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Tag: home buying

  • How to choose the best appraisal firm – MoneySense

    1. Look for designated appraisers (AIC Members)

    The first and most important factor is credentials. Ensure the firm’s appraisers are designated members of the Appraisal Institute of Canada (AIC)—either CRA (Canadian Residential Appraiser) or AACI (Accredited Appraiser Canadian Institute).

    These designations guarantee that your appraisal report meets Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP) requirements, ensuring credibility and acceptance by:

    • Major banks and lenders
    • Lawyers and accountants
    • The Canada Revenue Agency (CRA)

    2. Choose a firm with local market expertise

    Canada’s real estate market is diverse and constantly evolving. From urban condos to suburban family homes and rural properties, each region has its own unique value drivers. Choose an appraisal firm with deep local market expertise and access to regional MLS data through the appropriate real estate board.

    Local expertise ensures accurate valuations that reflect true market conditions and recent comparable sales.

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    3. Review their range of services

    Different situations require different types of appraisals. A reputable firm should offer a comprehensive range of appraisal services, including:

    • Mortgage financing & refinancing appraisals
    • Estate and probate appraisals
    • Retrospective (historical date) appraisals
    • Tax and capital gains appraisals
    • Separation or divorce appraisals
    • Pre-listing or pre-purchase appraisals

    Having a firm that specializes in multiple areas ensures they can handle any appraisal purpose you need—with consistency and professionalism.

    4. Check turnaround time and communication

    Timely service is crucial, especially when deadlines matter for refinancing, court filings, or estate settlements. The best appraisal firms maintain clear communication, reasonable turnaround times, and transparent pricing. Ask upfront:

    • What’s included in the quote?
    • How long will it take to receive the final report?
    • Will my lender or lawyer accept the report?

    Firms that prioritize client communication are typically the most reliable.

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    5. Read client reviews and testimonials

    Before choosing an appraiser, read Google Reviews and client testimonials. Positive reviews often highlight qualities such as professionalism, accuracy, and reliability—all signs of a reputable firm.

    Look for reviews that mention:

    • Clear explanations of value
    • Professional service and punctuality
    • Easy-to-read, detailed reports

    6. Compare quotes—but don’t choose based on price alone

    While cost matters, the cheapest quote isn’t always the best choice. A lower price can sometimes mean less experience, limited data access, or generic reports that aren’t accepted by banks or lawyers.

    Instead, focus on value for service: accuracy, reliability, and professional certification should come first. A reputable firm like Walson Consulting Inc., for example, offers:

    • Certified appraisers—reports prepared by accredited professionals
    • Standards compliance—following CUSPAP or other recognized appraisal standards
    • Local market expertise—knowledge of the neighborhoods or regions relevant to your property
    • Reasonable turnaround times—efficient service without sacrificing accuracy
    • Transparent pricing—clear quotes and no hidden fees

    Whether you need an appraisal for financing, estate planning, or tax purposes, you want to ensure that the firm you choose delivers accurate, credible, and professional valuation reports you can trust.

    Final thoughts

    Choosing the best appraisal firm doesn’t have to be complicated. Focus on credentials, experience, communication, and reputation, and you’ll find a firm that provides the accuracy and confidence you need.

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    About Tejveer S. Walia, P.App, CRA


    About Tejveer S. Walia, P.App, CRA

    Tejveer S. Walia is a designated appraiser with Appraisal Institute of Canada (AIC) and the founder of Walson Consulting Inc., serving homeowners, lawyers, and estate professionals across the Greater Toronto Area (GTA).

    Tejveer S. Walia, P.App, CRA

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  • How To Convince a Seller To Accept Your Offer

    Key takeaways

    • Strong offers balance price, financing strength, and clean terms. 
    • Sellers prefer certainty—limiting contingencies and offering flexibility can help. 
    • Emotional appeal and professional representation both play key roles in acceptance. 
    • Speed matters: competitive buyers act quickly in active markets.

    How to convince a seller to accept your offer in today’s competitive market

    Buying a home isn’t just about finding the perfect property—it’s also about persuading the seller that your offer is the right one. The National Association of Realtors (NAR) reports that homes in 2024 received an average of 2.7 offers nationwide, underscoring the continued competitiveness of the market.

    According to Redfin’s article “Highest and Best Offer: How to Win the House You Want,” sellers often value a smooth, certain closing over simply the highest bid. The strongest offers balance financial strength, clean terms, and respectful communication, giving sellers the confidence to say yes.

    1. Lead with your strongest offer

    Competitive pricing remains the most important factor in convincing sellers to accept an offer. Redfin data shows that homes priced accurately typically sell within about 15 days, while underpriced bids often fail to receive a counteroffer.

    Lead with your strongest price, especially in a multiple-offer situation. Even a small increase of 1% to 2% above the list price can help your offer stand out when others cluster at asking.

    2. Show solid financing

    A preapproval letter from a reputable lender, such as Rocket Mortgage, signals reliability to sellers. In fact, sellers view preapproved buyers as 58% more likely to close smoothly than those who are only prequalified.

    Always provide updated preapproval documentation and proof of funds for your down payment. Whenever possible, work with a well-known local or national lender recognized by listing agents; this helps reassure sellers that your financing won’t hold up the deal.

    3. Offer a competitive earnest money deposit

    Earnest money shows the seller you’re serious about buying their home. Most buyers put down 1% to 2% of the purchase price, but increasing your deposit to 3% to 5% can make your offer stand out. Some buyers even make a portion of their deposit nonrefundable once contingencies are cleared, an extra signal of commitment.

    4. Limit contingencies

    Contingencies are designed to protect buyers, but they can also create uncertainty for sellers. Shortening inspection timelines, covering potential appraisal gaps, or reducing financing or sale contingencies can make your offer more appealing. The fewer the unknowns, the more confident sellers feel about moving forward with you.

    5. Be flexible with closing and possession

    Timing can be just as important as price. Some sellers want to close quickly, while others may need extra time to move. Ask your agent to find out what works best for the seller, and consider offering a rent-back option if they need more time. A little flexibility can go a long way toward making your offer more attractive.

    6. Write a personal letter (with care)

    A short, sincere note can help you stand out in a sea of offers. Keep your buyer letter focused on what you love about the home and how you see yourself living there. Avoid making assumptions about the seller; instead, express genuine appreciation for their property. It’s a small, human touch that can make a big impression.

    7. Work with an experienced agent

    In a competitive market, having a skilled real estate agent can make all the difference. A reputable agent communicates clearly with the listing agent, anticipates counteroffers, and knows how to highlight the strengths of your offer. Their professionalism can help your bid get noticed and taken seriously.

    8. Consider a cash or near-cash offer

    Cash offers tend to stand out because they eliminate financing uncertainty and can close more quickly. If you can’t offer all cash, increasing your down payment or showing proof of additional funds can help demonstrate your financial strength and reliability.

    9. Add an escalation clause

    An escalation clause automatically increases your offer up to a set limit if another buyer bids higher. It’s a smart way to stay competitive without overpaying. Be sure to work with your agent to structure the clause clearly and transparently so both sides feel confident about the process.

    10. Offer creative incentives

    Small gestures can help your offer rise to the top. Consider covering a portion of the seller’s moving costs, offering flexible leaseback terms, or including a home warranty to ease post-sale concerns. These thoughtful extras can make your offer feel more personal and appealing without necessarily increasing your price.

    Frequently asked questions

    1. Should I waive the home inspection to make my offer stronger?
      Not entirely. Instead of waiving it, shorten the inspection period or agree to limit repairs to safety issues. This keeps your offer competitive without taking unnecessary risk.
    2. Does offering over the asking price guarantee acceptance?
      No, but it increases your chances. Sellers often weigh overall terms, not just price. A clean, well-structured offer may beat a higher but riskier one.
    3. How fast should I act once I find the right home?
      Immediately. Homes in many markets go under contract in less than two weeks. Quick action shows motivation and can help secure the deal before others bid.

    How to convince a seller to accept your offer and close the deal.

    Convincing a seller to accept your offer takes more than enthusiasm; it requires strategy, speed, and preparation. By combining strong financial footing, clear communication, and the guidance of a skilled agent, you can stand out in any market. Whether you’re a first-time buyer or moving up, these strategies can help turn your dream home into your new address.

     

    Jasica Usman

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  • Sales up, prices down in GTA housing market – MoneySense

    The Toronto Regional Real Estate Board said the 5,592 homes sold last month was up 8.5% from September of last year, and up 2% on a seasonally adjusted basis from August. The rise in sales came as the average selling price was down 4.7% from last year to $1,059,377, and the composite benchmark price was down 5.5% in September. Compared with August, the average selling price ticked up 0.2%. 

    “The Bank of Canada’s September interest rate cut was welcome news for homebuyers,”  said TRREB president Elechia Barry-Sproule in a press release. “With lower borrowing costs, more households are now able to afford monthly mortgage payments on a home that meets their needs.” 

    The central bank cut its benchmark rate by a quarter-percentage point to 2.5% on Sept. 17, breaking a streak of three consecutive holds since March.

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    GTA home sales show early rebound

    Consumers are starting to recognize “a new normal” when it comes to the economic and political situation, said Cailey Heaps, president of the Heaps Estrin Real Estate Team in Toronto. Although the GTA has not returned to the peak levels of activity seen during the pandemic years, there are “rays of sunshine within the market,” said Heaps.

    “We’re likely near the bottom or climbing out of the bottom, so it feels like opportunistically a good time to enter (the market),” she said in a phone interview. “I think there’s sort of this buyer mindset of, ‘It’s OK to buy again.’”

    New listings of 19,260 were up 3.9% from last year, and down 3.3%, seasonally adjusted, from August. Active listings were up 18.9% from last year with 29,394 homes on the market.

    In the City of Toronto, there were 2,063 sales last month, a 13.2% increase from September 2024. Throughout the rest of the GTA, home sales were up 5.9% to 3,529. Overall, all property types saw more sales in September compared with a year ago throughout the region. The largest increase was in the semi-detached segment, which was up 11%, followed by detached houses with a 9.6% increase and condos with a 7.2% increase. The number of townhouses that changed hands was 4.4% higher than in September 2024.

    Lower rates may spur buyer activity

    The board said more interest rate cuts from the Bank of Canada could help further push up sales.

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    “While home sales have improved over the past year, they still remain below normal levels relative to the number of households in the GTA,” said the board’s chief information officer Jason Mercer. “Two more 25-basis-point interest rate cuts by the Bank of Canada would see monthly mortgage payments move more in line with homebuyers’ average incomes, further spurring home sales and related economic activity.”

    Heaps said “it will be some time” before the market truly soars back to peak levels, but continued interest rate cuts are one factor that will lure potential buyers off the sidelines. “We need to see tightening of inventory and that will just inherently happen as buyers re-enter the market,” she said. “From a broader perspective, people just need to get comfortable that the Canadian economy is heading in the right direction.”

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    About The Canadian Press


    About The Canadian Press

    The Canadian Press is Canada’s trusted news source and leader in providing real-time stories. We give Canadians an authentic, unbiased source, driven by truth, accuracy and timeliness.

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  • Canadian home sales hit four-year August high as fall market heats up – MoneySense

    The association said there were 40,257 home sales across the country last month, up 1.9% from 39,522 in August 2024. Home sales also rose 1.1% on a month-over-month basis, marking the fifth straight monthly increase. Transactions have risen a cumulative 12.5% since March.

    Toronto slows, but other major markets drive gains

    Unlike in recent months when gains were led overwhelmingly by the Greater Toronto Area, sales in that region were down slightly month-over-month in August. But the association said this was more than offset by higher sales in Montreal, Greater Vancouver and Ottawa.

    CREA senior economist Shaun Cathcart said the upward trend in activity could accelerate this fall as the season usually brings a surge of new supply. “Part of what drives sales at different points in the year is the availability of a lot of fresh property listings for buyers to buy. For the fall market, that always happens right at the beginning of September, and this year was no exception,” he said in a press release. “If last year is any kind of guide, then there is the potential that sales could really pick up in the next month or so depending on how many buyers are drawn off the sidelines, particularly if we see a September rate cut by the Bank of Canada.”

    The central bank is set to announce its latest interest rate decision on Wednesday. Financial markets expect the Bank of Canada to cut its policy rate by a quarter point to 2.5%, ending a streak of three consecutive holds.

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    Atlantic sales slightly ahead of last year despite challenges

    There’s been “muted momentum” as of late in Atlantic Canada, said Halifax-based broker Matt Honsberger, who noted the region experienced a downturn earlier in the year due to uncertainty related to tariffs. Honsberger, president and owner of Royal LePage Atlantic, referred to the Maritime housing market as a “kiddie-coaster” when compared with the larger swings of Toronto’s roller-coaster market. He said Atlantic Canada has seen “much less significant” ups and downs from the U.S.-Canada trade war.

    “We were of course affected by tariffs. People just become uncertain and when you’re uncertain you don’t make a big purchase, so we definitely expected a busier spring than we got,” said Honsberger. “But at this point in the year given everything that’s gone on, to be slightly ahead of where we were this time last year in terms of the number of trades, I think we’ll all take it. Hopefully we’ll continue to build momentum into next year as people get more and more comfortable with the geopolitical environment.”

    Canada’s average home price up 1.8% year-over-year

    CREA said new listings were up 2.6% month-over-month nationally in August. There were 195,453 properties listed for sale across Canada at the end of August, up 8.8% from a year earlier. The actual national average sale price of a home sold in August was $664,078, up 1.8% from a year ago. CREA’s own home price index, which aims to represent the sale of typical homes, ticked 0.1% lower between July and August 2025.

    TD economist Rishi Sondhi said improving demand should contribute to the continued growth of average home prices. He said supply and demand conditions are still “relatively tight” across several provinces. “In contrast, market balances favour buyers in B.C. and Ontario,” Sondhi said in a note. “However, average home prices in these markets have been lifted by the outperformance of more expensive housing in recent months, and we assume this trend will continue in coming months.”

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    Honsberger said despite renewed demand, it’s important that sellers price their properties appropriately as the market isn’t yet seeing all-out bidding wars.

    “What we’re hearing from clients is that sellers still want to potentially overprice their property a little bit and buyers are just saying, ‘I’m not interested. I’ll just wait it out,’” he said. “It’s still a healthy market … If you put it on at the right price now, you should expect some level of activity, and you should probably expect to sell it in a reasonable amount of time.”

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    About The Canadian Press


    About The Canadian Press

    The Canadian Press is Canada’s trusted news source and leader in providing real-time stories. We give Canadians an authentic, unbiased source, driven by truth, accuracy and timeliness.

    The Canadian Press

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  • Helping your kids buy a home? Why a cash gift may be safer than co-signing – MoneySense

    “The most important thing to understand about co-signers is that if there are four people on the mortgage, each of them is not responsible for 25%; each one of them is responsible for 100%,” said Ron Butler, principal broker at Butler Mortgage.

    Co-signing a mortgage can be a risky commitment

    At several major lenders in Canada, he noted that only one person listed on the mortgage agreement needs to sign for a renewal to take effect. “There could be four people on the mortgage. The bank will accept the sign-off of one single person to process the renewal, and once the renewal is processed, it’s all locked in for another five years,” he said.

    Butler said once you co-sign, it’s extremely difficult to remove yourself from the mortgage. “You should probably never co-sign, to be honest with you. Co-signing, guaranteeing mortgages, is fraught with danger,” he said.

    Butler recalls one incident that saw a mother have a “spectacular falling out” with her son after co-signing his mortgage, totalling over one million dollars, years earlier. “Now she absolutely wants off the mortgage. She does not want to have any financial ties to the son,” he said. When she tried to approach the bank to get out of the mortgage and told the lender she would not sign a renewal, she was informed that her son could renew the mortgage on his own, he said.

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    Early inheritance or cash gifts may be safer than co-signing

    While co-signing for a child’s mortgage is not as popular with the slowdown in the housing market, Butler said, it was an “epidemic” during the real estate frenzy of the early pandemic years when interest rates hit rock bottom.

    Leah Zlatkin, a licensed mortgage broker and LowestRates.ca expert, noted parents should consider the potential impact co-signing could have if they have multiple children who might need help to buy a home, leading to “family squabbles.” Co-signing for one child may affect the parent’s ability to help their other children in the same way, as there is only so much debt a person can take on.

    Instead of co-signing, Butler said providing a monetary gift or early inheritance may make more financial sense for parents looking to support their children’s real estate aspirations.

    “If you’re in the money and you wish to give an early inheritance, that is absolutely fine,” he said, adding that parents should know their own capacity to give.

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    Zlatkin said parents could opt to take out a home equity line of credit and gift that money to their kids or just provide a lump sum of cash. Regardless of the option they choose, she said more parents are opting for a gift than to co-sign because then the parents “don’t have to be liable for anything.”

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    About The Canadian Press


    About The Canadian Press

    The Canadian Press is Canada’s trusted news source and leader in providing real-time stories. We give Canadians an authentic, unbiased source, driven by truth, accuracy and timeliness.

    The Canadian Press

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  • Why are mortgages so expensive in Canada? – MoneySense

    Why are mortgages so expensive in Canada? – MoneySense

    A total of three rate cuts passed down from the Bank of Canada since June have cumulatively lowered the cost of borrowing for Canadians by 75 basis points, from 5% to 4.25%, offering home buyers some much-needed relief in terms of affordability.

    This is according to the latest affordability report compiled by Ratehub.ca, which crunches the minimum annual income required to buy an average home in some of Canada’s major cities. (Ratehub Inc. owns both Ratehub.ca and MoneySense.) The report is based on September 2024 and August 2024 real estate data reported by the Canadian Real Estate Association (CREA). It illustrates how changing mortgage rates, stress test rates and real estate prices are impacting the income needed to buy a home. 

    The September edition (updated monthly, so bookmark this page) shows the required income lowered in 11 of the 13 housing markets studied, as the average five-year fixed mortgage rate dropped to 5.04%, compared to 5.16% in August. As a result, the corresponding average mortgage stress test rate—which tacks on an additional 2% to a borrowers’ contract mortgage rate—fell to 7.04% from the previous 7.16%.

    Let’s take a look at how that’s impacted home buyers across Canada.

    The best places to buy real estate in Canada

    Housing affordability across Canada’s major cities

    Check out the chart below to see how affordability changed between August and September in Canada’s main housing markets, based on the income required to qualify for a mortgage.

    September 2024: How much do you need to earn to buy a home in Canada?

    City Average home price in August Average home price in September Change in home price  Income required in August Income required in September Change in income
    Vancouver $1,195,900 $1,179,700 -$16,200 $224,000 $219,000 -$5,000
    Toronto $1,082,200 $1,068,700 -$13,500 $204,100 $199,800 -$4,300
    Hamilton $840,300 $831,500 -$8,800 $161,800 $158,740 -$3,060
    Victoria $866,700 $864,400 -$2,300 $166,420 $164,450 -$1,970
    Halifax $543,700 $538,100 -$5,600 $109,940 $108,000 -$1,940
    Calgary $586,100 $582,100 -$4,000 $117,360 $115,600 -$1,760
    Ottawa $646,000 $642,800 -$3,200 $127,830 $126,100 -$1,730
    Edmonton $400,200 $399,400 -$800 $84,850 $83,990 -$860
    Winnipeg $361,800 $362,500 $700 $78,140 $77,600 -$540
    Fredericton $311,300 $312,000 $700 $69,310 $68,860 -$450
    Regina $319,700 $320,700 $1,000 $70,780 $70,360 -$420
    Montreal $535,700 $543,400 $7,700 $108,550 $108,900 $350
    St. John’s $354,600 $364,100 $9,500 $76,880 $77,880 $1,000
    Data in the chart is based on a mortgage with 20% down payment, 25-year amortization, $4,000 annual property taxes and $150 monthly heating. Mortgage rates are the average of the Big Five Banks’ 5-year fixed rates in September 2024 and August 2024. Average home prices are from the CREA MLS® Home Price Index (HPI).

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    Canadian cities where affordability improved

    Where in Canada is owning a home becoming more affordable?

    Vancouver: A chilly start to the autumn market

    Vancouver topped the list of cities with most-improved affordability, largely due to the fact that the average home price absorbed a $16,200 drop from August. Make no mistake,—this is still Canada’s most expensive housing market with an average property price tag of $1,179,700. But demand has been quite cool coming out of the summer months. According to the Greater Vancouver Realtors, sales fell 3.8% year-over-year in September, while the supply of new listings rose 12.8%, leading to an easy buyers’ market. As a result, Vancouver home buyers need to earn $5,000 less than they did last month to qualify for a mortgage on the average-priced home, at an income of $219,000.

    Toronto: A month of flat sales

    The city of Toronto came in second, as home prices continue to fall within Ontario’s largest city; the average property sold for $1,068,700, $13,500 less than it did in August, according to the Toronto Regional Real Estate Board. This is largely due to the fact that sales were unchanged from the previous month (though things are improving on an annual basis, coming in 8.6% higher than in 2023). Meanwhile, fresh supply continues to flood the market with new listings, which surged 35.5% year-over-year. Combined with easing mortgage rates, the average Toronto home buyer saw their required income shrink by $4,300, to $199,800.

    Hamilton: Hovering below the historical average

    Rounding out the top three cities is Hamilton, which has long been a popular Southern Ontario real estate destination, without the million-dollar price tag that characterizes neighbouring Toronto. The average home price in Hamilton in September came to $831,500, a decrease of $8,800 from August. The Association of Hamilton-Burlington reports that while sales were brisk in September, they continue to lag 2023 levels by 4% year-to-date and remain 28% below the long-term average. Meanwhile, new listings and inventory levels continue to rise, now sitting at a cumulative five months. That’s all cooled home prices, and as a result, Hamilton home buyers need to earn $158,740 to buy a home, $3,060 less than they did in August.

    Penelope Graham

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  • Deloitte Canada predicts more economic growth, benchmark rate below 3% in 2025 – MoneySense

    Deloitte Canada predicts more economic growth, benchmark rate below 3% in 2025 – MoneySense

    In the company’s fall economic outlook released Thursday, it forecasts the central bank’s interest rate will fall to 3.75% by the end of this year and a neutral rate of 2.75% by mid next year. 

    Meanwhile, it expects the economy to grow moderately as softer labour market conditions persist, especially as many home owners have yet to face higher rates when they refinance their loans.  

    “We do think that we’re going to be in for a decent year next year,” said Dawn Desjardins, chief economist at Deloitte Canada. 

    It appears Canada will successfully skirt a recession despite the impact of higher borrowing costs on the economy, said Desjardins. 

    “It’s hard to argue that the economy is just skating through this period of higher interest rates. But having said that, the overall numbers themselves continue to show the economy is expanding,” she said. 

    “Yes, the labour market has softened, but I don’t think we’re in any kind of crisis in the labour market at this time.”

    Higher interest rates impacting economic growth, labour market

    The Bank of Canada has cut its benchmark rate three times so far this year as inflation has eased, and signalled more cuts are coming. 

    Inflation in Canada hit the central bank’s 2% target in August, falling from 2.5 in July to reach its lowest level since February 2021. 

    The Canadian Press

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

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

    “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.

    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

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

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

    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. 

    The Canadian Press

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  • What is porting a mortgage in Canada—and when should you do it? – MoneySense

    What is porting a mortgage in Canada—and when should you do it? – MoneySense

    But picking a fixed mortgage rate can be problematic if you decide to sell your house and are forced to break your mortgage contract in the middle of your term. The penalties associated with breaking a fixed-rate mortgage can be very costly. 

    Thankfully, many mortgage lenders allow you to avoid penalties by porting your mortgage, which means carrying your existing term and interest rate to your new property. 

    So, how does porting a mortgage work, and when does it make sense? 

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    What is porting a mortgage? 

    Porting a mortgage refers to taking your current mortgage and transferring it to a new property when you move. Your existing mortgage rate and term are transferred along with your current mortgage balance. 

    To qualify for a mortgage port, you must follow certain rules. For example, you must sell your home and purchase a new one at roughly the same time—usually within 30 to 120 days, depending on the lender. Also, you can’t port more than your current mortgage amount. If you need additional funds to purchase your next home, the new money will be subject to current interest rates and added to the mortgage balance—but more on that later. 

    Most Canadian mortgage lenders offer portability as an option, but not all do. That’s why it’s important to find out if a prospective lender offers this feature before you take out a new mortgage. After all, you never know when your plans might change and you need to sell your home before your mortgage term ends.

    When does it make sense to port a mortgage?

    There are two main reasons you would want to port your mortgage instead of breaking your contract and starting fresh. The first is to keep your existing interest rate if it’s lower than current mortgage rates. The second is to avoid breaking your mortgage early and incurring a costly penalty. 

    “Porting is typically a good idea if your existing fixed mortgage rate is lower than current rates and you’re moving before your mortgage maturity date,” explains Lyle Johnson, a Winnipeg-based mortgage broker. “By keeping your existing mortgage, you avoid the prepayment penalties that would apply if you break your mortgage before its maturity date, while keeping your low fixed rate.” 

    What about a variable-rate mortgage? Most variable mortgages do not offer a portability feature. (Note, however, that you may have the option to convert to a fixed rate first, and then port.) If you decide to sell your house before your term expires, you’ll likely need to break your contract and obtain a new mortgage for the new property. That said, the penalty for breaking a variable mortgage is usually equal to three months’ interest on your outstanding balance, which is often less than a fixed-rate mortgage penalty. 

    Colin Graves

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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

    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. 

    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

    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.

    Jason Heath, CFP

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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

    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. 

    Ryan Bembridge

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  • Marine moved from the U.S. to Brussels with her family—our mortgage is under $3,000/month: Take a look inside

    Marine moved from the U.S. to Brussels with her family—our mortgage is under $3,000/month: Take a look inside

    My husband Martin and I met in Brussels in 2012, when I literally stepped on his toes at my neighborhood farmer’s market. At the time, I was working as a security manager at NATO headquarters, and he was on a business trip from his home in the Netherlands. 

    Three days later, we went on our first date. Five weeks later, I moved to Washington, D.C., to take a post at the Pentagon. Almost a year and a half later, we decided we’d get married and he’d join me in D.C. 

    As a Marine Corps reserve officer, I took advantage of my VA loan benefits, and we bought a small home in 2014. We brought our newborn daughter home there in 2016.

    But we always knew we wanted to move back to Europe eventually. 

    Finding ‘the one’ in Brussels

    When the pandemic hit, it gave us time to pause and plan our long-awaited return to Europe. 

    We wanted to be a short drive away from my in-laws in my husband’s hometown of Rotterdam as they aged. We ultimately chose Brussels, the capital of Belgium and the administrative center of the European Union. We calculated that we could live there for less than D.C. or the Netherlands, and it’s only 90 minutes from Rotterdam.

    It helped that I already had a solid network of friends in Brussels, too.

    Jessica calls Martin her “90-day fiancé.”

    Courtesy of Jessica van Dop DeJesus

    We sold our D.C. home for $899,000 in 2021 — a 67.7% increase compared to what we’d paid for it. And after a year renting in Brussels, we started looking for a place to buy. Our two main requirements: It had to be walking distance to our daughter’s school and have an outdoor space big enough to eat outside. 

    Six months and 20 apartments into our search, we finally found “the one” in Saint Gilles, the neighborhood south of the city center where I’d lived before.

    I fell in love with the 14-foot ceilings, the Art Nouveau buildings, and the great parks nearby.

    One of Jessica’s favorite things to do in Brussels is go to the markets. There are cafés nearby where she likes to order a coffee or, “if I’m feeling a bit festive,” a glass of wine.

    Federico Campanale

    We offered 547,500 euro, or $586,767, for the apartment in Brussels, leveraging the cash we had from the sale of our D.C. home to put down a 10% down payment of $58,677 and securing a 20-year mortgage with a 3.59% interest rate.

    Take a look inside our apartment

    We live in a street-level duplex in a building with only three apartments. It’s slightly smaller than our D.C. home, but it’s been worth it. Our neighborhood is equivalent to Logan Circle in Washington, D.C., where a place like ours could easily cost double or more. We’ve been able to add our own touches. 

    The front door leads into our dining room — one of my favorite parts of the apartment because of its high ceilings and large space for our long dining table, where we host many dinner parties. 

    Jessica is a food and travel content creator, and cooks pretty much every day. She loves that she and her family can host dinner parties in the dining room.

    Federico Campanale

    Next to the dining room is our living room, where I made a “fitness nook” with my stationary bike and weights so I can work out while watching TV. 

    We added an American-style stove and oven that fits my Thanksgiving turkey, as well as a wine fridge to our galley kitchen. We put in terrazzo floors as an homage to my childhood home in Puerto Rico. 

    “In Europe usually ovens are very tiny, but not the case with me because I love a big Thanksgiving turkey,” Jessica says.

    Federico Campanale

    Toward the back of the first floor, a small room doubles as an office and a sitting room. Large sliding doors lead to our two-level terrace, one with a large table we use in the warmer months.

    Jessica and her family like to eat outside on the terrace in the warmer months. Above and beyond the patio, she says, “we have a beautiful view of the city hall.”

    Federico Campanale

    The bedrooms, laundry room, storage, and bathroom are on the bottom floor.

    Lack of closets and storage space is common in European apartments. Fortunately, the former owners made a storage system under the stairs, which we use for extra clothes, household items, wines, and photography equipment. 

    “My daughter’s room still has the home’s original tile, which we love,” Jessica says.

    Federico Campanale

    We have an average-sized bedroom with a walk-in closet and a small guest bedroom with a full-sized bed. 

    Our bathroom is big for European standards with a shower and tub, and we plan to renovate it in 2025.  

    The bedroom is “very basic,” Jessica says.

    Federico Campanale

    Currently, our monthly housing costs in Brussels include our mortgage ($2,931) and condo fee ($65) as well as utilities such as electricity ($73), gas ($70), water (about $50), and internet and cable ($68). 

    Our life in Brussels

    I miss being within driving distance of my family in Western New York. The main sacrifice of this move is being so far from people I’m close to. But we’re happy to be in Brussels. 

    Our neighborhood, Saint Gilles, has always been one of my favorite parts of the city, filled with Portuguese, Brazilian, Eastern European, Italian, Latin American, and North African restaurants and shops. We even had a Latino-themed Christmas market with Colombian food stands and live salsa music sponsored by the town hall last year! 

    Our daughter, now seven, is a half-Dutch, half-Puerto Rican, third-culture kid, so we wanted her to grow up in a diverse community.

    Jessica’s seven-year-old daughter already speaks English, Dutch, and Spanish, and will start learning French at school next year, too.

    Federico Campanale

    Belgium shares borders with four countries: the Netherlands, Germany, Luxembourg, and France. This close proximity makes it easy to take a quick weekend trip to explore even more places and cultures.

    I can’t say leaving the U.S. for Europe meant the end of all our problems. But I feel more content and at ease here. I don’t worry as much about school shootings, for example, or the potential loss of employer-sponsored healthcare. We can afford to live, get childcare for our daughter, eat and cook like the foodie I am, and travel regularly. 

    And we can embrace a slower pace of life and a culture that prizes friends and vacations at least as much as work. 

    Jessica van Dop DeJesus is a freelance journalist, a digital media strategist, and the founder of The Dining Traveler, a multimedia digital platform covering food and travel. Jessica was raised in Puerto Rico and began traveling as a young Marine over 25 years ago. She currently serves as the Latinx facilitator for the Breaking Barriers in Entrepreneurship program for Bunker Labs, providing mentorship to aspiring veteran entrepreneurs. Follow her on Instagram, Facebook, Twitter, Pinterest, and YouTube.

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    Plus, sign up for CNBC Make It’s newsletter to get tips and tricks for success at work, with money and in life.

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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

    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.

    The Canadian Press

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  • Don’t get stuck on financial advice that doesn’t ring true – MoneySense

    Don’t get stuck on financial advice that doesn’t ring true – MoneySense

    Dividends are after-tax profits a company distributes among its shareholders, typically every quarter, and can be paid in cash or a form of reinvestment.

    Heath said a company that pays a high dividend reinvests less of its profit into growth, potentially losing out on opportunities to up its market value. In Canada, stocks with high dividends come from a narrow slice of the stock market—banks, telecoms and utilities. 

    “Ideally, an investor should consider a combination of stocks with high and low dividends to have a well-diversified portfolio,” he said.

    Contribute to RRSP, save on taxes

    “There’s a lot of taxpayers, investment advisers and accountants who really promote the concept of putting as much into your (registered retirement savings plan) as you absolutely can,” said Heath.

    As a financial planner, he thinks the contrary. Heath says using RRSP contributions to get the biggest tax refund possible is not necessarily the best approach for people in low tax brackets and can hurt them in the long run when they withdraw those savings at a higher tax bracket in retirement.

    “Sometimes, it’s OK to pay a little bit of tax, as long as you’re paying at a low tax rate,” he said.

    Instead, tax-free savings account (TFSA) contributions could be better for someone with a low income. 

    It can be wise to use the low tax bracket by taking RRSP withdrawals early in retirement, even though it might feel good to withdraw only from your TFSA or non-registered savings and keep your taxable income low. 

    The Canadian Press

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