29 Sep

House Hunting in todays busy real estate market


Posted by: Anne Martin

house hunting in barrie


Are you house hunting in a fast paced real estate market like Toronto, or Barrie? 

Yes, I said Barrie.  “Housing activity in the Barrie region remains on track to set a new annual record in 2016, provided new listings manage to keep up with demand through to the end of the year,” said Mike Douglas, President of the Barrie and District Association of REALTORS®. “It’s important for buyers and sellers to ask their professional REALTOR® how to best do business in this changing market.”

According to the Barrie and District Real Estate Association, the year to date average price for all homes sold in their system as of August is up 16.8% with an average price of $429,111 and the year to date average price in the City of Barrie was up 17.3% or $402.640, compared to the average selling price for the first 8 months of 2015.  The year to date average selling price for areas surrounding Barrie $460,552, up 15.2%.

It’s been an unbelievable year if you own a house you wish to sell.  But what happens to the average buyer? Not to mention, if you sold your house you most likely will be buying another.  Barrie is starting to behave like Toronto.  I’ve been hearing from my clients about multiple offer situations, high demand and low supply.  Houses are being snapped up, as quickly as they are listed.  In one case, I heard of a house selling with multiple offers, have the deal fall through on financing a week later, then when it went back on the market a few days later, it received 5 more offers.

The question is….. How do you get your offer accepted when you are in such steep competition?  Many buyers are going into the offer situation at the asking price or above WITHOUT ANY CONDITIONS including financing and/or home inspection.

Most are fully aware of the risks.  In a situation like this, it is imperative that you visit with a mortgage broker prior to house hunting.  You must have some feeling of confidence in your prospect for finding a mortgage well before you make that offer that could be accepted.  Should you be the successful bidder, you could be leaving yourself open to consequences should you be unable to find financing and unable to close on the sale.  At best you will lose your deposit, at worst you may get sued.  Usually there is a string of sales that need to close in succession to yours.  As your home is paid for, those funds are used to purchase the sellers’ home, the funds from that sale purchases the next persons home and so on.  .  

Then why take the risk?  Most realtors make their buyers aware of the situation prior to signing on the dotted line.  Many feel that it’s the only way to make a purchase! And it might be.  So be very careful.  As a mortgage agent, I will not advise you to purchase a home without a condition on financing however, I will be able to tell you what your chances are.  I will make enquiries to confirm that you will likely be approved for the mortgage you seek, but I cannot make guarantees.  Having a good backup plan is important.  I will discuss that with you too.

There are consequences for making an offer without a condition on home inspection too.

What happens when you forgo a home inspection?  Many home owners are unable to accurately investigate the mechanics of a home.  They are unable to assess the electrical, plumbing, or structure to the degree that a knowledgeable home inspector is trained.  Home buyers generally do not enter the attic of the home to check the quality of the insulation, check for mould, ventilation, etc. nor would they have the expertise to do so appropriately.

By skipping this important step towards home ownership you may leave yourself vulnerable to any deficiencies in the home and the expense of repair.

Unfortunately, there is no right or wrong but what is important is to make the decision that is right for you, and to know the risks.

A good team of professionals working on your side will advise you of your options paving the way for an informed educated decision.

Calling a mortgage broker or agent with Neighbourhood Dominion Lending  Centres is a good start before embarking on your home purchase journey.

Written by Anne Martin

16 Sep

Canadian Home Sales Fell for Fourth Consecutive Month in August


Posted by: Anne Martin

Canadian Home Sales Fell For Fourth Consecutive Month in August

Canadian Home Sales Fell For Fourth Consecutive Month in August
This morning, The Canadian Real Estate Board (CREA) released their national real estate statistics for August, which showed a further slide in home sales as new listings resumed their decline and home prices increased once again. For Canada as a whole, the number of homes trading on the MLS Systems fell 3.1% month-over-month in August–the largest monthly decline since December 2014. Combined with the plunge in home sales in the prior three months, the August slide places national home sales activity 6.9% below the record set in April of this year. 

Sales activity fell in almost 60% of all markets in August, led by the steep decline in Greater Vancouver following the August 2nd introduction of the new property transfer tax on homes purchased by foreign buyers. According to the CREA, activity also declined in the Fraser Valley and August marked the sixth consecutive monthly decline in the Lower Mainland. 

“The sudden introduction of the new property transfer tax on homes purchased by foreign buyers in Metro Vancouver has created a cloud of uncertainty among home buyers and sellers,” said CREA President Cliff Iverson. “That the tax applies to sales that had not yet closed shows how the details for a new tax policy can unnecessarily destabilize housing markets.”

“Single family homes sales were already cooling before the new land transfer tax on foreign home buyers in Metro Vancouver came into effect,” said Gregory Klump, CREA’s Chief Economist. “The surprise announcement of the new tax caused sales to brake hard.”

Canadian Home Sales Fell For Fourth Consecutive Month in August
In direct contrast, activity in Greater Toronto continued strong, further evidence that the new tax on purchases by foreigners in Vancouver did have a meaningful impact. On a not seasonally-adjusted basis, actual sales activity for the country as a whole was up 10.2% y-o-y in August. Sales were up from year-ago levels in about three-quarters of all Canadian markets, led by Greater Toronto. Greater Vancouver posted the largest y-o-y sales decline. 

Listings Fall Again

The number of new listings resumed their decline in August, falling 2.7% from July–down in four-out-of-five of the previous months. Declines in new listings in the Lower Mainland, Greater Toronto and Montreal more than offset gains in less active markets.

Many potential home sellers have been reluctant to put their properties on the market. With the continued rise in prices, sellers have been waiting to garner additional gains in value. In addition, many have been priced out of alternative housing options. Clearly, a sustained softening in home prices in Vancouver, Toronto and Montreal could trigger a deluge of new listings, which would further soften prices. This would be a dramatic and long-awaited reversal of the pattern we have been experiencing for many months now. 

Sales-to-New-Listings Ratio 

With sales and new listings both down by similar magnitudes in August, the national sales-to-new listings ratio was little changed at 61.6%–down from the high of 65.3% posted in May. A ratio in the range of  40%-to-60% is considered generally consistent with balanced housing market conditions. Above 60% is considered a sellers’ market and below 40%, a buyers’ market. 

The sales-to-new-listings ratio was above 60% in almost half of all local housing markets in August–virtually all of which continued to be in British Columbia, in and around the Greater Toronto Area and across Southwestern Ontario. Quite importantly, the ratio moved down to the mid-50% range in Greater Vancouver in August, reflecting the outsized plunge in sales, after having begun the year at a whopping 90%.

Number of Months of Inventory

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 4.8 months of inventory on a national basis at the end of August 2016. This was up from 4.6 months in the previous three months and marked the first increase in almost a year.

The number of months of inventory had been trending lower since early 2015, reflecting increasingly tighter housing markets in Ontario – and, until recently, in B.C. It nonetheless remains below two months in Victoria and virtually everywhere within the Greater Golden Horseshoe region, including Greater Toronto, Hamilton-Burlington, Oakville-Milton, Guelph, Kitchener-Waterloo, Cambridge, Brantford, the Niagara Region, Barrie and Woodstock-Ingersoll. Indeed, major areas within the GTA have less than one month of inventory.

Prices Continue to Rise

The Aggregate Composite MLS House Price Index (HPI) rose 14.7% y-o-y last month, the largest gain in nearly ten years. This price index, unlike those provided by local real estate boards and other data sources, provides the best gauge of price trends because it corrects for changes in the mix of sales activity (between types and sizes of housing) from one month to the next. 

For the seventh consecutive month, y-o-y price growth accelerated for all types of property. Two-storey single family home prices continued to rise the most (16.3%), followed by one-storey single family homes (14.4%), while apartment unit prices rose 11.7% y-o-y.
Greater Vancouver (+31.4 percent) and the Fraser Valley (+38.3 percent) posted the largest y-o-y gains by a wide margin. Smaller double-digit y-o-y percentage price gains were also recorded by Greater Toronto (+17.2 percent), Victoria (+18.9 percent) and Vancouver Island (+13.1 percent).

By contrast, prices were down -4.1 percent y-o-y in Calgary in August. Although prices there have held steady since May 2016, they have remained down from year-ago levels since September 2015 and are 4.7 percent below the peak reached in January 2015.

Additionally, prices were down by -0.9 percent y-o-y in Saskatoon in August. While prices have remained below year-ago levels since August 2015, they are on track to begin rebounding before year-end should current trends persist.

Meanwhile, home prices posted additional y-o-y gains in Greater Moncton (+6.6 percent), Regina (+3.7 percent), Greater Montreal (+2.5 percent) and Ottawa (+1.7 percent).

Dr. Sherry Cooper
Chief Economist, Dominion Lending Centres
9 Sep

Life happens, let you home help!


Posted by: Anne Martin


Life Happens, Let Your Home HelpSometimes “life happens”, and when it does, your home can be your savior if you have accrued some equity in it. Maybe you’ve been out of work, run up your credit cards and driven your credit rating into the ground. Perhaps, you’ve decided to leave the job you hate and venture out into the world of owning your own business. Whatever it may be, the equity in your home can help.

I recently helped a client who had maxed out her high interest credit cards due to not being able to work for a couple of years, and the credit card debt had lowered her credit score substantially. She was now back to work as a self employed consultant earning a good income, but the $1,000 monthly interest payments she was paying was seriously eating at her cash flow and not reducing the principal she owed. Dead money!!

Luckily for her, she had great equity in her condo, so I was able to provide her with an Equity Take Out Mortgage. The mortgage lender I chose was able to loan her money based on the strength of her property and the low loan to value of the mortgage based on her equity, NOT her income or credit score.

Here are the numbers:

Mortgage Amount $75,000

Rate: 4.75% (due to low credit score and equity take out)

Monthly Payments: $425.59

Savings per month: $574.41

In this case, my client was able to pay off her credit card debt and had a fair amount of money left over to invest in her business and her future.

In the end, she was very happy to be able to get her finances and business back on track, and start her life anew!

By working with me, a licensed mortgage broker who has access to a variety of lenders and products, we were easily able to find a great solution to a “life happens” scenario.

If you would like to learn more about how the equity in your home can help you, contact your nearest Dominion Lending Centres mortgage professional.



Dominion Lending Centres – Accredited Mortgage Professional
Jordan is part of DLC City Wide Mortgage based in Vancouver, BC.

9 Sep

Canadian Jobs Seesaw Upward


Posted by: Anne Martin

Canadian Jobs Seesaw Upward

Canadian Jobs Bounce Back in August
The August jobs report was stronger than expected as payrolls bounced back from a significant July decline. Canada’s economy added 26,000 jobs last month (a 0.1% gain), thanks to large gains in the public sector and increased payrolls in Quebec. The rebound followed a disappointing July report where the economy shed 31,200 positions, with big losses in full-time employment. The unemployment rate rose a tenth of a percentage point to 7.0%, as more people entered the labour force.

Over the past year, employment increased by 77,000 (0.4%), but reflecting the weakness in the economy, especially in the oil sector, all of the gains in the past twelve months were in part-time work. Over the same period, the total number of hours worked fell by 0.4%.

Another troubling sign was that employment was down in August among the primary workforce, people aged 25 to 54, although job gains were posted for younger and older workers. Nevertheless, the jobless rate for younger workers remained high at 13.2%, as more youths entered the labour force. For older workers, aged 55 and older, employment rose by 29,000 last month with gains for both men and women, but the unemployment rate was stable at 6.0%.

The “lost men” phenomenon is showing up in Canada, as it is prevalent in the US where the number of men aged 25 to 54 in the labour force has declined precipitously–estimated at about 7-to-10 million men in the US who are not working or seeking work. This has led to an unprecedented decline in the labour force participation rate of men. In Canada, employment among people aged 25 to 54 decreased by 25,000 in August, virtually all of which was among men, as their jobless rate increased 0.3 percentage points to 6.6%. 

There are many theories about why this is happening. For one, the weaker sectors of the economy–goods production (especially oil) and construction (weaker in the US than in Canada)–are dominated by male employment. Many of these lost workers are less educated.

The labour force participation rate in Canada (adjusted to US concepts) was 65.4% in August, compared with 62.8% in the United States. The participation rate in Canada declined 0.4 percentage points over the past 12 months, while it increased slightly in the United States (+0.2 percentage points).

According to Stats Canada, “Adjusted to the concepts used in the United States, the unemployment rate in Canada was 5.9% in August compared with 4.9% in the United States. On a year-over-year basis, the unemployment rate was essentially unchanged in Canada, while it declined slightly in the United States (-0.2 percentage points).”

On a geographical basis, employment rose in Quebec and Newfoundland, while it declined in New Brunswick. For all of the other provinces, there was little change in payrolls.

Public sector jobs increased in August, while self-employment fell and the number of private sector employees was roughly unchanged. Job declines were posted in professional, scientific and technical services.

Bottom Line: Canada’s economy has been pummeled by the decline in the oil sector and the modest growth in manufacturing and service employment. While we are optimistic about a substantial growth rebound in the second half of this year continuing into 2017, lingering pain is evident. The brightest spot in the economy has been housing in Vancouver and Toronto, but that has boosted household imbalances and over-extended many first-time homebuyers, leaving us vulnerable to financial instability in the future. Preliminary evidence suggests that housing may now be slowing markedly in Vancouver. 

Dr. Sherry Cooper
Chief Economist, Dominion Lending Centres
7 Sep

Bank of Canada Holds Overnight Rate at .5%


Posted by: Anne Martin

Bank of Canada Hold Overnight Rate at 0.5%

Bank of Canada Hold Overnight Rate at 0.5%
The Bank of Canada’s decision to hold rates steady once again was very much as expected, even though first half growth was well below the forecast in the July Monetary Policy Report. US growth in the first half of this year was also disappointing, reflecting weakness in business and residential investment. US consumer spending was strong, held up by a buoyant labour market.

Rebounding US growth in the second half bodes well for a sustained rebound in Canadian exports. The recently released July trade report for Canada showed a major improvement in exports to the US, a long-awaited sign of a revival in Canadian growth.

Other recent indicators suggest that Canada’s economy entered the third quarter on a stronger footing following the wildfire-related slump in the second quarter. Q2 growth was also depressed by the larger-than-expected contraction in exports. The Bank expects a strong rebound in Q3 growth as oil production resumes and rebuilding in Alberta begins.

Fiscal stimulus will also play a role in the second half economic revival as consumer spending is boosted by the July 1 introduction of Canada Child Benefits payments. Federal infrastructure spending should also begin to impact growth by the final quarter of this year. Nevertheless, the Bank suggested that growth for the remainder of this year will remain below their July forecast. 

Inflation is in line with BoC expectations. Total CPI inflation is below the 2% target largely owing to the decline in consumer energy prices. “Measures of core inflation remain around 2%, reflecting offsetting effects of excess capacity and past exchange rate depreciation”.

As always, the final paragraph of the Bank’s statement assesses economic risks. The report suggests that the inflation profile has trended downward since July. As for elevated household debt levels, long a concern, the Bank alluded to the recent slowdown in the Vancouver housing market suggesting that while still early days, it might well be the start of a soft landing. Recent data for Toronto, however, suggest that housing activity remained as robust as ever in August. Clearly, household imbalances continue to rise and heighten financial vulnerabilities. 

Given the likely path of economic growth in Canada, I expect the Bank to maintain the current stance of monetary policy through 2017. This means that Canadian interest rates will remain well below rates in the US, as the Fed will likely hike the overnight rate once again either later this year or early next year. Mortgage rates will remain low for longer.



Dr. Sherry Cooper
Chief Economist, Dominion Lending Centres