What's Important to You in the 2018 Provincial Budget?

Excerpted from TREB News

These are the highlights of the budget already in summary form as prepared by OREA. There is a projected deficit of $6.7 billion with some benefits to trickle to you. Know it as a taxpayer.

Highlights of the 2018 Ontario Budget

March 29, 2018 -- The 2018 Ontario Budget, entitled A Plan for Care and Opportunity, was unveiled by The Honourable Charles Sousa, Ontario Minister of Finance, on Wednesday, March 28.

OREA has provided a summary and noted that the Budget, which proposes additional spending with a projected deficit of $6.7 billion in 2018 and continued deficits through 2024, offers little in terms of housing and no major new proposal to help young families afford a home.

Below are some of the highlights and major features of the Budget:

• A new Seniors' Healthy Home Program, which provides up to $750 annually for eligible households led by seniors 75 and over to help them live independently and offset the costs of maintaining their homes;
• A decrease in residential electricity bills as of July 1, 2017, by 25 per cent on average, and up to 40 or 50 per cent for eligible rural and low-income families.
• A new Ontario Drug and Dental Program for those without extended health plans;
• Free preschool for children aged two-and-a-half until eligible for kindergarten, beginning in 2020;
• An extension to OHIP+ that will provide people aged 65 and over with free prescription medication;
• An increase in minimum wage to $15 per hour in 2019;
• Free college and university tuition for 225,000 students;
• Investment of $2.1 billion to improve mental health care;

In advance of the Budget, TREB, along with OREA and other stakeholders, successfully secured a halt on Mandatory Home Energy Audits (HER&D), and we're pursuing an optional model. These audits would have resulted in lengthy delays in the home selling process and additional maintenance costs for homeowners.

How Did The Latest Canges To Mortgage Rules Affect House Prices!

Toronto is holding out!

As excerpted from Huffington post.

House Prices Falling In Majority Of Canadian Cities As New Rules Kick In

But Vancouver is back to its old tricks, and Toronto is seeing a temporary bounce.

By Daniel Tencer

Todd Korol / Reuters

For sale signs line in Calgary, Alta. Calgary was among the cities that saw falling house prices in January, according to the Teranet-National Bank house price index.

House prices fell in a majority of Canadian cities in January, the first month of tough new mortgage rules at the major banks, new data shows.
The latest edition of the Teranet-National Bank House Price Index shows prices falling in seven of the 11 cities covered.

Among them are Ottawa-Gatineau, Hamilton, Calgary and Edmonton. Halifax, Quebec City and Winnipeg saw particularly steep drops for a single month, with each city's price index down at least one per cent.

HuffPost Canada

It's a different story in Vancouver, where the market appears to be up to its old tricks again — rapid house price increases. The city's price index is up 1.2 per cent on the month, and up nearly 17 per cent over the past year.

Detached home prices in the city are up 13.5 per cent over the past year, while condos have soared by 23 per cent.
Without Vancouver, the national house price index would have dropped for the fifth month in a row, National Bank senior economist Marc Pinsonneault said. But with Vancouver included, it rose 0.3 per cent in January.

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A More Detailed Information On Changes To Mortgage Rules Soon To Take Effect

A few weeks ago I posted an article from OSFI (Office of the Superintendent of Financial Institutions) about changes to the mortgage rules taking place by January of 2018- roughly in 2 months. This may affect first time buyers and those planning to upgrade. This article details how it may affect you. Contact your realtor if your need more information.
Excerpted from Condo Now
Purchasing Your First Home Before January 1, 2018 May Immediately Be On Your To-Do List and Here’s Why

Purchasing Your First Home Before January 1, 2018 May Immediately Be On Your To-Do List and Here’s Why

According to the Office of the Superintendent of Financial Institutions (OSFI), tougher mortgage qualifying rules will take effect as soon as January 2018.

Why is this so important?

If you barely qualify for a mortgage now, you won’t in 2 months.
The new OSFI minimum qualifying rate, also known as the “stress test”, will be a requirement for all home buyers, including pre-construction condos, resale, freehold, and others requiring a mortgage. Presently, prospective home buyers with down payments of 20% or greater are not required to purchase mortgage insurance, and therefore forgo any preliminary testing.
Come January, new home buyers who fall under the uninsured borrower umbrella will submit to the same assessment as insured borrowers, with the qualifying rate ensuring that new mortgages, regardless of the down payment size, will be able to pay the loan if interest rates become higher than they are today. Meaning that, borrowers will be tested at either greater than the five-year benchmark rate, or two percent higher than their actual mortgage rate- whichever one is higher.
This equivalent of a 2% rate hike will equate to a drop of approximately 15-20% in purchasing power.
By the new year, some potential mortgagees may no longer be able to afford buying real estate.
With the help of Ratehub.ca’s Mortgage Affordability Calculator, here is an example of how the numbers tally up now, versus just about two months from now.

OCTOBER 2017 Vs. JANUARY 2018

Example:

Buyer’s mortgage rate is lower than the bank of Canada’s five-year benchmark rate
Current Bank of Canada Benchmark: 4.89%
Annual Income: $100,000
Down Payment: 20%
5 Year Fixed Mortgage Rate of 3.09%
Amortized over 25 Years
Results:
October 2017 maximum affordability: $706,692
January 2017 maximum affordability: $559,896

*Noteworthy:  The new stress test rules will not apply to mortgage renewals as long as you remain a client of your existing lender.

Is the buying frenzy and bidding wars we experienced in the Spring coming back?

Toronto housing price ‘correction’ eases: Report

Excerpted from The Toronto Star
Prices rose 1.5 per cent in recent months, the kind of gain that is expected to continue through the end of the year.

Toronto's trajectory, following the introduction of market cooling policies, such as the foreign buyers tax, mirrors Vancouver's experience, according to Royal LePage's Phil Soper.  (Richard Lautens / Toronto Star File Photo)  

By Tess Kalinowski Real Estate Reporter

Thu., Oct. 12, 2017

The chill of Ontario’s new housing policies appears to have passed, with signs that Toronto real estate is recovering, according to a new report.

In fact, some corners of the GTA market are showing a return to the bidding wars that were commonplace only last spring, says the third-quarter report from Royal LePage.
It shows prices were up 1.5 per cent in the third quarter, compared to the same period last year, with the bright spots in the entry-level priced homes, notably condos, and some relatively affordable pockets such as Ajax and Oshawa.

Although the Toronto-area market has climbed 21.7 per cent year over year to a median home price of $860,295 in the third quarter, much of that growth occurred in the early months of 2017.
“We’re in the throes of a market shift . . . the tail end or bottom of a market correction,” said Royal LePage CEO Phil Soper,

But he said, “This particular correction doesn’t look to be either deep or long.”
At the brokerage level, the company is seeing more multiple offers on properly priced properties, said Soper.
“If you go back to July and August, the multiple offers had all but disappeared and houses were not attracting the kind of foot traffic one would expect in a robust market,” he said.
Toronto’s trajectory, following the introduction of market cooling policies, such as the foreign buyers tax, mirrors Vancouver’s experience, said Soper.
But where Vancouver took about 10 months to turn around, six months seems to be Toronto’s recovery time following the April launch of the Liberal government’s Fair Housing policies.
Toronto’s bigger market and more diverse economy support a milder correction, he said. It’s also more affordable. As expensive as the Toronto region is, Vancouver prices are significantly higher, said Soper.
The concentration of foreign investment was also much higher in the Vancouver region, although some areas of the Toronto region, such as York Region, have sagged with the new foreign buyers tax.
More moderate price growth is a plus for home buyers, giving their incomes time to catch up with the cost of housing. Recent interest rate hikes and the possible tightening of lending rules could extend that trend, he said.
Condo prices in the Toronto region were up 2.9 per cent quarter over quarter to a median price of about $472,000, compared to 1.4 per cent growth in the $1 million median cost of a two-storey house and 0.2 per cent rise for bungalows, which had a median price of about $835,000.
The Royal LePage house price index showed that, for the first time since 2011, Canada’s five biggest cities were rising at a similar “healthy” pace in the low single digits.
Montreal is booming, Calgary appears to have moved out of its “oil-bust blues” and Ottawa is “a picture of healthy market growth.”
“Canadian housing is enjoying a Goldilocks moment,” said Soper in a news release. “Not too hot and not too cold.”
Toronto region in the third quarter
4.5%
Quarter-over-quarter increase in Brampton home prices with a median cost of $731,544
4.3%
Quarter-over-quarter increase in Ajax home cost to a median price of $723,601
-1.7%
Decrease in Richmond Hill prices with a median cost of about $1.3 million
2.5%
Increase in Toronto home prices quarter over quarter to a median price of $861,397

Is Another Rule Change for Mortgages Coming?

This is important for homeowners. Interest rates went up twice already just this summer. Is it time to 'lock-in' your mortgage if it is on variable rate? Read this article to find out more! Another rule change may be forthcoming in terms of qualifying for a mortgage - as you may already know buyers with less than 20% down payment are required to qualify not on the prevailing market rate but with the BOC 5 year qualifying rate of 4.84% right now which they have termed 'stress test'.. This may soon be extended to those with more than 20% down payment if approved. This will simply mean that it will be harder to qualify for a mortgage since more income will be required than the present way. Is this an incentive enough for buyers or up graders to act sooner than later.

After rate hikes, Canadian housing braces for 'biggest rule change of all time'.  

 by Gary Marr as excerpted from Financial Post

Interest rate hikes might be the last thing the housing market needs as sales in Toronto plunge and Ottawa considers even tougher measures for qualifying for loans.

It didn’t take long for the impact of rising rates to hit the market. People rushed to lenders Thursday to lock in contracts and get pre-approved mortgages after the Bank of Canada raised its overnight lending rate the day before.
While the short-term impact of rising rates usually means a temporary buzz of sales activity, the larger concern is what two hikes in the overnight lending rate in two months – another one is possible in October – will do to a housing industry that has seen its largest market in the Toronto area already under siege from provincial rule changes that targeted investors and foreign buyers.
On the horizon in terms of tighter credit regulations is a new rule from the Office of the Superintendent of Financial Institutions that would target home buyers with down payments of more than 20 per cent with a tough new stress test: they would have to qualify based on a rate 200 basis points above their contract.
“It could be the biggest rule change of all-time,” said Rob McLister, the founder of ratespy.com. The housing market has already been adjusting to changes in the insured market, instituted in 2016, which forced homeowners with less than a 20 per cent downpayment to qualify based on the Bank of Canada five-year qualifying rate as opposed to the one on their contract. That rate is now 4.84 per cent.

The present state of the GTA Real Estate Market

Excerpted from The Toronto Star:
This article is a recap of the state of the housing market in the GTA. After we've been thru a buying frenzy that drove prices up followed by a slow down- this article sort of says it all- that house prices will keep on going up confirming the need for every family to be a homeowner as soon as feasible.

New home sales in GTA plunge, prices soar in July

House prices rose 45% over last year and condos were up 40%.

There were 7,801 new homes on the market in July, a record low, that is down from 16,900 units last year and 28,358 10 years ago.   (Rene Johnston / Toronto Star File Photo)  

By Tess Kalinowski

Real Estate Reporter

Thu., Aug. 24, 2017

Despite a dramatic year-over-year drop in sales volumes of newly constructed home in July, prices in the Toronto region rose, with the industry association saying it expects a record year.

There were 85% fewer single-family homes sold in July compared to the same month last year, according to the Building Industry and Land Development Association (BILD).

But the cost of a detached, semi-detached or townhouse averaged about $1.32 million, a 45 per cent year-over-year increase.

Condos, which accounted for 92 per cent of new home sales in July, also rose in price by 40 per cent to an average of $665,041.

The cost per square foot of an apartment or stacked townhome averaged $764, up from $594 last July.

Article Continued Below

Condos also got bigger, averaging 871 sq. ft., compared to 801 sq. ft. a year ago.

While the number of condos sold was down 35 per cent year over year, the year-to-date sales volume has actually increased 51 per cent and is double the 10-year sales average as more consumers look to condos as an affordable way to get into the housing market.

That's a stark contrast to the 50 per cent year-to-date decline in new single-family home sales, said BILD vice-president of communications Michelle Noble.