Canada’s National Housing Strategy at A Glance

Canada_Housing_Strategy

Everyone deserves a safe and affordable place to call ‘home,’” Prime Minister Justin Trudeau said in a statement. “Canada’s first ever National Housing Strategy is a once-in-a-generation vision to reduce homelessness, support community housing and shelter spaces, and address challenges of housing affordability.”

We took a major step forward on housing today, and we will continue to deliver initiatives that strengthen the middle class and lift more Canadians out of poverty. –The Right Honourable Prime Minister Justin Trudeau

The strategy was developed by the Government of Canada through consultations with Canadians who have encountered obstacles with respect to quality affordable housing, experts, stakeholders, as well as provincial, territorial and municipal governments.

“Our Government is establishing a federal leadership role in housing,” said Jean-Yves Duclos, Minister of Families, Children and Social Development and Minister Responsible for CMHC. “The National Housing Strategy will create a new generation of housing in Canada. It will promote diverse communities and will build housing that is sustainable, accessible, mixed-income and mixed-use that will be located near transit, work and public services.”

Part of the National Housing Strategy includes the $4-billion Canada Housing Benefit, which will be funded jointly by the federal, provincial, and territorial governments. Launching in 2020, the Canada Housing Benefit will put funds support into the hands of Canadians living in social housing, those on a wait-list and those living in private residences but struggling financially. The Canada Housing Benefit will deliver an average of $2,500 per year to approximately 300,000 households across Canada.

For more information, visit CMHC.

Thanks to Remax for sharing this article.

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It Just Got Harder to Buy a Home in BC….

Did you know new mortgage changes and regulations are coming that will have a significant impact for home buyers?  Effective January 1, 2018 the new Residential Mortgage Underwriting Practices and Procedures (Guidelines B-20) will be applied to all federally regulated lenders.

The changes to the guidelines focus on:

  • the qualifying rate for uninsured mortgages
  • expectations around loan-to-value (LTV) limits
  • restrictions to purchases designed to work around those LTV limits.

What does this mean for homebuyers? I spoke with Geoff Lee of GLM Mortgage Group to give you the full details.

“The new guidelines will require that all conventional mortgages (those with a down payment higher than 20%) will have to undergo stress testing. Stress testing means that the borrower would have to qualify at the greater of the five-year benchmark rate published by the Bank of Canada (currently at 4.89%) or the contractual mortgage rate +2% (5 year fixed at 3.19% +2%=5.19% qualifying rate).”

These changes effectively mean that a buyer’s borrowing power is directly impacted—up to a decrease of 25%. Let’s look at an example:

BUYING A HOME

When buying a home with these new guidelines, borrowing power is also restricted. Using the scenario of a dual income family making a combined annual income of $85,000 the borrowing amount would be:

Current Lending Guidelines 

Qualifying at a rate of 3.34% with a 25-year amortization and the combined income of $85,000 annually, the couple can purchase a home at $560,000

New lending Guidelines

Qualifying at a rate of 5.34% (contract mortgage rate +2%) with a 25-year amortization and the combined annual income of $85,000 you would be able to purchase a home of only $455,000.

OUTCOME: This reduces your borrowing power by $105,000.  I’m sure you’ll agree that’s a significant amount.

*For more information on the other guidelines, read GLM’s full article HERE

In the above scenario, it is a scary thought that you would qualify for 20-25% less than you would under today’s current lending guidelines. In our Fraser Valley markets, this is exceptionally significant when the average detached home price is well above $800,000.

What can be done?  If you are thinking of buying, you may want to do so before these new guidelines take full effect in January of 2018. The market has maintained high median prices and low inventory over the past several months—and with the rate increases plus this new announcement- it is getting harder and harder to buy a home. Don’t wait- give me a call today and let’s meet to discuss how you can win! And remember, here at Young Real Estate Group, we get you more.

Guest Post: The Top 10 Latent Defects in Home Inspections

We are excited to have one of the sharpest Home Inspectors with us today! Say hello to Daniel Fedosenko of Mr. Home Inspector Ltd! Daniel has been in the industry for a number of years and has a wealth of knowledge when it comes to home inspections. From Vancouver to Hope and everywhere in between they are helping homeowners check off all the boxes when it comes to home inspections. So without further ado, take it away Danny!

I have worked with Alistair Young and his team for a number of years. At Mr. Home Inspector our goal is to:

  • Offer solutions to issues/challenges (not just reported problems)
  • Go above and beyond the call of duty, and
  • Provide exceptional customer service in the Lower Mainland (from Squamish to Hope).

Today, we wanted to cover the topic of Latent Defects.  Latent defects are those which would not be revealed by any inquiry which a purchaser is in a position to make before entering the contract. Here are the top 10 Latent Defects that you may miss if you don’t have a proper home inspection done!

  1. Bathing area moisture issues behind tile surrounds: water damage.
  2. Pest infestation in attic, crawlspace, and or living areas: damage and air qulity issues can arise.
  3. Plumbing issue: polybutylene pipes with plastic fittings 1978-1995 years installed. Water damage and insurance issues, extra costs
  4. Hidden water leaks: ceilings, walls, or floors: water damage and extra costs will occur.
  5. Grade levels around homes too high up onto the structure: structural rot and extra costs will occur.
  6. Electrical panel size 60 amps: causes insurance issues and extra costs to upgrade the panel size to minimum 100 amps.
  7. Poor ventilation in attic causes mildew/mold in areas: air quality issues and extra costs to treat area.
  8. Toilet tanks by Crane manufactured between 1980-1991 (tanks prone to crack): water damage
  9. Basement and crawspace water leakage issues: water damage and extra costs to address.
  10. Aluminum wiring 1960’s to 1970’s: expands and contracts and loosens and can cause a fire.

There you have it folks–these 10 defects can be avoided by having a home inspection done before you move into your new home. Get in touch with me and my team today, we promise to help you find any issues and find a solution!

 

Market Update + What defines a Sellers Market?

The summer heat has spilled over to the real estate market! This month the Fraser Valley remained in a Sellers Market.

Looking at the table above and seeing the ‘sales ratio’ you may ask how those numbers translate into a Seller’s Market. So we thought that this month we would dive into how we determine the market as a balanced, sellers, or buyers market.

First, what is a Sales Ratio? The Sales Ratio is the current inventory of homes that are selling. It is found by taking the number of sales and dividing

Examples:

 10% sales ratio=1 in 10 homes selling rate

33% sales ratip=1 in 3 homes selling rate

Make sense? We then take those ratios and compare them to benchmarks which determine if the market is balanced, favours buyers, or favours sellers.

  • A buyers market would have a sales ratio of 11% or less
  • A balanced market would have a sales ratio of 12-20%
  • A seller’s market would have a sales ratio of 20% or more
Looking at the stats in the table above, you can see that we are in a seller’s market–and have been for the past several months. If you would like to learn more about the stats for your specific area–or are interested in chatting about putting your home on the market get in touch with us today. We would love to meet with you and help you understand what the market is doing in your area!

4 Reasons to Buy in 2016

4-reasons-to-buyThe new year will be here before you know it! But there is still time to find your dream home in 2016—and there are 4 reasons why you SHOULD buy before we hit 2017!

 

  1. Harder for First Time Home Buyers Increased Government Intervention: With each passing month there seems to be more regulations and interest rate volatility.  From the changes on October 17th, to the new one’s coming into effect as of November 30th  buyers are seeing a significant impact on their spending ability.
  1. A Market Rebound will make Buying More Expensive The Real Estate market slowed in Vancouver for the month of October-which is good news for First Time Home Buyers. However, there is the potential of a market rebound occurring, and prices going back up in the new year.
  1. Segments of our Market are Increasing: Two segments have been growing in the real estate market and will continue to do so in 2017.  These two segments are First Time Home Buyers and Baby Boomers looking to downsize. This increase in demand, coupled with a lack of supply, tends to bring higher prices.
  1. Healthy Inventory of Homes Taper Off in the Winter: The supply of homes for sale is usually fairly low in January and February, making November and December a good time to pick up a new home. Buyers like a higher selection of homes and a lower chance of a bidding war.

The new year and holidays will be here before you know it! Take advantage of the less government intervention, lower pricing, and good supply available right now. This fall and winter could be your time to find the perfect home.