Tag Archives: Canada Mortgage and Housing Corporation CMHC

The Consultant: Time to get building in Brantford, Kitchener and Collingwood.

The Consultant: Time to get building in Brantford, Kitchener and Collingwood.

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The Consultant: Time to get building in Brantford, Kitchener and Collingwood.

by Ben Myers

The next hot areas

Demand for new housing in the GTA has never been higher. According to Altus Group data, the benchmark price for available new single-family homes was $1,225,774 in December, a 23.2 per cent annual increase. The benchmark price for available new condominium apartments was $716,772 at the end of 2017, 41.3 per cent above the average value from December 2016. And for the second consecutive year, new condo sales set a record high. So the industry must be building more homes than ever, right?

Actually, no. Housing starts in the Toronto Census Metropolitan Area (TCMA) reached 38,700 in 2017 according to CMHC, only slightly above the 10-year average of 36,800, but down 1 per cent from last year. There is a massive backlog of projects that have experienced strong absorption, but have yet to break ground due to a shortage of construction companies. The average single-detached home took 11 months to complete in 2017, the highest total ever tracked by CMHC, and it took 13.5 months to complete a semi and 14 months to complete a townhouse, both record highs. It took over two and a half years to finish construction on the average apartment (condo and rental) in the Toronto CMA last year, the second highest annual result to date.

Some buyers tired of waiting for new home deliveries are looking outside the region. According to Bullpen’s Residential Real Estate Round Up Report, the most popular destinations in December for prospective new homebuyers outside the GTA were Hamilton and Guelph. New homes are delivered much quicker in both of those markets. In fact, CMHC reports that it took just six months on average to build a single-detached home in Guelph last year. However, the prices are not as inexpensive as they used to be. Our report shows that the average new project in Hamilton has new single-family units starting from about $1,600 a square foot for about $570,000, while Guelph projects have lowrise product starting from $1,700/sf for $625,000.

GTA buyers are taking notice of these more affordable markets. Ryan Waller of Home Group Realty Group in Guelph estimates that a quarter of all resale transactions in Guelph were to GTA buyers based on the fact that 25.5 per cent of buyers were represented by GTA real estate agents in 2017.

With the new mortgage stress test in place, and GTA new home price growth through the roof, the next hot area for new homes will probably be outside the region. Based on our numbers, look for strength in the Brantford, Kitchener and Collingwood new home markets in 2018.

Ben Myers is President of Bullpen Research & Consulting.

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CMHC Housing Starts November 2017

CMHC reports housing starts realizes large gain in November 2017

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CMHC reports housing starts realizes large gain in November 2017

Trend in housing starts reached its highest level in almost 10 years, reflecting a second consecutive increase in multiple starts

OTTAWA (CNW) — The trend in housing starts was 226,270 units in November, compared to 216,642 units in October, 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.

“The trend in housing starts reached its highest level in almost 10 years this November, reflecting a second consecutive increase in multiple starts,” said Bob Dugan, CMHC’s chief economist. “This largely reflects construction of multiple units in Toronto, where evidence of overbuilding is low due to the decreasing inventory of completed and unabsorbed multiple units and strong demand.”

Monthly Highlights

 Toronto

Total housing starts in the Toronto Census Metropolitan Area (CMA) trended higher in November. Multiple-family dwelling starts trended significantly higher and contributed to the overall increase. Given escalating house prices of single-detached homes, more homebuyers continued to shift demand towards lower priced condominium apartments and townhomes. Higher sales of pre-construction condominium units in the past two years will continue to break ground throughout this year resulting in more condominium apartment starts.

Guelph

Guelph builders started 269 homes in November, significantly higher than the 62 homes started a year ago. This increase was due to the jump in apartment starts, which are above the 10-year average in response to strong demand from downsizing seniors, young households, immigrants and students. The rental market in Guelph is tight with a vacancy rate of 1.2 per cent. The strong demand for rental apartments has translated into more apartment starts. Single-detached and townhouse starts are lower this year. Fewer lowrise new home sales this year have translated into lower starts.

Kitchener-Cambridge-Waterloo

KitchenerCambridgeWaterloo builders started 658 homes in November, significantly higher than the 222 homes started a year ago. For the first 11 months of 2017, single-detached starts are lower, while starts for townhouses are up 51 per cent and for apartments, 26 per cent. Demographics are playing a role in new home construction, as there has been a shift to smaller households. One-person households, couples without children households and lone-parent households are increasing at a much faster pace than couples with children households, which stimulates demand for affordable options such as townhouses and apartments.

London

Total housing starts in London CMA posted one of the highest levels ever recorded for the month of November. Strong population growth and a low supply of resale home listings have strengthened demand for new single-detached homes, resulting in a 13 year high for single-detached starts during the month of November. In addition, stronger rental demand this year, indicated by the lowest vacancy rate since 2001, has already led to a higher number of apartment starts this year than the annual record set in 2016.

Vancouver

Seasonally adjusted monthly starts in the Vancouver CMA were lower in November mostly due to a pullback in apartment starts as the construction sector remains at full capacity. Fewer multi-family condo and rental projects are getting underway in the City of Vancouver, Richmond, and on the North Shore, meanwhile, Burnaby and New Westminster have observed higher multi-family starts so far in 2017, relative to the same period last year.

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 252,184 units in November, up from 222,695 units in October. The SAAR of urban starts increased by 14.4 per cent in November to 235,412 units. Multiple urban starts increased by 16.9 per cent to 175,016 units in November. Single-detached urban starts increased by 7.5 per cent, to 60,396 units.

Rural starts were estimated at a seasonally adjusted annual rate of 16,772 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.

Preliminary Housing Start Data in Centres 10,000 Population and Over

Single-Detached

All Others

Total

Nov. 2016

Nov. 2017

%

Nov. 2016

Nov. 2017

%

Nov. 2016

Nov. 2017

%

Provinces (10,000+)
N.-L.

66

55

-17

27

57

111

93

112

20

P.E.I.

16

29

81

11

55

400

27

84

211

N.S.

127

113

-11

230

216

-6

357

329

-8

N.B.

62

83

34

65

107

65

127

190

50

Atlantic

271

280

3

333

435

31

604

715

18

Qc

520

546

5

2,325

3,536

52

2,845

4,082

43

Ont.

2,672

2,303

-14

2,466

6,202

152

5,138

8,505

66

Man.

190

202

6

309

303

-2

499

505

1

Sask.

188

141

-25

81

186

130

269

327

22

Alta.

1,016

1,000

-2

1,027

1,774

73

2,043

2,774

36

Prairies

1,394

1,343

-4

1,417

2,263

60

2,811

3,606

28

B.C.

832

1,005

21

2,826

2,813

0

3,658

3,818

4

Canada (10,000+)

5,689

5,477

-4

9,367

15,249

63

15,056

20,726

38

Metropolitan Areas
Abbotsford-Mission

15

57

280

5

112

##

20

169

##

Barrie

44

83

89

12

73

##

56

156

179

Belleville

**

34

##

**

18

##

**

52

##

Brantford

8

8

14

2

-86

22

10

-55

Calgary

346

390

13

399

1,114

179

745

1,504

102

Edmonton

436

400

-8

550

526

-4

986

926

-6

Greater Sudbury

12

18

50

2

6

200

14

24

71

Guelph

16

19

19

46

250

443

62

269

334

Halifax

46

51

11

195

171

-12

241

222

-8

Hamilton

91

59

-35

81

366

352

172

425

147

Kelowna

93

88

-5

51

145

184

144

233

62

Kingston

38

11

-71

7

11

57

45

22

-51

Kitchener-Cambridge-Waterloo

97

88

-9

125

570

356

222

658

196

Lethbridge

**

34

##

**

6

##

**

40

##

London

141

163

16

84

478

469

225

641

185

Moncton

29

23

-21

16

91

469

45

114

153

Montréal

209

237

13

1,188

1,921

62

1,397

2,158

54

Oshawa

43

111

158

78

188

141

121

299

147

Ottawa-Gatineau

201

242

20

267

787

195

468

1,029

120

Gatineau

24

48

100

77

33

-57

101

81

-20

Ottawa

177

194

10

190

754

297

367

948

158

Peterborough

27

16

-41

9

0

-100

36

16

-56

Québec

90

66

-27

409

975

138

499

1,041

109

Regina

68

36

-47

30

102

240

98

138

41

Saguenay

17

19

12

26

41

58

43

60

40

St. Catharines-Niagara

122

110

-10

28

132

371

150

242

61

Saint John

6

25

317

6

2

-67

12

27

125

St. John’s

54

42

-22

24

52

117

78

94

21

Saskatoon

99

79

-20

25

60

140

124

139

12

Sherbrooke

28

22

-21

141

130

-8

169

152

-10

Thunder Bay

12

16

33

2

12

##

14

28

100

Toronto

1,308

886

-32

1,435

3,014

110

2,743

3,900

42

Trois-Rivières

16

13

-19

103

35

-66

119

48

-60

Vancouver

379

497

31

2,272

2,141

-6

2,651

2,638

0

Victoria

69

67

-3

199

156

-22

268

223

-17

Windsor

77

45

-42

63

96

52

140

141

1

Winnipeg

166

153

-8

291

291

457

444

-3

Total

4,403

4,208

-4

8,183

14,074

72

12,586

18,282

45

Data for 2016 based on 2011 Census Definitions.
Data for 2017 based on 2016 Census Definitions.
Source: Market Analysis Centre, CMHC

Preliminary Housing Start Data – Seasonally Adjusted at Annual Rates (SAAR)

Single-Detached

All Others

Total

Oct.2017

Nov.2017

%

Oct.2017

Nov.2017

%

Oct.2017

Nov.2017

%
Provinces (10,000+)
N.L.

517

526

2

511

612

20

1,028

1,138

11

P.E.I.

480

284

-41

252

660

162

732

944

29

N.S.

1,226

1,047

-15

1,180

2,420

105

2,406

3,467

44

N.B.

813

789

-3

2,154

1,266

-41

2,967

2,055

-31

Qc

6,191

6,440

4

43,848

38,311

-13

50,039

44,751

-11

Ont.

21,190

24,470

15

36,626

71,271

95

57,816

95,741

66

Man.

2,384

2,414

1

1,968

3,636

85

4,352

6,050

39

Sask.

1,825

1,570

-14

3,372

2,232

-34

5,197

3,802

-27

Alta.

11,960

11,078

-7

15,416

21,100

37

27,376

32,178

18

B.C.

9,604

11,778

23

44,341

33,508

-24

53,945

45,286

-16

Canada (10,000+)

56,190

60,396

7

149,668

175,016

17

205,858

235,412

14

Canada (All Areas)

69,161

73,247

6

153,536

178,937

17

222,695

252,184

13

Metropolitan Areas
Abbotsford-Mission

260

688

165

1,140

1,344

18

1,400

2,032

45

Barrie

836

1,048

25

600

876

46

1,436

1,924

34

Belleville

391

489

25

276

216

-22

667

705

6

Brantford

151

142

-6

0

24

##

151

166

10

Calgary

4,465

4,178

-6

6,816

13,368

96

11,281

17,546

56

Edmonton

4,396

4,351

-1

4,764

6,312

32

9,160

10,663

16

Greater Sudbury

102

160

57

48

72

50

150

232

55

Guelph

254

263

4

288

3,000

##

542

3,263

##
Halifax

850

628

-26

840

2,052

144

1,690

2,680

59

Hamilton

708

752

6

1,080

4,392

307

1,788

5,144

188

Kelowna

748

839

12

1,212

1,740

44

1,960

2,579

32

Kingston

221

97

-56

168

132

-21

389

229

-41

Kitchener-Cambridge-Waterloo

865

968

12

1,236

6,840

453

2,101

7,808

272

Lethbridge

452

462

2

948

72

-92

1,400

534

-62

London

1,632

1,858

14

504

5,736

##

2,136

7,594

256

Moncton

340

190

-44

1,680

1,092

-35

2,020

1,282

-37

Montréal

2,653

2,741

3

38,178

23,021

-40

40,831

25,762

-37

Oshawa

491

1,485

202

3,096

2,256

-27

3,587

3,741

4

Ottawa-Gatineau

3,004

2,669

-11

3,816

9,444

147

6,820

12,113

78

Gatineau

423

471

11

504

396

-21

927

867

-6

Ottawa

2,581

2,198

-15

3,312

9,048

173

5,893

11,246

91

Peterborough

249

191

-23

48

0

-100

297

191

-36

Québec

769

737

-4

3,276

11,700

257

4,045

12,437

207

Regina

521

399

-23

1,212

1,224

1

1,733

1,623

-6

Saguenay

274

246

-10

324

492

52

598

738

23

St. Catharines-Niagara

870

1,101

27

2,376

1,584

-33

3,246

2,685

-17

Saint John

189

279

48

48

24

-50

237

303

28

St. John’s

368

391

6

504

624

24

872

1,015

16

Saskatoon

1,094

887

-19

1,884

720

-62

2,978

1,607

-46

Sherbrooke

202

247

22

1,092

1,560

43

1,294

1,807

40

Thunder Bay

114

149

31

360

144

-60

474

293

-38

Toronto

6,975

9,040

30

21,048

36,168

72

28,023

45,208

61

Trois-Rivières

188

176

-6

348

420

21

536

596

11

Vancouver

4,376

6,171

41

30,408

25,692

-16

34,784

31,863

-8

Victoria

881

795

-10

8,460

1,872

-78

9,341

2,667

-71

Windsor

615

574

-7

648

1,152

78

1,263

1,726

37

Winnipeg

1,783

1,842

3

1,524

3,492

129

3,307

5,334

61

Data based on 2016 Census Definitions.
Source: Market Analysis Centre, CMHC

SOURCE: Canada Mortgage and Housing Corporation



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25 Leonard Avenue

25 Leonard Avenue

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25 Leonard Avenue

Condo and homebuilders join forces to help house the homeless

(CNW) — As the weather turns cold for Toronto’s homeless population, the city’s Kensington Market neighbourhood is seeing construction begin on Toronto’s first purpose-built homes for homeless people in more than 10 years.

An excavator broke ground earlier this week in preparation for spring construction on the small strip of land beside St. Clare’s Multifaith Housing Society’s existing building at 25 Leonard Avenue, just east of Bathurst Street. This unique three-storey, 22-unit project was backed by neighbours and made possible with government and private sector support.

St. Clare’s construction partners — including home and condo builders, unions and construction associations — are stepping up to the plate in a $1 million fundraising effort.

The corporate donors are Aspen Ridge, Brown Group, Great Gulf, Greenpark, Heavy Construction Association of Toronto, Laurier Homes, Liberty Development, Lindvest, LiUNA Local 183, LiUNA Ontario Provincial District Council, Mattamy Homes, Menkes, Ontario Formwork Association, Silvercore, Tridel and Yorkwood.

Through its Open Door Program, Toronto is assisting the project with a $500,000 capital grant and waiving municipal fees and development charges.

“This was a must-do project for St. Clare’s. We are relieved to finally be through a two-year planning process and are grateful for the support of RESCON, Toronto Deputy Mayor Ana Bailão, Councillor Joe Cressy and our very supportive neighbours, said Andrea Adam, St. Clare’s operations manager.

“I applaud the hard work and vision of St. Clare’s to make this innovative project a reality,” said Bailão, chairwoman of Toronto’s affordable housing committee. “St. Clare’s is a model that works. Their partnership-based approach has created new opportunities for those seeking a safe, clean, affordable place to call home.”

“Ensuring access to safe and affordable housing for all our friends and neighbours is critical,” Cressy added. “We have a housing crisis in our city, and the new affordable homes at 25 Leonard Avenue are a crucial and welcome addition to our community.”

According to Michele McMaster, affordable housing consultant of the Canada Mortgage and Housing Corporation, “CMHC has investigated St. Clare’s operating model and found it to be replicable and scalable. We are delighted that St. Clare’s is inspiring private developers, and we hope to encourage more in the future.”

“We chose to support this project because we believe the construction industry should give back. St. Clare,s is a caring and effective organization that we respect, and we know that they have the right leadership to steer this project to success, said RESCON chairman emeritus Phil Rubinoff.

This latest intensification of the site follows the award-winning 2006 addition of 26 apartments to the roof of the building at 25 Leonard.

St. Claire’s is a charitable foundation and landlord responsible for 413 rental units in five buildings across Toronto to help get the homeless and hard-to-house into their own home to give them privacy and dignity.

RESCON is the non-profit association that represents more than 200 of Ontario’s residential builders. Its members build highrise, midrise and lowrise homes, including rental apartments and social housing.

stclares.ca



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Finance: New Mortgage Rules Kick In January 2018

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Finance: New Mortgage Rules Kick In January 2018

For the sixth time since the financial crisis in 2008 Canada’s top banking regulator is making it harder for Canadians to qualify for a mortgage. Starting in January 2018 Canadians applying for a new mortgage will be subject to a stricter set of rules to prove they can afford the loan.

The most significant change is to guidelines around the mortgage stress test. Now all new mortgage applicants, regardless of down payment amount, will be subject to it. This stress test also includes those with an existing mortgage who choose to switch banks once their term is over.

Now financial institutions require all borrowers to qualify at the greater of the two, either the five-year benchmark rate published by the Bank of Canada or the contractual mortgage rate plus two percentage points.

Previously only those with less than a 20 per cent down payment had to undergo a stress test to show they could make their mortgage payments at a higher rate. Those borrowers still require mortgage insurance provided usually though the Canada Mortgage and Housing Corporation (CMHC).

The new guidelines, announced back in October 2017, are published by the Office of the Superintendent of Financial Institutions Canada (OSFI) in the Residential Mortgage Underwriting Practices and Procedures.

OSFI Superintendent Jeremy Rudin, in a press statement, says these rules are needed to “reinforce a strong and prudent regulatory regime for residential mortgage underwriting in Canada.” OFSI also makes clear that financial institutions must adhere to these rules going forward, which are “reflective of risk and are updated as housing markets and the economic environment evolve.”

There are more guidelines for lenders as well. All federally regulated financial institutions are also prohibited from arranging a mortgage with another lender, or a combination of a mortgage and other lending products, in any form that circumvents the institution’s maximum Loan to Value (LTV) ratio. This means banks can’t arrange other unsecured loans that make the borrower appear to have a larger down payment.

The good news for current homeowners is these new rules only affect new mortgage applications. If your mortgage is coming up for renewal, these changes won’t affect you if you stay with your current bank.

If you’re shopping for a home right now beware that your purchasing power will be lower than what it was prior to 2018. For first time homebuyers and those applying for a new mortgage, forecasters say these new rules will affect your affordability by as much as 15 per cent.

They also predict existing home sales will fall by up to five per cent and home prices will fall another up to four per cent, because of the new mortgage rules.

From a personal finance perspective I applaud these new rules for protecting Canadians who are stretching themselves to the financial limits to get into their dream home. As I have been saying for years, you should always calculate your affordability two percentage points higher than what the bank offers you, and pay your mortgage at that rate as well. Remember, even if the bank offers you a large mortgage it’s not always financially prudent to take it.

Rubina ahmed-haq is a journalist and personal finance expert. She is HPG’s Finance Editor. She regularly appears on CBC Radio and TV. She is a contributor on CTV Your Morning and Global Toronto. She has a BA from York University, received her post graduate journalism diploma from Humber College and has completed the CSC. Follow her on Twitter @alwayssavemoney.

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CMHC

Rising GTA house prices spreads to surrounding centres

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Rising GTA house prices spreads to surrounding centres

by Canada Mortgage and Housing Corporation

Highlights

  • Recent GTA house prices have increased disproportionately compared to other CMAs.
  • Increasing single-family home prices in the GTA are motivating buyers to purchase more affordable homes in nearby CMAs, driving up prices in those centres. In particular, historical house price spill overs from the GTA were prevalent in Hamilton, Barrie and Guelph.
  • Recent house price spill overs appear to have been occurring a bit farther out, especially in St. Catharines-Niagara, driven by GTA lowrise home prices.

The Greater Toronto Area (GTA) MLS average price in the third quarter of 2016 increased by 18 per cent compared to the same quarter in 2015. Market participants suggest that recent price increases are causing buyers to purchase more affordable properties in nearby Census Metropolitan Areas (CMAs), and that prices in these nearby CMAs would be pressured up as a result.

This report examines whether increases in GTA house prices have historically spilled over into Ontario’s other CMAs, especially those surrounding the GTA. We also provide the impact that a shock to GTA house prices might have on surrounding CMA house prices, in light of house price overvaluation in the GTA and house price spill overs from the GTA to surrounding CMAs.

Recent GTA house prices have increased disproportionately compared to other CMAs.

Except for the clear but short decline in many centres in 2008, house prices have steadily increased in most Ontario CMAs over the past 20 years, with even higher growth rates in the last five years. Overall, this substantial increase was due mainly to favourable economic conditions, population growth and relatively low mortgage rates, which increased demand for housing and drove up prices. However, more recently, moderate or elevated evidence of overvaluation was detected in Hamilton and the GTA by CMHC’s Housing Market Assessment framework, indicating that some of the price appreciation was not driven by fundamental factors.

Indeed, since the 2008-09 recession, the average GTA house price has been increasing at a faster rate and has also been increasing disproportionately compared to other Ontario CMAs. This trend is reflected in Figure 2, which shows the ratio of the GTA average price to the GTA expected price based on the average price across Ontario CMAs. Since the first quarter of 2016, the GTA average price increase has exceeded by about 30 per cent the GTA expected price increase. The previous historical peak was 26 per cent in the first quarter of 1989. Recent house price growth in the GTA has therefore been at its highest level relative to Ontario CMAs.

Read the full report.


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CMHC

CMHC to increase mortgage insurance premiums

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CMHC to increase mortgage insurance premiums

CMHC 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 1 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 per cent.
  • The average gross debt service ratio (GDS) was 25.6 per cent. To qualify for CMHC insurance, a homebuyer’s GDS should not exceed 32 per cent 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.

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. Its mortgage loan insurance enables Canadians to buy a home with a minimum down payment starting at 5 per cent. 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.

Backgrounder

CMHC’s standard mortgage loan insurance premiums will be changing 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%

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 per cent of CMHC’s transactional mortgage loan business were for loans of less than $300,000.
  • Nearly 95 per cent of CMHC’s transactional mortgage loan business were for loans of less than $600,000.
  • Less than 1 per cent 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 per cent with interest rates comparable to those with a 20 per cent down payment. Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20 per cent 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.

https://www.cmhc-schl.gc.ca/en/corp/nero/nere/2017/2017-01-17-0830.cfm


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Canada’s largest private mortgage default insurer is matching CMHC’s premium hikes

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Canada’s largest private mortgage default insurer is matching CMHC’s premium hikes

Financial Post

It took Canada’s second largest mortgage insurer about 12 hours to match premium hikes to mortgage default insurance announced January 17 by Canada Mortgage and Housing Corp, the Crown corporation that controls a majority of the market.

Genworth Canada said January 17 that it would be increasing its transactional mortgage insurance premium rates for homebuyers, essentially duplicating the increases brought in by CMHC. The increase in premiums depends on the down payment — they are rising more dramatically for loans with higher down payments — but the premium for consumers with a loan-to-value ratio up to and including 95 per cent, will rise to four per cent from the current 3.6 per cent on March 17 for both companies.

http://business.financialpost.com/personal-finance/mortgages-real-estate/largest-private-mortgage-default-insurer-is-matching-cmhc-premium-hikes

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Toronto housing starts decrease in November 2016

Toronto housing starts decrease in November 2016

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Toronto housing starts decrease in November 2016

(Marketwired) — Housing starts in the Toronto Census Metropolitan Area (CMA) trended at 39,195 units in November 2016, compared to 39,689 in October 2016, 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.

“Toronto’s housing start trend declined slightly in November due to a slowdown in new apartment construction,” said Dana Senagama, CMHC principal market analyst for the GTA. “However, single-detached home starts picked up pace as limited resale listings for lowrise homes continue to cause demand to spill over into the new home market.”

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 complete picture of the state of the housing market. In some situations, analyzing only SAAR data can be misleading in some markets, as they are largely driven by the multiples segment of the markets, which can be quite variable from one month to the next.

The standalone monthly SAAR was 30,425 units in November, down from 48,035 units in October. The decrease was mainly a result of fewer apartment starts.

The City of Toronto recorded the highest number of starts within the Toronto CMA primarily due to higher apartment starts. Milton Township had the highest number of lowrise starts followed by the City of Brampton, where a number of single-detached homes started construction.

National Trend

The trend measure of housing starts in Canada was 199,135 units in November compared to 199,641 in October, according to CMHC. The trend is a six-month moving average of the monthly SAAR of housing starts.

“Housing starts kept a steady pace in November as upward trends observed in British Columbia and the Prairies offset downward trends recorded in Ontario, Quebec and the Atlantic provinces,” said Bob Dugan, CMHC chief economist. “We’re also seeing that housing starts are on track to have moderated in 2016 compared to 2015 in most centres where we detected overbuilding.”

The standalone monthly SAAR for all areas in Canada was 183,989 units in November, down from 192,297 units in October. The SAAR of urban starts decreased by 5 per cent in November to 166,828 units. Multiple urban starts decreased by 7.7 per cent to 105,915 units in November, while single-detached urban starts held steady at 60,913 units.

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

Rural starts were estimated at a seasonally adjusted annual rate of 17,161 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.

https://www.cmhc-schl.gc.ca/en/index.cfm

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CMHC September 2016 numbers

Toronto housing starts decrease in September: CMHC

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Toronto housing starts decrease in September: CMHC

Source: Marketwired

Housing starts in the Toronto Census Metropolitan Area (CMA) trended lower at 37,947 units in September 2016 compared to 42,125 in August 2016 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.

“September saw fewer apartment starts in Toronto than earlier in the year, slowing the overall housing starts trend in the GTA,” said Dana Senagama, CMHC principal market analyst for the GTA. “However, limited supply of resale lowrise homes is shifting demand to the pre-construction market, leading to stable starts for this type of dwelling.”

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 complete picture of the state of the housing market. In some situations, analysing only SAAR data can be misleading in some markets, as they are largely driven by the multiples segment of the markets, which can be quite variable from one month to the next.

The standalone monthly SAAR was 30,232 units in September, down from 40,406 units in August. The decrease was mainly a result of fewer apartment starts.

The City of Toronto recorded the highest number of starts within the Toronto CMA primarily due to apartment starts. This was followed by the City of Brampton, which had a large number of single-detached starts. Next was the Town of East Gwillimbury, which saw construction start on a number of new lowrise housing 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.

Canadian housing starts trend increases in September

The trend measure of housing starts in Canada was 199,503 units in September compared to 196,465 in August, according to CMHC. The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

“Housing starts were on an upward trend in September, as residential construction increased across the country with the exception of Ontario, where the multiples segment softened to levels that are more consistent with household formation,” said Bob Dugan, CMHC chief economist. “Quebec saw the largest gain in housing starts due to the development of new rental apartments intended for seniors. That said, Quebec’s growing apartment stock emphasizes the importance of inventory management.”

The standalone monthly SAAR for all areas in Canada was 220,617 units in September, up from 184,201 units in August. The SAAR of urban starts increased by 19.7 per cent in September to 201,848 units. Multiple urban starts increased by 22.3 per cent to 137,803 units in September and single-detached urban starts increased by 14.5 per cent to 64,045 units.

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

Rural starts were estimated at a seasonally adjusted annual rate of 18,769 units.

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

Follow CMHC on TwitterYouTubeLinkedIn and Facebook. For more information, visit www.cmhc.ca

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Bungalow Re-Do

Bungalow Re-Do

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Bungalow Re-Do

by Samantha Sannella

Updating a postwar home

Ontario is dotted with charming bungalows, and it’s interesting to discover the history of these square boxes that so many of us call home. The CMHC (Canada Mortgage and Housing Corporation) published catalogues of designs by Canadian architects from 1947 to 1974. The plans were sold for a reasonable price in an effort to improve standards and address the postwar housing shortage. These plans, which were identified by number, were sold for $10 to owners and builders, alike.

As the years passed, the catalogues reflected an evolution in Canadian living standards. In the late 1940s designs were minimal and included a living room, a kitchen, two bedrooms and a bathroom. By the late 1950s the three-bedroom house became more popular. Powder rooms and family rooms were also added, and the carport was a typical feature in plans from the 50s. In the 1960s, garages were added. Brick choices were generally red, salmon or light beige.

With two-bedroom bungalows fetching record-high prices in the Toronto area, it’s no wonder that owners are looking to maximize the value of these homes. Originally built for approximately $22,000, these homes were modest in their design and detailing, but can be updated for increased functionality, improved energy efficiency and enhanced styling.

Functionality

Most of the postwar bungalows had a low basement ceiling and a supporting wall that ran the length of the house. Both issues can be problematic when looking to add more liveable space. If the budget allows, consider lowering the basement floor to provide more headroom. If doing a fullscale renovation, the load-bearing wall will need to be replaced with steel beams.

Once the space is open, it’s easier to reconfigure the kitchen by combining it with the living/dining area, which will offer much more space for entertaining and a growing family. To provide more light and to give the illusion of taller ceilings, consider adding a skylight or two.

Energy Efficiency

It’s a well-known fact that these bungalows were not well-insulated. This can be rectified by adding strapping to the interior walls and insulating with fibreglass, wool or foam insulation, and then adding drywall. A semi-rigid stone wool insulation works well. You’ll lose a few inches of interior space, as well as the lathe and plaster wall finish, but you’ll gain the much needed R-value.

New windows are an important upgrade to a bungalow renovation. If you suspect rot or deteriorating conditions around the frames and sills, opt for a full-frame replacement. With full-frame window replacements, the exterior trim and windowsills will need to be replaced, as well as the interior window trim. With inserts, the exterior trim and sills can be left in place and the new window is inserted. While inserts are easier to install, more cost effective and maintain the integrity of the exterior and interior trim, the condition of the existing windows and trim will need to be assessed.

The “Don’t List”

  • Don’t use over-scaled stone veneer on the facade
  • Don’t use red or green roofing shingles
  • Don’t pave the front yard
  • Don’t stucco a single-storey bungalow
  • Don’t embark on a transformation without hiring a designer

Style

The traditional-coloured bricks used on these bungalows can be enhanced by choosing complementary colours for the trim, roofing and front door. Consider neutrals like slate, charcoal and black. These shades match most brick work and can tie the entire facade together. If you are looking to add a few contemporary touches, consider a stainless steel mailbox, a doorbell and a fashionable door handle set.

If replacing the front door, a painted steel door with a full glass panel can make a big impact, as well as updating the railings. If you want to preserve the heritage look, but want to make it more interesting, consider hiring a metal artist to customize a wrought iron design. Of course, there are countless details that can be added to set your bungalow apart from the rest. Copper eaves troughs are one such detail, and the changing patina will gracefully age your home.

SAMANTHA SANNELLA, BFA ID, M ARCH,

is an internationally renowned expert in the field of design and architecture.


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