Welcome to my monthly newsletters!
Welcome to October!
I’m grateful the temperatures are cooler this month, I really didn’t like the incredible heat wave to finish September.
Real estate in the Region continues to be relatively stable, which is likely to continue for the next few months.
In K-W in September
• the average single detached in K-W sold for $512,655 in 25 days
• the average semi-detached in K-W sold for $372,226 in 22 days
• the average freehold townhouse in K-W sold for $411,144 in 15 days
• the average condo in K-W sold for $302,760 in 32 days
• the average list to sell price ratio was 99.4%
Attention First Time Buyers!
The Region of Waterloo has recently made some updates to their Affordable Home Ownership Program. This program provides assistance for low to moderate income households, by providing the 5% down payment required for home ownership:
– the maximum purchase price has been increased to $386,000
– must be located in the Region of Waterloo
– the Region must approve the property
– the property can be a single family, semi-detached, freehold or condo townhouse, or condo apartment
– you will need to remain in the home for 20 years, after which the loan need not be repaid. If you sell the home prior to the 20 years, you will have to pay back the principal, plus 5% of the increase in value of the home since it was purchased.
– you will need to participate in a seminar with the Region about home ownership
To be eligible:
– have a maximum household income of no more than $90,500
– you must be approved for a mortgage
– must be over 18 years of age
– currently renting a property, and do not own or have an interest in a home
– do not owe money to any Community Housing landlord
– intend to live in the home
– be a legal resident of Canada
– be willing to pay for the home inspection upon the purchase of a home. (No inspection, no down-payment loan)
Contact me for further details!
Canada’s growth expected to top the G7 this year as OECD boosts forecast
OTTAWA — The Organization for Economic Co-operation and Development has raised its expectations for economic growth in Canada this year compared with a June forecast.
The Paris-based economic think tank says it now expects the Canadian economy to grow by 3.2 per cent this year, best in the G7.
That is up from its forecast in June for growth of 2.8 per cent.
The OECD maintained its Canadian outlook for 2018 at 2.3 per cent.
The Canadian housing market is in good shape, and so are the banks, analysts say http://business.financialpost.com/investing/trading-desk/the-canadian-housing-market-is-in-good-shape-and-so-are-the-banks
Despite rising interest rates and various policy measures implemented to slow pricing growth, the Canadian housing market is not on track for a sharp decline. It nonetheless bears watching, as the domestic mortgage market is a big factor for the Canadian banks.
This business accounts for anywhere from 30 per cent to 60 per cent of their total lending portfolios, with CIBC and Royal Bank having the greatest exposure among the Big Six Canadian banks, and Bank of Montreal and Toronto-Dominion Bank being the least exposed. However, given the structure of Canadian mortgages and the composition of the banks’ portfolios, analysts are confident that a credit event remains remote.
John Aiken at Barclays noted that while interest rates have risen following the Bank of Canada’s two recent hikes, rates remain at very low levels, and the country’s affordability index is well below its long-term average.
“The market remains well in balanced territory, able to withstand incremental declines in demand,” Aiken told clients on Tuesday. …
But rather than focus on pricing when assessing the risk Canadian housing poses to the banking sector, Aiken instead believes employment is the key.
Not only is economic growth on the upswing, but the employment situation is improving, and he expects that will continue unless the Bank of Canada takes an aggressive stance on rates. The analyst noted that rising unemployment levels in early 2000, and during the most recent economic downturn, coincided with weaker mortgage credit growth. …
Why adding your kids to the house title will cost you
Q: My parents have both of their names on their house as joint tenants. My mother has been diagnosed with dementia and is now in long term care. My dad has trusteeship and guardianship for her. He wants to put his four daughters on the title of the house. How is this done and what is the procedure? Can this be done?
A: … If your father is a joint tenant on the house and has power of attorney or property for your mother, he is in a position where he can do whatever he sees fit with the house. He has two of two “votes,” so to speak, with the asset. The power of attorney also governs her personally-held assets like her RRIF, TFSA, bank accounts, etc. …
I suspect your father may still live in the family home. Your father may someday require long-term care like your mother. He may want care in his home. Or he may need to pay costs well in excess of your mother’s costs as the demand for such care increases in the coming years as the Canadian population ages. This house may be needed to fund not only your mother’s care but also your father’s care in the future. On that basis, if I were your father, or your mother for that matter, I would be reluctant to pass this asset along to the next generation.
If Mom and Dad own the house until they die, if they both aren’t otherwise living somewhere else – like in a long-term care facility – the house may qualify fully for the principal residence exemption. There may therefore be no income tax payable on their death. If you and your sisters are added on title and you own your own homes, the increase in value may not be tax-free and some capital gains tax may be payable.
So, adding your names potentially increases the family tax payable. Adding your names also requires the assistance of a lawyer to change title on the property. So legal fees are payable now. When the second of your parents die and the house is sold, that will require legal fees a second time. If the property just stayed in your parents’ names the whole time, legal fees would only be payable once.
So, adding your names increases the legal fees payable. If you or your sisters goes through a divorce, your spouse could make a claim that your share of the house should be included in your net family property for division. If you got in a car accident and were sued, your share could be included in your assets. If you died and left everything to your spouse, what if they demanded their share of your parents’ house while your father was still alive and living there?
So, adding your names increases the potential risk for family or creditor issues. There are only two potential benefits to transfer title in this case, ST. The first is so that the house proceeds can be divvied up faster on the second of your parents’ deaths. But I suspect that benefit would be limited if you had to go into the house after they died, sort through everything, prepare it for sale, list it and wait for the closing either way.
The second benefit is that you may save money on probate fees depending on the province in which your parents live and where their house is located. Probate is the process of validating a will legally to allow distribution by the executor. Ontario has the highest probate fees in the country, with 1.5% payable on assets in excess of $50,000. Some provinces have flat probate fees, meaning little to no savings to transfer the house now.
So, if your parents live in Ontario and the house is worth $1,000,000, there are potentially $15,000 in probate fee savings to add you and your sisters on title. But I might argue there are more than $15,000 in potential costs I’ve raised above. …
University of Waterloo among world’s best schools for getting a job
The University of Waterloo still excels at the mission baked into its genes 60 years ago: preparing students to succeed in jobs.
A leading education agency ranks the school 24th in the world for “nurturing graduate employability.” This puts UW in the top five per cent of 500 universities ranked, second in Canada behind the University of Toronto. …
Apartments, townhouses dominate latest Kitchener growth numbers
Housing is booming in Kitchener, and much of that housing is not detached homes, but apartments and multiple housing.
In 2016, Kitchener issued building permits for 2,417 new residential units, the second highest level in the past 30 years and almost double the number issued the previous year, when the city issued permits for 1,323 units.
The data, in the newest report on growth trends in Kitchener, shows that most of that housing was multi-residential — just over 60 per cent of the units were townhouses and apartments.
Although planners caution that housing data can spike and dip, the trend appears to hold true over the longer term: the average number of multi-residential homes being built each year has gradually been creeping up over the past 20 years.
The increase in multis doesn’t mean the end of single-family homes: 35 per cent of the units for which permits were issued in 2016 were single detached houses.
But it does suggest a greater range of housing types. Suburbs that are a uniform swath of single-family homes are likely a thing of the past. …
Schneiders site sold to London developer
The former Schneiders meat processing plant on Courtland Avenue has been bought by Auburn Developments.
The sprawling complex, which sat vacant for three years, includes 750,000 square feet of former industrial and office buildings, making it one of the largest redevelopment projects ever proposed in the region.
The London-based developer did the Arrow Lofts on Benton Street in downtown Kitchener, and the massive redevelopment of the BarrelYards site in Waterloo.
Its preliminary reports show the Schneiders site can include 150,000 square feet of commercial space and 2,000 residential units. The buildings and parking lot cover 27.6 acres of land, making the site more than twice the size of the BarrelYards project. …
Have a Happy Thanksgiving!
Welcome to September!
It’s back to routine for many with schools and fall activities beginning this week. Please be careful on the roads and watch for jay-walkers – some of whom are old enough to know better!
August featured the traditional summer real estate slow-down. In K-W in August:
– the average single detached in K-W sold for $516,378 in 25 days
· the average semi-detached in K-W sold for $351,223 in 30 days
· the average freehold townhouse in K-W sold for $394,970 in 15 days
· the average condo in K-W sold for $302,402 in 27 days
· the average list to sell price ratio was 99.2%
School Crossing Reminder Drivers and cyclists must stop and yield the whole pedestrian crossover until the person is completely off the roadway; this rule also applies at school crossings where there is a crossing guard holding a stop sign. Drivers and cyclists can be fined $150 to $500 and 3 demerit points for offences at pedestrian crossings and school crossings.
Canada’s housing bubble has vanished without a ‘crash landing’, say economists
… The Canadian housing bubble — long feared to be vulnerable to a dangerous pop — is no more.
“It has ceased. It has expired and gone to meet its maker,” said Douglas Porter, chief economist at BMO Capital Markets, parroting a famous Monty Python quote. “This is a late bubble. Bereft of life, it rests in peace.”
Canada’s housing market corrected for a fourth consecutive month in July, led by the cooling in Ontario. Yet the declines appear to be moderating, as the 2.1-per-cent monthly drop in nationwide home resales marked a significant moderation from the 6.4-per-cent average rate of decline in the previous two months.
“Housing market developments in July are consistent with our view that Canada’s market is in the process of moderating to a more sustainable level of activity,” said Robert Hogue, senior economist at RBC Capital Markets.
“Much of the ongoing cooling is taking place in Ontario where recent policy changes by the provincial government have contributed to a welcome shift in market psychology toward more caution.” …
Home building is booming in Canada
Canadian home construction is on pace for its best year since the 2008-2009 recession, with builders showing no sign of being slowed by rising interest rates or fears of a housing correction.
Work began on an annualized 222,324 homes in July, the third-fastest monthly pace since 2012, the Canadian Mortgage and Housing Corp. reported Wednesday. Starts have averaged about 215,000 in 2017, which puts the industry on track for the most new residential construction since 2007 if the current pace continues. …
A report Wednesday from Statistics Canada showed building permits unexpectedly rose 2.5 percent in June to the second-highest level on record, mostly on gains in commercial projects. Permits for single-family residences fell 12.5 percent in June from the previous month, while for multiple-unit residences they increased 12.5 percent.
For starts, the gain in July was led by a jump in new multiple-unit construction in the country’s three largest urban centers: Toronto, Montreal and Vancouver. New multiple-unit construction was up 9 percent to an annualized 145,543 units in July. New construction of single-detached homes was down 4 percent in July.
Economists had forecast home starts would fall to an annualized 205,000 during the month, and permits would drop 1.9 percent.
Sky-high house prices? Parents to the rescue https://www.canadianmortgagetrends.com/2017/08/sky-high-house-prices-parents-rescue/
With housing affordability declining across Canada, one trend is on the rise: parents are increasingly helping their adult children when it comes to housing.
That assistance is coming in the form of cash gifts/loans for today’s growing down payments, and also from parents providing shelter to their adult children under their own roof.
New data released from the 2016 census shows that more than one-third (34.7%) of young adults aged 20 to 34 are now living with their parents, having either left at some point and returned, or never left at all.
That number has been increasing steadily since 2001 when 30.6% of young adults were living with at least one parent.
Among those aged 30-34, the percentage co-residing with a parent rose from 11.2% in 2011 to 13.5% in 2016. …
Ontario saw the highest percentage of all the provinces, with 42.1% of those aged 20-34 living at home—up from 35% in 2001. That means more than two in five young adults in the province now live with their parents. …
For those who aren’t providing shelter, many parents are contributing financially towards the down payments of their children.
A recent CIBC poll indicated that a full 76% of parents would offer financial support to help their child move out, marry or live with a partner. And despite a significant percentage of adult children currently living at home, a majority of parents (65%) said they would prefer to give a financial gift rather than have their child and spouse/partner live with them.
The poll found that the national average gift size was $24,125. For those with household incomes over $100,000, that figure nearly doubled to $40,558, with as many as 25% giving their kids more than $50,000.
The changing voice of Waterloo Region
Try saying this: nín hǎo. It’s a polite way to say hello in Mandarin, the language of mainland China.
You may find it useful because Mandarin is on a roll in this region. It has surged to the Number 2 spot among languages spoken most often at home, according to findings released Wednesday from the 2016 census.
Yes, Mandarin has overtaken German, which has fallen to third place among languages spoken most often at home. There are now 6,885 residents who speak Mandarin at home compared to 6,170 who speak German at home. …
English still rules here, spoken at home by 440,140 residents, seven times more than all other languages combined.
Rounding out the top five languages you’ll hear around dinner tables are Spanish and Arabic, which is also surging and has overtaken Serbian and Portuguese.
More international start-ups eyeing Waterloo Region as new home
Waterloo Region stands to be a major winner of a government program bringing international start-ups to Canada.
The Start-up Visa Program is a pathway for cutting edge entrepreneurs to grow their companies in Canada.
The Canadian government initially started the program as a 5 year pilot, but announced this summer it will become permanent.
The Accelerator Centre at the University of Waterloo has already accepted five entrepreneurs through the program. …
“Canada is definitely a hot bed for start-ups, particularly in Waterloo Region, people like how we operate our program and they can really focus on scaling up their company here.” Said Ball.
Ball says it’s a win/win for the companies and for Canada because of the prospect for job creation,
“We are going to see more jobs here, and we are going to see very interesting technologies come here that are going to have a very positive impact on processes and how we do things.” …
Trail closure along the central promenade in Waterloo Park Beginning Sept. 1, 2017 to approximately March, 2018, the central promenade (the section of the Laurel/Trans Canada Trail that runs through Waterloo Park) will be closed for construction. Detailed signage regarding an alternate route during the construction phase will be provided at the trail entrances closer to the construction date. …
Welcome to August!
Are you looking forward to the upcoming long weekend?
The local real estate market has stabilized, we’re no longer seeing offers $100,000 above the asking price, which bodes well for the long term.
In K-W in July
– the average single detached in K-W sold for $519,797 in 15 days
– the average semi-detached in K-W sold for $349,577 in 18 days
– the average freehold townhouse in K-W sold for $411,239 in 23 days
– the average condo in K-W sold for $307,262 in 30 days
– the average list to sell price ratio was 100%
Homebuyers: Avoid These Common Mortgage Pitfalls
A home is the largest purchase most people will make in their lives.
That should reinforce the importance of planning ahead, doing your research, relying on the advice of experts and not rushing through the process. …
While a mortgage broker can help you avoid many of the pitfalls commonly encountered during the home buying process, it’s still important to be informed even before you start looking for that perfect home. Here are just a few examples:
1. Not checking your credit report before applying for a mortgage
Put simply, not knowing your credit score prior to applying for a mortgage is akin to not brushing your teeth before visiting the dentist.
Your credit score can have a huge impact on the best rate you’ll be able to secure. … You don’t want to discover your credit score is sub-par in the middle of a mortgage application. Knowing this information beforehand gives you time to improve your score, or address any errors that may appear on your report
2. Thinking it’s all about the rate
Let’s be honest, who doesn’t want the cheapest mortgage rate possible? And indeed it is important to find the best deal that meets your needs. After all, a few percentage points can make a not-insignificant difference to your interest costs over your mortgage term.
But don’t be too quick to jump at the cheapest rate without making sure it has all of the features you need/want, and that it doesn’t stick you with higher-than-normal penalties should you need to break your mortgage early. …
3. Not understanding the importance of the down payment
Many first-time buyers see a down payment as a big, almost-insurmountable obstacle to home ownership, particularly in regions where prices have skyrocketed into the stratosphere.
But when you get into the nitty-gritty of it all, there are many more considerations beyond simply coming up with the money.
Things to consider:
– How big of a down payment will you/can you make?
– The source of your down payment funds.
– Transferring the funds. No matter where your down payment funds are coming from (savings, investments, RRSP, proceeds from a prior sale), be sure to leave yourself plenty of time for the funds to clear and for a certified or cashier’s cheque to be produced before the closing.
4. Not setting (and sticking to) a budget
You’re probably thinking, “but budgets can be boring and tedious.” This is not entirely incorrect, but on the other hand a budget paints a clear picture of your financial situation and lays the framework for ensuring you can afford all of the hidden (and not so hidden) costs associated with buying a home—not to mention all of the costs that follow after the closing.
It’s important to plan for both the short and long term. Short-term costs include everything from:
– Land transfer taxes
– Legal fees
– Home inspection/appraisal fees
– Down payment (this is kind of a big one)
– Mortgage insurance (remember, the provincial tax on your insurance premium can’t be rolled into the mortgage like the premium itself, so expect this hefty expense at closing time)
Then there are the ongoing costs of home ownership. Previous owners will know what to expect, but first-time buyers may be caught off guard with sudden expenses after moving in, such as:
– Appliances and furniture
– Condo fees/Property taxes/Property insurance
– Utility costs
– Renovations/repairs (furnace replacement, new shingles, etc.)
– And everything else, down to tools, and yes, even a dehumidifier. These expenses can add up …
Interest rates have finally increased: How that could affect your loans
Canadians with variable-rate mortgages, also known as adjustable-rate mortgages, will immediately feel the increase in the overnight rate.
For homeowners who have locked in a fixed-rate mortgage, nothing will change until the fixed term ends and it’s time to renew. …
That said, it’s possible that some fixed-rate mortgage holders who renew in the near future could actually lock in a new fixed-rate mortgage at a lower interest rate than they signed up for five years ago, according to Preet Banerjee, author of Stop Over-Thinking Your Money!.
Those borrowers “may actually still be renewing into a lower rate, because even though rates are going up, they’re still lower than when a lot of people got their fixed-rate mortgage,” Banerjee said.
2. Home equity lines of credit (HELOCs)
Canadians who use their homes as a source of cash by borrowing against their home equity could quickly owe more now that interest rates have risen, as those loans are frequently variable rate. …
… A shift in sentiment?
The biggest change for Canadian consumers after an interest rate hike, Banerjee said, could be a shift in sentiment that alters the way we think about spending and borrowing.
“We’ve had now an entire generation of financial consumers who have grown up in a progressively falling interest rate environment. And for them, carrying a lot of debt has become the new normal — they’ve never known anything else,” said Banerjee.
“So because interest rates have fallen, and because borrowing money has become normalized, this could represent a real problem for them because they’ve gotten used to living month-to-month, paycheque-to-paycheque as a lot of people do, with very low costs of interest.”
‘Massive effort’ underway to create database that will shed light on Canada’s housing market
Last summer, as policy makers grappled with how to tackle soaring real estate prices in the Vancouver and Toronto areas, they encountered a major obstacle: there was no comprehensive database tracking all the potential variables at play, especially when it came to foreign buyers.
Now, a “massive” effort is underway at Statistics Canada to make sure that problem never arises again.
A team of more than 15 people is at work compiling the Housing Statistics Framework, an ambitious database that will contain everything from price information to owner demographics, on every property and piece of land in the country. …
The creation of the database will be facilitated by a National Property Register, which will keep tabs on every property in Canada, and information about their respective owners.
The Housing Statistics Framework would mine that data to generate statistics on foreign ownership, average prices, mortgage data, vacancy rates, property size and homebuyer characteristics.
The HSF will be renewed on a quarterly basis and is scheduled to be complete by the end of this year, though not all regions will receive their data at the same time. …
IMF predicts Canada will pass the U.S. to top G7 growth this year
… The IMF now expects Canada’s gross domestic product to grow 2.5 per cent this year, leading G7 growth, according to its latest World Economic Outlook. That’s up from the prior forecast of 1.9 per cent released in April.
The IMF expects Canada’s economy to grow 1.9 per cent in 2018, a slight decrease from the April forecast of 2.0 per cent.
In the July edition of its quarterly Monetary Policy Report, the Bank of Canada increased its forecast for 2017 Canadian GDP to 2.8 per cent, up from its April outlook of 2.6 per cent.
Others have been boosting their views on Canada. In June, the Paris-based Organization for Economic Co-operation and Development bumped up its call on Canadian 2017 GDP growth to 2.8 per cent, double last year’s pace.
The IMF’s revised outlook was contained in its latest World Economic Outlook, a quarterly report that sets out the organization’s projections for global and country-specific growth. …
Millennials choosing the Region
The Region is still the millennial capital of southern Ontario, for its size.
In Waterloo Region, 28 per cent of the population is aged 15 to 34, the millennial generation. That’s a greater proportion than Toronto (27 per cent), Ontario (26 per cent), and other big cities across southern Ontario, says new research drawing on the 2016 census. …
Community Access Bike Share; http://cabikeshare.org You can use the bikes for a maximum of 3 hours; and please remember to wear a bike helmet!
Canada’s Best Places to Live: http://www.moneysense.ca/canadas-best-places-to-live-create-your-own-ranking/ Waterloo is #30, Guelph #74, Kitchener #178, Cambridge #185.
Kitchener Public Library unveils new instrument lending library
Guitars, pianos and hand drums are all items you can now check out with your library card in Kitchener.
A new instrument lending program was launched Monday at the Kitchener Public Library, thanks to a 150-instrument donation from Sun Life Financial.
It’s all part of the library’s mission to transform from book lender to cultural hub, CEO Mary Chevreau told CBC K-W. “I see the instruments as just another expansion of our literacy mission,” Chevreau said.
“We also are looking at literacy in a broader, more of a renaissance term of literacy. So we’re looking at digital literacy, of course very seriously here, but also cultural literacy and arts and music.” …
Parking in Uptown Waterloo is going hi tech http://www.570news.com/2017/07/25/parking-uptown-waterloo-going-hi-tech/ Waterloo is going hi tech when it comes to parking in the Uptown.
Starting on September 1st, you will be able to use the Honk Mobile app to buy additional time once your two free hours have expired …
Contact me if you have any questions!
I only keep three months of newsletters on line, any longer and the information contained therein is likely out of date.