CMHC predictions on the New Home Real Estate Market

These are the comments made by CMHC on the New home real estate market.
New Home Market Sales Will Decline

The Greater Toronto Area (GTA) new home market will experience a slower pace in activity during 2009. Total new home sales are expected to drop to 15,500 units this year from 28,000 sales reached in 2008.

Pre-construction high-rise sales will reach 7,000 units while low rise sales are expected to hit 8,500 units in 2009, resulting in an increased share of new home sales in the low-rise segment for the first time in six years.

Softening resale market conditions have resulted in an increased supply of lower priced resale homes in many GTA neighbourhoods. Discerning buyers will be able to purchase homes at significantly lower prices in the resale market than in the new home market. Reduced pre-construction sales centre traffic will be the result. This substitution effect will slow price growth in the new home market in 2009 — the average price for a new single detached home will slip by about two per cent to $512,000.

Sales of high rise units will account for about 45 per cent of total sales this year, down from 55 per cent in 2008. While fewer projects are likely to open this year, reducing the total number of condominium units available for sale, project launches and sales are expected to pick up during the latter part of 2009.

Improved financing conditions and lower construction costs passed on by builders will bring more competitively- priced units to the market.

Steady immigration to Toronto and favourable demographic shifts will continue to play a major role in increasing demand for new condominium apartments. Lower prices for condominium apartments are especially attractive to newcomers to Canada looking for an entry point into homeownership.

An aging baby boomer population gearing up for retirement will also look towards this housing sector as they look to downsize and minimize housing maintenance.

A compositional shift in Toronto’s employment landscape will further add to demand for more affordable housing. Job losses in the goods-producing sector will mean GTA housing demand will rely more heavily on employment in the lower paying services industry.

I hope this finds you Happy and Healthy!

All the Best!

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS Newsletter
RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
2 FAX 905-828-2829 ÈCELL 416-520-1577
› E-MAIL : mailto:mark@mississauga4sale.com?subject=Mississauga
Website : Mississauga4Sale.com

• Thinking of selling your home in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
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CMHC reports on Resale Market Resale Home Buying

This CMHC's predictions on the residential Resale Market Resale Home Buying

Activity Will Ease

Strong economic fundamentals have been a driving force for the GTA housing market over the past decade.

Now faced with a rising unemployment rate and declining labour income growth, households are scaling back expenditures on big ticket items, particularly related to housing. As a result, resale home purchase activity will slow down in 2009. This year, GTA home sales will decline by 21.5 per cent to 60,000 units - the lowest level of existing sales since late 90’s. 2010 should bring signs of recovery and is forecast to be a turning point for the area’s resale housing market. Improving housing affordability, combined with more favorable employment and household wealth situations will gradually entice homebuyers back into the market.

First-time buyers will continue to be a key driver of housing demand this year and next. However, this segment will demonstrate a greater degree of caution while making their home-buying decisions. A deepening economic downturn especially impacts first-time buyers, who tend to have less job security and an inadequate savings cushion to deal with temporary periods of unemployment or underemployment.

Sales of existing homes peaked in 2007 — around the same time the cost of home ownership hit a new high in the GTA. Over the 2003- 2008 period, the accelerated rise in average resale prices caused the gap between actual household income and the income required to purchase a home in the GTA to narrow. Buyers responded with a much lower level of sales in 2008.
Over the next two years, the expected home price depreciation, stable household earnings growth

and record low mortgage rates should result in more comfortable homeownership conditions. As economic conditions begin to improve next year, buyers are expected to respond to the much improved affordability conditions.

The number of existing home sales in the area is forecast to increase in 2010.

I hope this finds you Happy and Healthy!

All the Best!

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS Newsletter
RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
2 FAX 905-828-2829 ÈCELL 416-520-1577
› E-MAIL : mailto:mark@mississauga4sale.com?subject=Mississauga
Website : Mississauga4Sale.com

• Thinking of selling your home in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
• Power of Sales and Foreclosures
• If you have not already signed up to receive my monthly real estate newsletter, you may do so here: On-Line Real Estate Newsletter sign up
• See seasonal housing patterns
• Would you like me to send you a 2009 Calendar?

CMHC report on GTA resale residential marketplace

CMHC has come out with their GTA housing report and has reported the following for the GTA marketplace in residential real estate.

Enjoy,
Mark


Resale Market Demand for Existing Homes Slows

Greater Toronto area (GTA) resale home purchase activity slowed considerably in 2009. During the first quarter of 2009, a total of 12,957 sales transactions were recorded through the Toronto Real Estate Board, down 27 per cent from the same period a year ago.

Despite reduced average selling prices, record low borrowing costs and continued income growth, households were hesitant in their home buying decisions. Increased choice in the market, along with a rising rate of unemployment and a less positive outlook for job and wage growth is leading to much less aggressive home buying activity.

The level of new listings, an indicator of resale market supply, edged lower by eight per cent in the first three months of 2009. More sellers have arguably realized that they could not get the anticipated values for their properties and were challenged by the larger number of competitors
on the market.

Despite a moderation in the pace of new home listings, the GTA resale market remained well supplied. New listings are coming off record-high levels in 2008 – a time when many homeowners capitalized on strong home equity gains accumulated over the previous years.


The relationship between demand and supply (measured by the sales to new listings ratio) dictates movements in price and measures the level of choice in the market. A Sales to New Listings Ratio (SNLR) below 40 per cent typically signifies a buyer’s market, where properties take longer to sell and the purchaser has the upper hand in terms of
negotiating terms and price.

In the first quarter of 2009, the SNLR moved down to 38 per cent while average resale prices in the GTA

I hope this finds you Happy and Healthy!

All the Best!

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS Newsletter
RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
2 FAX 905-828-2829 ÈCELL 416-520-1577
› E-MAIL : mailto:mark@mississauga4sale.com?subject=Mississauga
Website : Mississauga4Sale.com

• Thinking of selling your home in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
• Power of Sales and Foreclosures
• If you have not already signed up to receive my monthly real estate newsletter, you may do so here: On-Line Real Estate Newsletter sign up
• See seasonal housing patterns
• Would you like me to send you a 2009 Calendar?

CMHC report on New Home Market

This is the latest report by CMHC regarding the new homes market, there is a dichotomy!

This is likely my final post for 2008. I wish you a Happy New Year and all the best to you and your family in 2009.

Thank you,

Mark

New Home Market

Housing Starts Moderate

The seasonally-adjusted annual rate (SAAR) of total housing starts dipped below trend in November for the Toronto Census Metropolitan Area (CMA).

In response to higher home prices, comparatively less expensive high-rise home types have been increasingly popular.

Total home starts on an unadjusted basis were almost 25 per cent above last year’s level for the January through November period. Condominium apartment starts remained the driver – up by over 130 per cent.

Starts for all low-rise housing types were down compared to the same period last year, while apartment starts were up.

The dichotomy between high-rise and low-rise home construction remained in place year to- date through November.

CMHC reports on TORONTO HOUSING STARTS MODERATE IN NOVEMBER 2008

This is CMHC's report on the housing starts in Toronto area.

TORONTO’S HOUSING STARTS MODERATE IN NOVEMBER

issued TORONTO, DECEMBER 8, 2008 –

The seasonally-adjusted annual rate (SAAR) of total housing starts dipped below trend in November, according to preliminary housing starts data released today by the Canada Mortgage and Housing Corporation (CMHC) for the Toronto Census Metropolitan Area (CMA).

Total home starts on an unadjusted basis were almost 25 per cent above last year’s level for the January through November period. Condominium apartment starts remained the driver – up by over 130 per cent.

“The seasonally adjusted annual rate of home starts dipped in November, in part because of the volatile condominium apartment market segment in the GTA,” according to Jason Mercer, CMHC’s Senior Market Analyst for the GTA. “In line with the CMHC forecast, total starts year-to-date are up strongly compared to the first eleven months of 2007.’’

Source: Canada Mortgage and Housing Corporation

Read more about:

• Interest Rates
• Power of Sale Properties
• Price Trends
• or Search the MLS and more at my website

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
›mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

• Thinking of selling in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
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CMHC report GTA resale real estate market performance in 2009

Here are some highlights and thoughts taken out of the latest CMHC report on how our real estate market will perform in 2009

It's interesting to note that CMHC is still predicting growth for next year.

All the best,
Mark



From CMHC's perspective, how do they think the GTA resale residential home market perform in 2009?

• Increased resale market choice will result in less spill over demand in new home sales.
• GTA's resale home price in 2009 has been forecasted to moderately grow by 1.8%.
• GTA's MLS Sales are going to be strong from a historical standpoint.
• GTA's low rise sales trends will continue to lower according to RealNet Canada Inc. & CMHC forecasts.
• High rise sales will moderate but remain robust.
• Moderate growth in wages across the GTA has been forecasted by statistics Canada, Bank of Canada and CMHC to increase by 2.6%.
• Rising condominium completions will trigger more MLS listings.
• Homebuyer intentions for rental households will be lowered.
• Increasing choice in the resale home market will result in moderate price growth
• Price trend is flattening as average GTA existing home prices are going to stabilize.
• Resale market will be more balanced according to sales-to-new listings ratio.
• Condominium apartments will be popular as high rise sales. Share of high rise sales, as a percentage of total sales, has been forecasted to be 60% in 2009 compared to 58% in 2008.
• More supply in the condo market will result in more moderate price growth.

Drivers of Housing Demand, Economic Conditions & Interest Rate Outlook:

• Homeowners have accumulated equity in their homes across the country & the strongest accumulation of equity built was in Western Canada where homes appreciated more rapidly back in 2007.
• Immigration will continue to compensate for weaker growth from other sources & GTA will be the key beneficiary of immigration.
• Given the tight labour market, growth in disposable income will remain strong.
• Mortgage Rates will remain low, but will edge slightly higher late in 2009
• Foreign-born population as percentage of total population is 45.7% in Toronto.
• Home ownership is a key goal for immigrants & therefore rate of home ownership will increase.
• Tight labour market means job growth will moderate
• The share of mortgages in arrears is near its most moderate level since 1990
• Home owners in Ontario, Quebec, and the Atlantic Provinces have also built considerable equity in their homes.

Housing Outlook Summary

• MLS sales are expected to moderate from record levels in 2008 and 2009 and housing starts will move more in line with demographic fundamentals.
• Economic fundamentals will remain strong in Canada. High employment levels, rising incomes and low mortgage rates will provide a solid foundation for healthy housing markets. However, increased supply of existing homes listed for sale coupled with the rise in house prices in recent years will moderate the demand for housing in 2008 & 2009.

Read more about:

• Interest Rates
• Power of Sale Properties
• Price Trends
• or Search the MLS and more at my website

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
›mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

• Thinking of selling in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
• On-Line Real Estate Newsletter sign up
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CMHC predicting more choice equals moderate price growth in 2009

GTA MLS Sales Predictions for 2009

This chart shows historic and predicted MLS sales in the GTA for 2009 by CMHC
They are predicting that we will have about 75,000 in 2009 a drop of about 7000 from the number of sales in 2008

CMHC Outlook for GTA Resale Housing Market

In case you missed it, here is a report from CMHC about our housing market.

Here are some high-lights from CMHC and their thorough report:
For your information, please find attached the latest Housing Market Outlook data for GTA (Fall 2008 edition).

1. The New Homes and sales Market
i) High rise sales will dominate new home market...
- New home sales in the Greater Toronto Area (GTA) will continue to moderate in 2009.
- High rise sales have accounted for more than 50 per cent of the total share of sales since the end of 2007. This trend will continue and the share of high-rise sales will increase in 2009.
- New home sales will trend lower as choice increases in the resale market.

- The low-rise housing sector will experience moderating sales much more so than the high-rise sector.
- Strong immigration into the GTA has also played a role in increased demand for condominium apartments, due to their lower price point.
- Changing demographics in the GTA also explain the heightened interest in the high rise market. The average household size is shrinking with an increase in lone-parent and childless family households.
- The luxury high-rise market is also a growing niche that is catering to an increasing number of aging baby boomers and empty nesters.

ii) Starts of resale homes to edge down.
- Softer local economic conditions and elevated home prices will push the demand for home ownership lower.
- Following a healthy increase for 2008, total housing starts will edge lower by 21 percent in 2009.
- Low-rise home starts will decline at a greater rate than apartment starts.
- Condominium apartment completions have begun to trend higher and will grow at a stronger rate in 2009. For this reason, condominium apartment construction will remain at high levels through the end of next year.


2. Existing resale Home Market
i) Existing home sales off the peak...
- Over the next two years, the number of home sales under the MLS® system in the GTA will trend lower off the 2007 record high.

- Sales will moderate due to softer economic conditions domestically and elevated home prices.
- While home sales will be off record levels, continued steady net-migration and low borrowing rates will keep home buying activity in the GTA in line with the average over the past ten years.

ii) More real estate supply, moderate resale price growth.
- New listings will continue to grow to reach a record-high level in 2008. The trend will flatten out in 2009.
- The trend in listings growth will eventually slow and then change direction, however, as fewer home owners are able to sell their homes for the anticipated values for their properties. This will begin to happen toward the end of 2009.
- While the sales-to-new listings ratio will continue to decline, it will do so at a diminishing rate.

- The resale market will remain balanced, with prices growing in line with inflation.
- The average home price in 2008 will be up 2.6 per cent to $387,000. By the end of 2009, the average price of home will reach $394,000 - up 1.8 per cent.
- Not all housing types will experience the same moderation in price growth over the next year. Condominium apartments in the central Toronto area are a good example of this. The central Toronto area remains a tighter market than the region as a whole.

iii) First buyers of first time homesniche gets smaller.
- Over the long term, first-time buyers will remain the most important factor driving sustained demand for home ownership in the GTA. In the short-term, however, the level of first-time buying activity is subject to
the economic cycle.
- The number of households purchasing their first home will be trending lower in 2009. Softer labour market conditions along with elevated home prices will be the primary reasons. - Based on CMHC's Renovation and Home
Purchase Survey, the percentage of intended home purchases accounted for by first-time buyers declined to 40 per cent for 2008 compared to 47 per cent in 2007. This share will decline further in 2009.


3. Economic and final Trends
i) Toronto will continue to create jobs.
- Employers in the GTA have persevered in 2008. The rate of job growth will be 1.8 per cent in 2008 - above the average for Ontario.
- In 2009, job growth will remain positive, but the rate of growth will moderate to one per cent. Job growth will come from the service sector.

ii) Current Mortgage Rates.
- Mortgage rates are expected to be relatively stable throughout the last quarter of this year.
- Posted mortgage rates will decrease slightly in the first half of 2009 as the cost of credit to financial institutions eases.
- Rising bond yields, however, will nudge mortgage rates marginally higher in the latter half 2009.
- For the last quarter of 2008 and in 2009, the one year posted mortgage rate will be in the 6.00-6.75 per cent range, while three and five year posted mortgage rates are forecast to be in the 6.50-7.25 per cent range.

Thank you

Mark Argentino

The chart below shows how CMHC predicts that our GTA resale real estate market will perform in 2009

This chart shows how CMHC predicts that our GTA resale real estate market will perform in 2009
They are estimating that home sale will be down about 8.5% compared to 2008 and that there will be about 1.2% increase in the number of homes that are listed in the GTA in 2009.
Their conclusion is that we will experience moderate growth in resale homes prices in 2009 of about 1.8%

CMHC Reports that Toronto Housing Starts Remain Strong in October

CHMC (Canada Mortgage and Housing) reported that Toronto Housing Starts Remain Strong in October

TORONTO’S HOUSING STARTS REMAIN STRONG IN OCTOBER

TORONTO, NOVEMBER 10,

2008 –

The seasonally adjusted annual rate (SAAR) of total housing starts fell by 11 per cent to 46,200 in October from the previous month, according to preliminary housing starts data released today by the Canada Mortgage and Housing Corporation (CMHC) for the Toronto Census Metropolitan Area (CMA).

After edging lower, the annual rate of home starts still remained well above the average for the past three years.

Total housing construction on an unadjusted basis remains strong so far this year with starts up by 31per cent compared to the same time period a year earlier. Condominium apartment starts continue to drive new home construction.

"Condominium apartment starts continued to be much higher than last year’s levels through October," says Jason Mercer, CMHC’s Senior Market Analyst for the GTA.

"This strongest level of condominium apartment construction on record has resulted in a substantial jump in total new home construction this year.’’

Read more about:

• Interest Rates


• Power of Sale Properties


• Price Trends


• or Search the MLS and more at my website

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
›mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

• Thinking of selling in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?


• On-Line Real Estate Newsletter sign up


• See seasonal housing patterns

Shorter Amortization on Canadian mortgages is better in the long run

You may have heard that CMHC has lowered their maximum amortization on a mortgage to 35 years from 40 years. As well, there is no longer a no-money down-payment option, you must have minimum 5% cash to buy a property.

I like these changes, for one, it reduces the possibility of a real estate meltdown as is currently happening in the US.

Government changes mortgage rules for CMHC

The federal government here in Canada is attempting to avoid the kind of sub-prime mortgage meltdown plaguing the United States. Effective October 15, 2008, the 40-year mortgages with no money down will no longer be covered through the federal government insurance program administered by Canada Mortgage and Housing (CMHC). Instead of this option, the longest period of amortization for a Canadian mortgage insured by CMHC will be 35 years.

As well, a buyer insured by CMHC will have to make a minimum down payment of five per cent of the home's value. This will be grandfathered, as Canadians already holding 40-year no-money-down mortgages won't be affected by the changes.

The regulations will apply to such federal agencies as CMHC, (the Canada Mortgage and Housing Corp)., which has an estimated 60 per cent share of the mortgage insurance market. However, private-sector mortgage insurance rivals such as Genworth Financial, PMI Mortgage Insurance Co. Canada and AIG United Guaranty are free to offer the product.

One difference is that the federal government will no longer provide insurance that protects lenders in the event of a default by the insurers.

Existing 40-year mortgages will be grandfathered, a Finance Department spokesman said. In 2006, the maximum amortization period was extended to 40 years from 25, and longer-term mortgage products have become increasingly popular with buyers looking for lower monthly payments as the price of Canadian homes soared.

Today's announcement marks a responsible and measured approach by the government to ensure Canada's housing market remains strong, and to reduce the risk of a U.S.-style housing bubble developing in Canada," the Finance Department said in a statement.

In 2007, 37 per cent of new mortgages were for terms of longer than 25 years, according to the Canadian Association of Accredited Mortgage Professionals (CAAMP). But while longer amortizations stretch out monthly payments, they also greatly increase the cost of a mortgage over its lifetime. For example, the total interest on a $300,000 mortgage can soar from $286,161 over the life of a 25-year mortgage to $498,416 over a 40-year amortization period – adding more than $200,000 to the cost of the home.

According to analysts, the Canadian housing market would have slowed sooner if longer- term amortizations had not been introduced. The longer amortizations mean much greater interest costs over the life of the mortgage, but smaller monthly payments, which allows buyers to bid on a more expensive home than they otherwise could afford.

Bank of Canada Governor Mark Carney said in May he was concerned about the prevalence of long amortizations. "They add to the momentum in the housing market, and if everyone has a 40- year amortization mortgage, then you just have higher housing prices."

This, combined with the fact that these mortgages are often combined with little or no equity, raised alarm bells with policy makers looking at the turmoil that took place in the U.S. when house prices started to fall.

"We've seen an inclination now, a trend, toward longer-term amortizations and smaller down payments, and that is a matter of some concern," Finance Minister Jim Flaherty said in a speech in May. Mr. Flaherty was not available for comment Wednesday.

Jim Murphy, president and chief executive of CAAMP, said in talks with him the government expressed concern about the risky lending products that collapsed the U.S. housing market. The Finance Department was also worried about the future impact of competition between mortgage insurers, which led to the introduction of 40-year mortgage in 2006, Mr. Murphy said.

"I think you have a clear case of the government sitting down and looking at its risk exposure and wanting to review that. They have financial guarantees in place for the CMHC and private insurers, and they were saying, 'What is our risk, and what is the risk to the Canadian taxpayer?' " he said.

Others, however, say home buyers and banks have been prudent with their finances, and are being punished for the more lax approach south of the border. "Things here are not like they are in the U.S. where they had those NINJA loans, no income, no job, no assets. … It's only going to hurt the consumer," said John Panagakos, owner of Toronto brokerage Mortgage Centre.

Reaction from the industry was mixed. "CMHC supports the new parameters … . We also support their efforts to maintain the strong Canadian housing market," said spokesperson Stephanie Rubec, adding CMHC will stop insuring 40-year and zero down payment mortgages in October.

"It's the right move," said Nick Kyprianou, president of Home Capital Group Inc., whose principal subsidiary, Home Trust Co., provides alternative mortgages. "Why get people overextended? Nobody wins by getting people right to the end of the cliff."

The move actually comes at a time when the housing market has moved on to other concerns, the most pressing of which is chilling consumer sentiment due to high fuel prices, said Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc.

This was issued by CREA 10/07/2008

You may read more about this at my site, www.mississauga4sale.com

Thanks

Mark

CMHC reports that Housing Starts Edge Lower in May

CMHC Reports that Housing Starts Edge Lower in May
Total housing starts in the Greater
Toronto Area (GTA) trended slightly
lower in May. A continued decline in
low-rise home starts was moderated
by another strong month for condominium
apartment starts.

On an unadjusted basis, total housing
starts in the first five months of
2008 were up by 33 per cent compared
to the same time period a year
earlier. A resurgence in condominium
apartment construction was
the driver of the total starts increase
year-to-date, with starts of this
housing type more than doubling
through the first five months of the
year.

Strong pre-construction
condominium apartment sales in
2006 and 2007 have resulted in an
increase in new construction activity.
Rising house prices coupled with
strong first-time buying activity
resulted in increased demand for
less expensive home types over the
past two years, especially condominium
apartments.

Low-rise home starts during the first
five months of the year were down
13 per cent compared to the same
period in 2007. Semi-detached and
row houses experienced the greatest
decline, while single-detached starts
remained in line with last year's levels.
Single-detached starts have remained level because of strong pre-construction
sales in 2007. Many areas that
have experienced growth in single detached
starts in 2008 are also
those areas where average absorbed
prices are below the average for the
GTA as a whole.

Read more about:

• Interest Rates
• Power of Sale Properties
• Price Trends
• or Search the MLS and more at my website

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
›mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

• Thinking of selling in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
• On-Line Real Estate Newsletter sign up
• See seasonal housing patterns

Cottage Financing and CMHC

Hello,

The Canada Day weekend is here and many clients are enjoying Ontario's wonderful cottage country (in fact, some are enjoying cottage life so much that they are contemplating a purchase!).

Did you know CMHC insures vacation homes

CMHC will insure a property the borrower uses for vacation purposes as long as the property is occupied at some point during the year by the borrower, or by a relative of the borrower on a rent-free basis and meets CMHC's general property requirements including;

• The property is located anywhere in Canada and is suitable for, and available for, year round occupancy; and
• Properties located on an island must have year-round bridge or ferry access; and,
• The borrower's ability to occupy the property must not be restricted or limited at any time. Properties with seasonal use or access, time share interests, life leases, or properties in rental pools are not eligible.

Under CMHC's Second Home product, an individual can be a borrower/co-borrower on a maximum of two CMHC insured homeowner properties, including a vacation home which meets the above criteria. CMHC's Second Home product can also be used to purchase a home for a family member attending college or university away from home.

Enjoy the long weekend and don't hesitate in calling if you have any questions.

Read more about:

• Interest Rates
• Power of Sale Properties
• Price Trends
• or Search the MLS and more at my website

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
›mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

• Thinking of selling in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
• On-Line Real Estate Newsletter sign up
• See seasonal housing patterns

CMHC reports on Rental Market Outlook for 2008

Rental Market Outlook for 2008

Demand for rental housing in 2008
will remain on par with what was
experienced in 2007. The overall
apartment vacancy rate will be 3.5
per cent. The average two-bedroom
rent will increase by 1.5 per cent.
The movement to home ownership
will continue to be a drag on the
rental market, but in a different
fashion. While both existing and new
home sales are forecast to edge
slightly lower next year, first-time
buyers will continue to vacate rental
accommodation in favour of home
ownership. This movement, however,
will be based on a strong increase
in condominium apartment
completions in 2008. More than
double the number of condominium
apartment completions experienced
in 2007 will occur next year. In
addition, investor-held condominium
apartments in the secondary rental
market will attract some renter
households out of the primary rental
market, due to a higher level of
finishings and amenities.
Factors that will continue to influence
the demand for rental include
the following:
• Growth in youth employment
will continue due to tight labour
market conditions;
• Immigration will continue to
trend upward; and
• Rental affordability will continue
to improve as household earnings
outstrip growth in average
rents.
• rented freehold row/town
houses;
• rented duplex apartments;
• rented accessory apartments;
and
• rented apartments which are
part of a commercial or other
type of structure containing one
or two dwelling units.

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Mark

A. Mark Argentino
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Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
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CMHC reports on rental market

Report Highlights
• The average apartment vacancy rate in the GTA was unchanged at 3.2 per cent
in October 2007. Average same-sample two-bedroom apartment rents
increased by 1.2 per cent.
• Market conditions remained similar to 2006 because new renter household formation
was offset by a movement of existing renter households into homeownership.
• The rental market will experience little change in 2008, with the average
apartment vacancy rate at 3.5 per cent and average rents growing by less
than the rate of inflation.

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Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
›mark@mississauga4sale.com
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CMHC Starts decline to be felt on single home starts

Starts decline to be felt on single home starts

Across Canada, starts of singledetached
homes, which remained
near the 120,000 mark between
2005 and 2007, will decrease by 13.6
per cent to about 102,700 units in
2008 and by 3.6 per cent to 99,050
units in 2009.
The decline in residential construction
will not be felt as much in the
higher-density housing segments. In
response to the rise in new and
existing home prices, a larger share
of home buyers will purchase less
expensive multiple homes. Multiplefamily
homes include row and semidetached
homes, as well as condos
and rental apartments. Multiple
starts, which reached a 29 year high
of 109,426 units in 2007, will increase
slightly to 111,950 units in
2008. Multiple starts are expected to
decrease in 2009 for the first time
since 1998 to reach 100,850 units.

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A. Mark Argentino
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Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
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More predictions from CMHC on our futurereal estate market

Housing starts will trend lower in 2008

Higher mortgage carrying costs will be a catalyst for the decrease in residential construction to 214,650 units in 2008.

Seven of the ten provinces will register a lower number of housing starts in 2008 than in 2007. Housing starts, will reach 199,900 units in 2009.

MLS®1 sales to pull back from record in 2007

Record MLS® sales in 2007 Existing home sales, as measured by the Multiple Listing Service (MLS®), are expected to fall by 8.5 per cent in 2008 to 475,900 units.

In 2009, the trend will continue with a decrease to 465,000 units (-2.3 per cent). Despite a slowdown of MLS® sales, demand remains strong by historical standards.

So there you have it from CMHC
Mark

CMHC report on New Home Market Condominium Apartment Starts on the Rise

New Home Market Condominium Apartment Starts on the Rise

Condominium apartment starts
dominated new home construction
during April in the Greater Toronto
Area (GTA). Pre-construction
condominium apartment sales from
the last two years continued to
convert into strong housing starts
last month.

On an unadjusted basis, total housing
starts through the first four months
of 2008 were up by approximately
47 per cent compared to the same
time period a year earlier. Condominium
apartment starts were
nearly three times the levels compared
to the same time period a year earlier. Low borrowing costs and
steady job growth in the past couple
of years induced more homebuyers
to purchase condominium apartments
at the pre-construction stage.
The lower price tag for condominium
apartments, compared to
that of more expensive singleconstruction
of this housing type
has become less popular, CMHC’s
2008 Renovation and Home Purchase
Survey found that single-detached
homes have remained the housing
type of choice for many households.
detached homes, was especially
attractive to first time buyers.
Single-detached home starts remained
virtually unchanged on a
year-over-year basis, edging lower by
less than half a per cent for the first
four months of the year. While the construction of this housing type has become less popular.

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RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
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CMHC reports on National Vacancy Rates

National Vacancy Rate Unchanged at 2.6 Per Cent in October 2007

The average rental apartment vacancy rate in purpose
built apartment buildings with three or more units in
Canada's 34 major centres1 was unchanged at 2.6 per
cent in October 2007 compared to a year ago. The
centres with the highest vacancy rates in 2007 were
Windsor (12.8 per cent), Saint John (5.2 per cent)
and Moncton (4.3 per cent). The centres with the
lowest vacancy rates were Kelowna (0.0 per cent),
Victoria (0.5 per cent), Greater Sudbury (0.6 per
cent) and Saskatoon (0.6 per cent).
Strong employment growth, solid income gains, and high
immigration levels continued to support strong demand
for both ownership and rental housing. The rising gap
between the cost of home ownership and renting also
kept demand strong for rental accommodation. However,
modest rental construction and increased competition
from the condominium market offset the strong
rental demand, keeping the rental apartment vacancy
rate unchanged from a year earlier. Condominiums are
a relatively inexpensive type of housing for renters
moving to home ownership. Also, some condominium
apartments are owned by investors who rent them out.
Therefore, high levels of condominium completions have
created competition for the rental market and have put
upward pressure on vacancy rates.
The highest average monthly rents for two-bedroom
apartments in new and existing structures were in
Calgary ($1,089), Vancouver ($1,084), Toronto
($1,061) and Ottawa ($961), followed by Edmonton
($958) and Barrie ($934). The lowest average monthly
rents for two-bedroom apartments in new and
existing structures were in Trois-Rivières ($487) and
Saguenay ($490).
Year-over-year comparison of rents can be slightly
misleading because rents in newly built structures
tend to be higher than in existing buildings. However,
by excluding new structures, we can get a better
indication of actual rent increases paid by tenants.
The average rent for two-bedroom apartments in
existing structures increased in all major centres
except Windsor where the average rent in existing
structures was essentially unchanged for a second
consecutive year. The largest rent increases occurred
in markets where vacancy rates were quite low.
Rents in existing structures were up 18.8 per cent in
Edmonton, 15.3 per cent in Calgary, 13.5 per cent in
Saskatoon, 7.7 per cent in Greater Sudbury and 7.0
per cent in Kelowna. Overall, the average rent for
two-bedroom apartments in existing structures
across Canada's 34 major centres increased by 3.5
per cent between October 2006 and October 2007.
CMHC's October 2007 Rental Market Survey also
covers condominium apartments offered for rent in
the following centres: Vancouver, Calgary, Edmonton,
Toronto, Ottawa, Montréal, and Québec. In 2007,
vacancy rates for rental condominium apartments
were below one per cent in four of the seven centres
surveyed. Rental condominiums in Vancouver had
the lowest vacancy rate at 0.2 per cent. On the other
hand, Québec and Montréal registered the highest
vacancy rates for condominium apartments at 2.4 per
cent and 3.8 per cent in 2007, respectively. The
survey showed that vacancy rates for rental condominium
apartments in 2007 were lower than vacancy
rates in the conventional rental market in Vancouver,
Calgary, Toronto and Ottawa, the same in Edmonton,
and higher in Québec and Montréal. The highest
average monthly rents for two-bedroom condominium
apartments were in Toronto ($1,533), Vancouver
($1,435), and Calgary ($1,217). All surveyed
centres posted average monthly rents for twobedroom
condominium apartments that were higher
than average monthly rents for two-bedroom private
apartments in the conventional rental market in 2007.

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Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
›mark@mississauga4sale.com
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CMHC comments on Ontario holds on despite manufacturing woes — Despite

Ontario holds on despite manufacturing woes

—

Despite concern of a recession, Ontario managed to pump out growth of 2.1% last year. The manufacturing sector remained in contraction mode as output declined for a third consecutive year. The role of manufacturing in the economy continued to fall as well. In 2002, manufacturing accounted for 22% of Ontario's GDP compared to 18% in 2007.

Widespread strength in other sectors — including a vibrant consumer and a healthy construction sector — helped offset the decline. Job markets are being watched closely for signs that cracks are emerging. Despite weakness concentrated in the manufacturing and finance-related sectors, most other sectors are still adding jobs. However, a lion's share of the offset is coming from public sector job gains.

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RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
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CMHC reports that Growth in house prices will slow as housing market becomes more balanced

Growth in house prices will slow as housing market becomes more balanced

For 2008, the demand will moderate.
Existing home sales, as measured by
the Multiple Listing service (MLS®),
are expected to decrease by 8.5 per
cent to 475,900 units. In 2009, the
trend will be similar with another
decrease to 465,000 units (-2.3 per
cent). MLS® sales will step back given
a moderating demand due to rising
mortgage carrying costs.
Despite a slowdown of MLS® sales
and a general ease on the market,
demand remains strong by historical
standards. For 2008 and 2009,
growth in the MLS® average price will
remain above inflation. Prices will
reach $323,000 (+5.1 per cent) in
2008 and $333,500 (+3.3 per cent)
in 2009.

It will be interesting to see if this comes true!
Mark

CMHC reports Housing starts will begin to trend lower in 2008

Housing starts will begin to trend lower in 2008


Despite positive economic fundamentals,
housing activity will continue
to trend down over the next
year and a half. Most of the pent-up
demand that built up during the
1990s has now been fulfilled and
residential construction activity will
gradually move in line with Canadian
demographic fundamentals. Higher
home prices and the resulting
increase in mortgage carrying costs
will temper homeownership demand,
particularly in western provinces.
Competition from the existing
home market will increase as housing
markets move toward balanced
conditions, giving homebuyers more
choice. This, in turn, will dampen
spillover demand from the existing
market into the new home market.
These trends will dampen new
home construction. The number of
starts is expected to decrease to
214,650 units in 2008 and 199,900
units in 2009.

Interesting news from CMHC!
Mark

CMHC reports on economic outlook

At a glance:
Mortgage Rates
Employment
Income
Net Migration
Natural Population
Increase
Consumer Confidence
Resale Market
Vacancy Rates


Mortgage rates have moved slightly higher over the past year. This rise, in conjunction
with higher house prices, has and will continue to push mortgage carrying costs higher.

As a result, this will ease housing demand, particularly for first-time buyers.

A record share of Canadians continue to be employed, moving the economy close to
full-employment. Accordingly, job growth should slow to rates that are more in line
with overall population growth. Job creation will continue to stimulate housing
demand, but not as much as in the previous years.

Rising incomes will continue because of tight labour markets and a strong demand for
workers. This should partially offset the negative impact of higher mortgage carrying
costs on home ownership demand.

Net migration is expected to remain strong in 2008. Ontario, Quebec, and British
Columbia will continue to attract the bulk of the international immigrants. B.C.,
Alberta and Saskatchewan will attract a large number of inter-provincial migrants from
the rest of Canada.

Canada's population is aging, and as a result, a smaller proportion of people are in
their child bearing years and thus the birth rate is decreasing. High immigration levels
will slow the average aging of the population, however, the rate of increase in the
natural population (births - deaths) is slowing. This will eventually lessen the demand
for additional housing stock in the longer term.

Consumer confidence, as measured by the Conference Board of Canada, remains
positive. Furthermore, strong consumer sentiment is expected to prevail throughout
the forecast period. Confident consumers will continue to support demand for home
ownership.

Lower existing home sales, combined with a high level of new listings in 2008, will
move the resale market towards more balanced territory. As a result, the rate of
growth in the average MLS® price will moderate during 2008, especially in Canada's
western provinces.

Modest rental construction and increased competition from the condo market will be
offset by strong rental demand due to high immigration and a rising gap between the
cost of homeownership and renting. As a result, vacancy rates across Canada's
metropolitan centres should remain relatively stable, but slightly higher in 2008.

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A. Mark Argentino
P. Eng. Broker
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Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
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CREA report on Canadian existing home sales

Canadian existing home sales for April were released late this afternoon by the Canadian Real Estate Association, and were up a tad from March (+0.8% in seasonally adjusted terms).

That still left sales down 6.1% y/y versus a weather-pounded 18.7% y/y plunge in March. (In seasonally adjusted terms, sales were down 12% y/y in both months.) Average prices rose just 3.2% y/y, versus a Q1 pace of 5.5% and an 11% increase for all of 2007. That’s the slowest increase for prices since October 2001. Prices actually fell from a year ago in both Calgary and Edmonton, as well as in Windsor and St. Catharines. (Talk about the two extremes of the growth rainbow.)

Even Vancouver saw price increases dip into single-digit terrain, joining Toronto and Ottawa. However, Regina (at +64.6% y/y), Saskatoon (+31.2%) and Winnipeg (+19.9%) are still ripping along with double-digit price gains, joined by a few other smaller cities in central and eastern Canada.

So far this year, national home sales are down 11% y/y, and prices are up a moderate 4.8%.

The sales drop and the modest price gain are well down from years of double-digit increases, and further confirmation that the boom days are over. Notably, no city in the country has reported a price decline from year-ago levels over the first four months of the year, so the slowdown is still far from mimicking the U.S. experience.

However, we would point out that new listings have climbed more than 8% this year, even as sales have slid, pointing to “a more balanced market” according to CREA (i.e. much more of a buyer’s market), and even less upward pressure on prices looking ahead. In CREA’s words --- “presentation factors such as prudent pricing are necessary for a faster sale”. That’s a polite way of saying: If you’re looking for double-digit price gains, dream on

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Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
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CMHC predicting Terms of trade advantage to help Canada outperform the U.S. economy

Terms of trade advantage to help Canada outperform the U.S. economy

Canada's economy will slow but will slightly outperform the U.S. economy, with support coming from high prices for Canadian natural resource exports.

Domestic demand will slow modestly due to credit tightening.

Canada's trade sector will act as a significant drag on Canada's economy this year and next.

The core inflation rate is expected to remain below 2% this year, with the all-items CPI likely to drop to 1% mid-year.

We are calling for the Bank of Canada to lower the overnight rate to 2.75% to mitigate downside risks to the growth outlook coming from a weakening U.S. economy, tight credit conditions and a strong Canadian dollar.

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Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
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CMHC is bullish on Vacancy Rates across Canada

CMHC comments on the rental market in Canada

The vacancy rate across the major centres in Canada was unchanged at 2.6 per cent in 2007. Over the last year, demand remained relatively strong given a solid employment growth, particularly for the younger age groups. Overall net migration was high last year which fuelled demand for rental housing. However, construction of new condo and rental units helped keep the vacancy rate stable.

For next year, the expected slowdown in employment will moderate the demand for rental units. Moreover, the increasing number of condominium units offered for rent on the secondary market will put upward pressure on vacancy rates.

The average vacancy rate for Canada's 34 metropolitan areas is forecast to rise to 2.8 per cent next year. However, the direction and magnitude of the change in vacancy rates will vary from centre to centre. The outlook for vacancy rates for some key rental markets across Canada is summarized below.

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Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
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CMHC reports that House price gains will remain strong in 2008

House price gains will remain strong in 2008

The average MLS® house price is expected to grow by 10.6 per cent for 2007, to about $306,000 as strong sales in Western Canada continue to
put pressure on prices. In 2008, existing home markets will become more balanced and price pressures will begin to ease.

The average MLS® price will increase by 5.2 per cent to about $322,000 in 2008.

Looking ahead to 2009, the average MLS® price is forecast to increase by 3.8 per cent to approximately $335,000.

It is expected that inflationary pressures will remain stable within the Canadian economy. Inflation was up 2.4 per cent in 2007. For 2008
inflation is forecast to be 2.3 per cent.

Canada's core inflation rate for 2007 increased just 1.7 per cent. Mortgage Rates Mortgage rates increased by about 100 basis points between the start and

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P. Eng. Broker
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Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
›mark@mississauga4sale.com
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CMHC Report on the New Home Market

CMHC Report on the New Home Market

Strong January Apartment Starts

On the strength of condominium apartment construction, total Greater Toronto Area (GTA) housing starts for January were five per cent higher than experienced one year earlier, reaching 2,730.

January results were in line with expectations for 2008. Condominium apartment starts will increase this year, while low-rise starts will edge lower. Strong condominium apartment starts will be based on record pre-construction sales over the past three years.

As an increased number of condominium apartments reach the completion stage this year, builders will be able to shift resources to new projects in the development pipeline.

On the whole, demand for existing and new ownership housing has remained strong in the GTA, based on solid underlying fundamentals. A combination of steady job and income growth and low borrowing costs has kept home buyers confident in their ability to purchase and pay for a home over the long term.

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A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
›mark@mississauga4sale.com
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CMHC Update clients can now purchase rental properties (up to 4 units) with as little down as 5%

CMHC Update on investment property purchase

CMHC has just released an update where clients can now purchase rental properties (up to 4 units) with as little down as 5%.
And mortgage lenders are now allowed to use 80% rental income offset which makes it much easier for you to qualify! Let me know if you require more details and I will put you in touch with my mortgage people.
http://www.mississauga4sale.com/Investment-Property-Purchase.htm
Thank you and all the best!
Mark

read more about:

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Mark

A. Mark Argentino
P. Eng. Broker
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Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
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CMHC eases down payment rules for properties

CMHC eases down payment rules for properties

Move risks overheating already hot housing market

You have to wonder what David Dodge will be thinking this time. Just over a year ago, the Bank of Canada governor met with Canada Mortgage and Housing Corp. because of his fears exotic mortgages were juicing an already robust Canadian housing market. Now CMHC has decided it is going to let Canadians buy investment properties with no down payment.

The Crown corporation, which controls about 70% of the mortgage insurance market in Canada, has quietly introduced changes that lower the down-payment threshold for an investment property. Instead of needing 15% down, Canadians will be able to buy a second property -- not to mention a third and fourth and fifth -- with no money down.

"These enhancements will ensure continued supply of affordable rental accommodations across Canada," said Pierre Serre, vice-president of insurance products with CMHC.

Critics charge CMHC once again has moved into risky territory, the last time being its decision to allow Canadians no money down on a principle residence. "Look at the fee, anytime it's that high, you know there is a lot of risk," said one senior mortgage industry observer.

The mortgage insurance fee for the new product is 7.25% of the total amount of the loan. So a $300,000 mortgage would have a $21,750 mortgage insurance fee.

Instead of paying the fee up front, CMHC will allow that fee to be added to the overall mortgage which can be amortized over as many as 40 years. Based on 5.8% interest, the current discounted rate for a five-year term, it would cost just over $1,700 a month to carry that $321,750 mortgage.

By law, any consumer with less than a 20% downpayment must buy mortgage insurance if they are borrowing money from a financial institution covered under the Bank Act.

None of CMHC's competitors are coming close to this new offer. Genworth Financial Canada -- the other dominate player with about 30% of the mortgage insurance market -- requires investors to have at least 10% down.

Back in July, 2006, Mr. Dodge demanded a meeting with the federal crown corporation. He was concerned about products like interest-only mortgages which give consumers the option of not making a principle payment for the first 10 years of a mortgage.

Mr. Serre said CMHC did consider the issue of whether the changes could overstimulate the market. "We look at those kind of considerations all the time," he said, adding that to get a loan consumers will have to meet certain criteria in terms of their overall debt load. "We're not trying to get people into situations they can't manage."

Some question whether there was any need for the latest change, given how strong the market in Canada remains.

The Building Industry and Land Development Association said this week condo sales in Toronto - the largest market for new high rises in North America -- were up 31% over the first nine months of the year from a year earlier.

"I'm not sure why CMHC is relaxing the rules, the logic escapes me," said Stephen Dupuis, chief executive of BILD. "The market is strong. I look at what is happening in the United States and wonder if there is a need to be so free with credit."

The real reason for the new program, suggest some commentators, is CMHC trying to fend off competitors in the marketplace. In a constant battle with Genworth, CMHC is also facing up to four new mortgage insurers who have applied to do business in Canada or are already licenced to do so.

"There are competitors in the marketplace that didn't exist before. They are reacting to competition that hasn't even materialized yet," said Mr. Dupuis. CIBC World Markets senior economist Benjamin Tal said the latest changes by CMHC are probably just the beginning. "The genie is out of the bottle, this mortgage market is starting to move. Over the past 16 months we've seen more changes than the past 30 years," said Mr. Tal. Garry Marr, Financial Post
Published: Wednesday, October 24, 2007

Search the MLS or read more about Interest Rates, Power of Sale Properties, Price Trends and more at my website.

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
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Providing Full-Time Professional Real Estate Services since 1987
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CMHC's new snapshot of Canadian housing

CMHC's new snapshot of Canadian housing

Canada Mortgage and Housing Corp. (CMHC) recently released its annual state of the nation report on housing. The 2007 Canadian Housing Observer says building greener homes in higher-density neighbourhoods near public transit, rather than in sprawling suburbs, is key to reducing the housing sector's impact on the environment and lowering greenhouse gas emissions.

The 2007 Canadian Housing Observer analyzes the relationship between environment-friendly housing construction, neighbourhood design and transportation. It found that downtown living, which provides easy access to workplaces, schools, and shops, as well as housing located close to public transit, lead to reduced automobile use. Also, better design of the suburbs results in less short-distance driving and lower greenhouse gas emissions.

The 2007 Canadian Housing Observer also examines recent trends in affordable housing, housing finance and market developments. A key conclusion about the living conditions of Canadians, which is based on new CMHC information, found that the level of Canadians living in core housing need has declined slightly from 13.9 per cent in 2002 to 13.6 per cent in 2004. Core housing need is defined as "Households which occupy housing that falls below dwelling adequacy, suitability or affordability standards, and which spends 30 per cent or more of their before-tax income for the median rent of alternative local market housing that meets all three standards."

Other key findings of this year's Canadian Housing Observer include:
- Housing-related spending grew by 6.1 per cent in 2006, contributing more than $275 billion to the Canadian economy;
- Total mortgage credit outstanding in 2006 reached an annual average of $694 billion, up 10.7 per cent from 2005. This is mainly due to increased property values, which in turn increased the average mortgage amount approved;
- All of the fastest-growing metropolitan areas in recent years were in Alberta, Ontario and British Columbia, with the exceptions of Moncton, N.B. and Sherbrooke, Québec.
- Canada's population grew at a slightly faster pace in recent years than in the late 1990s mainly due to increased immigration. Senior, immigrant and Aboriginal groups are growing more rapidly than the general population. From 2001 to 2006, the vast majority (86 per cent) of population growth took place in metropolitan areas.
- The number of households in Canada owning second homes, vacation homes, or cottages reached 1.1 million in 2005, about 200,000 more than in 1999. From 1990 to 2004, high-income earners enjoyed much stronger income growth than those with low incomes. From 1999 to 2005, the average net worth of households in Canada, after adjusting for inflation, grew at an annual rate of more than four per cent. Increased equity in real estate played a major role in this increase.
- In 2006, the proportion of gross domestic product spent on housing increased to 19.1 per cent compared to 18.9 per cent the previous year.
- Total spending on housing renovations, repair and maintenance reached $43.9 billion in 2006, an increase of nine per
cent compared to 2005.
- From a record low of 5.99 per cent in 2005, mortgage rates rose to an average posted rate of 6.66 per cent for a five-year term mortgage in 2006. They were still low by historical standards. CMHC's 2006 Mortgage Consumer Survey found that the majority of mortgage consumers (84 per cent) were satisfied with the services they received when negotiating their current mortgage. About 70 per cent of mortgage consumers prefer to use one of the major lending institutions to obtain a mortgage.
- Urban households in British Columbia and Ontario continued to experience a high level of core housing need between 2002 and 2004. One-person households accounted for almost half (46.7 per cent) of Canadian urban households in core housing need, up from 43.7 per cent in 2002. The incidence of core housing need among senior-led urban households declined from 15.4 per cent in 2002 to 13.9 per cent in 2004. The percentage of immigrant urban tenant households in core housing need increased to 36.3 per cent in 2004 from 34.4 per cent in 2002.
- The 20 per cent of households having the lowest incomes accounted for about 81 per cent of all urban households in core housing need in 2004, up from about 78 per cent in 2002. Courtesy of R.Paul Chadwick TD/CT

Search the MLS or read more about Interest Rates, Power of Sale Properties, Price Trends and more at my website.

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
2 FAX 905-828-2829 ÈCELL 416-520-1577
› E-MAIL : mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

• Thinking of selling in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
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Banks applaud legislation to lower minimum payment needed for mortgage insurance

Banks applaud legislation to lower minimum payment needed for mortgage insurance


Saturday, April 21, 2007

TORONTO (CP) - Canada's big banks are applauding new legislation that lowers the required down payment for mortgages.

The federal government said Friday it is lowering the minimum down payment requirement for mortgage default insurance from 25 per cent to 20 per cent. The new legislation is part of Bill C-37, expected to be proclaimed next week.

BMO Bank of Montreal says homebuyers could save an average of $2,500 in insurance premiums, based on an average home price of $300,000.

"We see a number of customers scrambling to meet the 25 per cent down payment, in order to avoid paying the insurance premium," said Cid Palacio, Vice President, BMO Bank of Montreal. "These changes will allow those homebuyers to reduce their down payment and get into their new home faster."

The new limit also affects individuals who intend to refinance their mortgages.

RBC Royal Bank said a recent survey it did found 39 per cent of Canadians have borrowed against the equity of their home, by either refinancing their mortgage to a larger amount, or by taking out a home equity line of credit.

"Now, with refinancing at 80 per cent, we're making an extra five per cent equity available to our clients for their financing needs," said Catherine Adams, RBC Royal Bank's vice-president, Home Equity Financing.

Scotiabank said it will cover the cost of insurance paid by the few hundred customers whose high-ratio mortgages are currently being processed. These are customers of the bank who would have been exempt from default insurance under the new rules.

Under the existing Bank Act regulations, which have been in place for 40 years, a bank cannot provide a mortgage loan for more than 75 per cent of the value of the property, without having the customer purchase mortgage insurance. Bill C-37 raises the loan-to-value ratio requiring mortgage insurance from the current 75 per cent to 80 per cent.

More on mortgage rates



For more information please contact A. Mark Argentino

A. Mark Argentino, Broker, P.Eng.,
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc., Brokerage
2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1

BUS. 905-828-3434
FAX. 905-828-2829
E-MAIL: mark@mississauga4sale.com
Website: Mississauga4Sale.com

Wow - Didn't anyone notice this announcement on Down-payment changes in Canada?

Did you hear the latest on mortgages in Canada?

There was a major change to federal legislation regarding high-ratio mortgages in Canada last Friday April 20th. Effective immediately, residential mortgages with a loan to value ratio between 75 - 80% will no longer require insurance through CMHC or GE. This change was announced by the Finance Minister on Friday.

What this means is that you now only require 20% downpayment to avoid those 'high ratio' insurance fees. This coupled with the fact that 30 and 40 year mortgages are now readily available in Canada means two things:

1- affordability has improved dramatically in the past few months as both of these changes reduce either the fees charged or monthly payments.
2- this also means that prices will rise due to more people being able to afford the entry level properties.

This is a significant change in real estate ownership in Canada. I don't think many people noticed or even gave it much thought, but these two changes alone could increase affordability by as much as 30% which also means that house prices will rise due to these two changes. This certainly makes the banks happy, as they will now be able to loan out more money.

Take a $250,000 townhome as an example. You may now use the premium you would have paid for putting only 20% downpayment, which is 1% of the mortgage, so in this case, the mortgage amount with 20% downpayment is $200,000 (since 20% of $250,000 is $50,000 downpayment) and you save $2,000 insurance premium. Now you take a 40 year mortgage the payment is $1056 per month versus a 25 year mortgage $1250/month and your payment difference is $194 per month. At today's rate of say 5.75% this 194 payment is worth an extra $36,000 in mortgage payment, plus the $2000 fee you saved, this all means that you can afford an extra $38,000 most of which can be put towards your purchase price. The bottom line in this example is that you can afford about a $280,000 townhome with 20% downpayment and 40 year mortgage, that's a huge difference and will help to put upward pressure on prices.

Any comments? email me

This also means that thousands of websites and online mortgage calculators, mine included, must all be changed to reflect these changes, no small task! This change is so new that CMHC has not even updated their site to reflect the new rules, as of April 23rd.

You can do mortgage calculations for your situation at this link.



For more information please contact A. Mark Argentino

A. Mark Argentino, Broker, P.Eng.,
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc., Brokerage
2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1

BUS. 905-828-3434
FAX. 905-828-2829
E-MAIL: mark@mississauga4sale.com
Website: Mississauga4Sale.com

Five Percent Downpayment Home Buyer Program in Ontario

Five Percent Downpayment Home Buyer Program

With as little as five per cent down payment, from personal or other sources (see below for eligible other sources), all home buyers have access to mortgage insurance enabling then to enter the housing market, as long as they can manage the costs of home ownership.

Details of the program

• Mortgage insurance for 95 per cent mortgages is available to both first time and repeat home buyers. Homebuyers have the option of using personal sources, such as savings or gifts, or other sources, such as lender incentives, borrowed funds/credit, or sweat equity (the amount of money spent to help construct the home) for the required five per cent down payment.

• Buyers using the Program may consume up to 32 per cent of their gross monthly household income for payments of principal interest, property taxes and heating, and total debt load cannot exceed 40 per cent of monthly household income.

• Insurance premiums on loans for 95 per cent of the lending value of the house where the five percent down payment comes from personal sources will be 2.75 per cent of the mortgage loan. Insurance premiums on loans for 95 per cent of the lending value of the house where the five percent down payment comes from other sources will be 2.9 per cent of the mortgage loan. This premium can be added to the mortgage.

• The maximum amortization period is 25 years.

• Borrowers are required to demonstrate, at the time of application, their ability to cover closing costs equal to at least 1.5% of the purchase price.

• Where the minimum equity requirement. is being met by way of a financial gift, the funds must be in possession of the borrower 15 days before making an offer to purchase.
  
  For more information call CMHC at 1-800-668-2642 or access through www.cmhc.ca Mortgage insurance is available to both first time and repeat home buyers.
  

For more information please contact A. Mark Argentino

A. Mark Argentino Associate Broker, P.Eng.,
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc.
2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1

BUS 905-828-3434
FAX 905-828-2829
E-MAIL mark@mississauga4sale.com
Website: Mississauga4Sale.com