HST on Real Estate Home Buying, Selling and Renting, HST Calculators
Published Date: Sat, 12 Jun 2010 00:27:00 GMT
The Basics on how the HST is calculated if you are a Home Buyer, Seller, Landord or Tenant. The Ontario provincial government has provided rules/guidance on how it will transition to the implementation of the proposed Harmonized Sales Tax.
How the HST will work:
The Ontario provincial government has passed legislation to combine the 8% PST (Provincial Sales Tax) with the 5% FST (federal Goods and Services Tax), creating a new 13% HST - Harmonized Sales Tax
The HST will come into effect on July 1, 2010:
HST will NOT apply on the purchase price of resale homes.
But, HST would apply to services such as moving cost, legal fees, home inspection fees, appraisal fees, labour for renovations, landscaping and REALTOR® commissions if applicable.
It is estimated the average home buyer for re-sale homes will likely see a $1200 - $1500 additional cost in HST fees when moving.
HST will apply to the purchase price of newly constructed homes. However, the Province is proposing a rebate so that new homes across all price ranges would receive a 75 per cent rebate of the provincial portion of the single sales tax on the first $400,000.
For new homes under $400,000, this would mean, on average, no additional tax amount compared to the current system. For those considering buying for a new home for over $500,000 there will be a considerable impact with the hst.
Click here for GST - HST Info Sheet on Selling Your Owner Occupied Home
Transitional Rules for New Housing
- Generally, sales of new homes under written agreements of purchase and sale entered into on or before June 18, 2009 would not be subject to the provincial portion of the single sales tax, even if both ownership and possession are transferred on or after July 1, 2010.
- The tax would also not apply to sales of new homes under written agreements of purchase and sale entered into after June 18, 2009 where ownership or possession is transferred before July 1, 2010.
Is there HST on residential rentals:
If you are currently renting a house, condo or townhouse on a long term bases (or month to month) you are currently not paying GST, therefore, HST will not apply. However, expect that the Landlord will have increased costs for the goods and services he uses, such as labour for repairs, landscaping etc. With increased costs to the owner, increases in rental rates in the future might be expected.
Information on 2010 Rent Increase guidelines and if a Landlord can increase your rent.
Is there HST on Condominium Maintenance Fees:
Currently there is no GST charged by Condominum Associations. But as the HST takes effect, many services associated with the common maintenance of the building will be subject to HST. It makes common sense to expect some adjustments in the future monthly fees.
Is there HST on Commercial Rents:
GST and Commercial GST applies to most of the rentals of commerial real estate properties with limited exceptions. Therefore expect HST to apply.
With regard to the lease or license of goods, including non-residential real property, HST will generally apply to lease intervals or payment periods on or after July 1, 2010 and the general rules noted above will apply. However, where a lease interval begins before July 2010 and ends before July 31, 2010, it is not subject to HST.
With regard to the sale of non-residential property, HST is due where both possession and ownership of non-residential property occurs on or after July 1, 2010.
More Details
Additional detail on the transition rules is available at the provincial government web site here or by calling the provincial government enquiry line at 1-800-337-7222.
HST Calculator for Ontario Personal Tax Relief
HST Calculator on other possible house hold items.
www.SuttonRealty.com
Sutton Real Estate Toronto 416-896-3333
Sutton Real Estate Mississauga 905-896-3333
Buying or Selling Think Sutton!
Looking for a Rental in the GTA browse through and compare the inventory at www.searchtorontohomes.com - Click on our Homes for Rent Tab.
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Read full article...Is Buying a Home Still A Good Investment? Toronto
Published Date: Thu, 01 Apr 2010 08:27:00 GMT
With the Canadian Government constantly sending us messages about saving for our retirement, I can't think of a better way of creating wealth than paying off your own mortgage than your landlords. But let's look at some survey's of what other Torontonians and Canadians think about real estate as an investment.
Despite a tricky economy and concern about climbing household debt, a survey says the portion of Canadians who are "very likely" to purchase a home in the next two years has increased from 7 per cent to 10 per cent since the same question was posed two years ago.
The media has been full of speculation about house prices being unsustainable in Toronto and generally across the country, but the lure of homeownership remains strong among those surveyed by Ipsos-Reid on behalf of RBC.
An overwhelming 91 per cent of Canadian homeowners believe a home is a good investment. That's the highest level of confidence in homeownership that the survey has seen in 12 years. This was the 17th annual RBC Homeownership study.
Buyers are no longer waiting until they get married to enter the marketplace.
People aged 18 to 24 are most likely to buy in the next two years, says the survey. Most people who plan to buy are planning to take out a fixed-rate mortgage (44 per cent), although combination mortgages that include fixed- and variable-rate components are also popular at 40 per cent. Seventy per cent will take a mortgage term of five years or longer.
Low mortgage rates continue to fuel the real estate market, but the survey found that 64 per cent of respondents believe that rates will be higher in one year's time. They are expected to start rising gradually at the end of 2010 and into 2011, but will probably still be near historic lows.
Do you think the current 2010 real estate prices are over inflated?
A recent report by Canada Mortgage and Housing Corp. (CMHC) says that house price increases have not necessarily been as dramatic as they seem in some media reports. "To a large extent, price gains in 2009 reflected a rebound back to levels that prevailed prior to the economic downturn. In particular, measured from the fourth quarter of 2007 to the fourth quarter of 2009, home prices rose 6.5 per cent. This translates to an average annual rate of price growth of less than 3.5 per cent over this period, which is not out of line with average historical rates," says CMHC.
Many of the media reports rely on average MLS prices as a measure of price increases, but CMHC notes that these numbers are skewed when there's been a lot of activity in higher price ranges in the most expensive markets in B.C. and Ontario.
Alternative price indexes that take the fluctuations of average house prices into account "strongly suggest that recent developments in home prices have been much less volatile than indicated by average MLS price changes," says CMHC. "Analysis by the International Monetary Fund (IMF) also suggests that national house prices in Canada are supported by long-term fundamentals."
Another recent IMF report says that prices are "essentially at long-term equilibrium values," says CMHC.
Predictions for the future of the housing market
Factors expected to cool the housing market going forward include an increase in the number of homes for sale as more listings come on the market; the introduction of Harmonized Sales Tax in Ontario and B.C, which will add new taxes to the cost of buying a home; and new mortgage rules that require some buyers to have a larger down payment to qualify for a mortgage.
Cooling doesn't necessarily mean any downward price adjustments, if could simply mean fewer sales and a slower but steady price increase.
The Test - Give Yourself Wiggle Room
If you are just entering into the real estate market, do the "stress test", by figuring out what payment would be required if rates rise, and then determine if the home you want is affordable at that level. That will leave you "wiggle room" and ensure you can comfortably afford to purchase in that price range. Sometimes a compromise in lowering your expectations just a bit can give you peace of mind in the long term.
Even if the prices don't skyrocket in the next 10 years -- your mortgage will definitely decrease, still building you equity towards your retirement.
Sutton Group Realty Toronto 416-896-3333
Sutton Group Realty Mississauga 905-896-3333
Visit us on-line at www.SuttonRealty.com or www.SearchTorontoHomes.com
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Read full article...Big Banks Raise Interest Rates - Is This the End of Cheap Money?
Published Date: Tue, 30 Mar 2010 04:02:00 GMT
Toronto Real Estate Update on Mortgage Rates. We all knew it was coming, little hints that rates would not stay this low forever, but it still came as a surprise today when three big banks announced they would be hiking their mortgage rates overnight.
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Predictions were rates would stay unchanged until June with many economists saying rates would stay unchanged until late fall of 2010. So what happened!
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The Bank of Canada is expected to begin raising lending rates this summer as they try to fight the growing inflationary pressures in the economy. And it doesn't take the banks much of an excuse to jump the gun. Another lesson to never let your guard down, when there is a threat the rates will climb the banks will jump just before you actually expect it.
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So far RBC (Royal Bank), Laurentian Bank and TD Canada Trust changed their 3, 4 and 5 year rates. But expect other banks to follow.
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The biggest increase announced Monday affects the five year mortgages. All three banks are hiking their posted rate by six-tenths of a percentage point to 5.85 (up from 5.25%).
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What will this Rate Cost The Average Toronto Home Buyer?
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The average homeowner taking on a mortgage of $250,000 (with a 25 year amortization) would likely see an increase of $88.00 per month, from $1489 to $1577.00 per month.
But if you have great credit and employment, shop around and negotiate a better rate. Check out the Sutton Member mortgage rates as a comparison before heading to the bank.
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Pre-Approved Mortgages. I have always been a firm believer buyers shopping for a home, should have a pre-approved mortgage in hand. A preapproval with Scotia will hold your rate for up to 120 days. Those lucky buyers with pre-approvals have a unique opportunity to jump into the marketplace and still take advantage of yesterdays low rate.
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Variable or Closed. Historically staying short-term and flexible has been the best strategy, but banks usually advise that locking in at a still-attractive longer term rate of 5 years is always a good bet if you want to ease your risk.
So, if you currently have a variable mortgage there is still time to call the bank and see what their best offer for a 5 year mortgage rate would be (many can still offer you the rate before the hike).
If you are comfortable with the offer, now is the time to switch, but don't over react. A variable rate is still much lower and there is no guarantee the variable will increase dramatically over the next year. Talk to your branch manager for suggestions.
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Some homeowners will take the "possible risk" with the variable mortgage in hopes the rates will come down in 2011 as the economy slows and inflationary pressure subside. This could just be a temporary blimp. Keep in mind historically staying short term has been the best strategy.
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I love to compare mortgage rates, so on our website I added a link to compare rates from variable to 5 year mortgages by some of the largest lending institutions in Canada. Just remember if you are an AAA client, don't take the first offer, negotiate an even lower rate than is posted.
Sutton Group Real Estate Office Toronto 416-896-3333
Sutton Realty Mississauga 905-896-3333
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Read full article...New Mortgage Rules Overview - How Will It Affect the Real Estate Market? Toronto GTA
Published Date: Fri, 19 Mar 2010 08:30:00 GMT
The April 19th deadline is quickly approaching, and you can feel the rush in the active March real estate market. Sales for the GTA were up 70% from the same time last year reported the Toronto Real Estate Board members.
Finance Minister Jim Flaherty new mortgage rules are being aimed at stopping housing speculators and ensuring homebuyers can adequately handle their debts when interest rates inevitably rise. Some predict the rates to start climbing as soon as June. Mr. Flaherty stressed that Canada's real estate market is healthy, and that the new rules, which take effect April 19th, would stop “negative trends” from development.
It is obvious that many of the new condo developments were swooped up massively by speculators, leaving little inventory for the average buyer that planned on living in the unit, and not renting it out.
For most consumers, the new mortgage changes are unlikely to make it harder to get a mortgage but it could reduce the size of the mortgage an individual consumer can negotiate with a lender. And they might have to look at buying slightly less expensive properties.
People buying real estate for investment purposes including those looking for rental properties may find it harder to get into the market as they have to shell out more money form their own savings. But that might not be such a bad thing. More of a down payment will mean quicker positive cash flow and security for the investor.
Some volatility is expected in the housing market in the short term as home buyers rush to beat the April 19th date. After that, the activity will likely fade because so many buyers moved up their purchases. This could end up softening the sharp year-over-year price increases that have been characteristic in many cities recently.
The economic implications of this rule change are unlikely to be severe, and we expect the housing market to slow its ascent without crashing down. Perhaps house prices will increase at a slow rate, which most consumers will welcome. Slow and steady creates a more relaxed environment for both buyers and sellers.
Here is a quick look at the changes which apply to government-backed insured mortgages:
1. Borrowers must now qualify based on a five-year fixed rate even if they choose a mortgage with a lower interest rate and shorter term. The government’s rationale for this change is that it will help borrowers prepare for higher rates, although it may squeeze the purchasing power of home buyers. It remains unclear whether borrowers must qualify at the five-year posted rate or the five-year discounted rate.
2. The maximum amount Canadians can withdraw in refinancing their mortgages will be reduced to 90% of the value of their homes, instead of 95%. This change will help ensure home ownership is a more effective way to save. The impact of this change is expected to be minimal as relatively few homeowners withdraw equity from their homes to this extent.
3. A minimum down payment of 20% will be needed for government-backed mortgage insurance on non-owner-occupied properties “purchased for speculation,” which realistically means rental properties. While this measure is intended to hamper the speculative buying of properties by reducing the leverage of buyers, it will also impact those buying real estate for general investment purposes.
For information on the Sutton Member Mortgage Rates visit us at www.SuttonRealty.com
Browse through our listings at www.SearchTorontoHomes.com
Do you have a real estate question? Call our Toronto or Mississauga office real estate office and ask for the Branch Manager, we're happy to help. 905-896-3333 416-896-3333
Free Market Evaluations at www.SuttonRealty.com
sutton group realty toronto
sutton real estate mississauga
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Read full article...City of Toronto Front Pad Parking What Every Home Seller and Buyer Should Know
Published Date: Sat, 27 Feb 2010 10:48:00 GMT
Toronto Front Pad Parking - What Every Home Seller should know before they list their property and what Every Buyer Should be aware of before they purchase.
A license for Boulevard Parking does not automatically follow a property when it sells, the new property owner will need to apply to have the existing license agreement transferred with the City.
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Therefore, before you sell or buy a Toronto property with front pad parking / front yard parking, ensure that any existing front yard parking facility is properly licensed.
There is a filing fee involved, but the last time we checked it was under $100.00.
The City of Toronto has made it easier for home buyers to verify the legal status of a properties front pad parking. It is a much clearer process than in the past. Easy "look up" lists are available. For more information on front pad parking visit the City of Toronto's website: http://www.toronto.ca/transportation/offstreet
Residential Front Yard and Boulevard Parking applications, by-laws, appeal, permit renewal forms are all available on their website.
If you have any questions about a particular address, contact the District office responsible for the Ward. The City of Toronto discloses that they are not responsible for discrepancies between their postings and claims by individuals or representives involved in the sale and/or purchase of a property claiming to have front pad parking. So, take the extra steps to investigate further before you finalize your transaction.
Sutton Group Realty Toronto
Sutton Real Estate Office Telephone Number 416-896-3333
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Read full article...HST on Real Estate Home Buying, Selling and Renting, HST Calculators
Published Date: Thu, 25 Feb 2010 08:30:00 GMT
The Basics on how the HST is calculated if you are a Home Buyer, Seller, Landord or Tenant. The Ontario provincial government has provided rules/guidance on how it will transition to the implementation of the proposed Harmonized Sales Tax.
How the HST will work:
The Ontario provincial government has passed legislation to combine the 8% PST (Provincial Sales Tax) with the 5% FST (federal Goods and Services Tax), creating a new 13% HST - Harmonized Sales Tax
The HST will come into effect on July 1, 2010:
HST will NOT apply on the purchase price of resale homes.
But, HST would apply to services such as moving cost, legal fees, home inspection fees, appraisal fees, labour for renovations, landscaping and REALTOR® commissions if applicable.
It is estimated the average home buyer for re-sale homes will likely see a $1200 - $1500 additional cost in HST fees when moving.
HST will apply to the purchase price of newly constructed homes. However, the Province is proposing a rebate so that new homes across all price ranges would receive a 75 per cent rebate of the provincial portion of the single sales tax on the first $400,000.
For new homes under $400,000, this would mean, on average, no additional tax amount compared to the current system. For those considering buying for a new home for over $500,000 there will be a considerable impact with the hst.
Click here for GST - HST Info Sheet on Selling Your Owner Occupied Home
Transitional Rules for New Housing
- Generally, sales of new homes under written agreements of purchase and sale entered into on or before June 18, 2009 would not be subject to the provincial portion of the single sales tax, even if both ownership and possession are transferred on or after July 1, 2010.
- The tax would also not apply to sales of new homes under written agreements of purchase and sale entered into after June 18, 2009 where ownership or possession is transferred before July 1, 2010.
Is there HST on residential rentals:
If you are currently renting a house, condo or townhouse on a long term bases (or month to month) you are currently not paying GST, therefore, HST will not apply. However, expect that the Landlord will have increased costs for the goods and services he uses, such as labour for repairs, landscaping etc. With increased costs to the owner, increases in rental rates in the future might be expected.
Information on 2010 Rent Increase guidelines and if a Landlord can increase your rent.
Is there HST on Condominium Maintenance Fees:
Currently there is no GST charged by Condominum Associations. But as the HST takes effect, many services associated with the common maintenance of the building will be subject to HST. It makes common sense to expect some adjustments in the future monthly fees.
Is there HST on Commercial Rents:
GST and Commercial GST applies to most of the rentals of commerial real estate properties with limited exceptions. Therefore expect HST to apply.
With regard to the lease or license of goods, including non-residential real property, HST will generally apply to lease intervals or payment periods on or after July 1, 2010 and the general rules noted above will apply. However, where a lease interval begins before July 2010 and ends before July 31, 2010, it is not subject to HST.
With regard to the sale of non-residential property, HST is due where both possession and ownership of non-residential property occurs on or after July 1, 2010.
More Details
Additional detail on the transition rules is available at the provincial government web site here or by calling the provincial government enquiry line at 1-800-337-7222.
HST Calculator for Ontario Personal Tax Relief
HST Calculator on other possible house hold items.
www.SuttonRealty.com
Sutton Real Estate Toronto 416-896-3333
Sutton Real Estate Mississauga 905-896-3333
Buying or Selling Think Sutton!
Looking for a Rental in the GTA browse through and compare the inventory at www.searchtorontohomes.com - Click on our Homes for Rent Tab.
. . .
Read full article...Update on the New Mortgage Rules effective April 19th and the Effect on the Real Estate Market
Published Date: Wed, 24 Feb 2010 08:36:00 GMT
Canada's red hot housing market may get a little hotter following the federal government that new mortgage rule changes are coming to discourage cash-light buyers and speculators.
Market analysts say those who were just managing to qualify for government-insured mortgages may rush into the market before stricter rules take effect April 19.
Prospective homebuyers may also jump into the market this spring to beat coming interest rate hikes and, in Ontario and B.C., the introduction of the harmonized sales tax on July 1 that could add $1,500 to the cost of buying a home.
"The whole spring housing market is going to be on fire," predicted Derek Holt, vice-president Scotia Capital.
Basic Changes:
- In order to qualify for an insured mortgage, borrowers will have to meet the standards for a five-year fixed-rate mortgage even if the interest they are paying is less. (buyers are still able to select variable or short term mortgages)
- Qualified buyers can still purchase with 5% down, however refinancing of an existing mortgage will be limited to 90% max. Consumers are being sent a message not to use their homes as ATM machines, and to leave some equity as savings in their properties.
- Speculators will be required to place 20% down on a rental property purchases, which isn't that much of a shock, as investors purchasing their 4th or 5th condo were traditionally expected to place more than 5% down on the purchase.
Statistics:
In practical terms, the new rules mean that on the average $337,000 home, homeowners will need prove they have the financial means to absorb an additional $2,500 in mortgage costs a year, the TD Bank says. "It means if you are thinking of buying a $400,000 home, you may have to buy the $350,000 - $375,000 one."
TD Canada Trust president Tim Hockey estimated the rule change will effect up to 10 per cent of buyers, some who will choose not to buy and some who will opt to buy a smaller home.
The Vanier Institute of the Family reported Tuesday that average household debts loads climbed 5.7 per cent to $96,100 in 2009. The institute estimates some 1.3 million households could be vulnerable to a dangerously high debt service load by the end of 2011.
The minister insisted there is no housing bubble in Canada as yet, but added that with interest rates set to rise as early as this summer, he wants to ensure Canadians don't take on too much debt.
If you have a questions, please feel free to call our office manager at Sutton 905-896-3333 or 416-896-3333.
Contact Sutton by email at www.SuttonRealty.com
Sutton Group Toronto Real Estate - Mississauga Real Estate
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Read full article...Toronto GTA Mid-February Real Estate Market Update 2010 - 74% Increase in Sales
Published Date: Fri, 19 Feb 2010 07:13:00 GMT
The Real Estate market at a Glance:
The Toronto Real Estate Board reported an increase of 74% in sales in the first two weeks of February, 2010 compared to the same period in 2009 when resale transactions dipped due to the recession.
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The mid February sales total was 7.7 percent above the previous high set in 2006.
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The Average price of a single family home for this period was $429,997, an 18 percent increase over 2009 for the GTA
Breaking down the figures between 416 / 905:
Average House Prices for Mid-February 2010 in Toronto (416) area: $471,958 versus $400,467 in mid-February 2009
Average House Prices for Mid-February 2010 in GTA (905) area: $401,760 versus $341,013 in mid-February 2009
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As we get closer to the spring market, the listing inventory increases.
New Listings within the board boundaries where up 15 percent to 6,212.
Each day were are seeing the inventory climbing, but its still not enough to hinder the multiple offer, bidding war situation.
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Double-digit house price increases are predicted to continue through the first quarter, as buyers try to beat the new HST and new mortgage qualifying rules plus lock into the incredibly slow interest rates.
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As new listings continue to increase, creating a better supplied market, we will most likely see continued price increases but at a more moderate growth.
Helpful information for home buyers:
For more information on the new HST
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Information on the New Mortgage Qualifying Rules, 5% Down and 10% Down programs for new homebuyers and existing.
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Land Transfer Tax Calculators
Sutton Group Realty Ontario
Visit us on-line at www.SuttonRealty.com
Have a Real Estate Questions? Call 416-896-3333 or email us.
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Read full article...New Mortgage Rule Countdown - How it will Impact Home Buyers and Owners
Published Date: Wed, 17 Feb 2010 22:29:00 GMT
We will probably see another surge in sales as First Time Buyers rush to qualify for a mortgage before the April 19th new mortgage qualification changes take effect.
The new rules are mostly aimed at speculators trying to buy multiple properties, and homeowners trying to refinance to the max.
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There seems to be some confusion on the impact the new tightening rules will have on homebuyers in general, whether you are a first time buyer or second time buyer etc.
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Basically when purchasing a home, we are going back to the old style of qualifying as I remember from years ago.n
Qualifying "buyers" will still be permitted to purchase with five percent down if it will be their principal residence. Yes, don't worry, the 5% down program is still available through CMHC, but your qualifying will depend on the monthly payments based on a 5 year closed mortgage term. That doesn't mean you are required to take a five year product, feel free to explore the many terms available in the marketplace - from a variable mortgage, one year, to 10 years if you choose. Simply you will have to prove to the banks that in the worse case senario you would be able to maintain a 5 year fixed mortgage payment.xcx
The Impact of the New Mortgage Rules on Existing Homeowners:
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This is where the ten percentage confusion comes in. Existing homeowners, in recent years where able to re-finance and take out as much as 100% of their equity in their homes to consolidate debt. Under the new rules there will be a cap of 90% equity / refinance on existing mortgages. In the past, some consumers would accumulate debt and every few years, refinance and increase their existing mortgage. Without the ability to easily refinance to the max we might become more watchful of interest rates credit cards charge and the impact of "do not pay" until next year plans if we don't think we will have the saving to pay off the item. The Government is basically saying, leave at least 10% of equity in your home as a form of savings.
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The Article by Julian Beltrame of The Canadian Press is the most through report I have seen and can answer your questions about the impact the new rules will have on investors in general. Buying an investment property will take more savings, 20% more after April 19th.
OTTAWA - Finance Minister Jim Flaherty is tightening mortgage rules to crack down on speculators and discourage homeowners from taking on too much debt. n
The minister said he is responding to growing concerns that Canada's housing market is overheating, although he stresses there is no bubble in Canada's real-estate market - yet. nn
"There's no compelling evidence of a housing bubble, but we're taking proactive, prudent, measured and cautious steps today to help prevent a housing bubble," Flaherty said Tuesday. n
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The finance minister says all borrowers will need to meet stiffer criteria to take out mortgages. n
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In order to qualify for an insured mortgage, borrowers will have to meet the standards for a five-year fixed-rate mortgage even if the interest they are paying is less. n
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The government will also limit the amount Canadians can borrow on their homes from the current 95 per cent of the value to 90 per cent.
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- And to discourage speculation, prospective homebuyers who want to purchase a property for rental purposes will have to come up with a 20 per cent downpayment, instead of the current five.
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Flaherty said he has been told anecdotally of a tendency among speculators to purchase multiple condominium units and not live in any of them, which he says drives up prices overall. n
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"We're not aiming here at investment properties" such as rental units, he said. "What we're getting at is the speculation in multiple-condo markets, in particular." n
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Economists warned, however, that it will be difficult for lenders to determine on which side of the line buyers fall. n
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For most Canadians, particularly first-time owners who don't have a lot of cash to put down, the change that will most impact their home-buying choices is the higher affordability test used by banks to determine credit worthiness.
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Already, banks use the three-year fixed mortgage rate to test whether a prospective homebuyer can afford to meet payments even if the actual interest being charged - such as in a floating mortgage - is significantly less. Now, the test will go to the five-year rate, which is about one percentage point higher.
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In practical terms, it means that on the average $337,000 home, homeowners will need to have the financial means to absorb an additional $2,500 in mortgage costs a year, the TD Bank says.
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Flaherty said the additional cushion was needed because interest rates, which are at historic lows, have only one way to go - up. Most economists expect the Bank of Canada to move off its lower-bound 0.25 per cent policy rate in July.
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But the change does not effect mortgage costs, noted TD's deputy chief economist, Craig Alexander.
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"All this change does is limit the size of the mortgage you are going to be able to get; it doesn't prevent people from buying homes, it doesn't drive a lot of new homebuyers out of the market and it doesn't lead to higher payments," he explained.
"It means if you are thinking of buying a $400,000 home, you may have to buy the $350,000 one."
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In a release, the Canadian Association of Accredited Mortgage Professionals said it supports the amendments, calling them preventative measures against possible future risk.
- The new rules are intended to come into force on April 19.
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In recent months, economists have advised the minister to clamp down on the size of mortgages Canadians were taking on, and to cool the housing market which is at record levels in both prices and sales.
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Some wanted the government to take firmer steps, including raising the minimum downpayment to qualify for a government-insured mortgage to 10 per cent from five. Another suggestion the government could have taken was to reduce the amortization period from the current 35 years, which would have raised mortgage costs.
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The minister, however, said he wanted to choose a middle ground at this moment, but left open further measures if housing prices approach bubble territory.
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"On the one hand we don't want to discourage Canadians from home ownership," he said. n"On the other hand we do want to discourage a tendency by some to use their homes as an ATM machine, and a tendency by some to buy three and four condominiums by way of speculation. These are not the kind of steps that fulfil the goal of affordable home ownership."
If you are shopping low mortgage rates - check out our Sutton Member Mortgage Program for comparison at www.SuttonRealty.com
If you have a mortgage questions, feel free to email us or contact us at our Sutton Realty Toronto Office 416-896-3333 or GTA 905-896-3333.
Ontario and Toronto Land Transfer Tax Calculator
To view Toronto Homes for sale visit us at www.SearchTorontoHomes.com or www.SearchMissisaugaHomes.com
Read full article...GTA Real Estate Market Top Headlines for January 2010 - Toronto
Published Date: Tue, 09 Feb 2010 05:48:00 GMT
Here are my favourite Top Real Estate Headlines coming into the February 2010 market. The latest Toronto and GTA market stats plus general info you need to know when buying or selling.
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 January sales were off to a great start! GTA realtors reported 4,986 transactions in January 2010. That's an incredible 2,670 increase from January 2009 when home sales were in a recessionary trough. . The average home selling price in January climbed 19 percent to $409,058 compared to $343,632 in the same month last year. . Housing proved to be a safe harbour for much of last year. Rock bottom interest rates helped fuel the activity, but the value that Canadians place on owning a home was equally important. |
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The Canadian Real Estate Association has revised its forecast for Canadian home sales over the next two years. According to the report, activity will reach a record 527,300 units, up 13.3% from 2009. Meanwhile, home prices will climb 5.4% to a record $337,500, with gains in all provinces. Where will we see the biggest jumps? Click to find out msn's pick. .
Canada's housing market is on the rebound after a decline in 2009 with resales expected to set a new annual record this year and home building is off to a strong start, according to two reports Monday. There isn't a bubble because of a lack of speculation in the real estate market, said Scotiabank senior economist Adrienne Warren.
Prices are being driven by more buyers than sellers, not unexpected with a tight supply, and buyers may be overpaying a little in some markets, but, "we don't think there's a bubble," she said from Toronto. More
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 The Bank of Canada stated that conditional on the outlook for inflation, the overnight rate can be expected to remain at its level until the second quarter of 2010. Home ownership is the cornerstone of financial independence and security. It may seem a daunting prospect to younger people or first-time buyers, but it is achievable. You may be wondering how you can possibly afford to purchase. . Well, February brings a few extra opportunities if you contribute this month to a rrsp. Savings you can withdraw, plus a tax credit in April that could help with your closing costs. Call and we would be happy to can explain the process 416-896-3333. With rates so low, lock into a 5, 7 or 10 year mortgage rate if you want the feeling of long term stability. Compare Sutton Member Mortgage Rates |
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From September to December 2009, Treb reported 3,859 lease transaction for condo apartments and townhomes through the mls system. Up 12% over the same period in 2008. Condo apartment transactions, accounted for over 90 percent of the total, and up 12 percent. Complete Rental Report.We understand the needs of our investors, we want them to enjoy as carefree an investment as possible. Our "full service" rental department allows our clients to relax. We do it all - mls exposure, extensive advertise, schedule viewings, prepare documents, credit checks and more. . Do you have a Toronto / Peel Investment to Rent? Just call our Rental Department at 416-896-3333. Looking for a Mississauga Condo to Rent, A Home in Etobicoke, maybe a Studio Suite in Downtown Toronto, Check out the Rental Inventory | From The implementation of the Harmonized Sales Tax (HST) is expected to cause a run up in housing activity during the spring market, as purchasers move to avoid additional expenses.
In the longer term, the HST is expected to impact new construction, shifting some of the buyer demand to the resale sector, at least until buyers adjust to the new normal. More Details on the HST. Need a calcuator to figure out Ontario and Toronto Land Transfer Tax click here. |
| First Time Buyers! Here is Motivation to Buy Today with 5% Down . Finance Minister Jim Flaherty stated he has seen no evidence of a bubble, but he has discussed measures to cool the housing market, including raising the minimum down payment requirement above five per cent, or reducing the maximum length a residential mortgage can be amortized from 35 years. .
First Time Buyers with a low down payment may have a limited time to take advantage of the 5 percent down program.
Ask us about our Sutton Member Mortgage Program. Incredible Low Discounted Rates. Worth Comparing. |
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Sutton Group Real Estate Toronto 416-896-3333 or Mississauga Sutton 905-896-3333
Visit us at www.SuttonRealty.com or http://www.searchtorontohomes.com/
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