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Tag: CMHC

  • Housing starts stable in 2023, but demand still outpaces growing supply of apartments – MoneySense

    Housing starts stable in 2023, but demand still outpaces growing supply of apartments – MoneySense

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    The agency released its biannual housing supply report on Wednesday, which showed combined housing starts in the Toronto, Vancouver, Montreal, Calgary, Edmonton and Ottawa regions dipped 0.5% compared with 2022, totalling 137,915 units.

    That was in line with the annual average of around 140,000 new units over the past three years. CMHC deputy chief economist Aled ab Iorwerth said the 2023 numbers came in “better than we thought.”

    “We ended up being positively surprised by 2023. We were really quite concerned that higher interest rates were going to really have an impact,” said ab Iorwerth.

    “They did have an impact, but it seems to have been on smaller structures, single-detached (homes) and so forth.”

    Apartment starts grew 7% to reach a record 98,774 individual units last year. However, those gains were offset by declines in the number of new single-detached homes, which fell 20% year-over-year, due to weaker demand for higher-priced homes in an elevated mortgage rate environment.

    More housing needed to address affordability gaps

    The agency continued to warn about the need to ramp up housing construction to address affordability gaps and significant population growth in Canada.

    It said housing starts are projected to decrease in 2024, despite the CMHC’s forecast that Canada will require an additional 3.5 million units by 2030, on top of what is currently projected to be built, to restore affordability to levels seen around 2004.

    Its report cited rising costs, larger project sizes and labour shortages last year that led to longer construction timelines, prompting various levels of government in Canada to announce new programs aimed at stimulating new rental housing supply.

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    The Canadian Press

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  • Down payment for a second home in Canada: How much do you need? – MoneySense

    Down payment for a second home in Canada: How much do you need? – MoneySense

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    So, how much of a down payment do you need for a second home? That depends on a few factors, including whether or not you intend to live at the property. 

    Down payment requirements in Canada

    Every Canadian home buyer is required to have a minimum down payment when purchasing property. A down payment is the money provided up front towards the purchase of the home, and it is directly tied to the value of the property. 

    When buying a home, the down payment rules in Canada are as follows:

    Purchase price Minimum down payment required
    $500,000 or less 5% of the purchase price
    $500,000 to $999,999 5% of the first $500,000 of the purchase price
    +
    10% of the portion of the purchase price above $500,000
    $1 million or more 20% of the purchase price

    If you’re buying a home priced under $1 million and your down payment is less than 20%, you’ll need to purchase mortgage default insurance, also known as mortgage loan insurance—which protects the lender if you can’t make your mortgage payments. Using a mortgage down payment calculator is the fastest and simplest way to figure out how much money you will need for your home down payment.

    Minimum down payment for a second home in Canada

    Contrary to popular belief, there’s no blanket 20% down payment requirement for second-home purchases in Canada. In fact, the down payment rules for a second home are similar to those listed above for single-property ownership, as long as the second home will be owner-occupied, meaning the owner will be living in it. 

    “You can purchase a second home with 5% down as long as the property is intended for family use throughout the year and the mortgage is under $500,000,” says Samantha Brookes, CEO of Toronto-based Mortgages of Canada. 

    The 5% down payment requirement applies to second homes with one or two units in them. For properties with three or four units, the minimum down payment jumps to 10%.

    Buildings with five or more units are considered commercial buildings, and they require a commercial mortgage. Depending on the property’s location and the buyer’s cash flow, lenders may require a buyer to have a down payment of 20% to 35% on commercial properties, according to Brookes. 

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    Sandra MacGregor

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