1954: Introduction of the Mortgage Loan Insurance- by the Canada Mortgage and Housing Corporation

1971: Principal residences were exempted from Capital Gains in The Income Tax Act

1992: There were two programs created by the federal government.
The first was the Home Buyers’ Plan (HPB) allowing buyers to withdraw up to $20,000, tax-free, from their Registered Retirement Savings Plan (RRSP) and use it as a down payment to buy or build a home.

The second, was a test program called the First Home Loan Insurance Program (FHLIP) which decreased the down payment needed to buy a first home from 10% to 5%

1994 The federal government announces the HPB as a permanent program.

1998 The FHLIP was replaced by a permanent program. And instead of 10%, all buyers were now allowed a 5% downpayment.

2006  The CMHC launched CMHC Flex 100- (Remember the zero-downpayment mortgage?) a mortgage loan insurance product for owner-occupiers that allows them, under certain conditions, to buy a property by taking out a loan up to the total value of the property (no down payment required).

The amortization period for owner-occupiers were also extended to up to 40 years, under certain conditions.

2008 The maximum amortization period for new mortgages was reduced to 35 years and the minimum down payment increased from 0 to 5 per cent.

2009 The maximum amount that can be withdrawn as part of the HBP increased to $25,000

2011 The maximum amortization period for new mortgages was reduced to 30 years

Adapted from and Article from the Market Analysis Department of the QFREB
Sources: Government of Canada, CMHC, Industry Canada and the Department of Finance Canada. 

Posted By: Deya Bautista - Real Estate Broker working as part of the McGill Immobilier team. Specializing in high end condos in downtown and Old Montreal. For buying or selling contact Deya at: 514.917.7889 http://montrealrealestateblog.com/

Here are the International Top 3 Markets:

The first place: Ireland (+12%). {data from the 2010 market}
Second place: France (+6.8%)
Third place: Canada !!! (+5.3%)

In contrast, the countries with the largest price decreases in 2011 were:

Spain ( 8.5%)
The United States ( 4.8 %)
The United Kingdom ( 4.2 %)

Source: the Scotia Economics department at Scotiabank. Click here to read the report.

Seeing where we are ranking worldwide, gives us a better perspective on where we’re standing in terms of growth. We have a strong and stable economy by comparison. Here in Quebec, the market isn’t as volatile as the rest of the country. We have a moderate and steady growth, which makes it a great place for a sound investment.

Posted By: Deya Bautista - Real Estate Broker working as part of the McGill Immobilier team. Specializing in high end condos in downtown and Old Montreal. For buying or selling contact Deya at: 514.917.7889 http://montrealrealestateblog.com/

House prices could fall by as much as 25 per cent over the next three years.

“House prices have been growing rapidly for nearly a decade now and it has reached the point where housing is so overvalued relative to incomes that a downward correction seems unavoidable,” says Capital Economics.

The report says the downturn in the housing sector will severely constrain economic growth over the next couple of years as consumption expands at a more “muted” pace and housing investment “shrinks.”

“We also anticipate that the end of the housing boom will lead to a marked decline in housing-related activity and employment,” it says.

Capital Economics says signs of over-building are evident as unoccupied housing units are at historically high levels, similar to 1994-95 when housing construction was last mired in a slump.

“Another sign of over-building, or perhaps over-consumption, is the sharp increases in the home ownership rate over the last 10 years,” it says. “This run-up has coincided with a housing price boom fuelled by rising financial leverage.

“Our concern is that these excesses will eventually lead to a house price correction, which would greatly impact household wealth, consumer confidence and the economic recovery.”

Source: Montreal Gazette

… Good thing that here in Quebec the market remains stable. Not up, not down. Just stable.

Posted By: Deya Bautista - Real Estate Broker working as part of the McGill Immobilier team. Specializing in high end condos in downtown and Old Montreal. For buying or selling contact Deya at: 514.917.7889 http://montrealrealestateblog.com/

Expect a moderation and a slight increase on the home prices this year:

“The recent increase in the average MLS^® price reflected strong sales in Vancouver’s property resale market. For the remainder of 2011, we expect the average MLS^® price to moderate. Nevertheless, the average MLS^® price will experience an overall increase this year. As the existing home market moves to more balanced markets in 2012, growth in the average MLS^®price in 2012 is expected to be more modest than in 2011.”

So, that’s great news for the country. Let’s check out now how our local market is doing. Stay tuned.

Posted By: Deya Bautista - Real Estate Broker working as part of the McGill Immobilier team. Specializing in high end condos in downtown and Old Montreal. For buying or selling contact Deya at: 514.917.7889 http://montrealrealestateblog.com/

CTV News [Edmonton] reports: “The price of new homes fell 0.1 per cent in July after a 0.1 per cent increase in June — the first drop in more than a year, according to Statistics Canada’s latest report.”

So Statistics Canada comes out with a report that shows a 0.01% price decrease, while another report by the CHMC mentions: “housing starts slipped three per cent in August“.

If I were to read this without taking in consideration the latest market updates for Montreal, I would think our city is also suffering from the same malady as the rest of the Canadian cities involved in this price-drop ordeal. But it just happens that we recently got the numbers from the previous month’s sales and price changes. Sure it wasn’t from the CMHC and Statistics Canada but from a local source like the Montreal Real Estate Board, and even if we haven’t received the news on the August market performance yet, we have a good price increase during the previous summer months.

Something the so-called market experts forget to consider is that Summer Months are usually slower than the rest of the seasons. People take vacations, enjoy time with their families and the last thing on most of their priority list is to buy or get involved with real estate transactions. This is a cyclical industry, and summer is the slowest point of the yearly cycle.

Yet the media is spreading the panic without shame. But readers are biting back!
My favorites are from the CTV News comments, here are a couple:

Dean in Abby says:
I can’t wait for the “experts” to come out with some doom and gloom philosophy about supply and demand. Oh my god, we must be heading into a dreaded recession again! Come on experts, give us your best. We can take your negativity and your 2.5 minutes in the sun.

Chris in Ottawa says:
Thank you, media, for making an issue out of 0.1 % that is really only an impact in 1/2 dozen cities throughout the whole country. Let’s continue to try to scare Canadians into another downturn. Come on… enough already

David says:
Wow! 0.1%! The sky is falling. Can you imagine the margin of error in all the statistics of home sales when the same homes don’t sell every month. A home in the same neighbourhood next to the one that sold last month can vary by a few hundred thousand. So is it a price reduction or just a different price? 0.1% indeed.

and this one has to be my favorite of all:

Honest Ed says:
Do these “experts” actually ever get out to check what they say? I read the article today, and over the radio (in Montreal) the same story about Montreal housing was mentioned. House construction wad down from last year, and fewer homes were being sold. As I was driving home, guess what? Within a 5 KM distance from my house, there were 3 excavators excavating holes in the ground, and 2 signs for preliminary condo selling. In my area of town (Western Montreal), a house sells within 2-4 weeks after having being listed.

So where do these experts get their data? And do they ever get out form their offices, or are they simply reading whatever is placed on the Net?

Aside from the fact that the article from my perspective seems faulted, I’m getting tired of experts and their “expert” opinions which seem to be projected more as fact than as opinion.

Posted By: Deya Bautista - Real Estate Broker working as part of the McGill Immobilier team. Specializing in high end condos in downtown and Old Montreal. For buying or selling contact Deya at: 514.917.7889 http://montrealrealestateblog.com/

I haven’t really gotten involved with the bubble subject and I though of letting the whole thing pass without writing about it, until the heat would cool down a bit. It can be nerve wrecking to try and stay subjective when so many papers are writing about the same thing: HOUSING BUBBLE AHEAD.

Here we go again. Media frenzy, nervous sellers, confused buyers, high mortgage rates. 2007 all over again.

Now, the conference board of Canada is saying: “The housing market is taking a breather, but it’s not in free fall”, and that the main reason for its recent boom was due to the low interest rates over the past year.

What are your thoughts on this?

Posted By: Deya Bautista - Real Estate Broker working as part of the McGill Immobilier team. Specializing in high end condos in downtown and Old Montreal. For buying or selling contact Deya at: 514.917.7889 http://montrealrealestateblog.com/

Three changes will come in effect on April 19:

1. Qualification: All borrowers will need to meet standards for five-year fixed-rate mortgages regardless of whether they’re seeking a loan with a lower rate and shorter term.
2. Refinancing: The government is lowering the maximum amount Canadians can withdraw when refinancing a home to 90% of its value, from the current 95%.
3. Speculation: It will be required a 20% down payment for government-backed mortgage insurance on “speculative” investment properties. As opposed to 5% down-payment for investments not occupied by the owner.

I’ve posted a list of articles written by the media. You can also check out The Canadian Mortgage Trends for an interesting and detailed post.

Posted By: Deya Bautista - Real Estate Broker working as part of the McGill Immobilier team. Specializing in high end condos in downtown and Old Montreal. For buying or selling contact Deya at: 514.917.7889 http://montrealrealestateblog.com/