Avoiding Second Thoughts On A Second Property (NewsLetter)

We're in the height of the summer holidays – prime vacation time.  Is there a chance you might find yourself sitting on the dock of your rented cottage, daydreaming about one day owning your own vacation or retirement property?  Before making any impulsive decisions, make sure you discuss your plans with your real estate representative first.

If not a vacation home, perhaps you're thinking about purchasing an investment property, or even mulling over housing options for the upcoming school year that would accommodate your out-of-town, college-aged child while serving as a rental unit for his or her roommates.

To avoid the possibility of buyer's remorse later, it's important to first discuss your plans with a real estate representative who understands the particularities of different types of ownership issues for your specific circumstances, and who can advise you on issues that may not have applied to your primary property.

Scheduling an appointment with your bank or mortgage broker prior to getting caught up in the excitement of choosing a second property is also key, since borrowing guidelines are not necessarily the same for non-primary properties as they are for primary properties.

If you have any questions on today's real estate market – in regards to a primary property or a secondary one – please call today for a no obligation discussion.  It's always wise to do your research and get a clear understanding of all the issues surrounding different types of properties before making any decisions.

HGTV article by Gavin Chen (NewsLetter)

Don't forget to check out "Top 5 Renovations To Make Money On Your Condo" by Gavin Chen

Top 5 Renovations To Make Money On Your Condo

Selling In The Summer (NewsLetter)

Making buyers feel comfortable in your home is key to selling it, but that can be difficult when the mercury spikes.  Here are a few tips for showing your home during the hot, hazy days of summer.

• Make sure your home's temperature is comfortable.  Don't skimp on the air conditioning; if you have (quiet) fans, use them.  Have a friend visit and tell you if it's too hot, or even if you've overdone it on the A/C – you don't want buyers to rush through your home without getting a good look at it because they're uncomfortable.

• When the temperature rises, you probably keep your window coverings closed.  If you're tempted to keep them closed during showings too, to help keep things cool, don't: darkness doesn't do when selling your home.  It's natural light (and plenty of it) that buyers want, as well as appealing views.  So keep those window treatments open!

• Home-hunting is thirsty work any day of the year, but especially so during the scorching summer heat.  Leave some cold bottled water out for buyers, ideally in a decorative container full of ice, along with a note on some nice stationary reading "Help yourself!"  It's a small gesture, but one that buyers will really appreciate (and remember!) at this time of year.

• Many sellers bake before showings or even simmer cinnamon sticks for a welcoming aroma.  Opt for refreshing scents during the dog days of summer, and avoid the oven and stove.  Dab citrus essential oil on light bulbs or combine it with water to make a spray; run citrus peels through your garbage disposal or leave them in strategically placed bowls.

Fully Detached (NewsLetter)

Emotionally detaching from your home is key to remaining objective when setting your asking price and sitting at the negotiating table. Here's how to stop seeing your home as "your" place, and start seeing it as a product to be marketed and sold like any other.

Get packing. Start with the personal stuff: photographs, diplomas, trophies, kids' artwork, souvenirs, knick-knack collections, etc. With these things gone, it's easier for buyers to imagine themselves living in the space – and it's easier for you to picture them there, too. Besides, you'll have to pack these things up at some point anyway.

Redecorate – for buyers, that is. When your property's on market, its décor should appeal not to you, but to the greatest number of potential buyers: think neutral colors and subdued patterns on walls and floors. When it stops looking like your home, it stops feeling like your home – that's a step in the right direction for you and for buyers.

Adopt a show-ready lifestyle. While your home is for sale, you need to tweak your daily routine so as to be prepared for buyers' arrival at a moment's notice. That means making some rooms off-limits, taking the trash out every day, and making beds every morning, for example. With the change in routine comes the needed change in mentality.

Ask your real estate sales rep for a report on comparable sales – current sales of properties similar to yours in terms of square footage, number of bedrooms, number of bathrooms, etc. Seeing such a breakdown will help you to paint a picture of your home that's by the numbers rather than one that's drawn from emotion.

Market Remains in Balanced Territory (NewsLetter)

The Canadian Real Estate Association (CREA) continues to monitor the national real estate climate, and so far verifies that our overall housing market remains firmly in balanced territory.

CREA keeps track of the number of home sales processed through the MLS® systems of real estate boards and associations and other cooperative listing systems in Canada. CREA President Wayne Moen confirms, "There is little new to report about national sales activity, which continues to hold fairly steady at the lower levels first reached when mortgage rules were tightened in mid-2012." He adds, "That said, things are becoming more interesting among local markets, with improving sales in Vancouver and Toronto likely to come as something of a surprise to some. As always, all real estate is local, so buyers and sellers should speak to their REALTOR® to understand how the housing market is shaping up where they live or are considering to live."

Timely updates and market information are vital in today's real estate climate. In addition, a recent survey highlighted the need for specific conversations about affordability in today's market, with more than 63 percent of Canadians indicating a "major need" for more information about the financial details of buying a home. That figure rose to 70 percent for respondents between 18 and 29.

Remember that your one-stop information source about all things real estate is just a phone call away. Please call anytime with all of your real estate questions!

What's Up? Not Interest Rates! (NewsLetter)

Back in January of this year, the Bank of Canada announced that it would be keeping its key policy interest rate where it's been for more than two years – at one percent. This is positive news for would-be buyers in today's real estate market, especially in the midst of our active real estate season.

While the continued low interest rates may partially reflect a not-so-positive recognition that Canadian economic growth slowed more abruptly in the second half of 2012 than was previously anticipated, it is a silver lining for both first-time buyers contemplating buying real estate and current homeowners thinking about moving up in the market. What it is not, encouragingly, is a signal that the housing market is in trouble. In fact, Gregory Klump, Chief Economist with CREA, says history supports the notion that some sort of major event is needed to create a housing market collapse.

"In the late 1980s, it was a case of a spike in interest rates, in late 2008 and early 2009 it was a massive layoff," said Mr. Klump. "You need a massive and extended economic shock and none of that is in the forecast."

Of course, nobody definitively knows which direction our real estate market is heading towards, but these things are certain: there will always be movement in the real estate market, and real estate conditions can vary substantially from area to area.

Please call today for a personal, no-obligation review of your own housing plans!

Clutter Caution (NewsLetter)

Much has been said about the effects of clutter on homebuyers and home sales, but what about its effects on you and your everyday life? Most of us have a little clutter in our homes, which poses no threat to our quality of life, but for some, it can have a negative impact on our happiness and healthfulness. Here's how.


Stress and Other Negative Emotions 
Studies have shown that clutter can be a source of constant, low-grade stress, whether because it assaults the eye and brain with too much visual stimuli, resulting in feelings of "information overload", or because clutter is a visual reminder of the work you feel you should be doing – that is, cleaning up. Clutter can also engender feelings of lethargy, shame, hopelessness, and a loss of control over one's life and may be felt by the whole family.

Time and Money 
Clutter isn't just a psychic drain, it's a drain on your time and finances too. When you have a place for everything and everything is in its place, things are easy to find; when you live in clutter, you waste valuable time and energy every day looking for things – things that may be right in front of you, but obscured by clutter. A disorganized home can also cause us to waste money: we may not pay bills on time, or buy duplicates of items we "lost" or didn't realize we already had, for example.

Your Social Life 
Does the thought of having guests over send you into a tailspin of anxiety? Is getting ready for company an all-day event? Have you stopped inviting people over or making friends because you're embarrassed about your home? Are you habitually late for appointments because you're held up looking for things, causing conflict with friends and family? Or perhaps people have begun to treat you differently and are uncomfortable or avoid spending time in your home.

Living in the Past 
Holding onto "stuff" can be a way of holding onto the past. When we're tied down by the memories that are tied to our belongings, it's hard to move forward in life, to achieve our goals and address persistent problems. To put it in Feng Shui terms, "nothing new flows into your life until you make room for it". In other, more familiar words — out with the old and in with the new. Remember, you don't need to hold on to the item in order to hold on to the memory.

Safety and Sanitation 
Clutter can make a home difficult to navigate through, increasing the likelihood of trips and falls – something you especially want to avoid in homes with children or older adults. Speaking of children, clutter makes it easier for them to get their hands on things they shouldn't. It also makes it harder to keep your home clean, as it obscures surfaces and collects dirt itself, leading to excessive dust and perhaps mold, which is particularly problematic if anyone in your home has respiratory sensitivities.

Poker Tourney!

Hoping you can all join my Poker Event in April! Look forward to catching up with all my great clients and service providers. Cheers. Gavin

Average Selling Price Up in February

Average Selling Price Up in February
March 3, 2011 -- Greater Toronto REALTORS® reported 6,266 transactions through the TorontoMLS® system in February 2011. This result was 14 per cent lower than the record sales reported in February 2010.

While not representing a record, February 2011 sales were 50 per cent higher than the number reported in February 2009 during the recession and slightly higher than the average February sales over the previous ten years.

"Continued improvement in the GTA economy, including growth in jobs and incomes and a declining unemployment rate, has kept the demand for ownership housing strong," said Toronto Real Estate Board (TREB) President Bill Johnston.

The average selling price for February 2011 transactions was $454,423, which was more than five per cent higher than the average selling price reported in February 2010.

"Market conditions remain quite tight in the GTA. There is enough competition between home buyers to promote continued price growth," said Jason Mercer, TREB's Senior Manager of Market Analysis.

Median Price
Median Price In February, the median price was $379,000, from the $366,300 recorded during February of 2010.

2011 to be more stable: survey

Home sales in Toronto last year were disproportionately concentrated in the first half of the year, leading to some double-digit price hikes. Buyers rushed to beat anticipated mortgage rate hikes and, according to Royal LePage, many held a widespread misconception that the harmonized sales tax (HST), introduced in July, would be applied to the purchase price of a resale home.

The pace of sales slowed in the latter part of the year and year-over-year price rises were more moderate.

According to the Royal Le-Page House Price Survey and Market Survey Forecast, the average price of a standard two-storey home in Toronto rose 5.6% year-over-year to $594,321. The survey, covering the fourth quarter of 2010, notes that the price of a standard condominium rose 3.8% to $331,525 and the price for a detached bungalow increased 3.1% year-over-year reaching $481,733.

Looking ahead to this year's market, Royal LePage suggests there will be more modest growth in sales and prices.

"Much of that pent-up demand and the irrational exuberance [of the first half of 2010] has been sated," says Phil Soper, president and chief executive of Royal LePage Real Estate Services. "However, we continue to have the artificially low mortgage rates, which will likely cause people to want to get into the market in the earlier part of the year [ahead of expected mortgage rate rises]."

Mr. Soper says that lack of available homes for sale also pushed up prices and made the first half of last year very much a sellers' market.

"There'll be fewer homes sold [in 2011] in Toronto," Mr. Soper says. "Not a lot fewer, but we're projecting 5% fewer. It should be a less frenetic market overall...."

A broker in downtown Toronto says that while there may be more homes available for sale, buyers will still have to compete for that great home in a prime location.

"Ultimately, for the most desirable property in the best areas in central Toronto we are technically in a sellers' market, although we've seen some moderation," says Kevin Somers, broker and area manager with Royal LePage real estate services in Toronto. "For example, a prime property in Forest Hill or Rosedale or even Yonge and Eglinton might have drawn 10 offers in the spring market, but might have only had five or six or even four in the fall."

The expectation is that the Toronto housing market will become more balanced in 2011 but, Mr. Somers says, is unlikely to heavily favour buyers.

"The frenzied nature of the search is not as intense as it was. Buyers are taking a little bit longer to make up their minds and are doing a little bit more diligence," Mr. Somers says. "I would exercise a cautionary note for people to not get too excited about a dramatic shift in the balance in the market between buyers and sellers. It has been a very seller-driven market and a lot of buyers are very eager for change that has manifested itself in a lot of the country. But it might be a fair bit slower to have that happen here in central Toronto. As a result, they could run the risk of missing the boat relative to affordability and the right product for them."

Read more: http://www.nationalpost.com/related/topics/2011+more+stable+survey/4113301/story.html#ixzz1BbRxquQ4

Federal Government Changes Mortgage Financing Rules

Federal Government Changes Mortgage Financing Rules

January 17, 2011 -- The federal government has announced changes to mortgage financing rules for government-backed (insured) mortgages (less than 20 per cent down payment), which will affect maximum amortization periods, mortgage refinancing, and home equity lines of credit.

Details

The changes announced by the federal government include:

* Reducing maximum amortization period to 30 years, from 35 years.
* Lower the maximum amount Canadians can borrow in refinancing their mortgages to 85 percent, from 90 percent, of the value of their homes.
* Withdraw government insurance backing on lines of credit secured by homes, such as home equity lines of credit. This change would apply to Home Equity Lines of Credit that do not amortize over time (i.e. borrowers are not required to make regular payments on the principal amount of the loan). However, with established scheduled principal and interest payments, a loan will continue to be eligible for government-backed insurance, provided it meets the underwriting standards set by the mortgage insurer.

The changes to amortization periods and refinancing rules will come into force on March 18, 2011. The withdrawal of government insurance backing on home equity lines of credit will come into force on April 18, 2011. Exceptions would be allowed after the new measures come into force where they are needed to satisfy a binding purchase and sale, financing or refinancing agreement entered into before the corresponding coming into force dates.

December 2010 Market Watch Report

Third Best Year for Existing Home Sales

January 6, 2011 -- Greater Toronto REALTORS® reported 4,395 existing home sales for the month of December, bringing the 2010 total to 86,170 – down by one per cent compared to 2009.

"Market conditions were anything but uniform in 2010. We went from super-charged sales activity during the first four months of the year, to a marked drop-off in transactions in the summer and then in the fall saw sales climb back to levels that are sustainable over the longer term," said TREB President Bill Johnston.

"New Federal Government-mandated mortgage lending guidelines, higher borrowing costs and misconceptions about the HST caused a pause in home buying in the summer. As it became clear that the HST was not applicable to the sale price of an existing home and buyers realized that home ownership remained affordable, market conditions improved," continued Johnston.

The average home selling price in 2010 was $431,463 – up nine per cent in comparison to the 2009 average selling price of $395,460. In December, the average annual rate of price growth was five per cent.

"At the outset of 2010, we were experiencing annual rates of price growth at or near 20 per cent. This was the result of extremely tight market conditions coupled with the fact that we were comparing prices to the trough of the recession at the beginning of 2009," said Jason Mercer, TREB's Senior Manager of Market Analysis.

"Balanced market conditions in the second half of 2010 resulted in more moderate home price appreciation," continued Mercer. "Expect the average selling price to grow at or below five per cent in 2011. With this type of growth, mortgage carrying costs for the average priced home in the GTA will remain affordable for a household earning an average income."

Median Price
In December, the median price was $355,000, from the $349,000 recorded during December of 2009.

What's ahead for homes in 2011?

The year 2010 ended happily. It was one of the best years on record for home sales in the GTA, but market conditions were anything but uniform.

The Toronto Real Estate Board (TREB) reported 4,395 transactions in December 2010 -- down from December 2009's level of 5,541. The average selling price for these sales was $433,946 -- up 5% compared with December 2009. The December results capped off the third-best year on record for TREB, with total sales amounting to 86,170, just slightly off 2009's 87,308. The average selling price for 2010 as a whole increased by 9% to $431,463.

The outset of 2010 was characterized by extremely fast-paced home sales, with double-digit annual rates of growth for the first four months of the year. Because market conditions were tight, with sales accounting for a high percentage of listings, the average selling price grew at an annual rate of between 10% and 20% between January and May.

Jason Mercer, TREB's senior manager of market analysis, sheds light on 2010's super-charged start:

"The first four to five months of 2010 were a continuation of the strong housing market recovery that began in the second half of 2009. Low interest rates coupled with consumer confidence saw homebuyers coming off the sidelines," Mr. Mercer says. "It is also important to remember that at the beginning of 2010, we were comparing a strong recovery period to a period of recession at the beginning of 2009."

The situation changed markedly in the late spring and summer of 2010. Home sales were lower compared with 2009. The average selling price continued to grow, but at a slower pace. On a seasonally adjusted basis, sales dipped to their lowest level of the year in July. Mr. Mercer suggests a number of factors contributed to the changing market conditions.

"New stricter federally mandated mortgage lending guidelines and higher borrowing costs, especially for short term and variable mortgage products prompted some households to put their home-buying plans on hold," Mr. Mercer says. "Added to this were misconceptions about the application of the HST to resale housing. Initially, many would-be homebuyers incorrectly thought the HST would be applicable to the purchase price of a resale home. This, of course, was not the case.

"As we moved through the fall toward Christmas, market conditions improved once again in the GTA. Homebuyers began to understand the misconceptions around the HST and also realized that borrowing costs remained very low. The result was that home ownership remained affordable for the average household in the GTA," Mr. Mercer says.

We ended off 2010 on a positive note, with a high level of sales from a historic perspective and average price growth progressing at a more sustainable clip. As I think about what to expect in 2011, it is important to note that most commentators' outlooks for the economy and the housing market remain more positive than negative. As always, I'm sure we'll experience some unforeseen challenges, but, on balance, it feels as if the GTA market remains on solid footing.

- Bill Johnston is president of the Toronto Real Estate Board, a professional association that represents 30,000 realtors in the GTA.

Read more: http://www.nationalpost.com/related/topics/What+ahead+homes+2011/4113296/story.html#ixzz1B7EINf8v

Market Forecast 2011

Ontario home sales will rise by 5 per cent in 2011, while prices should hit a record high, according to a report on the state of the Canadian real estate market.

Central 1 Credit Union says a strong market in 2011 will also see housing starts increase by 9 per cent next year, in what has been the most bullish forecast for 2011 so far.

“An undersupply in the new home market will place upward pressure on resale home prices,” said Helmut Pastrick, chief economist with Central 1. “This will provide an incentive for builders to increase housing starts.”

Central 1 also expects house prices to increase by 4.5 per cent in 2011 to $356,500, up by 4.2 per cent.

The report is at odds with other economists who have forecast a far weaker housing market for 2011. It also underlines the difficulties that economists have in trying to read the volatile market moving forward.

While Central 1 says they expect housing starts to go up significantly in Ontario next year, hitting 66,000 units, the Canada Mortgage and Housing Corporation are forecasting that starts will decline to 55,000 units. The Toronto Dominion Bank is also calling for significantly lower starts of 47,000 units. The CMHC, like most other analysts is also expecting Ontario prices to remain flat or increase only slightly in 2011.

“The pace of job growth has started to cool, and we will likely see more cooling especially in the first half of next year,” said Ted Tsiakopoulos, Ontario regional economist for the CMHC.

“I’d say the momentum in Ontario real estate is in the other direction - activity has slowed,” said housing economist Will Dunning. “I would expect 2011 housing numbers in Ontario to be weaker than 2010.”

In order for housing starts, resale prices and sales to increase, you would have to see “a rapid pick up in job creation in Ontario which is not yet in evidence,” said Dunning.

However, the CMHC also released housing start figures for November on Wednesday which defied the expectations of most economists.

Toronto starts hit 51,100 seasonally adjusted and annualized units in November, up by 157 per cent from a month earlier. The stellar figure means starts are now 14 per cent higher this year than last year, and there is still one month to go.

The Toronto surge caught economists by surprise, pushing the national housing start figures to a much better than expected 187,200 units, representing an 11.6 per cent increase.

“The gain was almost entirely driven by a bounce in Toronto multi unit starts…the bigger picture continues to one of more moderate and stabilizing building activity,” said BMO Capital Markets economist Robert Kavcic.

While Ontario saw a massive increase in starts because of the Toronto market, most other provinces saw a decrease.

“Residential construction activity in November was making up for lost ground in October with strong increases in apartment and town home segments of the market,” said Tsiakopoulos. “However, it is unlikely that this above trend pace will be sustained.”

Slower job growth, less first time buyer demand and more choice in resale markets will temper any increases over the short term, said the CMHC.

“The rapid pace of sales earlier this year has resulted in strong starts for November,” said Ontario Home Builders’ Association president Bob Finnigan.

And despite the upbeat tone of the Central 1 report, Ontario builders are not gearing up for a record year.

“Looking forward to 2011 we are anticipating the housing market to level out with a moderate pace of activity,” said Finnigan.

Finnigan said home builders are pushing for the government to focus on job creation in 2011.

“We are watchful of the job market, because employment is a key indicator of economic health and something that could dampen performance in the coming year.”


December 8, 2010 in Toronto Real Estate Forecast

New Rules for Lending Tightening

As Federal finance Minister Jim Flaherty announced new rules Tuesday aimed at preventing homebuyers from getting into financial difficulty when mortgage rates rise.

After consulting with major Canadian lenders, Flaherty outlined the latest weapons at Ottawa's disposal aimed at removing some of the speculative froth in the housing market.

"There is no evidence of a housing bubble, but we're taking prudent steps today to prevent one," he said at a news conference in Ottawa. "If some lenders aren't willing to act themselves, we will act."
Federal finance Minister Jim Flaherty has announced new rules aimed at preventing homebuyers from getting in over their heads with mortgage debt.Federal finance Minister Jim Flaherty has announced new rules aimed at preventing homebuyers from getting in over their heads with mortgage debt. (Pawel Dwulit/Canadian Press)

Broadly speaking, the plan unveiled has three components.

First, Ottawa will require that all borrowers meet the standards for a five-year fixed-rate mortgage, even if they choose a variable mortgage with a lower rate or a shorter term.

"This will guard against higher rates in the future," Flaherty said.

Second, the rules would lower the maximum Canadians can withdraw when refinancing their mortgages to 90 per cent of the value of their home, from 95 per cent.

And finally, Ottawa will now require a minimum 20 per cent down payment to qualify for CMHC insurance for non-owner-occupied properties purchased as an investment.

The last rule is aimed at reining in would-be real estate speculators who own multiple properties beyond their primary residence.

"We want to discourage the tendency some people have to use a home as an ATM, or buy three or four condos on speculation," Flaherty said.
Minimum down payment unchanged

There had been speculation the Department of Finance might implement legislation raising the minimum down payment from five to 10 per cent of a home's value, or reduce the maximum amortization period from 35 years to 30 years.

Those measures were not part of Flaherty's announcement Tuesday, but all options are still on the table should circumstances change, Flaherty said.

The adjustments to the mortgage insurance guarantee framework, to be implemented as of April 19, 2010, are not likely to revolutionize the industry. Indeed, current policies at some large Canadian lenders are similar to the first peg of Flaherty's plan.

After Tuesday's announcement, the Bank of Montreal noted that it already requires its high-ratio borrowers to be able to qualify using the five-year rate. And all banks currently test all mortgage applicants on a three-year fixed-rate mortgage rule, Toronto-Dominion bank says.
People walk past new homes that are for sale in Oakville, Ont., in April. Finance Minister Jim Flaherty introduced new rules designed to rein in the real estate market Tuesday.People walk past new homes that are for sale in Oakville, Ont., in April. Finance Minister Jim Flaherty introduced new rules designed to rein in the real estate market Tuesday. (Nathan Denette/Canadian Press)

"While we do not believe that Canada faces a housing bubble, we fully support the minister's actions," Bank of Montreal said in a release. "Given the prospect of higher interest rates and the recent run-up in housing prices in some markets across Canada, the measures announced today are prudent."

"This is a little bit late in telling Canadians we need to be more cautious in taking out a mortgage," RBC Global Asset Management chief economist Patricia Croft said in reaction to Flaherty's announcement.

Though she stopped short of calling Canadian real estate in bubble territory already, she said the April 19 date for implementation is actually likely to cause more short-term stimulation of the market, as people scramble to get in under the deadline.

"If you wanted to buy a house, wouldn't you now do it before April?" Croft asked. "It's even more evidence that house prices are going to cool down later this year."

In terms of the impact on real estate buyers, the policy change will have an effect on a large portion of new buyers, TD Bank deputy chief economist Craig Alexander said in a report Tuesday. "Perhaps a quarter of all new mortgage originations might be influenced," he said.

The requirement that all buyers are held to the five-year fixed-rate standards will be particularly important, Alexander said. Based on the average home price of $337,000, a buyer with only five per cent down would require roughly $9,200 more in annual income to qualify under the new rules, he estimated.

For its part, the Canadian Association of Accredited Mortgage Professionals says it supports the amendments, calling them preventative measures against possible future risk.


(as quoted from CBC news)(newsletter)

Lending tightening in Canada?

Lender opposes clampdown to rein in mortgage borrowing
February 12, 2010


Gavin's Review:

I believe they will just increase credit ratings necessary and shorten amortization. I feel increasing the min. downpayment would contract the market too much, and that they will be unwilling to do so. Keep in mind that we have a very small sub prime market, and that all owners have equity in the property and proper credit and employment, versus the US market of past.


Dana Flavelle
BUSINESS REPORTER

In a bid to allay fears about a potential U.S.-style housing bubble, Ottawa is considering proposals that would make it tougher for Canadians to borrow to buy a home.

The proposals include raising the minimum down payment and shortening the maximum amortization period (the time it takes to pay off the entire loan), according to the country's sixth-largest mortgage lender.

There have been talks between various banks, the federal finance department and Canada Mortgage and House Corp., said Peter Aceto, president and chief executive of ING Direct Canada.

"There are some concerns because of what's going on with real estate, in terms of rapidly increased property values and the theory they're being fuelled by very low interest rates, that a bubble is being created similar to what happened in the U.S.," Aceto said in an interview Thursday.

Federal Finance Minister Jim Flaherty "is actively monitoring the housing market," a spokesperson said in a statement. "There is no clear evidence now of a housing bubble in Canada."

Aceto said ING opposes new mortgage limits because it would cut some creditworthy people out of the market.

"Why should Minister Flaherty be the one to change the rules? Why can't lenders just act responsibly? Speak with their customers and help them make decisions in the best interests of them in the longer term."

But TD Canada Trust president and CEO Tim Hockey said although evidence of a housing bubble is in doubt, Canadians are becoming more indebted at a faster-than-normal pace due to low interest rates.

"It's worth exploring ways to moderate that growth by putting policies in place now as a way of protecting consumers from the effects of anticipated higher rates," Hockey said.

The Canadian Bankers Association said in a statement that it "has not been lobbying the government about proposals that would restrict mortgage lending by raising the down payment and lowering the amortization period."

In the Greater Toronto Area, where the average price of an existing home in January hit $409,058, up 19 per cent compared with a year ago, a minimum 5 per cent down payment would cost an average of $20,452. If the minimum were raised to 10 per cent, the average downpayment would double to $40,905.

Shortening the amortization from the current 35-year maximum to 30 years would boost the average monthly payment by $149 to $1,714.08, assuming a five-year open variable mortgage at 3.05 per cent interest.

(newsletter)

Toronto existing home sales skyrocket 87 per cent

Toronto existing home sales skyrocket 87 per cent
February 3, 2010 Tony Wong

More on Real Estate
What they got Jan

The January real estate market started 2010 at full gallop, with sales up 87 per cent from the year before, according to figures released today.

There were 4,986 existing home sales in January, compared to 2,670 sales the year before when sales hit an all-time low for the month, according to a report by the Toronto Real Estate Board.

“The Greater Toronto Area home market has rebounded well from the lows in sales experienced at the beginning of 2009,” said Tom Lebour, president of the board.

Placed in perspective, this January’s sales were slightly higher than the January average in the years preceding 2009 when the economy faced recession.

The average price of a home this January hit $409,058, up 19 per cent compared with $343,632 in the same month last year.

TREB warned comparisons to last year will continue to be extreme in the first quarter of this year as “we continue to make comparisons to weak market conditions at the beginning of 2009.”

Jason Mercer, senior manager of market analysis for TREB said sales and price growth is expected to be slower in the second half of this year.

Fed buys up $25 million in Mortgages

THE CANADIAN PRESS

OTTAWA–Finance Minister Jim Flaherty has announced government measures aimed at stabilizing the country's troubled lending industry – measures he predicts will prod banks to further lower their lending rates.

Flaherty says the Canada Mortgage and Housing Corp. will take steps to maintain the availability of longer-term credit by purchasing up to $25 billion in insured mortgage pools.

He says the move will ease some of the pressure on banks and other lending institutions caught in the global credit crunch, thus making loans and mortgages more available and affordable to Canadians.

Flaherty says the program is an "efficient, cost-effective and safe way to support lending in Canada that comes at no fiscal cost to taxpayers."

The finance minister says Canada's banks and financial institutions remain "sound and well-capitalized, and less-leveraged than their international peers."

He says the mortgage system is also sound – Canadians have smaller mortgages relative to the value or their homes and household incomes than Americans.

But he says it's becoming increasingly clear that what he described as the severe, protracted and growing disruption of global credit markets has made it more difficult for Canadian financial institutions to raise long-term funding.

And he says that's beginning to affect the cost of mortgages and other loans in Canada.

Canada Banks #1

Thu Oct 9, 2008 4:40am EDT
CANBERRA (Reuters) - Canada has the world's soundest banking system, closely followed by Sweden, Luxembourg and Australia, a survey by the World Economic Forum has found as financial crisis and bank failures shake world markets.

But Britain, which once ranked in the top five, has slipped to 44th place behind El Salvador and Peru, after a 50 billion pound ($86.5 billion) pledge this week by the government to bolster bank balance sheets.

The United States, where some of Wall Street's biggest financial names have collapsed in recent weeks, rated only 40, just behind Germany at 39, and smaller states such as Barbados, Estonia and even Namibia, in southern Africa.

The United States was on Thursday considering buying a slice of debt-laden banks to inject trust back into lending between financial institutions now too wary of one another to lend.

The World Economic Forum's Global Competitiveness Report based its findings on opinions of executives, and handed banks a score between 1.0 (insolvent and possibly requiring a government bailout) and 7.0 (healthy, with sound balance sheets).

Canadian banks received 6.8, just ahead of Sweden (6.7), Luxembourg (6.7), Australia (6.7) and Denmark (6.7).
UK banks collectively scored 6.0, narrowly behind the United States, Germany and Botswana, all with 6.1. France, in 19th place, scored 6.5 for soundness, while Switzerland's banking system scored the same in 16th place, as did Singapore (13th).

The ranking index was released as central banks in Europe, the United States, China, Canada, Sweden and Switzerland slashed interest rates in a bid to end to panic selling on markets and restore trust in the shaken banking system.

The Netherlands (6.7), Belgium (6.6), New Zealand (6.6), Malta (6.6) rounded out the WEF's banking top 10 with Ireland, whose government unilaterally pledged last week to guarantee personal and corporate deposits at its six major banks.

Also scoring well were Chile (6.5, 18th) and Spain, South Africa, Norway, Hong Kong and Finland all ending up in the top 20.

At the bottom of the list was Algeria in 134th place, with its banks scoring 3.9 to be just below Libya (4.0), Lesotho (4.1), the Kyrgyz Republic (4.1) and both Argentina and East Timor (4.2).

RANKINGS
1. Canada
2. Sweden
3. Luxembourg
4. Australia
5. Denmark
6. Netherlands
7. Belgium
8. New Zealand
9. Ireland
10. Malta 11. Hong Kong
12. Finland
13. Singapore
14. Norway
15. South Africa
16. Switzerland
17. Namibia
18. Chile
19. France
20. Spain
--------------------------------------------
124. Kazakhstan
125. Cambodia
126. Burundi

Kitchen Fix- ups that won't break the bank!

Quick and easy kitchen fix-ups that won't break the bank.

If your kitchen is looking a bit blah, there are lots of ways to spruce it up without breaking the bank -- or taking on a full renovation. Here's a rundown of ideas, all of them under $100, which will help to cheer it up.

1 Paint is one of the most versatile decorating tools there is. Painting the walls in a lovely new colour will do a lot to lighten and brighten, but don't stop there. Repainting the cabinets can completely transform your look -- after all, cabinetry takes up most of the wall space in many kitchens. Melamine paint is best for kitchen cabinets, since it's tough, easy-to-wash and can be tinted any colour you like, and it's now available in easy-to-use latex formulations. Some types of flooring, such as wood and sheet vinyl, can also be painted.

2 Change the backsplash. Peel-and-stick mirror tiles are available at most building stores, for an instant brightener. Ceramic subway tiles are another trendy backsplash look that's surprisingly easy to do, especially if you can adjust the design to avoid having to cut them. (If you want or need to cut tiles, you can rent a tile cutter at a rent-all store.) Ceramic tile is also a great do-it-yourself way to update worn-out counters.

3 Make a shirred café curtain for your window. Cut a piece of pretty sheer fabric, half the height of the window plus 2 inches for hems, and 1-1/2 times the window width. Sew 1” hems on all four sides and thread it onto an adjustable curtain rod. Mount rod across the centre of the window, leaving the top half of the window bare.

4 Thin slatted blinds in wood or PVC make a clean-looking (and easy-to-clean) kitchen window covering. Wood blinds have the added advantage that you can paint them to match your colour scheme.

5 Change all the cabinet and drawer hardware. You can get all kinds of great designs, from forks and knives to sophisticated modern looks.

6 Change the faucet. Many of the new looks are specially designed for do-it-yourself installation, using just basic tools, and there are many styles to choose from that cost less than $100.

7 Add new mouldings. For instant elegance, new crown mouldings, chair rails or beefed-up baseboards (either to replace existing skinny ones, or added as an extra course above them) are another done-in-a-day job. For a glamourous look, you can also add crown mouldings to the tops of plain cabinets. Nowadays, some types of mouldings feature premitered corners, removing the trickiest aspect of the job.

8 For a low-cost mood lifter, simply treat yourself to new tea towels, oven mitts, and potholders in a bright colour or cheery pattern.

9 Update your accessories with stylish new ones. Canisters in graduated sizes, a tall pottery jar filled with wooden spoons and cooking utensils, or a beautiful antique breadbox are lovely additions for your countertop. Add a few hanging plants for a fresh look.

10 Finish a wall with a beautiful framed posters that coordinates with your kitchen scheme, or create a vignette with a series of frames from an art or photo supply store, filled with family photos or pictures taken from an old botanical calendar. If the frames are unfinished, paint them in your signature colour palette.