GoWest Realty Ltd

Parity beckons for the Canadian dollar: strategists

Expectations of higher interest rates and investor demand for Canada will keep the currency on its upward path, banks say

Globe and Mail Update Published on Wednesday, Mar. 10, 2010 8:29AM EST Last updated on Wednesday, Mar. 10, 2010 9:14AM EST

Expectations of rising interest rates, a revived economy and robust investor demand are prompting some strategists to suggest parity is around the corner.

CMHC Improvement offers greater financing choice to borrowers who are building new homes or who want to undertake small or large scale improvements to existing homes where the improvements will increase the value of the property.

CMHC-Improvement.pdf application/pdf Object.

(more…)

Gas prices drive inflation to 1.9 per centGasolineBank of Canada's core reading on consumer prices shoots to 2 per cent, though economists don’t expect a change in interest rates

via Gas prices drive inflation to 1.9 per cent – The Globe and Mail.

Federal Government Changes Mortgage Rules

February 16, 2010 — The federal government has announced changes to the rules for government-backed insured mortgages (less than 20 percent down payment) as follows:

• All borrowers will be required to meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter terms.
• Reduced maximum amount that can be withdrawn in refinancing a government-backed insured mortgage to 90 per cent from 95 per cent of the value of the home.
• Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner occupied properties purchased for speculation. Borrowers purchasing owner-occupied residential properties will still be able to access government-backed mortgage insurance with a 5 per cent down payment.Additional detail is available here.

CREA forecasts national activity will reach 527,300 units in 2010, up 13.3 per cent from 2009. This would represent a new annual record, standing 1.2 per cent above the previous peak in 2007. Low interest rates are expected to boost housing demand in the first half of the year, resulting in strong annual sales growth in nearly all provinces in 2010, led by British Columbia and Ontario.

More info @ The Canadian Real Estate Association

Canada’s top bankers are pushing the government to clamp down on the mortgage market to cool off the rise in home prices.

The heads of the country’s six largest banks have privately told policy makers that they fear the wide-ranging economic fallout of a U.S. style binge-and-collapse in housing. To head off any chance of that happening, they are willing to accept tighter rules on mortgages that would slow the real estate market, even though it would mean forgoing some short-term profits from giving out ever bigger mortgages as home prices jump.

more in The Globe and Mail

Bank of Canada chief, Mark Carney, says there is no housing bubble in Canada.

“We are following it closely but we would not characterize the current state of the housing market in those terms,” he said yesterday.

In reference to the need for further mortgage restrictions, Carney said: “We’ve seen the strength of the system of mortgage insurance…It’s allowed our housing market to weather the storm.”

“I must say we don’t see a need for structural change in the mortgage market.”

More from Reuters…

First-time home buyers may be eligible for a 15 per-cent income tax credit for closing costs.

Details

• To assist first-time home buyers with the costs related to the purchase of a home.
• The First-Time Home Buyers’ Credit (FTHBC) provides a 15 percent credit on a maximum of $5,000 of home purchase costs(e.g. legal fees, land transfer taxes, etc.), meaning maximum tax relief of $750.
• Applicable to first-time buyers purchasing a home closing after January 27, 2009.
• The FTHBC is claimable for the taxation year in which the home is acquired.
• An individual will be considered a first-time home buyer if neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the calendar year of the home purchase or in any of the four preceding calendar years.

For more information contact Service Canada at 1.800.662.6232 or visit www.fin.gc.ca

Amazing Offering In Very Desirable John Fraser / Gonzaga School District, Shows Like A Model Home, 3 Large Bed, $ Invested In Upgrades, Hardwood Floors Throughout Main Floor, Gr Floor Gas Fireplace, Cathedral Celling In Family Room, Bright Staircase, Breathtaking Pro. Finished Basement With Bar And 3 Pcs Bath, Updated Bath With Jacuzzi. Large Open Concept Kit With Breakfast Bar, Oversized Backyard, Terrific Neighborhood, Do Not Miss This Beauty.

The HST treatment of real estate transactions will generally follow the current GST treatment of real estate transactions.

Sales of used residential housing and long-term rentals of residential housing will be exempt for HST purposes.

Sales of new residential housing will be subject to HST and will qualify for GST, HST, and transitional rebates (subject to certain thresholds and maximum amounts).

Sales and rentals of commercial real property will be subject to HST.

HST Transition Rules

October 21, 2009 — The provincial government has provided rules/guidance on how it will transition to the implementation of the proposed Harmonized Sales Tax.

Background

The provincial government has passed legislation to combine the eight percent Provincial Sales Tax with the five percent federal Goods and Services Tax, creating a 13 percent Harmonized Sales Tax (HST).

• The HST is NOT YET IN EFFECT. The HST will come into effect beginning on July 1, 2010; however, note transition rules below.
• HST will not apply on the purchase price of re-sale homes.
• HST would apply to services such as moving cost, legal fees, home inspection fees, and REALTOR® commissions.
• HST will apply to the purchase price of newly constructed homes. However, the Province is proposing a rebate so that new homes across all price ranges would receive a 75 per cent rebate of the provincial portion of the single sales tax on the first $400,000. For new homes under $400,000, this would mean, on average, no additional tax amount compared to the current system.
• Click here for more background information on how the HST will affect REALTORS®.
• Click here for some common questions and answers.

Transitional Rules for New Housing

• Generally, sales of new homes under written agreements of purchase and sale entered into on or before June 18, 2009 would not be subject to the provincial portion of the single sales tax, even if both ownership and possession are transferred on or after July 1, 2010.
• The tax would also not apply to sales of new homes under written agreements of purchase and sale entered into after June 18, 2009 where ownership or possession is transferred before July 1, 2010.

Our 1% Full Service

-
Bank of Canada maintains overnight rate target at 1/4 per cent and reiterates conditional commitment to hold current policy rate until the end of the second quarter of 2010

via Bank of Canada maintains overnight rate …- 2010- Press Releases- Publications and Research- Bank of Canada.

During the negotiation stage of the transaction, a mutually agreed-upon date for closing is determined.
“Closing” is when you and the seller sign all the paperwork and pay your share of the closing fees, and the documents are recorded.
Closing costs are the legal and administrative fees and disbursements associated with buying your home.

Prior to closing, solicitor/notary will complete a detailed closing statement for buyer.

Typically buyer pays:

Legal fees paid to the attorney; Document preparation fees; Recording and notary fees; Title search and title insurance; Land transfer taxes, Repairs or inspections the buyer has agreed to pay for; Loan fees; Appraisal fees; Credit report fees

In typical transaction, you should be prepared to pay for:

CMHC or Genworth Financial Canada insurance

A conventional mortgage is a loan for no more than 80% of the appraised value or purchase price of the property, whichever is less. The remaining amount required for a purchase (20%) comes from your resources and is referred to as the down payment. If you have to borrow more than 80% of the money you need, you’ll be applying for what is called a high-ratio mortgage. Insurance premium can be added to the mortgage amount, the P.S.T. must be paid at closing

Land transfer taxes *

The tax is based on a percentage of the purchase price of the property, and varies from province to province. In Ontario, for example, the rate is ½% on the first $55,000 of the purchase price, 1% on the next $195,000, 1.5% on the next $150,000 and 2% on the remainder. (First time homebuyers can apply for a refund up to 2,000)***

Legal/notary fees

Legal Costs and Disbursements: A lawyer or notary will charge a fee for their professional services involved in drafting the title deed, preparing the mortgage, and conducting the various searches. The disbursements, on the other hand, are out-of-pocket expenses incurred, such as registrations, searches, supplies, etc., plus G.S.T.

Fire insurance (condominiums are excluded)

You are required by the mortgage lender to have fire insurance effective at the time you legally take possession of your new home. Some insurance companies may demand proof of a home inspection or may not insure certain types of dwellings. Make sure that you enlist your insurance agent early.

Closing Adjustments:

An estimate should be made for closing adjustments for bills that the seller has prepaid such as property taxes, utility bills, and other charges. Any bills after the closing date are the purchaser’s responsibility. Your lawyer/notary will let you know what they are exactly once the various searches have been completed.

GTA REALTORS® REPORTING JANUARY MID-MONTH HOUSING STATISTICS
TORONTO, January 18, 2010 – Greater Toronto REALTORS® reported 1,749 existing home
sales on the Multiple Listing Service (MLS®) during the first two weeks of January. This result
was almost double the 888 sales reported for the same period in 2009, when sales had dipped
to a recessionary low.
“We have had a strong start to 2010,” said Toronto Real Estate Board President Tom Lebour.
“Widespread sales growth in terms of geography and housing type indicates that many
households remain confident in their ability to purchase and pay for a home over the long-term.”
The average price for transactions in the first two weeks of January was $395,307, compared to
an average of $332,495 for the same period in 2009.
“Double-digit average annual price growth will continue through the first quarter of 2010 as sales
remain high relative to listings and we continue to make comparisons to last year’s winter
downturn,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Source: Toronto Real Estate Board

Greater Toronto REALTORS® are passionate about their work. They adhere to a strict
Code of Ethics and share a state-of-the-art Multiple Listing Service. Serving over 29,000
Members in the Greater Toronto Area, the Toronto Real Estate Board is Canada’s largest
real estate board. Greater Toronto Area open house listings are now available on
www.TorontoRealEstateBoard.com.

January 14, 2010
Property Assessment in Ontario

The Government of Ontario has made a number of changes to the property assessment system that went into effect in the 2009 property tax year. These changes include the introduction of a four-year assessment update cycle and a phase-in of assessment increases.

Currently, the assessed value of properties in Ontario is based on a January 1, 2008 valuation date. MPAC’s last province-wide assessment update took place in 2008 and was based on a January 1, 2008 valuation date.
To provide an additional level of property tax stability and predictability, the market increases in assessed value between 2005 and 2008 will be phased-in over four years. The phase-in program does not apply to decreases in assessed value. Any market decrease in the value of a property is applied immediately and reflected on your most recent Property Assessment Notice. The change in assessed values and the phased-in assessment values for the 2009 to 2012 property tax years are listed on the 2008 Notices. There is a difference between the 2008 Current Value Assessment (CVA) (the destination value) and the current year’s phase-in value. The current year (which can be 2009, 2010, 2011 or 2012 taxation year) phase-in value is the assessed amount that the municipalities or the local tax authorities use to calculate the annual property taxes. An example of this is as follows:

Current year (2010) Phase-in CVA=$250,000

Total Municipal Tax Rate= 1 %

Total Municipal Tax burden = $250,000 x 1 %= $2,500.

The 2008 CVA is not used until 2012 since this is the destination value.

The municipalities/local taxing authorities set property tax rates and the province sets the education tax rate. MPAC’s assessed values are used to determine these taxes.

How MPAC Assesses Properties

MPAC’s mandated role is to accurately value and classify all Ontario properties in compliance with the Assessment Act and related regulations. To establish a property’s assessed value, MPAC analyzes property sales in a community to determine the CVA. This method is used by most assessment jurisdictions in Canada and throughout the world. When assessing a residential property, we look at all of the key features that affect market value. Five major factors usually account for 85% of the value: location; lot dimensions; living area; age of the structure(s), adjusted for any major renovations or additions; and quality of construction. Examples of other features that may affect a property’s value include: number of bathrooms; fireplaces; finished basements; garages and pools. Site features can also increase or decrease the assessed value of your property such as traffic patterns; being situated on a corner lot; and proximity to a golf course, hydro corridor, railway or green space.
For more information on how MPAC assesses property, please visit our website at www.mpac.ca.

The low interest rates that have been implimented to ward off the recession in Canada and especially the United States may have set off a mini housing bubble.

Canada’s real estate market has not suffered as much as the United States market has. But with the economic turmoil of it’s southern neighbor, they have been able to benefit from the low interest rates and as such has seen housing prices skyrocket.

Let’s hope they have a better outcome than we have to the south.

“It is premature to talk about a bubble in Canadian housing markets,” Wolf said today in Edmonton, Alberta. “If the Bank were to raise interest rates to cool the housing market now – when inflation is expected to remain below target for the next year and a half – we would, in essence, be dousing the entire Canadian economy with cold water, just as it emerges from recession.”

The lowest mortgage rates since the Korean War helped fuel a 67 percent jump in existing home sales in November from their January low, with the average price up 19 percent from a year earlier to C$337,231 ($326,600). The Bank of Canada cut its benchmark lending rate to 0.25 percent in April and has committed to keeping it there through June unless the inflation outlook shifts to aid a recovery. via Bloomberg

Wolf Says Talk of Canada Housing Bubble ‘Premature’ (Update3) – Bloomberg.com.

Globe and Mail Update Published on Monday, Jan. 11, 2010 2:37PM EST Last updated on Monday, Jan. 11, 2010 3:21PM EST

via Bank of Canada won’t raise interest rates to cool housing – The Globe and Mail.