Purrfect Properties Blog

Archive for November, 2016

Will the Foreign Investor Tax Help You Buy Property?

Wednesday, November 23rd, 2016

If you’ve been watching the headlines, you’ll know that there is a lot of frustration with regards to two large Real Estate Markets in Canada.  One is Vancouver and the other is Toronto.  Recently the BC Government introduced a 15% Foreign Investor tax on property purchasers in B.C.  Christy Clark can be heard saying ‘that is the impact we wanted to have.’  To cool their Red Hot real estate market and that’s just what they did. According to data released by the B.C. government, billions of dollars in Metro Vancouver real estate deals dried up and almost overnight.

In fact, on the last day before the changes came into effect, 55% of all purchases were done so by foreign investors.  Probably some good, but most likely moreso just more buyers to add frustration into an already highly overinflated market area, where the regular Canadian cannot afford to buy a home. Instead, these homes sit vacant and derelict, causing rental and property prices to rise. It’s great what B.C. did, but did you know that China took action against B.C. and their politics first?  That’s right, China said they were going to come to Canada and sue to get their money back.  It is unprecedented and has been put forth to show an example to their own citizens.

The Chinese plaintiffs are asking B.C. judges to enforce monetary judgments awarded in Chinese courts. These Chinese rulings typically involve people found in China to have defrauded Chinese banks or business partners and then fled to Canada with the money and invested in real estate here. Billions of dollars of bank faud proceeds are alleged to be invested in BC, while Lawyers in Vancouver say they are seeing a substantial increase in B.C. court cases filed by Chinese companies seeking to seize real estate assets from Chinese immigrants in B.C.

Perhaps B.C. didn’t want all the attention they were getting, as they decided to help China and Canadians out by adding another tax to your total when buying in B.C.  The Greater Vancouver Real Estate Board revealed the number of homes being sold had dropped significantly and prices had stalled since it came into effect.  See below:

In the end, China coming in to sue for recovery of money will show some foreign investors that if they would like to own property in Canada, they should do it with their own money.  A wee ocean isn’t that much to cross to get back a few million.  The changes to mortgage loan values, as well as the vacancy tax starting in January for Vancouver, all help Canadians such as you and I buy and keep our properties.  Canadians who had to work for their millions and mansions. Right on China, Right on B.C.

Now that’s the Cats’ Meow in Real Estate.

Room for your Family to Grow in Gibbons

Wednesday, November 16th, 2016

CAN YOU HELP MY MILITARY CLIENTS SELL THEIR HOME IN GIBBONS?

Shout out to all Gibbons Pinners, can ou share this on your feed?

#smalltownpride

4006 51 Street in Gibbons Alberta

There’s ROOM TO GROW in this 5 Bedroom, 2 Full Bathroom – 1879 ft2 TOTAL living space FAMILY home located in the charming town of Gibbons and close to the Industrial Heartland. Open the Door to your Family friendly living room featuring a lovely bay window, parquet flooring, and updated dinette kitchen. UP a few stairs are 3 BEDrooms and an updated 4-PC Bath. Down a few stairs are 2 more bedrooms, laundry room, 3-PC Bath and a Family Room with Fireplace that’s tucked out of sight. Out the side door, down the pathway, past the shed to the double garage. Convenient, back lane access and lots of street parking. A great place for your FAMILY to call HOME.

Courtesy of Purrfect Properties and Remax Real Estate

Now that the elections over, let’s talk about that crazy mortgage change!

Thursday, November 10th, 2016

Hi Folks,

This isn’t the greatest news you’ve heard but it’s worth taking a look at.  Recently the Minister of Finance, Bill Morneau, announced four major changes to Canadas’ housing rules.  These changes mainly address concerns on foreign buyers and the high debt of middle class families over housing affordability.  In general, these new mortgage changes are going to decrease the buying power of Canadians by about 20% on every price range. Check out the chart below to really see the differences we are talking about here.

What this means, is that before you go to sell your house, or buy one for the first time, please understand that your champagne wishes may have to recede to your beer budget.  For example at the average annual income of $80,000, without debts and with 5% down payment – your buying power has decreased by almost $100,000.  $91,690 to be exact.  That’s a huge difference and it is directly within the average price range of Edmontonians and their families – sure to affect housing prices in the future.

Worse, is the average person needed about $220,000 to get their family in a townhouse condo (2 storey style) in our market.  This price range has suffered about a $50,000 drop in loan amounts which means buying an entry level townhouse condo is going to be even more hard.

There is a very fine line when you are deciding to buy a property for the first time.  Often a buyer just doesn’t have the down payment to complete the purchase.  Rising house prices make down payments more difficult to obtain.  Mortgage changes make loan applications more difficult to be approved.  Mortgage insurance groups reduce the availability of loans by capping qualification ranges.  Everything is always changing and a person is always subject to those changes.  Most of the time however, it gets more and more difficult to get that approved loan.  So buy when you can, get into home ownership while you are approved and look forward to the gains you can make over the long period.  Real Estate is not instant, nor is it easy to off-load in an emergency.

Shadow banking is most likely set to increase with the changes to regular lending.  Borrowers unable to secure tradition financing sources, will look to alternate sources, many of which are unregulated and outside of federal banking rules.  Uninsured loans at interest rates typically much higher than those provided by banks.

Change #1 – Effective October 17, first time home-buyers with mortgages inured by the CMHC will now undergo a more severe stress test to ensure buyers can still pay for their loan even if the interest rates go up.  This means consumers have less purchasing power.

Change #2 – Starting November 30, new restrictions will be imposed by the government on providing insurance for low-ratio mortgages.  The new criteria will include amortization period of 25 years or less, purchase price of less than $1 Million, the buyers credit score is 600 and the property should be owner-occupied.  This measure is targeted for Vancouver and Toronto markets.

Change #3 – New reporting rules for the primary residence capital gains exemption. The sale of the primary residence must be reported to Canada Revenue Agency.  This measure is to prevent foreign buyers from flipping houses and falsely claiming the tax exemption.

Change #4- The government is launching a public consultation paper on proposals for lenders, such as banks, to take additional risks in the event the insured mortgages go into default, which could mean higher mortgage rates for buyers.

All in all, before your renewal, before moving or before buying it would be advantageous to talk to a trusted mortgage professional about these recent changes and how you will be affected in the future.   If you need to speak with a trusted professional about how you are affected, please do not hesitate to contact me, I would be pleased to let you know who I am recommending these days.

Talk to a professional, contact me today.

The bottom line shows a seasonal down shift of the market.

Wednesday, November 9th, 2016

Edmonton Real Estate Market Reports for November 2016

It’s amazing how the year is almost ending and the holiday season is just a month away.  These days we are kept busy with our winter and early holiday preparation. The real estate market is also experiencing a lot of movement and changes with the governments announcement of the new motgage rules on October 3rd.  We recommend you read our next blog on these recent changes in order to better understand where you stand in the market today.

We remember on November 11, 2016.

The highest compliment you can give me is to recommend me to your friends and family who might be needing some real estate help. Thank you for your referrals!

EDMONTON MARKET REPORT for November

*stats as of October 31, 2016

Last October (2015) we had 2,272 new listings come on the market and a total of 6,641 properties for sale.  This October 2,147 new listings appeared for a total of 7,215 homes on market. This is continuing last years trend with an abundance of properties for sale, and 5.70 months of inventory.

Last October (2015) a total of 1,284 homes sold in the Edmonton area.  This October 1,265 SOLD.  About the same number of sales.

Average Days on Market – 61, last year we were at 56 days, compared to last year homes are selling 8.20% more slow

Odds of Selling -17.53%,  1,265 out of 7,215 listed, down 9.12% from last year, down 5.32% from last month

Average Selling Price:

     Condo Apartment: $245,698

     Condo Townhouse: $332,565

     Single Family Dwelling: $432,755 and the

Average selling price in the City of Edmonton is $364,004.

Down 6.4% from last year and 2.48% less than last month.

Home Sales by Price Range: The highest percentage of properties are and have the tendency in Edmonton to sell in the $300,000-$399,999 price range, and this year 34.37% of homes have sold in this price range. Second position goes to the $400,000-$499,999 price range at 20.40%.  Third place is the $200,000-$299,999 and 20.39%. These haven’t changed very much from month to month as this works in with Edmonton average earnings per family.  It may soon drop a bit with the recent changes to mortgage rules.

54 Years average of price increase for the City of Edmonton is 6.86%.

Prices have gone up for this year by 0.32%. A small reduction in the high end luxury market in Edmonton, in comparison to what is going on in the rest of our province.

Want market information about listings in your area or a free market anaylsis for your home?  Sign up here.

To download your full copy of this report – click here.

Edmonton Real Estate Market Reports November 2016

5 BEDroom Home in Gibbons – just reduced to $268,800

Thursday, November 3rd, 2016

MLS® E4041684 – Just reduced to $268,800 from $278,800

There’s ROOM for your family TO GROW in this 5 Bedroom, 2 Full Bathroom – 4 Level, Back Split located in the charming town of Gibbons and close to the Industrial Heartland. Open the Door to your Family friendly living room featuring a lovely bay window, parquet flooring, and updated dinette kitchen. UP a few stairs are 3 BEDrooms and an updated 4-PC Bath. Down a few stairs are 2 more bedrooms, laundry room, 3-PC Bath and a Family Room with Fireplace that’s tucked out of sight. Out the side door, down the pathway, past the shed to the double garage. Convenient, back lane access and lots of street parking. A great place for your FAMILY to call HOME. Seller discloses garage roof needs shingles.