Peng
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Tan
Broker
August A gu Au g stt 2012 20 0112 Volume Vol olum ume 02 02 0 2 Issue Issue Is sue 10 su
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Visit Us At: www.TANteam.com
CONTENTS August 2012 Volume 02 Issue 10 FEATURED CONTENT pg 4-6
FAQ - 2012 Announcement on measures to support the long term-stability of Canada Housing Market
pg 7
Canada Plans No New Steps To Cool Housing Market: Finance Minister
pg 8-9
Jan Wong: The class war over basement apartments in Brampton
FEATURED PROPERTY LISTINGS pg 12 High Desirable Area - Gorgeous property comes with modern open concept kitchen complete w/centre island, upgrd. washroom, hrdwd floors, & spacious rooms. A quiet, neighbourhood in the John Fraser/Gonzaga school district...
pg 12 Centre of Attraction - 2 bedroom condo with 9’ ceiling situated in downtown Brampton. Walking distant to Rose Theater, Gage Park, transit terminal and GO train. Want to know more? Call Tan now!
pg 13 Unique Designs - Brand new 4 storey achituarally styled brick and stucco complex located in the Carefree Living At The Crosings! Close to all shopping, walkking distance of everything, Town of Lasalle has over 100 Acres of Parkland, Playgrounds, Pool, Golfing and more! Get in touch with Tan!
7DQĂ•JD]LQH 1(:6 pg 14-16 pg 16-17
Mid-Month Resale Market Figures Back-to-back Market Watch Back-to-back double issue
pg 18
Food For Thought...
pg 21
New Mortgage Rules Effective On July 9, 2012 - What you need to know...
pg 22-23 Mortgage
Changes “may be too late�: Moody’s
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Tan.gazine NEWS
Frequently Asked Questions 2012 Announcement on measures to support the long-term stability of Canada’s Housing Market Department of Finance Canada - fin.gc.ca August 20, 2012
“Getting some FAQ’s out of the way, useful information to know”
Q. Why is the Government making these changes at this time? A. These measures will support the long-term stability of the Canadian housing and mortgage markets and promote savings through home ownership. They are intended to be timely, targeted and measured. The measures will reinforce the importance of borrowing responsibly and using home ownership as a savings vehicle. The Government actively monitors developments in the housing market and is committed to taking action when necessary. Q. What will be the impacts of the adjustments to the rules for government-backed mortgage insurance on the Canadian economy? A. The adjustments to the rules for government-backed mortgage insurance will provide significant benefits to the Canadian economy by supporting the stability of the housing market and promoting savings through home ownership. The short-term impact on the housing market is expected to be manageable, given that the majority of Canadian families are already taking a prudent approach in managing household debts. In the long term, these measures are expected to have a positive impact on the economy through higher savings and a lower number of financially vulnerable households. 4 | penghocktan.com
Tan.gazine NEWS Q. When do these measures take effect? A. The new measures will take effect on July 9, 2012. Q. Are further measures expected? A. The Government actively monitors developments in the housing market, consumer debt and the economy, and is committed to taking action when necessary to support the long-term stability of the housing market and protect the investment of Canadian families. Q. Do these measures apply to multi-unit buildings? A. These standards apply to mortgages on residential property with four units or less. Q. Why is the Government lowering the limit on refinancing again? A. The new measure announced today will reduce the maximum amount on refinancing to 80 per cent from 85 per cent of the value of the home. Limiting the amount of refinancing will promote saving through home ownership and limit the shifting of consumer debt into mortgages guaranteed by taxpayers. Q. Why is the Government lowering the maximum amortization period again? A. The new measure announced today will reduce the maximum amortization period to 25 years from 30 years. Limiting the maximum amortization period will reduce the total interest payments Canadian families make on their mortgages, helping them build up equity in their homes more quickly and pay off their mortgages sooner. For example, reducing the amortization period from 30 years to 25 years on a mortgage would result in a moderate increase in the monthly payment. However, over the life of the mortgage, this modest increase would result in a significant reduction in the total interest payments. For a $350,000 mortgage at 4 per cent interest rate, the interest savings could be over $45,000. Q. Why is the Government limiting the maximum gross debt service (GDS) and total debt service (TDS) ratios?
A. The GDS ratio is the share of the borrower’s gross household income that is needed to pay for homerelated expenses, such as mortgage payments, property taxes and heating expenses. The TDS ratio is the share of the borrower’s gross income that is needed to pay for home-related expenses and all other debt obligations, such as credit cards and car loans. The new measure announced today will set the maximum GDS ratio at 39 per cent and reduce the maximum TDS ratio to 44 per cent. These debt service ratios measure the share of a household’s income that is required to cover payments associated with servicing debt. Both measures are already used by lenders and mortgage insurers to assess a borrower’s ability to pay. Setting a GDS limit and reducing the TDS limit will help prevent Canadian households from getting overextended and reduce the number of households vulnerable to economic shocks or an increase in interest rates. Q. Why is the Government introducing a maximum allowable price for insured mortgages? A. The new measure announced today will establish that government-backed mortgage insurance is only available for a new high loan-to-value mortgage if the home purchase price is less than $1 million. Because homes priced at or above $1 million would not be eligible for government-backed high ratio insurance, borrowers for these homes would require a down payment of at least 20 per cent. Introducing a maximum allowable price will ensure that government-backed mortgage insurance operates the way it was originally intended: to help working families and first-time homebuyers. This measure is expected to have a negligible impact on working families and firsttime homebuyers as the vast majority of these borrowers purchase properties priced below the threshold. Q. I already have an insured mortgage. How will these changes affect me? A. Mortgage insurance is good for the life of the mortgage. Borrowers renewing their insured mortgages will not be affected by these changes. For example, if a borrower had a 30-year amortization and there are 27
penghocktan.com | 5
Tan.gazine NEWS years remaining on the mortgage, the mortgage can be renewed with a 27-year amortization, as long as no new funds are being added to the mortgage. Q. What is required to qualify for an exception to the new parameters? A. The new measures will apply as of July 9, 2012. Exceptions will be made to satisfy a binding purchase and sale, financing or refinancing agreement where a mortgage insurance application has been made before July 9, 2012. While the changes come into force on July 9, 2012, any mortgage insurance applications received after June 21, 2012 and before July 9, 2012 that do not conform to the measures announced today must be funded by December 31, 2012. Q. Will a purchase and sale agreement dated prior to July 9, 2012 be considered binding if there are outstanding conditions that have not been fulfilled prior to July 9, 2012? A. Yes, if the date on the purchase and sale agreement is earlier than July 9, 2012, and a mortgage insurance application has been made prior to that date, the new parameters will not apply, even if the conditions of the agreement have not been waived. Q. Will the new refinancing rules allow a borrower with a mortgage above 80 per cent loan-to-value (LTV) to refinance by extending the amortization period? A. No. Effective July 9, 2012, borrowers will not be permitted to refinance a mortgage above an 80 per cent LTV, unless the borrower has a binding refinance agreement dated prior to July 9, 2012, and a mortgage insurance agreement has been made prior to that date. Q. I have a written mortgage pre-approval from a lender, dated before July 9, 2012 with a 30-year amortization. Will I still be eligible for a 30-year amortization if I don’t sign an agreement of purchase and sale until July 9, 2012 or later? A. No, a mortgage pre-approval without an agreement of purchase and sale is not sufficient to qualify for a 30-year amortization. You may have a 30-year amortiza6 | penghocktan.com
tion only if your agreement of purchase and sale is dated before July 9, 2012 and you have made a mortgage insurance application before July 9, 2012. You may wish to discuss with your lender to revise your mortgage pre-approval using the new parameters announced today. Q. Will the new parameters apply to assignment (“switch� or transfer) of a previously insured loan from one approved lender to another? A. No. As long as the loan amount and amortization period are not increased, the new parameters will not apply to a switch/transfer/assignment of the mortgage to a different lender. Q. If I sell my current home and buy another, will the new parameters apply if I transfer the outstanding balance of my insured mortgage to the new home? A. As long as the outstanding balance of the insured loan, the LTV ratio and the remainder of the amortization period are not increased, the new parameters will not apply when the mortgage insurance is transferred from one home to another. Q. What if I need to increase the amount of my insured loan when I sell my current home and buy another? A. In this situation, the new parameters will apply for any insured loan. Q. If I bought a condo that is not expected to be built for another two years, will the new parameters apply? A. If you bought a condo and have made a mortgage insurance application on or before June 21, then the new parameters would not apply. If you buy a condo and make a mortgage insurance application after June 21, the new parameters will apply if the mortgage loan is not funded by December 31, 2012.
Tan.gazine NEWS
Canada plans no new steps to cool housing market: Edwin Chan - Reuters Canada finance minister August 01, 2012
Canada does not expect to have to tighten mortgage rules further as the real estate market has softened in the wake of government measures to cool it down, Finance Minister Jim Flaherty said in an interview on Wednesday.
Ratings agency Standard & Poor’s has warned that debt-ridden consumers and the cooling property market are leaving the country’s banks vulnerable, revising its outlook to “negative” from “stable” for the country’s biggest banks.
Home prices hit a third straight record high in June, extending a steady climb that had triggered fears of a property bubble. But a slowdown in the pace of price increases suggested to economists the red-hot housing market is cooling.
The debate comes as economic growth in Canada shifted into low gear in May on unexpected weakness in the manufacturing sector, casting doubt on the country’s ability to distance itself from the disappointing performance plaguing the United States.
“We always monitor the housing market. There has been concern, particularly with the condo market in Toronto and Vancouver. We have taken steps, including recently in June, another step to tighten the market for residential mortgages,” Flaherty said in an interview in Sunnyvale, California. “There has been some softening in the past month or so, so right now there is no intention to intervene again,” he said after a series of meeting with Silicon Valley tech corporations and venture capitalists. The minister tightened conditions for borrowers and lenders on June 21 to put the brakes on home buying and deflate a possible housing bubble before it popped. Canada does not have the subprime market that helped doom the United States to mortgage defaults and foreclosures, nor do lenders typically repackage and resell mortgages the way U.S. lenders did before the U.S. housing bust in 2009. But Flaherty and Bank of Canada Governor Mark Carney have expressed concern about rising household debt and about persistent strength in the condominium market.
IT’S GROWTH, AFTER ALL. Flaherty waved off calls for further government stimulus, saying the present situation did not call for it. Economists have called for more government borrowing and infrastructure spending should the economic picture worsen, but Flaherty said he would not speculate on what might happen. “We took certain steps back in 2009 to created economic stimulus. We’re not in that situation today,” he said. “We are seeing modest growth, not as much as Americans and Canadians would like it to be, but it is growth. And that’s better than many Western countries.”
penghocktan.com | 7
Tan.gazine NEWS
Jan Wong: the simmering class war over basement apartments in Brampton Jan Wong - Torontolife.com August 7, 2012
I once moved into an illegal basement apartment in Toronto for a newspaper series about working undercover as a maid. At $750 a month, it was the most affordable roach-free dwelling I could find. What’s more, it helped my landlord, himself a cleaner at the Four Seasons, pay his mortgage. Secondary suites are mutually beneficial for renters and homeowners. So I applaud the controversial new legislation that has finally legalized the subterranean world of basement apartments. The province-wide law, which took effect in January, overrides any municipal bylaws prohibiting thembylaws that were typically passed due to residents’ complaints about traffic congestion, overcrowded schools and, though less often vocalized, theregoes-the-neighbourhood fears. The laws that regulate secondary units are confusing, thanks to some political flip-flopping over the past two decades. In 1994, the provincial NDP government under Bob Rae passed Bill 120, permitting second units in houses, regardless of local zoning laws. A year later, Mike Harris’s new Conservative government introduced Bill 20, restoring to municipalities the right to outlaw secondary suites. Brampton, the epitome of sprawl, quickly took advantage of Bill 20 and banned the apartments. Pre-existing units that had been built to code were grandfathered, but anything built after 1995 was deemed illegal. (Secondary suites, for the record, are legal in Toronto, where they constitute 20 per cent of the rental stock and tend to be 10 to 15 per cent cheaper than apartment building units.)
Few neighbourhoods welcome basement apartments with open arms, but they’re especially unpopular in the supposedly bucolic burbs-lowdensity neighbourhoods where people have traditionally relocated to get away from the riffraff.
Tan.gazine NEWS
Brampton is the fastest-growing municipality in the country; between 2001 and 2011, its population increased by 61 per cent, to 525,000. The downside to this substantial growth has been a housing crisis—a very 21st-century suburban housing crisis. Nearly half of Brampton’s residents are new immigrants, many of whom can’t afford to buy one of the area’s predominant single-family detached homes. At the same time, there’s a dearth of affordable rentals; the CMHC estimates that the Peel region is in need of 1,900 new rental units per year over the next nine years. And for low-income residents requiring subsidized housing, the wait time is up to 11 years—one of the longest in the GTA. All of this explains why so many newcomers are landing in illegal basement suites, of which Brampton has an estimated 30,000. Few neighbourhoods welcome basement apartments with open arms, but they’re especially unpopular in the supposedly bucolic burbs—low-density neighbourhoods where people have traditionally relocated to get away from the riffraff. Not surprisingly, many Bramptonians are furious about the new law. Legitimizing basement apartments, they argue, will decrease property values and increase pressure on the city’s already strained infrastructure. They worry property taxes will go up in order to cover the costs of bylaw enforcement and added municipal services. Chris Vernon, the managing editor of the Brampton Guardian, dislikes the proliferation of basement apartments because of overcrowded hospitals and street parking that impedes snowplows in winter. Grant Gibson, a city councillor, says there’s been “a huge outcry� over basement apartments, with complaints about safety issues and overcrowded schools. “We used to know we’d get three kids from every household,� he says. “Now a lot of times the schools don’t know where the kids are coming from.�
It’s true that the estimated 60,000 illegal basement apartment dwellers wouldn’t be counted in the census, nor would they be factored into property taxes, creating a challenge for the municipality. But what opponents fail to see is that any added strain on the system is a result of the population boom itself. Bramptonians are desperate not only for affordable housing, but for other services as well. Their hospital, Brampton Civic, has only 553 beds—not enough for a city of Brampton’s size. Social services agencies are stretched. Basement apartments are merely filling a need that’s not being met by the city and the province. They’re an environmentally friendly form of social engineering that, if legalized and regulated, doesn’t chew up taxpayer dollars. It makes economic and environmental sense for two households to share the same pile of bricks and mortar, the same furnace and water heater, not to mention the same roads and public transportation—especially in a city like Brampton, which has half the population density of Toronto. And basement apartments have the healthy side effect of integrating newcomers into the middle class—where they can mingle with homeowners who go to work, mow their lawns and send their kids to university—instead of ghettoizing them in public housing.
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Dreaming of Home First-time homebuyers shouldn’t worry Talk about mixed messages. There's concern that the new mortgage rules might push first-time homebuyers out of the market. But mortgages are still a pretty amazing bargain – historically speaking. In fact, some are calling it the great Canadian mortgage sale. So what's a first-time homebuyer to do? Is buying a home right now a reckless risk... or a great, time-limited opportunity? Home ownership can make great financial sense. Over the long term, residential real estate has been a very strong asset – showing excellent appreciation. Renters who add up what they've shelled out during their renting years are often shocked to see how much mortgage help they've given their landlord. Most would prefer to have that money build their own home equity. If you're dreaming of a home of your own, then there's good news. Getting into today's housing marketing isn't out of the question if you do some good common-sense planning. Over the next few weeks we'll offer some tips for first-time homebuyers – to ensure that you get off on the right foot in your home buying journey! Google Search - Unknown Author August 20, 2012
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penghocktan.com | 11
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Tan.gazine NEWS Greater Toronto REALTORS® Report July Mid-Month Resale Market Figures TORONTO, July 18, 2012 -- Greater Toronto REALTORS® reported 3,679 sales through the first 14 days of July 2012, representing a 5.6 per cent increase compared to the 3,484 sales reported for the same period in 2011. New listings were up by 14.4 per cent over the same time frame. “Housing demand remained strong in the first half of July. Sales growth occurred in the regions surrounding the City of Toronto. In the City of Toronto, where sales were down, the relatively higher cost of home ownership likely prompted some buyers to purchase elsewhere in the GTA. Higher costs in the City of Toronto include the upfront payment of the additional land transfer tax,” said Toronto Real Estate Board (TREB) President Ann Hannah. The average selling price in the first half of July was $473,466 – up by 2.3 per cent compared to last year. On average, homes sold for 98 per cent of the asking price in 25 days – in line with July 2011. Price growth was strongest in the City of Toronto, climbing by 3.5 per cent to $496,645. “A better supplied market contributed to a slower annual rate of price growth in July relative to the first half of 2012,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “As buyers benefit from more choice in the second half of this year, expect price growth to slow to a more sustainable pace.”
14 | penghocktan.com
Tan.gazine NEWS Greater Toronto REALTORS® Report August Mid-Month Resale Market Figures TORONTO, August 16, 2012 -- Greater Toronto Area REALTORS® reported 2,857 transactions through the TorontoMLS system during the first 14 days of August 2012. This mid-month result represented a dip of 7.6 per cent in comparison to 3,091 sales reported during the same period in 2011. “A number of factors played into the dip in sales in the first half of August. Sales growth in the spring was very strong, suggesting that some buyers sped up their decision to buy. Stricter mortgage lending guidelines that came into effect at the beginning of July likely prompted some households to put their buying decision on hold. Finally, relatively higher home prices and the additional upfront cost of the City’s Land Transfer Tax go a long way to explain the more pronounced dip in sales in the ‘416’ area code,” said Toronto Real Estate Board (TREB) President Ann Hannah. The average selling price for the first two weeks of August in the Greater Toronto Area was $480,180 – up 9.2 per cent in comparison to 2011. “The strong annual rate of price growth so far in August was driven by the single-detached market segment, particularly in the City of Toronto. While this segment of the market has been consistently tight over the past year, the strong double-digit price growth for single-detached houses in the City suggests that the mix of houses sold this year compared to last also changed, with higher end homes accounting for a greater share of sales this year,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
penghocktan.com | 15
Tan.gazine NEWS GTA Home Prices Up in July In July, the median price was $476,947 from the $458,646 recorded during July of 2011. Toronto, August 3, 2012
Greater Toronto REALTORS® reported 7,570 sales in July 2012, representing a decline of 1.5 per cent compared to 7,683 sales reported in July 2011. The decline was most pronounced in the condominium apartment segment in the City of Toronto. Total sales in the rest of the Greater Toronto Area (GTA) were up compared to the same period last year. “Very strong annual sales growth in the first half of 2012 and an earlier peak in sales this spring compared to 2011 help explain more moderate sales this summer. New mortgage lending guidelines and the additional upfront cost of the City of Toronto land transfer tax also prompted some households to put their buying decision on hold,” said Toronto Real Estate Board (TREB) President Ann Hannah. The average selling price in July 2012 was $476,947 – up by four per cent compared to July 2011. The MLS® Home Price Index (MLS® HPI)* composite index, which allows for an apples-to-apples
16 | penghocktan.com
comparison of benchmark home prices from one year to the next, was up by 7.1 per cent year-over-year. “The GTA housing market became better-supplied in recent months. Buyers benefitted from more choice in the market place, resulting in less upward pressure on the average home price in July,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “The mix of homes sold in July 2012 versus July 2011 also appears to have changed, further influencing the average selling price. This is evidenced by the different annual rates of growth between the overall average price and the MLS HPI®,” continued Mercer.
Tan.gazine NEWS Low-Rise Home Types Drive June Price Growth In June, the median price was $508,622 from the $474,223 recorded during June of 2011. Toronto, July 5, 2012
Greater Toronto REALTORS® reported 9,422 home sales through the TorontoMLS system in June 2012. The number of transactions was down by 5.4 per cent in comparison to June 2011. The year-over-year decline was largest in the City of Toronto, where sales were down by 13 per cent compared to June 2011. Sales in the rest of the Toronto Real Estate Board (TREB) market area were comparable to a year ago. “Buyers continue to face the substantial upfront cost associated with the City of Toronto’s unfair Land Transfer Tax,” said TREB President Ann Hannah. “Recent polling by TREB suggests that many households are considering home purchases outside of the City of Toronto to avoid paying the Land Transfer Tax. This goes a long way in explaining the disproportionate decline in sales in the City versus surrounding regions.” The average selling price in June was $508,622 – up by 7.3 per cent compared to June 2011. The
mortgage payment associated with the average priced home in June, assuming five per cent down and a five-year fixed rate mortgage amortized over 25 years, would account for approximately 35 per cent of the average household’s income in the GTA after adding property tax and utility payments. “According to new mortgage lending guidelines set out by Finance Minister Jim Flaherty, the GTA housing market remains affordable. The share of the average household’s income going toward major home ownership payments for the average priced home remains below the 39 per cent ceiling recently announced by Mr. Flaherty,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “The average household in the GTA continues to benefit from a considerable amount of flexibility to account for higher interest rates moving forward,” continued Mercer.
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Tan.gazine NEWS
Food for Thought It is difficult to go a day without reading about more debt woes. Greece is the current country in trouble and is in need of $600 Billion, yes Billion dollars. In fact, beyond Greece, there are others, including too- big- to -save Italy. All of this is seemingly causing stress in global financial markets. China, as well, is facing problems of its own and is unlikely able to pull the globe out of its economic woes as it did back in 2008. With high inflation and debt worries of its own it is unlikely to pursue a stimulus package as it did back when we all needed it. So we find ourselves in a financial crisis yet again. The good news is the countries of the world are working together, and with the IMF standing by, we can create a solution coupled with austerity measures for the likes of Italy, Greece, Portugal, Spain, or PIGS as they have come to be known. Indeed, the era of easy finance is over and belt tightening is the flavor of the month. As they say, finance only works until it doesn’t‌well, it sure doesn’t anymore. What does this mean for Real Estate? The last time we were in a period of global financial shocks, deals were fewer in number and yet those who could buy something got exceptional value. When deal flow slows, spreads widen. In other words, when the market slows down, sellers tend to accept lower prices as their expectations become lower. Tougher to sell but great time to buy. Of course, most are inclined to buy when everybody else is buying. That is our instinct, as well as the nature of residential real estate, given that most homeowners need to sell before they buy something else. It is tough to do what Warren Buffett suggests, “buy when they are running for the exits and sell when they are beating down your door.â€? That said, for those able to pick up an investment property, surely now is the time.
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New mortgage rules effective on July 9, 2012
Department of Finance Canada - fin.gc.ca August 20, 2012
The Government is announcing four measures for new government-backed insured mortgages with loan-to-value ratios of more than 80 per cent: ‡ 5HGXFH WKH PD[LPXP DPRUWL]DWLRQ SHULRG WR \HDUV IURP \HDUV 7KLV ZLOO UHGXFH WKH WRWDO LQWHUHVW SD\PHQWV &DQDGLDQ IDPLOLHV PDNH RQ WKHLU PRUWJDJHV KHOSLQJ WKHP EXLOG XS HTXLW\ LQ WKHLU KRPHV PRUH TXLFNO\ DQG SD\ RII WKHLU PRUWJDJHV VRRQHU 7KH PD[LPXP DPRUWL]DWLRQ SHULRG ZDV VHW DW \HDUV LQ DQG IXUWKHU UHGXFHG WR \HDUV LQ ‡ /RZHU WKH PD[LPXP DPRXQW &DQDGLDQV FDQ ERUURZ ZKHQ UHILQDQFLQJ WR SHU FHQW IURP SHU FHQW RI WKH YDOXH RI WKHLU KRPHV 7KLV ZLOO SURPRWH VDYLQJ WKURXJK KRPH RZQHUVKLS DQG HQFRXUDJH KRPHRZQHUV WR SUXGHQWO\ PDQDJH ERUURZLQJV DJDLQVW WKHLU KRPHV ‡ )L[ WKH PD[LPXP JURVV GHEW VHUYLFH UDWLR DW SHU FHQW DQG WKH PD[LPXP WRWDO GHEW VHUYLFH UDWLR DW SHU FHQW 7KLV ZLOO EHWWHU SURWHFW &DQDGLDQ KRXVHKROGV WKDW PD\ EH YXOQHUDEOH WR HFRQRPLF VKRFNV RU DQ LQFUHDVH LQ LQWHUHVW UDWHV ‡ /LPLW WKH DYDLODELOLW\ RI JRYHUQPHQW EDFNHG LQVXUHG PRUWJDJHV WR KRPHV ZLWK D SXUFKDVH SULFH RI OHVV WKDQ PLOOLRQ ´,QYHVWLQJ LQ D KRPH LV D JUHDW ZD\ WR VDYH µ VDLG 0LQLVWHU )ODKHUW\ ´7KDW LV WKH GUHDP WKDW PRUWJDJH LQVXUDQFH ZDV LQWHQGHG WR VXSSRUW 7KH PHDVXUHV ZH DUH WDNLQJ WRGD\ PDLQWDLQ WKDW LQWHQGHG SXUSRVH µ
The Power With the Power of CENTUM - You Win
260+ Broker Offices and 2700+ Mortgage Professionals
You Win Over 40 lenders all competing for your business
Yung-pin (Ben) Yang, BA, B. Comm.
Maria Tse, AMP Owner/Mortgage Broker Licence #: M08004027 CENTUM Direct Financial Inc. 2900 Steeles Avenue East Suite no. 214, Thornhill ON L3T 4X1
Mortgage Agent - Licence #: M10001989 CENTUM Direct Financial Inc. 2900 Steeles Avenue East Suite no. 214, Thornhill ON L3T 4X1
T. 416.817.3803 F. 866.612.9959 E. maria_t@centum.ca W. www.centum.ca/Maria_Tse
T. 416.995.7069 C. 416.995.7069 F. 866.554.8883 E. ben_yang@centum.ca W. www.centum.ca/ben_yang
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Mortgage changes “may be too late”: Moody’s Barbara Shecter - Financial Post August 20, 2012
Last Week’s mortgage changes unveiled by regulators and the federal government are positive for Canada’s banks, but “may be too late to avoid a housing correction.” according to analysts at Moody’s Investors Service
Canadian banks should benefit as domestic borrowers will hold more equity in their homes and the new rules will tend to lead to stronger debt service. This will create “an equity buffer the banks can access if necessary through the sale of the property,” and reduce the risk of unsecured credit exposure, the Moody’s analysts said. “However,” the analysts note, “the government’s moves may have come too late, owing to the build-up in consumer debt that has already occurred.” In addition, slowing growth in household disposable income will be a challenge for consumers trying to pay down their debts, they said. “Canadian consumers’ reliance on low interest rates to support high debt loads remains a risk,” the Moody’s analysts conclude, pointing to Bank of Canada estimates that a 325 basis point rise in interest rates by mid-2015 would push to 20% the proportion of households with total debt service ratios of 40% or higher. According to the Bank of Canada’s Financial System Review published in June, only 11.5% of Canadian households fell into that category in 2011.
Nader Kanaan Mortgage Specialist Scotia Bank
Tel: 416.543.1145
Fax: 416.744.8928 Email: nader.kanaan@scotiabank.com Web: www.mdm.scotiabank.com/nkanaan
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The majority of property investors are already licking their chops, anticipating tighter mortgage rules will allow them to bump up rents, suggests a new CREW poll. Vernon Clement Jones - Canadian Real Estate June 28, 2012
The anticipation is based on an expected bump-up in the number of Canadians – in particular, first-time buyers – who’ll now find themselves shut out of the housing market.
Such a development would be pegged to Ottawa’s decision to limit maximum amortizations to 25 years for insured mortgages.
afford homes therefore more renters. The downside is that it may reduce prices if the demand softens.”
For first-timers in pricey markets such as Toronto and Vancouver, that may effectively block them from purchasing even starter condos, which already strain affordability. While economists expect some price declines because of the tighter mortgage rules that may not come soon enough to encourage young Canadians to buy instead of rent. Since the new rules were announced last week, investors have also been grappling with them, trying to decide whether they afford a net negative or benefit to landlords, already enjoying relatively low vacancy rates in most markets. “Since rental properties require 20% down, therefore not a CMHC insured mortgage, the rule will have no effect on most investors in terms of obtaining financing,” writes “shaune,” in responding to the CREW poll question. “The upside is that less people can penghocktan.com | 23
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DIY - Recipe For August 2012 Check out food.chatelaine.com for more cool recipes
August 20, 2012
recipes
Minty
Preparation time: 5 m Makes 6 Servings
Ingredients 24 large mint leaves, plu 1/4 cup granulated suga 2 cup bourbon ice cubes
Nutrients per Serving 183 calories 25 g protein 8 g fat 92 mg sodium
Roberto Caruso
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First Things First... 1. Combine mint leaves with sugar in a pitcher. Using a wooden spoon, mash leaves with sugar against side of pitcher to release flavour. Add bourbon and stir until sugar dissolves completely. Refrigerate until ready to serve. Strain bourbon mixture, then pour into glasses filled with ice. Garnish with mint. Makes for a extremely refreshing summer drink, sure to be a great hit with your next get-together!
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