Wednesday 28 October 2015

Just renew it? Don't you do it.

Forgive the cheesy rhyming title, but now that I've got your attention let's talk mortgage and  insurance renewals.

I know we all get busy and it's tempting to go with the fastest and easiest option, and that means just signing off on the renewal and sending it in.

But that is not always the best option.

When you get your mortgage or insurance renewal papers in the mail, you should contact a good, honest and independent mortgage or insurance broker to see what your other options are.  Sometimes the renewal you get in the mail really is the best you're going to do.  It was with my mortgage last time, so I signed the renewal.  But you don't know until you look at the options.

And while my last mortgage renewal was a good deal, I have had the opposite happen with insurance.  My insurance premiums actually went down one year and I was pleasantly surprised.  But I still decided to practice what I preach and consulted my insurance broker to review my options.  Even though my old policy premiums had gone down, he still beat them by about $800/year!

If I had simply signed off on the insurance renewal without checking my options, then I would have been paying quite a bit more than I could have.  And although I did stick with my mortgage lender, at least I know comfortably that I got the best deal I would have at that time.

So yes, when it comes to mortgage and insurance renewals, don't just sign and send it in right away.  At least have a discussion with a broker and be confident that you're not paying more than you have to.

If you'd like a referral to a trustworthy mortgage or insurance broker, drop me an email at or call me directly at 905-512-4069.  I'd be happy to help you out.

Tuesday 27 October 2015

Ontario Government One Step Closer to Doubling of Land Transfer Taxes

Provincial Government Looking to Extend Power to All Municipalities to Charge Unfair, Unsustainable Municipal Land Transfer Tax Despite Public Opposition and Election Promise
TORONTO, ON--(Marketwired - October 27, 2015) - The Ontario Ministry of Municipal Affairs and Housing has indicated that they are going to make buying a home even harder by giving every municipality province-wide the power to charge a Municipal Land Transfer Tax (MLTT), a change that will double the land transfer taxes consumers have to pay on their next home. The Ontario Real Estate Association (OREA) encourages all Ontarians to to learn more about the negative impact of the MLTT and stop this tax from spreading province-wide.
"Ontario home buyers are already charged a provincial land transfer tax, so by adding a municipal tax, they're essentially doubling the tax burden on Ontario families," said Patricia Verge, president of OREA. "If the Ontario Liberals follow through with this plan, home buyers will be forced to pay $10,000 in total land transfer taxes on the average priced home in Ontario, starting as early as next year."
Broken election commitment doubles tax on home buyers
The provincial government is currently undertaking a public consultation on changes to theMunicipal Act. Despite the fact that the period for public comment is still open until October 31, 2015, the Ministry of Municipal Affairs and Housing has indicated that they will move ahead with granting municipalities across the province the ability to impose a municipal land transfer tax, disregarding views expressed by Ontarians during this important public process.
Verge said that, "The Ontario Liberals wrote to us in May 2014, during the election, stating that 'they had no plans to extend these powers to municipalities'. On behalf of home buyers, we want them to remain good on this election promise and that means Ontarians need to send a strong message that the government must rethink its plan to double the land transfer tax burden on home buyers."
In 2008, the City of Toronto put an MLTT in place after the Ontario government extended the powers to do so two years prior. The result has been significant negative impacts on jobs and the economy. Over five years, it is estimated that 38,227 housing transactions did not occur in Toronto because of the MLTT. With every home transaction generating $55,000 in consumer spending on things like renovations, furniture, appliances, and fees to professionals, the MLTT has cost the City of Toronto $2.3 billion in lost economic activity and 15,000 jobs. This type of effect would be multiplied across Ontario if the government moves ahead with its plans.
New data from Ipsos Reid show Ontarians do not support new tax
A new Ipsos Reid poll shows that the overwhelming majority of Ontarians (89 per cent) outside of Toronto oppose a new MLTT charged on home purchases in their area. Respondents agreed that if a new land transfer tax were put in place, it would limit their ability to afford a home (77 per cent) and they would likely have to delay a purchase (75 per cent). Ontarians agreed (77 per cent) that the government should do all it can to help families own their own home.
About OREA
The Ontario Real Estate Association represents 62,000 brokers and salespeople who are members of the 40 real estate boards throughout the province. OREA serves its REALTOR® members through a wide variety of professional publications, educational programs, advocacy, and other services.
These are some of the findings of an Ipsos Reid poll conducted between August 28 to September 8, 2015, on behalf of the Ontario Real Estate Association. For this survey, a sample of 1,501 Ontarians from Ipsos' Canadian online panel was interviewed online. Weighting was then employed to balance demographics to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within +/-2.9 percentage points of what the results would be had all adults in Ontario been surveyed.
 Source:  Ontario Real Estate Association (OREA)

Monday 26 October 2015

Hamilton Housing Starts to Stabilize in 2016 as Existing Home Sales Decline in Next 2 Years

TORONTO, ONTARIO--(Marketwired - Oct. 26, 2015) - According to Canada Mortgage and Housing Corporation's (CMHC) Fall Housing Market Outlook report for the Hamilton Census Metropolitan Areas (CMA), total housing starts will stabilize near 2,400 units in 2016 and 2017 following a decline in 2015. Fewer single-detached housing starts in 2017 will be mostly offset by more multi-unit starts. High mortgage carrying costs will result in lower demand for single-detached housing in 2017, as this type of dwelling is less affordable compared to multi-unit housing. Existing home sales will decline from 15,000 units in 2015 to 14,000 units in 2016 and 13,600 in 2017.

"Relative to the Greater Toronto Area (GTA), Hamilton is still considered a more affordable housing market and will continue to attract potential homebuyers from the less affordable municipalities," said Abdul Kargbo, CMHC Senior Market Analyst for the Hamilton and Brantford. "As home prices continue to rise in the GTA coupled with a gradual increase in mortgage rates, carrying a mortgage will become a greater challenge in 2017."

As Canada's authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

Saturday 10 October 2015

Nice house, and it's listed for.... $1.00??

Houses listed for sale at $1.00...  does that really happen?

Not often, but you bet it does. But of course the seller does not intend to sell their house for that price.  It's basically a marketing gimmick, trying to gather attention through a radically different tactic. It also leaves the field wide open if a bidding war starts.

It's not been something we see in this area, but there is one listing that has just come up in the REALTORS® Association of Hamilton-Burlington jurisdiction listed for sale at $1.00.  You could probably find it easily enough if you go looking, but I refuse to identify the property because I don't want to contribute to any hype benefit of this approach.

Unfortunately, the hot local real estate market has brought in some listing tactics mostly only seen in the Greater Toronto Area before. One other example is deferred offers to increase the chances of multiple offer bidding wars, with wording like "no offers until such and such a date at such and such a time" becoming pretty common.  Now this one has made its way here, like it or not.

And there are at least a couple reasons why I don't like it.  First of all, I think it is just plain cheesy and gimmicky.  But that is a personal and subjective objection. On a more professional point, this kind of listing could skew statistics, especially the list-to-sale-price ratio.  That is something I have to look into.  It also makes it very difficult for a buyer to judge an appropriate starting point for an offer.  And there is a question of how effective it is, as it could easily be missed by buyers searching with a low end minimum to avoid the fixer-uppers.

But as a more relevant question that the public is more likely to care about, "is this legal?"  Yes, it is.  As real estate lawyer Mark Weisleder explains in [an old Hamilton Spectator article] from 2011, a seller can list their house for sale and is under no obligation to accept an offer even if it is full price.  There are lots of other terms in the offer, and circumstances change.  On that basis, a seller listed at $1.00 is not at all obligated to accept your offer if you decide to put in a bid at $1.00.  Or even "double list price" at $2.00.

Since the seller is obviously making no indication of what they feel is the right price, or the price range they are looking for, it becomes especially important for a buyer to be working with an experienced real estate professional who can give you comparable sales information and some competent advice on values.  If a bidding war starts, you still might have to pay a premium if you really want the property, but without the advice of a good agent it will be hard to make an informed opinion on what the proper value of the property is.

Friday 9 October 2015

September 2015 Housing Starts in Hamilton CMA

TORONTO, ONTARIO--(Marketwired - Oct. 8, 2015) - Housing starts in Hamilton Census Metropolitan Area (CMA) were trending up at 2,059 units in September compared to 1,826 units in August, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six month moving average of the monthly seasonally adjusted annual rates (SAAR)(1) of housing starts.

"The trend in Hamilton CMA total housing starts increased in September 2015, marking four consecutive monthly increases. This month's increase in the trend measure was broadly based, with starts of all dwelling types trending up. Strong employment growth and relatively low mortgage rates continued to support housing demand. Specifically, Hamilton's economy has created about 2,450 new jobs on a net basis in the first eight months of 2015 compared to the first eight months of 2014," said Abdul Kargbo, CMHC's Senior Market Analyst for Hamilton and Brantford CMAs.

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of the state of the housing market. In some situations, analysing only SAAR data can be misleading in some markets, as they are largely driven by the multiples segment of the markets which can be quite variable from one month to the next. The multiples segment includes apartments, rows and semi-detached homes.

The standalone monthly SAAR was 1,860 units in September, practically unchanged from 1,892 units in August.

(1) All starts figures in this release, other than actual starts and the trend estimate, are seasonally adjusted annual rates (SAAR) - that is, monthly figures adjusted to remove normal seasonal variation and multiplied by 12 to reflect annual levels. By removing seasonal ups and downs, seasonal adjustment allows for a comparison from one season to the next and from one month to the next. Reporting monthly figures at annual rates indicates the annual level of starts that would be obtained if the monthly pace was maintained for 12 months. This facilitates comparison of the current pace of activity to annual forecasts as well as to historical annual levels.

Wednesday 7 October 2015

Interest Rates & Payment Increases: The Actual Math

For several years headlines have warned of ‘inevitable’ interest-rate hikes. But reality has seen interest rates drop steadily over the past several years, to new record lows. It is the opinion of most Brokers - the frontline workers - that any increases in interest rates will be small and they will be gradual.

A key component often lacking from stories about potential interest rate increases is the actual math or impact of said increases. So I offer for you a cheat sheet outlining what eventual increases would mean to you personally.

Are you in a variable rate mortgage?

If yes, the Bank of Canada meets eight times per year (with the next meeting scheduled on October 21st) in order to make a decision that will influence the prime interest rate on which variable rate mortgages are based. Very rarely does Prime move by more than 0.25%.

What 0.25% means to a variable rate mortgage:

Per $100,000 of mortgage money borrowed, a 0.25% interest rate increase for the typical mortgage holder would translate into a monthly payment increase of $13.00.

$13.00 per $100,000 of mortgage money.

Eventual increases are likely to come in 0.25% increments, gradually.

Tip of the day: Variable rate mortgage holders can utilize prepayment privileges to increase their payment by at least $13.00 per $100,000 owed each year. Every penny of the immediate increase will be going straight to principal owed and will in turn reduce the amount of interest on every future payment. More importantly, you're getting out ahead of any future rate increases and your payment will already be increased.

Being one, two or three steps ahead makes sense, call your Broker about making a small increase today, to cushion you tomorrow.

Are you in a fixed rate mortgage?

On the upside, any immediate changes to interest rates will have no effect on your monthly payments or interest expense until your actual renewal date. Also on the upside, this gives you time to prepare for the potential of higher interest rates.

What 0.25% means to you will ultimately be much the same as the mathematics above. The risk is that instead of a slow, gradual rise, you may be in for a full 1% interest rate increase by the time your renewal rolls around. But that is OK, you have time on your side and your rate is fixed for now.

Key point; the mortgage balance you are renewing will be (in most cases significantly) lower than your original balance and thus the impact of an interest rate hike is that much less dramatic.

For example, a $300,000 mortgage on a 30 year amortization, taken at 2.59% today will have an ending balance five years from now of $264,613.00. (Increase your payments each year and it will be lower still)

Renewing $264,613 at an interest rate 1% higher would increase the payment from $1,197.27 to $1,333.74.

Increasing your payment by 0.25% ($39.00 per month) each year would have you ahead of that curve.

In any event, this is an 11.5% increase in your payment. Five years from now, odds are your household income will have risen by at least $136.47.

This is not to say an increase of 1% is not meaningful, but with five years to prepare, it need not be.

In the event that interest rates continue to defy journalists’ and various analysts’ expectations, as they have done for the past six years, and remain low – while you increase your payment incrementally each year, then come renewal, you will truly be sitting in a plum position. Your mortgage payment amplified the point that your effective amortization will have reduced by several years and your mortgage balance will be decreasing at a more rapid pace than any mortgage balance has in the past 50 years.

Call your Broker and talk about ways to take advantage of 50 year record low interest rates.

This article courtesy of:

Marianne Hobson
Mortgage Agent (Lic#M08004925)
Dominion Lending Centres Homestead Financial Lic#11711

Cell: 905-973-9266
Fax: 866-805-7785

Tuesday 6 October 2015

Another monthly sales record set in September: RAHB

Sales volume may be significantly lower than the peak in spring, but the hot real estate market in Hamilton certainly still has some steam left to it.  The REALTORS® Association of Hamilton-Burlington (RAHB) reported another sales volume record broken this year, setting a new record for the month of September at 1,387 sales.

On the positive side for buyers, listings activity has continued to increase as well, with 4.9% more new listings in September 2015.  Unfortunately, listing inventory at the end of the month was still down from the same time last year, between the demand and the pre-existing inventory shortage.

Read [the full report from RAHB here].

Monday 5 October 2015

Ontario Housing Market's Strong Growth Will Continue Through 2017, Says Central 1 Credit Union

TORONTO, ONTARIO--(Marketwired - Oct. 5, 2015) - Ontario home prices, sales and starts will keep rising for the next two years, says a new forecast by Central 1 Credit Union.

The surprising strength of the Ontario market this year has led Central 1's Chief Economist Helmut Pastrick to boost his forecast for this year and 2016 and 2017.

"Sales have been strong this year but fewer new listings are coming on the market, so prices are rising in most regions," Pastrick said. "Continued low mortgage rates have helped spur sales."

The outlook is positive for further gains in the housing market against the backdrop of low mortgage rates and some improvement in economic and income growth in 2016 and 2017, Pastrick said.

"Home sales, prices, and starts will head higher," he said. "Despite worsening affordability, the market will expand as long as no economic recession occurs."


  • Ontario MLS(R) residential sales are up 10.5 per cent over last year through to August.
  • The average sale price is up 8.1 per cent at $465,444.  
  • Greater Toronto sales were up 10.4 per cent year-to-date in August, while sales in Hamilton-Burlington rose 11.5 per cent, Niagara Region sales were up 14.9 per cent, and Windsor-Essex sales climbed 18.3 per cent.  
  • Sales in Ottawa, Sudbury, and Thunder Bay registered only single-digit gains.
  • Residential sales are now expected to come in 9.8 per cent higher than last year at 226,100 units. The average sale price forecast is raised to $466,000 from $453,000 previously, an 8.1 per cent rise over 2014.  
  • Prices are expected to climb to new records in 2016 and 2017, reaching an average annual price of $538,000.
  • Housing starts are now forecast at 67,600 units this year, compared to 61,300 units previously, a 14.3 per cent increase over 2014, largely due to condo construction in Toronto.
  • Starts are expected to rise each year reaching 72,100 units in 2017.

Read the full report [Ontario Housing Forecast Update 2015-2017].