Tag Archives: Canada Mortgage and Housing Corporation CMHC

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Affordability Is A Challenge

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Affordability Is A Challenge

Housing supply is not rising in response to increased demand

Every fall, BILD invites experts on economics and housing to join us for breakfast and speak to our members about what the GTA housing market will look like in the coming year. This fall was no exception and I was heartened by much of what I heard about current and future trends from Patricia Arsenault of Altus Group and Dana Senagama of the Canada Mortgage and Housing Corporation (CMHC). I also saw we have much left to do around housing supply and affordability in our region.

There’s no doubt we have a lot to look forward to in the GTA. Economic conditions are expected to be solid in the short term, with the employment growth rate projected to be 1.8 per cent in 2019, according to Arsenault, who is Altus Group’s executive vice president, data solutions.

More GTA households than last year are planning renovations of over $5,000 in the next year, and the percentage of GTA households that currently rent but plan to buy a home in the next year has rebounded after softening last summer, according to Altus Group’s survey.

But these survey results only indicate what homeowners and potential new homebuyers intend to do, not what they are ultimately able to do, and Arsenault noted that households may take longer to save for that first home in the face of new mortgage hurdles and housing affordability challenges. The prices of condo apartments, which used to offer potential homebuyers a more affordable choice than single-family homes, have been rising, reducing the advantage of this option. In September, the benchmark price of new condo apartments was $789,643 and the benchmark price of new single-family homes at $1,119,533.

Despite rapid price gains in both ownership and rental markets, the supply response has been weak or inelastic, said Senagama, who is CMHC’s manager of market analysis. That means our housing supply is not rising in response to increased demand for housing and the corresponding increase in the prices of homes, as the law of supply and demand would lead us to expect. In fact, Senagama showed that Toronto is one of the markets in Canada that are not at the risk of overbuilding.

I was not surprised to hear this. BILD has consistently delivered the same message. We have said that we are not building enough housing to accommodate the 115,000 new residents who are arriving in our region every year. We should be building 50,000 homes every year, and last year we only built 38,000. A big reason for this supply shortfall is the lengthy development process that housing projects face in the GTA, slowed down by outdated regulation and red tape.

We should be updating zoning bylaws and official plans and streamlining the list of conditions for municipal approvals, so that we can build the housing our growing region needs. Only then will potential homebuyers be able to afford to make their dream of owning a home a reality.

Dave Wilkes is president and CEO of BILD (Building Industry and Land Development Association), and can be found on: Twitter.com/BILDGTA) Facebook.com/BILDGTA YouTube.com/BILDGTA and BILD’s official online blog: BILDBlogs.ca

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THE INDUSTRY INSIDER: Affordability is a challenge

Affordability is a challenge: The prices of condos have been rising

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Affordability is a challenge: The prices of condos have been rising

The prices of condos, which used to offer homebuyers a more affordable choice, have been rising, reducing the advantage of this option.

Every fall, BILD invites experts on economics and housing to join us for breakfast and speak to our members about what the GTA housing market will look like in the coming year. This fall was no exception and I was heartened by much of what I heard about current and future trends from Patricia Arsenault of Altus Group and Dana Senagama of the Canada Mortgage and Housing Corporation (CMHC). I also saw we have much left to do around housing supply and affordability in our region.

There’s no doubt we have a lot to look forward to in the GTA. Economic conditions are expected to be solid in the short term, with the employment growth rate projected to be 1.8 per cent in 2019, according to Arsenault, who is Altus Group’s executive vice president, data solutions. More GTA households than last year are planning renovations of over $5,000 in the next year, and the percentage of GTA households that currently rent but plan to buy a home in the next year has rebounded after softening last summer, according to Altus Group’s survey.

But these survey results only indicate what homeowners and potential new homebuyers intend to do, not what they are ultimately able to do, and Arsenault noted that households may take longer to save for that first home in the face of new mortgage hurdles and housing affordability challenges. The prices of condo apartments, which used to offer potential homebuyers a more affordable choice than single-family homes, have been rising, reducing the advantage of this option. In September, the benchmark price of new condo apartments was $789,643 and the benchmark price of new single-family homes at $1,119,533.

Despite rapid price gains in both ownership and rental markets, the supply response has been weak or inelastic, said Senagama, who is CMHC’s manager of market analysis. That means our housing supply is not rising in response to increased demand for housing and the corresponding increase in the prices of homes, as the law of supply and demand would lead us to expect. In fact, Senagama showed that Toronto is one of the markets in Canada that are not at the risk of overbuilding.

I was not surprised to hear this. BILD has consistently delivered the same message. We have said that we are not building enough housing to accommodate the 115,000 new residents who are arriving in our region every year. We should be building 50,000 homes every year, and last year we only built 38,000. A big reason for this supply shortfall is the lengthy development process that housing projects face in the GTA, slowed down by outdated regulation and red tape.

We should be updating zoning bylaws and official plans and streamlining the list of conditions for municipal approvals, so that we can build the housing our growing region needs. Only then will potential homebuyers be able to afford to make their dream of owning a home a reality.

David Wilkes is president and CEO of BILD.

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Canada Outlook NEW

Canadian housing market to moderate in 2019 but growth to continue in Ontario and Toronto

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Canadian housing market to moderate in 2019 but growth to continue in Ontario and Toronto

Canada Outlook NEW

 

By Wayne Karl

Canada’s housing market should see a moderation in both housing starts and sales, while home prices are expected to reach levels that are more in line with economic fundamentals such as income, job and population growth. This forecast for 2019 and 2020 is drawn from the 2018 Housing Market Outlook from the Canada Mortgage and Housing Corp. (CMHC).

Source: CMHC Housing Market Outlook
Source: CMHC Housing Market Outlook

Nationally, CMHC’s outlook for 2019 projects total housing starts to edge down and range between 193,700 to 204,500, with the downward trend expected for both single and multi-unit starts. MLS sales are expected to be between 478,400 and 497,400 units annually while MLS prices should lie between $501,400 and $521,600.

“Our key takeaway from this year’s outlook is moderation in Canada’s housing markets for 2019 into 2020,” says Bob Dugan, chief economist, CMHC. “Housing starts are expected to decline from the higher levels we’ve seen recently. We expect resales in 2019 and 2020 to remain below recent peaks while prices should reach levels that are more in line with economic fundamentals such as income, job and populations growth.”

Ontario recovery

After dampened market activity in 2018, existing home sales and housing starts in Ontario, particularly in single-family homes, will post a partial recovery in 2019. Buyers are expected to re-enter the market on the strength of stronger than expected job growth and in-migration, before the downward trend in starts and sales resumes in 2020.

Source: CMHC Housing Market Outlook
Source: CMHC Housing Market Outlook

GTA growth

With balanced conditions prevailing in the GTA, CMHC expects moderate sales growth and home prices growing in line with inflation. The rising costs of homeownership will result in strong rental demand, while new supply will add some upward pressure on vacancy rates. Toronto buyers should see more housing choices as builders concentrate their efforts on new highrise projects.

OTHER REGIONAL HIGHLIGHTS

BRITISH COLUMBIA
Housing starts activity and MLS sales in BC should moderate, as economic and population growth slows while MLS average prices are expected to see a flatter growth profile through 2020.

Vancouver
Over the next two years, Metro Vancouver’s resale market will see lower sales, higher inventories of homes for sale and lower home prices compared with recent market highs. Through 2018, demand and home prices softened across all market segments and local geographies.

PRAIRIES
Buyers’ market conditions in Alberta and Saskatchewan should gradually shift to a balanced market with gradual improvement in economic and demographic fundamentals. Balanced market conditions in Manitoba are expected to continue.

Calgary
Various factors will push and pull the demand for housing in Calgary in 2019 and 2020. Calgary’s economy will experience stronger growth in population and employment. This will help support demand and lift sales in 2019 and 2020. However, the average MLS price will continue to face downward pressure but is expected to stabilize in 2019 and modestly rise in 2020.

QUEBEC
Housing starts and sales of existing homes will both be sustained, however, slower economic growth and rising borrowing costs will moderate activity through 2020. Starts will continue to be dominated by the apartment market segment, while demand for resale single-detached homes will remain relatively strong.

Montreal
In 2018 and 2019, rental housing demand will increase slightly faster than supply in Montreal, which will put some downward pressure on the vacancy rate. Demand will be supported by rising net migration over the forecast horizon.

ATLANTIC CANADA
The Atlantic region will see sustained activity, notably in Nova Scotia, where existing home sales and average prices should trend higher while rental demand will drive growth in apartment construction.

RELATED READING

7 factors that will affect GTA housing in 2019 – and 5 reasons to consider buying NOW

 

 

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Mortgage Rates web

Interest rate hikes may not cost you as much as you think

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Interest rate hikes may not cost you as much as you think

Mortgage Rates web

By Wayne Karl

When the Bank of Canada announced an interest rate hike  on Oct. 24 – and within hours all of Canada’s major banks followed suit in hiking their prime lending rates – consumers largely groaned.

All of CIBC, TD Canada Trust, Scotiabank, RBC Royal Bank and BMO Bank of Montreal almost immediately issued virtually the same statement, word for word: “(Insert bank name here) announced that it has increased its prime lending rate by 25 basis points from 3.70 per cent to 3.95 per cent, effective Oct. 25, 2018.”

Yes, the numbers, too, are identical.

BoC had already raised its influential overnight rate target three times since July 2017, to 1.5 per cent from 0.75 per cent, and now this most recent hike to 1.75 per cent, while hinting that further increases are likely.

For mortgage holders, though, the increases may not cost you as much as you fear.

Fixed rates

The majority of Canadian mortgage holders are on fixed-rate products, which is why a more moderate pace of rate increases likely won’t impact the market significantly, according to Canada Mortgage and Housing Corp. (CMHC).

Nearly half of existing mortgages in Canada will come up for renewal in 2018, according to a data release from CIBC Capital Markets. However, despite having to renew their mortgage in a rising interest rate environment, a borrower with a five-year mortgage rate may be able to get a better deal on their mortgage renewal today than when they entered the housing market five years ago.

According to calculations from mortgage rate comparison website  Ratehub.ca:

The best five-year fixed rate in September 2013 was 3.29 per cent. With that rate, a borrower with a $400,000 mortgage amortized over 25 years would have had a monthly mortgage payment of $1,953 over the last five years.

If that same borrower renewed their mortgage at today’s best five-year fixed rate of 3.19 per cent, their monthly mortgage payment would decrease by $17 per month to $1,936.

“Canadians who require a new mortgage in coming months should lock in a fixed rate as soon as possible,” says James Laird, co-founder of Ratehub Inc. and president of CanWise Financial. “This includes those who are purchasing a home, and homeowners whose mortgage is coming up for renewal.

“Remember that, on average, mortgage providers will offer their existing customers a discount of 0.25 per cent off their posted rate on a renewal. However, there may be more competitive rates out there. Be sure to shop around online or use a mortgage broker to negotiate the best rate for your renewal.”

Laird says borrowers should begin shopping around 120 days in advance of their renewal date in order to negotiate a competitive mortgage rate.

A rising interest rate environment could put downward pressure on home prices, he says, but upward pressure will come from predicted economic growth, lack of housing supply, immigration and first-time homebuyers.

Variable rates

“Borrowers should expect variable rates to perfectly correlate with Bank of Canada rate increases,” Laird says. “Variable rate mortgage holders should also be prepared for several increases to their interest rate in coming months and, with general interest rates in Canada on the rise, fixed rates will rise as well. However, those currently in fixed rates have nothing to worry about until their next mortgage renewal date.”

RELATED READING

7 factors that will affect GTA housing in 2019 – and 5 reasons to consider buying NOW

 

 

 

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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

Latest News


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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cl_dj2018_finance_fi

Finance: New Mortgage Rules Kick In January 2018

Latest News


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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