Which provinces are doing the most to cut energy costs?

Latest News & Economy DAZADA DIAMOND 31 Dec

Which provinces are doing the most to cut energy costs?

Which provinces are doing the most to cut energy costs?Of all the Canadian provinces, British Columbia is doing the most to save people money according to a new scorecard.

Efficiency Canada’s analysis measures policy progress on energy efficiency programs, enabling policies, buildings, transportation, and industry.

“British Columbia received the top score because of policies like the Energy Step Code that create a clear pathway towards net-zero energy-ready buildings, natural gas efficiency targets, and support for vehicle electrification. Quebec scores second, and is the national transportation leader,” explains Dr. Brendan Haley, the study’s lead author and the policy director at Efficiency Canada.

The impact of buildings and their transition to ‘smart’ buildings, technologies, and appliances is increasingly acknowledged as being vital to addressing climate change.

“In every province, we found both strengths and areas for improvement. We also identified policy gaps across all provinces that should be priorities for federal action — including catalyzing finance, building code implementation and compliance, transforming heating markets, and training for efficiency jobs,” added Haley.

  • https://www.mortgagebrokernews.ca/archived/which-provinces-are-doing-the-most-to-cut-energy-costs-323128.aspx?utm_source=GA&utm_medium=20191125&utm_campaign=MBNW-MorningBriefing&utm_content=CAB225E9-A56E-4453-BA7A-30CBD695B619&tu=CAB225E9-A56E-4453-BA7A-30CBD695B619

Property taxes a burden on Canadian businesses

Commercial & Rental DAZADA DIAMOND 30 Dec

Property taxes a burden on Canadian businesses

Property taxes a burden on Canadian businessesAltus, in conjunction with Real Property Association of Canada, recently released the 2019 Canadian Property Tax Benchmark Report, which provides an in-depth look at property tax rates, both commercial and residential, in 11 major urban centres across Canada. The report found that eight of the 11 cities surveyed have a commercial rate which is at least double that of the residential tax rate. This means that a commercial property would incur property taxes more than twice the amount of an equally valued residential property, having dramatic impacts on Canadian small businesses.

Montreal, Toronto and Vancouver posted the highest commercial-to-residential ratios in the country, for a 12th consecutive year. However, Calgary and Montreal saw the highest ratio increases in 2019, indicating a growing burden on commercial rate payers in those cities.

“Ideally, the tax rate on residential and commercial property should be the same and applied to current market values of both, but over time we’ve moved well beyond that, and municipalities across the country have been reluctant to increase taxes on residential rate payers who vote for them [versus] on commercial rate payers who don’t vote for them,” said Terry Bishop, president of Property Tax Canada at Altus Group. “Over the years, we’ve gotten a gap between the rates, and that’s really the purpose of the report . . . to shed some light on that.”

Property tax is the main source of revenue for Canadian municipalities and is used to fund services such as road repair, education, recreational programs and public transit. Both residents and business owners pay property taxes, but the rate they pay varies depending on whether the property type is commercial or residential – taxing authorities set these rates at their discretion.

The average commercial-to-residential tax ratio for all municipalities surveyed in 2019 was 2.84 as compared to 2.90 in 2018. This minor decrease is the result of eight cities lowering their ratio in 2019 as opposed to five cities lowering their ratio in 2018. Most significantly, for the first time in at least 20 years, Vancouver’s ratio dropped below 4.0, with a decrease of 17.17%. While Montreal, Toronto and Vancouver continue to post the highest commercial-to-residential ratios, Montreal has now taken the top spot for highest commercial-to-residential property tax ratio, reaching 3.93. Additionally, Calgary saw the largest increase in the survey for the second year in a row with a jump of 8.31% to 3.31. For the first time in six years, Halifax now sits slightly above average with a ratio of 2.87.

Increased Pressure on Small Business

The rising valuations on commercial properties in Vancouver, Toronto and more recently Montreal, have begun to put more pressure on the sustainability of small commercial businesses. In those locations, retail prices are being driven up by speculation, where people are buying retail locations for future development potential. While small retail in these markets is being impacted by rising values, Calgary retailers are being equally impacted, but by declining values. Since the energy crisis began, the city has experienced a drop in their commercial assessment base, but have been trying to collect the same amount of taxes from a declining property tax base, thereby shifting the tax burden from one sector onto another.

“I think the way to approach it is to try and target any tax relief efforts at the specific problem in that jurisdiction, and there are ways of doing that on an assessment basis or a tax basis,” Bishop said. “It’s a jurisdiction by jurisdiction issue that needs to be dealt with within those jurisdictions.”

The answer to widening ratios won’t be the same for every municipality, but there are choices that have to be made in terms of how they’re going to tackle a widening spread: either they have to tighten their belt on expenses, transfer some of the tax burden onto residential rate payers, or put businesses at risk, and if they put businesses at risk it could have other implications.

Effect on residential market

Those implications could have a knock-on effect on the residential market. Many urban and suburban homebuyers want to live in areas with vibrant commercial activity, and if high property taxes prove to be a burden, those businesses won’t be sustainable.

“It starts to change the complexion of the community, particularly in some of the areas with small retail strips. When businesses start to go dark, it starts to have a negative impact on the residential values as well in the community,” Bishop said.

Brokers might also want to keep an eye on clients looking to finance a property with development potential; future tax consequences could impact a borrower’s ability to pay.

Altus Group has conducted this report analyzing the differing tax ratios between commercial and residential properties for more than 16 years, and the average ratio has stayed between 2.5-3%, which indicates a balancing point somewhere in that range.

“Despite seeing some major shifts this year, the commercial-to-residential tax ratio is still an issue of relative fairness as we continue to see several cities across Canada shifting the burden of property taxes to business owners,” Bishop said. “Expecting businesses to shoulder the same burden while values decline, or taxes increase beyond business growth, is unsustainable. Measures that compress the gap between residential and commercial tax rates are positive steps that can help the viability of all businesses.”

Although each city is addressing this issue with their own unique approach, these solutions will compound the problem of inequities in commercial property taxes and create further disparities in commercial tax rates. Assessment phase-ins and tax mitigation measures such as capping, rebate programs and graduated tax rates, only serve to compound the existing inequities in taxation and prolong the inevitable tax increases. Reducing the gap between residential and commercial tax rates is a measure that can help the viability of all businesses.

More Market Trend Analysis

  • Quebec City’s commercial-to-residential tax ratio is the fourth highest of all cities surveyed. It has been steadily climbing for 15 years; however, it decreased by 3.75% this year.
  • Halifax’s commercial-to-residential tax ratio has slowly been increasing over the past few years. It now sits above the average for the first time in six years.
  • Ottawa’s commercial-to-residential tax ratio of 2.51, sits just below the average ratio for the 10th consecutive year.
  • Edmonton sits just below the average with a ratio of 2.41 and has remained relatively stable over the last four years.
  • Winnipeg’s ratio has remained stable for three years, it posted the highest 2019 residential rate at $12.33, an increase of 1.76% from last year.
  • Regina remains quite stable posting a 1.74 commercial-to-residential tax ratio, with only slight increases in both commercial and residential tax rates in 2019.
  • Saskatoon continues to show the lowest commercial-to-residential tax ratio at 1.71, a slight decrease from last year.

  • https://www.mortgagebrokernews.ca/news/property-taxes-a-burden-on-canadian-businesses-323239.aspx?utm_source=GA&utm_medium=20191127&utm_campaign=MBNW-Newsletter&utm_content=CAB225E9-A56E-4453-BA7A-30CBD695B619&tu=CAB225E9-A56E-4453-BA7A-30CBD695B619

Canadian banks bruised and battered at 2019 year-end

Banks & Bank of Canada DAZADA DIAMOND 27 Dec

Canadian banks bruised and battered at 2019 year-end

Canadian banks bruised and battered at 2019 year-end

Toronto Dominion Bank (TD Bank), Canada’s largest bank by assets, and Canadian Imperial Bank of Commerce (CIBC) posted smaller-than-expected quarterly profits on Thursday, sending shares sliding. CIBC shares fell 4.8% and TD shares dropped 2.8% and both were on track for their worst close in almost two months. The Toronto stock benchmark fell 0.4%.Similar fates have befallen all but one of Canada’s six biggest banks in a reporting season that closed out the worst year of profit expansion in more than a decade.

Since Bank of Nova Scotia kicked off fourth-quarter reporting on Nov. 26, the Canadian banks index has lost 3.5%, compared with the benchmark’s 1.1% decline.

Canadian banks are expecting another year of subdued earnings growth in fiscal 2020.

“Certainly, the days of robust growth for banks are over,” Barry Schwartz, chief investment officer at Baskin Asset Management, told Reuters. Schwartz forecasts 3% to 5% earnings growth in fiscal year 2020. “Banks aren’t going to grow more than the economy over the long term. A lot of the growth we saw over prior years was really a recovery from such terrible environments coming out of the financial crisis.”

Canadian banks are facing rising loan loss provisions and limited appetite for dealmaking as economic uncertainties mount. Oil price declines and decade-high consumer insolvencies in Canada are also creating headwinds.

Earlier in 2019, stronger growth in Canadian banks’ U.S. businesses helped offset slower growth at home. CIBC’s takeover of PrivateBancorp two years ago was the cornerstone of Chief Executive Officer Victor Dodig’s push to diversify beyond Canada. Profit from U.S. commercial banking and wealth management is at a record $180 million for the bank, and even though earnings missed analysts’ estimates, growth continues to outpace CIBC’s banking businesses in Canada. There was a 37% increase from U.S. commercial banking and wealth management in the quarter, surpassing its goal of getting 17% of its earnings from U.S. businesses by 2020.

But a slowdown U.S. expansion as of late, as well as challenges to other segments like capital markets as deals activity has stalled that growth, said Bryden Teich, portfolio manager at Avenue Investment Management. He added that that will continue to weigh on banks into 2020.

“Banks are in a slow-growth environment but are having to continue making these investments” in order to remain relevant and grow market share,” Teich told Reuters.

Dodig told investors earlier this year that 2019 earnings would be “relatively flat” after posting quarterly results hampered by a contraction in domestic mortgages and net interest income. CIBC’s per-share earnings fell 7.9% in the fourth quarter, leaving earnings down 3.9% for the year.

CIBC’s domestic mortgage book was unchanged from a year earlier at $202 billion in balances.

Banks are also facing higher expenses, as they invest in new technologies and take restructuring charges to boost efficiencies. The most notable was Bank of Montreal (BMO), which took a $357 million restructuring charge to cut about 5% of its workforce.

This being said, Teich expects banks with bigger U.S. operations to face fewer challenges than their domestically focused counterparts. With pressure on net interest margins in the United States easing as the Federal Reserve pauses rate cuts following three reductions this year, Canada faces the prospect of lower rates if global trade uncertainties persis.

Even if a trade deal is struck between the U.S. and China, those uncertainties are indeed likely to continue, said Bank of Canada Deputy Governor Timothy Lane.

“The damaging effects of trade conflict are only partly offset by easier monetary policy,” Lane said at a speech at the Ottawa Board of Trade, adding that it remained unclear whether market pricing fully reflected the inherent risks from the trade tensions.

Markets have taken a very optimistic approach for some time, Lane said, citing near-record equity markets and very low credit spreads.

“The sense is there’s a bit of disconnect between this quite optimistic pricing in the markets and the fact a lot of the macroeconomic news still suggests some adverse developments are quite possible,” he said.

  • https://www.mortgagebrokernews.ca/news/canadian-banks-bruised-and-battered-at-2019-yearend-323740.aspx?utm_source=GA&utm_medium=20191206&utm_campaign=MBNW-Newsletter&utm_content=CAB225E9-A56E-4453-BA7A-30CBD695B619&tu=CAB225E9-A56E-4453-BA7A-30CBD695B619

How to Verify Your Down Payment When Buying a Home

Down Payment & Buying DAZADA DIAMOND 23 Dec

How to Verify Your Down Payment When Buying a Home

Saving for a down payment is one of the biggest challenges facing people wanting to buy their first home.
To fulfill the conditions of your mortgage approval, it’s all about what you can prove (hard to believe – but some people have lied in the past – horrors!).
Documentation of down payment is required by all lenders to protect against fraud and to prove that you are not borrowing your down payment, which changes your lending ratios and potential your mortgage approval.

DOCUMENTATION REQUIRED BY THE LENDER TO VERIFY YOUR DOWN PAYMENT

This is a government anti-money laundering requirement and protects the lender against fraud.

1. Personal Savings/Investments: Your lender needs to see a minimum of 3 months’ history of where the money for your down payment is coming from including your: savings, Tax Free Savings Account (TFSA) or investment money.

  • Regularly deposit all your cash in the bank, don’t squirrel your money away at home. Lenders don’t like to hear that you’ve just deposited $10,000 cash that has been sitting under your mattress. Your bank statements will need to clearly show your name and your account number.
  • Any large deposits outside of “normal” will need to be explained (i.e. tax return, bonus from work, sale of a large ticket item). If you have transferred money from once account to another you will need to show a record of the money leaving one account and arriving in the other. Lenders want to see a paper trail of where your down payment is coming from and how it got into your account.

 

2. Gifted Down Payment: In some expensive real estate markets like Metro Vancouver & Toronto, the bank of Mom & Dad help 20% of first time home buyers. You can use these gifted funds for your down payment if you have a signed gift letter from your family member that states the down payment is a true gift and no repayment is required.

  • Gifted down payments are only acceptable from immediate family members: parents, grandparents & siblings.
  • Be prepared to show the gifted funds have been deposited in your account 15 days prior to closing. The lender may want to see a transaction record. i.e. $30,000 from Bank of Mom & Dad’s account transferred to yours and a record of the $30,000 landing in your account. Bank documents will need to show the account number and names for the giver and receiver of the funds. Contact me for a sample gift letter.

3. Using your RRSP: If you’re a First Time Home Buyer, you may qualify to use up to $35,000 from your Registered Retirement Savings Plan (RRSP) for your down payment.

  • Home Buyers Plan (HBP): Qualifying home buyers can withdraw up to $35,000 from their RRSPs to assist with the purchase of a home. The funds are not required to be used only for the down payment, but for other purposes to assist in the purchase of a home.
  • If you buy a qualifying home together with your spouse or other individuals, each of you can withdraw up to $35,000.
  • You must repay all withdrawals to your RRSP’s 15 years. Generally, you will have to repay an amount to your RRSP each year until you have repaid the entire amount you withdrew. If you do not repay the amount due for a year (i.e. $35,000/15 years = $2,333.33 per year), it will be added to your income for that year.
  • Verifying your down payment from your RRSP, you will need to prove the funds show a 3-month RRSP history via your account statements which need to include your name and account number. Funds must be sitting in your account for 90 days to use them for HBP.

4. Proceeds from Selling Your Existing Home: If your down payment is coming from the proceeds of selling your currently home, then you will need to show your lender an accepted offer of Purchase and Sale (with all subjects removed) between you and the buyer of your current home.

  • If you have an existing mortgage on your current home, you will need to provide an up-to-date mortgage statement.

5. Money from Outside Canada: Using funds from outside of Canada is acceptable, but you need to have the money on deposit in a Canadian financial institution at least 30 days before your closing date.  Most lenders will also want to see that you have enough funds to cover Property Transfer Tax (in BC) PLUS 1.5% of the purchase price available in your account to cover your closing costs (i.e. legal, appraisal, home inspection, taxes, etc.).

  • Property Transfer Tax (PTT) All buyers pay Property Transfer Tax (except first-time buyers purchasing under $500,000 and New Builds under $750,000). This is a cash expense, in addition to your down payment.
    Property Transfer Tax (PTT) cannot be financed into the mortgage

Buying a home for the first time can be stressful, therefore being prepared with the right documentation for your down payment and closing costs can make the process much easier.
Mortgages are complicated, but they don’t have to be. Contact a Dominion Lending Centres mortgage professional near you.

  • https://dominionlending.ca/news/how-to-verify-your-down-payment-when-buying-a-home/

Many Canadians signal hopelessness in severe debt traps

Credit & Debt DAZADA DIAMOND 20 Dec

Many Canadians signal hopelessness in severe debt traps

Many Canadians signal hopelessness in severe debt trapsAmid mounting financial burdens, fully two-fifths of Canadians believe that they will never escape debt in their lifetimes, according to a recent analysis by the Credit Counselling Society.

Citing figures from Statistics Canada, the study warned that the household debt ratio now sits at 175.9%.

An Ipsos poll on behalf of Manulife Bank also found that 45% of Canadians are spending more than their incomes. As much as 40% indicated a belief that their debts will outlive them, while 67% assumed that everyone else is undergoing the same hardships.

“Unfortunately, these statistics do reflect the financial situation of many Canadians we speak with, who struggle to balance the high cost of living with paying down debts and managing their household budget,” Credit Counselling Society president Scott Hannah said.

A significant proportion of the annual increase in household debt during Q3 2019 came from mortgages, according to Equifax Canada.

On average, Canadians each owed around $72,500 in debt at the end of September, with the amount increasing by 2.1% annually. The mortgage market grew by 4.5% year-over-year to $1.32 billion, while overall consumer credit shot up by 4.1% to $1.966 billion.

Furthermore, 94% of those polled by Ipsos admitted that the average Canadian household is shouldering too much debt, and 84% agreed that paying this debt off is a top priority.

“With so many Canadians relying on credit cards and other means of lending, the stress of being in debt has simply become a normal part of life. Carrying overwhelming amounts of debt and having limited means to pay them down, it’s understandable that many consider it an impossible situation to resolve,” Hannah added.

  • https://www.mortgagebrokernews.ca/news/many-canadians-signal-hopelessness-in-severe-debt-traps-324156.aspx?utm_source=GA&utm_medium=20191216&utm_campaign=MBNW-Newsletter&utm_content=CAB225E9-A56E-4453-BA7A-30CBD695B619&tu=CAB225E9-A56E-4453-BA7A-30CBD695B619

Why it’s high-time to break into Calgary

Latest News & Economy DAZADA DIAMOND 19 Dec

Why it’s high-time to break into Calgary

 

The city is expected to record no growth in sales price expectation next year, making it a buyer’s market, said the report. This would be due to Calgary’s economy and high unemployment rate.

“Housing affordability isn’t a concern due to low condo prices allowing buyers to easily enter the market. Despite the high unemployment rate, the city’s population is increasing due to residents from other parts of Alberta moving to the city,” RE/MAX said.

Three neighbourhoods are expected to be the hottest markets next year due to their affordability: Coventry Hills, Evergreen, and Northeast Calgary.

The city’s overall younger population compared to the rest of Canada could indicate a stronger demand from first-timers entering into the market.

Condominiums and two-storey detached homes are expected to be the most popular property types next year.

  • https://www.canadianrealestatemagazine.ca/news/why-its-hightime-to-break-into-calgary-324040.aspx?utm_source=GA&utm_medium=20191212&utm_campaign=CREWW-REPCW-Newsletter&utm_content=&tu=

Can You Qualify For A Mortgage After A Consumer Proposal?

Credit & Debt DAZADA DIAMOND 18 Dec

After you file a consumer proposal, the last thing on your mind might be a new mortgage, but you may be a lot closer than you think.

Maybe you wish to buy a home, or you own a home and are interested in refinancing your mortgage. Let’s first talk about purchasing a home.

When Can You Buy A Home After A Consumer Proposal?

Actually, this question comes up often. People want to know how soon can they buy. Sometimes they ask right after they file their consumer proposal, and other times it’s more than five years later, after they’ve paid it off in full.

First things first: pay off your consumer proposal completely before you take on major new mortgage debt.

If you have at least a 20% down payment, you may even be able to buy as soon as you complete your consumer proposal! As in, immediately.

Alternative lender adviceYou will almost always be working with either a B-lender or a private lender, but it is doable. But it’s more than just a matter of having finished your consumer proposal. Make sure you have been rebuilding your personal credit historywith new credit facilities and by cleaning up reporting errors. (There are ALWAYS reporting errors after you file a consumer proposal.)

If you have less than 20% down payment, you will be looking for a high-ratio mortgage, which has default insurance, from one of CMHC, Genworth or Canada Guaranty.

In that case, you will need at least two years of clean, new credit since you completed your consumer proposal. But it’s best if you have at least two tradelines (credit card, loan, line of credit, etc.) with limits greater than $2,000.

Worst case scenario, three years after you completed your proposal, or six years after you filed your proposal (whichever comes first), it will fall off your credit report and whether or not you qualify for a mortgage to purchase a home will depend on the usual mortgage qualification criteria we all face.

When Can You Refinance Your Home After A Consumer Proposal?

This, too, can happen very quicklyin fact, we have helped numerous homeowners refinance their homes so they could complete their consumer proposal early. In some cases, it was as soon as the terms of their proposal were ratified in court.

This is what we call a lump-sum consumer proposal, and can be a very attractive way to settle your debts if you are a homeowner.

Should You Pay Off Your Consumer Proposal When You Refinance?

Actually, there are a few private lenders who will allow you to leave your proposal unpaid while you extract equity from your home. But unless there are specific, logical reasons to doing this, it’s not something I recommend.

refinancing to pay off a consumer proposalI prefer refinancing to completely pay off the remaining balance owing on the consumer proposal. There may also be other things you need money for at the same timelike a home improvement project or a child’s higher education, or other family debts.

CRA debt crops up quite a lot too, particularly for those who are self-employed. You can take care of all these at the same time, provided you pay off the consumer proposal.

Why Would You Pay off Your Consumer Proposal Early?

1) Fear of the mortgage renewal. This concern is very real if your mortgage lender had a credit card or loan product included in your consumer proposal. They might have no interest in offering you a renewal when your current mortgage matures. So, you need to get in front of this issue as soon as you can, if your situation allows for it.

2) A strong desire to rebuild your personal credit history. Once you file your CP, your credit score is going to take a major beating. All debts included in the proposal will be reporting as R7s on your personal credit report.

Worse than that, some of them will be erroneously reporting as R9swritten off completely.

confused mortgage consumerAnd some credit cards may say they were included in a bankruptcy, even though that is not true.

A few credit cards even report ongoing late payments after the proposal was filed. And sometimes even after the proposal is completed!

If you want to fix the damage to your personal credit report resulting from your consumer proposal, you are going to have to wait until it is paid in full and you have a completion certificate from your trustee. Here is additional information on rebuilding credit after a consumer proposal.

3) Wish to be normal. When you have bad credit, everything in life seems tougher and more expensive. Even if you wish to rent a home, not buy one, the landlord will usually ask for a copy of your credit report.

And if you want a new smartphone, or lease or finance a new car, bad credit will make it all that much harder.

If you allow your consumer proposal to run the full five years, that means it could be in your credit history six years altogether. It falls off three years after you complete, so keep that in mind. You can significantly shorten the waiting time by paying the consumer proposal off early.

4) Improve cash flow. In nearly all cases when we refinance a home where the owner is paying off a consumer proposal, they see an improvement in their monthly cash outflows. In a society where half of us are living paycheque to paycheque, this is attractive.

How Do You Refinance To Pay Off A Consumer Proposal?

First, your mortgage broker will do a thorough assessment of whether or not this is even doable. They will assess the marketability of your property, the amount of untapped equity, the reasons behind you filing your consumer proposal, as well as all the normal stuff lenders look at when reviewing a mortgage application.

An important consideration is your current first mortgage. Was it just renewed, or is it nearing maturity? Which lender is it with, and what might the prepayment penalty be if you were to break it and refinance to a new first mortgage with a B-lender?

Plan BAnother consideration is whether or not your first mortgage is registered as a collateral charge, and if so, to what amount is it registered? We wrote about this a few months agoit can make things difficult.

If refinancing the current mortgage makes sense, your broker will present your application and a presentation to the B-lenders most likely to entertain a file like yours. And they will bring back quotes for your consideration. If you choose to proceed, most of the time the entire process can be wrapped up in four to six weeks.

We actually see that happen less often than the other approach, which is to first apply for a private second mortgage.

In this scenario, the first mortgage is left intact and a new lender is found who will lend enough money to cover the proposal balance, any other debts and needs, and all the expenses associated with the mortgage.

During the term of the second mortgage (usually one year), we take the opportunity to cleanse all the reporting errors from the credit report, and also to strengthen the borrower’s credit profile with new healthy credit.

After a year (longer if that makes sense), we then refinance the two mortgages into a single first mortgage.

It would be normal to expect this new replacement mortgage to be with a B-lender, since the consumer proposal is still fairly fresh.

  • https://www.canadianmortgagetrends.com/2019/12/can-qualify-mortgage-consumer-proposal/

Edmonton multi-family segment enjoying sustained demand

Real Estate DAZADA DIAMOND 17 Dec

Edmonton multi-family segment enjoying sustained demand

Edmonton multi-family segment enjoying sustained demandA resurgent economy and improving household incomes boosted Edmonton’s multi-family market, according to Marcus & Millichap’s Q4 2019 local apartment report.

Demand remained stable during the third quarter, even as the oil industry is still showing signs of weakness with the loss of 9,200 jobs over the year ending in September.

Fortunately, while the workforce shrunk by 1.2%, “robust healthcare and financial sectors in the metro should help to ease challenges in other industries, fuelling the need for more rental units in Edmonton,” Marcus & Millichap stated.

Over the past year, rental vacancy rate went down to 5.3%, while average monthly rent grew by 2.6% annually to $1,155. During the same year-over-year period, nearly 1,300 apartments were built in Edmonton, while almost 2,200 purpose-built rentals were underway as of Q3 2019.

“Edmonton is anticipated to outpace most other metros in household growth over the next five years as more families and young professionals locate here,” the report noted. “Single-family home values have fallen year over year in spite of strong housing demand, down 2.1% to $371,200, leading to a roughly $400 gap between the monthly mortgage payment and the average rent.”

Together, these trends have made the city’s apartments among the most attractive assets for investors.

“Strong investor perceptions coupled with yields above many other major metros kept deal flow at elevated levels over the past year,” Marcus & Millichap added. “Robust investor demand compressed the market’s average cap rate 50 basis points to rest in the upper-4% to low-5% territory over the past four quarters. In more suburban locations of Edmonton, investors found assets with initial yields above 6%.”

  • https://www.mortgagebrokernews.ca/news/edmonton-multifamily-segment-enjoying-sustained-demand-323322.aspx?utm_source=GA&utm_medium=20191128&utm_campaign=MBNW-Newsletter&utm_content=CAB225E9-A56E-4453-BA7A-30CBD695B619&tu=CAB225E9-A56E-4453-BA7A-30CBD695B619

Prime Minister urges review of stress test

Banks & Bank of Canada DAZADA DIAMOND 16 Dec

Prime Minister urges review of stress test

Prime Minister urges review of stress testMinister of Finance Bill Morneau was urged to reconsider the borrower stress test in a Ministerial Mandate letter from Prime Minister Justin Trudeau.

The prime minister reiterated Morneau’s commitment to four key principles for the implementation of the government’s fiscal plan: reducing the government’s debt; preserving Canada’s AAA credit rating; investing in people and things that give people a better quality of life; and preserving “fiscal firepower” in the event of an economic downturn.

Among the list of top priorities were to “review and consider recommendations from financial agencies related to making the borrower stress test more dynamic.”

Whether or not anything comes of the recommendation remains to be seen, but some brokers are encouraged by the fact that the conversation is continuing.

“I think it’s definitely a step in the right direction and the fact that they’re even considering looking at it—especially after re-election—is a good sign,” said Michelle Campbell, principal mortgage broker at Mortgage District, based in Mississauga.

The stress test has somewhat begrudgingly been hailed as a success in terms of cooling overheated housing markets and making it more necessary for consumers to turn to mortgage brokers for guidance. There has been no shortage of criticism, however, due to the fact that it negates the purchasing power of first-time buyers as well as making it harder for those renewing mortgages to switch lenders and take advantage of better deals.”

“From my perspective, I don’t think that there shouldn’t be a stress test, but it should be reasonable.” Campbell sits on the chapter committee for MPC, which has asserted that a reasonable bar for a stress test would be .75 above the contract rate.

“The fact that they’re realizing that it it’s effecting first-time homebuyers the most, I think it’s a positive thing,” Campbell said.

The prime minister also indicated for Morneau to work with the Minister of Families, Children and Social Development who is the Minister responsible for the Canada Mortgage and Housing Corporation (CMHC) to further limit housing speculation by “developing a framework and introducing a 1% annual vacancy and speculation tax on applicable residential properties owned by non-resident non-Canadians. This would involve working with provinces, territories, municipalities and law enforcement to track housing ownership and speculation.”

Other priorities include a complete implementation of the new financial consumer protection framework and the introduction of legislation to “cut taxes for the middle class and those working hard to join it.” This tax cut would increase the basic personal income tax exemption by around $2,000 to $15,000.

Mandate letters are meant to outline the strategic priorities of each department and to enhance the transparency and accountability of government. Commitments are described in the mandate letters sent from the Prime Minister to each cabinet minister and represent action on top priorities identified by the government. Progress of the government commitments are then tracked by the Government of Canada.

  • https://www.mortgagebrokernews.ca/news/prime-minister-urges-review-of-stress-test-324137.aspx?utm_source=GA&utm_medium=20191216&utm_campaign=MBNW-Newsletter&utm_content=CAB225E9-A56E-4453-BA7A-30CBD695B619&tu=CAB225E9-A56E-4453-BA7A-30CBD695B619

Alberta is easing regulations on condo regulations

General DAZADA DIAMOND 13 Dec

Alberta is easing regulations on condo regulations

Alberta is easing regulations on condo regulationsThere are changes ahead for the governance of condo buildings in Alberta which will cut red tape and help protect against rising costs for owners.

The provincial government has announced that, from Jan 1, 2020, there will be changes to a range of requirements from disclosure of information to how annual general meetings are organized, sanctions, fees for documents, and the qualifications for those who conduct reserve fund studies.

“The previous regulations would inevitably have led to increased condo fees for condo owners,” said Nate Glubish, Minister of Service Alberta. “I’m proud of the work we have done by listening to the concerns of Albertans, taking action immediately and working with condo owners, boards and managers to make thoughtful and sensible revisions. I’m confident Albertans will be pleased with the changes we’ve made.”

The changes are being introduced following consultations with stakeholders and have been welcomed by Terry Gibson, Condo Owners Forum Society of Alberta.

“Condo Owners Forum Society of Alberta congratulates Minister Nate Glubish and the staff at Service Alberta for reaching this milestone which will substantially improve Alberta condo governance, management and living,” he said.

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