A Little Help to Purchase Your First Home!

• The ability to withdraw up to $25,000 from a RRSP for a downpayment, interest and tax free. (A couple can draw out a total of $50,000). Talk to your bank for more information.
• A $750 First-Time Home Buyers Credit that can help with closing costs.  
• Qualifying first-time buyers may be exempt from paying the BC Property Transfer Tax of 1% on the first $200,000 and 2% of the remainder of the purchase price of a home priced up to $425,000. There is a proportional exemption for homes priced up to $450,000.
• The BC Home Owner Grant, which helps reduce property taxes by up to $570 with the basic grant and a further $275 for those who qualify.

You qualify as a first time home buyer for the Property Transfer Tax  if:

• you are a Canadian citizen, or a permanent resident as defined by the Immigration and Refugee Protection Act (Canada),
• you have lived in British Columbia for 12 consecutive months immediately before the date you register the property, or you have filed 2 income tax returns as a British Columbia resident during the 6 years before the date you register the property,
• you have never owned an interest in a principal residence anywhere in the world at any time (a principal residence is the usual place where an individual lives), and you have never received a first time home buyers’ exemption or refund.
• the fair market value of the property (land plus improvements) is not more than the qualifying value of $425,000 (only if purchasing an existing home),
• the land is 0.5 hectares (1.24 acres) or smaller, and
• the property will only be used as your principal residence.

• Maximum amortization reduced to 30 years from 35 years.
• Maximum refinancing limits reduced to 85% from 90%.
• No more ability for lenders to receive mortgage insurance on lines of credit (beginning April 18th).

More details regarding these changes will no doubt trickle out over the next few days. Although the first two points are directly aimed at high ratio financing involving the mortgage insurers it will be interesting to see if any lenders eliminate 35 year amortizations even on conventional financing deals.

Take note that CMHC purshases with 5% down are not affected by these rules because a purchase is treated differently than a refinance. There was substantial concern in the industry that the government was going to increase minimum downpayment requirements from the current 5% level to possibly as high as 10%. Thankfully, this didn't  happen although it may down the road.

Dropping...

Baby Steps...

Little Change This Week...

No Surprise Hikes.

Not much movement with interest rates this week. All lenders raised their prime rate last week with the Bank of Canada...but we were all ready for that move. The bond market has left room for lenders to bring down their longer term rates. The 5 year rate could come down by another .5%. The Banks are charging 4.49% for their 5 year rate while others are willing to discount further. Low rates are here for awhile longer. Still a great time to keep floating!

New Mortgage Standards to Begin April 19th.

Tuesday, February 16, 2010 - Globe an Mail Report on Business

• A minimum down payment of 20 per cent will be required for government-backed insurance on properties not lived in by their owners, up from 5 per cent. “This measure is likely aimed at tempering speculative buying of real estate by reducing the leverage available to buyers,” Mr. Alexander said. “It will, however, also impact individuals buying real estate for investment purposes more generally, including those looking for rental properties. In rough ballpark terms, the change might impact about 5 per cent to 15 per cent of new mortgage originations.”

Scotia Capital economist Derek Holt, noting that the market alone would have cooled things down, said the biggest move that could affect prices is the one on qualifying, which would kick out many potential buyers. “The mortgage rule changes raise the odds of lower house prices into the back half of 2010 and into 2011,” Mr. Holt said. “… I think house prices were going to fall because of market mechanisms, but today's rule changes add further pressure in that regard.”

Eric Lascelles, TD Securities chief economics and rates strategist, projected “some extreme volatility” in the housing market in the short term as home buyers rush to beat the April 19 date. After that, he said, activity could “crater” because so many buyers moved up their purchases. Over all, Mr. Lascelles said, “the economic implications of this rule change are unlikely to be severe, and we expect the housing market to slow its ascent without crashing back down to earth.”

Buyer Demand Remains Strong While Home Listings Increase

Greater Vancouver home sales remained strong last month, with the second highest number of residential sales ever recorded for the month of September.

“As homes sales in Greater Vancouver continued at an elevated pace in September it’s encouraging to see that more homes were listed on the MLS® in the month than any other so far this year,” Scott Russell, REBGV president said.

“During this period of renewed demand in our marketplace, home values have gradually recovered from the declines that occurred in 2008,” said Russell.

Since the beginning of the year, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver has increased 13 per cent to $547,092 from $484,211, while home prices compared to Septembers 2008 levels are up 1.6 per cent.

Market Conditions Drive Strong June Housing Sales!

VANCOUVER, B.C. – July 3, 2009 – The combination of low interest rates and more affordable pricing helped propel Greater Vancouver home sale numbers to the second all-time highest total for the month of June.

New listings for detached, attached and apartment properties declined 17.9 per cent to 5,372 in June 2009 compared to June 2008, when 6,546 new units were listed. However, new listings increased 13.5 per cent from May to June of this year. Total active listings in Greater Vancouver currently sit at 13,252, down 27 per cent from June 2008 and 2.9 per cent below the active listings count at the end of May 2009.

“Price reductions and low interest rates have created an improvement in affordability, which is causing the number of sales to rise to levels comparable to 2003 to 2007,” Scott Russell, REBGV president said.
 
“Many people who were reluctant to purchase a home last fall and earlier this year are returning to the market because they see conditions that appeal to their personal and financial needs,” Russell said. “However, the current marketplace is such that buyers are more inclined to walk if they don’t like the terms of an offer.”

Bright spots in Greater Vancouver in June 2009 compared to June 2008:

Detached

• Burnaby up 109.7 per cent (151 units sold from 72)
• Coquitlam up 122.2 per cent (160 units sold from 72)
• Delta - South up 107.7 per cent (56 units sold from 27)
• Maple Ridge/Pitt Meadows up 54.3 per cent (162 units sold from 105)
• New Westminster up 104.8 per cent (43 units sold from 21)
• North Vancouver up 96.2 per cent (153 units sold from 78)
• Port Moody/ Belcarra up 120 per cent (33 units sold from 15)
• Richmond up 77.4 per cent (204 units sold from 115)
• Squamish up 107.7 per cent (27 units sold from 13)
• Sunshine Coast up 33.9 per cent (75 units sold from 56)
• Vancouver East up 71.2 per cent (238 units sold from 139)
• Vancouver West up 85.2 per cent (200 units sold from 108)
• West Vancouver/Howe Sound up 117.8 per cent (98 units sold from 45)

Attached

• Burnaby up 81.8 per cent (140 units sold from 77)
• Coquitlam up 80 per cent (54 units sold from 30)
• Maple Ridge/Pitt Meadows up 48.6 per cent (55 units sold from 37)
• North Vancouver up 121.2 per cent (73 units sold from 33)
• Port Coquitlam up 82.6 per cent (42 units sold from 23)
• Port Moody/ Belcarra up 77.3 per cent (39 units sold from 22)
• Richmond up 84.5 per cent (155 units sold from 84)
• Vancouver East up 118.5 per cent (59 units sold from 27)
• Vancouver West up 121.8 per cent (122 units sold from 55)

Apartments

• Burnaby up 60.4 per cent (239 units sold from 149)
• Coquitlam up 93.9 per cent (95 units sold from 49)
• New Westminster up 57.1 per cent (121 units sold from 77)
• North Vancouver up 71.4 per cent (120 units sold from 70)
• Port Coquitlam up 58.1 per cent (49 units sold from 31)
• Port Moody/Belcarra up 128.6 per cent (48 units sold from 21)
• Richmond up 54.1 per cent (225 units sold from 146)
• Vancouver East up 58.7 per cent (165 units sold from 104)
• Vancouver West up 87.2 per cent (627 units sold from 335)
• West Vancouver/Howe Sound up 155.6 per cent (23 units sold from 9)