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Flaherty tightens mortgage rules

Free Real Estate Info — Mon, 17 Jan 2011 15:53:00 GMT

Flaherty tightens mortgage rules

Paul Vieira, Financial Post · Monday, Jan. 17, 2011

OTTAWA — Finance Minister Jim Flaherty unveiled changes Monday morning to mortgage lending rules that would see Ottawa stop backing home loans greater than 30 years and make it more difficult for households to use their property to access financing.

The changes, as reported by the National Post on Sunday, emerged as worries escalate among Bay Street leaders and the Bank of Canada about the record levels of household indebtedness, and how conditions could deteriorate unless pre-emptive action was taken.

The key change announced is that mortgages with amortization periods longer than 30 years will no longer qualify for government-backed mortgage insurance, which is required for buyers with less than a 20% down payment on a home. The previous limit was 35 years.

Also, Mr. Flaherty lowered the maximum amount Canadians can borrow against the value of their homes, to 85% from 90%, on a refinancing; and removed federal government backing for home equity lines of credit, or so-called HELOCs, whose popularity soared in the past decade with growth double that of mortgage debt.

"Canada's well-regulated housing sector has been an important strength that allowed us to avoid the mistakes of other countries," Mr. Flaherty said at a media conference. "The prudent measures announced [Monday] build on that advantage by encouraging hard-working Canadian families to save by investing in their homes and future."

Executives at Bank of Montreal applauded the government's move.

“The actions announced are prudent, measured, responsible and timely,” said Frank Techar, president of personal and commercial banking at Bank of Montreal.

The changes will be implemented in stages, with adjustments on amortization and refinancing limits coming into force on March 18. Government backing on HELOCs will be removed as of April 18.

The government said exceptions would be allowed after the new measures come into force when needed to satisfy a home purchase or sale and financing agreement struck before the March and April in-force dates.

The minimum down payment, at 5%, will remain as is. Further, there are no plans to target condominium purchases by requiring monthly condo fees be added to the list of expenses that is measured against income to decide whether a buyer can afford a mortgage.

Analysts at Scotia Capital said in a morning note the changes had been anticipated for some time. “We remain of our long-held belief that Canada is tapped out on housing and household finance variables that are all at cycle tops, in contrast to the U.S. that has already moved well off cycle tops and may be creating some pent-up demand,” said economists Derek Holt and Gorica Djeric.

The changes to the country’s mortgage rules -- the second in as many years -- emerge amid rising concern about the record levels of household debt, which measured as a ratio of money owed to disposable income nears a startling 150% as of the third quarter of last year. That surpasses the level of debt held by American households, whose appetite for borrowing helped stoke the financial crisis of a few years ago.

The Bank of Canada recently warned debt levels are growing faster than income, and the risk posed by consumer indebtedness to the domestic economy would continue to escalate without a “significant change” in how consumers borrow and banks lend.

Bank of Canada governor Mark Carney said policymakers have a “responsibility” to look at the benefits of pre-emptive action. Joining the chorus have been chief executives at the big banks, most notably Ed Clark at Toronto-Dominion Bank, in publicly advocating for tougher mortgage standards.

Last Friday, Prime Minister Stephen Harper acknowledged his government was considering changes to the rules governing mortgages.

In February of 2010, Mr. Flaherty moved to toughen up the mortgage rules amid worries that Canada was in the midst of a housing market bubble. The reforms, since introduced, compelled borrowers to meet standards for a five-year fixed-rate mortgage, even if the buyer wanted a shorter-term, variable rate loan; reduced the amount Canadian can borrow against their home, to 90% of the property value from 95%; and require purchasers of rental properties to issue a 20% down payment as opposed to 5%. The moves played a role, observers say, in slowing down real estate activity.

The Scotia Capital analysts suggested government regulation was the way to go in terms of curbing household appetite for credit as opposed to the Bank of Canada raising interest rates, which they said would be “imprudent” at this time.

The central bank issues its latest rate statement on Tuesday and it is expected to hold its benchmark rate at its present 1% level as signs indicate the economy may be benefiting from renewed business and consumer confidence in the United States.

Stewart Hall, economist at HSBC Securities Canada, said the extraordinarily low-rate environment “provides all the incentive to consumers to borrow and spend and none of the incentive to save. You can try to [regulate] that away but that is apt to be fraught with significant frustration.”
Read more: http://www.financialpost.com/personal-finance/Flaherty+tightens+mortgage+rules/4119505/story.html#ixzz1BIhkDuhh

Bank of Canada maintains overnight rate target at 1 per cent‏

Free Real Estate Info — Wed, 08 Dec 2010 15:36:00 GMT

OTTAWA, Dec. 7 /CNW/ - The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

The global economic recovery is proceeding largely as expected, although risks have increased. As anticipated, private domestic demand in the United States is picking up slowly, while growth in emerging-market economies has begun to ease to a more sustainable, but still robust, pace. In Europe, recent data have been consistent with a modest recovery. At the same time, there is an increased risk that sovereign debt concerns in several countries could trigger renewed strains in global financial markets.

The recovery in Canada is proceeding at a moderate pace, although economic activity in the second half of 2010 appears slightly weaker than the Bank projected in its October Monetary Policy Report. In the third quarter, household spending was stronger than the Bank had anticipated and growth in business investment was robust. However, net exports were weaker than projected and continued to exert a significant drag on growth. This underlines a previously-identified risk that a combination of disappointing productivity performance and persistent strength in the Canadian dollar could dampen the expected recovery of net exports.

Inflation dynamics in Canada have been broadly in line with the Bank's expectations and the underlying pressures affecting prices remain largely unchanged.

Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. This leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in an environment of significant excess supply in Canada. Any further reduction in monetary policy stimulus would need to be carefully considered.

Information note:

The next scheduled date for announcing the overnight rate target is 18 January 2011. A full update of the Bank's outlook for the economy and inflation, including risks to the projection, will be published in the Monetary Policy Report on 19 January 2011.

www.greatlondonhomes.com

August Sales Down, Prices Up!

Free Real Estate Info — Thu, 02 Sep 2010 14:59:00 GMT

August sales reflect national trend

Sales down Prices UP!

Last month a total of 627 homes exchanged hands, down 16.1% from the previous year, making August 2010 the third consecutive month in which the decline in market activity forecast by the Canadian Real Estate Association (CREA) and Canada Mortgage and Housing Corporation (CMHC) continued to erode the gains made last year. Erode but not erase: Year to Date home sales in the jurisdiction of the London and St. Thomas Association of REALTORS® still tops those of last year by 5.2%. “We absolutely knew this was going to happen,” explains Richard Thyssen, President of the London and St. Thomas Association of REALTORS®. “Last year’s bounty was the direct result of meeting pent-up demand on the way out of a downturn. It’s what happens under those circumstances. The fact is that the ten year average for home sales in August is 750.”

Year August Sales

2010 627

2009 747

2008 762

2007 871

2006 832

2005 894

2004 781

2003 672

2002 695

2001 673

2000 570

“The good news is that we continue to see modest gains in house prices month over month,” says Thyssen. “That’s a sure sign that our market is in recovery.” The average price for a home Year to Date now stands at $227,794, 7% higher than last year at this time. This month, as in previous months and years, homes in LSTAR’s jurisdiction maintain their affordability compared to other major Ontario and Canadian centers. According to the CREA’s Major Market MLS® Statistical Survey for July 2010 (the most current available), the average price year-to-date for: London and St. Thomas -- $227,794

Year Average Price Total Residential

2010 YTD $227,794

2009 $213,402

2008 $210,888

2007 $202,256

2006 $188,942

2005 $178,058

2004 $166,138

2003 $152,586

2002 $142,106

2001 $136,636

The best-selling house style in LSTAR’s jurisdiction for the month of August was the two-storey, followed by the bungalow, the ranch and the townhouse condo. Home sales in London’s Sister City of St. Thomas numbered 55, a decline of 26.7% from last August. However, St. Thomas sales are up 15.9% for the year. The average price of a home in St. Thomas Year to Date stands at $184,652, up 0.6% over last year. According to a recent study prepared for the Canadian Real Estate Association by Altus Group Economic Consulting in Toronto, a total of $46,400 in ancillary expenditure is generated by the average housing transaction in Canada over a period of three years from the date of purchase. “That means that this month’s sales will generate $29,192,800.00 of economic activity over the next few years,” says Thyssen. “What comes around goes around.”

www.greatlondonhomes.com

New CMHC Rules for Income Properties

Free Real Estate Info — Sat, 17 Apr 2010 20:11:00 GMT

as of April 19th, 2010 CMHC is Implementing new Rules for Qualifying For Investors

Clarification of CMHC’s Total Debt Service (TDS) Ratio Formula

On February 16, 2010, CMHC announced changes to the treatment of rental income when calculating a borrower’s total debt service ratio (TDS) for mortgage loan insurance applications. The purpose of this note is to provide additional detail with respect to this calculation and the documentation that can be used to support rental income.

Clarification of the Treatment of Rental Income from Residential Properties

Effective April 19, 2010 CMHC’s TDS formula will change as follows:

PITH1 + Other Debt
Borrower’s Gross Annual Income

1 PITH means principal, interest, property taxes and heat

If the subject property generates rental income, then:
· 50% of gross rents can be included in the borrower’s income; and
· T + H for the property generating rental income can be excluded.

If rental income from another property where the borrower resides is being used to support the application, then:
· 50% of gross rents can be included in the borrower’s income; and
· T + H for the property generating rental income can be excluded.

If the borrower has other non-owner occupied, rental income generating residential properties, then:
· net rental income can be included in the borrower’s income; and
· PITH for these properties can be excluded from the debt service costs.

50% of condominium fees must be included, when applicable. For chattel or leasehold loans, 100% of site or ground rents must be included.

Clarification of Net Rental Income
Net rental income may be determined by using the borrower’s Canada Revenue Agency T776 Statement of Real Estate Rentals form as a guide for expenses.

If the lender is using the net rental income from the borrower’s income tax return, the figure can be grossed up by 15% only if deductions have been taken to depreciate or amortize capital assets. The 15% gross up can also be applied to rental income if the borrower has taken self-employed deductions associated with the rental income that were not included in the Statement of Real Estate Rentals form such as business use of home or motor vehicle expenses, only if the income has not already been grossed up by 15% to offset the depreciation or amortization of capital assets.

Alternatively, the lender can use their own internal guidelines for determining the net rental income. Net rental income is to include gross rents less operating expenses and at least the interest portion of any loan payment that is secured by a mortgage on the property. Operating expenses should include factors for management expenses where applicable as well as vacancy and maintenance.

Similar to CMHC’s guideline for self-employed income, Lender’s are required to use the average of the most recent 2 years net rental income to ensure the income level is stable. If the lender is confident that rental income is stable, the current net rental income can be used.

Implementation
The TDS formula detailed in this note will apply to transactional and Portfolio applications for mortgage loan insurance at all loan to values, submitted to CMHC on or after April 19, 2010 for loans that will be funded on or after April 19, 2010.

CMHC will consider exceptions to the requirements described in this note where the Approved Lender has documentation that the borrower has a legally binding purchase and sale, financing or refinancing agreement dated before April 19, 2010 and the closing date occurs on or after the effective date.

www.greatlondonhomes.com

Bank of Canada Holds Rates Again!

Free Real Estate Info — Tue, 02 Mar 2010 18:09:00 GMT

The Bank of Canada is keeping its benchmark lending rate at a record low of 0.25 per cent, reiterating on Tuesday its conditional commitment to hold rates steady until the middle of this year.

Although it held the overnight lending rate steady, the bank acknowledged the recovery appears to be proceeding at a better pace than it had anticipated.

"The level of economic activity in Canada has been slightly higher than the bank had projected in its January Monetary Policy Report," the bank said in announcing the rate decision.

"Conditional on the current outlook for inflation, the target overnight rate can be expected to remain at its current level until the end of the second quarter of 2010 in order to achieve the inflation target."

The Canadian economy grew at a strong five per cent pace in the fourth quarter, Statistics Canada reported Monday. Robust growth like that makes it likely that the bank will move to hike rates and rein in inflation sooner rather than later.

After shrinking by 2.6 per cent in 2009, the bank projects that the economy will grow by 2.9 per cent in 2010 and 3.5 per cent in 2011.

In its statement, the bank repeated its mild concern over the risk that the elevated Canadian dollar presents to the recovery.

"On the downside, the main risks are a more protracted global recovery and persistent strength of the Canadian dollar," the bank said.

It is set to release its next decision on interest rates on April 20.

www.greatlondonhomes.com

Why Real Estate is the Greatest Investment

Free Real Estate Info — Mon, 01 Mar 2010 01:17:00 GMT

Let me show you why Real Estate is a Great Investment.

Why is real estate a great investment - EVEN IN A FLAT MARKET WITH $0 POSITIVE CASH-FLOW?

If you buy an Property with a 20% down-payment,and no positive cash-flow for 10 years, with;

a ) No appreciation- you have DOUBLED your money as the mortgage has been paid down 20% !

b ) 20% price increase (less than 4% annually compounded, below Canada's long term average!!), you would have TRIPLED your money.

c ) 30% price increase (less than 6% annually compounded, about Canada's long term average as house prices in Canada have doubled every 15 years in a normal economy !!) you would have made 250% on your money.

d ) 40% price increase (slightly higher than Canada's long term average as house prices in Canada have doubled every 15 years in anormal economy, you would have made 300% on your money

I do not recomend purchasing an investment property with Zero Cashflow, this article is to demonstrate how affective Real Estate is as an Investment vehicle. These are conservative numbers and Real Estate still proves to outperform stocks or other investments. Purchasing an income property with with good cash flow and in a good neighbourhood will increase these numbers, improving the investement.

www.investmentpropertieslondon.com

www.greatlondonhomes.com

Ottawa advised to tighten mortgage rules

Free Real Estate Info — Thu, 11 Feb 2010 15:48:00 GMT

Ottawa advised to tighten mortgage rules

February 10, 2010

By Julian Beltrame
OTTAWA — The federal government should avoid major surgery and make only minor adjustments to deal with fears of overheating in Canada’s housing market, a number of leading economists said Wednesday.

Federal Finance Minister Jim Flaherty and the Bank of Canada have expressed concern that Canadians may be assuming too much debt in home purchases, debt that could rebound on them when interest rates rise.

But some solutions being floated in advance of Flaherty’s March 4 budget — doubling the minimum down payment to 10 per cent, or reducing the maximum amortization period from 35 to 30 years — could do more harm than good, the economists said.

“We want some sort of micro-surgery, not (taking) a pickaxe to the problem,” said Avery Shenfeld, chief economist with CIBC World Markets.

Bank of Nova Scotia economist Derek Holt said such radical surgery could cause home prices to crash and shake confidence in the consumer sector, a key driver of the fragile economic recovery.

Interviews with economists at four of Canada’s big banks showed some disparity of views as to the size of the problem, but general agreement that there is good reason for concern.

Most see home prices in Canada as being 10 to 15 per cent too high, largely because construction of new homes ground to a halt during the recession, decreasing available supply, and because of record-low interest rates, which are luring many new entrants into the market.

The Canadian Real Estate Association said this week it expects home prices to gain another five per cent to a record average of $337,500 this year. Sales will also hit record levels this year before tailing off next year, the association said.

It is unclear whether Flaherty is contemplating measures to cool prices and activity. Last weekend, the minister told reporters he was closely watching prices, but did not believe Canada had a housing bubble as yet.

But if one were to develop it could have wider repercussions on the economic recovery, as occurred in the United States, the economists said.

The best approach now is to take baby steps that would help moderate prices and activity and create a so-called soft landing.

One measure, according to TD Bank deputy chief economist Craig Alexander, would be to tighten the “income test” banks use to assess whether a prospective homeowner can meet monthly mortgage payments.

Already, banks build in a cushion in handing out floating mortgages by judging credit worthiness based on the borrower’s ability to make payments on the three-year rate, not the variable rate — about a two percentage point difference. Alexander said that could be increased to the still higher five-year posted rate.

A variation would be for banks to judge ability to meet payments not just on the mortgage but on all outstanding debts of a prospective homebuyer.

Yet another idea would be to deny government-backed insurance on mortgages for investment properties, thereby dampening speculation.

Economists believe such measures could help deflate any housing bubble without bursting it.

“It’s not in the interest of either buyers or lenders to have boom-bust cycles,” said the TD’s Alexander.

“That’s the lesson from the U.S. experience. If you have the wrong incentives and you don’t have regulations, you end up in a place you don’t want to be.”

Bank of Montreal economist Douglas Porter said if Ottawa chooses to raise the down payment requirement, it should do so modestly, perhaps to six or seven per cent.

Porter said, however, that he didn’t think reducing the amortization period to 30 years would be dramatic enough to cause a major disruption in the market.

Economists point out that home affordability is expected to tighten this summer even if Flaherty does not change the rules.

The introduction of the harmonized sales tax starting July 1 in Ontario and British Columbia — two of the hottest home markets — is expected to add a couple of thousand dollars to home purchases in those provinces.

And Bank of Canada governor Mark Carney is widely expected to start raising interest rates as early as July.

The Bank of Canada is expected to raise its benchmark interest rate in the Summer of 2010. The only question remains is how much and how fast. That is only 6 months away and this will have a major impact on all lending rates including mortgages, lines of credit and maybe even credit cards. Now is the time to reexamine all your debts and financial situation.

Having a prudent financial mortgage expert working on your behalf is the best defense against rising interest costs. The decision you make over the next couple of months regarding your mortgage and other debts will have a major impact on your financial future

www.greatlondonhomes.com

CREA Forcasts Record Home market this year

Free Real Estate Info — Tue, 09 Feb 2010 16:21:00 GMT

CREA forecasts record home market this year

Garry Marr, Financial Post

Canadian real estate sales and prices are poised to set records this year, according to a new forecast that is bound to reignite calls in some quarters for tighter lending rules.

The Canadian Real Estate Association, which represents 100 boards across the country, said Monday it expects existing-home sales to reach 527,300, a 13.3% increase from a year ago and a 1.2% increase from the record high set in 2007.

The new-home market appears to be picking up steam, too. Canada Mortgage and Housing Corp. said there were 186,300 starts in January on a seasonally adjusted annualized basis, the highest level of new construction since October 2008.

Bank of Canada governor Mark Carney has warned about rising levels of household debt, which is reaching record levels. Finance Minister Jim Flaherty has suggested he is prepared to tighten mortgage requirements and continues to monitor the market.

"One of the legitimate concerns of the Finance Minister might be if you make qualifying for mortgage default insurance prematurely restrictive that it will quell housing activity even as erosion in affordability continues," said Gregory Klump, chief economist with CREA.

There are have been some rumblings that the government is considering new rules that would require buyers who need mortgage insurance to have at least 10% down and amortize their mortgage over just 25 years instead of the current 35 years.

Anybody with less than a 20% downpayment must get mortgage insurance, if they are borrowing from a financial institution governed by the Bank Act.

Mr. Klump's group contends the market is going to correct on its own in the second half of 2010. CREA has called for sales to drop 7.1% in 2011. The group says that while prices will rise by 5.4% in 2010, to a record high of $337,500, they will drop by 1.5% in 2011.

That view of the housing market is not out of step with some economists, who say that once interest rates rise and inventory levels increase, price increases will shrink. Year-over-year price increases in some markets, such as Toronto, have been around 20% for the past few months.

"There is still a sense of urgency to get into the market. The market will continue to be strong over the next few months," said Benjamin Tal, senior economist with CIBC World Markets, adding he could see new construction also touching 200,000 starts before beginning to fall.

Part of that urgency in the housing sector is being driven by the introduction of the harmonized sales tax in Ontario and British Columbia on July 1. The tax would apply to real estate services and could increase the cost of buying a home by a few thousand dollars.

"It's a factor fuelling a higher level of activity in Ontario and British Columbia," Mr. Klump said. "What's more Canadian than avoiding taxes?"

Elton Ash, vice-president of Re/Max of Western Canada, said he thinks the forecast put out Monday was a little optimistic for 2010, specifically the 4.2% price increase for British Columbia. "But I also think the market will be better in 2011 [than CREA]."

Mr. Ash is actually in favour of some measures to cool the market, like reducing the amortization period back to 25 years. But he wonders whether increasing the downpayment will take some people out of the housing market.

"I think leaving it at 5% would be okay," Mr. Ash said.

Banks Keep Interest Rates unchanged

Free Real Estate Info — Thu, 21 Jan 2010 16:25:00 GMT

Bank lowers slightly growth forecast for 2009 and 2010, but keeps interest rates unchanged

OTTAWA - The global recovery is under way but expansion of the Canadian economy remains dependent on government support and historically low interest rates, the Bank of Canada said today.

As expected, the central bank again pledged to keep its trendsetting policy rate at the lowest practical level of 0.25 per cent until mid-2010, saying the economy at the moment is performing slightly worse than it projected three months ago.

To reinforce the commitment, the bank said it was extending its emergency lending instruments to April, with maturity dates beyond June, at the low policy rate.

The announcement contained few surprises for markets, but the tweaking of growth rates — although at the margins — was somewhat unexpected.

“Economic growth in Canada resumed in the third quarter of 2009 and is expected to have picked up further in the fourth quarter,” bank governor Mark Carney and his policy-making council said in an accompanying note.

“Nevertheless, considerable excess supply remains, and the bank judges that the economy was operating about 3.25 per cent below its production capacity in the fourth quarter of 2009.”

Carney had been among the most bullish of forecasters for the economy this year, although by historic standards, even Carney was not anticipating a robust recovery.

Now the bank says the economy likely contracted by 2.5 per cent last year, a little worse than the 2.4 per cent it had predicted in October.

As well, it says growth this year will be 2.9 per cent, one-tenth of a point less than it had previously forecast and more in line with the private sector consensus of 2.6 per cent.

The good news is that the economy will make the up ground in 2011, says the bank, with a growth rate of 3.5 per cent. It had earlier pegged next year’s growth at 3.3 per cent.

The bank’s message to Canadians is that although conditions are improving, strengthened by a global economy that is expanding faster than expected, the recovery still is dependent on “exceptional monetary and fiscal stimulus, as well as extraordinary measures taken to support financial systems.”

In Canada , the bank says the private sector won’t become the sole driver of domestic demand until 2011.

As has been the case throughout the recession, Canada ’s recovery continues to be hampered by the slow pick-up in U.S. demand for Canadian products and the high Canadian dollar, which makes those exports less competitive.

That means Canada ’s internal domestic economy, largely reflected in consumer spending and the hot housing market, will be the main engine of the recovery.

The bank noted that inflation has been rising faster than it anticipated, but appeared not to be overly concerned, especially with the large amount of slack in the economy.

Although economists forecast inflation likely hit 1.6 per cent in December, after being below zero through much of the summer and part of the fall, the bank said it still doesn’t believe inflation will return to the two-per-cent target until the third quarter of 2011, when it expects the economy to be firing on all cylinders.

The Canadian Press

www.greatlondonhomes.com

Rates Not Going UP

Free Real Estate Info — Thu, 14 Jan 2010 17:04:00 GMT

The Bank of Canada won't raise interest rates to cool the country's hot housing market, a spokesman said Monday, preferring to leave any tinkering to the country's Finance Minister.

"Some observers - those who see a housing bubble forming - have said that since low interest rates have stimulated housing market activity, the Bank should now raise interest rates to dampen that activity," deputy governor Timothy Lane wrote in a speech delivered by an adviser on his behalf in Edmonton. "But that poses a problem."

Existing-home sales are up 73 per cent year-over-year, while prices have climbed nearly 20 per cent as buyers take advantage of historically low interest rates to finance purchases.

Those who fear a bubble worry that many people are taking advantage of cheap money to buy homes they wouldn't be able to afford once rates rise, leading ultimately to a crash in prices.

Council OK's Licence for Small Landlords

Free Real Estate Info — Tue, 22 Sep 2009 18:35:00 GMT

London Free Press Article September 22, 2009:

Council OK's licence for small landlords

London city council last night voted to license smaller landlords, a measure most politicians said would protect the health and safety of vulnerable tenants.

The new bylaw was a compromise measure that will leave about 8,000 landlords rather than bylaw officers policing properties on first inspections.

But while the change was moderate, drawing the support of 13 of 17 council members, the rhetoric was at times heated, with some supporters of licensing accusing a landlord lobby group of deceit.

"Reprehensible scare tactics" was how Coun. Nancy Branscombe described efforts by the London Property Management Association to enlist tenants who won't be affected by the change to oppose licensing.

The new bylaw only applies to rental properties with four or fewer units and properties that have added units since 1993 without expanding the size of the building.

But the London Property Management Association sought support from tenants in highrises with notices that warned they would be slapped with a "tenant tax."

That claim is disputed by city staff, who say the $25 licence fee per building simply covers the cost of adding a bylaw officer and a clerical worker to boost enforcement -- a view endorsed by most of council.

"I hope nobody stands up today and says it's a tenant tax because that would be shameful," Coun. Stephen Orser said.

His warning didn't deter Coun. Paul Van Meerbergen.

"It is a tenants' tax -- no ands, ifs or buts," he said.

Van Meerbergen was joined in opposition to the bylaw by Controller Bud Polhill and Couns. Roger Caranci and Cheryl Miller, but a broad coalition of council members held the day.

Not all tenant advocates were entirely pleased either -- Coun. Joni Baechler acknowledged some viewed the measure as "watered-down." But their allies on council seemed pleased to get more protection for tenants as well as neighbourhoods that suffer from absentee landlords.

"We're finally going to be able to go in and make the (bad) landlords smarten up," said Coun. Bernie MacDonald, whose ward includes student housing around Fanshawe College.

Larger landlords fear council will some day expand licensing to include them, too, Deputy Mayor Tom Gosnell said. But that's not reason to intervene now with smaller landlords who place tenants' health and safety at risk, he said.

The new bylaw will be phased in beginning next March when landlords will be given checklists by the city that highlight key areas of safety and health. A landlord must fill them out, share them with tenants and submit them to city hall. The bylaw also enables enforcement officer to enter rental buildings without permission as long as they provide notice, a power lacking in the existing bylaw. Jonathan Sher is The Free Press city hall reporter

April Home Sales Improve

Free Real Estate Info — Tue, 05 May 2009 22:04:00 GMT

April home sales improve

Last month, 804 homes exchanged hands in the jurisdiction of the London and St. Thomas Association of REALTORS® (LSTAR), including 666 detached homes (up 1.8% from April 2008) and 138 condos (down 26.6% from April 2008). Year to date, 1,840 detached homes and 414 condos have been sold – down 15.1% and 26.9% respectively compared to the same period in 2008.

April sales have increased by 20% over March .The federal government incentives announced in the last budget, including the increase in the maximum withdrawal allowed under the Home Buyers’ Plan to $25,000, and the First Time Buyer Tax Credit, have certainly influenced April’s sales.

Year-to-date for April 2009, the total residential average price is down 1.8% to $207,591, compared with a decline of 2.7% in March, 2.4% in February and 2.8% in January.

Inspections for New Homes

Free Real Estate Info — Wed, 14 Jan 2009 21:58:00 GMT

Inspections: If these walls could talk

Jan 03, 2009 Tracy Hanes Toronto Star

After almost a year of living in their new townhouse in Uxbridge, Libby McCready and her husband figured there was little wrong with their home. But Libby's parents, who had bought several new houses over the years, urged them to take the time to fill out the Tarion new home warranty program's one-year report listing any issues.

As neither Libby nor her husband had much knowledge or experience with home building or repairs, they hired home inspector Brian Daley to have a look.

"We wanted to make sure we caught everything but we're not handy," says McCready. "Brian found a number of things we never would have noticed. The stuff he found came as a surprise."

The most significant defect Daley found was that the clothes dryer hadn't been vented properly, thus was not blowing outdoors but into insulation, which could have eventually caused a moisture and mould issue. He also noted that the plumbing to a toilet in a seldom-used second bathroom wasn't on the right angle for flushing, that a promised rough-in for an electrical fan for the fireplace was not completed and that attic insulation had been flattened in places.

Armed with Daley's report and digital photos, the McCreadys filled out the Tarion Warranty Corp. forms by the one-year deadline and as a result, those issues are covered. If they hadn't submitted the report in time, their builder would not have been obligated to repair the defects.

"Although everything turned out fine, I'd never move in to a brand-new house again without having a home inspection done right away," says McCready. "I would have rather had a comprehensive list of the problems from the start, as we'd lived here for almost a year and some of the issues could have caused problems. The inspection was totally worthwhile."

Unfortunately, most new homebuyers mistakenly "believe their new house is perfect," says Daley, when that's seldom the case. That's why Daley and Charters Kenny, both registered home inspectors (RHI), have launched New Home Inspections , a company that specializes exclusively in new home warranty inspections in the GTA and beyond.

Other home inspectors, such as Milton RHI and engineering technologist Martin Sweeney of A Home Inspection Company Inc. have also started offering warranty inspections in addition to their regular inspections of resale homes. Sweeney began doing new home inspections and preparing Tarion documents for homeowners as new development boomed in Halton Region.

New homes in Ontario are covered by the Tarion warranty for deposit insurance, protection against defects in work and materials, against unauthorized substitutions and against delayed closings and occupancies without proper notice. The most common claims relate to defects in work and materials, which require homeowners to submit a list of deficiencies at 30-day and one-year deadlines.

While builders provide a pre-delivery inspection (PDI) for buyers to note defects, Daley and Sweeney say these are more geared to cosmetic issues, such as nicks in drywall and whether the right flooring, cabinetry, etc. are provided. Those inspections usually don't include checks of the attic, of heating and cooling systems or an in-depth exploration of the house's structure and systems. And while independent third-party inspections take about three hours, PDI inspections are usually far briefer.

Daley says outside a new home, his company checks drainage and grading, looks for foundation defects, checks installation of siding and brickwork, roof installation and venting. Inside, they inspect walls, windows, floors, ceilings and doors for structural issues, check that stairs are properly supported, plumbing fixtures and fittings properly installed, that insulation in attics, basements, etc. is sufficient and will see if the heating system is distributing air properly.

"I often find insulation is insufficient or missing in attics," says Sweeney. "Sometimes, vapour barrier hasn't been installed, and on the roof I might find that nail heads haven't been caulked and sealed, which will eventually cause moisture to seep in."

He says it's difficult for the average homeowner to have knowledge of the systems and techniques used to build a house. For example, the new tankless hot water heaters and heat recovery ventilators are "really sophisticated pieces of equipment." He often finds HRV units haven't been correctly installed.

Daley says his company finds an average of 30 defect items during a warranty inspection and Sweeney says his list usually includes 20 to 30. J.D. Power and Associates' 2008 survey of GTA new home buyers found that the proportion of homes delivered "defect-free" in the GTA market was 12 per cent in 2008 (which means 88 per cent had defects). The total number of construction problems noted by buyers was down to 21 per home in 2008 from 23 per home in the previous year, according to the J.D. Power study, which includes only large volume GTA builders.

"It's not because most builders aren't doing a good job or are taking shortcuts," says Daley, but because homebuilding involves numerous complex systems.

Most large builders rely on sub-trades and as many as 30 different trades can be involved in the building of a home, says Daley – and it's unlikely all were supervised during the building process. Because they are piece workers, saving time and money is their No. 1 goal, says Daley, which may compromise quality.

Municipal building inspectors are responsible for checking every aspect of a house as it is being built, but it's virtually impossible to do this effectively in a subdivision, says Daley.

"What generally happens is they check a small percentage of homes in hopes the builders will follow their requirements for the rest of the homes."

While a builder may offer to provide one of his own reps for a warranty inspection, "it is not in the builders' interest to find fault in their own work." Daley says some builders have the best intentions, but it's more likely that their inspector will find fewer defects than a third-party professional.

Daley's company charges $375 per inspection and Sweeney charges $340 to $400, depending on the size of the house. Inspectors from both companies can help fill out Tarion warranty forms.

Anyone considering hiring a home inspector should call at least three different companies before making a decision, Daley suggests. Those with RHI designation have extensive training and are insured. A good place to start a search for a home inspector is with the Ontario Association of Home Inspectors.

David Giovanniello

Century 21 First Canadian Corp.

519-777-0795 Cell

519-673-3390 Office

www.greatlondonhomes.com

www.freelondonhomeinfo.com

Canada's economy falls into Recession

Free Real Estate Info — Fri, 19 Dec 2008 18:41:00 GMT

Canada's economy falls into recession, says RBC Economics report

THE CANADIAN PRESS

December 19, 2008

TORONTO - Weaker U.S. growth and tight credit have resulted in Canada's economy falling into recession, according to a report by RBC Economics.

It says the country's economy will record growth of only 0.6 per cent this year, then experience no growth at all in 2009. RBC chief economist Craig Wright says the deep recession in the U.S. "will likely push the Canadian economy into recession as well."

But he says the slowdown in Canada may not to be as severe as in other countries since imbalances plaguing other countries are more pronounced.

Wright says the bank expects to see a "moderate, though sustained, recovery in the second half of 2009."

The bank forecast also says negative growth in the next two quarters may push Canada's unemployment rate to a peak of 7.4 per cent in 2009.

Recessions, or economic slow downs, What are the best things about them?

Free Real Estate Info — Mon, 17 Nov 2008 19:19:00 GMT

Recession or economic slow downs are not only great buying opportunities, they also provide you with the opportunity to slow down, look at your life and make changes for the better. We may have more time to spend with Family, friends, and even ourselves

1) real estate prices are coming down to levels where it makes sense again to buy
2) mortgage rates are lower
3) car dealers actually are open to talk hen you mention the word "discount"
4) seller's get more motivated on price and terms, and will accept VTBs and long closing (although I have not seen this yet in BC's or Edmonton's multi-family market .... yet)
5) used cars are a tremendous bargain
6) good deals are available when traveling to sun destinations like Palm Springs, Hawaii, Florida or Mexico
7) investors are happy with double digit ROIs and opposed to triple digit in 2-3 years
8) more renters

This makes for a great time to invest in real estate. It is a great time to invest in a great cashflowing property that will appreciate in time and the tenants will help you pay down.

www.greatlondonhomes.com

www.investmentpropertieslondon.com

www.stoprentinglondon.com

Home Sales Taper off after best September ever

Free Real Estate Info — Sun, 16 Nov 2008 18:52:00 GMT

London, November 4, 2008

Home sales taper off after best September ever

Last month, 581 homes exchanged hands in the jurisdiction of the London and St. Thomas Association of REALTORS® (LSTAR), including 475 detached homes (down 15.9% from October 2007) and 106 condos (down 24.3% from October 2007). Year to date, 6,137 detached homes and 1,555 condos have been sold – down 7.5% and 9.6% respectively compared to the same period in 2007.

"Given that we just had our best September ever, we expected to see our October numbers return to more normal levels," says Bruce Sworik, LSTAR President. "We have seen excellent numbers this year. In 2008, the area has seen its third-best February, its second-best May (also its third-best month ever), its second-best July on record and its best September ever. Since 2007 was a record-breaking year, we are pleased to see that our year-to-date sales for October 2008 are at 7,692, just 7.9% below last year’s figure of 8,355 over the same period. And that’s a good thing."

Year to date, number of sales and average prices in LSTAR’s jurisdiction were: Type	Units Sold	Average Price	$$ Increase from YTD 2007
Total Detached	6,137	$227,062	4.9
Total Condo	1,555	$152,723	4.4
Total Residential	7,692	$212,034	5.0

Source: London St. Thomas Real Estate Board Website

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