ARTICLES

 

 

September 2019

Bank of Canada does not need a rate cut at this point – National Bank

Ahead of the Bank of Canada’s policy meeting in September 4, National Bank has argued that the central bank does not need to cut rates.

This is because Canada is considerably outstripping the “disappointing” performances of other leading economic blocs like the Eurozone, the United States, and China.

“Canada remains in the opposite camp with positive economic surprises and higher than expected inflation,” National Bank Financial deputy chief economist Matthieu Arseneau stated in a client note, as quoted by Bloomberg.

“Unless the trade conflict between the Unites States and China escalates further, there is no need for monetary stimulus in Canada.”

In July, the BoC decided to hold its interest rate at 1.75% for the sixth consecutive policy meeting.

An inflation rate of 2% during that same month pulled down the odds of a BoC rate cut even lower, according to Bloomberg’s polling of economists in early August.

Immediately before the Statistics Canada numbers were released, traders were betting on one-in-five odds for a September rate cut, in response to anxiety surrounding the possibility of a global recession.

However, the reading pointed towards a stable, robustly performing economy. This led to much lower chances for a rate cut next month, at 16.8% as of August 28. The probability of an October cut remained high, at 61%.

2019 to 350,000 by 2021.

 

Sam Ansari
Principal Mortgage Broker,
Lic# M08009393
Centum Liberty Mortgages
Lic# 12088
📩: sam_ansari@centum.ca
📲: 416-356-6310
☎ /🖨: 905-881-4990
🖨: 647-977-2748
📬: 7191 Yonge Street
Suite 505, Thornhill,
ON L3T 0C4

💻: www.SamAnsari.com

 

September 2019

Canada’s mortgage rates are much higher than other developed nations

In global terms, Canadians are actually paying higher-than-normal mortgage rates, only exceeded by a small number of developed nations like the United States and Australia.

A new analysis by HuffPost Canada has shown that even with fixed-rate terms going for as low as 2.39% in Canada at present, these historic lows are still considerably above a majority of advanced European economies.

To compare, the United Kingdom has fixed-rate mortgages with rates as low as 1.65%, and France at 1.39%. Finland has 0.96%, while Germany has 0.5%.

Among the lowest in the world are the fixed-rate products offered by Japan (0.37%), Belgium (0.1%), and Denmark (-0.5%).

Canada’s rates are in no way deterring consumer activity, though. Last June, the nation’s household mortgage credit grew by 5.2% month-over-month – its fastest pace in two years, according to Scotiabank data.

The same month also saw the outstanding balance of Canadian mortgage debt grow by 3.7% annually, up to $1.57 trillion total.

Earlier this month, Royal Bank of Canada president and CEO Dave McKay warned that economies and organizations should not underestimate the effects of “rising geopolitical risks and trade tensions.”

“This uncertainty is manifesting itself in downward trends in global interest rates,” McKay said in an analyst conference call, as quoted by the Financial Post.

Fortunately, Canada itself is well-equipped to weather the worst of the impacts, despite fixed rates being much higher than the global standard.

“While there are risks to the outlook, current economic conditions in our core North American geographies remain solid, with unemployment near multi-decade lows and a continued resilience in the Canadian manufacturing sector.”

Sam Ansari
Principal Mortgage Broker,
Lic# M08009393
Centum Liberty Mortgages
Lic# 12088
📩: sam_ansari@centum.ca
📲: 416-356-6310
☎ /🖨: 905-881-4990
🖨: 647-977-2748
📬: 7191 Yonge Street
Suite 505, Thornhill,
ON L3T 0C4

💻: www.SamAnsari.com

 

 

September 2019

Canadian consumer confidence posts biggest dive this year

Canadian consumer sentiment recorded its biggest monthly setback this year in August, amid growing concerns about the global economic outlook, polling suggests.

The Bloomberg Nanos Canadian Confidence Index -- a composite indicator derived from phone surveys of households -- ended the month at 56.4, down from 58.6 at the end of July. The drop reflects waning optimism about Canada’s economy, and effectively reverses the pick-up in sentiment earlier this summer. It marks the first drop in the index of more than 2 points since November 2018.

The deterioration coincides with the escalation of the US-China trade war that is fueling concerns about a sharp global slowdown, with many Canadians increasingly worried they’ll soon feel a bigger impact.

The share of respondents who believe Canada’s economy will strengthen over the next six months dropped to just under 13% at the end of August, from about 18% a month earlier, according to polling by Nanos Research Group for Bloomberg. That’s approaching record low levels of optimism. The share who see the economy weakening increased five points to 29%.

Every week, Nanos Research asks 250 Canadians for their views on personal finances, job security, the outlook for the economy and where real estate prices are headed. Bloomberg publishes four-week rolling averages of the 1,000 telephone responses.

The good news for now is that the drop in confidence is largely confined to expectations for growth, and hasn’t yet hit pocketbooks. Perceptions of job security and personal finances were little changed last month at about historical averages.

Expectations for real estate prices fell in August from the 2019-high levels a month earlier but remain at above-average levels.

Consumer confidence can be a good barometer of an economy’s overall health. The sluggish readings may amplify concern the country is headed for a second-half slowdown, after a robust first-half performance that saw growth at a robust 2.1% annualized pace. The broad confidence index fell below year-earlier levels for the first time in three months in August.

Ontario, Canada’s most-populous province, recorded the biggest decline in sentiment.

Sam Ansari
Principal Mortgage Broker,
Lic# M08009393
Centum Liberty Mortgages
Lic# 12088
📩: sam_ansari@centum.ca
📲: 416-356-6310
☎ /🖨: 905-881-4990
🖨: 647-977-2748
📬: 7191 Yonge Street
Suite 505, Thornhill,
ON L3T 0C4

💻: www.SamAnsari.com

 

 

September 2019

Down payments are still the main challenge for first-time buyers

While a growing proportion of Canadians are more hopeful towards their prospects of buying homes, a considerable number are pointing at down payment costs as a significant roadblock.

According to a new survey conducted by Pollara Strategic Insights for Bank of Montreal, as much as 26% of first-time home buyers admitted that they will find raising funds for a 5% minimum down payment a “major” challenge, while 39% stated that it will be a “minor” struggle.

Moreover, just 14% of would-be buyers are already prepared to make down payments, while 55% are expecting to have their down payment funds within the next two years. Around 38% are confident that they will be debt-free prior to their first-time purchase.

“While first-time home buyers believe that market conditions are favourable for buyers, it’s important to make sure that carrying the costs are sustainable,” BMO head of personal lending and home financing products Hassan Pirnia said.

Roughly 13% of first-time buyers have stated that they are considering a home purchase valued at more than 30% of their incomes, while nearly 40% of these consumers expressed a willingness to sacrifice other expenses like travel, just so they can buy higher-priced homes.

The just-activated federal First-Time Home Buyers Incentive has also given consumers more reason to be optimistic: Among those in their 30s, as much as 50% held a strong belief that it will be very useful in their purchases. Across all demographics, fully 86% said that the incentive will help in fulfilling their home ownership dreams one way or another.

Sam Ansari
Principal Mortgage Broker,
Lic# M08009393
Centum Liberty Mortgages
Lic# 12088
📩: sam_ansari@centum.ca
📲: 416-356-6310
☎ /🖨: 905-881-4990
🖨: 647-977-2748
📬: 7191 Yonge Street
Suite 505, Thornhill,
ON L3T 0C4

💻: www.SamAnsari.com

 

 

September 2019

Immigrants, tech industry propelling demand for rental housing

Housing activity in Toronto and Montreal is increasingly leaning upon demand from immigrants and tech sector professionals, according to the latest edition of IPA’s Midyear Canadian Multifamily Investment Forecast Report.

With more and more global tech giants establishing major operations in Toronto, the city has seen accelerated housing demand over the last few quarters. January to June of this year alone saw 81,600 new jobs added to the burgeoning local economy, propelled largely by the high-technology sector.

“Many of these jobs are high-paying tech positions as more companies in the industry grow their Canadian workforce,” the IPA study noted. “Employment grew at a rate of 3.4% year over year in June, a substantial rise from the 2.9% pace posted one year earlier.”

With a vacancy rate of just 1.1%, the predominance of bidding wars has pushed Toronto’s average price per rental unit up by 9% annually, exceeding $277,000. Apartment rents stood at an average of $1,370 per month as of the end of 2018, which was 4.7% larger over the previous year.

The tech industry is also playing a significant role in Montreal, especially because the city plays host to multiple globally-acclaimed universities “along with industry-leading artificial intelligence and entrepreneurial programs.”

The average rent in the market increased by 4.1% year-over-year, to $797 per month. Average prices grew by 6% year-over-year, to $154,400 per unit.

In addition, the city’s immigration policy is paving the way for even more demand among non-locals. This will augment last year’s approximately 28,200 non-permanent residents (mostly students and temporary workers) originating from overseas.

“An estimated 16,000 households will be created this year, partly supported by a simpler immigration system than the U.S. that has lifted foreign entry numbers substantially,” IPA stated.

And this is most likely just the beginning: An RBC Economic Research earlier this year said that the Canadian government is looking to boost its annual immigration targets, from 330,000 in 2019 to 350,000 by 2021.

Sam Ansari
Principal Mortgage Broker,
Lic# M08009393
Centum Liberty Mortgages
Lic# 12088
📩: sam_ansari@centum.ca
📲: 416-356-6310
☎ /🖨: 905-881-4990
🖨: 647-977-2748
📬: 7191 Yonge Street
Suite 505, Thornhill,
ON L3T 0C4

💻: www.SamAnsari.com

 

 

September 2019

Ontario suffering from imbalanced immigration

Imbalanced population distribution risks plunging Ontario into economic and fiscal turmoil.

A report from The Conference Board of Canada warns that immigrants to Ontario overwhelmingly choose the Greater Toronto Area, overburdening its infrastructure and leaving other census metropolitan regions in the province gaunt.

However, the report, Immigration Beyond the GTA: Toward an Ontario Immigration Strategy, also identifies ways to rectify the imbalance, one of which is enlisting traditionally immigrant communities to extol the benefits of living in Ontario’s ignored CMAs.

“Despite offering a strong value proposition to newcomers, Ontario’s CMAs may not be putting their best foot forward in marketing themselves. For instance, they offer housing that is often more affordable than the GTA. Harnessing existing diaspora groups to conduct outreach to their networks overseas about the benefits of living outside of the GTA can help improve marketing efforts. Embedding regionalization objectives in federal pre-arrival services is another means of informing newcomers about the employment and quality-of-life opportunities that are offered by CMAs across Ontario.”

The GTA comprises 45% of Ontario’s population, yet received 77% of the province’s immigrants in 2018. According to Pedro Antunes, The Conference Board of Canada’s chief economist, if sustained, such disproportionate migration will erode quality of life in the GTA and doubtless make housing more expensive. That’s in spite of federal and provincial government efforts to cool rapid price escalation.

“Growth is an important factor that drives demand for housing, and while governments have essentially tried to put the brakes on home price appreciation, especially by focusing on Toronto and Vancouver with foreign buyer taxes and tighter mortgage rules, demographics will drive housing demand. And if supply isn’t generated fast enough, it will drive up prices,” he said.

Antunes added that most households are highly leveraged but nevertheless maintain a balancing act thanks to surging equity. However, that equilibrium is being imperiled.

“We often talk about households being highly leveraged, highly indebted, but they also, historically, have a very high asset level as a share of disposable income. We also need to be careful of what we wish for: do we want prices to drop or do we want them to ease? I think it’s the latter option and regionalizing immigration would help.”

Given buoyant labour prospects in many Ontario CMAs, Antunes says encouraging migration elsewhere shouldn’t be that difficult. But he concedes the CMAs have struggled to attract new immigrants for the past decade.

“Ontario’s smaller CMAs outside of the GTA have been trying to attract more international immigrants for a decade without much success,” he said. “In fact, their share has dropped.”

Sam Ansari
Principal Mortgage Broker,
Lic# M08009393
Centum Liberty Mortgages
Lic# 12088
📩: sam_ansari@centum.ca
📲: 416-356-6310
☎ /🖨: 905-881-4990
🖨: 647-977-2748
📬: 7191 Yonge Street
Suite 505, Thornhill,
ON L3T 0C4

💻: www.SamAnsari.com

 

 

September 2019

OSFI guidance on First-Time Home Buyer Incentive mortgages

OSFI has issued an advisory on the total requirements for First-Time Home Buyer Incentive insured mortgages.

The regulator says that the Mortgage Insurer Capital Adequacy Test (MICAT) is not currently designed to capture the mortgage insurance risk associated with FTHBI mortgages compared to non-FTHBI mortgages with the same risk drivers, e.g., loan-to-value, outstanding balance. 

The program to help eligible first-time homebuyers went live this week and borrowers will have a first position, high-ratio mortgage and will be required to purchase mortgage insurance.

OSFI’s assessment of the potential risks includes an expectation that FTHBI mortgages will have probabilities of default that are different compared to non-FTHBI mortgages, all else being equal, because FTHBI mortgages will have different loan-to-value ratios.

It also suggests that total requirements for a FTHBI mortgage should be in between the amounts required for a mortgage with a loan-to-value reflecting only the borrower's down payment and a mortgage with a loan-to-value reflecting the combined borrower's down payment and the shared equity component.

OSFI recommends “the development of a sound, consistent and tailored solution that can be implemented before any FTHBI mortgages are funded” to give mortgage insurers time to update their systems and plan.

Sam Ansari
Principal Mortgage Broker,
Lic# M08009393
Centum Liberty Mortgages
Lic# 12088
📩: sam_ansari@centum.ca
📲: 416-356-6310
☎ /🖨: 905-881-4990
🖨: 647-977-2748
📬: 7191 Yonge Street
Suite 505, Thornhill,
ON L3T 0C4

💻: www.SamAnsari.com

 

 

The problem with penalizing short-term rental operators

The row over short-term rental regulations in Toronto is before the Local Planning Appeal Tribunal largely because curbing measures are ineffective.

There’s mounting evidence that short-term rentals remove precious units from cities’ rental inventory, and should the regulations pass—which include restricting rentals to principal residences and mandating a 4% municipal tax—it could grind to a halt what has proven a lucrative business model.

 “I was with clients last night who are ready to purchase a property to rent out as a short-term rental, but they’re waiting with their realtor to see what happens at the tribunal. They’re basically in a holding pattern right now,” said Daniel Johanis, a mortgage broker with Rock Capital Investments.

“I think the regulations are probably a good idea,” he added. “There needs to be more enforcement with any sort of vacation rental that’s going to be offered in the city. The condo I live in has had issues with renters being disruptive, fighting, damaging property, and it doesn’t seem like condo board prohibitions have been enough to stop people from renting out their suites. There are no real penalties for it, so it needs to be regulated better.”

Johanis was once the owner of a unit he rented out on Airbnb but stopped after his condo board began enforcing proscriptions on short-term rentals.

“It depends on the condo board,” he said. “I was a super host for one of my condos, but what I’ve noticed of late is a lot of condo boards are prohibiting short-term rentals and coming down hard on unit owners—some will issue cease and desists—so I shied away from it to not upset the board.”

However, many short-term rental operators often flout the penalties anyway.

“It may be in the bylaws,” said Johanis, “but enforcement often isn’t there.”

Haris Zulqarnain of Treadstone Law echoed that sentiment, but says liens could be put against units found to circumvent short-term rental interdictions.

“They do it within 30 to 90 days and the unit owner is also responsible for the legal fees, and if they were to sell the unit they would have to pay that before they’re free and clear,” he said. “If they want to fight the company, they can. It would likely be in small claims court unless it’s over $25,000, and most times you see people pay it off because it isn’t worth the extra effort of going to small claims.”

But even getting to the point of enforcement is onerous. How can the condo board prove the unit owner has, in fact, been renting out the property on a short-term basis?

“If someone suspects it, it’s basically hearsay, at which point it becomes the unit owner’s word against theirs,” said Zulqarnain. “The resources you have to expend to prove something like that makes the whole proposition difficult, unless someone comes into the building and says they’re there for the Airbnb, but even then, the owner can say they expected the guest to stay longer.”

Finally, the condo board might even be too circumspect for financial reasons to go through with enforcement.

“The reality is you can have all the bylaws in the world, but if they don’t make economic sense they’re hard to enforce,” said Zulqarnain. “Most of these buildings try to minimize expenses as much as they can, and that includes management fees and the like, because they want the reserve fund to be higher and the condos fees to be lower. There are so many competing forces that, ultimately, proving there was an infraction is expensive.”

A City of Toronto report estimated that in April 2017 there were 20,000 short-term rental listings, and Airbnb alone rented out 988,378 nights in 2016. Statistics Canada also found short-term rental revenue in Ontario grew from $94 million in 2015 to $909m in 2018.

The City of Toronto first introduced regulations early last year, but LPAT is reviewing them over seven days (beginning August 26) with the possibility of an extension.

 

Sam Ansari
Principal Mortgage Broker,
Lic# M08009393
Centum Liberty Mortgages
Lic# 12088
📩: sam_ansari@centum.ca
📲: 416-356-6310
☎ /🖨: 905-881-4990
🖨: 647-977-2748
📬: 7191 Yonge Street
Suite 505, Thornhill,
ON L3T 0C4

💻: www.SamAnsari.com

 

 

TREB releases latest home sales data

 05 Sep 2019

The Toronto Real Estate Board says home sales in the Greater Toronto Area in August were up 13.4 per cent compared with a year ago.

The board say there were 7,711 home sales through its MLS system in August, up from 6,797 sales reported in August 2018.

On a month-over-month basis, seasonally adjusted sales were up 0.8 per cent.

The increase in sales came as the MLS home price index composite benchmark for August rose 4.9 per cent on a year-over-year basis.

The average selling price was $792,611 in August, up 3.6 per cent compared with a year ago.

The board noted that market conditions were tighter in August compared with a year ago as overall active listings at the end of the month were down by more than 11 per cent compared with August 2018.

 

Sam Ansari
Principal Mortgage Broker,
Lic# M08009393
Centum Liberty Mortgages
Lic# 12088
📩: sam_ansari@centum.ca
📲: 416-356-6310
☎ /🖨: 905-881-4990
🖨: 647-977-2748
📬: 7191 Yonge Street
Suite 505, Thornhill,
ON L3T 0C4

💻: www.SamAnsari.com

 

 

September 2019

The problem with penalizing short-term rental operators

The row over short-term rental regulations in Toronto is before the Local Planning Appeal Tribunal largely because curbing measures are ineffective.

There’s mounting evidence that short-term rentals remove precious units from cities’ rental inventory, and should the regulations pass—which include restricting rentals to principal residences and mandating a 4% municipal tax—it could grind to a halt what has proven a lucrative business model.

 “I was with clients last night who are ready to purchase a property to rent out as a short-term rental, but they’re waiting with their realtor to see what happens at the tribunal. They’re basically in a holding pattern right now,” said Daniel Johanis, a mortgage broker with Rock Capital Investments.

“I think the regulations are probably a good idea,” he added. “There needs to be more enforcement with any sort of vacation rental that’s going to be offered in the city. The condo I live in has had issues with renters being disruptive, fighting, damaging property, and it doesn’t seem like condo board prohibitions have been enough to stop people from renting out their suites. There are no real penalties for it, so it needs to be regulated better.”

Johanis was once the owner of a unit he rented out on Airbnb but stopped after his condo board began enforcing proscriptions on short-term rentals.

“It depends on the condo board,” he said. “I was a super host for one of my condos, but what I’ve noticed of late is a lot of condo boards are prohibiting short-term rentals and coming down hard on unit owners—some will issue cease and desists—so I shied away from it to not upset the board.”

However, many short-term rental operators often flout the penalties anyway.

“It may be in the bylaws,” said Johanis, “but enforcement often isn’t there.”

Haris Zulqarnain of Treadstone Law echoed that sentiment, but says liens could be put against units found to circumvent short-term rental interdictions.

“They do it within 30 to 90 days and the unit owner is also responsible for the legal fees, and if they were to sell the unit they would have to pay that before they’re free and clear,” he said. “If they want to fight the company, they can. It would likely be in small claims court unless it’s over $25,000, and most times you see people pay it off because it isn’t worth the extra effort of going to small claims.”

But even getting to the point of enforcement is onerous. How can the condo board prove the unit owner has, in fact, been renting out the property on a short-term basis?

“If someone suspects it, it’s basically hearsay, at which point it becomes the unit owner’s word against theirs,” said Zulqarnain. “The resources you have to expend to prove something like that makes the whole proposition difficult, unless someone comes into the building and says they’re there for the Airbnb, but even then, the owner can say they expected the guest to stay longer.”

Finally, the condo board might even be too circumspect for financial reasons to go through with enforcement.

“The reality is you can have all the bylaws in the world, but if they don’t make economic sense they’re hard to enforce,” said Zulqarnain. “Most of these buildings try to minimize expenses as much as they can, and that includes management fees and the like, because they want the reserve fund to be higher and the condos fees to be lower. There are so many competing forces that, ultimately, proving there was an infraction is expensive.”

A City of Toronto report estimated that in April 2017 there were 20,000 short-term rental listings, and Airbnb alone rented out 988,378 nights in 2016. Statistics Canada also found short-term rental revenue in Ontario grew from $94 million in 2015 to $909m in 2018.

The City of Toronto first introduced regulations early last year, but LPAT is reviewing them over seven days (beginning August 26) with the possibility of an extension.

 

Sam Ansari
Principal Mortgage Broker,
Lic# M08009393
Centum Liberty Mortgages
Lic# 12088
📩: sam_ansari@centum.ca
📲: 416-356-6310
☎ /🖨: 905-881-4990
🖨: 647-977-2748
📬: 7191 Yonge Street
Suite 505, Thornhill,
ON L3T 0C4

💻: www.SamAnsari.com

 

 

Rent growth has moderated for GTA rental apartment investors

 Apr 2019

There was an increase in purpose-built rental apartment completions in the first three months of 2019.

Urbanation says that completions hit a 25-year high of 1,849 units, nearly five times greater than the quarterly average since Q1-2016 and represented significant growth considering only 13,520 units have been built since 2005.

But for owners and investors, the increased supply meant weaker rent growth despite strong demand and low vacancy rate.

Purpose-built rents for units available for lease during Q1, 2019 grew by 5% year-over-year on a same-building basis, slowing from a 9% annual pace at the end of last year in Q4-2018.

As of Q1-2019, purpose-built rents in buildings completed since 2005 averaged $2,398, or $3.25 per square foot (psf) based on an average size of 738 sf.

On a same-building basis, condominium rents grew by 7.7% psf in Q1-2019, compared to a 9.2% annual increase in Q4-2018. Monthly condominium rents for units leased during the first quarter averaged $2,376 ($3.28 psf) across the GTA, 7.8% higher than a year ago.

Demand lags supply
The volume of condominiums leased through MLS grew by 13% year-over-year in Q1-2019 to 6,005 units, but supply grew faster than demand pushing down the ratio of leases-to-listings to 73% — the lowest level in four years.

“The increase in rental completions in early 2019, which is coinciding with more condominium projects finishing construction, has shown that growth in new supply can have a direct impact on the rate of rent growth,” said

Shaun Hildebrand, President of Urbanation. “The challenge going forward will be keeping rental construction numbers rising to a level that meets growth in demand”

A total of 42,841 purpose-built rental apartments were proposed for development but had not yet started construction as of Q1-2019, 20% higher than the total proposed inventory of 35,834 units as of Q1-2018 and nearly 50% higher than the 28,841 units proposed as of the end of Q1-2017.

Approximately 4,000 purpose-built rentals are projected to reach completion in the GTA in 2019 (a 26-year high), with 1,849 already occupying in Q1.

 

Sam Ansari
Principal Mortgage Broker,
Lic# M08009393
Centum Liberty Mortgages
Lic# 12088
📩: sam_ansari@centum.ca
📲: 416-356-6310
☎ /🖨: 905-881-4990
🖨: 647-977-2748
📬: 7191 Yonge Street
Suite 505, Thornhill,
ON L3T 0C4

💻: www.SamAnsari.com

 

 

September 2019

OSFI guidance on First-Time Home Buyer Incentive mortgages

OSFI has issued an advisory on the total requirements for First-Time Home Buyer Incentive insured mortgages.

The regulator says that the Mortgage Insurer Capital Adequacy Test (MICAT) is not currently designed to capture the mortgage insurance risk associated with FTHBI mortgages compared to non-FTHBI mortgages with the same risk drivers, e.g., loan-to-value, outstanding balance. 

The program to help eligible first-time homebuyers went live this week and borrowers will have a first position, high-ratio mortgage and will be required to purchase mortgage insurance.

OSFI’s assessment of the potential risks includes an expectation that FTHBI mortgages will have probabilities of default that are different compared to non-FTHBI mortgages, all else being equal, because FTHBI mortgages will have different loan-to-value ratios.

It also suggests that total requirements for a FTHBI mortgage should be in between the amounts required for a mortgage with a loan-to-value reflecting only the borrower's down payment and a mortgage with a loan-to-value reflecting the combined borrower's down payment and the shared equity component.

OSFI recommends “the development of a sound, consistent and tailored solution that can be implemented before any FTHBI mortgages are funded” to give mortgage insurers time to update their systems and plan.

Sam Ansari
Principal Mortgage Broker,
Lic# M08009393
Centum Liberty Mortgages
Lic# 12088
📩: sam_ansari@centum.ca
📲: 416-356-6310
☎ /🖨: 905-881-4990
🖨: 647-977-2748
📬: 7191 Yonge Street
Suite 505, Thornhill,
ON L3T 0C4

💻: www.SamAnsari.com

 

 

September 2019

Ontario suffering from imbalanced immigration

Imbalanced population distribution risks plunging Ontario into economic and fiscal turmoil.

A report from The Conference Board of Canada warns that immigrants to Ontario overwhelmingly choose the Greater Toronto Area, overburdening its infrastructure and leaving other census metropolitan regions in the province gaunt.

However, the report, Immigration Beyond the GTA: Toward an Ontario Immigration Strategy, also identifies ways to rectify the imbalance, one of which is enlisting traditionally immigrant communities to extol the benefits of living in Ontario’s ignored CMAs.

“Despite offering a strong value proposition to newcomers, Ontario’s CMAs may not be putting their best foot forward in marketing themselves. For instance, they offer housing that is often more affordable than the GTA. Harnessing existing diaspora groups to conduct outreach to their networks overseas about the benefits of living outside of the GTA can help improve marketing efforts. Embedding regionalization objectives in federal pre-arrival services is another means of informing newcomers about the employment and quality-of-life opportunities that are offered by CMAs across Ontario.”

The GTA comprises 45% of Ontario’s population, yet received 77% of the province’s immigrants in 2018. According to Pedro Antunes, The Conference Board of Canada’s chief economist, if sustained, such disproportionate migration will erode quality of life in the GTA and doubtless make housing more expensive. That’s in spite of federal and provincial government efforts to cool rapid price escalation.

“Growth is an important factor that drives demand for housing, and while governments have essentially tried to put the brakes on home price appreciation, especially by focusing on Toronto and Vancouver with foreign buyer taxes and tighter mortgage rules, demographics will drive housing demand. And if supply isn’t generated fast enough, it will drive up prices,” he said.

Antunes added that most households are highly leveraged but nevertheless maintain a balancing act thanks to surging equity. However, that equilibrium is being imperiled.

“We often talk about households being highly leveraged, highly indebted, but they also, historically, have a very high asset level as a share of disposable income. We also need to be careful of what we wish for: do we want prices to drop or do we want them to ease? I think it’s the latter option and regionalizing immigration would help.”

Given buoyant labour prospects in many Ontario CMAs, Antunes says encouraging migration elsewhere shouldn’t be that difficult. But he concedes the CMAs have struggled to attract new immigrants for the past decade.

“Ontario’s smaller CMAs outside of the GTA have been trying to attract more international immigrants for a decade without much success,” he said. “In fact, their share has dropped.”

 

Sam Ansari
Principal Mortgage Broker,
Lic# M08009393
Centum Liberty Mortgages
Lic# 12088
📩: sam_ansari@centum.ca
📲: 416-356-6310
☎ /🖨: 905-881-4990
🖨: 647-977-2748
📬: 7191 Yonge Street
Suite 505, Thornhill,
ON L3T 0C4

💻: www.SamAnsari.com

 

 

Mortgage stress test is ‘working’ as expected – OSFI

June 2019

The Office of the Superintendent of Financial Institutions stood by its stress test, maintaining that the much-tightened qualifications for mortgages is “working” as anticipated.

“The revisions to B-20 are working; strengthening mortgage underwriting across Canada and improving the resilience of the Canadian financial system to future shocks,” OSFI stated earlier this week, as quoted by the Financial Post.

The updates to B-20 were meant to counteract the dangers presented by housing market volatility and low interest rates. However, the regulatory regime has come under fire from multiple quarters, particularly politicians and real estate industry players.

OSFI assured that it will continue to keep an eye on the mortgage industry.

“While improvements have been made OSFI will continue to monitor lender practices, particularly in the area of income verification, and will be proactive with lenders when it identifies areas requiring attention.”

Last month, Ontario Real Estate Association CEO Tim Hudak called on the federal government to seriously reconsider its current approach, as B-20 has actually inflicted damage “beyond what many thought was the worst case.”

This was especially evident in nationwide residential resale volume, which suffered an 11% annual decline in 2018.

“Not only are many people unable to become home owners at all; others can’t upgrade as their families grow, which in turn means they aren’t selling their starter homes to people trying to buy for the first time,” Hudak stated.

“Beyond addressing the crisis caused by unnecessarily harsh mortgage stress tests, we need a comprehensive set of policies to make the Canadian dream of home ownership a reality for more families every year, not fewer.”

Sam Ansari
Principal Mortgage Broker,
Lic# M08009393
Centum Liberty Mortgages
Lic# 12088
📩: sam_ansari@centum.ca
📲: 416-356-6310
☎ /🖨: 905-881-4990
🖨: 647-977-2748
📬: 7191 Yonge Street
Suite 505, Thornhill,
ON L3T 0C4

💻: www.SamAnsari.com

 

 

September 2019

Immigrants, tech industry propelling demand for rental housing

Housing activity in Toronto and Montreal is increasingly leaning upon demand from immigrants and tech sector professionals, according to the latest edition of IPA’s Midyear Canadian Multifamily Investment Forecast Report.

With more and more global tech giants establishing major operations in Toronto, the city has seen accelerated housing demand over the last few quarters. January to June of this year alone saw 81,600 new jobs added to the burgeoning local economy, propelled largely by the high-technology sector.

“Many of these jobs are high-paying tech positions as more companies in the industry grow their Canadian workforce,” the IPA study noted. “Employment grew at a rate of 3.4% year over year in June, a substantial rise from the 2.9% pace posted one year earlier.”

With a vacancy rate of just 1.1%, the predominance of bidding wars has pushed Toronto’s average price per rental unit up by 9% annually, exceeding $277,000. Apartment rents stood at an average of $1,370 per month as of the end of 2018, which was 4.7% larger over the previous year.

The tech industry is also playing a significant role in Montreal, especially because the city plays host to multiple globally-acclaimed universities “along with industry-leading artificial intelligence and entrepreneurial programs.”

The average rent in the market increased by 4.1% year-over-year, to $797 per month. Average prices grew by 6% year-over-year, to $154,400 per unit.

In addition, the city’s immigration policy is paving the way for even more demand among non-locals. This will augment last year’s approximately 28,200 non-permanent residents (mostly students and temporary workers) originating from overseas.

“An estimated 16,000 households will be created this year, partly supported by a simpler immigration system than the U.S. that has lifted foreign entry numbers substantially,” IPA stated.

And this is most likely just the beginning: An RBC Economic Research earlier this year said that the Canadian government is looking to boost its annual immigration targets, from 330,000 in 2019 to 350,000 by 2021.

Sam Ansari
Principal Mortgage Broker,
Lic# M08009393
Centum Liberty Mortgages
Lic# 12088
📩: sam_ansari@centum.ca
📲: 416-356-6310
☎ /🖨: 905-881-4990
🖨: 647-977-2748
📬: 7191 Yonge Street
Suite 505, Thornhill,
ON L3T 0C4

💻: www.SamAnsari.com

 

 

وام مسکن در کانادا ، یعنی وامی که در مقابل آن، ملکی به گرو گذاشته شده است. بنابراین بیشتر افرادی که برای خرید مسکن وام می گیرند، در مقابل این وام منزل خود را در گرو بانک می گذارند. به طور کلی چون وام مسکن به ازای گرو گذاشتن یک ملک پرداخت می شود بانک ها و مؤسسات مالی (Financial Institutions) در چارچوب قوانین موجود، نسبت به پرداخت این نوع وام ها تمایل نشان می دهند
اگر بازار مسکن در وضعیت بحرانی یا خطر نباشد احتمال زیاد قیمت خانه بالا میرود و در بدترین حالت اگر گیرنده وام مسکن در کانادا موفق به بازپرداخت آن نشود، می توان مسکن مذکور را به حراج گذاشت تا بانک یا مؤسسه مالی طلب خود را پس بگیرد. مؤسسات مالی عوامل مختلفی را در اعطای وام در نظر می گیرند
به چند مورد از مهمترین این عوامل برای دریافت وام مسکن در کانادا میپردازیم

    وضعیت مالی متقاضی وام: درآمد جاری وی، نسبت درآمد وی به بدهی هایش و منابع مالی که متقاضی به آنها دسترسی دارد
    ثبات وضعیت مالی متقاضی وام: سازمانی که در آن استخدام شده یا اگر خوداشتغال است وضعیت مالی وی در چند سال اخیر چگونه بوده است
    اعتبار متقاضی – سابقه اعتباری Credit History: مسایلی نظیر موارد زیر

    آیا متقاضی وام در گذشته، وام یا اعتبار از بانک دریافت کرده است و اگر دریافت کرده است رفتار او در برابر پرداخت بدهی خود چگونه بوده است؟
    متقاضی وام در حال حاضر چقدر بدهکار است و بابت بدهی خود چقدر بهره ماهیانه پرداخت می کند؟
    متقاضی در سال های اخیر چندین بار تقاضای وام کرده است؟
    متقاضی در ماه های اخیر چند بار تقاضای وام کرده است؟
    آیا متقاضی در چند سال اخیر مشکلی با وام دهندگان داشته است؟
    امتیاز اعتباری Credit Score متقاضی چند است؟

    موقعیت مکانی ملکی که متقاضی قصد خرید آن را دارد.
    وضعیت حقوقی مسکنی که متقاضی قصد خرید آن را دارد
    وضعیت کلی بازار مسکن و اقتصاد کانادا
    این چندمین مسکن متقاضی است؟
    متقاضی مایل است چند درصد پول پیش مسکن را خود پرداخت کند؟
    پول پیش خانه از کجا پرداخت می شود؟
    متقاضی مایل است وام چند ساله بگیرد

بدیهی است هر بانک یا مؤسسه مالی ممکن است با توجه به شرایط خود عوامل دیگری را هم برای متقاضی وام در نظر بگیرد. در ضمن اهمیت هر یک از این عوامل در شرایط های خاص متفاوت خواهد بود. عوامل فوق هم بیشترین مقداری که متقاضی می تواند وام بگیرد را و هم میزان بهره وام را تحت تأثیر قرار می دهند
بهره وام در کانادا به طور معمول به دو صورت ثابت یا شناور (متغیر) محاسبه می شود. برای اطلاعات بیشتر در این خصوص توجه شما را به نوشته زیر جلب می کنم
بهره های متغیر و ثابت بانکی در کانادا
این روزها از آنجا که بهره شبانه Overnight Rate بانک مرکزی کانادا بسیار پایین است (0.5 درصد در سال) در نتیجه بهره وام های مسکن هم بسیار پایین است. اگر متقاضی در شرایط خوبی باشد بعید نیست بتواند وام با بهره کمتر از 3 درصد در سال دریافت کند. با محدودیت های جدیدی که از سوی دولت اعمال شده است بسیاری از متقاضیان قادر خواهند بود تا 95 درصد قیمت مسکن را وام دریافت کنند و وام خود را در یک دوره 30 ساله بازپرداخت نمایند. تأکید می کنم که درصد وام، بهره وام و زمان بازپرداخت بستگی به مجموعه ای از عوامل دارد که در بالا به تعداد قابل توجهی از آنها اشاره شد
نکته دیگر اینکه اگر کسی سابقه اعتباری Credit History نداشته باشد مثلا به تازگی وارد کانادا شده یا خارج از کانادا زندگی می کند معمولا لازم است درصد بیشتری از پول منزل را پرداخت کند. به طور معمول این افراد اگر حدود 35 تا 40 درصد پول منزل را از جیب خود بپردازند می توانند مابقی را وام مسکن در کانادا بگیرند

 

Sam Ansari
Principal Mortgage Broker,
Lic# M08009393
Centum Liberty Mortgages
Lic# 12088
📩: sam_ansari@centum.ca
📲: 416-356-6310
☎ /🖨: 905-881-4990
🖨: 647-977-2748
📬: 7191 Yonge Street
Suite 505, Thornhill,
ON L3T 0C4

💻: www.SamAnsari.com

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27 Nov 2020

Updated: August 01, 2017

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