in the net foreign asset position.

Household net worth increases, driven by real estate
Household sector net worth at market value rose 1.2% in the first quarter to $9,633 billion. On a per capita basis, household net worth was $266,900. Financial assets increased 0.7%, the weakest first quarter growth since 2009. Driven by gains in the value of real estate, the growth of non-financial assets (+1.5%) outpaced that of financial assets. As a result, the ratio of financial assets to non-financial assets decreased to 111.4%. Overall, the value of household assets rose $122.3 billion, while liabilities grew $9.0 billion; the ratio of household debt to total assets edged down to 16.9%.

Total household credit market debt (consumer credit, and mortgage and non-mortgage loans) reached $1,933 billion at the end of the first quarter. Consumer credit was $573.1 billion, while mortgage debt stood at $1,268 billion. The share of mortgage liabilities to total credit market debt reached 65.6% at quarter end, continuing an unbroken upward trend that began in the first quarter of 2010.

The ratio of household credit market debt to disposable income (excluding pension entitlements) was little changed in the first quarter, edging down to 165.3%. In other words, households held $1.65 in credit market debt for every dollar of disposable income. Disposable income and household credit market debt increased at nearly the same rate.

The household debt service ratio, measured as total obligated payments of principal and interest as a proportion of disposable income adjusted to include actual interest paid, increased to 14.8% in the first quarter. The interest-only debt service ratio, defined as household mortgage and non-mortgage interest paid as a proportion of disposable income, was 6.6% in the first quarter.

On a seasonally adjusted basis, households borrowed $24.4 billion in the first quarter, up $0.5 billion from the previous quarter. Mortgage borrowing represented $17.5 billion of total borrowing in the quarter, down from $20.7 billion in the previous quarter, while borrowing in the form of consumer credit and non-mortgage loans was $6.9 billion, up from $3.2 billion.

Federal government net debt to gross domestic product edges up
The ratio of federal government net debt (book value) to gross domestic product edged up to 30.9% in the first quarter from 30.8% in the fourth quarter. The ratio for other levels of government was up slightly from the previous quarter to 29.0%, continuing an upward trend that began in late 2008.

The federal government recorded $9.1 billion in net retirements of Canadian short-term paper in financial markets in the quarter, which was offset by $9.6 billion in net issuances of bonds and debentures.

Other levels of government borrowed $7.9 billion on financial markets during the quarter. The bulk of borrowing was $13.3 billion in net issuances of Canadian bonds and debentures, but this was partly offset by $5.6 billion in net retirements of Canadian short-term paper.

Non-financial private corporations’ borrowing slows from fourth quarter
Non-financial private corporations borrowed $3.9 billion worth of funds in financial markets in the first quarter, down sharply from $26.2 billion in the previous quarter and representing the lowest value since the fourth quarter of 2011.

On a book value basis, the credit market debt to equity ratio of non-financial private corporations was down in the first quarter, following four consecutive quarterly increases. There was 68 cents of credit market debt for every dollar of equity at quarter end.

Foreign equities reduce the value of financial corporations’ assets
Overall, the financial sector provided $21.7 billion of funds to the economy through credit market instruments, down from $48.2 billion in the previous quarter. The funds provided in the first quarter were mainly in the form of non-mortgage loans ($15.7 billion), bonds and debentures ($14.8 billion), and mortgages ($11.5 billion). Financial corporations recorded net redemptions of Canadian short-term paper ($15.2 billion).

The value of financial assets of financial corporations decreased $45.8 billion at the end of the first quarter to $12,133 billion. The principal contributor to this decrease was a $73.3 billion decline in the value of foreign equities, as the Canadian dollar had appreciated by the end of the first quarter.

Source: Statistics Canada

See the full report here.

Details of Ontario Retirement Pension Plan Act

Ontario Pension Plan

Ontario Pension PlanThe passage of the Ontario Retirement Pension Plan Act (Strengthening Retirement Security for Ontarians), 2016 delivers on the government’s commitment to strengthen retirement security for the more than 4 million Ontario workers — including many younger workers — who do not have access to an adequate workplace pension plan. The act enshrines in legislation key requirements of the plan, including participation, contributions, benefit types, and plan sustainability.

The government will continue to formalize additional plan design details, including those previously announced, in regulations expected this summer.

This act ensures employers and employees across the province have the information needed to prepare for implementation, with enrolment starting in January 2017, and the collection of contributions phased in, starting on January 1, 2018.

Overview of the Legislation

Participation and Eligibility:

Workers between 18 – 70 years old: By 2020, every eligible worker aged 18 to 70 in Ontario will be part of the ORPP or a comparable workplace plan. A member will be required to stop contributing when they reach 70 years of age.

Self-employed and non-crown federally-regulated workers: Self-employed individuals and those who work in industries such as banks, telecommunications, railway and air transportation will not be eligible to participate at this time, due to the current structure of federal income tax and pension rules. The province is currently in discussions with the federal government to support the participation of federally-regulated employees and the self-employed in the ORPP.

First Nations: On-reserve First Nations employers and their employees will have the option to opt-in to the ORPP.

Religious Exemptions: Individuals who object to participation in the ORPP on religious grounds may apply to the ORPP AC for an exemption. Future regulations will lay out the criteria for a religious exemption which would follow a similar approach to CPP.

Definition of Ontario Employee:

A person will be considered employed in Ontario if they report to work, full- or part-time, at an employer’s establishment in Ontario. This also applies to a worker whose salary or hourly wages are paid from an Ontario-based employer, but who is not required to work at an employer’s place of business (e.g., work from a home office).

Employer Duties:

Employers will be required to pay contributions on behalf of each of the eligible workers employed in Ontario, and also to collect and remit contributions from those workers.

Employer and Employee Contributions:

Employees and employers will each contribute 1.9 per cent of the employee’s annual earnings up to $90,000 (2017 dollars).

The full contribution rate would be phased in over time based on the size of the business.

Contributions Held in Trust:

All contributions will be held in trust and invested for the benefit of the members of the plan, and will not form part of general government revenues.

Benefit Types:

The plan will offer two benefits: a retirement benefit and a survivor benefit (payable to a surviving spouse, beneficiary or an estate).

The ORPP is designed to provide plan members a 15 per cent income replacement rate after 40 years of contributing to the plan. A member will be eligible to begin collecting a benefit at 65, with actuarially adjusted benefits as early as 60 or as late as 70. The ORPP will begin to pay benefits in 2022.

Indexation:

The amount of money an individual receives from the ORPP after they retire will depend on how many years they contribute to the pension plan and their salary throughout those years. Pension benefits and the maximum earnings threshold will be indexed to inflation.

Survivor Benefits:

Pre-Retirement Death: If a member dies before retirement, a lump sum will be paid to their spouse, beneficiary or estate.

Post-Retirement Death (Without a spouse): If a member retires without a spouse, they will receive a full pension. If the member dies within 120 months of retirement, the remaining value of their pension up to 120 months after retirement will be paid to their beneficiary or estate.

Post-Retirement Death (With a spouse): If a member retires and has a spouse, they will receive a joint survivor pension. This means that their retirement benefit is adjusted, and when they die, their spouse will receive a survivor benefit for life.

120-Month Guarantee Period:

The member and their spouse will be able to choose to waive the survivor benefit and receive a full pension with a 10-year guarantee period paid in 120 monthly instalments. If the member dies within 10 years of retirement, the remaining value of their pension, up to 10 years after retirement, would be paid to their spouse.

Comparable Plans:

The ORPP will be mandatory for employees and employers without a comparable workplace pension plan.

Comparable workplace pension plans are registered pension plans that meet a minimum benefit/contribution threshold:

Defined benefit (DB) plans – where an employee’s earnings history is considered as part of their retirement income calculation, the annual benefit accrual rate must be at least 0.5 per cent
Defined contribution (DC) plans – must have a minimum total contribution rate of 8 per cent, with employers contributing at least half that amount (voluntary contributions would not be applicable for the purposes of the ORPP comparability test)
Multi-employer pension plans (MEPP) – individual employers would have the option to assess the pension benefit comparability of their plan by using either the DB accrual or DC contribution rate threshold
Pooled-registered pension plans (PRPP) – when available in Ontario, a benefit/contribution threshold will be set for PRPPs.
Should future pension plan innovations address the principles of comparability that the government has identified, the government remains open to examining those plans for comparability.

A plan’s comparability will be assessed at the “subset” level of employees within a pension plan. A subset of members could exist where a pension plan provides for different contribution rates or benefit structures for employees, based on a clear definable category, such as:
▪ The nature of the member’s employment

▪ The terms of employment, years of service

▪ Whether or not the member belongs to a union

Members who belong to a subset must be subject to the same contribution or benefit structure.

Contribution Waves:

Contributions to the ORPP will occur in waves, starting on January 1, 2018, depending on the size of the employer. Employer size would be based on the number of T4s that were issued to Ontario employees in 2015.

Opt-in:

Employers that have comparable workplace pension plans will be able to opt-in to the ORPP starting in 2020. This includes if a decision to opt-in is made as part of a collective bargaining negotiation. An employer that elects to opt-in must do so for all of its employees.

ORPP Administration Corporation (ORPP AC):

This bill will enable the ORPP AC to continue implementing the ORPP. The ORPP AC is the independent, arms-length organization that will administer the ORPP, including investing in opportunities that maximize returns for plan members. Its broad responsibilities include enrolling members, collecting and investing contributions in trust, administering benefits, and communicating with employers, members and other beneficiaries. The ORPP AC will determine where and how contributions are invested.

Plan Sustainability:

The government has designed the ORPP to be sustainable over the long term. This act establishes formal funding rules to guide the actions of the ORPP AC and the government in the event of a funding shortfall or excess.

To support transparency and accountability regarding plan sustainability, the government is committed to introducing legislation this fall that would establish an Office of the Chief Actuary. This office would provide the government and the ORPP AC with expert and impartial advice and guidance.

Compliance and Enforcement:

This bill establishes the ORPP AC’s compliance and enforcement framework to encourage employers and plan members to comply with ORPP legislation, address issues of non-compliance, and create a way to resolve disputes.

The compliance and enforcement framework will apply to all stages of the administration of the ORPP, from the employer verification process to the collection of contributions and the payment of benefits.

The ORPP AC will be permitted to administer fines. Employers who fail to deduct or remit contributions will be charged interest on late payments.

Review Period:

The ORPP will be reviewed five years after its full implementation in 2027 to help ensure the plan is meeting its intended objectives. Subsequent reviews of the ORPP will occur every 10 years.

Source: Ministry of Finance

Mortgage Professionals Canada 2016 Spring Survey

Mortgage Professionals Canada logoNext generation of homeowners cautiously optimistic about economy and housing market, economic confidence main driver for purchasing decision

Mortgage Professionals Canada releases Spring Survey that provides a unique portrait of Canadians under the age of 40 who don’t currently own a home but expect to own in the future

Little has been reported about the group of Canadians just outside the housing market, sitting on the sidelines, thinking about buying or remaining renters. In this new Spring Survey, The Next Generation of Homebuyers, Mortgage Professionals Canada steps into the future to look at what these perspective homebuyers are thinking when it comes to investing in a home.

The report segments Next Gens into three categories based on their purchase time horizon: Distant Buyers looking to purchase beyond the next five years who may be less informed about the housing market conditions and the process involved in purchasing and financing a property; Mid-term Buyers looking to purchase in one to five years; and Imminent Buyers who are looking to purchase in the next year.

The majority of Next Gens feel that Canadian real estate is a good long-term investment and 72 per cent view having a mortgage as good debt. They have other debt to consider, however, before they’re ready to purchase. Young Canadians today are carrying heavier student loans than any previous generation. They also want to continue saving for a down payment or are waiting for important milestones in their lives like a promotion or marriage. These factors together with the high costs of homeownership are causing a majority of Next Gens to delay their purchase to sometime in the next five years.

“We found that there is a strong interest in homeownership among Next Generation Homebuyers but they are waiting until they feel financially secure,” said Paul Taylor, President and CEO of Mortgage Professionals Canada. “They are cautious as they save for the future. In the next few years, we expect to see an influx of first-time buyers who know exactly what they want from their first home.”

With average household incomes of $75,000 and average savings of $27,000, 61 per cent of Next Gens expect to make a down payment of less than 20 per cent of the purchase price of their home. Increasingly more self-reliant, this group is also expecting to front their down payments themselves, with 73 per cent relying on their own personal savings and only 36 per cent relying on gifts or loans from family.

Despite the increased price, Next Gens are hoping their first homes will be a low-rise dwelling (80 per cent), over a condominium (18 per cent). The majority are looking for detached homes (59 per cent), while 13 per cent are pursuing a townhouse or eight per cent a semi-detached home. Next Gens living in Ontario and Western Canada are slightly more likely to opt for a condo (19 per cent and 21 per cent, respectively) compared to Atlantic Canada (10 per cent).

“The economy and the housing market interact strongly together. Future homebuying activity will be highly influenced by the economic conditions that exist, including the job situation and mortgage interest rates, as well as the rules associated with mortgage lending,” said Will Dunning, Chief Economist, Mortgage Professionals Canada. “Evolving personal situations will be paramount in those purchase decisions.”

Overall, when Next Gens do enter the housing market, 93 per cent will be looking for a mortgage. While Next Gens as a whole either aren’t too sure of the type of mortgage to expect (30 per cent) or are planning on a combination mortgage (30 per cent), those looking to purchase in the next year are planning for either a fixed-rate (32 per cent) or combination (33 per cent) mortgage, with a median interest rate expectation of 3%. Nearly two thirds of imminent buyers (61 per cent) expect an amortization of 25 years, while 71 per cent expect to pay off their mortgage in less than 25 years.

For a full copy of The Next Generation of Homebuyers, click here.

About Mortgage Professionals Canada
Mortgage Professionals Canada (formerly CAAMP) is Canada’s national mortgage broker channel association representing more than 11,000 members from coast to coast. We recognize that Canadians need and deserve more. We believe in competition as it produces better options and demands ever-improving service and products. We believe in choice as it benefits Canadians and delivers an environment of opportunity. We believe in professionalism as it demonstrates commitment, trust and excellence. The mortgage broker channel is a critical and valuable profession. It creates possibility, fuels the economy and provides Canadians with choice when making among the most important financial decisions of their lives.
SOURCE Mortgage Professionals Canada

For further information: Paul Taylor, President and CEO, Mortgage Professionals Canada, O: 416-644-5465 / C: 905-334-1165, ptaylor@MortgageProsCan.ca; Karolina Olechnowicz, Senior Consultant, Media Profile, O: 416-342-1822, karolina.olechnowicz@mediaprofile.com

Syndicate Mortgage Investors Exit North Brampton Construction Project by Fortress Real Developments

Fortress Real DevelopmentsBuilding and Development Mortgages Canada Inc. (BCMC) announced today that lenders in a syndicate mortgage that funded a Fortress Real Developments Inc. (Fortress) project in Brampton received their principal back in full and an annualized return of 9.57%*, which included 8% per annum over a three year term, plus a deferred lender fee upon exit.

The five acre site in Brampton, located within the Alloa Greens Community, features 20 single-detached houses on the south portion of the development and 35 townhouses on the north portion (previously branded as Mayfield 2). Site servicing and construction on the homes off Clockwork Drive and Agave Crescent, east of Creditview Road is currently underway. Grand Brook Homes and Flato Developments had tremendous sales successes on their respective lots in Alloa Greens.

“Brampton has been one of the hottest markets for new ground-oriented housing for over 15 years” expressed Ben Myers, the Senior Vice President of Market Research and Analytics at Fortress, “the nearly 5,000 sales in the Brampton in 2015 was more the double the next highest municipality, and accounted for more than 25% of the annual total in the Greater Toronto Area.”

Frank Margani, Executive Vice President at Fortress added, “Flato and their consultants have a proven track record for taking vacant lands through the approvals process and creating value for their partners.” He went on to say, “we’re proud that Flato and Fortress have provided a healthy return on investment to their lenders, and ultimately helped many young families achieve their goal of homeownership.”

The initial Rezoning application was submitted in late 2011 and draft plan approval was received in the summer 2013. Marketing of the development started in late 2013 and residential unit sales started in 2014. Construction commenced in 2015.

“This is a perfect example of a well underwritten real estate opportunity” extolled BDMC mortgage broker Vince Petrozza, “strong marketplace for the product type planned, experienced developer with a track record in that municipality, and prudently-purchased land. We are pleased that syndicate mortgage lenders have benefited from this strong underwriting.”

This project is the fourth exit by Flato Developments and Fortress Real Developments over the past three years, the third in Brampton.

About the Companies

Building & Development Mortgages Canada Inc. – established in 2007, is a premier mortgage brokerage licensed in Ontario, Nova Scotia, Alberta, Manitoba, British Columbia and Saskatchewan. BDMC closes all of the syndicate mortgage transactions that fund Fortress projects. (The following individuals are licensed through Building & Development Mortgages Canada Inc. – Vince Petrozza, Mortgage Broker, #M08007162. Ben Myers, Mortgage Agent, #M13001264. Frank Margani, Mortgage Agent, #M08008842). For more information visit: http://www.bdmc.ca

Fortress Real Developments Inc. – Fortress Real Developments Inc. is a Canadian real estate development company that seeks out and analyzes opportunities in major Canadian markets. The company is focused on quality projects with recognizable alpha in residential low-rise, high-rise, commercial and industrial market segments. For more information on Fortress projects, visit: http://fortressrealdevelopments.com.

*SOURCE Building & Development Mortgages Canada Inc.

SOURCE Building & Development Mortgages Canada
For further information: Natasha Alibhai, Fortress Real Developments Inc., natasha@Fortressrdi.com, Phone: (905) 787-9266 ext. 235

Video Series on the Fundamentals of Retirement Plans

proteusProteus announces the launch of its new pension and investment educational video series, Proteus Viewpoint.

“We produced a series of 11 informative videos that clearly communicate information relating to common questions we hear in the pension and investment industry,” said Gord Lewis, Senior Vice President of Proteus. “Proteus Viewpoint is consistent with our corporate attitude toward providing education and information in a manner that is understandable and useful to all audiences.”

The videos will be released on a monthly basis on Proteus’ social media platforms and supplemented with further information on the Proteus website.

About Proteus

Proteus is an independent, owner-operated corporation founded in 1994. Proteus provides governance and investment solutions to institutional asset owners, including: jointly-trusteed pension plans; corporate defined benefit and defined contribution pension plans; foundations and endowments. Proteus works with clients across Canada.

YouTube
Twitter
LinkedIn
Facebook
Website

SOURCE Proteus

For further information: Megan Henry – Manager, Communications & Social Media, mhenry@proteusperformance.com, (416) 421-3557 ext 230

Early Exit for Syndicate Mortgage Lenders in Richmond Hill

Fortress Real DevelopmentsBest Homes Canada’s Single-Family Home Development

 

Lenders in a syndicate mortgage that funded a Fortress Real Developments Inc. Fortress project in Richmond Hill, Ontario received their principal back in full, and an annualized return of 8.30%* over a 3 year term, according to Building and Development Mortgages Canada Inc. (BDMC).

In 2013, Fortress partnered as development consultant with Best Homes Canada to assemble a series of properties at Harris Avenue and Beech Avenue (Harris Beech) in Richmond Hill. The planned 3.7 acre infill development is located in a mature residential area which backs onto a natural ravine. This project is planned for 24 single-detached homes, each with approximately 39′ of lot frontage. Adjacent properties were also recently added to the assembly.

“Tremendous value was created at the Harris Beech development through the smart land assembly spearheaded by our team and partners. As the saying goes, the whole is greater than the sum of its parts,” said Jawad Rathore, the CEO of Fortress.

“Low-rise housing builders and developers are quickly running out of inventory to sell, and the unsold supply of ground-oriented homes declined 48% in April according to Altus Data Solutions” expressed Ben Myers, the Senior Vice President of Market Research and Analytics at Fortress. “This shortage of supply has driven up land values, and owners of near-term development land are very popular.”

Mark Fogliato, Director of Acquisitions and Portfolio Management at Fortress added, “Draft plan approval for the Harris Beech development is expected in 2016, and the site could be shovel-ready by the end of the year. We were inundated with enquiries regarding the availability of the site and ultimately decided to sell the property based on the attractiveness of the offer.”

“This is another perfect example of how there are multiple exit strategies for syndicated mortgage lenders,” said BDMC mortgage broker Vince Petrozza. “The undersupplied single-family housing market combined with a marketable site taken through the bulk of the land approvals process, resulted in a much more valuable site in 2016 than three years earlier.”

This project represents the 14th time syndicated mortgage lenders have exited a Fortress project.

About the Companies

Building & Development Mortgages Canada Inc. – established in 2007, is a premier mortgage brokerage licensed in Ontario, Nova Scotia, Alberta, Manitoba, British Columbia and Saskatchewan. BDMC closes all of the syndicate mortgage transactions that fund Fortress projects. (The following individuals are licensed through Building & Development Mortgages Canada Inc. – Vince Petrozza, Mortgage Broker, M08007162. Ben Myers, Mortgage Agent, M13001264. Mark Fogliato, Mortgage Agent, M14002065). For more information visit: http://www.bdmc.ca

Fortress Real Developments Inc. Fortress Real Developments Inc. is a Canadian real estate development company that seeks out and analyzes opportunities in major Canadian markets. The company is focused on quality projects with recognizable alpha in residential low-rise, high-rise, commercial and industrial market segments. For more information on Fortress projects, visit:
http://fortressrealdevelopments.com.

SOURCE Building & Development Mortgages Canada

For further information: Natasha Alibhai, Fortress Real Developments Inc., natasha@Fortressrdi.com, Phone: (905) 787-9266 ext. 235

RELATED LINKS
www.fortressrealdevelopments.com

Ontario expanding pension coverage

Ontario Pension Plan

Ontario is expanding pension coverage to over four million workers without an adequate workplace pension plan.Ontario Pension Plan

The province passed the Ontario Retirement Pension Plan Act The Ontario Retirement Pension Plan (ORPP) will bring financial security and drive economic growth for generations to come, by providing Ontario workers with a predictable stream of income in retirement, paid for life. The ORPP will also offer a survivor benefit for all plan members.

Along with regulations expected this summer, the legislation gives employers and employees the information they need to prepare for the launch of the ORPP. This is a crucial step forward in fulfilling the government’s commitment that every eligible employee is part of the ORPP or a comparable workplace pension plan by 2020.

Strengthening the retirement income system is critical to the future prosperity of the province. Studies show that many of today’s workers are not saving enough to maintain their standard of living in retirement. Pension coverage is also low for many Ontarians, with only one in four younger workers, aged 25 to 34, participating in a workplace pension plan.

Building a secure retirement savings plan is part of the government’s economic plan to build Ontario up and deliver on its number-one priority to grow the economy and create jobs. The four-part plan includes investing in talents and skills, including helping more people get and create the jobs of the future by expanding access to high-quality college and university education. The plan is also making the largest investment in public infrastructure in Ontario’s history and investing in a low-carbon economy driven by innovative, high-growth, export-oriented business.

Quick Facts

  • The ORPP will offer a predictable, reliable and inflation-indexed stream of income in retirement, paid for life, by providing a pension of up to 15 per cent of an individual’s pre-retirement income. Employees and employers would contribute an equal amount, capped at 1.9 per cent each on an employee’s annual earnings up to $90,000.
  • A cost-benefit analysis conducted by the Conference Board of Canada found that over the long-term, the ORPP will add billions to Ontario’s economy.
  • Since 2014, the government has consulted extensively on the design of the ORPP with the business community, labour, academia, non-profits and Ontario workers, including holding public consultations in more than 10 communities across the province. Over 1000 responses were also submitted online and by mail.
  • Ontario looks forward to participating in the Federal-Provincial-Territorial Finance Ministers Meeting on June 20 in Vancouver. Ontario supports CPP enhancement. Ontario is open to exploring a range of potential CPP enhancements for a national solution to strengthening retirement security as long as it is targeted to those who need it most and provides substantial earnings replacement benefits in retirement.

 

Source: Ministry of Finance

Canadian Housing Starts Decline

Mortgages insured by CMHC

Mortgages insured by CMHCCanadian Housing Starts Trend Declined in March

The trend measure of housing starts in Canada was 196,783 units in March compared to 201,618 in February, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

“Overall, starts were trending lower in March due to a slowdown in multi-unit construction,” said Bob Dugan, CMHC Chief Economist. “This was the case across the country, except in British Columbia where declining inventories of new and unsold units as well as low levels of new listings in the resale market spurred builders to start new projects.”

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of the state of Canada’s housing market. In some situations analyzing only SAAR data can be misleading, as they are largely driven by the multi-unit segment of the market which can vary significantly from one month to the next.

The standalone monthly SAAR for all areas in Canada was 204,251 units in March, down from 219,077 units in February. The SAAR of urban starts decreased by 7.0 per cent in March to 185,022 units. Multiple urban starts decreased by 9.7 per cent to 123,207 units in March and the single-detached urban starts decreased by 1.1 per cent to 61,815 units.

In March, the seasonally adjusted annual rate of urban starts decreased in British Columbia, Québec, Atlantic Canada and the Prairies, but increased in Ontario.

Rural starts were estimated at a seasonally adjusted annual rate of 19,299 units.

Preliminary Housing Starts data is also available in English and French at the following link:Preliminary Housing Starts Tables

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

Information on this release:

Karine LeBlanc
CMHC Media Relations
613-740-5413
kjleblan@cmhc-schl.gc.ca

Source: CMHC

Preliminary Housing Start Data
March 2016
February 2016March 2016
Trend1, all areas201,618196,783
SAAR, all areas219,077204,251
SAAR, rural areas220,07219,229
SAAR, urban centres3
Single-detached62,49161,815
Multiples136,514123,207
Total199,005185,022
Atlantic, urban centres5,7262,613
Quebec, urban centres37,57530,142
Ontario, urban centres77,04786,712
Prairies, urban centres28,59025,717
British Columbia, urban centres50,06739,838
CanadaMarch 2015March 2016
Actual, all areas13,76513,458
Actual, rural areas722571
Actual, urban centres
March — Single-detached3,0893,379
March — Multiples9,9549,508
March — Total13,04312,887
January to March — Single-detached9,1619,884
January to March — Multiples24,43825,718
January to March — Total33,59935,602

For more information follow CMHC on Twitter, YouTube, LinkedIn and Facebook.

Strong Demand Keeps Commercial Real Estate Prices High

Morgard Corp logo

Morgard Corp logoStrong Demand and Limited Supply Keeps Commercial Real Estate Prices High; Sends Investors Looking to Secondary Markets in Canada

Real Estate Asset Managers Turning to Creative Solutions to Get Higher Yields from
Existing Properties

Morguard Corporation released today its first quarter 2016 Economic Outlook and Market Fundamentals Report – an analysis of trends and activity in the Canadian investment real estate market. Despite uncertainty in Canada’s economy, a number of real estate asset classes continue to attract strong investor interest – particularly in Ontario and British Columbia, while ongoing weakness in energy prices continues to place a drag on the commercial office leasing market, particularly in Calgary, Alberta.

Q1 2016 Key Findings

  • Canada’s low dollar continues to make real estate attractive to foreign investors
  • A limited supply of core quality commercial properties is keeping prices high and causing some investors to look to secondary markets for value – particularly multi-suite residential
  • Canada’s office leasing market is in a corrective phase.  In particular, weak energy prices continue to leave the Calgary office sector in decline, with excess supply putting downward pressure on rents for many owners
  • The Greater Vancouver Area continues to see strong performance, with the industrial availability rate at just 4.1%, despite 1.1 million square feet of new space added to inventory in Q1
  • Demand for space in industrial properties continued to match or exceed supply, leading to stable fundamentals, despite the relatively weak economy

To download the first quarter 2016 Economic Outlook and Market Fundamentals Report, visit http://www.morguard.com/news-knowledge/research.

Canada Faces a Continued Modest Market Supply of Commercial Real Estate Properties

The shortage of high-quality commercial properties for sale, relative to investor capital looking for real estate investments, continued to characterize the Canadian commercial investment property market in the first quarter of 2016.

“A low Canadian dollar, the continued low interest rate environment, and the belief that the sector is a source of stable returns continue to make the Canadian real estate market a strong lure for foreign investors,” said Keith Reading, Director of Research at Morguard. “Foreign investment interests continue to revolve around high quality commercial properties in the Vancouver and Toronto markets.”

However, the report shows that deals involving core quality real estate assets have been infrequent and asset values have been holding near their peak, sending many investors looking to secondary markets for opportunities.

Office Leasing Markets Continue to Weaken 

Demand for office space remained weak in the first quarter of 2016, largely the result of the weak economy and sagging energy prices. At the same time, two million square feet of new office space came onto the market across Canada, pushing the national vacancy rate up 30 basis points to 12.5%.

However, space demand continued in Vancouver and Toronto, with Montreal also showing well.  Urban centres saw a modest increase in occupancy, reflecting the first quarterly progress after two materially negative results in 2015.

Multi-Suite Residential Markets Attract Investors

Multi-suite residential properties are in high demand for investors. The short supply in major city centres has investors looking to secondary markets like Hamilton and London, Ontario, for stable returns. While some new construction is occurring, most new stock coming onto the market are older multi-suite residential properties previously held privately.

“When the economy is weak, people put off purchasing to some degree, which bolsters rental demand,” said Reading. “The consistently healthy migration to Canada from other countries also has stabilized demand for rental accommodation.”

Real Estate Asset Managers Getting Creative to Enhance Returns

With core asset investment properties in short supply, commercial real estate companies continue to look at ways to enhance returns from existing assets.

“With the commercial market as it is today in Canada, asset managers need to get creative and find innovative ways to obtain more value from existing properties. Experienced asset managers and real estate investment companies understand that success in current market conditions is often the product of strategic space development,” said Reading. “Developing innovative new uses for spaces is a trend we’re increasingly seeing – particularly across mixed-use properties – as managers look to generate stronger returns from their owned and existing portfolios.”

About Morguard Corporation
Morguard Corporation (TSX: MRC) is a major North American real estate and property management company.  It has extensive retail, office, industrial, multi–suite residential, and hotel holdings owned directly, or through its investment in Morguard REIT (TSX: MRT.UN) and Morguard North American Residential REIT (TSX: MRG.UN). Morguard also provides real estate management services to institutional and other investors. Morguard’s combined real estate portfolio is valued at $16 billion. Visit www.morguard.com.

SOURCE Morguard Corporation

For further information: Morguard Corporation, K. Rai Sahi, Chief Executive Officer, T 905-281-3800; Keith Reading, Director of Research, T 905-281-3800

Premier Highlights Economic Plan

Ontario Pension Plan

Ontario Pension PlanPlan is Delivering on Top Priority: Creating Jobs and Growth

From April 25 to 29, Premier Kathleen Wynne will visit Ontario businesses, postsecondary schools and other groups across the province to speak about the government’s economic plan and how it is delivering on her number-one priority — creating jobs and growing the economy.

The Premier will address organizations representing businesses, municipalities and researchers, and participate in roundtables at various fast-growing companies. The Premier will also ask for ideas on how to accelerate the province’s development as a hub of the knowledge economy.

The visits will spotlight the success that the government has achieved so far through its four-part economic plan. Ontario has one of the fastest-growing economies in Canada, and the Ministry of Finance forecasts that it will remain so over the next two years. Ontario leads the country in job creation, which since last year has reduced the provincial unemployment rate to below the national average.

During the week, the Premier will highlight the government’s actions to build on the economy’s momentum. These include:

  • historic investment in infrastructure of about $160 billion over 12 years, to build the roads, bridges, transit, schools and hospitals that people and the economy need
  • The Ontario Student Grant, to make average college and university tuition free for more than 150,000 students and make postsecondary education more accessible for students from low- and middle-income families
  • cap and trade program, to help Ontario transition to a low-carbon economy and create jobs and growth in the cleantech and innovations sectors of the future
  • The $400-million Business Growth Initiative, to modernize regulations and reduce red tape, help more businesses scale up from local to global and foster a culture of innovation
  • The Ontario Retirement Pension Plan, to ensure every eligible employee is part of the ORPP or a comparable workplace pension plan by 2020, so that every worker in Ontario has the retirement security they deserve.

Ontario’s four-part plan to grow the economy and create jobs invests in people’s talent and skills, including helping more people get and create the jobs of the future by expanding access to high-quality college and university education. The plan is making the largest investment in public infrastructure in Ontario’s history and investing in a low-carbon economy driven by innovative, high-growth, export-oriented businesses. The plan is also helping working Ontarians achieve a more secure retirement.

Quick Facts

  • Ontario’s real GDP increased by 0.8% (or 3.1% at an annualized rate) in the fourth quarter of 2015. The province’s real GDP grew by 2.7% in 2014 and 2.6% in 2015.
  • Ontario has added almost 86,000 net new jobs in the past 12 months, more than in any other province. All of the gains have been in full-time work.
  • The 6.8% provincial unemployment rate is the lowest since 2008.
  • Merchandise exports from Ontario totalled a record $17.6 billion in January.
  • Premier Wynne plans to make stops in Brampton, Brantford, Burlington, Hamilton, Milton, Mississauga, Oakville, Thunder Bay and Toronto.

“My top priority is creating jobs and growing the economy. Our four-part economic plan for Ontario is working — what we’re building is the infrastructure that will modernize how we live and work, the opportunity for everyone, from students to seniors, to succeed, and a low-carbon economy that creates growth and good jobs. What we’re building is a prosperous future for Ontario.”

Kathleen Wynne

Premier of Ontario

Additional Resources

Source: Office of the Premier

Most Profitable Day to List Your Home

the red pin

the red pinMay 3rd Tops This Year’s Real Estate Calendar as the Most Profitable Day to List Your Home in the GTA

In a seller’s market, the first Tuesday in May is a better bet than any other date in 2016

TORONTO, ONTARIO According to data analysis by online real estate brokerage TheRedPin.com, homeowners selling their homes can expect to net an average of $17,000 more if they play their cards right and list on Tuesday, May 3 this year. Sellers can also expect to sell 18 per cent faster if they list anytime during the month of May. The second best month to list is October, when homes sell for an average of $10,000 more than the yearly average.

Data collected between 2012 and 2015 reveals that even with the spike in premiums during peak season, the most highly priced homes on average are not selling in the City of Toronto. According to the data, homes in Oakville, Richmond Hill and Markham sold for an average $150,000 higher than homes in the City of Toronto.

A longer data analysis done between 2010 and 2015 by TheRedPin compared sold prices in May to the tepid January market and found that homeowners were able to sell their homes for upwards of $60,000 more in May.

“By listing your home early in the week, you get the shoppers who are keen to see homes before open houses, which usually take place on weekends,” says Rokham Fard, Co-Founder and CMO at TheRedPin. “Data from the past six years suggests that homes take 20 to 30 days on average from when they’re listed until they’re sold. With that in mind, listing in early May will likely position you to sell your home in May and reap the extra profits.”

Not just a seller’s market: May brings home buyers choice

The month of May sees the highest volume of new listings appear on the market, with an average of 20,105 new properties listed during its 31 days. May also sees the highest level of buying activity than any other month of the year, with around one-eighth of all home sales in the GTA taking place in May.

“Although spring is ripe for bidding wars, those who value choice over price can rest assured May is a good time for the house hunt,” says Fard.

For prospective home buyers looking for choice as well as value, there are areas outside the city core where homes are listed for less during the month of May compared to yearly averages, according to Toronto Real Estate Board (TREB) data collected between 2012 and 2015. For example, when analysing calendar averages, homes in Aurora, East Gwillimbury and Essa sold for an average of approximately $17,000 less in May.

“For condo seekers, May is the month when many pre-construction developments release their coveted floor plans and pricing structure,” says Fard. “May can be excellent for condo resales as well. In 2015, on average, condos sold for two per cent below asking in May, so it will be interesting to see if that trend continues this year.”

About TheRedPin.com

Founded in 2010, TheRedPin.com connects people, data and technology. Our platform carries the largest database of active residential listings in the Greater Toronto and Vancouver Area, with plans to expand nationally. TheRedPin is a challenger brand with a unique business model that streamlines the real estate journey, and provides exceptional end-to-end services and benefits not found at other traditional brokerages. We are a tech startup that doesn’t answer to the industry, we answer to our clients and ourselves.

CONTACT INFORMATION

Old Age Security pension goes from age 67 to 65

pensions

pensionsThe Honourable Jean-Yves Duclos, Minister of Families, Children and Social Development, today reaffirmed the Government of Canada’s commitment to help improve the quality of life for seniors through new investments announced in Budget 2016.

Budget 2016 makes the goal of a comfortable and dignified retirement more attainable for seniors and working Canadians through various measures, such as restoring the age of eligibility for the Old Age Security (OAS) pension and the Guaranteed Income Supplement (GIS) from 67 to 65. This change will put up to $17,000 into the pockets of the lowest income Canadians each year, as they become seniors.

Restoring the age of eligibility for the OAS pension and the GIS from 67 to 65 is only one of the many enhancements announced that will help improve the quality of life for seniors. Additional measures include:

  • increasing the GIS top-up by $947 annually for the most vulnerable single seniors;
  • providing higher benefits to senior couples receiving GIS and Allowance benefits and who are living apart for reasons beyond their control;
  • enhancing the Canada Pension Plan based on consultations with provinces, territories and Canadians, with the goal of being able to make a collective decision before the end of 2016;
  • looking at how a new Seniors Price Index that reflects the cost of living faced by seniors could be developed; and
  • providing for the construction, repair and adaption of affordable housing to help the many seniors who face challenges in accessing affordable housing.

Quote

“Our government is working hard to grow the bottom line for the increasing number of Canadians who need our support. Public pensions are an important part of the retirement income of Canadians, particularly for lower-income single seniors who face a much higher risk of living in poverty. Budget 2016 reaffirms our commitment to strengthening public pensions and improving the quality of life for seniors.Everyone deserves to live with dignity and respect—especially our seniors.”
– The Honourable Jean-Yves Duclos, Minister of Families, Children and Social Development

Backgrounder

On March 22, 2016, Budget 2016 announced important changes to address the needs of vulnerable low-income seniors, including:

Restoring the age of eligibility for Old Age Security
In 2012, the Old Age Security Act was amended to gradually increase the age of eligibility for the Old Age Security (OAS) pension and the Guaranteed Income Supplement (GIS) from 65 to 67 over six years. The changes were scheduled to start in April 2023 with full implementation by January 2029. Budget 2016 announced the intent to restore the age of eligibility for the OAS pension and GIS from 67 to 65 and Allowance benefits from 62 to 60.

This change will put up to $17,000 into the pockets of the lowest income Canadians each year, as they become seniors.

Increasing the Guaranteed Income Supplement for single seniors
The GIS will be increased by up to $947 annually for single seniors with the lowest incomes, starting in July 2016.

This will support seniors who rely almost exclusively on OAS and GIS benefits and may therefore be at risk of experiencing financial difficulties. This measure will improve the financial security of about 900,000 single seniors across Canada.

Increasing benefits for couples living apart for reasons beyond their control
Amendments to the Old Age Security Act will be introduced to ensure that couples who receive GIS and Allowance benefits and have to live apart for reasons beyond their control (such as a requirement for long-term care) will receive higher benefits based on their individual incomes, not their combined incomes.

Exploring a new Seniors Price Index
The Government of Canada is committed to ensuring that OAS and GIS benefits keep pace with the actual costs of living faced by seniors. The Government is therefore looking at how a new Seniors Price Index that reflects the cost of living faced by seniors could be developed.

Introducing a new Home Accessibility Tax Credit
The Home Accessibility Tax Credit for seniors and persons with disabilities will help with the costs of ensuring their homes remain safe, secure and accessible.

Enhancing the Canada Pension Plan
To help improve the retirement income security of working Canadians, the Government has begun discussions with provinces and territories to enhance the Canada Pension Plan with the goal to make a collective decision before the end of 2016. In the coming months, the Government will launch consultations to give Canadians an opportunity to share their views on enhancing the Canada Pension Plan.

Supporting affordable housing for seniors
The Government will support the construction, repair, and adaption of affordable housing for seniors through an investment of$200.7 million over two years starting in 2016-17 to help the many seniors facing challenges in accessing affordable housing.

In addition, the Minister of Families, Children and Social Development has been mandated to:

  • lead the development of a Canadian poverty reduction strategy that would set targets to reduce poverty and measure and publicly report on the Government’s progress.

 

SOURCE Employment and Social Development Canada

For further information: Media Relations Office, Employment and Social Development Canada, 819-994-5559, media@hrsdc-rhdcc.gc.ca

Budget 2016

Details of Proposed Ontario Retirement Pension Plan

Ontario Pension Plan

Ontario Pension Plan

The introduction of the Ontario Retirement Pension Plan Act (Strengthening Retirement Security for Ontarians), 2016 delivers on the government’s commitment to strengthen retirement security for the more than 4 million Ontario workers — including 75 per cent of younger workers — who do not have access to an adequate workplace pension plan. The act, if passed, would enshrine in legislation key requirements of plan design, including participation, contributions, benefit types, and plan sustainability.

The government will continue to formalize additional plan design details, including those that have been previously announced, in regulations expected this summer and in future legislation.

This act would ensure employers and employees across the province have the information needed to prepare for implementation, with enrolment starting in January 2017, and the collection of contributions phased in, starting on January 1, 2018.

Overview of the Legislation

Participation and Eligibility:

Workers between 18 – 70 years old: By 2020, every eligible worker aged 18 to 70 in Ontario would be part of the ORPP or a comparable workplace plan. A member would be required to stop contributing when they reach 70 years of age.

Self-employed and non-crown federally-regulated workers: Individuals who work in industries such as banks, telecommunications, railway and air transportation would not be eligible to participate at this time, due to the current structure of federal income tax and pension rules. The province is currently in discussions with the federal government to support the participation of federally-regulated employees and the self-employed in the ORPP.

First Nations: On-reserve First Nations employers and their employees would have the option to opt-in to the ORPP.

Religious Exemptions: Individuals who object to participation in the ORPP on religious grounds may apply to the ORPP AC for an exemption. Future regulations will lay out the criteria for a religious exemption which would follow a similar approach to CPP.

Definition of Ontario Employee:

A person would be considered employed in Ontario if they report to work, full- or part-time, at an employer’s establishment in Ontario. This also applies to a worker whose salary or hourly wages are paid from an Ontario-based employer, but who is not required to work at an employer’s place of business (e.g., work from a home office).

Employer Duties:

Employers would be required to pay contributions on behalf of each of the eligible workers employed in Ontario, and also to collect and remit contributions from those workers.

Employer and Employee Contributions:

Employees and employers would each contribute 1.9 per cent of the employee’s annual earnings up to $90,000 (2017 dollars).

The full contribution rate would be phased in over time based on the size of the business.

Contributions Held in Trust:

All contributions would be held in trust and invested for the benefit of the members of the plan, and would not form part of general government revenues.

Benefit Types:

The plan would offer two benefits: a retirement benefit paid for life and a survivor benefit (payable to a surviving spouse, beneficiary or an estate).

The ORPP is designed to provide plan members a 15 per cent income replacement rate after 40 years of contributing to the plan. A member would be eligible to begin collecting a benefit at 65, with actuarially adjusted benefits as early as 60 or as late as 70. The ORPP would begin paying benefits in 2022.

Indexation:

The amount of money an individual receives from the ORPP after they retire would depend on how many years they contribute to the pension plan and their salary throughout those years. Pension benefits, contributions and the maximum earnings threshold would be indexed to inflation.

Survivor Benefits:

Pre-Retirement Death: If a member dies before retirement, a lump sum will be paid to their spouse, beneficiary or estate.

Post-Retirement Death (Without a spouse): If a member retires without a spouse, they would receive a full pension. If the member dies within 10 years of retirement, the remaining value of their pension up to 10 years after retirement, will be paid to their beneficiary or estate.

Post-Retirement Death (With a spouse): If a member retires and has a spouse, they will receive a joint survivor pension. This means that their retirement benefit is adjusted, and when they die, their spouse would receive a survivor benefit for life.

10-Year Guarantee Period:

The member and their spouse can choose to waive the survivor benefit and get a full pension with a 10-year guarantee period. If the member dies within 10 years of retirement, the remaining value of their pension, up to 10 years after retirement, will be paid to their spouse.

Comparable Plans:

The ORPP would be mandatory for employees and employers without a comparable workplace pension plan.

Comparable workplace pension plans are registered pension plans that meet a minimum benefit/contribution threshold:

  • Defined benefit (DB) plans – where an employee’s earnings history is considered as part of their retirement income calculation, the annual benefit accrual rate must be at least 0.5 per cent
  • Defined contribution (DC) plans – must have a minimum total contribution rate of 8 per cent, with employers contributing at least half that amount (voluntary contributions would not be applicable for the purposes of the ORPP comparability test)
  • Multi-employer pension plans (MEPP) – individual employers would have the option to assess the pension benefit comparability of their plan by using either the DB accrual or DC contribution rate threshold
  • Pooled-registered pension plans (PRPP) – when available in Ontario, a benefit/contribution threshold will be set for PRPPs.

Should future pension plan innovations address the principles of comparability that the government has identified, the government remains open to examining those plans for comparability. A plan’s comparability would be assessed at the “subset” level of employees within a pension plan. A subset of members could exist where a pension plan provides for different contribution rates or benefit structures for employees, based on:

  • The nature of the member’s employment
  • The terms of employment, years of service
  • Whether or not the member belongs to a union

Members who belong to a subset would be subject to the same contribution or benefit structure.

Contribution Waves:

Contributions to the ORPP would occur in waves, starting on January 1, 2018, depending on the size of the employer. Employer size would be based on the number of T4s that were issued to Ontario employees in 2015.

Opt-in:

Employers that have comparable workplace pension plans would be able to opt-in to the ORPP starting in 2020. This includes if a decision to opt-in is made as part of a collective bargaining negotiation. An employer that elects to opt-in must do so for all of its employees.

ORPP Administration Corporation (ORPP AC):

This bill will enable the ORPP AC to continue implementing the ORPP. The ORPP AC is the independent, arms-length organization that will administer the ORPP, including investing in opportunities that maximize returns for plan members. Its broad responsibilities include enrolling members, collecting and investing contributions in trust, administering benefits, and communicating with employers, members and other beneficiaries. The ORPP AC will determine where and how contributions are invested.

Plan Sustainability:

The government has designed the ORPP to be sustainable over the long term. This act would establish a formal funding policy to guide the actions of the ORPP AC and the government in the event of a funding shortfall or excess.

To support transparency and accountability regarding plan sustainability, the government is committed to introducing legislation this fall that would establish an Office of the Chief Actuary. This office would provide the government and the ORPP AC with expert and impartial advice and guidance.

Compliance and Enforcement:

This bill would establish the ORPP AC’s compliance and enforcement framework to encourage employers and plan members to comply with ORPP legislation, address issues of non-compliance, and create a way to resolve disputes.

The compliance and enforcement framework would apply to all stages of the administration of the ORPP, from the employer verification process to the collection of contributions and the payment of benefits.

The ORPP AC would be permitted to administer fines. Employers who fail to deduct or remit contributions would be charged interest on late payments.

Review Period:

The ORPP would be reviewed five years after its full implementation to help ensure the plan is meeting its intended objectives. Subsequent reviews of the ORPP would occur every 10 years.

Source: Ministry of Finance

Seniors want to stay at home but must renovate

renovate with a reverse mortgage

renovate with a reverse mortgageHomEquity Bank teams with Ipsos Canada to study top renovations required and how a reverse mortgage could be the answer.

TORONTO, April 6, 2016 – Most Canadian seniors want to remain in the family home as they age, but often must renovate and retrofit areas of the home as part of aging in place.

That is according to the results of a study conducted by HomEquity Bank and Ispos Canada, where 300 Canadian homeowners were surveyed from March 15th to 18th 2016.

The study focused on Canadians aged 55 and older and asked if renovations were needed to remain in their home, as well as what type of renovations and retrofits would be necessary and how they would be financed.

Here, below, are the key findings of the study:

  • 58% of respondents stated that improvements would be required.
  • 46% stated that minor renovations would be required.
  • 11% stated that major renovations would be required.
  • 44% of respondents who stated that improvements would be required indicated that their kitchens and/or bathrooms would have to be renovated to improve accessibility.

The study also showed how respondents planned to finance improvements: 62% plan to draw on savings; 25% plan to arrange a reverse mortgage or HELOC; 11% plan to utilize investments; 9% plan to sell existing assets; and, 7% plan to use other types of loans.

Accessibility remains the top issue when it comes to seniors remaining in the family home, according to Vince Agovino, Executive Director, AGTA Home Health Care, a company providing products and services – from Personal Support Workers (PSW) to home renovations – for barrier free living. In fact, the top areas his company addresses include: improving accessibility from the main floor to the second floor; improving accessibility from outside the home to inside the home; and, renovating the home so there is a full bathroom on the main floor.

Mr. Agovino founded the company in 2000, following his personal, and challenging, experience of helping his aging grandparents remain in the family home.

“It was very difficult as my grandparents aged. It was difficult to find the products they needed, such as bathroom safety equipment, and especially hard to find everything we needed in one place. We also needed a PSW and needed to explore financing. I discovered we were not unique in this situation,” he explained.

That led to the launch of AGTA Home Health Care, which, Mr. Agovino notes, strives to address and solve all aspects of barrier free living.

AGTA Home Health Care’s most common renovation projects include:

  • Improving accessibility from the main floor to the second floor, via a stair glide, starting at $3,000.
  • Improving accessibility from outside the home to inside, via a ramp, starting at $3,000.
  • Creating a full bathroom on the main floor of a home, starting at $10,000.

The February, 2015 Retirement Study of Canadians aged 55+, conducted by HomEquity Bank and The Brondesbury Group, detailed 47% of pre-retired and 56% of retired respondents stating that ‘staying in my home is critical for my quality of life.’

HomEquity Bank, the only Canadian bank working exclusively with seniors, helps elderly people remain in their homes through its CHIP reverse mortgage solution. Seniors can supplement their income via reverse mortgage monthly or lump sum payments.

About HomEquity Bank

HomEquity Bank is a Schedule 1 Canadian Bank offering the CHIP reverse mortgage solution www.chip.ca. It was founded 30 years ago as an annuity based solution addressing the financial needs of Canadians who want to access the equity of their top asset – their home.

About Ipsos Canada

Ipsos is one of the world’s largest independent market research companies. Its commitment to driving the industry with innovative, best in class research techniques that are meaningful in today’s connected society is a primary goal. www.ipsos.ca

For this survey, a sample of 301 Canadian homeowners aged 55+ was interviewed online via the Ipsos I-Say panel. Weighting was then employed to balance demographics to ensure that the sample’s composition reflects that of the age 55+ population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within +/ – 6% percentage points, 19 times out of 20, had all Canadian homeowners age 55+ been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.

SOURCE HomEquity Bank

 

reverse mortgages

Related article at BNN

Equifax Teranet Announce Partnership

Mortgage Credit Score

Mortgage Credit Score

Industry leaders team up to provide real estate insights on Canadian consumers

Equifax Canada Co. and Teranet Enterprises Inc. have entered into a strategic partnership in order to deliver property and RESL (Real Estate Secured Lending) insights on Canadian consumers. The two industry leaders will be working together to build a suite of solutions leveraging the analytical expertise, and the credit and property data assets held respectively by each company.

Through this partnership, Teranet and Equifax will be able to provide Financial Institutions with comprehensive Canadian real estate data and analytics needed to better evaluate and service their clients throughout the customer lifecycle.

“We know our clients have been looking for insights into Canadians’ mortgage and real estate status,” explains Bill Johnston, Vice President, Data and Analytics at Equifax Canada. “Partnering with Teranet enables us to shape data into solutions to help meet that need. Providing deeper insights can help our customers make more informed decisions, which ultimately benefits Canadian consumers seeking credit. We’re pleased to be part of that.”

Drew Doherty, Director of Marketing & Product Development, from Teranet echoes Johnston’s enthusiasm. “We are very excited to partner with Equifax and look forward to providing customers with even greater insights that will ultimately help strengthen lending decisions. These data-rich solutions can be used by financial institutions to inform and adjust their strategies and underwriting guidelines while aligning solutions to meet the evolving needs of the Canadian consumer.”

The first suite of solutions generated from this partnership is now commercially available.

About Equifax

Equifax powers the financial future of individuals and organizations around the world. Using the combined strength of unique trusted data, technology and innovative analytics, Equifax has grown from a consumer credit company into a leading provider of insights and knowledge that helps its customers make informed decisions. The company organizes, assimilates and analyzes data on more than 800 million consumers and more than 88 million businesses worldwide, and its databases include employee data contributed from more than 5,000 employers.

Headquartered in Atlanta, Ga., Equifax operates or has investments in 21 countries in North America, Central and South America, Europe and the Asia Pacific region. It is a member of Standard & Poor’s (S&P) 500® Index, and its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. Equifax employs approximately 9,200 employees worldwide.

Some noteworthy achievements for the company include: Ranked 13 on the American Banker FinTech Forward list (2015); named a Top Technology Provider on the FinTech 100 list (2004-2015); named an InformationWeek Elite 100 Winner (2014-2015); named a Top Workplace by Atlanta Journal Constitution (2013-2015); named one of Fortune’s World’s Most Admired Companies (2011-2015); named one of Forbes’ World’s 100 Most Innovative Companies (2015). For more information, visit www.equifax.com

About Teranet

Teranet is an international leader and pioneer in electronic land registration systems and commerce.

In Ontario, Teranet is the exclusive provider of online property search and registration. Teranet developed, owns and operates the Ontario Electronic Land Registration System, enabling customers to perform searches, transfer title documents through our search and registration capabilities, and perform many other functions in what is widely recognized as one of the world’s most advanced, secure, and sophisticated land registry systems.

In Manitoba, Teranet owns and operates The Property Registry (TPR), offering land and personal property security registration and search services. TPR provides certification of titles to land, maintains land records, and offers reliable information of financial interests in personal property to the public.

A Teranet affiliated entity also holds an interest in Foster Moore International Limited, a New Zealand-based global market player in the government registry sector, including Occupational, Secured Transaction, and Corporate Business registries.

In addition, Teranet offers a complementary suite of innovative solutions for real estate, legal, financial services, government, utilities and local authorities through mapping, property valuation, tax collection and risk assessment products. Reaching a network of over 81,000 end users, 34 real estate boards and over 250 municipalities and institutions, Teranet’s Value Added Solutions create efficiencies for these industries.

Teranet is owned by Borealis, a leading global infrastructure investment manager and the infrastructure arm of the Ontario Municipal Employee Retirement System.

For more information about Teranet, visit www.teranet.ca

CONTACT INFORMATION

CREA Updates Resale Housing Forecast

Canadian Real Estate Association

Canadian Real Estate Association

The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations for 2016 and extended it to include 2017.

CREA’s recent forecasts anticipated that housing activity would rebalance in 2016, with cooling activity and smaller price gains in British Columbia and Ontario, resulting in slower national price growth. However, many of the defining themes among Canadian housing markets last year have persisted, and in some cases intensified, in early 2016. Interest rate are now also widely expected to remain low for longer, with administered lending rates beginning to rise no earlier than the second half of 2017.

Canadian resale housing market trends this year are expected to resemble those apparent in 2015, with very tight supply leading to strong price gains in British Columbia and Ontario – particularly in the Lower Mainland and in and around the Greater Toronto Area. Price gains in these regions are expected to continue to stand in sharp contrast to moderate price declines among housing markets whose prospects are closely tied to oil and other natural resource prices. In line with the prevailing forecast for stronger Canadian economic growth beginning in the second half of 2016, Canadian home sales activity is now expected to rebalance in 2017.

Nationally, sales activity is forecast to rise by one per cent to 511,400 units in 2016. The annual increase continues to reflect significant regional variations in housing market trends (Chart A).

British Columbia is again forecast to post the largest annual increase in activity (+11.8 per cent), with Alberta expected the record the largest annual sales decline (-18.7 per cent). A lack of supply is expected to hold activity in check in Ontario in 2016 (+0.3 per cent) despite the continuation of very strong demand.

Elsewhere, modest sales gains in Manitoba (+3.4 per cent), Quebec (+3.4 per cent), New Brunswick (+1.2 per cent), Nova Scotia (+1.1 per cent) and Prince Edward Island (+3.3 per cent) are forecast for 2016, reflecting expected improvements in these province’s economic prospects.

By contrast, sales activity in 2016 is forecast to ease in Saskatchewan Newfoundland and Labrador, two of Canada’s major oil producing provinces, by 3.7 per cent and 4.5 per cent respectively.

With prices continuing to push higher in British Columbia and Ontario and sales in these expensive real estate markets hitting record highs, CREA’s forecast for national average price has been revised upward to $478,100 in 2016, representing an annual increase of eight per cent.

British Columbia is forecast to be the only province where average home prices rise materially faster (+10.0 per cent) than the national average, reflecting an increasing proportion of sales above $1 million. The rise in Ontario’s average price (+8.2 per cent) is forecast to be roughly in line with the national increase.

Elsewhere, average prices in 2016 are forecast to rise by 2.1 per cent in Manitoba, 1.6 per cent in Quebec, and 1.1 per cent in both Nova Scotia and Prince Edward Island.

Average prices are forecast recede in Alberta (-2.5 per cent), Saskatchewan (-2.4 per cent), New Brunswick (-0.4 per cent) and Newfoundland and Labrador (-1.4 per cent).

In 2017, national sales are forecast to number 513,400 units. This is little changed (+0.4 per cent) from forecast levels for 2016, as activity in B.C. and Ontario comes off the boil due to deteriorating affordability while confidence begins to recover in provinces hardest hit by weak prices for oil and other natural resources.

Consumer confidence is anticipated to strengthen and begin drawing homebuyers off the sidelines in Alberta, Saskatchewan and Newfoundland and Labrador as their economic prospects improve. This is anticipated to contribute to a modest rebound in sales activity in these provinces in 2017.

British Columbia is the only province forecast to post an annual decline in home sales in 2017, reflecting a combination of a growing shortage of single family homes available for sale and deteriorating affordability. Even so, activity is expected to continue trending near record levels. Ontario is forecast to see sales level off in 2017.

Sales activity is forecast to continue to push higher in Manitoba, Quebec, and Nova Scotia in 2017, reflecting the prevailing forecast for improving economic prospects in these provinces. Sales in Prince Edward Island are also forecast to improve as the province continues to benefit from a lower Canadian dollar.

The national average price is forecast to edge higher by 1.1 per cent to $482,500 in 2017, with modest price gains near or below inflation among provinces.

Slower national average price growth in 2017 reflects weaker price gains in British Columbia and Ontario. Price trends in these provinces reflect an anticipated slowdown in luxury sales activity, a continuing supply shortage of relatively more affordable low rise family homes and an anticipated increase in relatively more affordable condo unit sales as a proportion of total sales activity. In other provinces, an ample supply of listings relative to demand will continue to keep price gains in check.

About The Canadian Real Estate Association

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 100,000 real estate Brokers/agents and salespeople working through more than 100 real estate Boards and Associations.

SOURCE Canadian Real Estate Association
For further information: Pierre Leduc, Media Relations, The Canadian Real Estate Association, Tel.: 613-237-7111 or 613-884-1460, E-mail: pleduc@crea.ca

RECO Issues Public Advisory

RECO Logo

RECO LogoPublic Advisory – Real Estate Council of Ontario Issues Public Advisory Regarding Baljit Singh Dhaliwal

The Real Estate Council of Ontario (RECO) is warning members of the public not to engage in real estate transactions with Baljit Singh Dhaliwal. Neither he nor his company, Global West Real Estate Developments Limited, are registered to trade in real estate.

In order to trade in real estate in Ontario, salespersons, brokers and brokerages must be registered under the Real Estate and Business Brokers Act, 2002 (REBBA 2002). This is the law that regulates real estate trading in the province and which is enforced by RECO.

On January 14, 2016, RECO revoked the registration of Mr. Dhaliwal. The Registrar’s proposal to revoke, which was not appealed by Mr. Dhaliwal, alleged that he was improperly handling trust funds.

On February 4, 2016, RECO received new information about a trust deposit on a real estate transaction where Mr. Dhaliwal was the listing and selling representative. Following further investigation, RECO located an account containing consumer funds.

Based on suspicions of ongoing illegal activity, on February 23, 2016, RECO issued a freeze order on a bank account of Global West Real Estate Developments Limited, being operated by Mr. Dhaliwal. Global West Real Estate Developments Limited is not registered as a real estate brokerage under REBBA 2002.

Freeze orders are issued for the protection of consumers, and prevent any funds being withdrawn from accounts.

RECO is continuing its investigation and taking appropriate action under the law. Anyone who has a complaint regarding their real estate transaction with Baljit Singh Dhaliwal should contact RECO.

Mr. Dhaliwal was previously registered under REBBA 2002 with Global West Realty Limited and Century 21 New Stars Realty Inc. Both of these brokerages remain registered.

SOURCE Real Estate Council of Ontario

For further information: James Geuzebroek, Manager of Communications, Real Estate Council of Ontario, 416-207-3108; james.g@reco.on.ca

http://www.reco.on.ca

RBC reports first quarter 2016 results

Royal Bank of Canada

Royal Bank of CanadaRoyal Bank of Canada, RBC, reported net income of $2,447 million for the first quarter ended January 31, 2016, flat from the prior year. Our results reflect higher earnings in Wealth Management which benefited from the inclusion of our acquisition of City National Bank (City National) which closed on November 2, 2015 and contributed $53 million to earnings; $107 million excluding amortization of intangibles of $31 million after-tax and $23 million after-tax of acquisition and integration costs. Results also reflect record earnings in Personal & Commercial Banking and higher earnings in Investor & Treasury Services offset by lower results in Insurance and Capital Markets. Our results include favourable foreign exchange translation. Our provision for credit loss (PCL) ratio of 0.31% increased 7 bps from the prior year, resulting from the low oil price environment. In addition, today we announced an increase to our quarterly dividend of $0.02 or 3% to $0.81 per share.

Compared to last quarter, net income decreased $146 million or 6%, mainly reflecting the prior quarter net favourable tax adjustments recorded in Corporate Support. Higher earnings in Investor & Treasury Services, Wealth Management, Personal & Commercial Banking and Capital Markets were also partially offset by lower earnings in Insurance.

We maintained a strong Common Equity Tier 1 (CET1) ratio of 9.9%, down 70 bps from the prior quarter, reflecting the impact from the closing of the City National acquisition.

“Within the context of a challenging macro environment, we delivered solid earnings of $2.4 billion this quarter, and I’m pleased to announce a 3% increase to our quarterly dividend,” said Dave McKay, RBC President and CEO. “In today’s environment, I’m confident that RBC’s diversified business model and disciplined risk and cost management approach position us well to continue to support our clients and deliver long-term value to our shareholders.”

Q1 2016 compared to Q1 2015

  • Net income of $2,447 million (flat from $2,456 million)
  • Diluted earnings per share (EPS) of $1.58 (down $0.07 from $1.65)
  • Return on common equity (ROE)(2) of 15.3% (down 400 bps from 19.3%)
  • Basel III CET1 ratio of 9.9% (up 30 bps from 9.6%)
Q1 2016 compared to Q4 2015

  • Net income of $2,447 million (down 6% from $2,593 million)
  • Diluted EPS of $1.58 (down $0.16 from $1.74)
  • ROE of 15.3% (down 260 bps from 17.9%)
  • Basel III CET1 ratio of 9.9% (down 70 bps from 10.6%)
____________________________________
– City National results excluding amortization of intangibles and acquisition and integration costs is a non-GAAP measure that provides readers with a better understanding of management’s perspective on our performance.
– This measure does not have a standardized meaning under GAAP.For further information, refer to the Key performance and non-GAAP measures section of our Q1 2016 Report to Shareholders.

Q1 2016 Business Segment Performance

Personal & Commercial Banking net income was a record $1,290 million, up $35 million or 3% compared to last year. Canadian Banking net income was $1,231 million, up $11 million or 1% compared to last year, driven by solid volume growth of 6% and higher fee-based revenue, mainly offset by lower spreads. Results also reflect higher costs to support business growth and higher PCL. Caribbean& U.S. Banking net income was $59 million, up $24 million from last year, largely reflecting the favourable impact of foreign exchange translation and cost management initiatives.

Compared to last quarter, Personal & Commercial Banking net income was up $20 million or 2%. Canadian Banking net income was relatively flat compared to last quarter as solid volume growth, higher fee-based revenue and lower marketing costs were largely offset by higher PCL and lower spreads. Caribbean & U.S. Banking net income was up $16 million, largely reflecting higher fee-based revenue and the favourable impact of foreign exchange translation.

Wealth Management net income of $303 million was up $73 million or 32% from last year, largely reflecting the inclusion of our acquisition of City National, which contributed $53 million to net income, after amortization of intangibles and acquisition and integration costs as noted above. Results also reflect lower restructuring costs of $19 million ($18 million after-tax) related to our International Wealth Management business, and higher earnings from growth in fee-based client assets, mainly in Canadian Wealth Management and Global Asset Management. These factors were partially offset by lower semi-annual performance fees, and lower earnings due to a decrease in transaction volumes reflecting unfavourable market conditions.

Compared to last quarter, net income was up $48 million or 19%, mainly due to the inclusion of our acquisition of City National as noted above.

Insurance net income of $131 million decreased $54 million or 29% from last year, reflecting higher claim costs, mainly in our life retrocession business, and lower earnings from a new U.K. annuity contract as compared to two new contracts last year.

Compared to last quarter, net income was down $94 million or 42%, as the prior quarter included favourable actuarial adjustments reflecting management actions and assumption changes. Higher claims costs also contributed to the decrease.

Investor & Treasury Services net income of $143 million was relatively flat from last year, primarily due to higher funding and liquidity results, the positive impact of foreign exchange translation, and increased earnings from growth in client deposits. These factors were mostly offset by higher technology initiative spend and lower custodial fees.

Compared to last quarter, net income was up $55 million or 63%, primarily due to higher funding and liquidity results reflecting stabilizing credit spreads.

Capital Markets net income of $570 million decreased $24 million or 4% from last year, primarily due to lower results in Global Markets and Corporate and Investment Banking as compared to strong levels last year, and higher PCL. These factors were partially offset by lower variable compensation, the positive impact of foreign exchange translation and a lower effective tax rate.

Compared to last quarter, net income was up $15 million or 3%, driven by higher trading results reflecting increased client activity and moderately improved market conditions, lower litigation provisions and related legal costs, and higher results in Corporate and Investment Banking. These factors were partially offset by higher PCL. In addition, our results in the prior quarter included favourable income tax adjustments.

Corporate Support net income was $10 million, largely reflecting asset/liability management activities. Net income last year was $50 million, largely reflecting a gain on sale of a real estate asset and asset/liability management activities. Net income last quarter was $200 million, mainly reflecting net favourable tax adjustments and asset/liability management activities, partially offset by transaction costs related to our acquisition of City National.

Capital – As at January 31, 2016, Basel III CET1 ratio was 9.9%, down 70 bps compared to last quarter, largely reflecting the acquisition of City National which closed on November 2, 2015, partially offset by internal capital generation.

Credit Quality – Total PCL of $410 million increased $140 million or 52% from a year ago, largely reflecting higher PCL in Capital Markets mainly due to higher provisions in the oil & gas and utilities sectors, and higher provisions in Personal & Commercial Banking largely in our personal lending and credit card portfolios. Our PCL ratio was 0.31%, up 7 bps compared to last year and up 8 bps compared to last quarter.

Total gross impaired loans (GIL) of $3,120 million increased $987 million or 46% from last year, of which $576 million is related to Federal Deposit Insurance Corporation covered loans we acquired through our City National transaction. The increase in GIL was also partially due to the impact of foreign exchange translation and an increase in impaired oil & gas loans. Our GIL ratio was 0.59%, up 13 bps compared to last year and up 12 bps compared to last quarter.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

From time to time, we make written or oral forward-looking statements within the meaning of certain securities laws, including the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. We may make forward-looking statements in this earnings release, in filings with Canadian regulators or the U.S. Securities and Exchange Commission (SEC), in reports to shareholders and in other communications. Forward-looking statements include, but are not limited to, statements relating to our financial performance objectives, vision and strategic goals, and include our President and Chief Executive Officer’s statements. The forward-looking information contained in this earnings release is presented for the purpose of assisting the holders of our securities and financial analysts in understanding our financial position and results of operations as at and for the periods ended on the dates presented, our financial performance objectives, vision and strategic goals, and may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as “believe”, “expect”, “foresee”, “forecast”, “anticipate”, “intend”, “estimate”, “goal”, “plan” and “project” and similar expressions of future or conditional verbs such as “will”, “may”, “should”, “could” or “would”.

By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that our predictions, forecasts, projections, expectations or conclusions will not prove to be accurate, that our assumptions may not be correct and that our financial performance objectives, vision and strategic goals will not be achieved. We caution readers not to place undue reliance on these statements as a number of risk factors could cause our actual results to differ materially from the expectations expressed in such forward-looking statements. These factors – many of which are beyond our control and the effects of which can be difficult to predict – include: credit, market, liquidity and funding, insurance, operational, regulatory compliance, strategic, reputation, legal and regulatory environment, competitive and systematic risks and other risks discussed in the Risk management and Overview of other risks sections of our 2015 Annual Report and in the Risk management section of our Q1 2016 Report to Shareholders; weak oil and gas prices; the high levels of Canadian household debt; exposure to more volatile sectors, such as lending related to commercial real estate and leveraged financing; cybersecurity; anti-money laundering; the business and economic conditions in Canada, the U.S. and certain other countries in which we operate; the effects of changes in government fiscal, monetary and other policies; tax risk and transparency; and environmental risk.

We caution that the foregoing list of risk factors is not exhaustive and other factors could also adversely affect our results. When relying on our forward-looking statements to make decisions with respect to us, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Material economic assumptions underlying the forward looking-statements contained in this earnings release are set out in the Overview and outlook section and for each business segment under the heading Outlook and priorities in our 2015 Annual Report, as updated by the Overview and outlook section in our Q1 2016 Report to Shareholders. Except as required by law, we do not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by us or on our behalf.

Additional information about these and other factors can be found in the Risk management and Overview of other risks sections of our 2015 Annual Report to Shareholders and in the Risk management section of our Q1 2016 Report to Shareholders.

Information contained in or otherwise accessible through the websites mentioned does not form part of this earnings release. All references in this earnings release to websites are inactive textual references and are for your information only.

ACCESS TO QUARTERLY RESULTS MATERIALS
Interested investors, the media and others may review this quarterly earnings release, quarterly results slides, supplementary financial information and our Q1 2016 Report to Shareholders on our website at rbc.com/investorrelations.

Quarterly conference call and webcast presentation
Our quarterly conference call is scheduled for Wednesday February 24th, 2016 at 8:00 a.m. (EST) and will feature a presentation about our first quarter results by RBC executives. It will be followed by a question and answer period with analysts.

Interested parties can access the call live on a listen-only basis at: www.rbc.com/investorrelations/ir_events_presentations.html or by telephone (416-340-2217 or 1-866-696-5910, passcode 6770410#). Please call between 7:50 a.m. and 7:55 a.m. (EST).

Management’s comments on results will be posted on our website shortly following the call. Also, a recording will be available by 5:00 p.m. (EST) on February 24th, 2016 until May 25th, 2016 at: www.rbc.com/investorrelations/ir_quarterly.html or by telephone (905-694-9451 or 1-800-408-3053, passcode 9484611#).

ABOUT RBC
Royal Bank of Canada is Canada’s largest bank, and one of the largest banks in the world, based on market capitalization. We are one of North America’s leading diversified financial services companies, and provide personal and commercial banking, wealth management, insurance, investor services and capital markets products and services on a global basis. We have over 80,000 full- and part-time employees who serve more than 16 million personal, business, public sector and institutional clients through offices in Canada, the U.S. and 37 other countries. For more information, please visit rbc.com. RBC helps communities prosper, supporting a broad range of community initiatives through donations, community investments, sponsorships and employee volunteer activities. In 2015, we contributed more than $100 million to causes around the world.

Trademarks used in this earnings release include the LION & GLOBE Symbol, ROYAL BANK OF CANADA and RBC which are trademarks of Royal Bank of Canada used by Royal Bank of Canada and/or by its subsidiaries under license. All other trademarks mentioned in this earnings release, which are not the property of Royal Bank of Canada, are owned by their respective holders.

SOURCE RBC

For further information:

Media Relations Contacts
Claire Holland, Senior Director, Communications – Financial, Technology, Risk Management claire.holland@rbc.com, 416-974-2239 or 1-888-880-2173 (toll-free outside Toronto)
Sandra Nunes, Director, Financial Communications sandra.nunes@rbc.com, 416-974-1794 or 1-888-880-2173 (toll-free outside Toronto)

Investor Relations Contacts
Amy Cairncross, VP & Head, Investor Relations amy.cairncross@rbc.com, 416-955-7803
Lynda Gauthier, Managing Director, Investor Relations lynda.gauthier@rbc.com, 416-955-7808
Stephanie Phillips, Director, Investor Relations stephanie.phillips@rbc.com, 416-955-7809
Brendon Buckler, Associate Director, Investor Relations brendon.buckler@rbc.com, 416-955-7807

Canadians to invest more internationally this year says CIBC

Canadian Imperial Bank of Commerce

Canadian Imperial Bank of CommerceThis is interesting poll conducted by CIBC which shows that even Canadian investors are not that optimistic about Canada’s economy.

Canadians investing for retirement are increasingly looking to diversify their portfolios with global equities in an attempt to boost returns, a new CIBC poll finds. Despite the lower loonie, as many as 41 per cent of investors say they are looking for opportunities outside of Canada, up sharply from only one third (31 per cent) last year.

Key poll findings include:

  • 41 per cent of Canadians investing for retirement in stocks or mutual funds this year, will invest mainly outside of Canada, up from 31 per cent in a similar poll last year
  • Of these:
  • 15 per cent plan to add exposure to the U.S.
  • 15 per cent intend to invest in emerging markets and
  • 11 per cent are looking to invest in developed markets

“While it’s natural for investors to have a ‘home bias’ by overweighting your portfolio to domestic stocks, taking a Canada-only approach can hurt returns,” says Luc de la Durantaye, Managing Director, Asset Allocation and Currency Management, CIBC Asset Management. “Canada accounts for only about three per cent of the world’s market capitalization, so diversifying geographically can strengthen your portfolio for the long-term. It significantly broadens your investment options and helps to mitigate risk.”

Searching the world and alternate asset classes for returns

Over the past 15 years, four different equity markets around the world posted the best annual returns. But, Canada’s benchmark S&P/TSX Composite Index didn’t top the list once during that period. Last year, Japan’s Nikkei was the top performer, rising 9.2 per cent, while the U.S. Standard & Poor’s 500 Index ranked first in 2014, returning 13.7 per cent.

The poll also showed that recent market volatility and the lower loonie are prompting nearly a quarter (22 per cent) of investors to look at so-called “alternative asset” classes, such as real estate or infrastructure, as a way to diversify and gain exposure to growth. Another 26 per cent said they wanted to learn more about alternative asset classes.

“Adding carefully selected alternative investments to a portfolio of traditional stocks and bonds is another way to diversify and can help to reduce your portfolio’s overall risk,” says Mr. de la Durantaye. “With resources and financials the two biggest weights in Canada’s equity markets, it’s important that investors diversify their holdings both geographically and between asset classes to help them meet their long-term investment goals,” he adds.

Strategies for investors striving to diversify their investments

  • Work with an advisor: A financial advisor can help you assess your portfolio and understand its overall sensitivity to stock market volatility. An advisor will help customize a plan based on long-term investment goals and help to ensure that the investments are globally diversified.
  • Consider global “balanced” investments: A strategically diversified mix of different kinds of stocks and bonds, and potentially alternative asset classes, such as infrastructure and real estate, can provide a smoother ride to investment goals by mitigating the volatility of their underlying components.

Key poll findings

Geographic region Canadians think they will mainly invest in:

Canadian stocks, incl. mutual funds holding these stocks59%
U.S. stocks, incl. mutual funds holding these stocks15%
Global stocks in emerging markets, incl. mutual funds holding these stocks15%
Global stocks in developed markets like Europe, incl. mutual funds holding these stocks11%

From January 20th to 22nd, 2016, Vision Critical conducted an online survey among 1,003 Angus Reid Forum panelists who are Canadian adults with an investment portfolio for retirement. The margin of error – which measures sampling variability – is +/- 3.1 per cent, 19 times out of 20. The results have been statistically weighted according to age, gender and region. Discrepancies in or between totals are due to rounding.

About CIBC Asset Management
CAM, the asset management subsidiary of CIBC, provides a range of high-quality investment management services and solutions to individual and institutional investors. CAM’s offerings include: a comprehensive platform of mutual funds, strategic managed portfolio solutions, discretionary investment management services for high-net-worth individuals, and portfolio management for institutional clients. CAM is one of Canada’s largest asset management firms, with over $111 billion in assets under management as of December 31, 2015.

About CIBC
CIBC is a leading Canadian-based global financial institution with 11 million personal banking and business clients. Through our three major business units – Retail and Business Banking, Wealth Management and Capital Markets – CIBC offers a full range of products and services through its comprehensive electronic banking network, banking centres and offices across Canada with offices in the United States and around the world. You can find other news releases and information about CIBC in our Media Centre on our corporate website at www.cibc.com.

SOURCE Canadian Imperial Bank of Commerce

For further information:

Caroline Van Hasselt, Director, External Communications and Media Relations, 416-784-6699 or caroline.vanhasselt@cibc.com

First Real Estate Auction Set for Toronto Investor Forum

Real Estate Investor Forum Auction Property

Real Estate Investor Forum Auction PropertyU.S. based Williams & Williams, a global leader in real estate auctions has teamed with Bill White of Ontario-based Real Estate Auction Canada to bring live and interactive auctions to the Canadian marketplace. The powerhouse team, in conjunction with Pamela Mallysh Real Estate Brokerage, will auction its first joint listing on Sunday, March 6, at the Real Estate Investor Forum at the Toronto International Center, 6900 Airport Rd in Mississauga.

The auction property is a brick four-plex located at 205 Russell Ave in St. Catharines. The property is partially occupied and is available for investment or owner purchase. Bidding is open to the public for the 12:30pm auction. Bidders may bid in person at the Investment Forum, or online at AuctionNetwork.com. The Nominal Opening Bid is $50,000.

The Auction group says this event will give the Forum attendees a new perspective on auction as a sales method for real estate. “Real estate auctions in Canada are not common like they are in the United States and other countries,” says White, who is also the broker of record. “We plan to demonstrate that the concept of a time-definite sale is not only possible, but highly efficient for both buyers and sellers.”

Fontana Fitzwilson, Executive Vice President of Williams & Williams, says her company is thrilled to bring real estate auctions to Canada and sees the trend growing swiftly over the next 12 months. “Our sellers have been asking us to bring our services to Canada,” Fitzwilson says. “Many of them have holdings here and want to use auction as a strategic, time-definite disposition method.”

The high bidder of the St. Catharines property will sign a purchase contract immediately after the auction. Closing will occur in about 30 days.

To view information and photos for this auction please visit

http://www.williamsauction.com/ontario

About Williams & Williams:

Williams & Williams (www.williamsauction.com) is a worldwide real estate auction firm and the leader in global live and interactive auctions. A full-service brokerage with an operating footprint in all 50 United States and U.S. Territories, Williams & Williams also cooperatively partners with residential, commercial and land brokers to auction properties throughout the United States and abroad.

About Auction Network:

www.AuctionNetwork.com is a subsidiary of Williams, Williams & McKissick, LLC, whose holdings include Williams & Williams. Auction Network™ is a 24-hour global broad-band television network that lets bidders participate from anywhere in the world during live and online auctions.

SOURCE Williams & Williams

For further information: Cindy Dees, 918.217.6410, cindy.dees@williamsauction.com, http://www.williamsauction.com

Pensions & Benefit Complexities

Canadian Payroll Association logo

Canadian Payroll Association logo

Pension & Benefit Complexities and the Ongoing Focus on Financial Wellness Call for Compliance Knowledge from Payroll Practitioners and Employers

Even before the new Liberal government took office, the need to provide additional retirement savings to Canadians was a crucial topic. The Canadian Payroll Association’s (CPA’s) National Payroll Week research continually shows that Canadians are challenged in saving enough for their retirement goals.

With financial wellness high on the agenda of governments and employers, payroll, accounting and HR practitioners involved in pensions and benefits processing and administration must stay abreast of developments and regulation by taking ongoing pensions and benefits training to enhance their payroll compliance knowledge.

The CPA offers three pension and benefit seminars: Pensions and Benefits from a Payroll Perspective, Advanced Pension Case Studies from a Payroll Perspective, and Best Practices of Employee Group Benefits, offering the most up-to-date payroll compliance knowledge practitioners require to successfully administer their plans.

Pensions Highly Valued Among Employees and Payroll Practitioners, Survey Shows

The CPA’s recent Employment and Retirement Benefits Survey ranks pensions plans (including RRSPs, defined benefit and defined contribution pension plans) among the top 15 most common employer-provided benefits. These types of pension benefits are also viewed by payroll professionals as one of their most valued benefits, according to Hays Canada’s 2016 Payroll Salary Survey.

“With the spotlight on pensions, and their role in supporting Canadians’ retirement goals, employers and payroll practitioners must be knowledgeable in payroll compliance so they can accurately administer these plans,” said Janet Spence, the CPA’s Manager of Compliance Services and Programs. “The Canadian Payroll Association’s Professional Development Seminars help to achieve this goal.”

Pension Legislation and Regulations Have Payroll Implications

Governments continue to discuss pension legislation – from potential Canada Pension Plan (CPP) enhancements to the Ontario Government’s proposed Ontario Retirement Pension Plan (ORPP). The CPA’s Professional Development Seminars help payroll practitioners and their employers navigate legislation and regulation to ensure compliance.

“The Association works collaboratively with all levels of government to enhance the efficiency and effectiveness of payroll-impacting legislation, regulations and administration for all stakeholders,” says Rachel De Grace, the CPA’s Manager of Advocacy and Legislative Content. “We are thankful to be a part of the Ontario Government’s ongoing Pre-Budget and ORPP consultations to provide our recommendations on pension reform from an employer perspective and we look forward to carrying on this working relationship.”

Payroll Compliance Resources Available for All Levels

Payroll practitioners rely on the CPA to communicate and advise on legislative updates that impact payroll, including those related to pensions and benefits. The Association continually updates its payroll compliance tools and resources and Payroll Best Practices Guidelines to provide the most current payroll compliance information.

The CPA offers over 20 different Professional Development Seminars across Canada, for members and non-members in payroll, accounting, finance and human resources professionals who recognize the value of payroll compliance knowledge.

For a complete listing of seminar dates and for more information on the Canadian Payroll Association’s Professional Development Seminars, Certification Programs and Benefits of Membership, visit payroll.ca / paie.ca.

About the Canadian Payroll Association:
Canada’s 1.5 million employers rely on payroll practitioners to ensure the timely and accurate annual payment of $901 billion in wages and taxable benefits, $305 billion in statutory remittances to the federal and provincial governments, and $169 billion in health and retirement benefits, while complying with more than 200 federal and provincial regulatory requirements. Since 1978, the Canadian Payroll Association has annually influenced the payroll compliance practices and processes of over 500,000 organizational payrolls. As the authoritative source of Canadian payroll compliance knowledge, the Canadian Payroll Association promotes payroll compliance through education and advocacy.

SOURCE Canadian Payroll Association

For further information contact:
Alison Rutka
Communications Specialist
alison.rutka@payroll.ca
416-487-3380 x 125

Real Estate Lawyers .ca Expands to Serve the Greater Toronto Area and Beyond

real estate lawyers

A local real estate law firm, Real Estate Lawyers .ca, recently announced their Southern Ontario expansion to better serve the hundreds of thousands of real estate transactions in the Golden Horseshoe area. Real Estate Lawyers.ca LLP has comprehensive expertise and exclusive proprietary technologies to help clients, buy property, sell property, refinance property and transfer property, both residential and commercial. Also, because Real Estate Lawyers.ca LLP has multiple real estate lawyers, it can close both ends of a transaction, the buy and sell side, and also, real estate agents can refer all their business to our firm without contravening RECO rules because our firm has more than three real estate lawyers. Effective immediately, the firm will begin offering their services throughout the Greater Metro Toronto area and the Golden Horseshoe area and beyond, including cities such as Ottawa, North York, Scarborough, Burlington, Oakville, Markham, Brampton, Richmond Hill, Mississauga, Vaughan, Oshawa, Ajax, Pickering, Whitby, Cambridge, Kitchener, Waterloo, London, St. Catharines, Milton, Guelph, Niagara Falls, Barrie, Orangeville, Newmarket and Etobicoke.

“We are very excited to announce our expansion into these major cities. Our services have helped thousands of people throughout the Toronto area, and we are sure that the residents of these other local areas will greatly benefit from our skilled staff of real estate lawyers. Whether someone is looking to buy or sell their home or property, refinance their mortgage, or transfer ownership, our friendly and dedicated staff can help,” says Shayle Rothman, Founding Partner at Real Estate Lawyers.ca LLP

In addition to property buying, selling, refinancing and transfer of ownership services, the firm also offers a wide variety of other services including asset transactions, commercial lease reviews, federal and provincial incorporation, and joint venture agreement services. The firm also offers services such as wills, estates and probate.

About Real Estate Lawyers.ca LLP
The dedicated legal staff at the firm work hard to ensure their clients legal rights and best interests are protected throughout every property transaction. From reviewing legal documents to finalizing transactions, the team of lawyers at Real Estate Lawyers.ca LLP take pride in their skills and commitment to serve their clients throughout the Greater Metro Toronto Area, Golden Horseshoe area and all Southern Ontario. Their main office is located in the heart of Toronto at the corner of Bay and King Street, but with the firm’s expansion, they also have offices in most major cities outside Toronto. Best of all, included in their flat rate legal fees is free mobile service, where the law firm comes to you, at home or at work or anywhere else you chose, evenings or weekends too, no more wasting vacation days or missing work to complete a real estate transaction.

For more information about Real Estate Lawyers.ca LLP or to find a nearby office, please visit www.RealEstateLawyers.ca or call toll-free 855-466-3801

Media Contact:
Real Estate Lawyers.ca LLP
Address: 100 King Street West, Suite 5700, Toronto, Ontario, M5X 1C7, Canada
Phone: 647-497-5704
Media Relations Contact
Scott Hayes

Ontario Retirement Pension Plan

current rates

current rates

Ontario Takes the Next Step Towards Strengthened Retirement Income Security

Ontario has announced new decisions on the proposed design of the Ontario Retirement Pension Plan (ORPP) — another step in delivering on its commitment to strengthen retirement income security for the two-thirds of Ontario workers without a secure workplace pension plan.

Premier Kathleen Wynne joined Minister of Finance Charles Sousa and Associate Minister of Finance Mitzie Hunter today to share information on a range of decisions, including the structure of ORPP benefits, compliance and enforcement, plan comparability and member participation.

The government also released details on the ORPP’s funding policy.

The details released today, combined with details released last August, will help employers prepare for the implementation of the ORPP, beginning on January 1, 2017.

Ontario has made significant progress on the ORPP in recent months. This includes the Ontario Retirement Pension Plan Administration Corporation appointing a CEO and Board of Directors, passing two pieces of enabling legislation and releasing key design and implementation details.

Studies show that many Ontarians are not able to save enough to maintain a similar standard of living when they retire. For many workers, long-term, full-time employment with pension benefits is no longer attainable. Today’s announcement brings the government closer to achieving its goal of ensuring that every eligible Ontario employee is part of the ORPP or a comparable workplace pension plan by 2020.

ORPP plan design details have now been shared with the Canada Revenue Agency.

Building a secure retirement savings plan is part of the government’s plan to build Ontario up and deliver on its number-one priority to grow the economy and create jobs. The four-part plan also includes investing in people’s talents and skills, making the largest investment in public infrastructure in the province’s history and creating a dynamic, supportive environment where business thrives.

Quick Facts

  • Pension coverage is lower for young workers than for any other age group. Only about one quarter of Ontario workers aged 25 to 34 participated in a workplace pension plan in 2012, compared to nearly half of workers aged 45 to 54.
  • The ORPP would expand pension coverage to more than 4 million workers. It would provide a predictable, reliable and inflation-indexed stream of income in retirement by replacing up to 15 per cent of an individual’s earnings, up to $90,000 (in 2017 dollars).
  • Enrolment would be phased in to ensure that the ORPP is focused on workers without access to a workplace pension plan, and to give employers time to adapt.
  • Under the proposed phase-in, plan members would start making contributions in 2017 and the ORPP would start providing benefits in 2022.

Background Information

Additional Resources

Quotes

Kathleen Wynne

“Our government is unwavering in its focus on ensuring a financially secure retirement for every worker in our province through the Ontario Retirement Pension Plan, and I am committed to ensuring that Ontarians have a strong, stable and prosperous retirement. Today’s announcement brings us another step closer to achieving this goal.”

Kathleen Wynne

Premier of Ontario

Charles Sousa

“After a lifetime of contributing to the economy, every Ontarian deserves a secure retirement. In the long-term, the economy will also benefit from the increase of investments and savings. Ontarians deserve a secure retirement and a strong economy, and the ORPP will help us achieve that goal.”

Charles Sousa

Minister of Finance

Mitzie Hunter

“We’ve shown tremendous progress on our commitment to build the ORPP as a strong, stable and sustainable plan. This puts us on the right course to ensure Ontario workers are able to achieve the retirement security they deserve. We know that people need a reliable, predictable plan that will support workers today, tomorrow and for generations to come.”

Mitzie Hunter

Associate Minister of Finance (Ontario Retirement Pension Plan)

Press release by the Province of Ontario.

Tapping your RRSP before retirement?

Canadian Imperial Bank of Commerce

CIBC National debt poll

Beware of the do’s and don’ts around Registered Retirement Savings Plans (RRSPs) if you’re planning to make a contribution or an early withdrawal, says Jamie Golombek, Managing Director, Tax & Estate Planning, CIBC Wealth Advisory Services.

“It’s tempting to tap your RRSPs for an emergency, but RRSPs should generally be viewed as long-term savings tools,” says Mr. Golombek, who recently issued a new report, Ten RRSP Hacks. “Borrowing money from your RRSP can make sense if you use the funds prudently to fund longer term goals that deliver their own return, such as buying a home, which hopefully increases your net worth, or investing in your education, which may help boost your earnings potential.”

A Tax-Free Savings Account (TFSA), which allows you to recontribute any amounts withdrawn in a future year, may be a better option if you need more flexibility with your finances, he says.

Using an RRSP to help buy your first home

Under the Home Buyers’ Plan (HBP), you can withdraw up to $25,000 from your RRSP to purchase a new home. Your spouse or partner may also be able to withdraw $25,000, for a combined total of $50,000. To take advantage of the HBP, you need to be a “first-time home buyer”, which is generally defined as someone who hasn’t owned a home in the past five years.

“This is a smart option for first-time home-buyers who are just pulling together their funds,” says Mr. Golombek. “It can help you meet your down-payment requirements and save you a lot of money on a mortgage loan insurance you might otherwise need.”

Amounts withdrawn under the HBP, however, must be repaid over a maximum of 15 years or the amount not repaid in a year is added to your income and becomes taxable.

Using an RRSP to go back to school

Through the Lifelong Learning Plan (LLP), you can borrow $10,000 a year, up to a total of $20,000, from your RRSP to finance your education. To take advantage of this plan, you must be enrolled or must have received an offer to enroll on a full-time basis in a qualifying Canadian or foreign educational institution. The funds can then be used for any purpose with no proof of expenses required, and must be repaid over a 10-year period. The LLP cannot be used to fund your child’s education.

With both the HBP and LLP, there are no penalties for paying back the funds earlier than required. “If you repay early, you can benefit from the tax-free compounding of investment returns inside your RRSP as soon as possible,” says Mr. Golombek.

Resist using your RRSP as an emergency fund

While an RRSP can help fund long-term financial goals, it should generally not be viewed as a go-to emergency fund, he says.

RRSP withdrawals are taxable at your marginal tax rate and are subject to immediate withholding taxes when withdrawn.

“If you dip into your RRSP for extra cash, you will not only be taxed, but you will lose the ability to recontribute those funds to your RRSP without generating additional room,” says Mr. Golombek.

If you think you may have to draw on your long term savings before retirement, a TFSA may be the better option because it offers more flexibility.

A financial advisor or tax expert can help you determine the best option for your retirement savings. This year’s deadline to make a RRSP contribution is Feb. 29.

“Regardless of whether you opt for an RRSP or a TFSA, the important thing is to save so you can meet your life goals today and in retirement,” says Mr. Golombek.

About CIBC

CIBC is a leading Canadian-based global financial institution with 11 million personal banking and business clients. Through our three major business units – Retail and Business Banking, Wealth Management and Capital Markets – CIBC offers a full range of products and services through its comprehensive electronic banking network, banking centres and offices across Canada with offices in the United States and around the world. You can find other news releases and information about CIBC in our Media Centre on our corporate website at www.cibc.com.

SOURCE Canadian Imperial Bank of Commerce

For further information: Caroline van Hasselt, Director, External Communications, at 416-784-6699 or Caroline.VanHasselt@cibc.com

RELATED LINKS
http://www.cibc.com

Bank of Canada Holds Interest Rate

mortgage interest rates

mortgage interest rates

Today the Bank of Canada kept the overnight lending rate at 0.5% after cutting it twice last year. This rate is what the banks charge each other for short-term loans and generally affects retail mortgage rates. Many economists had predicted a rate drop of 0.25% although that would have further weakened the Canadian dollar.

The Bank of Canada’s official news release is below.

The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/2 per cent. The Bank Rate is correspondingly 3/4 per cent and the deposit rate is 1/4 per cent.

Inflation in Canada is evolving broadly as expected. Total CPI inflation remains near the bottom of the Bank’s target range as the disinflationary effects of economic slack and low consumer energy prices are only partially offset by the inflationary impact of the lower Canadian dollar on the prices of imported goods. As all of these factors dissipate, the Bank expects inflation will rise to about 2 per cent by early 2017. Measures of core inflation should remain close to 2 per cent.

The dynamics of the global economy are broadly as anticipated in the Bank’s October Monetary Policy Report (MPR), with diverging economic prospects and shifting terms of trade. China continues its transition to a more sustainable growth path and the expansion in the United States is on track, despite temporary weakness in the fourth quarter of 2015. The U.S. Federal Reserve has begun to gradually withdraw its exceptional monetary stimulus. While risks to the world outlook remain and have been reflected in sharp price movements in a range of asset classes, global growth is expected to trend upwards beginning in 2016.

Prices for oil and other commodities have declined further and this represents a setback for the Canadian economy. GDP growth likely stalled in the fourth quarter of 2015, pulled down by temporary softness in the U.S. economy, weaker business investment and several other temporary factors. The Bank now expects the economy’s return to above-potential growth to be delayed until the second quarter of 2016. The protracted process of reorientation towards non-resource activity is underway, helped by stronger U.S. demand, the lower Canadian dollar, and accommodative monetary and financial conditions.  National employment remains resilient despite job losses in the resource sector and household spending continues to expand.

The Bank projects Canada’s economy will grow by about 1 1/2 per cent in 2016 and 2 1/2 per cent in 2017. The complex nature of the ongoing structural adjustment makes the outlook for demand and potential output highly uncertain. The Bank’s current base case projection shows the output gap closing later than was anticipated in October, around the end of 2017. However, the Bank has not yet incorporated the positive impact of fiscal measures expected in the next federal budget.

All things considered, therefore, the risks to the profile for inflation are roughly balanced. Meanwhile, financial vulnerabilities continue to edge higher, as expected. The Bank’s Governing Council judges that the current stance of monetary policy is appropriate, and the target for the overnight rate remains at 1/2 per cent.

Information note:

The next scheduled date for announcing the overnight rate target is 9 March 2016. The next full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 13 April 2016.

Canada Pension Plan and Old Age Security benefits effective Jan 1, 2016

cpp oas

cpp oas

Employment and Social Development Canada today announced the benefit amounts for the Canada Pension Plan (CPP) and Old Age Security (OAS) effective January 1, 2016.

CPP benefits will increase by 1.2 percent for those already receiving CPP benefits. For 2016, the maximum CPP retirement benefit for new recipients age 65 will be $1,092.50 per month, an increase of $330 for the year compared to the 2015 maximum CPP retirement benefit.

The new CPP rates will be in effect until December 31, 2016. CPP benefits are revised once a year, in January, based on changes over the 12-month period (November 2014 to October 2015) in the Consumer Price Index (CPI), which is the cost-of-living measure used by Statistics Canada.

OAS benefits, which consist of the basic OAS pension, the Guaranteed Income Supplement (GIS) and the Allowances, will increase by 0.1 percent for the first quarter of 2016 (January to March). As of January 1, 2016, the basic OAS pension will increase from $569.95 to$570.52 per month.

OAS benefits are also based on the CPI, but are reviewed quarterly (in January, April, July and October) and revised as required to reflect increases in the cost of living as measured by the CPI. Although OAS and CPP benefits are not indexed at the same time, they are both adjusted with the cost of living over a given year.

Quick Facts

  • The Old Age Security (OAS) program and the Canada Pension Plan (CPP) enhance the quality of life of Canadian seniors by providing a modest base upon which to build additional income for retirement.
  • The OAS program is funded through general tax revenues and provides a basic monthly income for Canadian seniors. For 2014–15,$44.1 billion in OAS benefits were provided to 5.6 million individuals.
  • The CPP is funded through contributions by Canadian workers, their employers and the self-employed and through investment earnings on the Plan’s funds. In addition to retirement benefits, the Plan provides disability, death, survivor and children’s benefits.

Quote

“I would like to reiterate the government’s commitment to improve the income security of seniors, which includes increasing the Guaranteed Income Supplement for seniors who live alone, indexing Old Age Security and Guaranteed Income Supplement payments to a new senior’s price index, and cancelling the increase in the age of eligibility, from 65 to 67 years, for Old Age Security.”
The Honourable Jean-Yves Duclos, Minister of Families, Children and Social Development

Associated Link

For up-to-date CPP and OAS benefit amounts, please visit http://www.esdc.gc.ca/en/cpp/oas/payments.page.

Backgrounder

The CPP is a stable, well-designed plan that is portable from province to province. According to the 2013 Chief Actuary Report, the CPP is expected to meet its obligations and remain financially sustainable over the long-term under the current contribution rate of 9.9 percent.The OAS program is funded through general tax revenues and provides a basic monthly income for Canadian seniors.

The GIS and the Allowances provide additional income to low-income pensioners, their spouses or common-law partners, and eligible survivors. These benefits are income-tested. This means that a person’s entitlement depends on their previous year’s net annual income, or the combined net income with their spouse or common-law partner, excluding the OAS pension.

The OAS program has played a major role in reducing the incidence of low-income among seniors. In 2013, the rate of low-income among seniors was 3.7 percent. Canada now has one of the lowest rates of low-income among seniors in the world.

Source: Employment and Social Development Canada

New Mortgage Rules Bad For Realtors

Realtor Financing

Realtor Financing

The new mortgage rules talked about below are only for CMHC insured mortgages and do not apply to other insurers. Once the new rules are implemented in February 2016, someone purchasing a $750,000 home would need to have a minimum down payment of $50,000, which is what you get when you add five per cent of $500,000 and 10 per cent of the remaining $250,000. I’m not sure this will affect many first time buyers who are the ones mainly using mortgage insurance.

New Canadian mortgage rules could soon cool down housing prices, and put the ice on commissions for Realtors. Canada’s new Liberal government announced last week new minimum down payment requirements in order to control what it sees as inflated housing prices in many of the country’s large urban centres like Toronto and Vancouver. Buyers will now have to cough up a minimum of 10% (instead of 5%) for homes valued between $500,000 and $999,999.

“These changes are not good for Realtors, especially those in BC and Alberta. We expect to see fewer home sales, and lower commissions earned in 2016 when the rules take effect,” said Ryan Suchet, President of Capital Growth Financial Corporation, a company dedicated to providing commission advances to Canadian real estate agents.

According to CIBC World Markets, Calgary, Edmonton, and Victoria will see 7-10% of home sales affected negatively. On the heels of the slowing oil market, this comes as another major blow to Calgary where 86% of new single-family homes are over $500,000.

“These new rules mean less demand and consequently lower prices for homes in that range,” said Suchet. “As a Realtor, you’re going to be working harder and earning less on those sales. Now more than ever, agents are going to need our commission advance service.”

Suchet believes financing will now become more complicated for the buyer due to proposed changes on mortgage companies, leading to more deals falling through. This will also put more pressure on the market resulting in lower commissions.

Capital Growth Financial Corporation is a Canadian company that provides commission advances to Realtors. The company will provide the agents much of their commission now, so they don’t have to wait – sometimes months – for their payments after the closing date.

Commission advances are provided to Realtors from all brokerages in Canada, from the large multinationals, to the small independent offices. Most customers receive their commission same-day from Capital Growth’s professional support team. Click here to learn more.

SOURCE Capital Growth Financial Corporation

For further information: Capital Growth Financial Corporation, Ryan Suchet, E-mail: ryan@capitalgrowth.ca, Phone: 1-888-818-9621

RELATED LINKS
www.capitalgrowth.ca

Capital Growth offers loans to real estate agents on future incoming commissions at an interest rate of .069% per day which works out to about 25% per year.

CREA Forecasting 8% Price Increase in Ontario

Canadian Real Estate Association

Canadian Real Estate Association

I think it is only fair to point out that the real estate forecast below, was done by the CREA (Canadian Real Estate Association) who have a vested interest in people believing house prices are still going up, and therefore a good investment. It is only a forecast based on the market’s past behaviour and what the CREA hopes will happen. Home prices are actually on the decline in many parts of Canada and interest rates have started climbing.

CREA 2016 Market Forecast

Press Release – Alberta, Saskatchewan and Newfoundland and Labrador are forecast to see average home prices decline by 2.5 per cent, 1.2 per cent and one per cent respectively in 2016, according to the Canadian Real Estate Association (CREA). The downturn in the oil industry may be one of the major reasons for the decline.

British Columbia will be the only province this year where average home prices rise faster (+11.5 per cent) than the national average. The rise in Ontario’s average price (+8.0 per cent) is forecast to be roughly in line with the national increase. CREA says that low interest rates will assist sales but that the federal government’s recent reforms to mortgage lending rules will have a negative effect beyond its intended targets in the Vancouver and Toronto areas. New mortgage rules will also likely reduce sales activity in Calgary once they take effect early next year.
The forecast for national sales in 2015 has been revised higher, reflecting stronger than anticipated activity in B.C. and Ontario. National sales are now projected to rise by five per cent marking the second strongest year on record for home sales in Canada.
British Columbia is projected to post the largest annual increase in sales activity in 2015 (+21.4 per cent), while home sales in Ontario are projected to rise by 9.3 per cent. The increase would in all likelihood be higher were it not for a shortage of low rise homes available for purchase in and around the Greater Toronto Area (GTA).
Sales in Quebec and New Brunswick are forecast to rise by 4.8 per cent and 5.4 per cent respectively while activity in Prince Edward Island, having benefitted from the lower Canadian dollar, is expected to be up 18.8 per cent from 2014 levels.
CREA is one of Canada’s largest single-industry trade associations, representing more than 111,000 REALTORS® working through 90 real estate Boards and Associations.

Borrowell Gives $100 Amazon Gift Card

Borrowell Personal Loans

Borrowell Personal Loans

Borrowell is an online lender which offers unsecured loans in direct competition with the big banks. As a holiday promotion they are offering a $100 gift card to Amazon to anyone who anyone who takes out a loan with then by December 31st. 2015.

Personal loans

With companies such as Borrowell are great alternatives to carrying a balance on your credit or store cards. Apply now before the Visa bill show up in January and save some money.

Apply Here! Approved in minutes.

Borrowell

111 Richmond Street West Suite 500
Toronto, Ontario M5H 2G4 Canada

News Release:

Borrowing for Canadians just got smarter. Borrowell, the new marketplace lending platform, offers affordable, fixed-interest loans giving Canadians a smarter way to manage their debt. The online platform accepts applications from Canadians with good credit scores who want better alternatives to high interest rates on credit cards and avoid the inconvenience of bank loans.

According to Equifax, Canadians currently hold over $80 billion in credit card debt with a typical interest rate of 19.9 per cent or higher. Borrowell is designed to let responsible Canadians be smarter about their borrowing, and customizes interest rates based on the borrower’s credit profile. The marketplace lending platform offers loans up to $35,000 on three and five-year terms with rates starting from 5.9% APR. Interest rates are fixed, loans are fully paid off at the end of the term and there are no early pre-payment fees.

“We believe Canadians deserve better borrowing options,” says Andrew Graham, CEO, Borrowell. “We reward responsible Canadians who have good credit by giving them an affordable alternative to the traditional, expensive and cumbersome options currently available. Our goal is to help Canadians conquer debt by giving them a smarter solution.”

How It Works
Borrowell matches people who want to borrow with lenders who want to lend money to responsible Canadians. Its proprietary technology does the matching quickly and securely. Borrowell operates exclusively online, cutting down on cost and complexity to pass the savings on to the borrower.

Growing Popularity of Marketplace Lending
Marketplace lending is disrupting traditional borrowing. In the US and UK, online marketplace lenders have served over one million customers to date. Goldman Sachs estimates online lending could grow to take over $1.7 trillion of an addressable $4 trillion of debt. In the past year, the industry has seen rapid growth and has been named ‘Innovation of the Year’ by American Banker.

“We’re seeing massive growth in marketplace lending around the world,” said John Bitove, Canadian businessman and Borrowell investor. “With Toronto-based Borrowell entering the market, Canadians now have an innovative and smarter way to borrow money, allowing them to get a better handle on their debt.”

In December 2014, Borrowell received $5.4 million in seed funding and loan capital. Key investors include Equitable Bank and Oakwest Corporation Limited, a private investment company owned and managed by the Beutel family. In addition to John Bitove, notable individual investors include Roger Martin, Dan Debow and Joe Canavan.

To learn more, visit www.borrowell.com.

About Borrowell Personal Loans
Borrowell is an online marketplace lending platform that provides responsible Canadians with better borrowing options. Its affordable, fixed-interest loans are funded by carefully selected institutional investors, allowing the company to offer better rates, better service and a better customer experience. Borrowell’s institutional partners include Equitable Bank and Oakwest Corporation. More information is available at: www.borrowell.com

SOURCE Borrowell

SecurOption – Lifetime Retirement Income

SecurOption Pension Plan

SecurOption Pension Plan

A Financial Group Launches its new Version of SecurOption – Lifetime Retirement Income

iA Financial Group (Industrial Alliance Insurance and Financial Services Inc.) is proud to launch the improved version of SecurOption – Lifetime Retirement Income, the guaranteed lifetime retirement income option of its group retirement plans.

SecurOption is a simple, innovative and distinctive option offered in the iA Financial Group’s DPSPs and group RRSPs. It allows members to build guaranteed lifetime retirement income the amount of which is known in advance, through their accumulation plan. The first version of SecurOption made iA Financial Group a leader in group retirement plans offering income security. With its new solution, which provides an increase to the annuity based on the amount as well as the complete integration of data in all its tools, iA Financial Group meets a challenge in terms of innovation and makes the retirement planning process significantly easier for its clients while reducing the risk related to increased longevity.

“SecurOption addresses our clients’ dire need for income security.  Many members of defined contribution retirement plans have less tolerance to risks related to financial markets, worry about outliving their savings, and look for new ways to ensure a guaranteed retirement income supplement for their retirement. With SecurOption, our innovative solution, we meet this new needs”, states Renée Laflamme, Executive Vice‑President, Group Benefits and Retirement Solutions.

The new version of SecurOption is described in detail at securoption.com/advisor. With this initiative, iA Financial Group demonstrates once again that it offers smart and high-performance solutions as well as superior services in order to build with its clients long-term relationships focused on simplicity.

About Group Savings and Retirement
Group Savings and Retirement has been administering pension funds for more than 60 years. It offers a wide range of products and services adapted to the needs of savings and retirement plan members. With regional offices across Canada, it is one of the largest group savings and retirement service providers in the country.

About iA Financial Group
Founded in 1892, iA Financial Group offers life and health insurance products, savings and retirement plans, RRSPs, mutual and segregated funds, securities, auto and home insurance, mortgages and car loans, and other products and services for both individuals and groups. It is among the four largest life and health insurance companies and one of the largest publicly traded companies in Canada. iA Financial Group stock is listed on the Toronto Stock Exchange under the ticker symbol IAG.

 

SOURCE Industrial Alliance Insurance and Financial Services Inc.

For further information: Pierre Picard, Manager, Public Relations, Office phone: 418-684-5000, ext. 11660, Email: pierre.picard@ia.ca

RELATED LINKS
http://www.inalco.com

Please note: This post for information purposes – The Mortgage Wellness Group only arranges mortgage products through Industrial Alliance and does not have any information or dealings in the above mentioned products and services.

What can seniors expect from the Liberals?

Canadian Seniors
Canadian Seniors
What can seniors expect from the Liberals?

Canadian seniors worried about finances may be wondering what changes they can expect now that a majority Liberal government has been elected.

“The comments we hear from seniors, every day, are that government changes are needed to areas affecting finances. Some are struggling while others face dire financial challenges,” notes Yvonne Ziomecki, SVP, HomEquity Bank, the only bank dealing exclusively with seniors.

“The most important promise of the Liberal government to retirees is what it won’t do and that is end pension income splitting. My spouse and I split my pension income. At the same time, the Trudeau government will introduce a new Seniors Price Index to ensure that Old Age Security benefits keep up with actual rising costs. Both policies will help us to remain in our home, which is a major priority for us,” explains Joyce Wayne, Professor Emeritus Journalism, Sheridan College and blogger, www.retirementmatters.ca

“On the downside, Justin Trudeau has pledged to cut the Tax Free Saving Account yearly contribution from $10,000 back to $5,500.  The increased TSFA limit was a critical piece of my retirement plan. Now I must calculate how much faster I’ll need to withdraw funds from my RRSP, and that means adding to my taxable income,” she adds.

According to the Liberal party website ‘Retirement Security For Our Seniors’ section, the new government plans to:

  • Restore eligibility for Old Age Security and the Guaranteed Income Supplement to 65, allocating an average of $13,000 annually to the lowest income Canadians as they become seniors.
  • Increase the Guaranteed Income Supplement for single, lower income seniors by 10% providing up to an additional $920 per year for Canada’s lowest income seniors. Current benefits generally ensure couples are able to stay out of poverty, however more than one in four single seniors is defined as low income. This will allocate $840 million by 2019 and benefit 1.25 million seniors, including 900,000 single women.
  • Develop a new measure for the cost of living faced by seniors: the Seniors Price Index. OAS and GIS will be indexed to this new, more accurate and more generous measure, rather than to the Consumer Price Index that reflects the wider population.  In periods when the Consumer Price Index grows faster than the Seniors Price Index, the traditional Consumer Price Index will be used. Pension income splitting will remain.
  • Work with provinces and territories, workers, employers and retiree organizations to enhance the Canada Pension Plan.
  • Introduce a more flexible and accessible Employment Insurance Compassionate Care Benefit so six months of benefits are available to those who provide care to a seriously ill family member, rather than only those caring for a loved one at risk of death.
  • Commit to a new, 10-year investment of $20 billion in social infrastructure, prioritizing significant new investment in affordable housing and seniors facilities.

HomEquity Bank, the only Canadian bank working exclusively with seniors, helps elderly people remain in their homes through its CHIP reverse mortgage solution, www.chip.ca and Income Advantage products. Seniors can supplement their income via reverse mortgage monthly or lump sum payments.

If you are looking for more information on a CHIP Reverse Mortgage please give me a call at 705-717-5598 or 647-559-5049 or email me at mcurry(at)mortgagewellness.ca. You can also use the Reverse Mortgage Calculator to see how much you would qualify for and get pre-qualified in minutes.

Michael Curry
Certified Reverse Mortgage Specialist
HomEquity Bank

The Mortgage Wellness Group Ltd.

About HomEquity Bank

HomEquity Bank is a Schedule 1 Canadian Bank offering the CHIP reverse mortgage solution www.chip.ca. The company was founded 29 years ago as an annuity based solution addressing the financial needs of Canadians who want to access the equity of their top asset – their home.

For further information: or to interview Yvonne Ziomecki or Joyce Wayne, please contact: Teresa Donia, iAMBIC Communications, teresa@iambic.ca, 905-508-5550; Yvonne Ziomecki, Senior Vice President, Marketing and Sales, HomEquity Bank, yziomecki@homequitybank.ca, 647-723-6812

CHIP Mortgage Trust Announces Redemption of Medium Term Notes

Homequity Bank

Homequity Bank

CHIP Mortgage Trust (“CMT” or the “Trust”) announced that it will redeem $100,000,000 principal amount of Series 2011-1 senior medium term notes (the “Notes”), on a pro-rata basis, on January 5, 2016. The redemption price will be $101,922,934.25, which includes accrued and unpaid interest to the Early Redemption Date. Further notice(s) may be issued to redeem the remaining $51,700,000 principal of the Notes prior to the expected final payment date of February 1, 2016.

The funds used to redeem the Notes were sourced from a combination of cash flow generated in the normal course of business, and from the issuance of Guaranteed Investment Certificates (“GICs”) by HomEquity Bank. HomEquity Bank has increased the diversification of its sources of funding, adding three major distribution relationships in the last 12 months.

“We are extremely satisfied with our ability to redeem the Notes early,” said Steven Ranson, President and Chief Executive Officer. “HomEquity Bank’s access to funds through the issuance of GICs has significantly enhanced our liquidity management capabilities, and has provided additional financial flexibility in our funding operations.”

Forward Looking Statements

CMT from time to time makes written and verbal forward-looking statements about business objectives, operations, performance, and financial condition, including, in particular, forecasted mortgage origination growth, as well as the likelihood of its success in developing and expanding its business. Forward–looking statements are typically identified by words such as “will”, “should”, “believe”, “expect”, “forecast”, “anticipate”, “intend”, “estimate”, “plan”, “may” and “could”.  These statements may be included in CMT’s annual and quarterly reports, regulatory filings, press releases, presentations and other communications. These forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of CMT. The uncertainties and contingencies include, but are not limited to, risks related to capital markets and additional funding requirements, credit and underwriting risk, fluctuating interest rates, asset quality and rates of default as well as those factors discussed in the documents filed on SEDAR. Actual results may differ materially from those expressed or implied by such forward-looking statements.  CMT does not undertake to update any forward-looking statement, whether written or verbal, that may be made from time to time, except as required under applicable securities legislation.

About CHIP Mortgage Trust

CMT is a wholly owned subsidiary of HomEquity Bank. HomEquity Bank is a Schedule 1 Canadian bank and is the only national provider of reverse mortgages to homeowners aged 55 and over, Canada’s fastest growing demographic segment. HomEquity Bank originates and administers Canada’s largest portfolio of reverse mortgages under the CHIP Reverse Mortgage ™ and Income Advantage ™ brands. HomEquity Bank has been the main underwriter of reverse mortgages in Canada since its predecessor, Canadian Home Income Plan, pioneered the concept in 1986.

CMT, a special purpose entity, finances a portion of HomEquity Bank’s reverse mortgage portfolio, which totalled approximately $1.9 billion as at September 30, 2015, with medium term notes.

SOURCE CHIP Mortgage Trust

For further information: Steven Ranson, President and Chief Executive Officer (416) 413-4663, or John Garofano, Treasurer (416) 413-4674.

HomEquity Bank

1881 Yonge Street, Suite 300
Toronto,ON M4S 3C4

For other bank inquiries:
Toll Free: 1-866-522-2447
Local: 416-925-4757

New Mortgage Down Payment Rules

Mortgage Down Payment Rules Changing
Mortgage Down Payment Rules Changing
Finance Minister Bill Morneau

Government of Canada Takes Action to Maintain a Healthy, Competitive and Stable Housing Market

December 11, 2015, Ottawa, Ontario, Department of Finance

Finance Minister Bill Morneau today announced changes to the rules for government-backed mortgage insurance to contain risks in the housing market, reduce taxpayer exposure and support long-term stability. Effective February 15, 2016, the minimum down payment for new insured mortgages will increase from 5 per cent to 10 per cent for the portion of the house price above $500,000. The 5 per cent minimum down payment for properties up to $500,000 remains unchanged.

Today’s announcement represents a graduated approach to increasing the down payment requirement proportionally to the cost of a home. Canadians who already hold mortgages will not be affected by this announcement.

The Government continuously monitors the housing market and is committed to implementing policy measures that maintain a healthy, competitive and stable housing market. Higher homeowner equity plays a key role in maintaining a stable and secure housing market.

In making this announcement, Minister Morneau also highlighted the increases in guarantee fees for Canada Mortgage and Housing Corporation (CMHC)-sponsored securitization programs, announced today by CMHC. The Office of the Superintendent of Financial Institutions has also announced today its plans to update regulatory capital requirements for residential mortgages to ensure that capital requirements keep pace with market developments and risks. Taken together, today’s actions will strengthen the resiliency of Canada’s housing finance system to promote long-term stability and balanced economic growth.

The Government’s role in housing is to set and maintain a framework that is equitable, stable and sustainable. The actions taken today prudently address emerging vulnerabilities in certain housing markets, while not overburdening other regions. They also rebalance government support for the housing sector to promote long-term stability and balanced economic growth.

This measure will increase homeowner equity, which plays a key role in maintaining a stable and secure housing market and economy over the long term. It also protects all homeowners, including many middle class Canadians whose greatest investment is in their homes.

Bill Morneau, Minister of Finance

Quick Facts

  • Federally regulated lenders are required to obtain mortgage insurance when the down payment is less than 20 per cent of the purchase price of a property.
  • Properties valued at $1 million and above require a minimum down payment of 20 per cent.
  • The average price of homes sold in October 2015 through the Canadian Real Estate Association’s Multiple Listing Service® (MLS) system was about $453,000.
  • Insured homebuyers typically purchase lower-priced properties than the overall average. In 2014, the average property price for new insured purchases with down payments of less than 20 per cent was about $293,000, compared to an average price of about $416,000 for properties sold through the MLS system.

Related Products

Additional Links

Media Contacts

Jack Aubry
Media Relations
Department of Finance
613-369-4000

Stephanie Rubec
Office of the Minister of Finance
613-369-5696

The original press release can be found at the Government of Canada’s website Here.

Manulife Mortgages Available Through Brokers

Manulife Financial

Manulife Financial

Manulife Bank is coming to the broker channel.

One of Canada’s largest financial institutions is going to be offers its mortgage products through the broker channel very soon. Manulife Bank, which is a subsidiary of Manulife Financial will begin making its mortgages readily available through brokers starting in 2016. This move is planned to be in place for the spring market, giving brokers access to their popular Manulife One (M1) product amongst others.

This announcement is a huge asset to the mortgage broker channel as some of the bigger banks have exited in recent years. Manulife is an internationally reputable business and Its product section will enhance the excellent options that brokers already provide clients. This move is also seen as a vote of confidence in the broker channel, hopefully making some of the other banks rethink their decision to leave.

But unlike most new players in our space, Manulife’s Jeff Spencer that unlike other lenders, they are trying to help consumers. “We want to help brokers help people get out of debt,” says Spencer, Vice President of Retail Sales. “Manulife One is not just a line of credit. It’s a way for clients to manage their financial lives.” One of their products he is referring to is the M1’s interest offset feature which lets you incorporate debt and savings into one account. Incoming deposits like a paycheque would reduce your personal debt balance temporarily, and save you interest.

Manulife’s entrance will generate strong competition in the broker channel for National Bank who are the only other national lender with a similiar product. It is also expected to take business away from the other large lenders such as Scotiabank and MCAP. The added competition can only be a good thing as interest rates creep up.

Foreign Investment In Our Housing Market

new home financing

new home financing

As most of us are aware, foreign investment in Canadian real estate– is impacting the rising resale values in our main markets.

The Canada Mortgage and Housing Corporation (CMHC) seems to have accepted this fact also. In an announcement this week, the president of CMHC Evan Siddall, stated that irrespective of having low-quality data on foreign ownership, it was most likely driving up the cost of Canadian housing. The issue with the data is that although many buyers are Asian, it is unclear if they are citizens, immigrants, or even citizens investing foreign money for friends and relatives.

Besides Canada being seen as a safe place to invest in real estate, the low Canadian dollar is making overseas investment even more lucative. While supply may not be an issue with new home construction, this is not the case with the resale market, where bidding wars are common place in both Toronto and Vancouver.

Since factors outside of the Canadian economy are driving up house prices, it is creating artificial demand that can easily decline if foreign buyers decide to invest elsewhere. Unfortunately, Canada does not have much of an idea as to how much foreign money is being invested in Canadian housing market, while many other countries do keep track of this and in some cases restrict foreign ownership.

The CEO of the CMHC, Evan Siddall, admits they are dependent on minimal real information. Since it is not a legal requirement in Canada, buyers may be unwilling to divulge their ownership status.

“Most of the available information is uncertain at best. The problem is that many foreign investors may prefer to hide their ownership,” Siddall said in a recent speech. There is no conclusive way to distinguish between investment by foreign buyers, new immigrants, or long time residents.

So what’s the problem in selling something to China that newer actually leaves the country? In theory, there is basically nothing wrong with foreign money taking a share of the Canadian real estate market. Canadian investors do the same thing all over the world, especially in the US and South America. Here at home it helps create jobs in the construction industry, and provides rental housing which is not currently abundant.

Siddall also pointed out that this type of investment can have a down side. “While both domestic and foreign investment activity can be speculative, foreign investment may be more mobile and subject to capital flight, increasing the volatility in domestic housing markets.”

 

2015 Canadian Election

Justin Trudeau

Justin Trudeau

Well the results are in and the Liberals have the majority government they aimed for. It surprised me that this election garnered so much attention as the economy in Canada is not really suffering, unlike in other parts of the world. Perhaps fear of what could happen here moved people to do something before it happens – I don’t know.

Several people I spoke with before the election seemed unhappy with the Conservatives, although their reasons were vague at best. One friend was unhappy with the price of gas and felt it should have dropped in price just like crude oil did. I pointed out that the cost of refining the crude oil had not dropped, but that didn’t seem to matter. Another friend sited the low Canadian dollar as the reason he was voting Liberal even though the world price of oil has driven down our dollar.

It would seem that Canadians wanted change, after all change is considered good. A couple of other people I spoke with just wanted change and didn’t know the difference between the Liberals and the Conservatives. Personally I think Harper did a decent job of keeping Canada out of the economic woes most of the world has been going through, but maybe it just happened that way in spite of our government’s policies.

While I don’t think borrowing to spend is a great idea, it has been done successfully in the past to bolster economies. The Canadian economy may benefit from the Liberal’s plans, however, we cannot isolate ourselves from the rest of the world and the economic issues it is facing. Even though I would tend to support Conservative policies, giving the Liberals a majority government will allow them to implement their plans without interference from the other parties. After all, no matter which party we support, we all want what is best for Canada and let’s hope the Justin Trudeau and the Liberals are the right choice.

6 Retirement Planning Tips

Planning for retirement

Planning for retirement

Retirement planning:

Retirement is supposed to be that time in your life when you can take it easy and do the things you enjoy. If you have planned for your retirement properly then you will have that time and freedom that working didn’t allow. These days with the cost of living many people are having to work well past retirement age just to maintain their lifestyle. Below are some tips, that if implemented early enough, can help make your retirement plans a reality.

Start saving for your retirement as early as possible. Obviously the sooner you begin saving for retirement, the better off you will be. Most financial institutions and financial planners can set up a direct deposit type of account, that can deduct a contribution from your pay or account when you get paid. As long as it is a manageable amount, you will barely even notice it and set up properly can defer income taxes.

Plan for the lifestyle you want when you retire. Everyone is different, and we all wan to do different thing when we retire. If you want to travel the world, you need to realize that this will cost a lot more than gardening or fishing. Once again, a financial planner can help you achieve these goals and tell you how much you need to be saving now.

Try to invest in a variety of things. We all know the stock market goes up and down, but in the long term it always goes up overall. With this type of investment it is best to put your money into a mutual fund where it is invested in a variety of safer options like banks etc.. Investing in just one stock can be risky even with large established companies – remember; Delta Airlines, Enron, WorldCom? Currently VW stock has dropped 30-40% in a very short time.

Plan to make your investments last. These days people are living longer and doing more. While nobody know how long they will live for, you should plan for this to some degree. If you have a hundred thousand dollars invested at 5%, you should minus the rate of inflation so as not to deplete your investment.

Keep working if need be. It is better to work at least part time, than to live in poverty. Many people enjoy the interaction of getting out and seeing other people as it is known to have huge psychological benefits

Access some of your homes equity. With the rising cost of living, more and more people are using the equity in their home to maintain their lifestyle. While this option is not for everyone, it can benefit many seniors who are struggling financially. Reverse mortgages can also be used to purchase a property in retirement. This allows you to purchase a property you could not normally afford and not have any mortgage payments. Food for thought!

Reverse Mortgage Study

Homequity Bank

reverse mortgages

HomEquity Bank teams with Equifax Canada to study Debt in Retirement

Mortgage debt amongst seniors is increasing right across Canada, and for those aged 70 and older, it has increased 12 percent in comparison to 2013. That is based on the final results of a debt in retirement research study carried out by HomEquity Bank and Equifax Canada.

The research was carried out in July of 2015 and concentrated on Canadians aged 55 and older. It analyzed the main categories of debt including: mortgages, lines of credit, bank loans, car loans, credit cards and retail cards. The study provided a comparison period of 2013 and 2015.

“At HomEquity Bank, we’re not surprised to see the results of this study. Every day, we hear from seniors who are having difficulties with debt. It can be due to insufficient pensions, the high cost of living or costly health care issues, but debt is increasingly a concern for many seniors,” states Yvonne Ziomecki, SVP, HomEquity Bank.

Conclusions of the study:

Mortgage debt is growing fastest in the Greater Toronto Area and Quebec and less so in Alberta and British Columbia
In 2015, 16.5% of people aged 55 and older are holding a mortgage. This is an increase of 10% from 2013
The average mortgage balance for Canadians aged 55+ grew by 11% from $158,000 in 2013 to $176,000 in 2015
The average mortgage balance is highest in the 55 to 60 age group, at $189,000, and lowest for the 75+ age group at $134,000
Seniors aged 71 and older with a mortgage have an average balance of $140,000
Overall debt for those 70+ has increased by 12% between 2013 and 2015 versus only a 4% increase for those under 70.

“It’s shocking to find Canadians 71+ are still carrying hefty mortgages,” notes Laurie Campbell, CEO, Credit Canada Debt Solutions. “By this age, they are fully retired and there’s no opportunity to increase their income.”

In fact, the study is showcasing a more relaxed attitude towards debt, she adds, “and this can jeopardize retirement.”

The best case scenario is to “have your financial cards in good order in your early 50s and mortgage free by retirement,” Campbell explains.

HomEquity Bank, the only Canadian bank working specifically with seniors, helping elderly people remain in their homes through its CHIP reverse mortgage solution. Seniors can supplement their income via reverse mortgage monthly or lump sum payments or a combination of both. HomEquity bank also mortgages new home purchases allowing people to purchase a more expensive home without mortgage payments.

For more information on reverse mortgage products, and how they work, contact Michael Curry at 705-717-5598 or 647-559-5049 or use the contact form HERE.

About HomEquity Bank

HomEquity Bank is a Schedule 1 Canadian Bank offering the CHIP reverse mortgage solution. It was founded 28 years ago as an annuity based solution addressing the financial needs of Canadians who want to access the equity of their top asset – their home.

About Equifax

Equifax empowers businesses and consumers with information they can trust www.equifax.ca. A global leader in information solutions, Equifax leverages one of the largest sources of consumer and commercial data, along with advanced analytics and proprietary technology, to create customized insights that enrich both the performance of businesses and the lives of consumers.

SOURCE HomEquity Bank

Home Capital Cuts Ties With Mortgage Brokers

Alternatice lenders

Alternatice lenders

Alternative mortgage lender Home Capital Group was halted trading on the TSX Wednesday after the company divulged it had severed connections with multiple mortgage brokerages for inflating income information pertaining to applicants.

Home Capital opened an investigation immediately after being advised that some of their brokers were involved in falsifying income numbers. The company said it had become aware of situations where applicants had submitted employment letters declaring more substantial incomes than they in fact earned.

“There was no evidence of falsification of credit scores or property values,” the Toronto-based company said in a statement.

The organization noted in a statement that it is publishing the important information after a request from the Ontario Securities Commission (OSC). Home Capital provides residential financing mainly to recent immigrants, self-employed individuals and borrowers who have non-traditional incomes, making it more difficult for them to get financing from traditional financial institutions like the big banks.

In an investigation stared in September 2014 threw until March of this year, Home Capital said it terminated fifty three broker companies in the review. That is out of more than 4,000 brokers the company works with at any given time, however, these were the higher performing ones. The company stated that the brokers which have been singled out, contributed $960 million worth of mortgage loans last year. That number is roughly 5% of the mortgages the lenders has out presently.

“During the course of its review, Home Capital did a broader test to ensure that this was not a widespread issue in its portfolio and the company is comfortable that it is not.”

Home Capital’s stock has fallen more than 43 per cent in the last 12 months, but was up 11 per cent once trading resumed on Thursday.

Even though income was inflated to qualify applicants for higher mortgage amounts, it is doubtful that these mortgages will actually default or have any real impact on Home Capital. The only real impact is that their mortgage portfolio is not as valuable as it seemed.

TransUnion Predicting Increase in Debt Delinquency Rates

credit reporting agency in Canada

 

credit reporting agency in Canada

TransUnion anticipates surge in personal debt delinquencies in parts of western Canada where employment is largely oil related. Alberta and Saskatchewan are forecasted to be hardest hit.

Alberta and Saskatchewan may soon be facing a distinct increase in the amount of consumers getting behind on their debt obligations later in the year, according to credit reporting agency TransUnion.

In a study released Wednesday, by TransUnion, there is a forecasted rise in amount of personal loan delinquencies. This is expected to grow by double-digits in Saskatchewan, and as much as 60% in the province of Alberta. These two provinces are the ones most reliant on oil prices. In Alberta, more than one quarter of the province’s GDP is linked to oil pricing, which as we all know is down 50% in the past year. In Saskatchewan, more than one sixth of GDP is tied to oil.

Low priced oil has affected these provinces in several different ways. “First, oil price drops cause lower oil sector investment,” says TransUnion . That will lead to increasing joblessness which leaves less spendable income going towards other areas of the overall economy.”Consumers then have lower ability to service debt, finally resulting in higher delinquency rates.”

According to the TransUnion study, the amount of individuals who choose to pay off just twice their minimum credit card payment has increased by 10% in the oil town of Fort McMurray, since last summer.

“Based on an historical analysis of the last oil crash and recent payment behavior trends, we expect materially higher delinquency rates in Alberta and Saskatchewan in the second half of 2015,” according to TransUnion’s research director Jason Wang. “If lenders do not take proactive measures to address the impact of the decline in oil prices, we could potentially see double-digit delinquency rate increases in Saskatchewan, and as much as a 60% increase in some areas of Alberta.”

The credit reporting agency arrived at these figures after taking a look at what happened to delinquencies the last time the price of oil declined by this much, in 2008. At that time, the increase in delinquencies developed two quarters following the price of oil fell, and increased by 60% for the following four quarters. “These are particularly noteworthy observations because it shows that Albertans suffered financially for a period much greater than the actual oil slide and recovery,” said Jason Wang.

Frequently the first sign of a future debt problem is a decrease in how much people pay off their credit cards every month. “The fraction of the balance that is paid, and changes in that fraction, are quite effective indicators of future non-repayment risk,” according to TransUnion. In their case study of oil town, Fort McMurray, the percentage of people who pay off no more than twice the minimum payment every month has increased by 10% since last summer.

“Many consumers in Alberta may be facing challenges meeting their monthly payment obligations,” said Jason Wang.

At the moment, there is hardly any evidence that there is any change to nationwide delinquency rates. This could be due to the fact that Alberta only accounts for 12% of Canada’s debt, compared to Ontario’s 39%.

“What is particularly important to understand is that balances are much greater today than they were in the 2008 and 2009 period, therefore any delinquent accounts will place a greater burden on the economy.”

For an alternative to credit card debt consolidation find out more about Grouplend personal loans.

Full Rental Income Now Allowed to Qualify For a Mortgage

Mortgages insured by CMHC

Canada Mortgage and Housing Corp. (CMHC) is intending to make it much easier for homeowners renting apartments out in their primary homes to qualify for a mortgage. The CMHC, which controls a large percentage of the mortgage default insurance market in Canada, unveiled improvements to its guidelines Monday, and effective Sept. 28th., which are designed create more affordable housing.

“Many municipalities across the country now formally recognize secondary rental suites as a source of affordable housing,” CMHC published in its report created for industry associates. “Rents in secondary rental suites are often lower than those for apartments in purpose-built rental buildings.”

The Crown corporation has said Vancouver has 26,600 rental units in primary residences which is around 20% of the rental apartments currently in the city. The updates from CMHC would permit property owners to include the revenues from their supplementary apartment when being qualified for a mortgage. This is seen as something that could bring more individuals into the real estate market. The changes would primarily apply to multi-unit owner-occupied properties include basement rental units. Secondary apartment units should be self-contained and have a separate kitchen, bedroom, and bathroom.

One important issue will be whether the apartment units are legal or not. CMHC only recognizes units that are legal or conform to local municipal standards. The Crown corporation says that it will be up to lenders to use sound judgment when it comes to borrowers proving that the units are indeed legal. Since most basement apartments are not legal, it is difficult to say what impact these changes will have.

According to the latest guidelines, CMHC will take into account 100% of the rental income from a two-unit owner-occupied property that is being financed. The municipal tax and heat for the property, including the apartment, must be used when establishing the debt service ratios. Currently only 50% of the rental income is used for qualifying.

Banks All Cut Prime Rates

mortgage rate cuts

mortgage rate cuts

After yesterday’s move by the Bank of Canada to cut the overnight lending interest rate to 0.5 per cent various key mortgage providers have also lowered their rates. As anticipated they have not discounted their mortgage rates by the full 0.25% again, but some have discounted them more than last time.
The Toronto Dominion Bank was first to respond, just 12 minutes after the Bank of Canada’s announcement. It would appear they were ready for the rate drop and discounted their prime rate by 0.10%, like last time, to 2.75%. Other financial institutions, who clearly watched TD’s move, elected for a cut of 15 basis points (0.15 per cent). TD cut their prime rate again to match the other banks.
Scotiabank, RBC, CIBC, and BMO have all announced the rate cut to 2.70 per cent effective today. TD’s second rate cut will be behind the others for one day as the initial decrease takes effect today. The second cut comes in tomorrow (Friday 17th).

It is surprising that the banks have cut their rates by .015% this time, when they only cut them by .010% the last time the BoC made a .025% reduction. The banks have always claimed that mortgage rates depended more on the bond market, than the BoC’s overnight lending rate. Perhaps last time they decided to profit from the cut in rates.

Interest Rates Drop Again

mortgage interest rates

mortgage interest rates

The Bank of Canada’s Governor, Stephen Poloz, publicly accepted the fact that he has been overly optimistic regarding the condition of the Canadian economy. He has now tried to help the economy once again by reducing the central bank’s over night interest rate from 0.75 to 0.50 per cent.

The Canadian dollar has reacted by dropping to 77.43 cents U.S., a level not seen since March 2009. This is when Canada was in the middle of a recession. The economy is now recognized as having contracted slightly in the first half of the this year by the bank, mentioned in a statement accompanying the latest announcement.

The Bank of Canada overnight lending rate is the central bank’s main tool for influencing Canadian interest rates. This important decision comes in the wake of lower oil prices. A number of major banks have concluded the Canadian economy has been in a recession for the first half of this year. The negative growth in Canada’s economy the first half of 2015 fits the typical meaning of a recession. The bank governor consistently refused to make any reference to a recession, claiming that any discussion as to whether we are in a recession or not is unhelpful.

Stephen Poloz, who shocked the financial community in January by delivering in an unanticipated rate decline, had been expecting the overall economy to rebound rapidly from the oil price shock that hurt our economy earlier this year. Now he is saying that he had been overly optimistic, and the bank’s estimation of economic growth in 2015 has been reduced considerably from April. This new position demonstrates even further cutbacks in financial investment in the energy market, combined with weakened exports of non-energy goods.

“Canada’s overall economy is expected to expand by about 1%,” Poloz said, and our economy is not expected to be back to normal until the first half of 2017. The Bank of Canada’s governor also cited international circumstances for Canada’s economic issues, referring mainly to conditions in the United States and China. Poloz stated he anticipates the U.S. economic climate to recover again in the second half of this year, but does not see any immediate change in China.

As with the last quarter point drop was saw, a few months ago,, mortgage interest rates are not going to drop buy the same amount. Mortgage rates are actually dictated more by the bond market than the Bank of Canada’s overnight lending rate, and will likely only drop 0.10%. Some consumer who have a variable rate mortgage will see some savings for now.

Making Sure You’re Not Buying a Grow-op!

financing an ex- grow-op

financing an ex- grow-op

Protecting yourself from purchasing a home that has been used for producing illegal drugs is becoming more and more of an issue these days. This kind of home can easily be concealed and no neighborhood is exempt from this kind of activity.

Photo is one tweeted by Dutch Police showing melted snow from lights used to grow marijuana – any more than five plants is illegal in their country.

On the exterior these homes generally appear completely average and normal, but they can be concealing some potentially hazardous conditions. A regular home inspection, even done by a professional, may not turn up any evidence of any past illegal activity. A home inspector cannot start taking things apart looking for issues and generally reports on what is visible.

Just one indicator of a marijuana growing operation is the presence of mould as these growing operations (grow-ops) need heated and moist conditions for plants to grow. This is precisely the very same conditions that produces the development of mould. Of course this will negatively impact the air quality in the home, causing various health related problems. Removing the mould will usually be costly and escalate dependent upon the extent of the problem. Hiring an air quality testing professional could be well worth it if there is any suspicion of mould.

Yet another indication of a grow-op can be issues with the home’s wiring. A drug growing location demands lots of electrical power, generally meaning the home’s wiring will have been modified to manage the requirements. in rare cases the hydro meter is bypassed to conceal the excessive electricity being consumed. Even if th wiring has been removed, an experienced electrician can often tell that changes have been made. Irregular wiring can also be a sign of DIY renovation work which can be just as scary.

The length of time the house was used for drug manufacturing will also have a bearing on any possible long term damage that may have been caused. Knowing who lived in the home previously is always a good place to start. If it was a family who lived there for many years, chances are they did not grow drugs in the basement. However, if the house has been a rental, then anything is possible. Doing a quick internet search on the address can also bring up any police activity involving the property.

If a property is known and disclosed as being a former grow-op, obtaining financing and insurance can be difficult and costly. The excellent deal you are getting on the place may not be worth it.

Electronic signatures legal in real estate deals as of July 1, 2015

Real Estate Deal Signatures

Real Estate Deal Signatures

Ontario is now making the process of buying or selling a home much easier by making it possible for real estate documentation to be signed in electronic format.

When Ontario’s Electronic Commerce Act was first introduced in 2000, it permitted specific legal documents to be signed with electronic signatures. Documents that created or transfered interest in land, and required registration to be effective against third parties, were excluded from the Act and still necessitated handwritten signatures.

This will change on Canada Day as an amendment to the Electronic Commerce Act comes into force. Effective on July 1, 2015, modifications to the Electronic Commerce Act will make electronic signatures legally the same as to signatures on paper documents for real estate transactions. Under existing legislation, when real estate is sold, many copies of documents such as offers and agreements of sale, need to be signed by hand.

Permitting these financial transactions to be signed in electronic format will also make it more convenient to send legal documents electronically and save time for anyone buying or selling property, particularly when the two parties are separated by distance.

Offering more convenient solutions for consumers is a portion of the government’s economic plan to build Ontario’s economy stronger. This four-part plan includes investing in people’s talents and skills, making the most extensive financial investment in public infrastructure in Ontario’s history, developing a dynamic and innovative environment where business flourishes, and creating a secure retirement savings plan.

It is difficult to say whether these new changes will actually be adopted by the realtors and others involved in the sale and purchase of real estate. Many lenders may not accept electronic signatures if they become linked to fraudulent activities.

Mortgage Interest Rates Hikes Looming

mortgage rates set to increase

mortgage rates set to increase

Residential home purchases are on the rise in the US and are set to be the best in eight years – since 2007. Buyers are surging back into the housing market, and the vast majority are first time purchasers. This influx of home buyers is driving prices up and up, due to strong employment and very low mortgage interest rates.

The busy housing market is a sign that the U.S. economy is firmly on the road to recovery and definite improvement. Buyers are more positive about their own financial futures and appear ready to close sales quickly. Many fear being possibly priced out of the market by potential mortgage rate hikes and steadily increasing home prices.

According to Nela Richardson (Chief Economist at Redfin), “demand is off the charts in 2015, and that is really boosting sales. Last year, buyers were dipping their toes in their water. Now, they’re diving in.”

The National Association of Realtors stated on Monday that sales of existing homes climbed 5.1% last month to a seasonally adjusted annual rate of 5.35 million. May was the third straight month of the sales increasing, and has surpassed 5 million homes.

Listings have not been able to keep up with the increase in demand, leading to the higher than normal price increases. Average home selling prices have risen 7.9 per cent in the last 12 months to $228,700, (US) coming in just below the July 2006 peak before the crash.

Roughly 32% of the homes purchased last month were by first timer buyers. This is up from 27% just one year ago. The increase is significant but is still behind the traditional average of first time buyers making uo 40% of the residential buyers. The larger percentage of non-first-time buyers could be due to the large amount of displaced homeowners re-entering the market after being forced to rent.

The increase in home sales can easily be linked to employment numbers. 3.1 million additional workers have been hired in the past year, and the unemployment rate has dropped to 5.5% from 6.3%. This has led more Americans to start feeling financially comfortable immediately following the most severe housing related downturn in eighty years.

According to Richardson,“that’s the big psychological shift between this year and last year.”

Mortgage rates are reasonably modest, however, may be set to rise as the Federal Reserve considers an interest rate increase – the first time in nearly a ten years. Thirty year fixed rates were up to 4% last week, according to mortgage provider Freddie Mac – that is an increase from a year long low of 3.59%.

“This has plenty of buyers appearing willing to complete their purchase before rates and prices increase any further,” according to Jonathan Smoke, chief economist at Realtor.com. A recent Coldwell Banker survey discovered that 28% of homes are selling within as little as two weeks, in comparison to 19% before the recession. Numerous economists warn that the sales increases in recent months may be only temporary if prices increasees continue and price buyers out of the market.

Whatever happens south of the border will most likely have an effect on Canadian interest rates also. The extremely low mortgage interest rates we are enjoying in Canada currently are about as low as they can go. Combined with a declining Canadian dollar, a move by the Federal Reserve may be all it takes to bump our rates also. Nobody is disputing the fact that interest rates are going up – it is just a matter of when.

Reverse Mortgages – Good or Bad Idea?

chip reverse mortgage

A lot more Canadians are using the economic value of their own property to make up for financial shortfalls, as they head towards retirement life. Many over the age of 55 find themselves house rich and cash poor. Numerous senior Canadians are on their way into retirement with either too much personal debt, or not enough savings, or in many cases both of those.

As they leave behind the labor force their earnings decrease but their financial obligations continue. So many are facing this scenario and managing it becomes stressful. Many property owners in this situation ask themselves if a reverse mortgage is the answer, since it would allow them to take funds out of their home, and continue to live there. Reverse mortgages can relieve financial challenges and allow seniors to live a little, do some renovating, or maybe give their children financial help.

Reverse mortgages are a good idea, but they should only be taken into consideration after all alternate options have been explored. Reverse mortgages do carry a higher rate of interest than a conventional mortgage although not much different from second mortgages or lines of credit. They do erode the equity in your principal investment, which in turn might need to be sold later. If you are prepared to overlook this, you are probably under financial pressure or perhaps you are not living the life you want after years of working hard.

HomEquity Bank offers reverse mortgages in Canada, the greater part of which are in larger more expensive cities like Toronto and Vancouver. The bank provides them through the Canadian Home Income Plan (CHIP).

Here is how reverse mortgages work:

To qualify you need to be over 55 and own a home, you can get up to 55 per cent of its value depending on your age. The money is tax-free and you do not have to pay anything back until you want to sell your house or you die. Then the principal and accrued interest is due in full, within six months or at closing of the sale of the home.

The rate is somewhat higher than a conventional mortgage mortgage with an “A” lender. HomEquity is offering a 5-year fixed reverse mortgage at 4.99 per cent compared to rates under 3% for a first mortgage to clients with excellent credit. After the five-year term is up, the rate is renegotiated and will depend on market conditions at that time.

The real cost is very easy to forget about as you are not making any payments unless you want to. HomEquity Bank, says their typical consumers are in their early 70s and borrow on average $110,000, and usually sell their home within six to eight years.

Ziomecki says the process involves a home appraisal and those with mortgages would not be turned down, though they would be able to borrow less. Applicants must have a lawyer to ensure they understand what’s involved. HomEquity encourages the entire family to get involved to avoid acrimony later.

HomEquity sees four types of customer:

Debtors (35%): They have poor money management habits and may be maxed out on department store and bank-issued credit cards. They have large credit lines and in some cases huge mortgages. It adds up to a reduced credit rating, and they often cannot obtain additional financing from their bank.

Spenders (30%): They desire a much better lifestyle without having the repayments. It could perhaps be a holiday home or a significant home refurbishment. They may not want to have a credit line given that they would have to make a payment each and every month.

Cash poor (17.5%): This group cannot make ends meet. Their pension income and savings are moderate. Many are single women or widows who did not work outside the home. They need the extra cash to stay afloat.

Unanticipated needs (17.5%): This could be big bills or a desire to deliver an early inheritance to their children. If the latter, giving the money makes them feel good.

HomeEquity had a banner year in 2014. Its reverse mortgage business increased 23 per cent and was worth $309 million. As more Boomers head into retirement, the company says it expects the growth to continue.

Bank of Canada Overnight Rate Stays at 3/4 per cent

mortgage interest rates

mortgage interest rates

The Bank of Canada is keeping its overnight lending rate at three quarters of a point for the time being. The Consumer Price Index (CPI) has stayed around one percent, largely driven down by energy prices. Since the CPI is used calculate inflation, this has kept inflation at around two percent so far this year.

Economists with the Bank are predicting global growth to be in the 3.5% range for the next few years, however, Canada and the U.S. had a very weak start in the first quarter of 2015. Both countries are expected to rebound from this in the second quarter of the year.

Low overnight lending rates are being partially passed onto consumers by way of lower interest charges on mortgages, which is hoped to drive the spring housing market. Most lenders have not passed this discount completely onto consumers as they do not expect the lower interest rates to be long term. Mortgage interest rates have only really dropped about .15%, not the .25% the Bank lowered its prime by. The large banks have been the slowest to drop their rates compared to lenders whose primary business is mortgage financing.

The Bank is not expecting the Canadian economy for reach and maintain full capacity until towards the end of 2016, so the lower interest rates we are enjoying could be in place for a while longer.

 

Low Mortgage Rates Continue as CMHC Predicts Moderation in Housing Market Activity for Canada in 2015 and 2016

Mortgages insured by CMHC

Mortgages insured by CMHC

Canada’s federal housing division, CMHC, has revised their predictions for new residential housing starts for 2015. CMHC anticipates that the rate of new home development to steadily decelerate in the foreseeable future.

Even though the Canada Mortgage and Housing Corp said on February 6th., it anticipates employment and disposable income to continue to support the country’s robust housing market, it noted the downside risks have increased since its October forecast due to the fact of the decline in oil prices. They stated that low oil prices will detrimentally impact certain economic regions like Alberta, Saskatchewan, and Newfoundland and Labrador. This will only be partially balanced out by the favorable impact of reduced exchange and mortgage interest rates.

Housing starts are expected to range between 154,000 and 201,000 units this year, with a point forecast, or most likely outcome, of 187,400 units, the CMHC stated. This is somewhat reduced from the projection it offered in October, stating a range of 172,800 to 204,000 units, and a point forecast of 189,500. According to its base case scenario, new housing starts will drop by 1% in comparison to 2014. In 2016, the CMHC anticipates a range of 148,000 units to 203,000 units, with a point forecast of 185,100, which is not much of a change.

Canada averted most of the global economic turmoil and has experienced and accelerated housing market helped by continuing lower interest rates on mortgages. Many economists are still expect the Canadian housing market to see a softer landing, even though the sudden slide in the price of crude oil has brought up some anxiety about Canada’s financial future moving forward, since oil is a leading export.

Lastly the CMHC is forecasting average home prices to improve by 1.5 percent in comparison to last year.

See full press Release below or read it on CMHC’s site by clicking HERE:

OTTAWA, ONTARIO–(Marketwired – Feb. 6, 2015) – According to CMHC’s first quarter 2015 Housing Market Outlook, Canada Edition, housing starts in 2015 will remain similar to levels observed in 2014 and broadly in line with economic and demographic trends. By 2016, slight moderation is expected.

“Our market outlook calls for gradual moderation in the pace of new home construction over the next couple of years as employment, disposable income and high net migration continue to support the market,” said Bob Dugan, Chief Economist for CMHC.

“However, downside risks have increased since the previous forecast due mainly to recent declines in oil prices. Lower oil prices will negatively affect oil-producing economies like Alberta, Saskatchewan, and Newfoundland and Labrador, which will only be partly offset by the positive effects of lower exchange rates and interest rates across all provinces. We have widened the forecast ranges for housing starts, MLS® sales and average MLS® prices to reflect these risks.”

Under CMHC’s base case scenario, housing starts are expected to decline by 1.0 per cent in 2015 relative to 2014; Multiple Listing Service®(MLS®2) sales are expected to remain unchanged, and the MLS® average price is expected to increase modestly by 1.5 per cent.

On an annual basis, housing starts are expected to range between 154,000 and 201,000 units in 2015, with a point forecast of 187,400 units. For 2016, housing starts are forecast to range from 148,000 units to 203,000 units, with a point forecast of 185,100 units.

MLS® sales are expected to range between 425,000 and 504,000 units in 2015, with a point forecast of 479,900 units. In 2016, resales are forecast to range from 410,000 units to 505,000 units, with a point forecast of 474,400 units.

The average MLS® price is forecast to be between $384,000 and $428,000 in 2015, with a point forecast of $414,200. For 2016, the average MLS® price is forecast to be between $388,000 and $438,000, with a point forecast of $420,900.

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

Follow CMHC on Twitter @CMHC_ca.

1 The forecasts included in the Housing Market Outlook reflect information available as at January 21, 2015. Where applicable, forecast ranges are also presented in order to reflect financial and economic risks to the outlook.

2The Multiple Listing Service® (MLS®) is a registered trademark owned by the Canadian Real Estate Association.

CONTACT INFORMATION

Bank of Canada Lowers Overnight Prime

mortgage interest rates

Interest rates drop

The Bank of Canada’s surprise decision to lower the overnight lending rate by 25 basis points, is furthering household concerns that the economy is in for possible downturn.

The share of Canadians who predict the national economy will weaken over the next six months rose to 41.5% last week, the highest since the 2009 recession and up from 36.1% a week earlier, according to Nanos Research. It was the first full week of polling since the central bank made its surprise cut on Jan. 21.

There is a mixed opinion as the whether the rate drop actually did any good at all in bolstering the Canadian economy. On the one hand it has validated the fears of some who think this years housing market will take a downturn. Canadians have typically been much more cautious than our neighbors to the south when it comes to borrowing. Just because interest rates are lower doesn’t mean people will take advantage of them.

While lower interest rates are seen as good for the economy, the actual 25 basis point (0.25%) decrease has not been passed onto the consumer. Most lending institutions were slow to react and even when they did, their rates have only dropped 10 – 15 basis points.

Only time will tell if Canadians get lured into a false sense of security by low interest rates and cheap gas – both of which could rise dramatically at any time.

CHIP Reverse Mortgage Facts and Misconceptions

Facts and common misconceptions about Home Equity Mortgages

– As soon as you are approved for a reverse mortgage in Canada, you are accepted for life.

– Anyone can easily meet the requirements for a home equity loan no matter what your credit rating is or your income level.

– Most individuals will still have equity remaining in their residence when they decide to sell it and in generally HomEquity Bank customers average around 50% equity kept in their property.

– Nobody is allowed to sign final documentation for a reverse equity mortgage without having first received Independent Legal Advice from their lawyer. This requires all Canadian seniors must receive independent counsel before a reverse mortgage can be prepared.

– The CHIP mortgage program is not complicated, and many people have characterized setting up these home loans as one of the least complicated financial transaction they have ever arranged.

– Reverse home loan rates are not as expensive as many people think, and can be as low as Prime plus 1.25% they can be less expensive than a line of credit or second mortgage.

– The money is always tax free because it is a loan and not actually income as defined by the Canada Customs and Revenue Agency.

– In the event that one spouse passes away, there will be no changes to the terms and conditions of the equity financing arrangement. The equity does not have to be repaid and you do not have to move or re qualify.

– Using the equity in your home can provide an opportunity to diversify your retirement portfolio. There are investment opportunities which pay higher returns than the interest on a CHIP mortgage. This difference can create an income over and above the reverse mortgage payments received.

– If part or all of the CHIP funding is used for investment, there is an option to repay the interest each year and preserve your equity.

– The interest cost associated with a CHIP reverse equity mortgage are also offset somewhat by rising home values.

The rules in Canada are different when it comes to this type of financing, please do not look to U.S. sources for information. For Canadian relevant information visit: www.barriemortgagebroker.ca/reverse-mortgages/

Michael Curry
VERICO The Mortgage Wellness Group Ltd.
Call (705) 717-5598
email mcurry@mortgagewellness.ca

home equity mortgage

For more information on The Canadian Home Income Plan you can visit the Canadian Government’s website: www.cmhc-schl.gc.ca

Home Trust Now Offering 90% Mortgage Bundle

Home Trust 90 percent mortgage

Home Trust has now added a high ratio bundle mortgage which allows borrowers to finance up to 90 percent of their home.

Bundle mortgages are basically an uninsured first mortgage with a typical 80 percent loan-to-value (LTV) with an additional second mortgage for the balance of the funds up to 90 percent.

The intended niche for their bundle is the consumer who cannot qualify for an insured mortgage for 90 percent LTV through normal channels such as CMHC. That will probably include self employed business owners with harder-to-document income. Another benefit to this new bundle is the minimum credit score required of 620 which is not overly high.

Instead having to pay Canada Mortgage and Housing Corporation (CMHC) insurance premiums of 2.4 percent, Home Trust is charging a lender fee of 2.5 percent that can added to the second mortgage therefore not becoming an addition closing cost expense.

Mortgage Rates Dropping Again

mortgage rates

Bank of Montreal announces lowering their five year fixed mortgage rates.

The leading news reports from the mortgage industry last week came from one of the major Canadian banks. The Bank of Montreal announced it was reducing their five-year fixed mortgage rates to below the controversial 3% rate – 2.99% five year fixed. BMO will lower the five-year rate from 3.49% to 2.99%.

mortgage rates

The 50 basis point cut would be the lowest among the big banks although non-bank lenders are offering even slightly lower ratesalready. Press reporters inquired if this mortgage rate decrease was associated with Jim Flaherty no longer being the federal finance minister and Mark Carney the Governor of the Bank of Canada. Bank of Montreal Chairman Bill Downe stated that he got into contact with the new finance minister before the bank made the rate change. Federal finance minister Joe Oliver refused to interfere in the bank’s decision, saying simply that “the government is gradually reducing its involvement in the mortgage market”. Mr. Oliver seems inclined to let market forces determine mortgage pricing at this time probably due to average or below housing starts.

As the five year government of Canada bond yield presently sits at 1.71% (close of trading March 28th), mortgage rate below 3% would result in a markup of 1.28%. Other financial institutions will have to determine if this is enough profit as they get ready to remain competitive during the higher seasonal volumes of the spring.

The real estate and mortgage industry have identified two important the specifics of BMO’s rate drop. First off, the 2.99% rate offered by BMO is for a mortgage that is not open for prepayment other than a sale of the property, includes relatively punitive penalty calculations and provides very restricted alternatives for lump sum payments and regular mortgage payment increases. Secondly, the Bank Of Montreal is not the only lender with mortgage rates below 3%. These lower rates are readily available in the market through non-bank lenders and the mortgage brokers, and have been for some time. What the bank has evidently executed is yet another very successful marketing ploy creating the perception that it must be the marketplace leader in mortgage rate pricing.

Bank of Montreal started last year’s mortgage rate wars with its 2.99% offer. Others  started matching with similar rate deals including Manulife Financial Corp. that took its five-year product down to 2.89%.

CMHC Rate Hike

Mortgages insured by CMHC

 

CMHC has announced, in a recent press release, that they are going to be increasing the rates they charge for default insurance on high ratio mortgages. A high ratio mortgage is basically one with a down payment of less that twenty percent.

This rate hike will likely only affect new home and single income buyers who are already making a stretch to buy a home. The rate increase is also higher for those with the smallest 5% downpayment making the threshold for qualifying just a little bit higher.

Loan-to-Value RatioStandard Premium (Current)Standard Premium (Effective May 1st, 2014)
Up to and including 65%0.50%0.60%
Up to and including 75%0.65%0.75%
Up to and including 80%1.00%1.25%
Up to and including 85%1.75%1.80%
Up to and including 90%2.00%2.40%
Up to and including 95%2.75%3.15%
90.01% to 95% – Non-Traditional Down Payment2.90%3.35%

CMHC reviews its premiums on an annual basis and this is the result of their most recent review.

95% Loan-to-Value
Loan Amount$150,000$250,000$350,000$450,000
Current Premium$4,125$6,875$9,625$12,375
New Premium$4,725$7,875$11,025$14,175
Additional Premium$600$1,000$1,400$1,800
Increase to Monthly Mortgage Payment$3.00$4.98$6.99$8.98

Based on a 5 year term @ 3.49% and a 25 year amortization

85% Loan-to-Value
Loan Amount$150,000$250,000$350,000$450,000
Current Premium$2,625$4,375$6,125$7,875
New Premium$2,700$4,500$6,300$8,100
Additional Premium$75$125$175$225
Increase to Monthly Mortgage Payment$0.37$0.62$0.87$1.12

Based on a 5 year term @ 3.49% and a 25 year amortization

The new premiums can be paid up front in one lump sum as before or added to the mortgage. In Ontario the premiums are subject to provincial sales tax which cannot be added to the mortgage and must be paid up front.

See the full CMHC press release here.