New Rules for Canadian Mortgages

You’ve probably read about the new regulations regarding Canadian mortgages for buyers/ investors and home owners wanting to re-finance. In case you haven’t been following, here is the scoop.

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.

Wednesday Links: Mortgage Rules in the Media

Reckless speculators get a cold shower – The Globe and Mail
Ottawa’s decision to hike minimum down payment required to obtain insurance on investment homes likely to have immediate effect.

Don’t worry, home loan rules can still be bent - The Montreal Gazette
The good news or bad news, depending on your perspective, is you can still buy a home in Canada with almost no money…

Home buying rush expected in spring - The Globe and Mail
That may be the calm before the storm. Analysts expect a hot spring real estate market given Finance Minister Jim Flaherty’s move to tighten mortgage standards yesterday.

The trouble with bubbles: They’re elusive – The Globe and Mail
Some say government spending has overinflated global assets; but even the best minds have missed calling most collapses

Home re-sale market shows signs of recovery

Canada’s housing market shows every sign of having bounced back from its recessionary bottom, with both the number and price of homes rising for the third straight month in April.

The Canadian Real Estate Association said homes sales soared 11.2 per cent on a seasonally adjusted basis from March, the biggest jump in five years, and with 34,838 units trading hands, the highest level in seven months.

Meanwhile, the national average sale price of homes listed by realtors also rose in April to $306,366 in April.

But while encouraging, the report noted that both sales activity and prices remain at levels lower than a year ago, indicating the housing market has yet to fully recover to pre-recession levels.

The average home resale price is down 3.2 per cent from a year ago and down almost 10 per cent from the peak of $324,000 reached in December 2007.

Economists with Scotia Capital pointed out in a note to clients that the resale housing market does little to increase gross domestic product since it involves paper transactions, and that new home construction remains week.

Source: Canadian Press. Read the complete article

L’économie se rapprocherait de la reprise- La Presse

This was an article published at La Presse today.

L’économie mondiale se rapproche «du moment de la reprise» a affirmé lundi le porte-parole des dix grandes banques centrales mondiales (G10) Jean-Claude Trichet lors d’une conférence de presse à Bâle.

«Il y a un très fort engagement des autorités, des gouvernements à ne pas laisser sombrer des institutions d’importance systémique», ce qui représente «un très fort engagement qui n’a pas été totalement pris en compte par les marchés», selon M. Trichet.
«La plupart des observateurs s’attendent à une croissance négative pour les pays industrialisés» cette année, a précisé M. Trichet, à l’issue de la réunion bimestrielle du G10 au siège de la Banque des règlements internationaux (BRI).La croissance mondiale devrait être proche de zéro en 2009, avec une «reprise» en 2010, a précisé M. Trichet, par ailleurs président de la Banque centrale européenne.

Les élements «positifs» – les mesures prises par les différents gouvernements pour contrer la crise économique et la baisse du prix du pétrole – «n’ont pas totalement été pris en compte» pour l’heure, a-t-il poursuivi.

At this point it looks like the glass is half empty. Let’s see what changes they come up with once the government measures against the economic crisis are considered into the equation.

Friday Blogwrap and News

Last summer in Le Plateau. photo: Deya Bautista

• McTavish Revisited…after $9M in security measures.[Spacing Montreal]
• St Laurent block to be rebuilt as an “eco-friendly showcase of art.” [Montreal City Weblog]
• Gare de la future navette ferroviaire: 25 millions investis sans garantie [La Presse]
• New hypothetical airport train station [Same subject by Spacing Montreal]
• Arrests made in murder of Canadian developer in Thailand [CTV.ca]
• Quebec CAA declares war on potholes for the ninth year on the row [Daily Commercial News]
• Gossip: Vince Vaughn engaged to a Calgary real estate agent [The Star]

Thursday Real Estate News & Blogwrap

Photo: Graffiti on Rue Duluth by Deya Bautista

• Property investors in Canada likely to see sliding property sales and prices [Property Wire]
• Housing market to rebound for 2010 [ The West Island Chronicle]
• Women homeowners value financial security, personal space, poll says [Calgary Herald]
• Mont Royal: un patrimoine culturel en péril! [Le Devoir]
• Projet Montreal proposes the creation of Sidewalk squads. [Montreal City Weblog]

In Vancouver: Ritz Carlton Condo-Hotel Project Cancelled

Missed opportunity of what could have been a great Development.

The Holborn Group stopped its 60-storey Ritz-Carlton project in downtown Vancouver after only 62 of the 123 units were sold. The $500-million luxury hotel and condominium project featured a 20-storey hotel topped by 40 storeys of condos.

“The development would have been the second-tallest building in the city and was scheduled to be completed in 2011.
Prices ranged from between $2.5 million and $10 million, with the penthouse set at $28 million. Buyers will get their deposits refunded.” -The Canadian Press

Reasons: Lack of pre-sales and the current economic downturn

“To get financing, you need a certain amount of presales – and because we didn’t have enough units sold, financing didn’t turn out the way we wanted,” Holborn president Joo Kim Tiah said yesterday.
Those sales didn’t meet the threshold of 75 the company, and potential lenders, were looking for, so the project was put on ice. – Globe and Mail

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