Tag: home financing Canada

Rom’s Kelowna Real Estate Opinion January 2020
Kelowna Real Estate Opinion for Jan 2020

We are well into the swing of things for 2020. I hope you are continuing on with any resolutions and visions you set for yourself for 2020! It’s never too late to get back on track. For this months opinion, I will start off with a couple of real estate definitions:
- Market Correction: A downward trend with prices, absorption and sales reducing, and inventory and DOM (days on market to sell) increasing
- Market Recovery: An upward trend with prices, absorption and sales increasing, and inventory and DOM (days on market to sell) decreasing
One of the important differences when comparing the Real Estate Market to the Stock Market is that the Stock Market is global and the Real Estate Market is local. The old phrase, “location, location, location” is not only important in real estate. It causes a lot of misunderstandings with ‘experts’ who try to predict the Real Estate Market (including a lot of realtors). The press will grab onto anything that looks radical in the market. Then they report without a lot of reference to the relevance of the information or the differences in the various locations. The problem is that the public gobbles up whatever the press feeds them. This problem is relevant in the Real Estate statistics in the Okanagan right now.

Current Okanagan Situation

Currently, when we look at the statistics, the Okanagan is in recovery mode. Around the third quarter of 2019, it started to shift from a slight correction to a slight recovery. Here in the Central Okanagan, there was a bit of a lag for the last couple of years. We have a larger economy than some surrounding markets. Therefore, it was building up rebound pressure. We are now seeing a positive market bounce back! It will be interesting to watch as we proceed through 2020 if this trend continues. I expect big markets like Vancouver and Toronto will continue to recover. This means for the Okanagan that we will be in a very gradual recovery trend for the next couple years.

As always, this is just the Real Estate World according to Rom.
February 17, 2020
Rom’s Kelowna Real Estate Opinion December 2019

December 2019 Kelowna Real Estate Report:

*Click the images to enlarge

Kelowna Real Estate Opinion for Dec 2019

Welcome to a new decade! Last month, I did a year in review for 2019 and made some predictions for the new year. Now, lets get into the full swing of 2020!

There is something interesting going on in the market right now! We weren’t sure about it until we had a full year of stats to compare. If we compare the averages and totals of all of 2019 to all of 2018, it shows what I saying last year. The market is in a soft correction. Inventory is up in the Okanagan area. Absorption, prices and sales are down slightly, compared to 2018. However, here is the cool part. When we compare the second half of 2019 to the second half of 2018, the trend is upwards.

What does that mean?

It means that about half way through 2019, the market started to shift from a very slight correction (Down Market) to a very slight recovery (Up Market). If you remember, half way through 2019 I said there are some positive forces coming into the market that should make a difference in 2020. These positive forces reflect the introduction of the first time buyer program from CMHC, interest rates at record lows again and Vancouver and Toronto – our 2 biggest economies – are in recovery again. Home sales in Vancouver rose 5.2%. This makes it a great time to sell your home in Kelowna as many Vancouverites are making the move to the Okanagan.

As expected, these forces are making a difference and we are starting to see that in the stats. 2019 was a relatively balanced year in the Okanagan, with a slight downturn. 2020 will be a relatively balanced year with a slight upturn. As always, this is just the Real Estate World according to Rom.

January 15, 2020
Emigration Expo 2020

Emigration Expo 2020 in The Netherlands!

I am excited to share that I will once again have at booth at the Emigration Expo in Europe! This is a great opportunity to go overseas and promote the amazing lifestyle we live here in Kelowna. Do you have a home or business for sale and want to promote it internationally? Contact me today and we can set up a meeting to discuss.

What is the Emigration Expo?

The Emigration Expo is held on February 8 and 9, 2020. With about 11,000 visitors, the Emigration Expo is Europe’s largest event for emigrants, expats, job seekers, entrepreneurs and anyone else looking to live abroad. The Emigration Expo is about information, orientation and doing business. There are 3 halls with an area of 12,000m² and about 200 exhibitors and free lectures and presentations. The Emigration Expo is a must for everyone planning to move abroad, temporarily or permanently.

My sister, Pauline and I, in front of my booth at the Emigration Expo in 2019.

Do you want a FREE ticket to the Emigration Expo?

The first 50 people to click here can get a free ticket to the Expo! Let me know if you will be attending, I would love to see you there! My booth number is #230 in Hall 2.

Do you want more information for immigration, live and work in Canada? Please fill out the form here and I will contact you shortly.

January 13, 2020
Purchase Plus Improvements Mortgage

Considering buying a home that could use an update? A purchase plus improvements mortgage might be the right choice for you.

The purchase plus improvements mortgage is a customizable mortgage that will allow you to make home improvements as soon as you move into your new home by rolling the renovation cost into your mortgage. Improvements such as replacing the floors, updating a bathroom or replacing old wiring are some of the many ways to enhance the value of your new home.

Affordability

Even though there are some limits on what you can do, a purchase-plus-improvements mortgage is the most affordable way to finance a renovation. This is because of today’s low mortgage rates. A mortgage is the cheapest way to borrow. If you put an additional $40,000 on your mortgage, it will cost you far less than if you borrow $40,000 on a line of credit for renovations down the road.

Timeline

There are 90 to 180 day timeline on these mortgages, meaning you and your contractor must be prepared to finish any renovations promptly. The timeline is part of what makes this mortgage so great – you improve the value of your home and you get to live in it right away. The exact timeline will depend on your lender and your mortgage broker can help you navigate your options.

How It Works

The first thing you will do is work with your mortgage broker to be pre-approved for your maximum amount.

Then the fun part – find a home you love! Once you have found a home and your purchase offer is accepted, you will get estimates for the improvements you want to make. Your broker can then pass along the estimates to your lender for approval.

If your lender agrees that the renovations will improve the value of your home, they will send your broker an approval for the revised amount of your mortgage – the purchase price PLUS the cost of renovations.

On your closing date, the amount approved for your renovation will go to your lawyer, to be held until you’ve completed the proposed renovations. You will receive the funds once your renovation is complete. This means you must pay the renovation costs up-front from your pocket. Some choose to use a credit card or line of credit to get through the renovation period.

An appraisal will confirm that your renovations were completed within the agreed upon amount of time and then your lawyer can release the funds to you.

It’s important to note that your minimum down payment will be calculated based on the total amount of your home’s assessed value – the purchase price plus the price of the approved renovations.

Purchase-plus-improvements mortgages are the most affordable way to finance home improvements! Contact me today for more information – or if you have any other real estate question! I’d love to help!

November 25, 2019
Modern, Open Concept Downtown Kelowna Home

FOR SALE: 968 FULLER AVE, KELOWNA, BC $688,800

ULTRA MODERN, OPEN CONCEPT DOWNTOWN KELOWNA HOME. Abundant natural light and crisp modern lines greet you inside as you enter this uniquely designed two-story home with custom cedar plank accents outside. The expansive main floor features a beautiful kitchen with quartz counters, and a comfortable dining and living room area. Quality wide plank hardwood and tile flooring are evident throughout the home. Large floor-to-ceiling windows and double glass sliding doors lead to a south exposure patio at the front for those relaxing summer days.

Upstairs you will find 3 bedrooms, a full bathroom, convenient laundry room and office area. The spacious and private master bedroom includes a deluxe 5 piece ensuite and walk-in closet. New custom blinds are located throughout the home. There is also a brand new detached garage with lane access, and a low maintenance yard. New furnace, a recent roof and 9 foot ceilings on both the main and upper floors.

The home is located in a very quiet neighborhood and yet is a short walking distance to the downtown center. Amazing quality of life with an abundance of restaurants, coffee shops, brew pubs, wineries and retail shopping nearby. Also a short walk away is Prospera Place, the theatre/cultural district and Okanagan Lake beach areas.

For more details, please contact Rom Houtstra at 250-317-6405 or email him at rom@romrealty.com.

November 20, 2019
Rom’s Kelowna Real Estate Opinion Oct 2019

October 2019 Real Estate Report:

*Click the images to enlarge

Kelowna Real Estate Opinion for Oct 2019

The Okanagan is continuing to go down the path of a mild correction or a flat market. Central Okanagan sales are down about 10% and prices are down about 4% for the year to date. Some people would say that this would be a declining market. However, compared to what Alberta is going through, we are simply flat. Also, our markets are still substantially higher/better than the 10 year averages. One of my favourite phrases these days is: the market is a good, balanced market, not boom or bust.

The interesting thing to take note of is what is continuing to happen in big cities like Toronto and Vancouver. Both these 2 giants are continuing to show promise and positive gains in their lower-end markets. To give you an idea of how much statistics from Toronto and Vancouver affect the overall averages of the country, consider this. There are about 108,000 REALTORS® in Canada. About 62,000 of them are in Toronto and Vancouver. This explains why, when the media is reporting Canadian Real Estate statistics, it really has nothing to do with the market that your home is in, unless you live in Toronto or Vancouver.

The market in the Okanagan will remain steady as we go forward into 2020. Keep in mind that the market will follow it’s usual annual trends. In other words, the last quarter of each year and the first quarter of the following year are always the slowest quarters of every year.

If you are a first time home buyer, click here to read my recent blog on the new incentive program that was just introduced.

As always, this is the Real Estate World according to Rom.

November 12, 2019
Rom’s Kelowna Real Estate Opinion for Sept 2019

September 2019 Real Estate Report:

*Click the images to enlarge

Kelowna Real Estate Opinion for Sept 2019

Fall is here and with that brings the falling of leaves, cooler temperatures and a new season of the real estate world. Like I have stated in the last few months, the current market is flat. No exciting rises or bubble bursts and there will be none in the immediate future. Bubbles burst when the market has shot up like a rocket like 2004 to 2007. Markets rise dramatically when the market previously fell off a cliff like in 2009 to 2013. We have nothing like that going on. The market is good; not great, not terrible but good.

A new report shows disparity in home price trajectories across Canada, including some large decreases. The CENTURY 21 analysis of home prices reveals that some communities have seen some steep decreases in price per square foot in the past year, most notably in British Columbia. Brian Rushton, Executive Vice-President of CENTURY 21 Canada said, “It is not surprising to see Vancouver prices drop so much, but the drop is actually more significant in some Metro Vancouver suburbs like West Vancouver and secondary B.C. markets such as Vernon and Kelowna”.

While the report is showing prices drop, sales activity is steady. The townhome market under $500,000 continues to be very active. The single family house market is all over the place. The market for homes over $1 million is very slow right now, with only 3 sold last month. Condo sales are still strong too but I suspect this market to stabilize within the next 2 years.

The only insight we can give you is that so far it looks like 2020 will be very similar. There may be a slight increase in the markets in 2020 caused by some of the positive lending changes; lower interest rates, lower qualifying stress test rates and the new first-time buyer incentive program. These programs and changes will allow a small percentage of the population the ability to buy when they could not before the program. Also, the five year bond yields and mortgage rates (yes, there is a correlation there), are back at or have broken levels compared to five years ago.

As always, this is the Real Estate World according to Rom.

October 13, 2019
If you bought your very first home in 2014, the Canadian Government wants to give you $750!

This is how the First Time Homebuyer Tax Credit works:

The initial costs associated with purchasing a home can be a particular burden for first-time homebuyers especially when added to the money required for a down payment.
To assist first-time homebuyers with the costs associated with the purchase of a home, the Government of Canada introduced a First Time Homebuyers Tax Credit (FTHB) in 2009.
The HBTC is calculated by multiplying the lowest personal income tax rate for the year (15% in 2009) by $5,000. For 2009 (and still in 2014), the credit will be $750.
For more information on this great plan, please click on the following link:

http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html

January 13, 2015
Watch Out for Banks Offering You to Skip Mortgage Payments

It’s no secret that Canada’s major banks offer their clients the opportunity to skip mortgage payments. While this can work to their advantage, industry experts are not big supporters of the option.

Bank customers are attracted to this method because no additional fees are required. Not surprisingly, the banks have been actively promoting the skip-a-payment option.

“In most cases, there is no fee for this option, and your payments won’t change during the term of your mortgage,” explains Marcel Greaux, a broker with Mortgage Alliance.

Although consumers enjoy the comvenience it provides for them, skipping payments can potentially create a treacherous situation for them long term.

“Any skipped interest is added to the principal balance,” Greaux explains. “This is where it gets dangerous, as the increase costs start to compound and ultimately work in favour of the lender, not the borrower.”

Despite his understanding of the skip-a-payment option, Greaux believes mortgage brokers should not recommend it to their clients.

“I would say the option is convenient to have available, but should only be used in an absolute emergency,” he says. “Skip-a-payment is more like defer-a-payment due to the interest compounding at a later date.”

He adds that “a more prudent measure to access funds may be to make use of a line of credit, if available.”

December 12, 2013
End of Rent to Own?

A number of mortgage brokers are among those applying more scrutiny to rent-to-own deals following yet another investment horror story.

The viability of the rent-to-own market took another hit last week following news that an Ottawa-based company is facing $2 million in lawsuits from unhappy investors. Golden Oaks Enterprises, the company at the centre of the scandal, had reportedly promised high returns in exchange for loaning cash and investing in the property.

“Stories like these do scare buyers from this market,” says Deepak Bansal. “From my own experience, there have been a lot of bad rent-to-own developments and this is just another. There are some good obviously, but the risks and costs in general are too high for many.”

Elizabeth Kelly, VP of Sandstone Management Inc, says all industries have “bad apples” and as with all home purchases, buyers need to carry out substantive research and due diligence beforehand. The same applies to property investors considering this platform as a way of diversifying their portfolios.

Still, much of the criticism of rent-to-own is focused on the buyer/renter. Those agreements are increasingly touted as a good alternative for those who cannot afford a down payment or have poor credit ratings or are unable to qualify for a high-ratio mortgage under the new mortgage rules, introduced one year ago.

“The main flaw in this market is how some developers are valuing the property once the rent-to-own term has finished,” warns Bansal. “I am aware of some cases where, for example, after three years of paying into the fund, the developer turns around and says the property’s value has gone up by 20,000 to 30,000.”

Kelly, however, says such cases only arise when legal issues are not ironed out from the start.

“Education and communication is central in rent-to-own, especially when it comes to the application process,” she says. “The only problems I have seen with regards to this market are when people sign up for a rent-to-own informally and no agreements are in place.”

Source: Canadian Real Estate Wealth Magazine

August 6, 2013