Toronto Condo and Real Estate Blog

Government of Canada Moves to Protect and Strengthen Canadian Housing Market

The Government of Canada recently announced adjustments to the rules for government guaranteed mortgages aimed at protecting and strengthening the Canadian real estate market.

The new measures include:

1) Fixing the maximum amortization period for new government-backed mortgages to 35 years;

2) Requiring a minimum down payment of 5% for new government-backed mortgages;

3) Establishing a consistent minimum credit score requirement

4) Introducing new loan documentation standards.

This announcement marks a responsible and measured approach by the government to ensure Canada’s real estate market remains strong and to reduce the risk of a U.S.-style housing bubble developing in Canada.

The new limits are planned to take effect October 15, 2008. This would allow existing mortgage pre-approvals with the common 90-day duration to be used or expire. Certain exceptions would also be permitted after October 15. The government will work closely with all stakeholders to ensure timely and effective implementation of these measures.

The new regulations apply only to new mortgages, while existing originations will be unaffected. The lag period prior to the regulatory change will allow existing mortgage pre-approvals to be used or expire. All mortgage insurance companies will be affected by this regulatory change.

As Canada Mortgage and Housing Corporation (CMHC) is a Crown corporation, the government is ultimately responsible for CMHC’s obligations, including mortgage insurance claims. Hence, CMHC will no longer offer 40-year amortization and 100% loan-to-value ratio mortgage insurance products, given the new regulations.

In addition, the government also backs private insurers’ obligations to lenders in the event of default, provided the business is eligible to the guarantee, but claims are subject to a 10% deductible of the original principal amount of the loan agreement.

Private insurers are still free to insure 40-year amortization and 100% loan-to-value mortgage products, but the lack of government backing will lead to sizeable increase in risk. This may mean the elimination of these products after October 15, or a higher insurance cost for the borrower.

The measures announced today will build on the strength of Canada’s real estate market. According to the International Monetary Fund, the increase in house prices in Canada is based on sound economic factors such as low interest rates, rising incomes and a growing population. A recent Statistics Canada report concluded that home ownership is at record levels, with over two-thirds of Canadians owning their own home.

For the news release from the federal Department of Finance, visit www.fin.gc.ca/news08/08-051e.html.

————————————————————————————————————

Contact the Jeffrey Team for more information - 416-388-1960

Preview opening Thursday September 18 - only registered guests will be allowed to attend. Contact us via email at laurin@jeffreyteam.com or phone 416-388-1960 to book your spot.

Neilas Inc.’s new condominium project in Leslieville is designed to foster a close-knit community, according to the builder.

Dubbed Stage East because of its location just east of the film district, the building will be set on a deep and narrow site on Queen Street East at Leslie Street, within an up-and-coming section of the city.

“It’s just at the east end of what would be considered the ‘hot’ area,” lead architect Richard Witt of Raw Design says of the development, which will open for sales on May 16.

“This is the first [development] which will be going in on that strip, so it’s going to stand out just because it’s a new building,” he adds.

The building will consist of two four-storey towers linked by an interior courtyard and glazed corridors leading to a freestanding elevator. There will be 24 units between the towers.

“The way that we’ve arranged the building around this courtyard — with these glazed links — no one’s going to be a stranger in the building,” Mr. Witt says.

“Everyone is going to see you walking through the corridors and know who everyone is. It’s a real community that we’re trying to make here.”

A green roof will be put on top of the mezzanine, while the courtyard and balconies will have landscaped dividers. Operable windows will be installed, and the south side of the building will have large overhangs.

Bike storage space will be provided, and residents will have access to a vehicle through an auto-sharing operation.

“The Queen Street streetcar is right there and there’s access to bike paths along the lake not very far away,” Mr. Witt adds.

The building will have retail shops fronting on Queen, and residents will be within walking distance of parks with sports facilities.

Suite sizes range from 530 to 863 square feet in one-bedroom, one-bedroom-plus-den or two-bedroom plans.

Interiors will include walls of windows; high-end, contemporary finishes; and private terraces averaging 250 square feet.

“In all our projects, we try to provide as much outdoor space as possible,” Mr. Witt explains.

“There’s something really nice about being in the city, but also being outside in your own space.”

The largest model will have 863 square feet of living space on two levels, with two bedrooms and a den, a balcony and a 350-square-foot wraparound terrace on the roof.

“All the top [floor] units… have absolutely fantastic sunrooms up at the top that have wraparound terraces,” Mr. Witt says. “They’re sensational units.”

Parking and lockers will be available for an extra cost, and maintenance fees have not been set yet.

Occupancy is slated for fall, 2009.

Preview opening Thursday September 18 - only registered guests will be allowed to attend. Contact us via email at laurin@jeffreyteam.com or phone 416-388-1960 to book your spot.

—————————————————————————————————————

Also, Monarch is offering 2% off suites at both Nautilus and Quay West. Discount applies to the condo, parking and locker! It is a limited time offer (they aren’t even telling us how long it will run) so if either of these projects interests you, contact us today via email at laurin@jeffreyteam.com or phone 416-388-1960.

—————————————————————————————————————

Contact the Jeffrey Team for more information - 416-388-1960

What You Should Know Before Buying.

Condominiums are a great alternative to home ownership. If you’re looking to buy your first home, or want to downsize, chances you are considering buying a condominium. There are a few things that you should know first before signing on the dotted line.

It’s often said that buying a condominium is buying a lifestyle. What does that mean?

Condominium living is different from owning or renting a detached house because condominiums have a dual nature. Condominium owners hold title to their units and share responsibility for the operating costs of the balance of the property (common elements such as lobbies) that makes up the condominium.

There are many advantages to condominium ownership. It may be less expensive than other types of home ownership. It can provide an “instant” sense of community. While someone else is shovelling the snow, you could be enjoying a swim in the shared warm water swimming pool.

However, condominiums are not everyone’s cup of tea. Condominium corporations may set restrictions on things such as owning pets or having an outdoor barbeque.

How is the condominium managed?

A Board of Directors, elected by the owners, manages the condominium association. Major decisions are voted on at owners’ general meetings. Participation in community decision-making is a benefit of condominium living.

Conditions and Restrictions

Condominiums are governed by a set of rules called Covenants, which are enforced by the condominium association. Condominium Conditions and Restrictions (CC&Rs) vary from one development to another. The CC&Rs may impose restrictions on noise levels, renovation projects, pet ownership and renting.

As a potential condominium owner, you should be comfortable living within the rules and restrictions of the condominium association and living in close proximity to others.

Condo Fees

The condo or owners association budgets and determines the fees for all units, usually based on the size of each unit, the number of units occupied and the projected expenses for maintenance and repair.

Every condo owner pays fees to help maintain the building, pay the salaries of concierges, handymen or groundskeepers, and provide facilities such as a pool, gym or gardens. The fees are paid monthly and are subject to change.

Special assessments could be made when an unexpected repair or planned modification exceeds the cost of the condo fees collected.

Questions to ask!

It’s absolutely critical that you read and understand the documents given to you when you are purchasing a condo. The association is required to give you all documents affecting the use of your property. These documents will tell you absolutely everything you need to know, what you can do and what you cannot do. If you don’t have a clear understanding of the information provided in the documents, ask for clarification so that you know what you are getting into.

Request copies of minutes from the past two years from the Board of Directors’ meetings. If there are any major problems with the condominium association, this is where you’ll find it. The association is required to have regular meetings and make the minutes available. Be absolutely sure to do this so that you are aware of any major problems with the bureaucracy of the condominium association that would make living in the condo undesirable.

Ask owners for comments or complaints about the association’s activities and reputation.  Find out if there any plans to add to the facilities, such as a swimming pool or gym? Such projects can mean a rise in fees. The minutes of the condo association meetings should reveal any such plans.

Be aware of the marketing hype

If you are thinking of buying a pre-construction condominium unit, be aware of the marketing hype, and bear in mind you are buying from plans. You may be surprised to learn that the beautiful rooms you saw in the model suites are not necessarily like the ones you’ll live in once your building is complete.

The den on your floor plans may become a walk-in closet by the time you move in. And the fantastic view you see in the building model, may soon get distracted by the following phases of the project. Your dream condo may turn out to be dog and you may not get what you paid for.

On the other hand, if you get a prime suite, you could make thousands of dollars in profit by the time you receive your keys.

Your real estate agent can help you avoid the pre-construction sale pitfalls and help you make the right decision.

————————————————————————————————————

Contact the Jeffrey Team for more information - 416-388-1960