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Tag: first time home buyers

  • What is the price cap for insured mortgages in Canada? – MoneySense

    What is the price cap for insured mortgages in Canada? – MoneySense

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    “It is going to put the dream of home ownership in reach for more young Canadians,” Freeland told reporters Monday, announcing changes she said will come into force in December.

    How much do Canadians need for a down payment?

    The price cap for insured mortgages will be boosted for the first time since 2012, moving to $1.5 million from $1 million, to allow more people to qualify for a mortgage with less than a 20% down payment.

    “That is going to have a real impact for thousands, even millions of Canadians,” Freeland said.

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    What can you buy with a 30-year mortgage?

    The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home. On Aug. 1 eligibility for the 30-year amortization was changed to include first-time buyers purchasing a newly-built home. Freeland said this change better reflects the housing market while “giving first-time homebuyers a leg-up.”

    She pushed back on suggestions that the measures will only further inflate housing prices. She said boosting the price cap for insured mortgages reflects how Canada’s gross domestic product has grown over years. “It needs to keep up with the increase in the size of the Canadian economy,” Freeland said. “That’s just a recognition of economic reality.”

    Bill of rights for Canadian home buyers

    Justice Minister Arif Virani is also releasing drafts for a bill of rights for renters as well as one for homebuyers, both of which the government promised in its federal budget five months ago. Virani says the government intends to work with provinces to prevent practices like renovictions, where landowners evict tenants and make minimal renovations and then seek higher rents.

    Ottawa also wants to boost transparency by making sales price history available on title searches, and protect potential buyers from blind-bidding.

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    The Canadian Press

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  • High borrowing costs, record completions lead to condo oversupply – MoneySense

    High borrowing costs, record completions lead to condo oversupply – MoneySense

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    A report by TD economist Rishi Sondhi said sales activity hasn’t been absorbing supply fast enough, with July condo resales in the GTA down 25% from pre-pandemic levels.

    Sondhi said the trend is tied to factors such as a wave of newly built condos hitting the market, elevated borrowing rates that have made it difficult for some buyers to close on their mortgages, and investors looking to sell properties as declining rents and negative cash flow make them unprofitable.

    “The relatively elevated interest rate backdrop means that the gap between the rate of return from a condo in the GTA … and from a risk-free’ government bond has narrowed,” he said in the Sept. 5 report.

    “This may have reduced the incentive to hold a condo as an investment, although the recent drop in yields could be helping to re-widen this spread.”

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    Condo completions in the GTA

    Sondhi’s report showed there were around 19,000 condo completions in the region between January and July of this year, up from about 12,000 during the same seven-month period in 2023 and 10,000 the year before.

    The pace suggests this year could see “record high” condo completions in the GTA, said Brendon Cowans, a sales representative for Toronto-based brokerages Property.ca.

    “You can just imagine all of this supply coming in a high interest rate environment. It’s not a lovely combination,” he said.

    Active condo listings across the GTA were up 63.9% in July from the same month last year, growing from 5,416 to 8,879, according to data from real estate firm Zoocasa. The City of Toronto has seen a similar jump, with active condo listings increasing year-over-year by 61.5% in the same period.

    What’s happening in other major cities?

    Although the GTA leads the country in active listings gains, the trend is in line with other major cities across Canada. Year-over-year active condo listings rose more than 40% in London, Hamilton-Burlington, Mississauga and Ottawa in Ontario, as well as Vancouver. Montreal and Calgary each saw growth of about 23%.

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    The Canadian Press

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  • Variable mortgage rates regaining traction as Bank of Canada cuts rates – MoneySense

    Variable mortgage rates regaining traction as Bank of Canada cuts rates – MoneySense

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    Are more rate cuts likely?

    In announcing the rate cut Wednesday, Bank of Canada governor Tiff Macklem said if inflation continues to ease broadly in line with the bank’s July forecast, it is reasonable to expect further cuts in the policy rate. 

    Julie Leduc, a mortgage broker at Mortgage Brokers Ottawa, said clients with variable-rate loans were not happy when rates were rising, but the cycle is turning. 

    “We’ve lived the worst of it, we’re on our way out,” she said. 

    “So let’s look for the benefits and the benefit is, if they go variable and the rates go down, they’re going to live the benefit.”

    Right now, the rates offered to those looking for a new variable-rate mortgage or needing to renew are higher than those being offered for five-year fixed rate mortgages, something that Leduc called an anomaly.

    That’s because the expectations are that the Bank of Canada will continue to cut interest rates, lowering the amount charged to borrowers in the future. If something unexpected happens and the central bank doesn’t cut rates, then the rates charged on variable-rate mortgages won’t go down.

    What to expect if you’re mortgage holder

    But if things continue to roll out as expected, those choosing variable-rate loans will see the amount they are charged go down. Just how much and how quickly will depend on the central bank.

    Sojonky says the discounts lenders offer to the prime rate for variable-rate mortgages are also improving. 

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    The Canadian Press

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  • Open bidding in Ontario: Game-changer or business as usual? – MoneySense

    Open bidding in Ontario: Game-changer or business as usual? – MoneySense

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    Late last year, changes to Ontario’s real estate legislation, the Trust in Real Estate Services Act (TRESA), came into effect, making open bidding legal in Ontario. (Real estate is generally regulated at a provincial level, so as of now, these changes only apply to Ontario.) It was big news at the time, but has it made a big impact? Here’s what this legislation means for buyers and sellers in the province, and how it could influence the housing market.

    What is open bidding in real estate?

    Open bidding in real estate is when the details of all registered offers on a property are shared openly between prospective buyers. This means that if four different offers are registered on a house, the four potential buyers can see the specifics of each competitor’s offer, including the purchase price, deposit, closing date and other terms. The name of each person making an offer is withheld, and if the purchase is contingent on the sale of another property, that information is also confidential. 

    Unlike a closed bidding process—often referred to as blind bidding—open bidding allows each prospective buyer to know exactly how their offer compares to the competition. It also means that they can adjust their offer based on this information (within a given timeframe). Open bidding eliminates a lot of the guesswork in making an offer on a home, and it’s intended to maximize transparency between buyers and sellers.

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    What impact has open bidding had on Ontario’s housing market?

    In 2022, the federal government announced that it would be implementing a Home Buyers’ Bill of Rights. One of the goals of the bill was to make housing more affordable by putting an end to blind bidding, and it appears to have influenced the changes to the TRESA. However, blind bidding has not been banned in Ontario or anywhere else in Canada at this time. Because this new legislation makes open bidding optional, not mandatory, blind bidding is still commonplace in Ontario.

    “Open bidding brings more visibility to the buying process,” says Doug Vukasovic, a realtor in Toronto. That said, he isn’t seeing open bidding being used broadly yet: he’s only represented one buyer in an open bidding process, and so far none of his listing clients have opted to use open bidding. “It’s not something people are gravitating towards.”

    Based on what he’s seeing in Toronto, Vukasovic doesn’t think that open bidding will have an impact on real estate prices. Changes in the market will come from interest rates, he says, noting that after a slight cool-down in some regions, the demand for houses should gradually increase as mortgage lending costs continue to ease. In other words, affordability is the bigger factor. “We need lower interest rates for people to be comfortable placing an offer,” he says. 

    How can sellers decide if open bidding is right for them?

    Once you share the details of your listing with prospective buyers, there’s no going back—but you can change the bidding process from closed to open relatively easily. “At any point during the bidding war process, a seller can change from closed to open bids,” Vukasovic explains. “They just need to give written consent to the agent” and disclose the change to buyers. 

    It rarely benefits a seller to start with open bidding, Vukasovic says, but it can be helpful once several bids have been registered on the property. For example, if the top three offers on a million-dollar-plus home are within $20,000 of each other, a seller can open up the bidding process to encourage each of those prospective buyers to put in their best and final offer. In this situation, the buyers benefit from greater price transparency, and the seller wins if one of the bidders decides to increase their offer. 

    However, when the top two offers on a property are farther apart—say, by $100,000 or more—it’s unlikely that the seller would want prospective buyers to know that through open bidding, as the higher bidder might pull their offer to avoid overpaying for the property. This scenario is far less common than the one described above. “Someone’s got to stick their neck out a little, but paying hundreds of thousands over [the next best offer] is rare,” Vukasovic says. 

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    Erin Pepler

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  • A parents’ guide to home down payment gifts and loans – MoneySense

    A parents’ guide to home down payment gifts and loans – MoneySense

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    Loan forgiveness is an option

    If you loan money to a child, you can forgive the loan during your life or upon your death. Of course, you should only do so if you know you won’t need or want the money back in the future.

    If you have loaned different amounts of money to your children, documenting the loans can help ensure an equal division of your estate. Some wills include a so-called “hotchpot” clause that accounts for all loans outstanding, so that one child does not receive a disproportionate gift or forgiven loan, as well as an equal share of the estate.

    What are the tax implications of a gift or loan?

    There are generally no tax implications to gifting in Canada. This differs from the U.S., which has a gift tax. U.S. citizens in Canada still need to be mindful of these U.S. implications. Only two situations may trigger additional income taxes for the parent: selling an asset at a capital gain or withdrawing an asset from a tax-sheltered account a registered retirement savings plan (RRSP). But gifting itself has no tax issues with adult children.

    If a loan to your child was for investment or business purposes, forgiving it can have tax implications. This is in part because loan interest on funds borrowed to buy investments or fund a business is generally tax-deductible for the borrower.

    As a result, forgiveness of such a loan may lead to a capital gain for the lender—if it’s forgiven during your life. If the loan is forgiven upon your death, there should generally be no tax implications.

    If you loan money to a child to invest and the loan does not bear the Canada Revenue Agency prescribed rate of interest—currently 5%—the income may be attributed back to you and taxable to you. You can give an adult child money to invest and not be subject to attribution. But if you loan it and can call it back without charging the prescribed rate, the CRA will attribute interest, dividends, rental income and business income back to you. Capital gains, however, are taxable to the child.

    Before you loan or gift money for a down payment…

    When considering a gift or loan, you should first and foremost be sure that you are in a position to help your kids without risking your own financial security.

    There may be family law, estate and tax implications to making a loan. Seek legal and tax advice from a qualified professional to protect yourself and your family.

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    Jason Heath, CFP

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  • 6 things to consider before borrowing from the Bank of Mom and Dad for your first home – MoneySense

    6 things to consider before borrowing from the Bank of Mom and Dad for your first home – MoneySense

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    Before locking into a familial loan, both parties must assess whether they are on the same page and are in a position to take on this type of agreement—along with knowing the power and relationship dynamics that could come with it. Here are six key considerations when borrowing from the Bank of Mom and Dad for your first home.

    1. Is it a gift or is it a loan?

    Determine if the financial help you’re discussing with your family is a gift or a loan. “Make sure there’s good communication with regard to the parent and the child about the nature of this,” explains Nicholas Hui, P.Eng, CFP,  an advice-only Financial Planner at VAVE Financial Planning. “Is it a gift, or is it a loan? If it’s a gift, then I highly recommend having a ‘gift deed.’ A loan could be set up with some type of contract with payment terms and then seek legal advice to make it rock solid.” (More on gift deeds in a sec.)

    If it’s a gift

    If your parents gifted you money toward the down payment for your home purchase, then your mortgage lender may need proof of a gift deed or gift letter. In Canada, a gift deed is a legal document that transfers ownership of a property or asset from one party to another without exchanging money. This document confirms that the down payment amount from your parents is truly a gift and not a loan, which helps your lender verify the source—and nature—of the funds.

    Hui also suggests discussing with your family whether it’s part of an early inheritance and, if not, whether other siblings should be informed to prevent future miscommunication over the division of assets, especially after your parents pass away.

    If it’s a loan

    If you’re considering a loan from a family member, discuss interest. If your parents decide to charge interest, it’s not necessarily a bad thing. For one, it could be beneficial to keep those funds “in the family” and support the Bank of Mom and Dad instead of a financial institution or mortgage company. And you’ll likely benefit, too, if the agreed-upon interest rate is less than prime. 

    Hui says parents could consider using the prime rate of Canada as a guideline (currently 6.95%) and then go a little lower or higher than that—but he says it’ll depend on the dynamics, loan amount and other factors. 

    Whether interest will be charged or not, Hui suggests having all aspects of the agreement—repayment timeline and terms of the loan—put in writing so everyone is on the same page.

    2. Consider the tax implications 

    While there’s currently no “gift tax” in Canada, there are some tax implications to be mindful of. Interest charged on a loan is taxable income, so your parents will need to know that. “Like any investment, they’re loaning money to their child. If you pay them ‘income’ for that loan, it’s taxable,” Hui says.

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    Alicia Tyler

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  • Mortgage broker vs. bank—which will save you more money? – MoneySense

    Mortgage broker vs. bank—which will save you more money? – MoneySense

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    For most Canadians, using a broker is the wisest choice to save money, as they have access to a wider selection of products and should have more experience in going through the application process than you do. 

    However, not all brokers are made the same. Some specialize in mainstream lenders, others are more familiar with getting you a mortgage if you have impaired credit, while others tend to source mortgages for investment properties. Again, ask around, search online. Look at reviews and get referrals if you can.

    What to do before signing a mortgage contract

    Before signing your mortgage contract it’s worth reading the fine print, to make sure everything’s above board. Are you getting the interest rate you signed up for? What about the cost of any lender fees, like an arrangement or booking fee? 

    One important aspect is your “prepayment privilege,” which means how much you’re able to overpay your mortgage every month, shortening the time it takes to pay off the loan. It’s good to know where you stand, because by paying too much you can be charged a prepayment penalty, which makes paying it off faster not worth it.

    Buyers should view a survey of the property before signing the contract, as this can reveal if there are any issues with the home they’d need to deal with, and could even justify a renegotiation on the price. Surveys reveal the boundary of the home, so you have an idea of where you’re allowed to build on. In Canada most sellers take out the survey, known as real property reports (RPRs), and they should be scrutinized before you sign on the dotted line.

    If you’re buying a condominium—often the most affordable option in cities—you’ll want to review documents on how it’s run. Generally you join a condominium corporation where you have to pay fees which are used to manage common areas of the building, so it’s a good idea to know what you’re getting into.

    In the contract you should make sure any verbal agreements are in writing. For example if the seller informally agreed to leave some furniture as part of the purchase it’s best to make this official, just in case you get a nasty surprise when you move in.

    When getting a mortgage it’s important to make sure you don’t overburden yourself and have a backup plan if something goes wrong. Like, could you afford to repair a major leak if that happened? Do you have a plan of action on how you’ll be able to repay the mortgage if you lost your job? In some cases the latter issue can be mitigated by either taking out insurance, or using a guarantor when applying for a mortgage. 

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    Ryan Bembridge

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  • Where to Buy Real Estate in Canada 2024: Neighbourhood data – MoneySense

    Where to Buy Real Estate in Canada 2024: Neighbourhood data – MoneySense

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    For more information on real estate trends and the top neighbourhoods in each region, as well as insights on the top-ranked regions nationally, return to the national page or select a region from the drop down menu.

    Halifax Regional Municipality, N.S.

    Toronto, Ont.

    Peel Region, Ont.

    York Region, Ont.

    Durham Region, Ont.

    Halton Region, Ont.

    Edmonton, Alta.

    Calgary, Alta.

    Vancouver, B.C.

    North Shore, B.C.

    North Vancouver and West Vancouver

    Tri-Cities, B.C.

    Coquitlam, Port Coquitlam and Port Moody

    Burnaby, New Westminster and Richmond, B.C.

    Pitt Meadows and Maple Ridge, B.C.




    About Zoocasa

    Zoocasa is an award-winning consumer real estate search portal. It uses data and technology to deliver an intelligent, end-to-end real estate experience.

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    Zoocasa

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  • Best places to buy real estate in Vancouver – MoneySense

    Best places to buy real estate in Vancouver – MoneySense

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    Best places to buy real estate in Vancouver

    In the table below, you’ll find the best Vancouver neighbourhoods for real estate purchases. To view all the data, slide the columns right or left using your fingers or mouse. You can download the data to your device in Excel, CSV and PDF formats.

    Source: Zoocasa

    Top three neighbourhoods in Vancouver

    The steep price tag of homes in Point Grey is justified by their extravagant features. Sprawling mansions grace expansive properties that seamlessly blend into meticulously maintained streets. In spite of a 2023 benchmark home price of $2,532,842, Point Grey has seen steady price growth in recent years. In many Vancouver neighbourhoods, the benchmark home price stalled or fell over the last year, but Point Grey’s benchmark price was 6% higher than in 2022. It was 24% higher than in 2020 and 14% higher than in 2018, earning Point Grey a value score of 3.9. 

    Point Grey’s housing stock is mainly luxury houses, and many of Vancouver’s premier amenities are nestled within or near this opulent community. Everything is conveniently within reach, from top-tier schools like Queen Mary Elementary, Lord Byng Secondary, Jules Quesnel Elementary and West Point Grey Academy to exceptional recreational facilities like Jericho Tennis Club, Royal Vancouver Yacht Club and Brock House. While Point Grey may seem like an exclusive gated community reserved for the elite, a mix of residents calls this neighbourhood home, including working professionals, business owners, faculty members of the University of British Columbia, artists, university students and young families. One drawback of Point Grey is its accessibility score of 1.9, which is the third-lowest in Vancouver.

    View Point Grey real estate listings on Zoocasa.

    One of the more expensive areas of the city, Dunbar is located near the University of British Columbia campus. It’s home to a mix of high-income people and older residents who bought in years ago. That’s why you’ll find everything from enormous mansions to small bungalows in this neighbourhood. And it’s why Dunbar had a 2023 benchmark home price of $3,044,625. However, home prices aren’t increasing as fast as those in other Vancouver neighbourhoods. The benchmark price remained unchanged last year, and it was 12% higher than in 2020 and just 7% higher than in 2018. As a result, Dunbar has a value score of 1.8. Its neighbourhood economics score of 5.0 helped propel it to the number two spot on our list.

    Residents in this area love the local golf course and their easy access to the forested trails of Pacific Spirit Regional Park. Indeed, the area has a lot of parks—as well as riding stables nearby. While there are several great public schools in Dunbar, the area is known for its private schools, including Crofton House and St. George’s. Dunbar has a family feel, with many baseball diamonds and soccer fields for extracurricular activities. It’s no surprise that it has Vancouver’s highest concentration of households with children (at 51%). Because the housing stock is mostly single-family homes, Dunbar is not as accessible as other areas of the city, but it still has a decent accessibility score of 2.9 out of 5. 

    View Dunbar real estate listings on Zoocasa.

    Killarney is perched on East Vancouver’s south-facing slope, offering a scenic view of the Fraser River. Housing costs in this area are relatively more reasonable compared to downtown, offering home buyers a balance between affordability and proximity to the city centre. But having seen significant price growth in recent years, homes here are also a great investment. Killarney’s 2023 benchmark home price was $1,677,192, which was 1% higher than in 2022, 30% higher than in 2020, and 27% higher than in 2018. That works out to a value score of 4.4.

    As one of the newer neighbourhoods in Vancouver, Killarney radiates a stronger connection to nature and a distinct lack of congestion. However, it falls short in terms of accessibility, earning a neighbourhood accessibility score of only 0.7. Known for its tranquility, Killarney features small shopping plazas and residential cul-de-sacs. With four public schools, including the notable Killarney Secondary—the largest secondary school in Vancouver—the neighbourhood has a large number of households with children (47%).

    View Killarney real estate listings on Zoocasa.

    In 2013, Vancouver home prices followed a trajectory similar to those in other markets; the benchmark price continuously climbed until it reached a peak of $1,210,700 in July, and then it gradually declined, finishing the year at $1,168,700. Despite higher borrowing costs last year, the Vancouver real estate market still experienced price growth, with the benchmark price rising by about 5% from January to December. Most of this price growth occurred in the first half of the year, driven by an exceptionally limited supply of homes. 

    Demand for the more affordable home types stalled, while the luxury market saw less of a slowdown. “The price of luxury homes went up quite a bit last year,” says Geoff Pershick, a local eXp real estate agent. (Zoocasa, the author of this study, is wholly owned by eXp World Holdings.) “More homes sold for more money than expected, and it speaks to the influx of capital that is coming to the area.” 

    High interest rates deterred many sellers from listing last year and prompted many buyers, including cash buyers, to postpone their purchases. But better conditions are already emerging for 2024. 

    “The global wealth shift is ushering in an increasingly diverse group of buyers to Vancouver,” says Pershick. “Last year’s uncertainties might have slowed down [real estate] activity, but with interest rates finding their footing and a sense of stability returning, I’m expecting a resurgence of cash buyers.”

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    What’s next for real estate in Vancouver?

    The number of Vancouver home sales was up about 6% month-over-month in January, and up about 45% month-over-month in February, according to Greater Vancouver Realtors. If this momentum continues, the Vancouver real estate market is poised to have a stronger year in 2024 than in 2023.

    “As interest rates decline, we’re going to see a surge in buyers alongside a decrease in sellers within the Vancouver market,” says Pershick. “This imbalance will drive property prices up and shape a competitive landscape for potential home buyers.” 

    Though buyer sentiment is improving from 2023, the supply of Vancouver homes has remained scarce since last year, pushing the market further into seller’s territory. “Greater Vancouver is consistently grappling with supply challenges, and I don’t think that will change in 2024,” says Pershick.

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    Zoocasa

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  • Best places to buy real estate in Metro Vancouver – MoneySense

    Best places to buy real estate in Metro Vancouver – MoneySense

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    Between December and January, the benchmark home prices in Port Coquitlam and Coquitlam increased by about 3% and 2%, respectively. In Port Moody, the benchmark home price dipped by about 1%, but home prices will likely climb as the spring market kicks off.

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    Burnaby, New Westminster and Richmond, B.C. 

    The city of Vancouver is bordered by Richmond to the south, and by Burnaby and New Westminster to the east. Burnaby and Richmond are B.C.’s third- and fourth-largest cities, respectively, each with a population above 200,000.

    Best places to buy real estate in Burnaby, New Westminster and Richmond 

    In the table below, you’ll find the top neighbourhoods for real estate purchases in Burnaby, New Westminster and Richmond. To view all the data, slide the columns right or left using your fingers or mouse. You can download the data to your device in Excel, CSV and PDF formats.

    Source: Zoocasa

    Top three neighbourhoods in Burnaby, New Westminster and Richmond

    Situated in Richmond, Hamilton is just north of Annacis Island and the Annacis Channel, and west of Queensborough. Hamilton’s 2023 benchmark home price was $947,750 as a result of a consistent and stable increase in property values. The benchmark was 3% higher than in 2022, 37% higher than in 2020, and 22% higher than in 2018. This trend contributes to Hamilton’s impressive value score of 4.6.

    Hamilton is a distinctive neighbourhood with a blend of residential properties, predominantly single-family homes, alongside businesses and recreational facilities. It offers various amenities such as the Hamilton Community Centre, Hamilton Highway Off-Leash Dog Park, and the Bridges Marina. The neighbourhood boasts several parks, including the well-kept and popular Hamilton Community Park. Locals appreciate the trails that lead to the waterfront, a popular spot for dogs to take a swim. Hamilton has the highest percentage of households with children (57%) in this part of Metro Vancouver, by a significant margin. Families can send their kids to Hamilton Elementary School, the Choice School for Gifted Children, or Queen Elizabeth Elementary School. However, Hamilton has the third-worst accessibility score among the three cities, at 0.3.

    View Hamilton real estate listings on Zoocasa.

    In the southwest corner of Richmond lies the historic community of Steveston, where the powerful Fraser River meets the Pacific Ocean. Steveston is bordered by Williams Road to the north, the Fraser River to the south, No 2 Road to the east, and the Strait of Georgia to the west. The neighbourhood’s 2023 benchmark home price was $1,529,183, considerably higher than those of surrounding neighbourhoods. Home prices in Steveston Village have been on a slight upward trajectory. The benchmark home price was 1% lower than in 2022, but 28% higher than in 2020 and 17% higher than in 2018. As a result, Steveston has a modest value score of 2.0. However, it has by far the highest neighbourhood economics score in the region (5.0), which helped push it to the top. 

    So, what brings buyers to this neighbourhood? Following the closure of the fish canneries, significant residential development has transformed the area, with the emergence of new luxurious condominiums and townhomes reshaping the landscape. Residents benefit from outstanding local dining options, unique boutiques, a picturesque boardwalk that is popular among both tourists and locals, beach access, parks, playgrounds and biking trails—all enhancing Steveston’s charm. While primarily residential, Steveston has several parks near schools like Diefenbaker and James McKinney Elementary, along with the expansive Manoah Steves Neighbourhood School Park, which features four sports fields, three ball diamonds and a playground. The neighbourhood has one of the highest concentrations of households with children (49%).

    View Steveston Village real estate listings on Zoocasa.

    Nestled in North Burnaby, the Brentwood Park neighbourhood has traditionally offered a balanced mix of affordable single-family detached homes and condominiums. With The Amazing Brentwood housing spectacular developments, Brentwood Park is poised to become one of the largest urban destinations in North America. In 2023, the neighbourhood’s benchmark home price stood at $881,425. Home prices in Brentwood Park haven’t risen as rapidly as those in other neighbourhoods on our list. The 2023 benchmark price was 1% lower than in 2022, 18% higher than in 2020, and 11% higher than in 2018. This translates to a value score of 3.2. But Brentwood Park has one of the highest neighbourhood economics scores, 3.1, in this part of Metro Vancouver, behind only Steveston. 

    The neighbourhood boasts stunning views of Burnaby Mountain and the North Shore Mountains. Beecher Park offers forested areas, a sports field, a children’s playground and Beecher Creek, a local salmon spawning habitat connecting to Still Creek. Eileen Dailly Leisure Pool & Fitness Centre is well known for its swimming pool, children’s water play area, sauna and steam room, weight room, and more. The area is also home to the McGill Branch of the Burnaby Public Library. Public schools in Brentwood include Brentwood Park Elementary, for kindergarten to grade seven, and Alpha Secondary School, which offers an advanced placement program allowing students to take college-level courses while still in high school.

    View Brentwood Park real estate listings on Zoocasa.

    What happened in the real estate markets of Burnaby, New Westminster and Richmond?

    Real estate activity was stable in all three cities last year, and there was much less fervour compared to previous years. Home prices experienced modest price growth from January to December 2023, though this was due more to tight competition than increased demand. 

    Burnaby East experienced the most price growth, with the benchmark price rising about 7% from January to December. But the area is also the most expensive, with a December benchmark price of $1,157,400. New Westminster had the most affordable homes, with a benchmark home price of $815,600 in December, up about 4% from the beginning of the year. In Richmond, the benchmark home price rose from $1,109,200 in January to $1,153,400 in December—an increase of about 4%. 

    “Interest rates played a pivotal role in shaping affordability [in these areas], and there was a noticeable withdrawal from the market among potential buyers,” says Pershick. For the three cities combined, total home sales across all property types in 2023 came in below 2022 levels.

    What’s next for real estate in Burnaby, New Westminster and Richmond?

    Between December 2023 and February 2024, benchmark home prices in all three cities inched upward, suggesting a stronger start to the year than in 2023. Of the three, Richmond’s benchmark price increased the most, rising about 2% to $1,173,100 in February. Burnaby South has also experienced a decent increase, with the benchmark price rising by about 2% to $1,113,500 over the same period. 

    As of February, year-to-date sales for detached properties in Burnaby and Richmond are up compared to 2023. However, it’s Burnaby condo apartments that have gotten the most attention, with year-to-date sales up by about 19%. 

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  • Best places to buy real estate in the Greater Toronto Area – MoneySense

    Best places to buy real estate in the Greater Toronto Area – MoneySense

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    Top three neighbourhoods in York Region

    Nestled in Markham, Vinegar Hill is encompassed by Highway 7 to the north, Highway 407 to the south, and streets situated just west and east of Main Street South, with the Rouge River serving as its natural border. The neighbourhood is a sought-after residential destination known for its picturesque settings and historical charm. In 2023, its benchmark home price was $1,126,400—which was 44% higher than in 2022, 72% higher than in 2020, and 40% higher than in 2018.

    The community’s name is thought to have connections to either a cider mill located on the east side of the river valley or barrel makers who filled their barrels with vinegar to assess their straightness as they rolled down Markham Road. Slightly more than half (53%) of households in the area have children. Despite its desirability, Vinegar Hill has a relatively low accessibility score of 1.8—which is still higher than the other two top neighbourhoods in York.

    View Vinegar Hill real estate listings on Zoocasa.

    Located in the northeast part of King Township, Pottageville stands out for its distinctive topography and environmental importance. It’s situated atop the elevated ridges of the Oak Ridges Moraine and within the Ontario Greenbelt corridor, and it features an abundance of ranch-style bungalows and older homes. Coming in second among our top three neighbourhoods in York, Pottageville had a benchmark home price of $1,657,917 in 2023, and a value score of 3.3. The benchmark price was 55% higher than in 2022, 27% higher than in 2020, and 113% higher than in 2018. With above-average levels of household income, education and home ownership, Pottageville has a perfect neighbourhood economics score. 

    It also has an above-average number of families with children, representing 56% of households. With easy access to the Greenbelt Route, a province-wide bike trail, it’s the perfect area for bikers. Pottageville may only have a general store, a gas station and a few small businesses, but there’s ample recreational space centred around Pottageville Community Park, which features a playground, a baseball diamond, tennis courts and soccer fields. There’s a train station a 10-minute drive away, making it easy to commute to Toronto, but the neighbourhood still only has an accessibility score of 0.4.

    View Pottageville real estate listings on Zoocasa.

    Concord benefits from excellent commuter highway access, with both Highway 407 and Highway 7 passing through. In 2023, Concord’s benchmark home price was $742,158, which was 2% lower than in 2022, but 9% higher than in 2020 and 54% higher than in 2018. The area has the second-highest value score (3.6) of our top three York neighbourhoods, and it does well on neighbourhood economics as well, scoring 4.6. 

    Concord residents often spend their time enjoying recreational and leisure activities. One popular destination is Vaughan Mills shopping centre, with its many retail stores, entertainment options and family-friendly attractions. Locals can also explore Concord’s natural beauty while visiting Boyd Conservation Area or Black Creek Pioneer Village. Many families live in modest brick detached homes and townhomes with single-car garages, which are popular in the area.

    View Concord real estate listings on Zoocasa.

    What happened in the York Region real estate market?

    In 2023, York Region’s home prices fell less than those in other regions of the GTA. In January, the benchmark home price was $1,285,583, and by December, it had dropped 0.4% to $1,281,020. But with mortgage rates as high as they were last year, the market was never able to gain much momentum. 

    “Last year, as banks tightened their borrowing criteria, we saw a decrease in sales while average prices remained relatively flat or decreased just a little,” says Kirby Chan, a local eXp real estate agent. “It was tough,” he says, because even though prices came down a bit, interest rates were so high that mortgage affordability suffered.

    Buyer uncertainty played a big role in slowing down home sales, as many people were hesitant to enter the market amid the anticipation of rising interest rates. The number of home sales in York stayed above 1,000 during the spring and summer, but trickled off in July. In December, there were only 612 sales.

    What’s next for real estate in York Region?

    January started off with a boost in home sales, suggesting the market is rebounding. Home sales were up about 27% from December and about 42% from January 2023.

    “Buyers are coming out now into the market, and there’s a positive outlook on how the market is going to look this year,” says Chan. “But if buyers wait until interest rates come down, then prices will go up and their buying power will go down.” 

    York Region buyers could face more competition than last year, as would-be Toronto buyers are attracted by the area’s comparable affordability. “With the city of Toronto increasing property taxes soon, I think there’s a good possibility this will drive more buyers into York Region and areas like Markham, Richmond Hill and Vaughan,” says Chan. 

    Assuming mortgage rates go down and buyer confidence returns, Chan expects this year to be a strong one for York Region real estate. “Sales-wise and price-wise, I think we’re going to have a record year in 2024. Last year, the government raised interest rates to cool everything down, and so there were fewer sales. That means there’s a lot of buyers out there waiting, and this pent-up demand is going to push prices even higher.”

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  • Best places to buy real estate in Halifax in 2024 – MoneySense

    Best places to buy real estate in Halifax in 2024 – MoneySense

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    Best places to buy real estate in Halifax

    In the table below, you’ll find the top Halifax neighbourhoods for real estate purchases. To view all the data, slide the columns right or left using your fingers or mouse. You can download the data to your device in Excel, CSV and PDF formats.

    Source: Zoocasa

    Top three neighbourhoods in Halifax

    For the second consecutive year, Cole Harbour is the top place to buy a home in HRM. Located east of Dartmouth, Cole Harbour is named after a local harbour. It has easy access to Highway 107 and Highway 111, making it an attractive location. Cole Harbour’s 2023 benchmark home price was $505,774, and that’s the result of consistent price growth in recent years. The benchmark price was 13% higher than in 2022, 66% higher than in 2020, and 69% higher than in 2018, giving Cole Harbour a value score of 4.0. It also has a neighbourhood economics score of 4.3, the third-highest in HRM. 

    The area has several schools—a convenience for the above-average 47% of households with kids. Residents love the area’s beaches and trails, including the Salt Marsh Trail and Rainbow Haven Beach Provincial Park. Cole Harbour is also a popular tourist destination: the quaint Cole Harbour Heritage Farm Museum and Fisherman’s Cove are two must-see stops. However, with the neighbourhood’s accessibility score of 0.6, you’ll likely need a car to get around.

    View Cole Harbour real estate listings on Zoocasa.

    Situated on the Eastern Shore of HRM near the Shearwater Canadian Air Force base, Woodside-Eastern Passage is a popular destination for military families due to its mid-sized community feel. Boasting a dozen eateries, convenient access to Halifax through the Woodside Ferry, the main Nova Scotia Community College campus and abundant character, this emerging neighbourhood proves to be a smart investment and a delightful place to live. Woodside-Eastern Passage’s benchmark home price was $432,486 in 2023, which was 18% higher than in 2022, 64% higher than in 2020, and 97% higher than in 2018. It’s the only neighbourhood in HRM with a perfect value score of 5.0. 

    The area features multiple recent subdivisions that provide a variety of housing options, including semi-detached and detached homes. There are many elementary, junior high and high schools that cater to the 45% of households with children. Like most places in HRM, you’ll likely need a car to live here, though.

    View Woodside-Eastern Passage real estate listings on Zoocasa.

    Located a mere 10 minutes from the airport and 30 minutes from downtown Halifax, the Waverly-Fall River-Beaver Bank area is renowned for its scenic landscape, featuring numerous lakes, expansive open spaces and generously sized lots. It also has the most expensive homes of the top three neighbourhoods on our list, with a 2023 benchmark price of $666,815. That was 8% higher than in 2022, 62% higher than in 2020, and 83% higher than in 2018. Notably, Waverly-Fall River-Beaver Bank has the second-highest economics score on our HRM neighbourhoods list.

    All homes in this area use septic systems; some rely on wells for water, while others are connected to city water. Residential lots are spacious and feature a range of traditional-style homes. Many residences boast lake access, and some even enjoy a lakefront setting. The neighbourhood has many sought-after schools. While the area may have limited amenities, it boasts a well-established canoe and kayak club, multiple daycare facilities, a post office and a convenience store. Living in Waverly-Fall River-Beaver Bank may necessitate owning a car, given its accessibility score of 0.1.

    View Waverly-Fall River-Beaver Bank real estate listings on Zoocasa.

    Unlike the ups and downs of 2022, Halifax real estate prices did not sharply increase or decrease in 2023. The benchmark price consistently rose from January through the end of the spring market and reached a late peak of $530,900 in August. Following this, home prices softened before experiencing a modest rise in December, settling at a benchmark price of $511,600. 

    “In the first quarter of 2023, prices and sales were up, but then the market really slowed down after the spring,” says local eXp real estate agent Richard Payne. (Zoocasa, the author of this study, is wholly owned by eXp World Holdings.) “Properties were lingering on the market longer, and we didn’t see multiple offers on a home anymore. By the second half of the year, buyers had shifted to a more cautious stance, preferring to wait on the fence to see how conditions would evolve.”

    As interest rates rose in the summer, buyers experienced some frustration, which morphed into confusion about what to expect from the market, says Payne. “Once buyers got confused, they didn’t feel confident to make any decisions, and this contributed to the slowdown in market activity.” 

    The uncertainty also influenced buyers’ budgets. “A lack of affordable options, especially in the $400,000 to $600,000 range, pushed many buyers to look out of the core and into more of the suburbs,” says Payne. “Homes in that range were getting more attention as interest rates rose.”

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    What’s next for real estate in Halifax?

    The benchmark home price in Halifax has increased by a little more than 1% since December, reaching $518,500 in January. With demand expected to rebound, price growth will likely continue, though that will depend on the mortgage rate outlook. 

    Payne expects the opposite of 2023 to unfold in 2024—with a quiet start to the real estate market, followed by an active second half. “In the beginning of 2023, activity was fairly up, and then as interest rate hikes were announced, it put the brakes on momentum,” he says. “This year, I anticipate a surge in activity in the second half of the year as buyers catch on to falling interest rates and rush back into the market.”

    Buyers who were sitting on the sidelines last year may be better positioned to join the market in 2024. An influx in buyer activity might also encourage more sellers to list their homes, leading to a much-needed bump in the number of homes on the market. 

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  • 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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  • Gen Z and millennials look to relatives for down payment funding

    Gen Z and millennials look to relatives for down payment funding

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    HOUSTON, Texas — The real estate market is still a tough sell for first-time home buyers.

    The country is experiencing the highest mortgage rates and home prices in a generation, and a lot of people are having a hard time saving up for a down payment.

    Local real estate expert Tricia Turner said the pandemic is behind us, but there are still lagging factors from lockdowns impacting the market. Many young people moved in with their parents, and now those relatives are ready for their kids to relaunch.

    SEE ALSO: Texans are paying the 7th highest property taxes in the United States, report shows

    Turner also explained that there’s other assistance available for first-time home buyers, even if they don’t have family members who can help them with money for a down payment.

    You can watch Turner’s full interview in the video player above.

    For updates on this story, follow Briana Conner on Facebook, X and Instagram.

    RELATED: Average Houston home buyer needs 70% more income than in 2020, study finds

    Prospective homebuyers in Houston’s housing market need to drop big money as mortgage rates lock in at record numbers, officials say.

    Copyright © 2024 KTRK-TV. All Rights Reserved.

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  • Buying pre-construction: What if your home is worth less than you paid? – MoneySense

    Buying pre-construction: What if your home is worth less than you paid? – MoneySense

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    What are your options if you find yourself in this situation? Let’s look at the intricacies of buying a pre-construction home in Canada, why some buyers are having difficulty closing on their purchases, and steps you can take to avoid losing a large deposit.

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    How does buying a pre-construction home work in Canada? 

    Generally, pre-construction homes offer several key benefits. For one, the property is brand new. Unlike with a resale home, you can customize a new home right down to the finishes and countertops. And because the home is new, you can expect to spend a lot less on repairs and maintenance.

    New homes also give you more time to save. With resale homes, you typically must pay the deposit and down payment within a 30-to-90-day timespan. With new homes, the deposit can often be spread over several months or years.

    In case you’re new to buying pre-construction homes in Canada or you’d like a refresher, here are some important details to be aware of.

    Payment schedule for pre-construction homes

    Unlike a resale home when you usually pay the deposit within 24 hours of your offer being accepted, with a pre-construction home there’s typically a deposit payment schedule.

    With a pre-construction home, you’re usually expected to have a down payment of between 20% and 25%. This may sound like a lot at first, but the amounts are spread over several months and years. For example, you may be asked to make a deposit of $3,000 at the time of making an offer, followed by 5% within 30 days of the offer, 5% within 90 days, 5% within 180 days and a final 5% at the time of occupancy.

    Oftentimes, the deposit structure is up for negotiation. If the builder’s payment schedule doesn’t work for you, you should try to negotiate one that does.

    Mortgage rules for pre-construction homes

    In Canada, mortgage rules are the same for a new home as a resale home. For example, you’re required to pass the mortgage stress test in both cases. However, a key difference is timing. With a new home, you don’t know what mortgage rates will be when the property closes. Mortgage rates could be the same, or they could be higher or lower. This adds uncertainty. Without knowing what mortgage rates will be, you actually don’t know if you’ll be able to afford the property in the future.

    There’s also the issue of the property value for mortgage lending purposes. Lenders don’t sign off on the mortgage for a pre-construction home until the time of closing. You make an offer without financing, then hope to get financing at the time of closing.

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  • Fixed or variable mortgage rate: Which should you choose in 2024? – MoneySense

    Fixed or variable mortgage rate: Which should you choose in 2024? – MoneySense

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    It’s been a tough time for home owners (and first-time home buyers), but the Bank of Canada (BoC) has held interest rates steady since July 2023, and the latest economic data is leading experts to suggest that interest rate cuts may be on the horizon. So, what can Canadians expect from interest rates in the months and years ahead, and what does that mean for fixed mortgage rates and variable mortgage rates? We spoke to an economist and a mortgage broker to get a better sense of what’s ahead, and whether a fixed or variable rate is your best option in 2024.

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    What happened with interest rates in 2022 and 2023?

    Rates went up significantly over the past two years, and a lot of it had to do with post-pandemic inflation.

    “Central banks had to react very aggressively to the spike in inflation, and they jacked up interest rates significantly—475 basis points since March 2022,” says Robert Hogue, assistant chief economist at RBC Economics. (One basis point is equal to one hundredth of a percentage point. And 475 BPS means 4.75%.) “This is easily the most aggressive monetary policy we’ve seen in at least a generation.”

    John-Andrew Newman, a mortgage broker in Oakville, Ont., notes that this aggression was essentially a side-effect of the economic impacts of the COVID-19 pandemic. “The COVID environment brought all rates down because the government influenced the interest rate marketplace in a way that was intended to help Canadians manage the effects of various lockdowns,” Newman explains. “They went extreme in one way, which led to inflationary factors peaking after [COVID], and then interest rates started to go up.” 

    Rates climbed quickly to help tame decades-high inflation. “There was almost a whiplash effect [after COVID] as rates went up to the other extreme—and that’s where we are today,” Newman says.

    Many mortgage holders with fixed-rate mortgages secured before the pandemic now face steep payment increases at renewal. Canadian mortgage holders with variable rates are also dealing with higher costs, though the impact has not been the same for everyone—some have seen their payments increase with every hike in the prime rate, while others haven’t. 

    With a variable mortgage with adjustable payments (sometimes referred to as an adjustable-rate mortgage), the mortgage payments fluctuate in response to changes in the lender’s prime rate. Borrowers with this type of mortgage watched their payments increase as interest rates began to rise. 

    However, many variable-rate holders have a mortgage with fixed payments. As interest rates rose, their mortgage payment stayed the same, but the amount of principal paid each month decreased as the amount of interest paid went up. Some of these borrowers have seen their amortizations stretched to point that their payments are almost interest only, Newman says. Some have reached their trigger rate—the point at which the mortgage payment no longer covers the mortgage interest costs.

    This is one of the reasons it’s important to know what type of variable mortgage you have—the former can have a far bigger impact on your budget and cash flow in the short term, and the latter can result in a sudden spike when renewing your mortgage. That increase may be challenging for many mortgage holders to navigate, particularly if they’ve gone into negative amortization (when the monthly mortgage payments aren’t high enough to cover the interest owed on the loan). 

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  • Renting vs. owning: Can you be financially secure without buying a home? – MoneySense

    Renting vs. owning: Can you be financially secure without buying a home? – MoneySense

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    I don’t expect real estate prices to rise at the same 6.75% rate we have seen over the past 10 years, so instead, let’s say prices rise at 4% per year. Some people may think that number is high, while others may think it is low. But if you look back at U.S. residential real estate appreciation since 1890, which looks to be similar here in Canada, prices have only risen by a bit more than the rate of inflation, so even 4% may be generous. Nevertheless, assuming 4% growth is correct, the condo would be worth $740,122 after 10 years. Home equity, representing the condo’s value minus the mortgage balance, would be $471,613.

    What if someone could rent the same $500,000 condo for $2,000 per month (a number that might seem high or low depending on where you live)? Compared to making monthly mortgage payments on that same property, the renter would be saving $559 per month. Their rent would rise over time, say, at 2% per year, so the $599 per month of savings would decrease over time.

    Now, let’s say they invested their initial $100,000 (the amount that would have been used on a down payment) and $559 a month (a number that would decrease as rent increased) into a tax-free savings account (TFSA). If they earned 4% per year on their investment, they would have $204,396 after 10 years. The buyer, with $471,613 of home equity, is clearly better off than the renter, right?

    The problem here is you cannot just compare the mortgage payment to the monthly rent. Owning has other incremental costs that might include:

    Property tax: $200 monthly (not ap
    Condo insurance: $10 or more per month, compared to tenant insurance
    Condo fees or repairs: $500 more per month, compared to renting

    Property tax rates can vary significantly depending on where you live. And condo fees and repairs can vary, depending on the age and amenities in the building. But if we added another $710 per month from the categories above to the renter’s monthly investment deposits, the renter would have $319,117 accumulated after 10 years. The same tax-free TFSA return of 4% is assumed, perhaps in their spouse’s TFSA.

    The owner would still have 471,613 in home equity. So, owning is still better than renting, right?

    Let’s not forget there are costs to buy and sell real estate. It could cost $10,000 in land transfer tax, legal fees and other costs to buy, and another $40,000 to sell after 10 years. If the renter added these amounts to their investments, they would be at $373,919. The buyer is still ahead of the renter with $471,613, but as you can see, the gap is closer.

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    Jason Heath, CFP

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